1086289 Ontario Inc. (Urban Electrical Contractors) v. Welland (City) was a lengthy decision addressing four appeals requiring reconsideration of the framework governing disclosure of partial settlement agreements in multi-party civil litigation and an assessment of the rule in Handley Estate. The Court held that Handley Estate was wrongly decided and overruled it The Court determined that its inflexible rule, whereby non-disclosure of a settlement agreement that changed the litigation landscape automatically constituted an abuse of process without proof of prejudice and the only remedy was a mandatory, was inconsistent with long-standing abuse of process doctrine. The doctrine of abuse of process has always required a contextual and discretionary inquiry directed to whether the impugned conduct gives rise to unfairness, prejudice, or oppression. Going forward, non-disclosure is to be assessed under ordinary abuse of process principles based on the specific facts of each case, with remedies fashioned according to proportionality and informed by the recently enacted r. 49.14 of the Rules. That rule expands the scope of the disclosure obligation, provides defined time limits and offers a spectrum of remedies for non-disclosure. Applying the new framework to the individual appeals, the Court dismissed the appeals in Evertz (upholding the stay where the motion judge made sufficient factual findings of prejudice and misleading conduct) and Howran (upholding the refusal of a stay where the City suffered no prejudice). The Court allowed the appeals in Welland and Thrive and remitted both for fresh consideration under the revised abuse of process analysis.

In Kingsdale v. Sprott, the Court found that a strategic advisory agreement between a proxy solicitation firm and an asset management company was “goal-focused” rather than tied to a specific takeover strategy, entitling Kingsdale to its success fee despite the ultimate acquisition of CFC occurring through a consensual transaction rather than the hostile takeover campaign in which Kingsdale had directly participated. The Court dismissed Sprott’s appeal in its entirety, affirming that the contract’s success fee provision was triggered by Sprott obtaining management control of CFC regardless of the transactional method used to achieve that result or whether Kingsdale was involved in the strategy that ultimately resulted in the goal being achieved.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Kingsdale Partners LP v. Sprott Asset Management LP, 2026 ONCA 356

Keywords: Contracts, Interpretation, Commercial Reasonableness, 1891868 Alberta Ltd. v Central Fund of Canada Limited, 2015 ABCA 331, Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 S.C.R. 1210

1086289 Ontario Inc. (Urban Electrical Contractors) v. Welland (City), 2026 ONCA 352

Keywords: Civil Procedure, Contracts, Partial Settlement Agreements, Non-Disclosure, Multi-Party Litigation, Abuse of Process, Prejudice, Discretion, Remedies, Stays, Orders, Final or Interlocutory, Jurisdiction, Standard of Review, Stare Decesis, Overruling, Rules of Civil Procedure, rr. 1.04, 7.08, 21.01(3)(d), 49.14, 49.14(7), Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(b), Handley Estate v. DTE Industries Limited, 2018 ONCA 324, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, Metropolitan Bank v. Pooley, (1885), 10 App. Cas. 210 (U.K. H.L.), R. v. Cunningham, 2010 SCC 10, British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52, Foy v. Foy (No. 2), (1979), 26 O.R. (2d) 220 (C.A.), R. v. Varennes, 2025 SCC 22, Saskatchewan (Environment) v. Métis Nation – Saskatchewan, 2025 SCC 4, Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, Behn v. Moulton Contracting Ltd., 2013 SCC 26, R. v. Conway, [1989] 1 S.C.R. 1659, R. v. Scott, [1990] 3 S.C.R. 979, R. v. Brunelle, 2024 SCC 3, R. v. Cawthorne, 2016 SCC 32, R. v. Anderson, 2014 SCC 41, R. v. Jewitt, [1985] 2 S.C.R. 128, Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, R. v. Power, [1994] 1 S.C.R. 601, R. v. O’Connor, [1995] 4 S.C.R. 411, Abarca v. Vargas, 2015 ONCA 4, Pine Glen Thorold Inc. v. Rolling Meadows Land Development Corporation, 2025 ONCA 604, leave to appeal requested, [2025] S.C.C.A. No. 459; SIF Solar Energy Income & Growth Fund v. Aird & Berlis LLP, 2024 ONCA 946, Davies v. Clarington (Municipality), 2023 ONCA 376, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, leave to appeal refused, [2019] S.C.C.A. No. 284; Khan v. Law Society of Ontario, 2020 ONCA 320, leave to appeal refused, [2020] S.C.C.A. No. 288; Visic v. Elia Associates Professional Corporation, 2020 ONCA 690, leave to appeal refused [2020] S.C.C.A. No. 473, Currie v. Halton Regional Police Services Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.), Canada (Transportation Safety Board) v. Carroll-Byrne, 2022 SCC 48, P. (W.) v. Alberta, 2014 ABCA 404, David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Company, (2005), 76 O.R. (3d) 161 (C.A.), leave to appeal refused, [2005] S.C.C.A. No. 388, Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2022 ONCA 66, leave to appeal refused, [2022] S.C.C.A. No. 170, Bennington Financial Corp. v. Medcap Real Estate Holdings Inc., 2024 ONCA 90, Crestwood Preparatory College Inc. v. Smith, 2022 ONCA 743, Kingdom Construction Limited v. Perma Pipe Inc., 2023 ONSC 4776, aff’d 2024 ONCA 593, CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467, Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, 2025 ONCA 450, Smialek et al. v. Status Construction Ltd. et al., 2025 ONSC 5229, Ball v. 1979927 Alberta Ltd., 2024 ABKB 229, Erickson v. Mile Two Church Inc., 2025 SKKB 71, Green v. Canadian Imperial Bank of Commerce, 2014 ONCA 90, aff’d 2015 SCC 60, Waxman v. Waxman, 2022 ONCA 311, leave to appeal refused, [2022] S.C.C.A. No. 188, Fernandes v. Araujo, 2015 ONCA 571, R. v. White (1996), 29 O.R. (3d) 577 (C.A.), York Region Standard Condominium Corporation No. 1206 v. 520 Steeles Developments Inc., 2020 ONCA 63, York Condominium Corp. No. 46 v. Medhurst, Hogg & Associates Ltd. et al. (1983), 41 O.R. (2d) 800 (C.A.), Aecon Buildings v. Brampton (City), 2010 ONCA 773, Halton Standard Condominium Corporation No. 550 v. Del Ridge (Appleby) Inc., 2023 ONCA 753, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Johnson v. Ontario, 2021 ONCA 650, Paulpillai Estate v. Yusuf, 2020 ONCA 655, Ball v. Donais (1993), 13 O.R. (3d) 322 (C.A.), Camdev Corp. v. Campeau, [1996] O.J. No. 3814 (C.A.), Ontario v. Lipsitz, 2011 ONCA 466, leave to appeal refused, [2011] S.C.C.A. No. 407, Manos Foods International Inc. v. Coca-Cola Ltd. (1999), 125 O.A.C. 66 (C.A.), Abbott v. Collins, (2002), 62 O.R. (3d) 99 (C.A.), Alfano v. Piersanti, 2012 ONCA 442, Hopkins v. Kay, 2014 ONCA 514, M.J. Jones Inc. v. Kingsway General Insurance Co. (2003), 68 O.R. (3d) 131 (C.A.), Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260, Locking v. Armtec Infrastructure Inc., 2012 ONCA 774, Dobson (Litigation Guardian of) v. Dobson, [1999] 2 S.C.R. 753, Thrive Capital Management Ltd. v. Noble 1324, 2021 ONCA 722, Thrive Capital Management Ltd. v. Noble 1324 Queen Inc., 2022 ONSC 4081, Skymark Finance Corporation v. Ontario, 2023 ONCA 234, I.H. Jacob, “The Inherent Jurisdiction of the Court” (1970), 23 Curr. Legal Probs. 23, P. M. Perell, “A Survey of Abuse of Process”, in T. L. Archibald and R. S. Echlin, eds., Annual Review of Civil Litigation 2007 (Toronto: Thomson Reuters, 2007), 243, B.L. Grossman & A. Basmadjian, “Waxman v. Waxman: Failure to Immediately Disclose a Partial Settlement Agreement That Changes the Litigation Landscape Will Result in a Stay of Proceedings” (2022) 53 Advoc. Q. 251, E.G. Upenieks & J.M.E. Chumak, “The Balancing Act for Canadian Litigators: Encouraging Settlement between Parties and the Procedural Risks of Entering into Settlement Agreements in Multi-Party Litigation” (2023) 53 Advoc. Q. 393, S. Aylward, “A Shifting Landscape: Non-Disclosure of Partial Settlements in Multi-Party Litigation” Ann. Rev. Civil (Toronto: Thomson Reuters, 2023), K.T. Di Tomaso et al., “Obligation to Immediately Disclose a Partial Settlement Agreement That Changes the Litigation Landscape in Multi-Party Litigation” (2024) 55 Advoc. Q. 86

Short Civil Decisions

Menghesha v. Gebremariam, 2026 ONCA 364

Keywords: Wills and Estates, Capacity, Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Succession Law Reform Act, R.S.O. 1990, c. S.26., s.21.1

Dani Building System Inc. v. Hossain, 2026 ONCA 362

Keywords: Contracts, Construction, Liens, Civil Procedure, Appeals, Jurisdiction, Leave to Appeal, Extension of Time, Settlements, Construction Act, R.S.O. 1990, c. C.30., s.58, 58(1)(a), 71(1) Courts of Justice Act, R.S.O. 1990, c. C.43., s. 134(3), Rules of Civil Procedure, r. 54, 54.09(1)(b), MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422, Chaly v. Structured Restoration Inc., 2025 ONCA 901, Martin v. 11037315 Canada Inc., 2025 ONCA 44

Bemco Financial Services Ltd. v. 12425467 Canada Inc., 2026 ONCA 363

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Mortgages, Debtor-Creditor, Enforcement, Power of Sale, Civil Procedure, Summary Judgment, Evidence, Burden of Proof, Land Titles Act, R.S.O. 1990, c. L.5, s. 78(4), 160, Airport Business Park Inc. v. Huszti Holdings Inc., 2023 ONCA 391

Reid v. Bracebridge (Town), 2026 ONCA 365

Keywords: Civil Procedure, Orders, Administrative Dismissal for Delay, Appeals, Standard of Review, Palpable and Overriding Error, Labelle v. Canada (Border Services Agency), 2016 ONCA 187, Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, Piedrahita v. Costin, 2023 ONCA 404

CIVIL DECISIONS

Kingsdale Partners LP v. Sprott Asset Management LP, 2026 ONCA 356

[Paciocco, Thorburn, and Dawe JJ.A.]

Counsel:

D. Chernos, B. Brammall and J. D’Silva, for the appellant

J. Renihan and J. Medvedev, for the respondent

Keywords: Contracts, Interpretation, Commercial Reasonableness, 1891868 Alberta Ltd. v Central Fund of Canada Limited, 2015 ABCA 331, Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 S.C.R. 1210

facts:

Sprott Asset Management LP (“Sprott”), an asset management firm, retained Kingsdale Partners LP (“Kingsdale”), a shareholder advisory and proxy solicitation firm, in June 2015 to provide strategic advisory services in connection with Sprott’s efforts to gain control of Central Fund of Canada Ltd. (“CFC”), a competing investment entity controlled by the S family. The parties’ agreement provided for both a management fee and a substantial “success fee,” with success defined as “SPROTT becoming the Manager of CFC.”

Although the agreement was executed in June 2015, the parties had discussed multiple takeover strategies for several months beforehand. At the time the contract was signed, Sprott and Kingsdale pursued a hostile “meeting requisition” strategy that would have involved a shareholder meeting and vote to replace CFC’s management. Kingsdale assisted Sprott with that campaign. However, the strategy failed after the Alberta Court of Appeal ruled the meeting requisition invalid in late 2015.

Despite the collapse of the initial strategy, Kingsdale and Sprott continued discussing possible next steps throughout 2016. In 2017, Sprott independently pursued a different hostile strategy by proposing a plan of arrangement to acquire CFC. Later that year, Sprott shifted to a consensual transaction with the S family under which CFC’s assets were acquired through a newly created entity known as the New Sprott Trust. That transaction ultimately gave Sprott control over the management of CFC.

Following completion of the acquisition, Kingsdale claimed entitlement to the contractual success fee and the unpaid balance of the management fee, asserting that the agreement applied to Sprott’s overall objective of obtaining control of CFC regardless of the specific takeover strategy used. Sprott refused payment, arguing that the contract related only to the original hostile takeover campaign and meeting requisition strategy in which Kingsdale had participated.

The trial judge found in favour of Kingsdale, concluding that the agreement was “goal-focused” rather than strategy-specific, that the contract had never been terminated, and that Kingsdale’s work contributed to the ultimate acquisition of CFC. Sprott appealed, alleging numerous contractual interpretation errors and arguing that the trial judge improperly interpreted the agreement in a commercially unreasonable manner.

issues:

1. Did the trial judge err in interpreting the contract as a whole by concluding that the agreement was “goal-focused” rather than limited to the initial takeover strategy or first takeover bid?
2. Did the trial judge err by considering an earlier draft of the contract as part of the surrounding circumstances and factual matrix?
3. Did the trial judge interpret the contract in a commercially unreasonable manner, including by awarding the success fee following a consensual acquisition transaction?
4. Did the trial judge improperly imply a notice or termination requirement into the contract?
5. Did the trial judge commit palpable and overriding errors, including in awarding the management fee and characterizing Sprott’s interpretation argument?
6. Was there any basis to interfere with the trial judge’s costs award?

holding:

Appeal dismissed.

reasoning:

1. No.

The Court held that the trial judge properly interpreted the agreement as a whole and reasonably concluded that the contract was directed toward the broader objective of Sprott obtaining control of CFC, rather than being confined to a single takeover strategy.

The Court emphasized that the trial judge expressly considered the entire agreement, including Sprott’s submissions that the use of singular language such as “the meeting” and “the campaign” tied the contract to the original meeting requisition strategy. However, the contract also contained broader language describing Kingsdale’s role and repeatedly framed the retainer in terms of the overarching objective of “gaining control of the management of CFC.” The success fee provision itself was triggered by “SPROTT becoming the Manager of CFC,” not by the success of any specific hostile strategy.

The Court also upheld the trial judge’s reliance on surrounding circumstances. Before execution of the agreement, the parties discussed multiple possible takeover strategies and understood that the acquisition campaign could require flexibility and strategic “pivoting.” The agreement had been drafted before the initial meeting requisition strategy was selected, yet its language was never revised to confine it to that approach. The parties also continued communicating after the initial strategy failed, which supported the conclusion that the engagement had not ended.

The Court rejected Sprott’s argument that the contract became commercially unreasonable if interpreted as goal-focused. The agreement did not create a perpetual obligation because it contained mechanisms through which the contract could end, including termination by mutual consent or breach. The interpretation adopted by the trial judge reasonably protected Kingsdale from being excluded after contributing work product to Sprott’s acquisition efforts

2. No.

The Court held that the trial judge was entitled to consider the earlier draft agreement as part of the surrounding circumstances known to both parties at the time of contracting.

Sprott argued that the factual matrix must be assessed only as of the date the final agreement was executed and that the earlier draft improperly influenced the interpretation exercise. The Court rejected this submission, explaining that the surrounding circumstances include information reasonably within the knowledge of both parties at or before contract formation. Since both parties knew that materially identical language had existed before the first takeover strategy was selected, the draft supported the inference that the agreement was not tied exclusively to the meeting requisition approach.

Accordingly, the trial judge committed no error by considering the earlier draft in interpreting the contract.

3. No.

The Court held that the trial judge’s interpretation was commercially reasonable and consistent with both the contractual language and the evidentiary record.

Sprott argued that Kingsdale should not recover a success fee because the ultimate acquisition occurred through a consensual transaction rather than the hostile takeover strategies in which Kingsdale directly participated. The Court rejected this distinction, agreeing with the trial judge that there was a sufficient causal connection between the work Kingsdale performed during the hostile takeover campaign and the eventual consensual acquisition of CFC. The contract was directed toward the broader commercial objective of obtaining control of CFC, regardless of the precise structure ultimately used to achieve that result.

The Court also rejected the submission that the success fee was commercially unreasonable because it was calculated as a percentage of gains whose value could not have been known when the contract was formed. Percentage-based compensation arrangements are common in commercial agreements, and Sprott could not avoid its contractual obligations merely because it later restructured the acquisition through a different transactional form.

4. No.

The Court held that the trial judge did not imply a new contractual notice provision but merely made a factual finding that Sprott never communicated that the engagement with Kingsdale had ended.

The trial judge found that the parties continued discussing acquisition strategies after the initial meeting requisition approach failed and that Sprott never advised Kingsdale that the retainer was terminated. This supported the conclusion that the contractual termination provision had not been triggered because Kingsdale’s services had not been “completed.” The Court further agreed that Sprott could not unilaterally avoid its contractual obligations simply by excluding Kingsdale from later stages of the acquisition effort without terminating the agreement

5. No.

The Court found no palpable and overriding errors that would justify appellate intervention. Sprott argued that the management fee was not payable because the specific triggering events referenced in the agreement—such as mailing a circular or holding a shareholder meeting—never occurred after the Alberta Court of Appeal invalidated the meeting requisition strategy. The Court rejected this submission because it depended on the interpretation that the contract applied only to the initial hostile takeover strategy. Since the agreement was properly interpreted as goal-focused, the consensual acquisition transaction constituted a “settlement” within the meaning of the management fee provision, thereby triggering payment of the entire outstanding management fee.

The Court also rejected Sprott’s submission that the trial judge materially misapprehended its position by characterizing its argument as a “single strategy” interpretation. In substance, Sprott’s position was that the agreement was confined to the original takeover effort and meeting requisition approach. In any event, any alleged mischaracterization was immaterial because the trial judge’s decision ultimately turned on the contractual language and surrounding circumstances supporting a broader goal-oriented interpretation.

6. No.

Because Sprott’s appeal was dismissed in its entirety, there was no basis to interfere with the trial judge’s costs award in favour of Kingsdale.

1086289 Ontario Inc. (Urban Electrical Contractors) v. Welland (City), 2026 ONCA 352

[Tulloch C.J.O., Lauwers, Sossin, Wilson and Pomerance JJ.A.]

Counsel:

A. Lundy and Z. Levy, for the appellant Rounthwaite, Dick & Hadley Architects Inc. (COA-24-CV-0855)

K.A. McGivney and N. D. Kolos, for the appellant The Corporation of the City of Kawartha Lakes (COA-24-CV-0938)

E.A. Cherniak, K.C., W. Pepall, R. Shoom and H. Scher, for the appellants Thrive Capital Management Ltd., Thrive Uplands Ltd., 2699010 Ontario Inc. and 2699011 Ontario Inc. (COA-24-CV-1159)

J.C. Orr and J. H.W. Careen, for the appellants Evertz Technologies Limited and Evertz Microsystems Limited (COA-24-CV-1252)

S. Dewart and B. Hughes, for the respondent The Corporation of the City of Welland (COA-24-CV-0855), and the respondents CH and CF (COA-24-CV-0938)

E. Rankin, for the respondents CH, by her Litigation Guardian, JF, and JF personally (COA-24-CV-0938)

J. Wadden, M. O’Brien and A. Gupta, for the respondents Noble 1324 Queen Inc., MH, GA, Noble Developments Corporation, Hampshire and Associates Incorporated, Noble 12826 Leslie Corp., Wilshire Holdings Inc., Noble 376 Derry Corp., Nobel 390 Derry Corp., 2704536 Ontario Inc., 2724136 Ontario Inc., Hampshire Holdings Inc., Azan Homes Inc., LSA, GA Jr., S A-H, JH, AH and MH (COA-24-CV-1159)

A. Koshal, R. Chan and A. MacDonald, for the respondents Providius Corp., TZ, (a/k/a AZ), AAK and JW (COA-24-CV-1252)

Keywords: Civil Procedure, Contracts, Partial Settlement Agreements, Non-Disclosure, Multi-Party Litigation, Abuse of Process, Prejudice, Discretion, Remedies, Stays, Orders, Final or Interlocutory, Jurisdiction, Standard of Review, Stare Decesis, Overruling, Rules of Civil Procedure, rr. 1.04, 7.08, 21.01(3)(d), 49.14, 49.14(7), Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(b), Handley Estate v. DTE Industries Limited, 2018 ONCA 324, Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, Metropolitan Bank v. Pooley, (1885), 10 App. Cas. 210 (U.K. H.L.), R. v. Cunningham, 2010 SCC 10, British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52, Foy v. Foy (No. 2), (1979), 26 O.R. (2d) 220 (C.A.), R. v. Varennes, 2025 SCC 22, Saskatchewan (Environment) v. Métis Nation – Saskatchewan, 2025 SCC 4, Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, Behn v. Moulton Contracting Ltd., 2013 SCC 26, R. v. Conway, [1989] 1 S.C.R. 1659, R. v. Scott, [1990] 3 S.C.R. 979, R. v. Brunelle, 2024 SCC 3, R. v. Cawthorne, 2016 SCC 32, R. v. Anderson, 2014 SCC 41, R. v. Jewitt, [1985] 2 S.C.R. 128, Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, R. v. Power, [1994] 1 S.C.R. 601, R. v. O’Connor, [1995] 4 S.C.R. 411, Abarca v. Vargas, 2015 ONCA 4, Pine Glen Thorold Inc. v. Rolling Meadows Land Development Corporation, 2025 ONCA 604, leave to appeal requested, [2025] S.C.C.A. No. 459; SIF Solar Energy Income & Growth Fund v. Aird & Berlis LLP, 2024 ONCA 946, Davies v. Clarington (Municipality), 2023 ONCA 376, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, leave to appeal refused, [2019] S.C.C.A. No. 284; Khan v. Law Society of Ontario, 2020 ONCA 320, leave to appeal refused, [2020] S.C.C.A. No. 288; Visic v. Elia Associates Professional Corporation, 2020 ONCA 690, leave to appeal refused [2020] S.C.C.A. No. 473, Currie v. Halton Regional Police Services Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.), Canada (Transportation Safety Board) v. Carroll-Byrne, 2022 SCC 48, P. (W.) v. Alberta, 2014 ABCA 404, David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Company, (2005), 76 O.R. (3d) 161 (C.A.), leave to appeal refused, [2005] S.C.C.A. No. 388, Tallman Truck Centre Limited v. K.S.P. Holdings Inc., 2022 ONCA 66, leave to appeal refused, [2022] S.C.C.A. No. 170, Bennington Financial Corp. v. Medcap Real Estate Holdings Inc., 2024 ONCA 90, Crestwood Preparatory College Inc. v. Smith, 2022 ONCA 743, Kingdom Construction Limited v. Perma Pipe Inc., 2023 ONSC 4776, aff’d 2024 ONCA 593, CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467, Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, 2025 ONCA 450, Smialek et al. v. Status Construction Ltd. et al., 2025 ONSC 5229, Ball v. 1979927 Alberta Ltd., 2024 ABKB 229, Erickson v. Mile Two Church Inc., 2025 SKKB 71, Green v. Canadian Imperial Bank of Commerce, 2014 ONCA 90, aff’d 2015 SCC 60, Waxman v. Waxman, 2022 ONCA 311, leave to appeal refused, [2022] S.C.C.A. No. 188, Fernandes v. Araujo, 2015 ONCA 571, R. v. White (1996), 29 O.R. (3d) 577 (C.A.), York Region Standard Condominium Corporation No. 1206 v. 520 Steeles Developments Inc., 2020 ONCA 63, York Condominium Corp. No. 46 v. Medhurst, Hogg & Associates Ltd. et al. (1983), 41 O.R. (2d) 800 (C.A.), Aecon Buildings v. Brampton (City), 2010 ONCA 773, Halton Standard Condominium Corporation No. 550 v. Del Ridge (Appleby) Inc., 2023 ONCA 753, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Johnson v. Ontario, 2021 ONCA 650, Paulpillai Estate v. Yusuf, 2020 ONCA 655, Ball v. Donais (1993), 13 O.R. (3d) 322 (C.A.), Camdev Corp. v. Campeau, [1996] O.J. No. 3814 (C.A.), Ontario v. Lipsitz, 2011 ONCA 466, leave to appeal refused, [2011] S.C.C.A. No. 407, Manos Foods International Inc. v. Coca-Cola Ltd. (1999), 125 O.A.C. 66 (C.A.), Abbott v. Collins, (2002), 62 O.R. (3d) 99 (C.A.), Alfano v. Piersanti, 2012 ONCA 442, Hopkins v. Kay, 2014 ONCA 514, M.J. Jones Inc. v. Kingsway General Insurance Co. (2003), 68 O.R. (3d) 131 (C.A.), Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260, Locking v. Armtec Infrastructure Inc., 2012 ONCA 774, Dobson (Litigation Guardian of) v. Dobson, [1999] 2 S.C.R. 753, Thrive Capital Management Ltd. v. Noble 1324, 2021 ONCA 722, Thrive Capital Management Ltd. v. Noble 1324 Queen Inc., 2022 ONSC 4081, Skymark Finance Corporation v. Ontario, 2023 ONCA 234, I.H. Jacob, “The Inherent Jurisdiction of the Court” (1970), 23 Curr. Legal Probs. 23, P. M. Perell, “A Survey of Abuse of Process”, in T. L. Archibald and R. S. Echlin, eds., Annual Review of Civil Litigation 2007 (Toronto: Thomson Reuters, 2007), 243, B.L. Grossman & A. Basmadjian, “Waxman v. Waxman: Failure to Immediately Disclose a Partial Settlement Agreement That Changes the Litigation Landscape Will Result in a Stay of Proceedings” (2022) 53 Advoc. Q. 251, E.G. Upenieks & J.M.E. Chumak, “The Balancing Act for Canadian Litigators: Encouraging Settlement between Parties and the Procedural Risks of Entering into Settlement Agreements in Multi-Party Litigation” (2023) 53 Advoc. Q. 393, S. Aylward, “A Shifting Landscape: Non-Disclosure of Partial Settlements in Multi-Party Litigation” Ann. Rev. Civil (Toronto: Thomson Reuters, 2023), K.T. Di Tomaso et al., “Obligation to Immediately Disclose a Partial Settlement Agreement That Changes the Litigation Landscape in Multi-Party Litigation” (2024) 55 Advoc. Q. 86

facts:

In this combined decision, the Court heard four appeals together, as each required reconsideration of the framework governing disclosure of partial settlement agreements in multi-party civil litigation and an assessment of the continuing validity of the rule articulated in Handley Estate v. DTE Industries Limited (“Handley Estate”). This rule provides that where parties enter into a partial settlement agreement that changes the adversarial landscape of the litigation, such agreement must be disclosed immediately to the non-settling parties and the court. Per Handley Estate, failure to disclose immediately constitutes an abuse of process, prejudice need not be shown, and a stay of proceedings is the only remedy available. The appeals raised common legal issues concerning the characterization of non-disclosure as an abuse of process, the appropriate remedy, and the interaction between the common law and the recently enacted r. 49.14 of the Rules of Civil Procedure. Following are the underlying facts of the four appeals.

1086289 Ontario Inc. v. Welland (City) (“Welland”) was a highly contentious multi-party dispute relating to the construction of a sports facility for the 2015 Pan American Games. Three parties entered into a settlement agreement, which they disclosed about a month later. The architect defendant moved to stay the proceedings against it as an abuse of process, claiming that the agreement entirely changed the litigation landscape and that the settling parties had breached their immediate disclosure obligations. Applying Handley Estate, the motion judge refused the requested stay, holding that the agreement did not significantly alter the parties’ adversarial positions and that disclosure, despite the one-month delay, was prompt enough, given the glacial pace of the litigation overall. The architect appealed.

In Evertz Technologies Limited et al v. Providius Corp. et al (“Evertz”), a tech company, Evertz, sued its former employees and their new corporation, Providius, for the alleged theft of confidential technological information and market advantage. Evertz also sued a competitive German company, Lawo, in Ontario and Delaware, claiming it had conspired with Providius to market and sell the stolen technology. On June 4, 2022, Evertz settled both actions with Lawo. Although Lawo and Evertz progressively revealed select details of the settlement to Providius, the full text of the agreement was only provided eight months after settlement. Following Handley Estate, the motion judge stayed the action against Providius, concluding that the agreement changed the litigation dynamics by giving Evertz business leverage over Providius. He held that the eight-month disclosure delay and piecemeal disclosure strategy were unacceptable, with both painting a misleading picture of the parties’ changed adversarial orientation. Evertz appealed.

Howran v. Howran (“Howran”) emerged from a motor vehicle accident in which an infant and her mother suffered serious injuries. They subsequently alleged negligence against the City of Kawartha Lakes, the father who had been driving the car, and his mother CF, as owner of the vehicle. On October 26, 2021, the plaintiffs agreed to a settlement with the father and CF. Complete terms of this agreement were not disclosed to the City immediately, though a draft agreement subject to finalization was provided and the City was updated as negotiations progressed, with the full text disclosed on August 14, 2023. The motion judge dismissed the City’s request for a stay, holding that the City had been provided with the agreement’s essential terms early in the litigation and was not misled in its litigation strategy. The City subsequently appealed.

In Thrive Capital Management Ltd. v. Noble 1324 Queen Inc. (“Thrive”), the appellant corporations brought a civil fraud action against the respondents alleging misuse of investment funds. The motion judge stayed the action, since the appellants failed to immediately disclose a settlement reached with an individual defendant, DB. This agreement provided that, in exchange for not pursuing sanctions against DB for contempt of a Mareva injunction order, DB would pay the appellants $110,000. He also agreed to cooperate with and assist the appellants in the main action. The motion judge found this agreement changed the parties’ adversarial positions and should have been immediately disclosed, with non-disclosure amounting to an abuse of process. She stayed the proceedings as mandated by Handley Estate but made clear that she would have imposed a different remedy if she had any discretion to do so.

issues:

Common Issues

1. Was Handley Estate wrongly decided?
2. If yes, should Handley Estate be overruled?
3. Should r. 49.14 be applied to these appeals?
4. Do remedies awarded short of a stay constitute final or interlocutory orders?

Individual Appeals

5. Given the reversal of Handley Estate, should the appeal of the stay refusal in Welland be remitted for further evidence and argument?
6. Given the reversal of Handley Estate, should the appeal of the granted stay in Evertz be remitted for further evidence and argument?
7. Given the reversal of Handley Estate, should the appeal of the stay refusal in Howran be remitted for further evidence and argument?
8. Given the reversal of Handley Estate, should the appeal of the granted stay in Thrive be remitted for further evidence and argument?

holding:

Appeals allowed in Welland and Thrive. Appeals dismissed in Evertz and Howran.

reasoning:

1. Yes. The Court confirmed that Handley Estate was wrongly decided, since the inflexible and exceptionless rule it established departed from the fundamental principles governing the doctrine of abuse of process. More specifically, the Handley Estate rule’s stipulation that non-disclosure of partial settlement agreements that change the adversarial landscape of the litigation constitutes, in every case, an abuse of process, even where prejudice was not shown, coupled with its prescription of a mandatory stay of proceedings as the sole available remedy, was inconsistent with entrenched abuse of process doctrine. Through a lengthy historical jurisprudential analysis, the Court demonstrated that the abuse of process doctrine has always required a contextual and discretionary inquiry, directed to whether the impugned conduct gives rise to unfairness, prejudice, oppression, or otherwise undermines the integrity of the administration of justice, and, if so, what remedy is appropriate and just in the circumstances.

2. Yes. Not all wrongly decided cases must be reversed, and only where the advantages of overruling outweigh the disadvantages will the Court dispense with stare decisis and discard its past precedents. Considering the nature of the error and its impact on future litigants and the integrity of the justice system, the Court held that the advantages of reversing Handley Estate outweighed any disadvantages. The Handley Estate rule had been the subject of significant academic controversy and heavy litigation, with the Court and many others concerned that the rule was unduly harsh and led to punitive and unfair outcomes. Moreover, the obligation to disclose had been criticized for unhelpful ambiguity, since the meaning of immediate disclosure and the extent of required disclosure had been interpreted differently across the jurisprudence. Having overruled Handley Estate, the Court clarified that, going forward, non-disclosure of partial settlement agreements was to be assessed under ordinary abuse of process principles. Hence, whether non-disclosure constituted an abuse of process would be determined not categorically but based on each case’s specific facts, including the nature and timing of the non-disclosure and whether it resulted in prejudice to the parties or the administration of justice. Remedies where an abuse of process is made out must be fashioned according to proportionality, with the draconian option of a stay remaining available but reserved for cases where no other remedy would suffice. Otherwise, courts now have discretion to impose a range of remedies responsive to the facts, including those set out in r. 49.14.

3. Yes. The Court held that r. 49.14 is consistent with and reinforces the new post-Handley common law approach to non-disclosure of partial settlement agreements. Rule 49.14 was created to address concerns with Handley Estate. It expands the scope of the disclosure obligation, applying wherever there is a partial settlement agreement (not only to those agreements that entirely change the litigation landscape), and provides for a spectrum of non-disclosure remedies including orders for costs, further discovery, additional disclosure, striking of evidence, adjournments, a stay or any other order that is just. The rule clarifies that all terms in a partial settlement agreement other than the monetary value of settlement must be disclosed and provides defined time limits for disclosure. Notably, a breach of r. 49.14 does not in itself mandate a finding of abuse of process or the imposition of any particular remedy.

4. Under the new common law framework and r. 49.14, appeal routes are determined by the nature of the order under scrutiny. Orders granting a stay are final and appealable to the Court, while orders imposing remedies short of a stay or declining to grant a stay are generally interlocutory and thus appealable to Divisional Court, with leave.

5. Yes. The Court allowed the Welland appeal and remitted the stay motion for a fresh hearing on the new abuse of process framework, should the parties wish to re-argue the motion. The motion judge’s two justifications for refusing to grant a stay were tied directly to the Handley Estate framework, as were the parties’ submissions. Neither the parties nor the motion judge considered the potential prejudice to non-settling parties arising from the timing of the disclosure of the agreement, which would now be a significant consideration in the revised abuse of process analysis.

6. No. Regarding Evertz, the Court concluded that the motion judge made sufficient factual findings to ground an abuse of process and reached the appropriate disposition of staying the action. The motion judge considered the express terms and practical effect of the settlement agreement and found that by executing it, Lawo effectively switched sides and acted largely at Evertz’s behest, while giving Providius the misleading impression that it was acting independently. Moreover, abuse of process was engaged since Evertz had repeatedly misled Providius and the Court that the settlement agreement need not be disclosed since it related solely to the Delaware action. The motion judge’s factual findings supported the conclusion that Evertz’s conduct prejudiced Providius. Hence, the Court was not satisfied that a lesser remedy than a stay would be appropriate and saw no reason to remit the case to the lower court.

7. No. Turning to Howran, the Court saw no basis to interfere with the motion judge’s findings, which were entitled to deference and dispositive of the appeal. The motion judge clearly found that the City suffered no prejudice or unfairness from the lack of immediate disclosure as it was made aware of the essential terms of the agreement and provided with updates, and the plaintiffs’ conduct did not harm the integrity of the judicial process. Hence, there was no reason to invoke the doctrine of abuse of process.

8. Yes. Finally, regarding Thrive, the Court allowed the appeal and remitted the matter to the motion judge for a discretionary assessment of the appropriate remedy for the abuse of process she found. This disposition flowed naturally from the motion judge’s reasons, wherein she explicitly stated that she only stayed the proceedings because Handley Estate required that remedy. Discretion to order a different remedy now existed under the Court’s new framework addressing non-disclosure of partial settlement agreements.

SHORT CIVIL DECISIONS

Menghesha v. Gebremariam, 2026 ONCA 364

[Copeland, Monahan and Gomery JJ.A.]

Counsel:

G.V. Ert, K.C. and D. Shuhaibar, for the respondent/moving party

D.L.Y. So and V. Akujobi, for the appellant/responding party

Keywords: Wills and Estates, Capacity, Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Succession Law Reform Act, R.S.O. 1990, c. S.26., s.21.1

Dani Building System Inc. v. Hossain, 2026 ONCA 362

[Miller, Trotter and Osborne JJ.A.]

Counsel:

M. Wyatt, for the respondent/moving party

S.H., acting in person

N.H., acting in person

Keywords: Contracts, Construction, Liens, Civil Procedure, Appeals, Jurisdiction, Leave to Appeal, Extension of Time, Settlements, Construction Act, R.S.O. 1990, c. C.30., s.58, 58(1)(a), 71(1) Courts of Justice Act, R.S.O. 1990, c. C.43., s. 134(3), Rules of Civil Procedure, r. 54, 54.09(1)(b), MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422, Chaly v. Structured Restoration Inc., 2025 ONCA 901, Martin v. 11037315 Canada Inc., 2025 ONCA 44

Bemco Financial Services Ltd. v. 12425467 Canada Inc, 2026 ONCA 363

[Miller, Trotter and Osborne JJ.A.]

Counsel:

G. Cadogan, for the appellants

A. Deveaux, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Mortgages, Debtor-Creditor, Enforcement, Power of Sale, Civil Procedure, Summary Judgment, Evidence, Burden of Proof, Land Titles Act, R.S.O. 1990, c. L.5, s. 78(4), 160, Airport Business Park Inc. v. Huszti Holdings Inc., 2023 ONCA 391

Reid v. Bracebridge (Town), 2026 ONCA 365

[Copeland, Monahan and Gomery JJ.A.]

Counsel:

M. Klippenstein and H.A. Taylor, for the appellant

C.M. Loopstra, K.C. and M. Parsons, for the respondent Area Municipality of the Town of Bracebridge

Varoujan Arman and Nadav Amar, for the respondent C.C. Tatham & Associates Ltd.

Keywords: Civil Procedure, Orders, Administrative Dismissal for Delay, Appeals, Standard of Review, Palpable and Overriding Error, Labelle v. Canada (Border Services Agency), 2016 ONCA 187, Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, Piedrahita v. Costin, 2023 ONCA 404

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