Victor L. Freidin

The bankrupt appealed an order declaring that a prior judgment debt was not released by discharge under s. 178(1)(d) of the Bankruptcy and Insolvency Act.

The appeal court held that the underlying trial reasons established breach of contract and breach of trust, but did not contain findings of bad faith, dishonesty, fraud, misappropriation, or defalcation required to engage the statutory exception.

Applying appellate authority interpreting s. 178(1)(d), the court concluded that innocent or non-dishonest fiduciary breach does not suffice.

The order below was set aside and appeal costs were awarded to the bankrupt.

The applicants sought to depart from the normal rule that costs follow the event after their application for judicial review of a Compensation Fund Committee decision was dismissed.

They argued that they had already suffered financial loss due to a lawyer's misappropriation, that the case involved a novel public interest issue, and that awarding costs would run contrary to the purpose of the Compensation Fund.

The Divisional Court rejected these arguments, finding the issues were not novel and that the applicants chose to pursue the judicial review knowing the costs risks.

The court awarded partial indemnity costs of $25,000 to the respondent Law Society.

The applicants sought judicial review of a decision by the Law Society of Upper Canada's Compensation Fund Committee, which denied their claims for compensation following the misappropriation of funds by their lawyer.

The Committee found that the lawyer had received the funds in the capacity of a banker rather than a lawyer, and thus the losses were not in connection with his professional business.

The Divisional Court dismissed the application, holding that the Committee's interpretation of the Law Society Act and its application of the Guidelines were reasonable.

Following a civil trial, the court addressed the issue of costs where the plaintiff achieved only modest recovery exceeding the Small Claims Court jurisdiction.

The defendants had failed to fulfill settlement obligations, engaged in obstructionist conduct during the litigation, and contributed significantly to the continuation and length of the proceedings.

However, the court found the plaintiff’s litigation strategy unfocused and excessively costly, contributing to unnecessary complexity and expense.

Balancing these factors under the Rules of Civil Procedure, including Rule 57.05(1), the court exercised its discretion to award reduced costs rather than the full amount sought.

The defendants were ordered jointly and severally to pay a lump sum costs award.

The plaintiff brought a civil action arising from real estate transactions involving two properties and agreements with a development company.

The court considered whether an agreement relating to the plaintiff’s interest in one property had been fulfilled and whether the defendant corporation was obligated to indemnify the plaintiff for liabilities arising from a mortgage and overdraft related to another property held in trust.

The court held that claims relating to the first property were barred by the Limitations Act, 2002 and failed.

However, the court found the plaintiff held the second property as bare trustee for the corporate defendant pursuant to a declaration of trust containing an indemnity clause.

The corporate defendant was therefore liable to indemnify the plaintiff for payments made toward a deficiency judgment and overdraft judgment arising from the mortgage obligations.

The respondent sought substantial indemnity costs following an appeal.

The Court of Appeal declined to award substantial indemnity costs and instead ordered the appellant to pay the respondent's costs of the appeal fixed at $15,000, inclusive of disbursements and GST.

The appellant appealed the dismissal of its claims for negligent misrepresentation and intentional interference with economic relations arising from a timber allocation dispute under an Overlapping Licence Agreement.

The appellant also raised a new claim for breach of fiduciary duty.

The Court of Appeal dismissed the appeal, declining to hear the new fiduciary duty claim and upholding the trial judge's factual findings that the appellant did not reasonably rely on the alleged misrepresentations and that the respondent had no intention to injure the appellant's economic relations.

The appellants challenged an order in a bankruptcy proceeding concerning ownership of property and the bona fides of an alleged trust in favour of one respondent.

The Court of Appeal held that the motion judge acted within his discretion under the bankruptcy rules in deciding the merits on a motion rather than directing a trial of an issue, particularly given the appellants' primary position below.

Although conflicting evidence could have supported a different finding, the finding made was open to the motion judge on the totality of the record.

The appeal was dismissed with costs.

The appellant appealed an order dismissing its solicitor's negligence action as an abuse of process.

The Court of Appeal held that the appellant was barred from relitigating the previously determined issue that recission was unavailable in the underlying commercial action, and therefore could not maintain negligence allegations premised on the solicitor's failure to plead recission.

However, the court accepted that the statement of claim also contained distinct negligence allegations unrelated to recission.

The appeal was allowed in part, the recission-based claims remained barred, and the remaining negligence claims were permitted to proceed.

No costs were awarded because success was divided.