Law Times

Law times • OctOber 5/12, 2009 ventures with individual A.B., a long-term colleague and friend. A.B. was in financial difficult- ly and asked M.V. to acquire one-half of his 10% interest in two projects in exchange for $270,000, being one-half of A.B.'s apparent investment in projects. A.B. held no interest in either project personally, but through separate corporations. Without any due diligence by M.V., moneys were advanced to A.B. personally, but transactions neither documented nor was M.V. ever recorded as holding any interest. A.B.'s interest was not in fact transferable under terms of joint venture. A.B. sub- sequently went bankrupt. M.V. made no claim in A.B.'s bank- ruptcy or against either of A.B.'s corporations. Appeal denied. M.V. knew he was receiving no legally recognized interest in ei- ther project. No prior consider- ation had been given to nature of arrangement until after A.B.'s bankruptcy. M.V. had not dem- onstrated that he realized loss arising from real estate business development activities properly characterized as non-capital loss or business loss on income ac- count. Vanlierop v. Canada (Aug. 18, 2009, T.C.C., Boyle J., File No. 2006-1215(IT)G) Order No. 009/239/040 (8 pp.). ONTARIO CIVIL CASES Bankruptcy And Insolvency ASSIGNMENTS Assignment during matrimonial dispute did not amount to abuse of process Application by wife for annul- ment of husband's assignment in bankruptcy. While in middle of matrimonial dispute, husband made assignment in bankrupt- cy. Wife sought annulment so that husband's interest in mat- rimonial home would be avail- able to satisfy whatever order for equalization of net family prop- erty may be made. Application dismissed. Assignment did not amount to abuse of process or that husband intended or com- mitted fraud on his creditors including wife. There were no orders that husband was seeking to avoid at time of assignment. Terry (Re) (Aug. 19, 2009, Ont. S.C.J., Gans J., File No. 31-1081485) Order No. 009/236/096 (9 pp.). Civil Procedure AFFIDAVITS Affidavit did not comply with rule 39.01(4) of Rules of Civil Procedure (Ont.) Defendants sought order strik- ing out affidavit of private in- vestigator filed by plaintiff as part of motion for leave to plead cause of action in Part XXIII of Securities Act (Ont.). Private investigator had no personal knowledge of information con- tained in affidavit and relied on information gathered from witnesses. Informants were not always speaking from personal knowledge. Affidavit indicated information came from five former employees and disclosed extensive information about five employees. Affidavit set out grounds for private investiga- tor's belief five confidential in- formants were telling truth. Af- fidavit was struck with leave for plaintiff to file proper affidavit material. Affidavit did not com- ply with rule 39.01(4) of Rules of Civil Procedure (Ont.). Infor- mation outlined in affidavit was contentious. Affidavit did not provide source of information. Information about informants did not allow informants to be examined as witness. Private investigator did not provide as- surance of confidentiality to in- formants. Five informants con- veyed information without any expectation of privacy. Affidavit was replete with hearsay and double hearsay. Five informants were real deponents. Metzler Investment GMBH v. Gildan Activewear Inc. (Aug. 7, 2009, Ont. S.C.J., Leitch R.S.J., File No. 58574 CP) Order No. 009/230/079 (14 pp.). CERTIFICATE OF PENDING LITIGATION Discharge of certificate was just and fair Plaintiff sold shares in certain company to two of defendants. Financial obligations of pur- chasers were secured by way of second mortgages against two real properties, including 1526 Merivale Road, owned by com- panies controlled by individual defendants. Certificate of pend- ing litigation was issued and registered at request of plain- tiff. Parties referred dispute to arbitration. Arbitrator released award adverse to plaintiff. Plain- tiff appealed award. Defendants brought motion for order dis- charging or vacating certificate registered against 1526 Merivale Road. Discharge was made con- dition by potential lender of de- fendants for planned refinancing arrangement. Motion allowed. Discharge was just and fair to parties under circumstances. Security represented by other property of defendants was suf- ficient to cover claim of plaintiff should latter succeed on appeal. Certificate of pending litigation ordered vacated. Judge however required firm agreement on refi- nancing in place as prerequisite for registration of order of dis- charge on title covering 1526 Merivale Road. Demers v. Desrochers (Aug. 6, 2009, Ont. S.C.J., Power J., File No. 08-CV-40613) Order No. 009/223/028 (15 pp.). CLASS ACTIONS Settlement of class proceeding was approved Plaintiff's application for ap- proval of settlement of class pro- ceeding. Underlying action arose from allegation that hospital S.'s equipment used in trans rectal ultra sound prostate biopsies had not been adequately disinfected, with result that 913 patients ex- posed to risk of Hepatitis B and C and HIV infection. Claims based on psychological distress associated with risk of infection. With one possible exception, no CASELAW class member infected. Proposed settlement created $1,200,000 fund. Members of patient class to receive minimum payment of $943. Members of spousal class to receive approximately $100. $360,000 allocated for counsel fees, $42,000 to Ministry of Health related to health care ex- penses, and $30,000 for each of loss of income claims and settle- ment administration. Single ob- jection filed by R.T., infected by unknown virus, though source of infection unknown. RT not opposed to settlement generally, but as applied to him person- ally. Application allowed. Settle- ment fair, reasonable, creative and socially responsible, and in class' best interest. R.T.'s objec- tion insufficient to justify rejec- tion where: R.T. could in light of personal circumstances have opted out of class, but did not; not clear that R.T.'s infection attributable to actions at issue, and therefore potentially not barred by settlement, and; even if infection caused by actions at issue, terms of settlement including loss of income claim were fair and reasonable. Farkas v. Sunnbrook & Women's College Health Sciences Centre (Aug. 25, 2009, Ont. S.C.J., Perell J., File No. 03-CV- 259655CP) Order No. 009/239/026 (12 pp.). DEFAULT Defendants did not present evidence demonstrating arguable defence on merits Motion by defendants to set aside default judgment. State- ment of claim had been served on defendant November 29, 2007. On December 21, 2007 plaintiff's counsel had sent de- fendant e-mail advising that if response to proposal was not delivered by January 7, 2008 ac- tion would be taken to note de- fendant in default. On January 3, 2008 plaintiff's counsel asked defendant when they could ex- pect his statement of defence. On February 25, 2008 plain- tiff's counsel sent defendant e- mail indicating that defendant would be noted in default if matter was not resolved and on March 3, 2008 plaintiff's coun- sel informed defendant that un- less he filed defence by March 10, 2008 he would be noted in default. Defendant contended that nore obligation of defendants to file defence that his default was intentional. On motion to set aside default judgment court must take hard look at merits and assess whether moving par- ties had established arguable de- fence. Here defendants did not file draft defence and affidavit set out defence in inconsistent and unclear terms. Accordingly defendants did not put before court evidence demonstrating arguable defence on merits. Chronology of events revealed that defendants were well aware of need to reach agreement with plaintiff or file defence. They ignored clear warnings by plain- tiffs' counsel that they would be noted in default if they did not file defence by specific date and only came to life again when plaintiff took steps to enforce judgment. It was not in interests of justice to set aside default. Hanratty v. Woods (Aug. 20, 2009, Ont. S.C.J., Brown J., File No. 07-CV-344429SR) Order No. 009/236/092 (4 pp.). PLEADINGS Right of amendment does not encompass adding new claims after expiry of limitation period Motion by plaintiff to amend statement of claim against de- fendant physician to allege that he performed surgical procedure on her that was not within ambit of written consent and to allege that defendant's failure to secure her informed consent amounted to battery in law. Plaintiff had issued statement of claim June 19, 2006 alleging that on March 24, 2005 defendant performed gynecological surgery upon her to remove tumour from her ovary and had also performed bi-lateral oophorectomy. Plain- tiff alleged that as result she suf- fered post-operative infection that necessitated re-admission following service he en- gaged in discussions with plain- tiff and his counsel and had mistakenly thought matter had been resolved and did not real- ize until December 2008 that he had confused sequence of events in his mind and believed that plaintiff was not pursuing claim. Defendants learned of default judgment on December 18, 2008 when former employ- er was served with notice of gar- nishment. Defendant filed mo- tion to set aside default January 29, 2009. Motion dismissed. While defendants moved with dispatch to set aside default judgment court rejected defen- dant's explanation that he had confused sequence of events and mistakenly concluded that plaintiff was not pursuing claim. Court concluded that defendant had decided to ig- www.lawtimesnews.com to hospital and further surgical intervention. Claim was framed in negligence alleging that de- fendant failed to take all reason- able care during surgical proce- dure. Battery was not alleged as cause of action in original state- ment of claim. Defendant re- sisted amendment of statement of claim on ground that pro- posed amendment added new cause of action that was statute- barred. Defendant submitted that limitation period expired at latest on June 19, 2008, two years after issuance of statement of claim. Motion dismissed. While Rules of Civil Procedure (Ont.), generally allow for wide scope of amendment of plead- ings, including at trial, this right of amendment does not encom- pass adding new claims after expiry of limitation period. In those circumstances some prej- udice is presumed. Pleading of battery is separate and distinct tort from negligence and test for battery is distinct from test for negligence. Plaintiff sought to raise new cause of action in bat- tery and as to informed consent after expiry of limitation period. She was aware of facts that gave rise to such claim but did not include them in her original statement of claim issued before expiry of limitation period. De- PAGE 21 fence was prejudiced by plaintiff raising new cause of action after expiry of limitation period that expanded scope of potential li- ability. Goodship v. Hergott (Aug. 19, 2009, Ont. S.C.J., Pierce R.S.J., File No. 23697/06) Order No. 009/236/094 (7 pp.). Conflict Of Laws FOREIGN JUDGMENTS Enforcement of United States judgment would not have been precluded on public policy grounds Motion by plaintiff for partial summary judgment enforcing judgment obtained in United States. Cross-motion by defen- dants for order staying part of action based on abuse of pro- cess or lack of standing. Plaintiff was United States Federal Trade Commission. Defendants were various individuals and compa- nies who operated lottery ticket resale businesses from Ontario. Defendants believed their resale service was lawful and did not intend to engage in unlawful conduct. Plaintiff erroneously believed defendants were among group of perpetrators who oper- ated fraudulent telemarketing scheme that targeted American citizens. Plaintiff commenced proceedings against defendants in United States. Plaintiff suc- cessfully brought ex parte mo- tions in Ontario for Mareva injunction and Anton Piller order and provided undertak- ings regarding damages. De- fendants' businesses were effec- tively shut down and they were unable to conduct full defence in United States proceeding. Plaintiff commenced purported representative action in Ontario against defendants for relief on behalf of United States residents who paid money to defen- dants. Defendants successfully brought motion for order set- ting aside ex parte orders. Plain- tiffs were found not to have had basis for their allegations against defendants. Plaintiff obtained judgment against defendants in United States proceeding based on deceptive sales practices. Plaintiff amended statement of claim in Ontario to include enforcement of United States judgment. Motion dismissed; cross-motion granted in part. Defendants established genuine issues for trial. While proceeding in United States provided rea- sonable procedural safeguards, defendants were apparently de- nied meaningful opportunity to be heard based on manner in which plaintiff proceeded. Genuine issues existed as to whether defendants were in fact denied meaningful opportunity to be heard and whether this might qualify as new defence to United States proceeding. Fact that some documents used by plaintiff in United States pro- ceeding were obtained under ex parte orders was not significant. Documents would have been available to plaintiff pursuant to defendants' discovery obliga- tions. Enforcement of United States judgment would not have been precluded on public policy grounds since it was in nature of restitutionary judgment and

• Cover
• New Mentoring Program
• Withdrawal
• Focus On Litigation