In Ontario, as a general rule, partial indemnity, which ranges from approximately 40-60% of the actual costs incurred by a party, is awarded to the successful litigant. Full indemnity, which comprises 100% of the costs
Continue Reading Failure to make full and fair disclosure can result in a full indemnity costs
In Li et al. v. Barber et al., the Ontario Superior Court of Justice dismissed a motion by two “Freedom Convoy” organizers to release $200,000 of previously frozen funds needed to retain legal
Continue Reading Access Denied: Ontario Court Rejects “Freedom Convoy” Organizers’ Request to Access Frozen Funds for Legal Fees
Aiden Pleterski, the self-described “Crypto King“, and his company AP Private Equity Limited were petitioned into bankruptcy on August 9, 2022 on application by certain of their creditors. David Gadsden, Michael Nowina and Ben Sakamoto at Baker McKenzie act for the creditors who brought the bankruptcy applications.
Continue Reading “Crypto King” declared bankrupt
In a previous post, we discussed disgorgement as an alternative remedy to compensatory damages in cases where a fraudster has profited from the wrongful acts. In a recent Ontario Superior Court decision, Justice Koehnen granted a $10.2 million disgorgement order to return ill-gotten profits made by a former Canadian National Railway Company (CN) employee in breach of his fiduciary duties. This is noteworthy as most of the profits to be disgorged were gone as they been used up during the course of a long and expensive receivership.
Continue Reading Ontario Superior Court Grants Significant Disgorgement Order in Canadian National Railway v. Holmes
When a plaintiff suffers a loss due to the misconduct of a defendant, the typical approach is to award damages that reflects the loss. However, this does not always fit the circumstances of the breach. In some cases, a plaintiff may have suffered no damages, but the defendant has gained significantly. For example, a wrongdoer who improperly uses trust funds, profits from that breach of trust, and later returns the monies to the trust account, but seeks to keep the gains. Where a wrongdoer’s profits are so intimately connected with the wrong and these profits would not have been earned but for the wrongful acts, a plaintiff may turn to gain-based disgorgement remedy as a more appropriate measure of damages.
Continue Reading Disgorgement instead of Damages?
In Thrive Capital Management Ltd. v. Noble 1324, 2021 ONCA 722, the Ontario Court of Appeal reversed a Superior Court’s judgment against Noble 1324 Inc. for contempt of court for the failure to disclose their assets and account for money paid in respect of real estate investments. The Superior Court ordered two alleged fraudsters to repay at least $9 million to investors as a sentence for being found in contempt of court, notwithstanding that the trial on the merits had not been heard. In allowing the appeal, the Ontario Court of Appeal offered important guidance on strategic considerations and remedies when a party is dealing with a party who refuses to comply with court orders.
Continue Reading Judgment is not a Sanction for Contempt: Ontario Court of Appeal Offers Guidance on the Enforcement of Orders in Fraud Proceedings
In a recent Commercial List Decision, Justice Koehnen granted an injunction to prevent a party from enforcing a settlement agreement on the basis that the settlement had been induced by fraud.
Continue Reading Potential Pitfalls in Litigation Settlement – Agg v. Watson, 2021 ONSC 3068
On October 28, 2020, the Ontario Court of Appeal overturned a respected Commercial Court judge’s decision on a motion affecting a range of important legal issues, including the fraud exception to the autonomy principle regarding letters of credit. In 7636156 Canada Inc. (Re), 2020 ONCA 681, Ontario’s highest court clarified the law regarding a landlord’s right to call on a letter of credit (“LC”) when its tenant becomes bankrupt. The Court of Appeal confirmed that, under the autonomy principle, a bank’s obligation under an LC is independent of a tenant’s obligations under the lease, and clarified the fraud exception that allows a bank to refuse to pay on an LC. The case also holds implications for Canadian bankruptcy law.
Continue Reading Fraud exception to letter of credit autonomy principle requires “impropriety, dishonesty or deceit”. Court of Appeal overturns ruling that had denied commercial landlord of bankrupt tenant full amount of credit.
In an unreported judgment Pallotta v. Cengarle, Court file CV-16-56337 released on February 27, 2020, Faieta J. found real estate lawyer Licio Cengarle vicariously liable for his clerk’s mortgage fraud scheme as well as for breach of trust. This case is a cautionary tale for professionals and employers about the need for internal controls.
Continue Reading Ignorance of Fraud is No Defence: Employer Vicariously Liable for Rogue Employee
David Holden was recently convicted of defrauding Canadian investors in Seaquest Corporation and Seaquest Capital Corporation of more than $54-million in a complex ponzi-scheme. In related civil proceedings our team acted to obtain significant recoveries for some of Holden’s victims. Sadly, this was not the first time that Holden had defrauded investors.
Continue Reading Ponzi Mastermind Sentenced to 12 Years – $54 Million Payment Ordered