Every week, Bell Temple LLP selects and reports on interesting and relevant decisions from the Ontario Superior Court of Justice, Ontario Court of Appeal, and Supreme Court of Canada.
This week’s case reports are written by Anders Hoenisch.
Lang Management Inc. v. Vandyk-Heartlake Limited, 2023 CanLII 66341 (ONSC)
Lang Management Inc. applied for a certificate of pending litigation over a property located at 10194 Heart Lake Road in Brampton, which was described as the “Jordan Lands”. Associate Justice Jolley applied the relevant principles for determining a motion for a certificate of pending litigation (as set out in Perruzza v. Spatone, 2010 ONSC 841) and granted the motion. Her Honour was satisfied that the applicant had raised a triable issue as to its interest in the land in question – by agreement, entered into twice, the respondents had contracted to grant the applicant a mortgage over the Jordan Lands to secure payment of its fees if the applicant “at any time” had a reasonable apprehension that its fees would not be paid. The respondents had advised the applicant that they would not pay the fees, as they were of the view that the fees were not due and owing. While it remained open to the respondents to argue their position, in the interim, the certificate of pending litigation would provide notice of the applicant’s claimed interest in the Jordan Lands until its entitlement to the fees could be determined. Her Honour found that the issuance was just and equitable in all the circumstances. The parties had negotiated for this specific security – a mortgage over the Jordan Lands if there was any reasonable concern about the payment of the fees. Moreover, Her Honour was not satisfied that the security offered by the respondents (an offer to pay any net profits from the development on the Jordan Lands into trust, up to a maximum of $6,000,000) offered an adequate alternative, and she concluded that the respondents’ proposal would have effectively renegotiated the parties’ commercial agreements.
Santos v. State Farm Mutual Automobile Insurance, 2023 ONSC 4311
The Plaintiff, Lucia Santos, applied for leave to amend her statement of claim to include a claim for a declaration that she had sustained a catastrophic impairment, and for punitive, aggravated, and exemplary damages of $500,000. She also sought an order compelling the Defendant, State Farm Mutual Automobile Insurance, to produce its redacted adjuster’s log notes up to date and continuing until trial, along with explanations for each redaction. Justice Kurz dismissed the request to amend the statement of claim and granted the request for the redacted adjuster’s log notes along with explanations for any redactions. In refusing the Plaintiff’s request to amend the statement of claim, His Honour found that the Plaintiff was barred from making the amendments by operation of section 280 of the Insurance Act. Under section 280, all claims for statutory accident benefits must be resolved at first instance before the provincial Licensing Appeal Tribunal. His Honour’s task was to determine whether the proposed amendments represented permissible further iterations of the claims already made in the original pleadings, or whether they represented prohibited new claims. His Honour found that the proposed amendments were not referred to or even implicit in the original pleadings, which only requested a declaration regarding the Financial Services Commission of Ontario’s Minor Injury Guideline, not catastrophic injuries. Furthermore, the original pleadings made no reference to facts that would support a claim for punitive damages. In granting the Plaintiff’s request to produce the redacted adjuster’s log notes along with explanations for any redactions, His Honour found that counsel for the Defendant had made an undertaking to produce the notes. Furthermore, the adjuster’s notes were relevant to the Plaintiff’s ongoing claim for income replacement benefits.
Bernataviciute v. Tsiaris and Lipak, 2023 ONSC 4326
The Defendants, Panagiotis Tsiaras and Stefica Lipak, brought a motion for security for costs against the Plaintiff, Jurgita Bernataviciute, on the basis that she is ordinarily resident outside of Ontario. The Plaintiff alleged that she sustained personal injuries when, on January 13, 2018, she slipped and fell on ice while descending the outside staircase at 5389 River Road in Niagara Falls, Ontario, a property jointly owned by the Defendants. The Plaintiff is a citizen of Lithuania, she moved back there in December of 2019, and she has no plans to relocate to Canada. Associate Justice Graham dismissed the Defendant’s motion, finding that the Plaintiff had met her onus of demonstrating both that she was impecunious and that her claim was not clearly devoid of merit. His Honour found that the Plaintiff’s verbal evidence was sufficient to meet her burden to demonstrate impecuniosity absent supporting documentation. The Plaintiff’s evidence consisted of uncontradicted sworn statements that she had no income or property, and that she had never filed taxes in Lithuania or knowingly opened a bank account there. His Honour noted that it would be difficult to imagine what documentation could possibly exist to substantiate these statements, and there was no basis on which to reject them. Regarding the merits of the Plaintiff’s claim, the requirement that the Plaintiff’s claim not be clearly devoid of merit is a very low evidentiary threshold. In this case, there was at least a triable issue of liability with an objective injury, which supported the conclusion that the claim was not clearly devoid of merit.
Van der Ende v. Dool, 2023 ONSC 4333
The applicant, Robert Van der Ende, brought a motion for vacant possession of his property. Specifically, he wanted an order requiring the respondent, Rene Dool, his common law wife of 13 years, to leave the property. The respondent opposed the motion on the basis that she could not afford alternate accommodations, and she sought interim spousal support to allow her to secure a new place to live. The applicant denied that the respondent was entitled to support and pointed to the parties’ cohabitation agreement to support his position. However, the respondent argued that the agreement was void and unenforceable. Justice Chown ordered on an interim and without prejudice basis, inter alia, that the respondent move out by October 1, 2023, that the applicant pay $5,000 towards past spousal support, and that commencing August 1, 2023, the applicant must pay the respondent monthly spousal support of $1,300. His Honour found that there was a wide discrepancy between the parties’ financial circumstances and that the respondent’s financial situation appeared strained. The respondent had a strong need for support, and without it she may have required government assistance. In contrast, the applicant had a considerably higher income and significant assets. His Honour found that the respondent had established that there was a triable issue over whether the cohabitation agreement was enforceable, and that the respondent had shown a prima facie entitlement to support based on need.
Hrvoic v. Hrvoic, 2023 ONCA 508
Dag Hrvoic (“Doug”) appealed the disposition of his application to compel the sale of common shares held by Melissa Hrvoic (“Melissa”) of a company they co-founded. Doug’s application was tried together with Melissa’s action for a declaration, among other heads of relief, that she owns 50% of the company’s common shares. The trial judge determined that Doug and Melissa held equal shareholdings and valued them in the amount of $10,800,000. She ordered that Doug purchase Melissa’s common shares for the amount of $5,400,000. Coroza J.A. ordered a partial lifting of the automatic stay pending appeal to the extent of $1,874,400, finding that while the appeal was not frivolous and vexatious, it was not particularly strong because most of the grounds of appeal were grounded in the trial judge’s factual findings and were unlikely to succeed: 2023 ONCA 27. The order was upheld by a panel of the Ontario Court of Appeal on April 27, 2023: 2023 ONCA 288.
Feldman J.A., Benotto J.A., and Roberts J.A. dismissed the appeal. In the court’s view, all the grounds of appeal hinged upon the trial judge’s unassailable findings and effectively amounted to an invitation for the court to redo the trial judge’s findings of fact and mixed fact and law absent any error, which was not the court’s task. The court did not interfere with the trial judge’s findings that Doug and Melissa held equal shareholdings pursuant to an agreement, the valuation of the shareholdings of the company, her interpretation and application of the “clean hands” doctrine in granting Melissa any remedy, her interpretation and application of the test for the commencement of the applicable limitation period, or in failing to address Doug’s counterclaim. Melissa was entitled to partial indemnity costs of the stay motion and the appeal in the all-inclusive amount of $60,000.
Bradley J. Grant Investments Inc. v. Nestig Inc., 2023 ONSC 4373
The Plaintiff, Bradley J. Grant Investments Inc., alleges that Stephen Lee Heimbecker and Nestig Inc. (jointly referred to as “Heimbecker”) perpetrated a fraud in excess of $51 million dollars. The alleged fraud involved the Defendants through the receipt, transfer and distribution of monies from Heimbecker obtained from the Plaintiff. The Plaintiff brought a motion for an interim Mareva Injunction and for a Norwich Order. On October 11, 2022, the Plaintiff commenced an action against Heimbecker for breach of contract and breach of fiduciary duty. The Plaintiff recently amended its claim to add additional parties and causes of action to include allegations of fraud. Heimbecker filed a responding affidavit, which was considered on the motion. The added parties, Stephen Lee Heimbecker as Trustee of the Heimbecker (2015) Family Trust, Joanna Heimbecker, and Keystone Capital, although served, were not represented at the motion, and did not file materials. On consent, the parties agreed that the interlocutory motion for the Mareva Injunction on its merits, with a full evidentiary record, will be heard on September 18, 2023.
Justice Ricchetti granted the two interim Orders. His Honour found that there was a strong prima facie case of fraud and breach of trust and / or breach of fiduciary duty. The most significant factor was that Heimbecker had provided investment details as a means of inducing the Plaintiff to advance monies in those investments, but now failed or refused to disclose any information or documentation to support that the funds used by Heimbecker were used in the manner represented. As for the other Defendants, whether they were aware of it or not, they had received, transferred or dealt with the Plaintiff’s advances. His Honour was satisfied that Heimbecker had and was attempting to liquidate assets in Ontario, which would make any judgment obtained by the Plaintiff difficult or impossible to enforce. The disposition of Heimbecker of its assets through and to the other Defendants would irreparably harm the Plaintiff by putting enforcement out of reach, or at least making it difficult to trace the Plaintiff’s advances. His Honour concluded that the interim Mareva Injunction would preserve the status quo until the motion is heard for an interlocutory Mareva Order. The Order also required immediate disclosure of the Defendant’s assets to ensure that, if the interlocutory order is granted, any additional transfer or disposition of assets will be readily ascertainable. An undertaking was provided to the court by the Plaintiff.
In granting the Norwich Order, His Honour was satisfied that the Plaintiff had a bona fide claim against the Defendants and that monies advanced by the Plaintiff had been transferred into or from the accounts set out in the draft order. Heimbecker had not been forthcoming in providing financial documentation, and His Honour was satisfied that the only source of obtaining the documentation, particularly at this early stage of the proceeding, was by issuing the Norwich Order requiring production of the documents from the relevant financial institutions. His Honour was satisfied that in these circumstances, the interests of justice required the Norwich Order.
