Adrian Scotchmer

The appellant creditor appealed a decision upholding the Trustee's disallowance of its unsecured claim in the bankruptcy.

The claim was based on a promissory note and subsequent agreement, but no payments or acknowledgments had been made for over two years prior to the bankruptcy, rendering it statute-barred under the Limitations Act, 2002.

The court held that a statute-barred claim, being unenforceable at law, is not a claim to which the bankrupt is 'subject' under section 121(1) of the Bankruptcy and Insolvency Act, and is therefore not provable in bankruptcy.

The appeal was dismissed.

The appellant bank appealed an interlocutory order adjourning its summary judgment motion.

The motion judge had adjourned the motion to hear oral evidence regarding whether the bank knew or should have known that the respondent's brother was using a line of credit, secured by the respondent's condominium, for his own benefit contrary to a trust agreement.

The appellant argued that under Hryniak v. Mauldin, the motion judge was required to determine if there was a genuine issue for trial based solely on the paper record before ordering oral evidence.

The Divisional Court dismissed the appeal, holding that Hryniak does not restrict a motion judge's inherent equitable jurisdiction to adjourn a motion and hear oral evidence to determine if a genuine issue for trial exists.

In the CCAA proceedings of U.S. Steel Canada Inc., its parent company, United States Steel Corporation, sought approval of several proofs of claim totaling over $2 billion.

Various stakeholders objected, arguing that the intercompany loans should be re-characterized as 'equity claims' under the CCAA and that the security granted for certain advances was void as a fraudulent preference or unenforceable for lack of consideration.

The court rejected the objections, finding that the parent company had a reasonable expectation of repayment when the advances were made, and that the security was validly granted for fresh consideration and did not constitute a fraudulent preference.

The claims were confirmed as debt claims.

In a CCAA restructuring proceeding, stakeholders sought disclosure of a settlement agreement between U.S. Steel, its Canadian subsidiary, and the Attorney General of Canada regarding undertakings under the Investment Canada Act.

The CCAA judge held that the agreement was entirely privileged under s. 36 of the ICA.

On appeal, the Court of Appeal found that while s. 36(5) protects the Crown from being compelled to disclose the agreement, this protection does not extend to the private corporations.

The appeal was allowed, and the issue of whether common law settlement privilege barred disclosure was remitted to the CCAA judge.

The moving party sought default judgment against the defendants for fraudulently obtaining pre‑retirement death benefits and health and welfare benefits by falsely claiming that a union member had died.

The defendants had previously pleaded guilty in criminal proceedings involving the same fraudulent scheme and were noted in default in the civil action.

The court held that the admitted facts established fraud, deceit, fraudulent misrepresentation, conspiracy, conversion, and unjust enrichment.

Judgment was granted for the amounts paid out under the benefit plans, together with punitive damages and declarations preventing the defendants from receiving future benefits until the debt was repaid or permitting set‑off against any future entitlements.