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.

The EMEA Debtors sought leave to appeal an order approving an Allocation Protocol that provided for a joint trial by the Ontario Superior Court of Justice and the US Bankruptcy Court for the District of Delaware to allocate over US$7 billion in proceeds from the sale of Nortel assets.

The moving parties argued the joint trial violated the Ontario court's independence and that the parties had previously agreed to binding arbitration.

The Court of Appeal dismissed the motion for leave to appeal, finding the proposed appeal lacked prima facie merit as the joint trial did not infringe judicial independence and the relevant agreement did not mandate arbitration.

The Court of Appeal issued a costs endorsement following an appeal in CCAA proceedings.

The appellant, Computershare Trust Company of Canada, was ordered to pay costs of the appeal to the respondent Crystallex International Corporation in the amount of $110,688.00, and to the respondent Tenor Capital Management Company, L.P. and Affiliates in the amount of $80,000.

Both amounts are inclusive of disbursements and HST.

The applicants sought an interlocutory injunction compelling a hotel operator to continue managing and branding a hotel under a particular brand pending determination of a permanent injunction application.

They argued the lease required continued operation of the hotel using the brand and associated operational infrastructure despite expiry of the hotel management agreement.

The court applied the RJR‑MacDonald test and held that the lease provisions did not clearly impose an obligation requiring the operator to continue providing the full operational benefits of the brand.

The alleged harm, primarily reduced participation rent and potential reputational impacts, was found to be quantifiable and compensable in damages.

The balance of convenience favoured the operator, which would otherwise be compelled to operate a business relationship it no longer wished to maintain.

The appellant bank appealed a trial judgment awarding the respondent damages for losses arising from forged cheques drawn on its account by an employee.

The bank argued that a verification of account clause in the banking agreement provided a complete defence.

The Court of Appeal dismissed the appeal, finding that the clause did not clearly and unambiguously apply to forged cheques, which are wholly inoperative under s. 48(1) of the Bills of Exchange Act.

The respondent's cross-appeal for additional compensatory and punitive damages was also dismissed due to insufficient evidence and lack of basis for punitive damages.

The appellant, an Evangelical Christian organization operating community living residences, appealed a Human Rights Tribunal decision finding it discriminated against a support worker on the basis of sexual orientation.

The Tribunal had held the organization could not rely on the religious exemption in s. 24(1)(a) of the Human Rights Code because it served the broader public rather than primarily serving its own religious group.

The Divisional Court found the Tribunal erred in its interpretation of s. 24(1)(a) by failing to consider the organization's subjective religious purpose in providing charitable services.

However, the Court upheld the Tribunal's conclusion that the prohibition on same-sex relationships was not a bona fide occupational qualification for a support worker, as the role did not involve religious proselytization.

The Court also upheld the finding of a poisoned work environment but narrowed the systemic remedies ordered by the Tribunal.

The moving parties sought leave to appeal an interlocutory decision removing their law firm as solicitors of record due to a conflict of interest arising from the transfer of an associate.

The court dismissed the motion for leave to appeal, finding no conflicting decisions under rule 62.02(4)(a) regarding the failure to provide prompt notice of a conflict, and no good reason to doubt the correctness of the motions judge's decision under rule 62.02(4)(b).

The court affirmed that independent counsel should manage conflict issues and that the motions judge correctly applied the principles from McDonald Estate v. Martin.

The appellant appealed an order regarding compensation in a class action.

The appeal was resolved on consent, with the appellant abandoning his claim for compensation in excess of $95,000.

Class counsel consented to a payment of $95,000 to the appellant on a quantum meruit basis, to be paid from funds set aside for class counsel and appellant compensation.

Appeals and cross-appeals arising from the collapses of two airlines operating leased aircraft and leaving substantial unpaid airport and civil air navigation charges.

The Court held that legal titleholders were not personally liable for unpaid navigation charges under s. 55 of the Civil Air Navigation Services Commercialization Act because 'owner' was limited to persons with legal custody, control, or possession in the statutory context.

However, the seizure and detention remedies under s. 56 of that Act and s. 9 of the Airport Transfer (Miscellaneous Matters) Act operated against aircraft owned or operated by the defaulting airlines and could not be defeated by leasing arrangements or by separating attached engines.

The remedies extended to security posted in substitution for the aircraft, subject to the motions judges’ supervisory discretion to craft fair terms.

Interest continued to run until payment, posting of security, or bankruptcy.

The moving party brought a motion to quash an appeal of an order directing it to pay principal and accrued interest to the respondents and to pay further sums into court.

The moving party argued the order was interlocutory and that the respondents were estopped from appealing because they had derived a benefit from the order.

The Court of Appeal dismissed the motion to quash, finding that the order was final in respect of the respondents' secured priority position.

The Court also held that the respondents were not estopped from appealing, as they had complied with the order and immediately notified the moving party of their intention to appeal.

The respondents, having been largely successful on the main appeals concerning the interpretation of seizure and detention remedies under the Airport Transfer (Miscellaneous Matters) Act and the Civil Air Navigation Services Commercialization Act, sought costs totaling over $631,000.

The court declined to award costs to any party.

The court reasoned that the proceedings raised novel issues of statutory interpretation that engaged the public interest, the respondents were not completely successful as their cross-appeals were dismissed, and the appellant airport authorities acted reasonably in bringing the appeals given the lack of established jurisprudential authority.

The appellant brought a class action seeking restitution for unjust enrichment arising from late payment penalties (LPPs) levied by the respondent gas utility in excess of the interest limit prescribed by s. 347 of the Criminal Code.

The Supreme Court of Canada allowed the appeal, holding that the appellant made out a claim for unjust enrichment.

The Court established a two-part test for the juristic reason analysis and found that the OEB orders did not constitute a juristic reason because they were inoperative to the extent they conflicted with the Criminal Code.

The respondent was ordered to repay LPPs collected in excess of the legal limit after the action was commenced in 1994.

The appellant investor appealed the dismissal of his action against his investment advisor and brokerage firm for damages arising from advice regarding the sale and acquisition of shares, including Bre-X shares.

The appellant argued the trial judge erred in not finding a fiduciary relationship and in failing to find the advisor's conduct wrongful.

The Court of Appeal dismissed the appeal, finding the trial judge correctly applied the test for a fiduciary relationship and that the findings regarding the advisor's conduct were supported by the evidence with no palpable and overriding error.

Following the sale of a business, the Superintendent of Pensions approved the transfer of pension assets and liabilities from the exporting employer to the importing employer without giving notice to the importing employer's employees.

The employees applied for judicial review, arguing a breach of natural justice.

The Court of Appeal dismissed the appeal, holding that the Superintendent's procedure was reasonable.

The court found that the employees' interests would be adequately protected at the second stage of the process, when the importing employer applied to amend its pension plan, at which point notice and an opportunity to make submissions would be provided.

On appeal from summary judgment dismissing an intended class proceeding, the court held that the proposed claim for restitution of late payment penalties charged by a regulated gas utility was not an impermissible collateral attack on Ontario Energy Board rate orders, and that statutory and regulatory defences based on the Ontario Energy Board Act, the Criminal Code, and a regulated industries doctrine did not bar the proceeding.

The majority nevertheless dismissed the appeal on the merits, finding the unjust enrichment claim failed because receipt of the penalties did not constitute an enrichment in the utility's regulatory context and, in any event, the Board-ordered rate structure supplied a juristic reason for retention.

The court declined preservation, declaratory, and injunctive relief.

The appeal from the costs award was allowed, with no costs ordered either below or on appeal.

The appellant commenced a class action against the respondent gas utility, alleging that its five percent late payment penalty constituted interest at a criminal rate under s. 347 of the Criminal Code.

The motions judge granted summary judgment to the respondent, finding that the penalty was not an interest charge and that its payment was a voluntary act by the customer.

The Court of Appeal dismissed the appeal.

The Supreme Court of Canada allowed the appeal, holding that the late payment penalty is a charge payable for the advancing of credit under an agreement or arrangement, and therefore constitutes 'interest' under s. 347.

The Court also held that the payment of the penalty is not a voluntary act that would preclude the application of the criminal interest rate provision.

Additionally, the Court set aside a personal costs award against the appellant, as he had received financial support from the Class Proceedings Fund.

The applicant union alleged that the appointment of a court-appointed receiver and manager of a nursing home constituted a sale of a business under section 63 of the Labour Relations Act, making the receiver and the secured creditor successor employers.

The Ontario Labour Relations Board dismissed the application, finding that a receiver and manager merely acts as an officer of the court to manage the business on behalf of creditors, and no disposition or transfer of the business occurred until the assets were subsequently sold to a third-party purchaser.