C.L. Campbell

The defendant brought a motion seeking production of invoices issued by the plaintiff to a third party for consulting services during a period when the plaintiff was also billing the defendant.

The plaintiff resisted production on the basis that the documents were irrelevant and not within his possession or control.

The court held that the requested invoices had potential relevance to the interpretation of the parties’ contractual billing arrangement and could inform whether the plaintiff customarily billed on a fixed-fee basis.

The court concluded that, had the documents remained in the plaintiff’s possession, they would have been producible and directed that the plaintiff not object to the third party producing the documents.

Costs were reserved to the trial judge but fixed at $3,000.

The applicant sought continuation of a Mareva injunction freezing the respondent’s assets in connection with a disputed promissory note and security agreement.

The respondent argued the injunction should be set aside due to material non‑disclosure on the original ex parte motion, including the applicant’s assignment of the security underlying the debt and the respondent’s asserted set‑off claim.

The court held that the potential weakness of the undertaking as to damages arising from the assignment should have been disclosed to the judge who granted the ex parte order.

Although the court declined to continue the Mareva injunction in its existing form, it found that some interim relief was justified to preserve the status quo pending a short trial.

The injunction was continued temporarily for ten days with limited permitted expenses and directions for proposals regarding payments and trial scheduling.

A former spouse sought to advance a proof of claim in the bankruptcy of her husband after paying amounts under personal guarantees of corporate debts owed to financial institutions.

The court considered the rule against double proof in bankruptcy, which prevents multiple claims in respect of the same underlying debt so as to preserve pari passu distribution among unsecured creditors.

The court held that the claimant could not advance a proof of claim relating to amounts paid to a bank where the bank had not recovered its debt in the bankruptcy beyond the payment she made, as this would constitute double proof.

However, the court permitted a claim for the full amount paid under a separate guarantee to another creditor whose debt had been fully satisfied.

The court also rejected the trustee’s attempt to recover household contents from insurance proceeds, accepting evidence that the separated spouses had agreed those assets would belong to the claimant.

In CCAA proceedings involving the debtor corporations, a significant creditor sought a declaration imposing a constructive trust and super‑priority over litigation proceeds to recover payments it made to a strategic advisor who served as a director and litigation committee chair.

The creditor argued that the payments justified a solicitor’s lien, unjust enrichment, constructive trust, or oppression remedy.

The court held the advisor’s work was performed in the capacity of a director and business advisor rather than as a solicitor, precluding a solicitor’s lien.

The court further held that the criteria for unjust enrichment and constructive trust were not satisfied and that imposing a proprietary remedy would disrupt the established CCAA priority regime.

The motion seeking super‑priority status was dismissed.

The applicant sought rectification of Articles of Amalgamation following a corporate reorganization intended to occur on a tax-deferred basis.

Due to an unintended mistake, Class B shares were issued as non‑voting shares rather than voting shares, which was inconsistent with the intention of the shareholders and their professional advisors.

The application was brought on an unopposed basis and was not opposed by the Canada Revenue Agency or the Director under the Ontario Business Corporations Act.

The court found it had jurisdiction to grant rectification and was satisfied that the prerequisites for rectification due to mistake were met.

The requested relief correcting the share attributes was granted.

The defendants brought motions to adjourn a motion to remove the plaintiff's counsel, to remove the plaintiff's counsel for an alleged conflict of interest, and to amend their Statement of Defence and add a counterclaim.

The court dismissed the adjournment motion, finding the information sought on cross-examination irrelevant.

The court dismissed the removal motion, concluding a reasonably informed member of the public would not find the plaintiff's counsel possessed confidential information about the defendants.

The court also dismissed the motion to amend the pleadings, finding the proposed amendments sought to re-litigate issues already decided by summary judgment, and rejected the proposed counterclaim.

The Trustee in Bankruptcy sought an order under s. 164 of the Bankruptcy and Insolvency Act compelling the former Chief Restructuring Officer (CRO) and a secured creditor to produce documents.

The respondents claimed solicitor-client and litigation privilege over the documents.

The Trustee argued that the CRO could not assert privilege against the Trustee and that any common interest privilege was dissolved upon the CRO's appointment.

The court dismissed the motion, holding that the CRO could assert privilege regarding its specific duties and that the common interest privilege between the secured creditor and the CRO (acting as a consultant prior to appointment) was not dissolved.

Following an application related to enforcement of contractual obligations under the Bankruptcy and Insolvency Act and Courts of Justice Act, the court addressed the issue of costs.

The applicants sought recovery of their legal costs pursuant to a contractual provision requiring the respondents to pay all enforcement costs, including interest.

The court accepted that such provisions create a prima facie entitlement to costs but emphasized that the ultimate costs award remains discretionary under Rule 57.01 of the Rules of Civil Procedure.

The respondents’ request for substantial indemnity costs was rejected.

The court directed that a full bill of costs or dockets be provided before fixing the final costs amount.

The plaintiffs brought a motion concerning undertakings, refusals, and questions taken under advisement arising from examinations for discovery.

The court reviewed disputed undertakings and refusals involving several witnesses and determined which questions were relevant and required answers.

Many undertakings and refusals were ordered to be answered where the information was relevant and no sufficient basis for commercial sensitivity or irrelevance had been established.

Some requests were found overly broad or premature and were not required at that stage.

The plaintiffs were found substantially successful and awarded partial indemnity costs.

In bankruptcy proceedings involving several related entities operating a Ponzi scheme, a creditor sought authorization under s. 38 of the Bankruptcy and Insolvency Act to prosecute preference actions after the trustee failed to proceed due to lack of funds.

Another creditor opposed the request and sought its own assignment as a secured creditor, arguing entitlement to priority in any recovered proceeds.

The court held that s. 38 allows a creditor to pursue estate claims where the trustee refuses or neglects to act and that the opposing creditor, as a potential defendant in the preference action and lacking security over the proceeds recovered from third parties, was not entitled to the assignment.

The court also rejected arguments that a prior decision regarding secured creditor rights over recovered collateral applied to preference recoveries paid into third‑party accounts.

Authorization was granted to the moving creditor to pursue the preference actions at its own expense and risk.

Two appeals were brought from the decision of a Claims Officer in insolvency proceedings under the Companies’ Creditors Arrangement Act concerning disputed landlord claims arising from leases originally entered in 1979.

One appellant challenged the Claims Officer’s jurisdiction to permit an amendment to a proof of claim and argued that the landlord failed to provide clear and timely notice of an intention to seek prospective damages following lease repudiation.

The other appellant argued that its claim was wrongly disallowed on the basis that notice of its intention to claim damages was untimely and prejudicial to the assignor tenant.

The court held that the Claims Officer had jurisdiction under the claims order to permit amendments and determine procedural matters and that the notice given by one landlord was sufficient.

The court also held that the second landlord’s delayed notice, after entering into a new lease in mitigation, prejudiced the assignor and justified disallowance of its claim.

Both appeals were dismissed.

Within Companies’ Creditors Arrangement Act proceedings, a dispute arose regarding the proper form of an order issued following earlier reasons approving certain settlements.

Counsel for certain defendants argued that the issued order should have included a “comeback” clause allowing parties to return to court for directions regarding ongoing case management.

The supervising judge concluded that the order had been signed on the mistaken assumption that counsel had agreed on the form of order.

Given the anticipated ongoing disputes over discovery and production in the underlying action, the court held that continuing judicial supervision was necessary in the CCAA context.

The order was therefore amended to include a comeback clause permitting affected parties to seek directions from the court.

The trustee in bankruptcy of a securities firm sought directions on how to calculate a customer's “net equity” under s. 253 of the Bankruptcy and Insolvency Act in the context of the firm’s insolvency.

The dispute concerned whether post‑bankruptcy mark‑to‑market adjustments for commodity futures contracts should be included in the calculation of the customer’s claim.

The customer argued that daily settlement obligations inherent in futures contracts required inclusion of post‑bankruptcy adjustments.

The court held that net equity must be calculated based on the liquidation value of securities positions as of the date of bankruptcy, without adjustments for post‑bankruptcy mark‑to‑market fluctuations.

The trustee’s interpretation was preferred as consistent with the statutory language and the objectives of Part XII of the Bankruptcy and Insolvency Act.

The applicant first mortgage creditor sought declarations confirming the validity and priority of its registered security over multiple real estate development properties subject to receivership, and an order directing distribution of sale proceeds by the court‑appointed receiver.

Various investors holding undivided interests and lot purchasers opposed the motion, arguing that their prior contractual interests and alleged breaches of trust by the debtor should defeat the applicant’s mortgage priority.

Relying on Alberta land titles legislation, the court held that registered interests take priority over unregistered interests absent fraud, and that mere knowledge of unregistered claims does not amount to fraud or equitable subordination.

The court also rejected arguments that postponements granted by mortgage investment corporations were invalid.

The applicant’s priority was confirmed and the requested declaratory and distribution relief granted.

The moving party sought advice and directions under a court‑approved CCAA Plan of Arrangement governing the restructuring of Canada’s third‑party asset‑backed commercial paper market.

The administrator argued the Plan and related agreements permitted it to terminate credit default swap transactions and fund termination payments from collateral without dealer consent below specified thresholds.

A dealer noteholder opposed, asserting the agreements required negotiated consent where collateral beyond a specific trade would be affected.

The court held that the contractual language did not eliminate consent requirements and that the court’s broad CCAA jurisdiction could not be used to effectively rewrite the negotiated agreements.

The request for declaratory or corrective relief was refused.

The applicant lender sought declaratory relief confirming the validity and priority of its security interests under a general security agreement granted by the respondent corporations, including over precious metals and a cause of action assigned to a third party.

The assignee opposed the declaration, arguing that a security agreement should not permit a creditor to control litigation brought by the debtor against the creditor itself.

The court accepted that causes of action may fall within the definition of collateral under a general security agreement but emphasized that control of the litigation would be exercised by the court‑appointed receiver rather than the secured creditor.

In those circumstances, the court found no unfairness or absurdity in including the assigned cause of action within the secured collateral.

Declaratory relief was granted confirming that the cause of action formed part of the collateral subject to the security.

The plaintiffs sought court approval of a settlement agreement resolving complex litigation and related bankruptcy proceedings arising from the collapse of Lehman Brothers.

The dispute concerned ownership and recovery of investment fund assets held by the prime broker at the time of its insolvency, including securities subject to re-hypothecation and claims advanced in multiple jurisdictions.

The court considered the fairness and reasonableness of the settlement, including its impact on investors and the risks and delays associated with continued litigation and cross-border enforcement.

Relying on principles reflected in the Bankruptcy and Insolvency Act and the court’s jurisdiction under the Courts of Justice Act, the court concluded that the compromise was fair and reasonable.

The court approved the settlement and issued vesting orders in relation to assets conveyed under the agreement.

A not‑for‑profit campus radio corporation sought a winding‑up order under the Winding Up and Restructuring Act after losing its broadcast licence, premises, and funding.

The opposing party argued the court lacked jurisdiction, that the members’ resolution was invalid because it referred to “dissolution” rather than “winding up,” and that potential derivative claims should proceed.

The court held that the distinction between “dissolve” and “wind up” was immaterial in the circumstances and that the corporation had no meaningful assets or operational purpose.

The court rejected the argument that speculative derivative claims justified preserving the corporation’s existence.

A winding‑up order was granted and the opposition dismissed.

Addendum reasons addressing the applicable evidentiary protections for the examination of a witness pursuant to a letter of request issued in connection with foreign antitrust litigation in the United States.

The applicant argued that the Canada Evidence Act should govern the examination because the foreign order contemplated evidence taken in accordance with Canadian law.

The respondent submitted that protections under the Ontario Evidence Act should also apply.

The court held that both the Canada Evidence Act and the Ontario Evidence Act, together with the Charter of Rights and Freedoms, apply, ensuring the witness benefits from all available statutory protections against self-incrimination.