Think Research Corporation v. N&M Medical Enterprises 2023 ONSC 6910

By: Joseph Ma, Articling Student, Katzman Litigation P.C.

The recent decision of His Honour Koehnen J. in the matter of Think Research Corporation v. N&M Medical Enterprises 2023 ONSC 6910 underscores the importance of case conferences in the legal process and highlights how case conferences can be instrumental in resolving disputes efficiently by addressing substantive issues early on, potentially avoiding the need for long and protracted litigation. Such an approach promotes judicial efficiency and serves the interests of justice by facilitating the timely resolution of legal matters.

In this matter, the applicant, Think Research Corporation, had acquired a business known as Clinic 360 by way of a share purchase agreement. The share purchase agreement stipulated that if the parties could not agree on the net working capital calculation, Ernst & Young LLP or KPMG LLP would be appointed to determine the appropriate calculation. The parties could not agree on the calculation of net working capital, and Think Research sought to appoint KPMG.

The share purchase agreement required the applicant to provide networking capital calculations within 60 days of closing. However, the applicant failed to meet this deadline and provided the required calculations well past the deadline on October 22, 2021. Subsequently, the applicant delivered its notice to the respondent that it intended to appoint either Ernest & Young or KPMG. In the context of the proceeding, the respondent argued that the time for the appointment of an independent accountant expired.

The Court ruled that relief on the merits could be granted despite the absence of a complete and formal evidentiary record. It found that the applicant had met its obligations within a reasonable timeframe and that the respondents' argument regarding the appointment of an independent accountant being out of time was unfounded. The court highlighted that the email exchange involving the respondents' authorized representative, along with the participation of other respondents, demonstrated their cooperative efforts in the post-adjustment process.

In rejecting the respondents' arguments, the Court exercised its authority to ensure that the contractual provisions are applied fairly and in accordance with the intentions of the parties. By interpreting the contract in a manner that allows for flexibility and acknowledges the practical realities of the situation, the Courts continue to promote a balanced and equitable resolution of the dispute. This underscores the Court's essential role in providing clarity, resolving ambiguities, and upholding the principles of contractual fairness and justice.

In the context of the case conference, the respondents argued that substantive relief could not be granted at a case conference pursuant to Rule 50.13(6) seeking to confine judicial powers at a case conference.  The Court rejected this argument, finding as follows:

“On December 6, 2023, I sat in Civil Practice Court. At the time, the first date available for a motion of less than two hours was February 3, 2025. The first date available for a motion of less than two hours was February 3, 2025. The first date for a motion of over two hours was June 24, 2025. Approximately halfway through Civil Practice Court, the first date available for a motion over 2 hours was in July 2025. In other words, a wait of between 14 and 20 months for a motion.” [1]

Considering this now not-so-rare phenomenon, his Honour Koehnen J. clarified the scope of the Court’s authority in the context of a case conference, as follows:

“[C]ivil courts have become burdened by their own procedures to the point that those procedures impede the very justice civil courts are tasked to administer. When it takes between 14 and 20 months to schedule a simple motion, it is incumbent upon courts as the stewards of the justice system to take proactive steps to develop more proportionate procedures to diminish those delays.”[2] 

Notwithstanding the fact that it had been indicated to the parties that the purpose of the attendance on November 28, 2023 was to determine the issue on the merits, by ruling in favor of the applicant's request for relief on the merits, the Court made clear that a case conference is not merely a procedural formality but can, and should where appropriate, serve as a crucial stage of the proceeding during which substantive determinations may well be made.

The Court’s decision in Think Research highlights the court's commitment to avoiding unnecessarily prolonged litigation and promoting judicial efficiency, particularly in the face of the current Motions climate in the Toronto Courthouse and the lengthy delays associated with the same. This approach is crucial in ensuring timely and effective resolution of legal disputes. In coming months and years, legal system may find courts liberally applying its power experimenting with old systems of justice with hopes to give people “their day in court, not their years.”

[1] Think Research v. N&M Medical Enterprises 2023 ONSC 6910, para 20.

[2] Think Research v. N&M Medical Enterprises 2023 ONSC 6910, paras 24 and 25.

Senthillmohan v Senthillmohan, 2023 ONCA 280

By: Joseph Ma, Articling Student

The Court of Appeal has recently provided clarity on the matter of debt enforcement against a jointly held property in Senthillmohan v Senthillmohan.

The respondents, who are a separated wife and husband, held their matrimonial home as joint tenants. In September 2021, a third-party creditor obtained a default judgment against the husband and subsequently filed a writ against the title of the matrimonial home.

In October 2021, the respondents entered into an Agreement of Purchase and Sale for the sale of the subject property. In order to facilitate the sale, the Judgment creditor agreed to temporarily lift the writ that had been placed. After settling outstanding obligations such as the mortgage, construction lien, and other secured encumbrances, the net proceeds from the sale amounted to approximately $925,000.00.

The wife subsequently filed an urgent motion to sever the joint tenancy in the matrimonial home and was successful. As a result, the respondents held the title to the matrimonial home as tenants in common, which carries important implications for their respective rights and interests in the property.

In February 2022, the wife brought a motion seeking the release of her 50% portion of the net proceeds from the sale of the matrimonial home. The Judgment creditor opposed the release of the sale proceeds on the basis that the writ was attached to the interests of both the husband and wife and claimed that the wife’s interest did not take priority over the writ. Additionally, the Judgment creditor claimed that at the time of obtaining the default judgment and filing the writ, the respondents still held the home in joint tenancy.

The motion judge rejected both of these arguments finding that the wife was entitled to half of the net proceeds from the sale despite the writ. It was determined that the wife’s interest in the property should be given priority, disregarding the creditor’s claims based on the joint tenancy status of the respondents at the time of the default judgment and writ filing. Consequently, the wife was granted her share of the net proceeds of the sale.

The Judgment creditor appealed the decision on the basis that the motion judge, inter alia, erred in determining that the wife had priority entitlement over the appellant’s writ and erred by failing to consider that the writ attached to the full proceeds of a voluntary sale of the jointly owned home. The Court of Appeal dismissed the appeal and held that the Judgment creditor could not seize the interest of a joint tenant who is not a debtor.

In reaching this conclusion, the Court referred to the precedent in Royal & SunAlliance and emphasized that the fundamental characteristics of joint tenancy, which include the unity of title, unity of interest, unity of possession and unity of time, do not automatically justify a creditor’s right to claim the entire property when the debt itself is not jointly held. Furthermore, with reference to s. 9(1) and 10(6) of the Execution Act, the Court held that a creditor can only claim against the debtor’s exigible interest in the land held in joint tenancy. This sets a clear precedent that protects non-debtor joint tenants from having their interests in a property subject to creditor claims.

It is important to understand that the judgment not only safeguards the rights of non-debtor joint property owners, but also serves as a crucial reminder to Judgment creditors regarding the boundaries of their claims. The Senthillmohan decision firmly reinforces the principle of proportionality in debt enforcement. It underscores the significance of honouring the distinct interests and rights of joint tenants regardless of whether one of the tenants is indebted. The ruling emphasizes that creditors must operate within the confines of the relevant legal framework governing debt enforcement. Creditors cannot overreach by attempting to seize the entire property solely based on the joint tenancy status. This decision serves as a crucial reminder to creditors that they must respect the individual rights and limitations associated with jointly held properties when pursuing debt collection efforts.

Lake v. La Presse, 2022 ONCA 742

By: Daniel Kraus and Fahad Warraich

In Lake v. La Presse, 2022 ONCA 742, the Court of Appeal has clarified the standard of “reasonable steps” that a former employee ought to take in mitigating their damages following wrongful termination, as it relates to seeking other employment. Ultimately, a terminated employee need only be required to seek out comparable employment that reflects the remuneration received, status held, and hours worked relative to the position they held at the time of dismissal.

The circumstances in Lake concern Merida Lake (“Lake”), who from August 2013 to March 2019, held the position of General Manager at the Toronto office of La Presse (2018) Inc. (“La Presse”), a Montreal based newspaper. In March of 2019, La Presse decided to close its Toronto office and accordingly terminated Ms. Lake, the most senior member of the office, on a without cause basis. Lake subsequently brought an Action against La Presse for wrongful termination, and at the Motion for Summary Judgment in this matter, the Court ruled that while Lake was entitled to a total of eight months reasonable notice (and a “lost bonus”) on the basis of her seniority and years worked, the damages awarded to Lake would reflect only six months of reasonable notice as a result of Lake’s delay in searching for other employment, and choice to unreasonably limit her search by “aim[ing] too high”, rather than applying for lesser paying positions.

The Motion's Judge did not address the second part of the test concerning mitigation by a former employee in the context of wrongful employment, which asks whether Lake would have found a comparable position within the reasonable notice period had she made reasonable attempts to do so.

Lake took appeal of the judgment rendered at the Motion for Summary Judgment, arguing, in part, that the Motion’s Judge erred in principle by faulting her for not seeking lesser paying positions, and made a palpable and overriding error in determining that she aimed too high.

Though the Court of Appeal agreed with the Motion’s Judge as to the unreasonable delay in Lake’s search for employment, it found that an error in principle was indeed made by the lower court in determining the said search ought to have encompassed employment of lesser remuneration, which the Court of Appeal clarified does not form part of a terminated employee’s duty to mitigate. Rather, the duty only extends to seeking comparable employment relative to the position held at the time of dismissal, which employment is typically similar in status, hours and remuneration. It is a duty evaluated relative to the steps a reasonable person in Lake’s position would take in respect of their own interests – not one where the dismissed employee must act in the former employer’s interest.

The Court of Appeal also found the lower court to have made a palpable and overriding error in arriving at the conclusion that Lake aimed too high when conducting her employment search. On the Court of Appeal’s assessment of the evidence, Lake made substantial mitigation efforts to find other employment that matched her experience and qualifications. It was also found that the Motion’s Judge did not give proper consideration to Lake’s evidence, and placed emphasis on the titles of the positions being applied for.

In addition to Lake’s evidence, the Court of Appeal found that La Presse was unable to meet its burden, in the context of wrongful termination, and demonstrate that Lake failed to take reasonable steps in mitigation, or that a comparable position would have been secured had she done so. When relying on Lake in future employment disputes, one must be mindful of the finding that La Presse’s failed to present sufficient evidence to meet its burden.

The Court of Appeal ultimately ruled that the judgment under appeal be replaced with a judgment in favour of Lake for damages that are reflective of eight months reasonable notice, negating the reduction ordered by the lower court.