Craig A. Mills

The applicant, founder of a carpentry business, sought an oppression remedy against the respondent, the younger active manager and 49% shareholder.

The parties had entered into a unanimous shareholders' agreement to transition the business to the respondent while completing existing projects.

The respondent breached the agreement and his fiduciary duties by usurping the company's employees for his new competing business, failing to maintain proper financial records, and causing the original company to fail.

The court found the respondent liable for oppression and ordered him and his new company to jointly and severally disgorge $2,248,328 in profits.

The applicants, five community futures organizations, sought the appointment of MNP Ltd. as receiver over Future Health Technologies Inc. (FHT) under section 243 of the Bankruptcy and Insolvency Act and section 101 of the Courts of Justice Act.

FHT provides technology and technical support for the Community Paramedicine Remote Patient Monitoring Program (CPRPM), which delivers free tele-home monitoring services to approximately 1,500 chronically ill patients in rural Ontario.

The respondent, 2804476 Ontario Inc., opposed the application, arguing the receivership was a scheme to seize control of disputed intellectual property.

The court found that FHT was insolvent, that the appointment of a receiver was necessary to preserve critical healthcare services, and that the applicants held valid secured debt.

The court appointed the receiver and granted a stay of proceedings in related litigation, while confirming that the receiver would not take possession of disputed intellectual property without further court order.

The court was asked to decide between the debtors’ application for protection under the Companies' Creditors Arrangement Act (CCAA) and the Toronto-Dominion Bank’s application for the appointment of a receiver.

After reviewing the facts and arguments, the court concluded that it was most just and convenient to appoint a receiver, dismissing the CCAA application.

The decision reviews the history of the debtors’ restructuring efforts, the positions of the parties, and the legal principles governing the choice between CCAA and receivership, ultimately finding that the interests of the senior secured creditor should prevail in the circumstances.

Money Gate Corporation (MGC) brought a motion for an extension of time to file its notice of appeal and a declaration that it had an appeal as of right under s. 193(c) of the Bankruptcy and Insolvency Act (BIA), or alternatively for leave to appeal under s. 193(e).

The underlying matter involved a receivership where a motion judge had dismissed MGC's claim for payment from the proceeds of a property sale, finding no valid assignment of a second mortgage and that MGC was not the registered owner.

The Court of Appeal granted the extension of time, finding MGC's grounds of appeal not frivolous and no real prejudice to the responding parties.

Crucially, the court declared that MGC had an appeal as of right under s. 193(c) of the BIA, concluding that the motion judge's order finally determined MGC's economic interests in the property proceeds, distinguishing it from a mere priorities dispute.

Ida Covello appealed a motion judge's order dismissing her motion to set aside a default judgment obtained by Flex Park Inc. arising from a mortgage.

Covello alleged the mortgage was fraudulent due to a law clerk's falsification of information in other transactions.

The Court of Appeal dismissed the appeal, finding no error in the motion judge's decision that the law clerk's activities did not affect the validity or enforceability of Covello's mortgage.

The court also rejected Covello's attempt to introduce fresh evidence and her reliance on the Unconscionable Transactions Relief Act, neither of which were relevant or met the necessary legal tests.

The appellants appealed the disallowance of their claims in a bankruptcy proposal proceeding.

They claimed a 20% beneficial interest in the proceeds of a commercial property sale based on an amended trust declaration, and advanced an unsecured claim for damages alleging oppressive conduct.

The court dismissed the appeal, finding no certainty of intention to create an express trust, no basis for a constructive trust, and no evidence of oppressive conduct by the bankrupt corporation.

This endorsement addresses the costs of an action brought by CIT Financial Ltd. against several defendants, which was dismissed on summary judgment as statute-barred.

The defendants sought costs on a partial indemnity scale, including legal and expert fees.

The court considered the complexity, importance, and reasonable expectations of the parties.

While the court found the defendants were diligent in bringing their summary judgment motion after discoveries, it significantly reduced the claimed expert fees for Zeifmans (to one-third) and Duff & Phelps (to 50%).

This reduction was due to the defendants' experts' unreasonable refusal to cooperate with the plaintiff's expert, leading to unnecessary duplication of work in calculations.

Ultimately, CIT Financial Ltd. was ordered to pay the defendants legal fees totaling $1,706,147.92 and reduced disbursements (including expert fees) totaling $550,182.34.

The defendants brought a motion for summary judgment seeking to dismiss the plaintiff's action for indemnity under a share purchase agreement.

The action was based on alleged breaches of a tax representation and warranty.

The defendants argued the action was statute-barred and that the plaintiff's claim for "loss of use of funds" was limited by contract.

The court granted summary judgment, finding the action was statute-barred because the six-year limitation period began when the plaintiff knew the material facts of the breach and the resulting "claim" (Revenue Canada's reassessment), not upon a demand for indemnity or its refusal.

The court also dismissed the claim for loss of use of funds beyond the contractually agreed prime rate.

The appellants, unsecured creditors, sought to appeal a motion judge's order approving an amended proposal under the Bankruptcy and Insolvency Act and refusing to adjourn the approval motion to allow further examination of the debtor's president.

The Court of Appeal held that leave to appeal was required because the issues were procedural and did not directly involve property exceeding $10,000.

The Court denied leave, finding the proposed appeal lacked merit, raised no issues of general importance, and the motion judge's conclusions on the reasonableness and good faith of the proposal were unassailable.

The parties reached a settlement in principle regarding the bankruptcy proposal of Enroute Imports Inc. but required time to finalize specific terms.

The Court of Appeal adjourned the appeal on consent, to be restored to the list if the settlement was not finalized by December 23, 2015.

The plaintiff First Nation, located in Quebec, commenced an action in Ontario against the federal Crown and two third-party managers for breach of fiduciary duty, breach of contract, and negligent misrepresentation regarding the management of its funding.

The defendants moved to stay the action for lack of jurisdiction.

The court applied the real and substantial connection test and section 21(1) of the Crown Liability and Proceedings Act, finding that the substance of the claims arose in Quebec where the alleged failures and losses were experienced.

The motion was granted and the action was stayed.

Following successful motions by the defendants for security for costs under Rule 56.01(1)(d) of the Rules of Civil Procedure, the court addressed the appropriate costs awards for those motions.

The defendants sought costs on a partial indemnity basis exceeding $11,000 and $16,000 respectively.

The plaintiff argued that the requested amounts were excessive for motions of this nature.

Applying the principles under section 131 of the Courts of Justice Act and Rule 57.01, and emphasizing proportionality under Rule 1.04(1.1), the court concluded the requested amounts were excessive given the straightforward issues and the partial success achieved by the defendants.

The court awarded costs of $7,000 inclusive of HST and disbursements to each set of moving defendants.

Following a successful motion declaring that a commercial lease had been validly renewed, the receiver of a pharmacy business and the senior secured creditor sought recovery of their legal costs from the landlord.

The court considered objections that counsel time was excessive and that only one counsel should have participated, as well as a challenge to computerized legal research as a recoverable disbursement.

Applying the factors in Rule 57.01 of the Rules of Civil Procedure, the court held that the preparation time and participation of separate counsel were reasonable given the high financial stakes of the litigation.

Computerized legal research was also found to be a proper disbursement.

Costs were fixed at reduced amounts but substantially in favour of the successful parties.

The moving party, a commercial tenant who built a store on the subject property, sought a stay of an order approving the sale and vesting of the property free and clear of its interests pending appeal.

The court granted the stay to preserve the status quo, finding the moving party would suffer irreparable harm if its appeal became moot.

To alleviate prejudice to the responding party mortgagee, the moving party was ordered to continue paying rent into trust and to deposit a $100,000 letter of credit.