Bankruptcy and Insolvency Law

The applicant filed a human rights application alleging discriminatory termination of employment.

The respondent employer had filed for bankruptcy and its assets were sold to a new entity.

The Tribunal dismissed the application, finding that the claim against the bankrupt employer was stayed under the Bankruptcy and Insolvency Act, and that the Human Rights Code does not contain successor employer provisions that would allow the claim to proceed against the new entity.

The appellant appealed an order finding its bid in a receivership sale process to be invalid.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the agreed process required parties to submit their final and best offer by a specified date and that the bids were to remain confidential.

As such, an auction was not contemplated, and the appellant's bid was properly ruled invalid.

The moving parties sought leave to appeal an order approving a settlement in the CCAA proceedings of Nortel Networks.

The Court of Appeal denied leave, finding no procedural or substantive unfairness in the settlement.

The motion judge had carefully balanced the various interests at stake and made no demonstrable error.

The appellants, a non-profit housing co-operative and a co-operative housing federation, appealed an order approving a receivership sale of the co-operative's assets to a municipality-controlled entity.

The appellants argued that the motion judge failed to properly consider the special nature of co-operative housing and the rights of its members.

The Court of Appeal dismissed the appeal, holding that the standard Soundair principles for approving a receiver's sale apply, and that the motion judge correctly balanced the special factors of social housing against the financial realities and statutory framework.

The appellant appealed an order regarding funds collected by a receiver.

The Court of Appeal dismissed the appeal, finding that the funds collected by the receiver never lost their character as trust funds because they were not co-mingled with pre-receivership funds and remained identifiable.

The cross-appeal regarding the interpretation of s. 191.0.1(3) was also dismissed, as the provision imposes obligations on persons in Ontario arranging carriage of goods.

The appellant factored accounts receivable and registered its interest under the PPSA using an incorrect spelling of the debtor's name.

The respondent bank later registered a general security agreement using the correct spelling.

Following the debtor's bankruptcy, a priority dispute arose.

The Court of Appeal held that the PPSA applies to absolute assignments of accounts and that the curative provision in s. 46(4) of the PPSA does not validate a registration where the debtor's name is misspelled, as a search under the correct name would not disclose the error.

The appeal was dismissed, granting priority to the bank's perfected security interest.

The respondent entered into a Tax Refund Agreement with Grant Forest Products Inc. (GFPI) to purchase income tax refunds.

GFPI failed to deliver the required transfer document before seeking CCAA protection.

The motion judge applied the equitable maxim that equity considers done what ought to be done, declaring the transfer had taken place.

The appellant, representing secured lenders, appealed.

The Court of Appeal dismissed the appeal, holding that the motion judge correctly applied the maxim to cure GFPI's breach and that doing so did not inequitably rewrite the contract or create an unlawful preference.

The moving parties, Objecting LTD Beneficiaries, sought an order expediting their motion for leave to appeal and consolidating the leave motion with the appeal itself.

The responding parties consented to expediting the leave motion but opposed consolidation.

The court agreed with the responding parties, finding no urgency requiring consolidation as benefits continued until the end of the year.

A schedule for the expedited leave motion was approved.

The appellants, major creditors of a bankrupt estate, appealed a Superior Court decision that varied a registrar's taxation of the trustee's final Statement of Receipts and Disbursements.

The registrar had drastically reduced the trustee's fees to $1, disallowed significant legal disbursements, and ordered the trustee to personally pay solicitor and client costs due to misconduct.

The Superior Court judge restored many of the fees and disbursements, finding the registrar exceeded his jurisdiction.

The Court of Appeal allowed the appeal in part, finding the registrar did have jurisdiction under s. 152(6) of the BIA to review previously taxed solicitor accounts.

The Court fixed the trustee's fees at $49,464.44, allowed $100,000 for the estate solicitor's fees, and ordered the trustee to personally pay half of the appellants' costs of the taxation hearing on a solicitor and client scale due to his misconduct.

The appellant appealed an order approving a settlement by an Interim Receiver.

The appellant argued there was no evidence to sustain the motion judge's findings under the Soundair principles.

The Court of Appeal dismissed the appeal, finding ample evidence in the Interim Receiver's reports that no assets beyond certain Swiss accounts were locatable or realizable, and that there was a 60% chance of success in related California litigation.

The court concluded the settlement was the best that could be achieved in the circumstances.

The appellant appealed a bankruptcy order granted under s. 42(1)(j) of the Bankruptcy and Insolvency Act.

The respondent, a diamond merchant, brought the petition after the appellant failed to pay for diamonds.

The appellant argued the bankruptcy judge erred in finding it had debts with other creditors.

The Court of Appeal dismissed the appeal, finding the evidence supported the conclusion that the appellant had outstanding liabilities to other suppliers.

The appellant trustee in bankruptcy appealed an order granting the Ministry of Health and Long Term Care equitable set-off.

The Ministry sought to set off $1,000,000 owed by the Crown for occupation rent of a nursing home against $4,413,285.85 owed by the bankrupt owner for over-subsidization.

The Court of Appeal dismissed the appeal, finding the application judge correctly applied the test for equitable set-off, as the cross-obligations were directly related and arose from the Ministry's decision to fund the operation directly rather than by subsidy.

The appellants appealed an order dismissing their motion to set aside an order granted under s. 38(1) of the Bankruptcy and Insolvency Act, which authorized a creditor to pursue a fraudulent conveyance action in the trustee's stead.

The appellants argued the creditor lacked standing because it had settled its claims against the bankrupt.

The Court of Appeal held that the appellants had standing to challenge the s. 38 order due to allegations of abuse of process.

However, the Court found the creditor was a valid creditor at the date of bankruptcy and no binding settlement had been concluded with the bankrupt estate.

The appeal was allowed in part only to set aside a costs provision and stay the trustee's original motion, but otherwise dismissed.

The appellant appealed a summary judgment dismissing his action for abuse of process against the bank.

The appellant alleged the bank brought bankruptcy proceedings for the improper purpose of purchasing his share in a company.

The Court of Appeal dismissed the appeal, noting the appellant had the opportunity to purchase the assets, did not object to the court-approved sale, and a previous judge had already struck similar allegations and found no improper purpose.

The Registrar and customers of a bankrupt motor vehicle leasing company appealed the dismissal of their motion to vary a vesting order and for leave to sue the trustee in bankruptcy.

The vesting order had transferred the bankrupt's lease portfolio to assignees free and clear of customer claims for security deposits.

The Court of Appeal dismissed the appeal, finding that the appellants' proprietary or economic rights were not directly affected by the order, as the contractual obligation to refund deposits remained with the bankrupt.

The court also held that a motion to vary under s. 187(5) of the BIA or Rule 37.14 cannot be used to substantively change an order or as a substitute for an appeal.

The appellants appealed a summary judgment dismissing their claim to an interest in a company.

The appellant, an undischarged bankrupt, argued that his interest should be returned to him under s. 40(1) of the Bankruptcy and Insolvency Act as property incapable of realization, and that the trustee had told him not to disclose the interest.

The Court of Appeal dismissed the appeal, finding that the trustee had not determined the property was incapable of realization, and the appellant's bare assertions about the trustee's advice lacked sufficient detail to raise a genuine issue for trial.

The appeal was dismissed with costs fixed at $9,000.

A load broker made a voluntary assignment in bankruptcy.

Prior to bankruptcy, it had co-mingled moneys received from shippers instead of segregating them in a trust account for carriers as required by the Load Brokers Regulation.

After bankruptcy, the trustee collected moneys owed by shippers and held them in a separate account.

A carrier sought payment of its outstanding accounts from these segregated funds.

The motion judge held that the funds satisfied the conditions for a trust and must be paid to the carrier, excluding them from distribution to creditors under the Bankruptcy and Insolvency Act.

The Court of Appeal dismissed the trustee's appeal, confirming that the statutory trust obligations apply to a trustee in bankruptcy who collects and segregates carrier fees.

The moving party union sought to quash the responding party employer's application for judicial review of a preliminary arbitration award on the basis of undue delay.

The employer had delayed 16 months in commencing the application and 21 months in perfecting it.

Applying the test for undue delay, the court found that while the delay was substantial, there was no actual prejudice to the union because the underlying employment relationship had ceased years prior due to bankruptcy, and the issue was a pure question of law regarding related employer status.

The motion to quash was dismissed, and the employer's cross-motion to have its application heard together with a related application was granted.

The franchisor of a shoe repair business went bankrupt, and its assets were purchased by the appellant.

The respondent franchisees sought to assume direct tenancies with their respective landlords under s. 39(2) of the Commercial Tenancies Act.

The appellant argued that the landlords had not consented to the subleases 'in writing' as required by the Act.

The Court of Appeal held that the landlord's approval need not be in writing and can be implied by conduct.

The Court also dismissed the franchisees' cross-appeal, finding no fundamental breach of the franchise agreements by the franchisor.

The respondent judgment creditor brought a motion to the Court of Appeal for an order allowing the sheriff to seize all assets of a corporation found to be the appellant's alter ego, after the appellant filed a proposal under the Bankruptcy and Insolvency Act.

The Court of Appeal declined to grant the relief, finding that while it might have jurisdiction under the Rules of Civil Procedure, matters regarding the enforcement of judgments and bankruptcy stays are properly dealt with by the Superior Court or Bankruptcy Court.

The motion was dismissed, with an interim order preserving the status quo until the matter is brought in the appropriate forum.