Barbara L. Grossman

The Court of Appeal for Ontario issued an endorsement on costs and minor revisions to its January 26, 2024 disposition of an appeal and cross-appeal.

The primary issue was whether Buduchnist Credit Union Limited (BCU) breached a Mareva Order and the consequences.

Trade Capital Finance Corp. (Trade Capital) was substantially successful on the breach and remedy issues, leading to BCU losing priority as a secured creditor and being unable to immediately enforce its judgment.

The court also addressed BCU's request for minor factual revisions to the previous reasons, adopting some and rejecting others.

This appeal concerned the breadth of the court's jurisdiction to address a breach of a Mareva order and abuse of process.

The appellant, Trade Capital Finance Corp., appealed a distribution order in favour of the respondent, Buduchnist Credit Union Limited (BCU).

BCU had made advances to clients in breach of a Mareva order and subsequently obtained consent judgments.

The motion judge found BCU breached the Mareva order, disallowed its secured claim for post-Mareva advances, but allowed it to enforce as an unsecured judgment creditor.

Trade Capital argued the enforcement should be delayed.

BCU cross-appealed its loss of priority.

The Court of Appeal found that the motion judge erred in limiting his discretion.

It held that the court has broad inherent jurisdiction to respond to a breach of its orders, including delaying enforcement of claims arising from such breaches.

The Court allowed Trade Capital's appeal, ordering that BCU's judgment enforcement for post-Mareva advances be delayed until Trade Capital's action is determined, with both parties collecting pari passu if Trade Capital succeeds.

The cross-appeal by BCU was dismissed.

The issue of specific Woodland Property advances was remitted for further adjudication.

Trade Capital Finance Corp. (TC) and Buduchnist Credit Union Limited (BCU) filed opposing motions in an insolvency appeal.

TC sought an extension of time and leave to appeal a lower court's final disposition order concerning the distribution of receivership proceeds, arguing the order allowed BCU to enforce judgments arising from transactions in breach of a Mareva order.

BCU sought to lift the automatic stay of proceedings and security for costs.

The Court of Appeal granted TC's motions for extension of time and leave to appeal, finding the appeal prima facie meritorious and raising issues of general importance regarding Mareva orders and creditor enforcement in insolvency.

The court denied BCU's motions to lift the stay and for security for costs, concluding that the BIA governed the appeal and that lifting the stay would render TC's appeal moot, and that security for costs was not fitting given BCU was the applicant below and TC's insolvency stemmed from the alleged fraud.

The respondent credit union brought a motion to quash an appeal filed by debtors from a receivership order.

The order appointed a receiver over two residential properties pursuant to the Bankruptcy and Insolvency Act and the Courts of Justice Act.

The appellants sought to appeal without leave.

The court held that no appeal as of right existed and declined to grant leave to appeal, finding that the appeal did not raise an issue of general importance, was not prima facie meritorious, and would unduly hinder the receivership proceedings.

The motion was granted and the appeal quashed with costs fixed at $20,000.