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.