Cameron D. Neil

Motion to determine priority to funds paid into court in a bankruptcy proceeding.

The trustee in bankruptcy sought determination of whether the respondent had a valid lien or secured interest in a trailer component installed before the bankruptcy and also sought reimbursement of prior interpleader costs.

The court rejected the respondent’s claim to a lien under the Repair and Storage Liens Act but found that the respondent had repossessed the trailer prior to the bankruptcy and therefore held a perfected security interest in the installed component under the Personal Property Security Act.

As a result, the respondent held a secured claim limited to the value of the component, with the remainder of its claim treated as unsecured.

The trustee’s request for reimbursement of costs relating to earlier proceedings was denied.

Shareholders and a director of two corporations brought an application seeking interim access to corporate books and records, including accounting records and source documents.

The respondents argued that the applicants already had sufficient financial information through electronic systems and financial statements.

The court held that under ss. 20 and 155 of the Canada Business Corporations Act and the applicable unanimous shareholders agreement, shareholders and directors have a broad and largely unconditional right to inspect corporate accounting records.

The term “adequate accounting records” includes source documents and records used to prepare financial statements, not merely the statements themselves.

The court granted the applicants immediate and unfettered access to specified corporate records but dismissed a related request for a restraining order as premature.

The plaintiff brought a motion for an interim interlocutory injunction seeking to preserve rights under a motor fuel supply agreement with the defendants.

The agreement permitted termination without notice where the plaintiff failed to make required payments.

The court applied the test for interlocutory injunctions from RJR MacDonald Inc. v. Canada (A.G.) and found that the plaintiff failed to establish a serious issue to be tried, given repeated breaches of the agreement including numerous NSF payments and failure to meet contractual obligations.

The court further held that the plaintiff did not demonstrate irreparable harm or that the balance of convenience favoured relief, particularly where alternative fuel suppliers could be obtained and evidence of business collapse was speculative.

The motion was dismissed and costs were awarded to the defendants.

The appellants appealed an order refusing to set aside a default judgment and refusing an adjournment.

The Court of Appeal dismissed the appeal, finding that sufficient facts were pleaded and admitted by default to establish that the appellants diverted trust funds under the Construction Lien Act.

This conduct fell within the exception to discharge under s. 178(1)(d) of the Bankruptcy and Insolvency Act for misappropriation or defalcation while acting in a fiduciary capacity.

The plaintiff equipment leasing company brought a motion for summary judgment alleging fraud arising from equipment leases entered into with corporate defendants and individuals.

The plaintiff claimed it was induced by false representations to purchase and lease heavy construction equipment, much of which was not recovered after the leases went into default.

One individual defendant asserted she signed documents under the direction of another individual and lacked knowledge of the alleged misrepresentations, raising credibility issues.

The court held that the evidentiary record did not permit a full appreciation of the issues regarding that defendant and required a trial.

However, partial summary judgment was granted against the other individual defendant, who had not defended the action, for the liquidated damages amount.

The defendants brought a motion for summary judgment seeking dismissal of claims arising from a logistics services agreement.

The plaintiff alleged contractual entitlement to shortfall penalties, negligent misrepresentation, and breach of a duty of good faith.

The court held that the contract expressly barred shortfall penalties for periods shorter than a full fiscal year and refused to imply a term to allow recovery.

The court also dismissed the pre‑contractual misrepresentation claim based on an entire agreement clause and struck the good faith claim for failing to identify a contractual term performed in bad faith.

However, summary judgment was refused for alleged misrepresentations made during the contractual relationship, as factual disputes regarding falsity, reliance, and damages required a trial.