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Case: IMAX Corporation v. Guzzo et al., 2026 ONSC 621 (Schabas J.)

Court File No.: CV-25-00740258  ·  Heard January 19, 2026  ·  Released February 2, 2026

Few procedural questions arise as often in commercial litigation as this one: a respondent swears to a version of events that the applicant flatly denies, then argues that the resulting “conflict in the evidence” can only be sorted out at a trial where the judge can look the witnesses in the eye. In IMAX Corporation v. Guzzo, the Superior Court gives that argument short shrift — and in doing so clarifies how the 2018 amendment to Rule 14.05(3)(h) reshaped the application process.

The dispute in brief

IMAX leased projection systems and films to Cinémas Guzzo Inc. in exchange for lease payments, film charges, and a share of box-office revenue. After Cinémas Guzzo repeatedly defaulted, IMAX deferred enforcement in exchange for a personal guarantee from Vincenzo Guzzo — the company’s CEO and co-owner — signed on July 22, 2024, covering all amounts then or thereafter owing.

Cinémas Guzzo kept defaulting. IMAX demanded payment on the guarantee, then brought an application for judgment against both the company and Guzzo personally. By the date of judgment the outstanding balance stood at roughly $2.09 million. Critically, neither the amount owing nor the fact that Guzzo signed the guarantee was in dispute.

The defence: an alleged off-the-books assurance

Guzzo’s answer was a single, late-breaking allegation. In an affidavit filed roughly nine months into the enforcement process, he swore that IMAX’s Global President, Mark Welton, had told him the guarantee existed only to reassure IMAX’s auditors and “had no real enforceability.”

The court catalogued the problems with that account. There were no contemporaneous emails, texts, or records supporting it; Guzzo offered no detail of when or how the supposed side deal was struck; and he had never raised it — not when IMAX moved to enforce, not when counsel sent a demand, not when he was served, and not in his own text exchanges with Welton. Welton categorically denied the conversation, on affidavit and on cross-examination. And the guarantee itself contained an entire-agreement clause (Article 8.1) confirming that no representations affecting the guarantor’s liability had been made outside the document.

The procedural battleground: trial or application?

Faced with that record, Guzzo’s counsel argued the conflict between his evidence and Welton’s raised a genuine credibility contest that could only be resolved at a one-day trial. Schabas J. noted the awkward timing of that submission: at a September 2025 case conference, the respondents had agreed the matter could proceed by way of application and recorded no objection to that procedure.

More importantly, the court rejected the premise. Rule 14.05(3)(h) permits the application procedure where it is “unlikely that there will be any material facts in dispute requiring a trial.” Schabas J. emphasized the operative words — requiring a trial — added by amendment in 2018, which replaced the older language barring applications wherever there were “material facts in dispute.”

The Hryniak parallel

This is the decision’s central contribution. Schabas J. drew a direct line to Hryniak v. Mauldin, where the 2010 summary-judgment reforms shifted the test from “a genuine issue for trial” to “a genuine issue requiring a trial.” The 2018 amendment to Rule 14, the court held, serves the same purpose for applications. The rule no longer bars determination of an application merely because a material fact is contested.

The court was careful about the limits of the analogy. An application judge does not inherit the enhanced fact-finding powers in Rule 20.04(2.1) reserved for summary-judgment motions. But following the staged approach in Hryniak, a judge can ask whether the record permits a fair and just determination — including the resolution of a disputed material fact — without a trial. Where it does, that route is preferable in service of the just, most expeditious, and least expensive determination of the proceeding under Rule 1.04(1).

Credibility can be decided on the paper record

On the merits of the swearing contest, the court reaffirmed that demeanour is an unreliable guide to credibility. Drawing on Faryna v. Chorny and the Court of Appeal’s treatment of it in R. v. Kiss, Schabas J. held that the real test is whether a witness’s account is in harmony with the preponderance of probabilities a practical, informed person would recognize as reasonable.

Guzzo’s account failed that test. It was uncorroborated, raised only after a nine-month delay with no explanation, and inherently implausible — there was no rational reason Welton would have given an assurance contrary to IMAX’s interests and damaging to its own position. The court characterized it as a bald allegation lacking credibility and reliability that could be rejected without a trial. And in any event, because of the entire-agreement clause, even a proven representation would not have been a material fact affecting enforceability.

The unconscionability argument

Guzzo’s fallback — that the guarantee was unconscionable — was dismissed on the two-part test from Uber Technologies Inc. v. Heller: inequality of bargaining power and a resulting improvident bargain. Guzzo, a well-educated and sophisticated businessman with access to legal advice, who was invited to comment on the guarantee and whose own counsel returned the signed document, came nowhere near establishing the first element. Nor was the bargain improvident: it was offered as an alternative to immediate large payments and allowed Cinémas Guzzo to keep receiving films and earning revenue. Improvidence, the court reiterated, is measured at formation — not by reference to later hardship.

Result

IMAX obtained judgment against both Cinémas Guzzo and Guzzo personally for the full outstanding amount, with pre-judgment interest under the lease agreement and post-judgment interest under the Courts of Justice Act. Costs submissions were directed if the parties could not agree.

Takeaways for litigators

1. A swearing contest is not an automatic trial. Post-2018, an application judge may resolve a disputed material fact on the record where a fair and just determination is possible. Plan your application materials — and your responses — as if the merits will be decided then and there.
2. Put your best foot forward. As with summary judgment, parties are expected to lead their full evidentiary case. A respondent who holds back a key allegation, or surfaces it late, invites the inference that it is an afterthought.
3. Entire-agreement clauses carry real weight. Article 8.1 meant that even a proven oral assurance would not have been a material fact. A well-drafted no-representations clause can take an entire defence off the table before credibility is ever reached.
4. Demeanour is overrated; probability is not. Faryna v. Chorny and Kiss remain the touchstones. Frame credibility submissions around the inherent plausibility of the account and its consistency with the documentary and digital record — not the witness’s presence in the box.
5. Mind the case-conference record. Agreeing that a matter may proceed by application, then arguing for a trial, undercuts credibility on the procedural question. Take a consistent position from the first appearance.
6. Unconscionability is a high bar for sophisticated parties. Uber’s two-part test rarely assists a well-advised commercial actor, and improvidence is judged at the moment of contracting.

Citation: IMAX Corporation v. Guzzo et al., 2026 ONSC 621 (CanLII).

This post is a summary for general information and does not constitute legal advice.

If your business is involved in a commercial dispute, enforcement issue, or application proceeding, speaking with a Toronto commercial litigation lawyer early can help you assess the strongest procedural path before costs escalate.

Contact Ruzbeh Hosseini to discuss your litigation options.

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Johl v. Lingard et al, 2025 ONSC 5923

A recent endorsement from the Ontario Superior Court of Justice serves as a clear warning to parties involved in litigation: if you want the video recording of an examination for discovery to be available for use at trial, you must secure consent or a court order before the examination – not after.

The Motion

In Johl v. Lingard, the plaintiff brought a motion under Rule 30.10 to compel a non-party court reporting service to produce the audio-visual files of two Zoom discoveries. The motion was brought after the examinations were conducted and the plaintiff had not obtained consent or a prior order under Rule 34.19. The plaintiff’s intention was to use the recordings at trial to impeach the witnesses based on their demeanour — including an alleged emotional reaction from one defendant and a nervous laugh from another.

The Court’s Reasoning

The Court dismissed the motion on several grounds.

The first is that the plaintiff used the wrong rule. A video recording of a discovery is not a “document” within the meaning of Rule 30.10. It is a record of evidence, not a contemporaneous record of the events underlying the litigation. The court expressed concern that treating such files as ordinary non-party documents would neutralize Rule 34.19.

The second is a matter of timing, which is built into Rule 34.19. Rule 34.19 exists as a means to produce a video or other recording of an examination into evidence. An order under Rule 34.19 is uncommon and is typically sought and obtained when there is a demonstrated need to preserve a witness’s evidence for possible use at trial – for instance, if the witness is elderly, in poor health, or unlikely to be available to testify in person. The consent-or-order for the use of a recording at trial must be sought before the examination and not afterwards as was done by the plaintiff in this case.

Finally, the court observed that demeanour is a fragile foundation. The plaintiff’s purpose of obtaining the recorded video of the examinations was to use the video at trial to proffer into evidence their non-verbal reactions to questions asked. Drawing on R. v. Norman, Faryna v. Chorny, R. v. S.(N.), and R. v. Rhayel, the Court emphasized that demeanour is only one — and an often unreliable — factor in assessing credibility. The transcripts already in the hands of the parties would assist in cross-examination and impeachment.

Conclusion

Rule 30.10 is not a workaround for Rule 34.19. The purpose of Rule 34.19 is to produce the audio-visual files of an examination in very limited circumstances – typically when a witness is elderly, in poor health, or unlikely to be available to testify in person. An audio-video recording of an examination is not to be used to determine credibility as facial expressions and reactions are unreliable indicators of credibility. Transcripts from examinations remain the workhorse for impeachment during a trial. A better strategy is to build a case around inconsistencies and reliability in the evidence, not emotional expressions or nervous laughter.

Considering Using Discovery Evidence at Trial? Get Legal Advice Early.

If your case may involve recorded discovery evidence, witness availability concerns, or impeachment at trial, early legal advice can help avoid procedural missteps. Cambridge LLP assists clients with civil and commercial litigation strategy across Ontario, including examinations for discovery, evidentiary issues, and trial preparation.

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This decision is a reminder that appellate courts will rarely disturb factual findings made at trial, especially where the appeal amounts to an attempt to reargue the case. In 12563789 Canada Inc. v. Tiki Tours International Corp., 2026 ONCA 269, the Ontario Court of Appeal confirmed that a failed business relationship does not become a joint venture simply because one party later claims that it was. The ruling also reinforces the legal risks of making public accusations during a commercial dispute, particularly where defamation and fiduciary issues are in play.

Cambridge LLP successfully defended a trial decision on appeal in a dispute arising from a failed business relationship involving two boats and competing claims about the legal structure of the parties’ dealings. The Court of Appeal upheld the trial decision in full, dismissed the appeal, confirmed punitive damages and awarded an additional $17,000 in appeal costs.

This case is directly relevant to businesses entering into asset purchases, informal arrangements, or partnership-style dealings where the legal structure of the relationship is not clearly defined from the outset.

Three Practical Lessons From This Decision

• Appellate courts defer heavily to trial judges on factual findings. Appeals are not an opportunity to relitigate the facts.
• An agreement, including a joint venture, requires agreement on essential terms. Agreements to agree and negotiations on draft agreements do not create binding rights.
• Public accusations made during a commercial dispute can generate serious defamation exposure, particularly where those statements go beyond asserting a legal position.

Background of the Dispute

The dispute arose from a failed business venture involving tiki-themed boat rentals in Wasaga Beach. The respondents sought to enter the market but initially lacked the necessary municipal approvals. They entered discussions with the appellants, contemplating an operator agreement.

Critically, no final operator agreement was ever executed. Despite that, the respondents purchased and took possession of two tiki boats from the appellants. The relationship broke down shortly afterward. The respondents moved forward independently, while the appellants asserted ongoing rights tied to the contemplated but never finalized agreement.

Why the Joint Venture Argument Failed

The appellants attempted to reframe the transaction as a joint venture rather than a contract for the sale of assets. The trial judge rejected that characterization and the Court of Appeal agreed.

The reason is straightforward: a joint venture requires agreement on essential terms. Drafts and negotiations do not create a binding agreement. The court found no enforceable agreement governing the parties’ relationship, which eliminated any contractual foundation for the appellants’ claims to control the respondents’ operations or reclaim the vessels that were sold to the respondents.

That finding also stripped away any justification for the certainty with which the appellants made their public statements about the respondents.

The Court of Appeal’s Approach to Trial Findings

The appellants asked the Court of Appeal to revisit the factual findings reached at trial. The court declined to do so.

Appellate courts apply a high standard of deference to trial judges on questions of fact. Absent a palpable and overriding error, findings made after a full trial will stand. This case illustrates that principle clearly. The attempt to relitigate the core factual dispute on appeal was unsuccessful across every ground. The Court upheld the trial judge’s findings on fiduciary breach and defamation, affirmed punitive damages, affirmed the dismissal of the counterclaim and declined to interfere with costs.

Defamation and Fiduciary Duty Issues

Rather than keeping the dispute within legal channels, the appellants took a different approach. They published statements on their website and social media platforms alleging that the respondents:

1. were operating illegally.
2. lacked insurance.
3. had effectively stolen the boats or engaged in fraudulent conduct.

The trial judge had no difficulty finding those statements were prima facie defamatory. Allegations of illegality, lack of insurance and fraud plainly tend to lower a business’s reputation in the eyes of a reasonable person.

The appellants could not establish justification. The court drew a clear line between asserting a legal position in a dispute and publishing definitive public accusations of wrongdoing. The latter, without a solid evidentiary foundation, attracts liability.

On the fiduciary duty issue, the appellants took several unilateral steps to prevent the respondents from using the boats. In 2022, without notice to the respondents, the appellants directed Transport Canada to change the registered owner of the boats. In 2024, again without notice, the appellants sent several emails to Transport Canada falsely stating that the boats had been removed from service. The trial judge found that the appellants leveraged the power imbalance in the relationship in a manner inconsistent with the loyalty expected of them and, although this was not a classic fiduciary relationship, recognized an ad hoc fiduciary relationship on the facts.

The Court of Appeal upheld those findings, along with the award of punitive damages and the dismissal of the counterclaim.

Why This Decision Matters for Businesses

This case carries practical implications for any business entering into asset purchases, contemplated operator agreements, or partnership-style arrangements without first settling in writing the essential terms of the agreement.

Where the nature of the relationship is unclear, both parties are exposed. The party claiming a joint venture must prove agreement on essential terms. The party denying it must be prepared to demonstrate that clearly from the outset.

The case also highlights the risks created by a party’s conduct during a commercial dispute. Public statements made in the heat of a disagreement can have consequences that outlast the underlying transaction. Businesses and their advisors should treat reputational risk as a litigation risk from the earliest stages of a dispute. 

What Businesses Should Do Differently

• Document the legal structure of any business relationship clearly and in writing before proceeding.
• Negotiations and draft agreements do not create binding rights. The absence of an executed agreement matters.
• Appellate courts will not relitigate factual findings made at trial. A strong appeal requires more than disagreement with the outcome.
• Public statements made during a commercial dispute can result in defamation liability. The line between asserting a legal position and making unproven public accusations is a real one.
• Unilateral steps taken to undermine another party’s use of assets, particularly without notice, can give rise to fiduciary liability in certain circumstances.

Facing a Commercial Dispute? Get Early Legal Advice.

If your business is involved in a partnership, asset sale, or commercial dispute where the legal structure of the relationship is unclear, early legal advice can help reduce the risk of litigation and reputational harm. Cambridge LLP acts for businesses and corporations in commercial disputes across Ontario and beyond.

Frequently Asked Questions

What is required to prove a joint venture in Ontario?

A joint venture requires agreement on the essential terms. Drafts, negotiations, and informal dealings are not enough. The court looks for clear evidence that the parties actually agreed on how the arrangement will work.

When will an appellate court overturn a trial judge’s findings?

Only in limited circumstances. A party must show a palpable and overriding error, not simply a disagreement on the findings made by the trial judge.

Can defamatory statements made during a business dispute lead to damages?

Yes. Public accusations made during a business dispute can support a defamation claim if they are unproven and harmful to the opposing side’s reputation. A finding of defamation can lead compensatory and, in some cases, punitive damages.

What is an ad hoc fiduciary relationship?

An ad hoc fiduciary relationship is one where there is a duty of loyalty and care that arises in specific and non-traditional circumstances. The duty can arise where one party has discretionary power affecting another’s interests and is expected to act loyally in that context. The existence of an ad hoc fiduciary duty depends on the facts, including vulnerability, influence, and the nature of the undertaking given.

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