Carole J. Hunter

The appellants, construction lien claimants, appealed a decision holding that the proceeds of a court-approved asset sale by a company under CCAA protection did not constitute trust funds under ss. 7 and 9 of the Construction Lien Act.

The Court of Appeal dismissed the appeals, finding that the statutory prerequisites for a trust were not met, as the sale proceeds were not 'received by' or 'in the hands of' the owner, but were instead paid to a court-appointed monitor and stood in substitution for the company's fully secured assets.

Ardagh PLC, an unsuccessful bidder in a court-approved sale process under the CCAA, sought leave to appeal the order approving the sale of Consumers Packaging Inc.'s assets to Owens-Illinois, Inc. The Court of Appeal refused leave, noting that leave to appeal in CCAA proceedings should be granted sparingly and not where it would prejudice the restructuring.

The court also noted that an unsuccessful bidder generally lacks standing to challenge a sale approval order.

The appellant bank appealed a decision ordering a court-appointed receiver to pay municipal realty taxes to the respondent municipality in priority to the bank's secured claims.

The Court of Appeal dismissed the appeal, holding that under section 382 of the Municipal Act, municipal realty taxes have priority over all other claims except the Crown.

The Court also held that a court-appointed receiver is a 'trustee' within the meaning of section 400(11) of the Act, giving the municipality priority over the proceeds of personal property realized by the receiver.