Law Times

Page 14 June 22, 2015 • Law Times www.lawtimesnews.com August 1, 2013. Trustee brought motion for declaration that bankrupt's transfers of prop- erty to his children for nominal or no consideration on August 23, 2010 and April 2, 2012 were void against trustee pursuant to s. 96 of Bankruptcy and In- solvency Act (Can.), or alter- natively, for judgment against three children of bankrupt in amount of $150,000 or for value of trustee's interest in property. Motion granted. Transfers to children were done in face of significant legal proceedings and threatened proceedings. Consideration was inadequate. Bankrupt retained one percent interest in property following August 23, 2010 transfer. Bank- rupt continued to pay mortgage and carrying costs for prop- erty after transfer. Bankrupt purchased property on April 6, 2010 beneficially and not in trust for two of his children. Further, his transfer of 99 per cent interest in property to Au- gust 23, 2010, and subsequent transfer of his remaining 1 per cent interest on April 2, 2012 were for undervalue and done with intent of defeating credi- tor. Pursuant to s. 96 (1)(b) of Act, transactions were void against trustee. Motion judge declined to make order against children. Rehman, Re (Apr. 10, 2015, Ont. S.C.J. [Commercial List], L.A. Pattillo J., File No. 32-1774657) 252 A.C.W.S. (3d) 401. Conflict Of Laws JURISDICTION Ontario had closest connec- tion to contract action and was appropriate forum Plaintiff was business incorpo- rated in Ontario with head of- fice in Toronto, and defendant was business incorporated in Wisconsin with head office in Wisconsin. Plaintiff brought action to collect royalty pay- ments it claimed were due and owing under parties' contract and sought accounting of all of defendant's net sales, alleg- ing it failed to provide accu- rate accounting as required by license agreement. Motion by defendant for order dismissing or staying action on basis court lacked jurisdiction simpliciter or was not convenient forum. Motion dismissed. Defendant clearly carried on business in Ontario, where it had actual physical presence, advertised, and sold products directly re- lated to calculation of royalty payments in dispute. Rebut- table presumption of jurisdic- tion applied and defendant failed to rebut. Subject matter of litigation was directly related to monies made through defen- dant's worldwide sales, which included those in Ontario. On- tario had closest connection to action and was appropriate fo- rum. License agreements were signed by parties in Ontario and Wisconsin, plaintiff planned to call Ontario witnesses while de- fendant did not provided spe- cifics about intended witnesses. There was no ongoing litigation in Wisconsin to which this ac- tion could be joined and no evidence in record regarding why Wisconsin law would ap- ply so presumption was court would apply lex fori. While pre- amble to original agreement stated it was entered pursuant to Wisconsin law, more recent agreement and amendment contained no forum selection clause, and Ontario could apply foreign law anyway. Defendant did not meet burden to displace plaintiff 's choice of forum. Orthoarm Inc. v. American Orthodontics Corp. (Mar. 30, 2015, Ont. S.C.J., Firestone J., File No. CV-14-511682) 252 A.C.W.S. (3d) 441. Corporations DIRECTORS Defendant liable for pay- ment of default judgment against corporation Plaintiff had obtained default judgment against corporate defendants, but had been un- able to recover. Plaintiff 's claim against respondent defen- dant was for repayment of US $1,000,000 debt and interest of $400,000, with liability arising from his alleged agreement to repay or by piercing the cor- porate veil. By means of defen- dant's representations, plain- tiff agreed to invest in energy project by way of US $1,000,000 loan, structured as convert- ible debenture: upon maturity, plaintiff had option of repay- ment with 30 per cent inter- est or converting investment to shares. Defendant directed funds to account controlled by corporate defendant, which he admitted was a shell and he per- sonally and totally controlled funds. Issues arose on project and parties agreed to exten- sion of one month with interest rate increased to 40 per cent. Plaintiff sent over 20 emails to defendant confirming terms of revised agreement and repay- ment obligations but he chose not to respond, other than sending text acknowledging he would make partial repayment of $700,000, though he did not repay anything, ignored repay- ment demands and now denied all liability. Motion by plaintiff for summary judgment of US $1.4 million. Motion granted in part. Defendant offered no credible evidence to address plaintiff 's allegations or explain his bald denials and some of his denials were contradicted by his own admission he received emails confirming he would cause $1.4 million to be repaid and his text message assuring he would repay $700,000. While loan agreement and debenture were not entered with defen- dant personally, and he did not execute guarantee, evidence es- tablished loan proceeds of US $1 million were transferred to company he controlled and had since disappeared without ex- planation. However, as defen- dant was not signatory or party to debenture, evidence fell short of establishing with necessary clarity that he had agreed to be responsible for repayment of interest provided for. Summary judgment for US $1 million granted against defendant but his personal liability for interest was a triable issue. Irani v. Cheung (Mar. 24, 2015, Ont. S.C.J., Stewart J., File No. CV-13-494071) 252 A.C.W.S. (3d) 472. Employment WRONGFUL DISMISSAL Program director failed to establish constructive dismissal arising from change of duties Employer was regional health service. Employee was nurse who worked her way up to one of seven health program direc- tor (HPD) positions. HPD's du- ties changed on ongoing basis. Employee took on interim posi- tions as vice president in 2005 and 2008. Employee's duties changed again when returned to HPD position in September 2010. In March 2011, employee was advised of another change in duties relating to opening of new hospital. Employee found this change upsetting and went on sick leave. Discussions ensued to clarify employee's role. Employee took summer months to consider her posi- tion and take care of her health. Employee advised employer in July 2011 that she considered herself to have been construc- tively dismissed. Employer advised in August 2011 that it disagreed and that employee's position was still available. Employee resigned after her sick leave expired in September 2011. Employee brought ac- tion against employer for dam- ages for constructive dismissal. Action dismissed. Employee failed to establish constructive dismissal. Evidence confirmed employee and other HPDs necessarily operated in envi- ronment of change because of nature of hospital services be- ing provided to community. Prior to March 2011, everyone within healthcare system un- doubtedly knew huge change in operations was coming because of construction of new hospital. Employer's intention and obli- gation to get things right during and after transition was clear. Employee failed to establish there was abusive behaviour that made her working condi- tions intolerable so as to con- stitute grounds of constructive dismissal. Evidence established employee was treated with ci- vility, respect, and dignity at all times. There was no reason why good working professional relationship could not have continued. Employee would have maintained her same sal- ary and benefits and title as HPD, and even her own office if she wanted. Employee's status would have been enhanced by her starting to report to chief planning officer. This change in reporting ref lected high impor- tance of employee's job func- tions. Employer had right to make reasonable reassignment of employee to other duties. Bolibruck v. Niagara Health System (Mar. 3, 2015, Ont. S.C.J., Nightingale J., File No. 53325/11) 252 A.C.W.S. (3d) 476. Evidence OPINION EVIDENCE Doctor's reports showed advocacy Plaintiffs claimed damages for burns suffered as result of ex- plosion. On fifth day of trial photographs of burns taken on plaintiff 's admission to hos- pital surfaced for first time. Defendants consented to pho- tographs being shown to jury. Defendants took position that doctor should not be allowed to modify his opinion based on photographs. Ruling was made that doctor could review photographs and deliver new reports. Plaintiffs wished to call doctor to give expert evi- dence. Defendants now object- ed to doctor giving evidence at all asserting that he breached duty as expert, was biased and should be disqualified. Doctor was allowed to testify, but was to confine his observations, analysis and opinion to mat- ters there were within his area of expertise. Doctor was not to make personal comments about plaintiffs' conditions and circumstances and was to refrain from using inf lamma- tory language. Substance of doctor's opinions on issues on which he was qualified to give evidence was not affected by his desire to advance plaintiffs' cases. Doctor's reports showed advocacy. Language in quota- tions was objectionable because it was inf lammatory and was used to evoke strong feelings in reader. Doctor purported to make findings of fact that were outside of his area of expertise. Doctor speculated in reports. It was not doctor's job to sum- marize medical records except as might be relevant to giving his opinion. Doctor used infor- mation selectively highlighting portions he thought were fa- vourable to plaintiffs' case and leaving out portions he thought were otherwise. Lane v. Kock (Jan. 4, 2015, Ont. S.C.J., Bale J., File No. 116/08) 252 A.C.W.S. (3d) 484. Family Law CUSTODY Child would likely suffer harm if returned to father in Jordan Parties were married, sepa- rated and divorced in Jordan. Father opposed residence of nine-year-old child and mother obtained custody order over her in Jordan. Parties all came to Canada in 2013, after di- vorce, and mother decided to stay. Father returned to Jordan with two children, including youngest, without mother's knowledge or consent and when mother retrieved her and brought her back to Canada, fa- ther filed complaint in Jordan seeking child's return. Mother then commenced application here for custody, support and equalization of property. Mo- tion by father for judicial stay on basis court lacked jurisdic- tion over custody issue. Motion dismissed. Mother commenced application three months af- ter returning to Canada with child; prior to that, they had lived in Jordan since 2009, so child was habitually resident in Jordan. However, it was ap- propriate for court to exercise jurisdiction considering factors in s. 22(1)(b) Children's Law Reform Act (Ont.). Child was physically present in Ontario when application commenced, mother lived here with three children and all told OCL they wanted to stay here, there were no pending applications for custody in Jordan and no extra provincial court orders, virtu- ally all witnesses lived in On- tario and Jordanian law did not recognize best interests of child as paramount, child was born here and had extensive family and friends here. Child would likely suffer harm if returned to father in Jordan given father's history of corporal discipline against children and assaults against mother, psychological impact of separating child from mother and siblings, and fact mother would likely be arrested if she returned to Jordan, due to father's complaint. Mother granted interim custody. Matrook v. Bani-Ahmad (Mar. 13, 2015, Ont. S.C.J., Andre J., File No. FS-14-1414-00) 252 A.C.W.S. (3d) 499. Planning DEMOLITION PERMIT Corporation knew or ought to have known that demoli- tion permit not valid Respondent corporation took down its building without de- molition permit, contrary to court order. Applicant munici- pality applied for order finding corporation in contempt and it requested order to enforce emergency order that required corporation to remediate land. Application granted. Corpora- tion was found in contempt of court. Contrary to court order, corporation hired company to demolish building without first obtaining demolition permit. Nothing in evidence or Busi- ness Corporations Act (Ont.), supported argument that cor- poration had reason to believe that demolition permit that was issued to it in 2012 was reinstat- ed upon revival of corporation. Corporation knew or ought to have known that demolition permit issued in 2012 was not valid and it was not entitled to rely on that permit when it di- rected company to demolish building. Court order was clear and unequivocal that corpora- tion must obtain demolition permit if it wanted to demolish building and comply with all requirements of chief building officer and legislation. Cor- poration deliberately chose to ignore order or was willfully blind to legal effect of reviving CASELAW

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