In Badesha v.
In
In Bogue v Miracle, the Court confirmed that a non-Indian cannot appoint a receiver over a Indian debtor's property on reserve in order to collect a debt. In this case, a lawyer had successfully handled an arbitration on a 25% contingency fee basis, recovering
Other topics this week included stay pending appeal in a dispute over the removal of estate trustees, and interest and costs under a commercial lease.
Table of Contents
Civil Decisions
Badesha v.
Keywords: Securities Law, Secondary Market Misrepresentation, Class Proceedings, Leave to Commence Proceeding, Certification, , Securities Act, R.S.O. 1990, c. S.5, ss. 138.3 - 138.8, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5(1), Business Corporations Act, R.S.O. 1990, c. B.16,
Keywords: Bankruptcy and Insolvency, Receiverships, Priority Dispute, Civil Procedure, Orders, Injunctions, Mareva Injunctions, Leave to Appeal, Stay Pending Appeal, Security for Costs, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-43, s. 193(e), 195, 243(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 101, Rules of Civil Procedure, R. 56.01, 60.12(c), 61.06(1)(b), Bankruptcy and Insolvency General Rules, C.R.C., c. 368, s. 31(1),
Keywords: Contracts, Debtor-Creditor, Promissory Notes, Damages, Interest, Interest Act, R.S.C. 1985, c.
Di Santo v.
Keywords: Wills and Estates, Estate Trustees, , Civil Procedure, Order, Costs Order, Leave to Appeal, Stay Pending Appeal, Rules of Civil Procedure, r. 63.01(1),
Keywords: Contracts, Real Property, Commercial Leases, Damages, Interest, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43 s. 127,
Bogue v Miracle, 2022
Keywords: Aboriginal Law, Contracts, Debtor-Creditor, Enforcement, Receiverships, Indian Property on Reserve, , Indian Act, R.S.C. 1985, c.
Short Civil Decisions
2748355
Keywords: Contracts, Insurance, Coverage, Civil Procedure, Parties, Procedural Fairness
Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Summary Judgment
Keywords: Wills and Estates, Contracts, Real Property, Agreements of Purchase and Sale of Land, Fundamental Terms
CIVIL DECISIONS
Badesha v.
Feldman, Roberts and Favreau JJ.A.
Counsel:
Keywords: Securities Law, Secondary Market Misrepresentation, Class Proceedings, Leave to Commence Proceeding, Certification, , Securities Act, R.S.O. 1990, c. S.5, ss. 138.3 - 138.8, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5(1), Business Corporations Act, R.S.O. 1990, c. B.16,
facts:
The appellant was a shareholder in
The appellant sought leave to proceed with a proposed class action on behalf of the shareholders of the respondent Cronos alleging that there were misrepresentations in Cronos' 2019 public filings. In order to proceed with the proposed action, the appellant required leave of the court pursuant to s. 138.8 of the Securities Act, R.S.O. 1990, c. S.5, and certification of the action as a class proceeding pursuant to the Class Proceedings Act, 1992, S.O. 1992, c. 6. The motion judge heard the leave motion and certification motion together. The motion judge characterized the appellant's proposed claim as an action alleging that the defendants made 7,449 separate misrepresentations. He dismissed the motion for leave under the Securities Act ("SA") on the basis that the appellant failed to put forward any evidence that each of the alleged misrepresentations materially contributed to the drop in the price of Cronos's shares at the relevant time. The motion judge also dismissed the motion for certification on the same basis.
issues:
(1) Did the motion judge err in characterizing the claim as 7,449 individual misrepresentations?
(2) Did the motion judge err in finding that the appellant had no reasonable possibility of success at trial?
(3) If the motion judge did err in determining that the appellant had no reasonable chance of success, should the Court certify the class action?
holding:
Appeal allowed.
reasoning:
(1) Yes
The Court held that, viewed properly, the claim alleged one central misrepresentation, that is, Cronos misrepresented its revenues for the 2019 interim financial statements by treating transactions involving the exchange of cannabis products with a third party as generating revenue. The motion judge made a palpable and overriding error in characterizing the claim as alleging that the respondents made 7,449 separate misrepresentations. S. 138.3(6) of the Securities Act provides the Court with the discretion to treat multiple misrepresentations having common subject matter as a single misrepresentation.
Furthermore, though the appellant sought a declaration that there were multiple misrepresentations, it was clear that the purpose of this was to maximize available damages due to the limit imposed in s. 138.7 of the Securities Act. The Court stated that the declaration sought by the appellant was part of the relief sought, and therefore an issue to be dealt with at trial.
(2) Yes
The Court found that the test for leave to proceed with a misrepresentation claim under s. 138.3 of the Securities Act is that (a) the action is being brought in good faith, and (b) there is a reasonable possibility that the action will be resolved in favour of the plaintiff at trial. The Court noted that no issue was raised regarding good faith. In order to meet the "reasonable possibility" of success branch of the test, the plaintiff must show that there was a misrepresentation and that it was material. This branch is meant to be "more than a speed-bump", but not meant to be a "mini-trial":
The motion judge had accepted the evidence of the respondent's expert witness that the drop in the share price was largely a result of the COVID-19 pandemic. Furthermore, he found that the transactions that led to the restated financial reports were a relatively small portion of Cronos's business. The Court held that this analysis was tainted by the mischaracterization of the claim as being 7,449 individual misrepresentations. Therefore, a proper analysis on whether the single misrepresentation was material was never conducted. Had this been done, the motion judge ought to have found that misrepresentations were corrected in early 2020 and that there was a corresponding drop in the share price. There had been conflicting evidence regarding whether the share price dropped due to reissuing the financial statements or because of the COVID-19 pandemic. The reasonable possibility threshold was met and the issue should be left for trial.
(3) Yes
The motion judge simply dismissed the certification motion on the ground that the test for leave to proceed on the misrepresentation claim was not met. The requirements for certification under s. 5(1) of the Class Proceedings Act were not addressed. Accordingly, the Court held that it would not be appropriate to decide this issue and that the
Paciocco J.A. (Motion Judge)
Counsel:
Keywords: Bankruptcy and Insolvency, Receiverships, Priority Dispute, Civil Procedure, Orders, Injunctions, Mareva Injunctions, Leave to Appeal, Stay Pending Appeal, Security for Costs, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-43, s. 193(e), 195, 243(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 101, Rules of Civil Procedure, R. 56.01, 60.12(c), 61.06(1)(b), Bankruptcy and Insolvency General Rules, C.R.C., c. 368, s. 31(1),
facts:
Trade
On
After receiving notice of TC's Mareva injunction, BCU arranged to use two of the mortgages as security for a post-Mareva debt to BCU that Mr. DM incurred. Mr. DM had written approximately
On
On
TC moved for an extension of time to appeal, leave to appeal, if necessary, and for stay pending appeal. BCU brought a cross-motion for security for costs.
issues:
(1) Does the BIA or the CJA govern TC's appeal?
(2) Is TC's appeal out of time, and if so, should relief be granted to TC, or should a declaration be made that TC's appeal is a nullity that does not stay the Order?
(3) Is TC's appeal as of right, or is leave required, and if so, should leave be granted?
(4) Should a stay pending appeal be applied?
(5) Should an order be made requiring TC to pay security for costs?
holding:
Motion for leave to appeal and stay pending appeal granted. Cross-motion for security for costs dismissed.
reasoning:
(1) The BIA applies.
The Court held that where a receivership order is made pursuant to both s. 243 of the BIA and s. 101 of the CJA, the more restrictive appeal provisions of BIA govern the rights of appeal. TC argued that the jurisdiction of the Court is governed by the substance of the order made. The Court stated that the test to be applied is whether the order under appeal is one granted in reliance on the jurisdiction of the BIA. It was clear that the Receivership Order in this case purported to direct a receiver, appointed pursuant to the authority of the BIA, in the management of the receivership. In other words, it was clear that the orders "substantively" engaged the receivership. The fact that TC's purported appeal also addressed orders governing creditors' rights issues relating to the distribution of the proceeds of sale did not change this. The BIA governs.
(2) No.
The Court held that when clarification of an order is required because the judgment is uncertain on an issue, it is reasonable to treat the date of the clarification as the date from which the appeal period begins. In this case, the Court found that there was no uncertainty with the order in question. Notwithstanding the Court's ruling that TC's appeal was out of time, the Court rejected BCU's request for a declaration that the appeal was a nullity. The implications of non-compliance with a procedural rule should turn on prejudice and broader interests of justice. BCU did not experience material prejudice because TC filed late.
The Court noted that granting the motion for an extension to file TC's appeal depended upon whether justice required it. The Court stated that the relevant considerations were: 1) whether TCF formed an intention to appeal within the appeal period; 2) the length of, and explanation for delay; 3) prejudice to BCU; and 4) the merits of the appeal. The Court was satisfied that TC formed an intention to appeal within the relevant appeal period, the delay was short and did not materially prejudice BCU and the proposed appeal had merit. The Court held it was in the interest of justice to grant an extension in this case.
(3) Leave was required and was granted.
TC argued that it was entitled to appeal as of right, pursuant to s. 193(c) of the BIA, which permits an appeal "if the property involved in the appeal exceeds in value
The Court granted TC leave to appeal, notwithstanding that it failed to seek leave until filing its Supplementary Notice of Appeal almost two months after the Final Distribution Order.
The Court noted that in considering to grant leave, the focus is on whether the proposed appeal: 1) raised an issue of general importance to the practice in bankruptcy/insolvency; 2) was prima facie meritorious; and 3) would unduly hinder the progress of the proceedings.
First, the parties knew of no authority addressing whether a party may enforce a judgment debt, thereby defeating the purpose of a Mareva Order, where that judgment debt arises from a transaction undertaken in breach of a Mareva Order. The Court was satisfied that this was an issue of general importance to the practice in bankruptcy/insolvency. For similar reasons, as well as the fact that BCU and its claims are arguably not legitimate, rendering it unable to enforce a judgment against assets otherwise subject to a Mareva Order, the Court held that TCF's appeal was prima facie meritorious. Lastly, there was no evidence that granting leave would unduly hinder the progress of the proceeding.
(4) Yes
The Court held that the appeal had merit and lifting the stay would render the appeal moot. The balance of prejudice favoured leaving the stay in force.
(5) No.
Rule 61.06(1)(b) authorizes the Court to make an order for security for costs that could be made against an appellant. However, a respondent in an appeal, such as BCU, may only rely upon Rule 61.06(1)(b) where it was not the applicant below, that is, the applicant in the proceeding where the Order was made that is the subject of the appeal. The Court explained that this limitation is intended to prevent imposing security for costs orders on impecunious parties who were forced into court. Although TC became a party because it took the initiative of objecting to the requested distribution order, it was responding to proceedings initiated by BCU. The Court held that a security for costs order against TC would not be fitting, nor in the interests of justice.
Wu v. Chen , 2022
Zarnett, Coroza and Favreau JJ.A
Counsel:
A. Ostrom, for the appellant
Keywords: Contracts, Debtor-Creditor, Promissory Notes, Damages, Interest, Interest Act, R.S.C. 1985, c.
facts:
After the breakdown of their equal partnership in a business, the appellant sought recovery from the respondents of debts he claimed were owed to him. The appellant's debt claim was on a series of promissory notes, some signed by respondent Q.C., and some signed by respondent B.C. The respondents denied the notes were authentic and alleged they were forgeries. They also denied that the appellant had advanced the funds the note indebtedness was said to represent. The respondents claimed to have made their own financial contributions to the business which negated or reduced the appellant's claimed over-contribution, which the appellant contested.
The trial judge found the appellant to be a credible witness. She found the evidence of the respondent Q.C. to be neither reliable nor credible, and that the evidence of respondent B.C. had to be approached "with caution", however, she was satisfied that he made financial contributions to the business that had to be deducted from the appellant's claim against him. She accepted that the promissory notes were genuine and had been signed by the respondents, represented funds the appellant had advanced, and were valid debts of the respondents. The appellant argued these findings were not open to the trial judge; that having accepted the appellant's evidence and found the notes to be genuine, she ought to have rejected the respondents' evidence, including that of contributions.
The appellant also argued that the trial judge erred in failing to award interest on all of the promissory notes at the rate of 18 percent per year from their dates. Some of the promissory notes provided for interest at 1.5 percent per month. They did not express the interest as an annual rate. For those, the trial judge held that the Interest Act, R.S.C. 1985, c.
Section 4 of the Interest Act provides that (except for mortgages) whenever interest is made payable by the terms of a written contract, and no statement of the equivalent yearly rate is stated in the contract, no greater rate is payable than 5 percent per year. The word "contract" in s. 4 of the Interest Act includes a promissory note:
issues:
(1) Did the trial judge err in her findings by accepting the respondent's evidence that there were financial contributions made by them in the business?
(2) Did the trial judge err in failing to award interest on all of the promissory notes at the rate of 18 percent per year from their dates?
holding:
Appeal dismissed.
reasoning:
(1) No.
The Court held that the finding of the trial judge that there were contributions by respondent B.C. was open to her, and was entitled to deference from the Court. Absent a palpable and overriding error, the Court cannot interfere with them: Housen v. Nikolaisen, 2002 SCC 33. The trial judge conducted an assiduous review of the evidence. It was open to her to accept the evidence of any witness in whole or in part. She gave reasons for accepting the evidence of B.C. that he had made contributions, noting that it found some support in customs and shipping documents, and invoices. She considered difficulties with the respondents' evidence but also noted there were difficulties with the appellant's accounting as well.
(2) No.
The Court held that the language of s. 4 of the Interest Act was directly applicable to the foundation of the debt on which the appellant claimed and on which the trial judge awarded judgment, namely, the promissory notes. The Court, however, noted that arguably, the trial judge should have limited interest after demand on these notes to no more than 5 percent per year, but any error in this regard ran in the appellant's favour.
The appellant argued the trial judge should have awarded interest on these notes at 18 percent per year, to give effect to the appellant's evidence that 1.5 percent per month was a customary rate in the region of
Di Santo v.
Gillese, Huscroft and Sossin JJ.A.
Counsel:
Keywords: Wills and Estates, Estate Trustees, , Civil Procedure, Order, Costs Order, Leave to Appeal, Stay Pending Appeal, Rules of Civil Procedure, r. 63.01(1),
facts:
The application judge ordered the removal of J. D. S., C. D.
J.D. S., C. D.
In the first motion, the Appellants sought a stay of the provisions in the Order that removed the named trustees and replaced them with
issues:
(1) Should the Appellant's motion for a stay of the provisions in the Order that removed the named trustees and replaced them with
(2) Should the second motion, brought by the Respondents, to lift the stay of the Costs Order be granted?
(3) Should the third motion, brought by the Respondents, to quash or stay the appeal be granted?
holding:
Appellants' motion granted. Respondents' motions dismissed.
reasoning:
(1) Yes.
In
The Court held that all three factors militated in favour of ordering the requested stay. On the first factor, the Court noted that removing a trustee whom a deceased has specifically chosen is a serious matter and is a serious issue to be determined on appeal. On the second factor, if the stay is not granted and the removal and replacement orders are overturned on appeal, the Estate, the
(2) No.
The Costs Order was automatically stayed by the filing of the appeal: Rules of Civil Procedure, r. 63.01(1). The Court saw no basis for lifting that stay.
(3) No.
The Respondents' motion to quash or stay the appeal was based on two grounds. First, it was submitted that the appeal must be quashed for lack of jurisdiction because the appeal route for the interlocutory parts of the Order was to the Divisional Court (and, in some instances, leave of that court is required). Second, the Respondent said that the Appellants "flagrant[ly]" disregarded the Order and their "wilful breach[es]" disentitle them to proceed with their appeal.
In responding to the first ground, the Court held that the Order relating to the removal and replacement of trustees are final in nature and, therefore, the Court had jurisdiction to hear them.
In responding to the second ground, the Court held that the Appellants had made all payments of money and support required by the Order. Further, they acted reasonably and promptly in respect of disclosure and passing of accounts. In the Court's view, there was nothing in the Appellants' conduct that disentitled them from proceeding with their appeal. Thus, the Respondents' motion to quash or stay the appeal was dismissed.
Gillese, Huscroft and Sossin JJ.A.
Counsel:
Keywords: Contracts, Real Property, Commercial Leases, Damages, Interest, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43 s. 127,
facts:
The appellant entered into a sub-tenancy agreement with the respondent,
issues:
(1) Did the motion judge err in finding there was no evidence to support the appellant's claim for loss of profit?
(2) Did the motion judge err by not enforcing the interest rate set out in the head lease with respect to the post-judgment interest?
(3) Did the motion judge err by awarding costs on a partial indemnity scale despite the higher costs scale set out in the head lease?
holding:
Appeal allowed in part.
reasoning:
(1) No.
The Court held that the motion judge carefully considered the matter and invited the appellant to address the calculation of damages for lost profits. In essence, the appellant relied on the difference between the rent RCCI owed under the lease and the amount it charged Pistachio as proof of loss of profits. The Court held that the motion judge was entitled to conclude that the appellant failed to establish that this disparity amounted to a loss of profits.
(2) Yes.
The Court held that the motion judge erred in declining to award post-judgment interest at the rate of interest set out in the head lease, namely, prime plus 5%. In the absence of exceptional circumstances, the appellant was entitled to interest at the rate set out in the head lease. The Court found that the motion judge provided no reasons for her decision not to give effect to the parties' agreement. Accordingly, the appellant was entitled to post-judgment interest at the rate of prime plus 5% per annum.
(3) Yes.
The Court noted that the motion judge found that the appellant's costs were reasonable but awarded them only on a partial indemnity basis. The Court further noted that the motion judge gave no reason for not enforcing the terms of the head lease, which clearly entitled the appellant to costs on a higher scale. Thus, the Court held that the appellant was entitled to costs of the appellant's summary judgment motion and dismissal of the respondents' action, which the Court fixed at
Bogue v Miracle, 2022
Doherty, Tulloch and Miller JJ.A
Counsel:
Keywords: Aboriginal Law, Contracts, Debtor-Creditor, Enforcement, Receiverships, Indian Property on Reserve, , Indian Act, R.S.C. 1985, c.
facts:
The appeal originated as a dispute between father and son. Both are Mohawks of the Bay of Quinte and thus qualify as Indians under the Indian Act. The initial dispute focused on the right to profits and ownership over an on-reserve business, Smokin' Joes.
The appellant father retained the respondent to act for him on the arbitration on a contingency fee basis. The respondent is not an Indian for the purposes of the Indian Act. The contingency agreement stipulated that the respondent would receive 25 percent of any amount awarded in the arbitration. The arbitrator ultimately awarded the appellant over
The appellant has only paid the respondent
The appellant appealed the order of the application judge on the ground that the order contravened s. 89 of the Indian Act, which prohibits the enforcement by anyone who is not an "Indian or a band" against the assets of an Indian situated on a reserve. The appellant argued that since the respondent is not an Indian for the purposes of the Indian Act, this section prevented the receiver from seizing the proceeds of the appellant's businesses. The Court determined that this was a threshold issue which needed to be decided before an appeal could be heard. The Court directed that the matter be returned to the application judge. On
The application judge reviewed s. 89 of the Indian Act and drew, in part, upon
issues:
(1) Are the actions of the Receiver covered by s. 89 of the Indian Act?
(2) Is there a "commercial mainstream" exception to s. 89 of the Indian Act?
(3) Are the appellant's on-reserve businesses "situated on reserve"?
(4) Did the appellant waive his s. 89 rights under the Indian Act?
holding:
Appeal allowed.
reasoning:
(1) Yes.
The Court held that while s. 89 does not expressly refer to receiverships, it does reference seizures and restraints of property, which captured the substance of the current order under appeal.
(2) No.
The application judge interpreted McDiarmid Lumber to find that s. 89 did not extend to "contractual arrangements in the commercial mainstream that amount to normal business transactions". The appellant's business was therefore open to the receiver to take control of and recoup profits from. However, the Court held that the application judge committed a reversible error by inaccurately relying on a summary of the jurisprudence on s. 89. While the
The Court noted that the application judge misinterpreted
The Court concluded that, apart from the case law, nothing in the language of s. 89 offered support for a broad "commercial mainstream" exception. S. 89 draws distinctions between: (1) the property of an Indian or band, and the property of others; (2) property located on, and off, reserve; and (3) execution-type measures taken by Indians or Indian bands, and those taken by everyone else. Foreclosing commercial property located on reserve from s. 89 would undermine both the text and purpose of the provision.
(3) Yes.
The Court held that the locations of the appellant's businesses were "objectively easy to determine". The appellant's businesses were firmly located on the Tyendinaga Mohawk Territory and owned by the appellant, who is an Indian within the meaning of the Indian Act. As such, neither property is "subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a band". Thus, the Court concluded that the respondent's receiver, acting on behalf of a creditor who is not an Indian for the purposes of the Indian Act, cannot recoup profits from the appellant's on-reserve businesses.
(4) No.
The respondent cited Tribal
SHORT CIVIL DECISIONS
2748355
Counsel:
Keywords: Contracts, Insurance, Coverage, Civil Procedure, Parties, Procedural Fairness
Counsel:
Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Summary Judgment
Downey v. Arey, 2022
Feldman, Hoy and Lauwers JJ.A.
Counsel:
Keywords: Wills and Estates, Contracts, Real Property, Agreements of Purchase and Sale of Land, Fundamental Terms
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.
Mr
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