William E. Pepall

This five-judge appeal reconsidered the common law governing non-disclosure of partial settlement agreements in multi-party civil litigation.

The court held that the prior rule mandating an automatic finding of abuse of process and an automatic stay, without proof of prejudice or regard to proportionality, was wrongly decided and should be overruled.

The proper approach requires a contextual and discretionary abuse of process analysis focused on unfairness, prejudice, oppression, harm to the administration of justice, and a proportionate remedy, with r. 49.14 of the Rules of Civil Procedure reinforcing that framework.

Applying that approach, the court allowed two appeals and remitted those matters, while dismissing two others where the record was sufficient to determine the result.

The decision concerns the certification and approval of a partial settlement in a class action regarding business interruption insurance for dentists, specifically Aviva’s “Triple Guard” policies marketed by CDSPI.

The court certified the class action for settlement purposes as against CDSPI and approved the settlement, finding that all statutory criteria were met and that the settlement was fair and reasonable.

The court also dismissed Aviva’s motion for a stay, holding that disclosure of the settlement was timely and that Aviva’s rights were not prejudiced by the settlement or its timing.

This endorsement addresses a scheduling dispute in a class action involving dentists who purchased insurance policies brokered by CDSPI Advisory Services Inc. and issued by Aviva companies.

The plaintiffs sought to adjourn upcoming motions for settlement approval and a stay of proceedings, pending an anticipated Court of Appeal decision in Thrive Capital Management Ltd. et al v. Noble 1324 Queen Inc. et al., which may reconsider the principles in Handley Estate v. DTE Industries Limited regarding partial settlements.

The court declined to adjourn, emphasizing the need for timely resolution and noting that new procedural rules (Rule 49.14) would be in force for the scheduled hearing.

The appellants appealed an Associate Justice's order dismissing their cross-motion to amend their statement of claim to add a new plaintiff on the basis of misnomer under Rule 5.04(2).

The proposed claim by the new plaintiff was statute-barred.

The Divisional Court dismissed the appeal, finding that the Associate Justice applied the correct legal test for misnomer, properly distinguished outdated case law relying on the defunct 'special circumstances' doctrine, and made factual findings regarding the lack of intention to include the new plaintiff that were entitled to deference.

The appellants appealed a motion judge's order that permanently stayed their action against a law firm (A&B) on the basis that it constituted an abuse of process for not having been added to an existing 'Main Action' involving the same factual circumstances.

The Court of Appeal found that the motion judge erred in concluding that commencing a separate action was an abuse of process, as it is not always abusive to start a new action instead of amending an existing one, especially when distinct claims or privilege concerns are involved.

However, the Court upheld the procedural direction that the claims should proceed in a single action.

The appeal was allowed in part, setting aside the permanent stay and replacing it with a temporary stay, allowing the appellants to bring a motion to add A&B as a defendant to the Main Action, with the ultimate determination of a permanent stay to be made by the motion judge hearing that application.

The appellants appealed an arbitrator's costs award under section 45 of the Arbitration Act, 1991.

The arbitrator had awarded the respondent its full legal expenses, including fees paid to its corporate counsel for 'litigation support'.

The court first determined that leave to appeal an arbitral costs award is not required under section 133(b) of the Courts of Justice Act, as that provision applies only to courts.

On the merits, the court found that the arbitrator did not err in principle or act plainly wrong in awarding full indemnity costs, noting that the Arbitration Act does not bind arbitrators to the scales of costs in the Rules of Civil Procedure.

The court also upheld the arbitrator's decision to allow recovery of the litigation support fees.

The appeal was dismissed.

The appellant, OZ Optics Ltd., appealed the dismissal of its action against two former general counsel, Diane Lesley Evans and Samuel Edgar Schwisberg, following a successful motion for summary judgment.

The action alleged breach of contract, breach of fiduciary duty, conspiracy, and negligent performance of service.

The Court of Appeal dismissed the appeal from the bench, upholding the motion judge's findings that the claims were amenable to summary judgment, that Evans's actions did not constitute a breach or cause loss, and that Schwisberg's obligations under a holdover clause were absolved by the appellant's actions.

Costs were awarded to the respondents.

This endorsement addresses two motions in a complex litigation involving allegations of misappropriation of confidential information and trademark infringement.

The first motion, brought by the plaintiffs, sought further document production from the defendants and leave to amend the claim.

The second motion, brought by certain defendants, sought forensic examination of specific electronic documents and production of network access records from the plaintiffs, and also proposed bifurcation of a key issue.

The court ordered reciprocal production of relevant confidential business documents under a protective order, denied bifurcation due to lack of consent, ordered the plaintiffs to undertake a forensic search for disputed electronic documents and produce network access records, and largely granted the motion to amend the claim, with the exception of a plea to pierce the corporate veil.

The defendants were successful on their motions for summary judgment dismissing the plaintiff's action.

They sought costs on a substantial indemnity basis, arguing the plaintiff made unsubstantiated allegations of intentional wrongdoing.

The court found the plaintiff's conduct did not rise to the egregious level required for substantial indemnity costs and awarded costs on a partial indemnity basis.

The court rejected the plaintiff's argument that the costs should be reduced because there were two defendants, noting the plaintiff chose to sue both.

The court awarded $32,000 to one defendant and $30,000 to the other.

The plaintiff corporation sued its former in-house counsel for breach of contract, breach of fiduciary duty, negligence, and conspiracy to injure, alleging they improperly withdrew as counsel of record in an ongoing litigation and disparaged the plaintiff's principal in internal emails.

The defendants moved for summary judgment.

The Superior Court of Justice granted the motions and dismissed the action, finding no genuine issue requiring a trial.

The court held that the defendants did not breach any duties, as one defendant was medically required to withdraw following a stroke, and the other properly resigned due to a breakdown in the solicitor-client relationship.

Furthermore, the plaintiff failed to prove any damages or conspiracy.

The plaintiffs requested a case conference to fix a trial date despite failing to complete a mandatory mediation by the court-ordered deadline.

One of the plaintiffs booked a vacation that conflicted with the scheduled mediation date, showing disregard for the court's prior order.

The court refused to dispense with the mediation requirement or hold a trial date as a placeholder, and consequently struck the action from the trial list until mediation is completed and the matter is truly ready for trial.

The appellants appealed a motion judge's decision dismissing their summary judgment motion and granting summary judgment and a permanent stay to the respondents.

The core issue was the appellants' failure to immediately disclose settlement agreements with other defendants, which altered the litigation's adversarial landscape.

The Court of Appeal affirmed the motion judge's finding that these contingent settlement agreements, which included provisions for private evidence gathering and financial incentives for cooperation, changed the adversarial relationship into a cooperative one, triggering the immediate disclosure rule from Handley Estate.

The court reiterated that immediate disclosure is mandatory, regardless of contingencies or confidentiality clauses, and that a stay of proceedings is the appropriate remedy for such an abuse of process.

The appeal was dismissed.

The appellants appealed the motion judge’s dismissal of two actions and an application via summary judgment.

The motion judge had found the proceedings to be an abuse of process, that the claims had been previously released, and that they were barred by statutory limitation periods.

The Court of Appeal upheld the motion judge's decision, finding no errors in his assessment that there was no evidence of fraud tainting prior settlements or releases, and that the claims were indeed barred by abuse of process, releases, and limitation periods.

The court affirmed that summary judgment was an appropriate tool for addressing these threshold issues.

This is a costs decision following the permanent stay of the plaintiffs' main action and third-party proceedings.

The defendants, Paul Gribilas and Peter Gribilas, and the third party, J+W Foods Inc., sought costs as successful parties on dispositive motions.

The plaintiffs argued against costs, claiming a miscarriage of justice given the prior ruling that there were genuine issues for trial.

The court found no miscarriage of justice and applied the normal rule that costs follow the outcome, awarding partial indemnity costs to the Gribilas defendants and full indemnity costs to J+W Foods Inc. based on a contractual provision in a release.

The Attorney General of Ontario brought an application under the Civil Remedies Act, 2001 for the civil forfeiture of approximately $3.7 million held in the respondents' bank accounts, alleging the funds were the proceeds or instruments of illegal online cannabis sales and money laundering.

The respondents had used a Hawala informal currency exchange to transfer legitimately earned Chinese currency into Canadian funds.

The court found that while a small portion of the funds could be traced to unlawful activity, the respondents were 'uninvolved interest holders' and 'responsible owners' who acquired the funds for fair value without knowledge of the illegal source.

The application for forfeiture was dismissed.

The Attorney General of Ontario sought forfeiture of the contents of several bank accounts under the Civil Remedies Act.

At the scheduled hearing, the court found that the AG had uploaded over 112,000 pages of unorganized and improperly formatted documents to CaseLines, rendering the electronic record unusable.

The court adjourned the hearing and issued detailed procedural directions for the proper organization, hyperlinking, and uploading of the electronic materials.

The defendants brought a motion for a mandatory interim injunction to enforce indemnity agreements and require the plaintiffs to advance funding for their legal expenses.

The court found that the Cytrynbaum jurisprudence did not apply because the motion sought a mandatory injunction against an individual and a corporation, rather than a final determination under the CBCA.

The court dismissed the motion, holding that the defendants failed to establish a strong prima facie case due to concerns about conflicts of interest and lack of independent legal advice in the drafting of the indemnity agreements.

The court also found no irreparable harm, as any harm could be quantified in monetary terms.

The appellant, Richard Smith, appealed an arbitral award that set aside a paragraph of Minutes of Settlement due to his failure to make full disclosure of significant stock option income.

The Arbitrator found that Mr. Smith's disclosure created "information asymmetry" by not clearly presenting the $1.1 million stock option income in his financial statements and affidavits, despite it appearing on attached pay stubs.

The Superior Court dismissed the appeal, affirming the Arbitrator's finding that Mr. Smith did not fulfill his positive duty of full and honest disclosure, as required by Rick v. Brandsema.

The court rejected the appellant's arguments that the Arbitrator made palpable and overriding errors of fact or erred in law by relieving the respondent of her duty to inquire, emphasizing that the onus to inquire only shifts after complete and unambiguous disclosure.

The Attorney General of Canada moved to dismiss or stay an action brought by an Indian Residential Schools Settlement Agreement (IRSSA) claimant, arguing abuse of process based on release, re-litigation, requirement for leave, and improper forum.

The court rejected the arguments regarding release and re-litigation of certain disclosure issues.

However, it found that the action against Canada, which sought damages for breach of IRSSA disclosure obligations, involved the implementation and enforcement of the IRSSA and should have been initiated as a Request for Directions before the Eastern Administrative Judge under the Court Administration Protocol.

The action against Canada was stayed, while the action against the other defendants (solicitors) was deemed properly brought outside the IRSSA provisions.

The plaintiffs moved to set aside a Registrar's administrative dismissal for delay of their action against the defendant law corporation for lawyer's negligence.

The action, commenced in 2013, was dismissed in 2018 for failure to set it down for trial within five years, as required by Rule 48.14.

The court applied a contextual approach to the four-factor test for setting aside such dismissals, considering the plaintiffs' explanation for delay (inadvertence due to staff changes and maternity leave), their intent to prosecute, and the defendant's claim of prejudice (aging principal, health issues, memory deterioration).

The court found that both parties shared responsibility for the delay and, balancing the interests, decided to restore the action to active status with a strict new timetable for setting down for trial, with no costs awarded.