The Latest In The Catalyst Capital Litigation Saga: Spoliation, Substantial Indemnity Costs And Abuse Of Process

Two decisions have been recently issued in respect of the claims brought by the investment management firm Catalyst Capital Group Inc. following its unsuccessful efforts to acquire WIND Mobile Inc. in 2014. The results in both decisions (one by the Ontario Superior Court of Justice, and the other by the Court of Appeal) were driven primarily by factual findings. However, the reasons of both courts consider a number of legal points, such as spoliation, substantial indemnity costs, and dismissal of proceedings on the basis of issue estoppel, cause of action estoppel, and abuse of process.

At the time of Catalyst's acquisition efforts, separate acquisition efforts were made by another investment management firm, West Face Capital Inc. In early 2014, Catalyst and the principal shareholder of WIND engaged in negotiations and appeared to be close to a deal. However, in August 2014, West Face, along with other investors (collectively referred to in the decisions as the "consortium"), made a new bid which resulted in their acquisition of WIND. West Face and the consortium later sold WIND for a very substantial profit to Shaw Communications.

Catalyst brought an action against West Face and Brandon Moyse, an analyst at Catalyst who left the company to work at West Face in May 2014. Catalyst alleged that Moyse communicated confidential information to West Face about Catalyst's...