Law Times

Law Times • SePtember 1, 2014 Page 15 www.lawtimesnews.com setting aside default judgment. Motion judge did not fail to give adequate weight to unexplained delay and prejudice to plaintiff. Motion judge made no error in law or principle, no palpable or overriding error of fact and deci- sion was not so clearly wrong as to amount to injustice. However, motion judge erred in making final determination of merits of defendant's defence. Defendant's motion sought to set aside de- fault judgment. Motion did not seek determination of whether defence should succeed if there was arguable defence. To move from finding arguable defence to final determination was not just result. Appropriate remedy was to set aside default judgment in part and order that matter pro- ceed on issue of interest. Mountain View Farms Ltd. v. McQueen (Mar. 14, 2014, Ont. C.A., E.E. Gillese J.A., Paul Rou- leau J.A., and M. Tulloch J.A., File No. CA C56832) Decision at 227 A.C.W.S. (3d) 969 was re- versed. 239 A.C.W.S. (3d) 635. Corporations WINDING UP Behaviour was not so serious as to justify winding up of company Parties were all family and ex- tended family members. Parties were shareholders of numbered company that was incorporated in 1990 to enable acquisition of investment property by original investors. Applicants were ma- jority shareholders of company. Since 2003, relations among parties began to become more difficult as regards operation of business and other matters. Ap- plicants alleged that they had now been precluded from ob- taining any information about business, that respondent in- dividual had failed to disclose financial and other information about operation of business, had failed to call sharehold- ers meetings since 2006, had obtained and used pre-signed blank cheques from applicant, had misused them and had misappropriated funds. Appli- cants sought orders, including removal of respondent indi- vidual as director, repayment by respondent individual of misap- propriated funds, full disclosure of all financial and corporate books and records, accounting of all finances of company, and winding up of company with sale or court imposed buy-sell process. Application allowed in part. Evidence did not support applicants' assertions that their reasonable expectations were vi- olated by conduct falling within terms oppression, unfair preju- dice or unfair disregard of rel- evant interests. While court was satisfied that that there had been disaccord, mistrust and some unco-operative and unbusiness- like behavior on parts of various shareholders, it was not of view, that such behaviour was so op- pressive, unfairly prejudicial or so serious as to justify winding up of company. However, there was to be full disclosure of all business records, financial state- ments, banking records from all banks used by company from 2008 to present, within 30 days. ereaer, shareholders meet- ing was to be held on annual basis. Papais v. Moretto (Mar. 27, 2014, Ont. S.C.J., Carole J. Brown J., File No. CV-13-480434) 239 A.C.W.S. (3d) 639. Damages MALICIOUS PROSECUTION Complainant using criminal charges to gain advantage in civil suit Plaintiff was senior account executive at company and was married with two children. De- fendants resided across street and to south of plaintiff 's prop- erty. Defendants owned proper- ty that was adjoined to plaintiff 's property by party wall. Plaintiff had extensive renovations done on home and replaced chain link fence with wood fence. Plaintiff obtained permits and party wall agreement. Defendants agreed to fence as long as it was placed in same location as chain link fence. Relationship between neighbours deteriorated and there was much tension. ere were several incidents between neighbours in which police were called. Plaintiffs commenced proceeding for determina- tion of boundaries. Defendant privately laid charges against plaintiff. Plaintiff was charged with mischief by spraying de- fendants with water by using garden hose and for knowingly uttering death threat to defen- dants. Following pre-enquette Crown withdrew charges on the ground that it appeared that complainant was using crimi- nal charges to gain advantage in civil suit between parties. Only plaintiff 's immediate family, and immediate supervisor knew of charges. Plaintiff brought ac- tion for malicious prosecution and sought damages. Claim al- lowed. Plaintiff established ma- licious prosecution and was en- titled to damages of $44,712.40 forthwith. Proceedings were concluded in plaintiff 's favour. Allegations were not founded in honest belief in guilt of plaintiff and such belief was not reason- able in circumstances. Reason- able and probable cause was ab- sent. Attempting to gain private collateral advantage in civil suit proceeding against defendants could be seen as abuse of pro- cess. Plaintiff would not suffer significant ongoing injury to his reputation or dignity as result of private information charges laid. ere was emotional impact on plaintiff as result of prosecution. Ferreira v. Marcos (Mar. 31, 2014, Ont. S.C.J., Carole J. Brown J., File No. CV-12-449625) 239 A.C.W.S. (3d) 810. Expropriation VALIDITY Defendant expropriated lands for valid public purpose and with approval Defendant purchased 27 par- cels to provide for development of Toyota plant. Defendant was unable to negotiate purchase of last parcel and expropriated plaintiff 's land. Aer expropri- ate defendant transferred 1,000 acres of lands to Toyota for same price defendant offered to pay for lands pursuant to Expropria- tions Act (Ont.). Toyota built plant on 1,000-acre site. Plaintiff did not accept offer of $4.2 mil- lion in compensation for expro- priated land. Plaintiff alleged transfer of lands to Toyota was unlawful and without jurisdic- tion because it conferred bonus on Toyota at expense of plaintiff contrary to s. 106 of Municipal Act, 2001 (Ont.) (MA). Parties presented questions for court to answer. Defendant had lawful authority to expropriate lands for purposes set out in bylaw, which included transferring lands to Toyota for proposed develop- ment of plant. Defendant expro- priated lands for valid public pur- pose and with approval. Bylaws and agreements they approved dealt with matters within defen- dant's jurisdiction. Expropriation and later sale of land did not con- fer obviously undue advantage on Toyota contrary to s. 106(1) of MA. Vincorp Financial Ltd. v. Oxford (County) (Apr. 30, 2014, Ont. S.C.J., C. Horkins J., File No. To- ronto 05-CV-301179 PD3, 05- CV-301154 PD3) 239 A.C.W.S. (3d) 661. Family Law PROPERTY Family trust was not designed for any purposed associate with marriage of husband Parties were married for 16 years. Husband's father settled trust for benefit of husband and siblings and common shares with nominal value were issued to trust for benefit of husband and siblings. Husband was one of trustees of trust. Aer parties separated trust was wound up because it was in existence for 21 years. Husband was given shares worth $3.2 million. Dur- ing marriage husband got US $1.2 million gi from family member. Husband invested US $1 million by way of sharehold- er loan to numbered company for land development in United States, which went bankrupt in 2008. Trust caused one of companies to amalgamate with numbered company and pay out loans. Wife sought equal- ization. Application dismissed. Value of trust was not property and was not to be included in husband's net family property. Husband had no present or fu- ture vested or contingent inter- est in trust until aer marriage ended. Family trust was not designed for any purpose as- sociated with marriage of hus- band. Husband had no legal or practical right to assets held by trust until they were distrib- uted, which occurred aer end of marriage. Fact that company amalgamated with numbered company and took on its debt was sufficient to establish that amounts could be directly traced to US $1.2 million gi. Howe v. Howe (Apr. 28, 2014, Ont. S.C.J., J.A. Ramsay J., File No. St Catharines 163/12) 239 A.C.W.S. (3d) 707. SUPPORT Consequences of husband's conduct disrupted wife's ability to support herself Parties developed very success- ful real estate business during marriage. Husband was charged with sexual assault of female employee. Parties separated and husband immediately took steps to exclude wife from home and business. Husband's criminal trial was very public and he was convicted. Impact of conviction and publicity remained impedi- ment to husband's financial suc- cess. Wife did not return to real estate, but devoted time to build- ing woman's clothing business. Wife applied for spousal sup- port. Trial judge found that wife was not entitled to ongoing sup- port, but that she was entitled to transitional amount because of husband's actions following separation. Trial judge awarded lump sum spousal support of $200,000. Husband appealed. Appeal dismissed. Lump sum award incorporated elements of compensatory, non-compen- satory and retroactive support and accorded with principles mandated by s. 15 of Divorce Act (Can.). Trial judge balanced objectives of support with view to self-sufficiency of wife and award included compensatory support for economic disad- vantage wife suffered as result of marriage and its breakdown and non-compensatory support as result of economic hardship arising from breakdown of mar- riage. Trial judge was justified in exercising discretion and award- ing lump sum support. Trial judge did not misapprehend evi- dence or commit error in prin- ciple. Spousal support award was not so high that it warranted appellate interference. Conse- quences of husband's conduct ended financial success of busi- ness and disrupted wife's abil- ity to financially support herself. ere was no basis to interfere with lump sum support award. Racco v. Racco (Apr. 28, 2014, Ont. C.A., E.E. Gillese J.A., Glo- ria Epstein J.A., and M.L. Ben- otto J.A., File No. CA C56694) Decision at 226 A.C.W.S. (3d) 805 was affirmed. 239 A.C.W.S. (3d) 710. Judgments and Orders RES JUDICATA There was never any adjudication on merits of action for damages Plaintiffs engaged defendant to provide accounting services. Defendant commenced action against corporate plaintiffs for outstanding fees. Parties en- tered into minutes of settlement. Settlement included broadly worded mutual release signed by parties. Plaintiffs discovered defendant's representations that transaction should be structured on tax-free basis were misrepre- sented. Plaintiffs engaged tax lawyer to bring application to rescind transactions. Plaintiffs brought action seeking legal and accounting fees paid to rescind transactions proposed by de- fendant. Action was founded on breach of contract, professional negligence and misrepresenta- tion. Plaintiffs sought order set- ting aside release. Defendants brought motion for summary judgment asserting action was res judicata. Motion dismissed. Action was not barred by previ- ous matter and release. Doctrine of res judicata did not apply. Plaintiffs raised serious triable issues that required trial. Re- lease referred to claims existing to present time, and there was no basis for plaintiffs to have as- serted claim in fees action at rel- evant time. ere was never any adjudication on merits of action for damages. Standard release in fees action could not be read broadly to cover circumstances. Action was separate and distinct cause of action unknown at time of release and unrelated to issue of disputed fees claimed by de- fendants. Claim had merit. Biancaniello v. DMCT LLP (Apr. 23, 2014, Ont. S.C.J., Chapnik J., File No. CV-12-453362) 239 A.C.W.S. (3d) 749. Mortgages DEFAULT At all times defendant was fully aware of second mortgage Defendant had number of mortgages on what was once matrimonial home of defen- dant and his wife. Mortgages were in default. Defendant, neighbour and principal of plaintiff agreed that plaintiff would purchase existing mort- gages at discount; exercise pow- er of sale under first mortgage; sell property to neighbour; and defendant would live in home as tenant of neighbour. Neigh- bour arranged first mortgage which le shortfall and plaintiff agreed to provide second mort- gage. Transaction closed. Mort- gages went into default. Plain- tiff took assignment of first mortgage and sought to enforce both mortgages against neigh- bour and defendant. Defendant asserted second mortgage was not binding on him alleging second mortgage was executed without his knowledge. Prop- erty was sold and funds were held in trust pending outcome of litigation. Funds held in trust belonged to plaintiff. Second mortgage was binding on de- fendant. At all times defendant was fully aware of second mort- gage. In e-mail correspondence between defendant and prin- cipal of plaintiff aer second mortgage went into default, de- fendant behaved as if he knew all about mortgage and assured principal that it would be paid. Whether true owner of proper- ty was neighbour or defendant, mortgage was binding and en- forceable. Winchester Financial Corp. v. Ruggier-Casselman (Apr. 29, 2014, Ont. S.C.J., Gray J., File No. 185/10, 2317/11) 239 A.C.W.S. (3d) 767. LT CASELAW

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