Peter Allan Cumming

Creditors of an undischarged bankrupt commenced an action under s. 38 of the Bankruptcy and Insolvency Act challenging transactions allegedly intended to defeat creditors, including the redemption of special shares and alleged diversion of income.

Certain defendants moved for summary judgment arguing the plaintiffs lacked standing under the existing s. 38 order and that the limitation period had expired.

The court held that any procedural irregularity in commencing the claim without a specific s. 38 authorization could be cured nunc pro tunc and that the limitation period had not expired because the material facts were discovered later.

The court further found that the “imputed income” allegations raised genuine issues requiring credibility assessments that could not be resolved on summary judgment.

Counsel for the parties attended before the court for the signing of orders implementing Minutes of Settlement resolving the proceeding.

The court confirmed that the orders, issued on consent, concluded the litigation between the parties.

The court further clarified that investors associated with the plaintiff corporation retained any rights or claims they might have against the corporation regarding their investments.

However, those investors were barred from bringing further proceedings challenging the authority of the trustee, the FTA, or the corporation to settle the action.

Directions were given for copies of the orders, supporting affidavit, and the endorsement to be sent by registered mail to each investor.

A creditor applied for bankruptcy orders against an individual debtor and his corporation arising from an unpaid arbitration award exceeding $465,000.

The respondents objected and argued that the creditor was attempting to seize control of a separate civil action they had commenced against a lawyer.

The court considered the requirements under ss. 42(1)(j) and 43(1) of the Bankruptcy and Insolvency Act and the principles governing acts of bankruptcy where a debtor fails to meet liabilities as they become due.

Despite the existence of only one known creditor, the court found special circumstances, including the large unpaid judgment outstanding for several years and the creditor’s unsuccessful collection efforts.

The court concluded that the debtors had ceased to meet their liabilities generally as they became due and granted the requested bankruptcy orders.

Following the dismissal of defendants’ summary judgment motions and related motions to set aside an Anton Piller order, the court addressed the issue of costs.

The defendants had argued the plaintiff’s action was barred by limitation periods under s. 18(5) of the Radiocommunication Act and the Ontario Limitations Act and sought dismissal on summary judgment.

The court held that the motions were unreasonable given the extensive factual disputes, credibility issues, and evidentiary record requiring trial under the “full appreciation test” articulated in Combined Air Mechanical Services Inc. v. Flesch.

The defendants also unsuccessfully sought to challenge the Anton Piller order.

Costs were therefore awarded to the plaintiff on a substantial‑indemnity basis.

A court-appointed receiver sought approval of a sale transaction for a partially completed commercial condominium project owned by the debtor.

The property had been marketed through a court-approved process that produced four offers, all significantly below the amount owing on the first mortgage held by the secured creditor.

The secured creditor proposed a credit bid through a related nominee purchaser at the highest price obtained in the marketing process.

The court accepted the receiver’s evidence that the marketing process had been exhausted and that the proposed transaction represented the best available price in the circumstances.

The court also approved the distribution of purchaser trust deposits to identified unit purchasers, with disputed amounts paid into court pending further determination.

The defendants brought motions to set aside an Anton Piller order and to exclude evidence obtained under it, and also sought summary judgment dismissing the action on limitation grounds.

The action alleged an unauthorized SMATV scheme distributing encrypted satellite television programming to hundreds of tenants using residential subscriber accounts, contrary to the Radiocommunication Act, contract, and tort principles.

The court held that the plaintiff established a strong prima facie case and that the Anton Piller order was properly granted, finding no failure of full and frank disclosure.

The court also found that complex factual disputes, credibility issues, and allegations of fraudulent concealment prevented determination of limitation defences on summary judgment.

Both the motions to set aside the Anton Piller order and the motions for summary judgment were dismissed.

Two related applications arose from a commercial arbitration concerning a Liquidity Payment obligation under a financing arrangement between a dairy company and a pension fund.

The moving party sought to set aside a final arbitral award under s. 46(1) of the Arbitration Act, 1991, alleging breaches of procedural fairness and arguing the arbitrator’s contractual interpretation was unreasonable.

The court held the arbitration process was fair, the parties had adequate opportunity to present their cases, and the arbitrator’s interpretation of the Liquidity Payment Agreement was consistent with its plain language.

The application to set aside the award was dismissed.

The responding party’s application to enforce the arbitral award and supplementary costs award was granted, with interest fixed at 3% in accordance with the contract and applicable statutory rates.

Following a successful motion by the plaintiffs for leave to issue a Certificate of Pending Litigation and dismissal of a defendant’s cross-motion to strike affidavit evidence, the court determined the issue of costs.

The plaintiffs sought partial-indemnity costs supported by a detailed bill of costs.

The defendant argued that costs should be reserved for the trial judge due to limited financial resources, potential indemnification rights, and the plaintiffs’ CCAA protection.

The court held that impecuniosity, potential indemnification, and speculative trial costs considerations were not valid reasons to deny or delay a costs award.

Partial-indemnity costs were awarded to the successful moving parties.

The bankrupt appealed a registrar’s determination concerning the characterization of a disability tax credit refund received during bankruptcy.

The issue was whether the refund constituted “property” under s. 67 of the Bankruptcy and Insolvency Act or “income” under s. 68.

Relying on prior bankruptcy jurisprudence and policy considerations underlying the disability tax credit, the court held that the credit functions to augment income available to persons with disabilities.

Accordingly, the refund was properly treated as income under s. 68 of the Act rather than property of the estate.

The court considered a motion by a court-appointed receiver seeking approval of professional fees incurred during a complex receivership investigation.

The receivership arose after the judgment debtor engaged in extensive efforts to conceal assets through individuals and corporate entities in order to avoid enforcement of a judgment owed to a former spouse.

The receiver, counsel, and forensic investigator undertook substantial asset tracing and recovery efforts that resulted in over $2 million being realized for the estate.

The court found the professional fees reasonable and necessary given the complexity of the concealment and the extensive investigative work required.

The motion to approve the professional fees was granted.

In a receivership proceeding on the Commercial List, the receiver sought approval of a sale of a dormant condominium development project and related vesting relief.

The receiver and secured creditors also sought a declaration confirming the validity of mortgage amendments that increased the secured debt amounts, where the amendments had been registered using Land Titles instruments titled “Notice” and “Application (General)” rather than the standard Charge/Mortgage form.

The court held that registration under s. 71 of the Land Titles Act provided effective notice of the amended security interests and rendered the amendments valid.

The court approved the sale as the highest and best offer obtained through a fair and transparent sale process and granted the requested declarations and sealing order.

The plaintiffs, a group of affiliated corporations under Companies’ Creditors Arrangement Act proceedings, brought a motion for leave to issue a Certificate of Pending Litigation against residential property owned by one defendant.

The plaintiffs alleged that corporate funds were improperly used to pay for renovations, maintenance, and improvements to the property and sought a constructive trust and tracing remedies.

The defendants opposed the motion and brought a cross‑motion to strike portions of the affidavit evidence filed in support of the motion.

The court held that the affidavit material was relevant and properly admitted and dismissed the cross‑motion.

Finding that the evidentiary record disclosed triable issues regarding alleged misappropriation of corporate funds and potential unjust enrichment supporting a constructive trust, the court granted leave to issue the Certificate of Pending Litigation.

A proposed purchaser under a second agreement of purchase and sale sought leave to intervene in litigation between the original purchaser and the vendor concerning the enforceability of an earlier agreement for the sale of condominium units.

The proposed intervenor also sought a mandatory order compelling completion of the second agreement, declaratory relief, and security for costs.

The court held the proposed intervenor would not assist in resolving the dispute between the original contracting parties and would merely duplicate the vendor’s position.

Any damages arising from failure to complete the second agreement would be compensable and properly pursued against the vendor in a separate proceeding.

The court dismissed the motion for intervenor status and related relief, refused the vendor’s request to withdraw its undertaking not to transfer title, and directed that the dispute proceed by expedited trial on the Commercial List.

The applicants sought a representation order under Rule 10.01 of the Rules of Civil Procedure permitting them to represent 416 claimants who had used payroll processing services and alleged that trust funds were misapplied by a bank.

The underlying dispute concerned funds withdrawn from employers’ accounts for payroll and tax remittances that were deposited into mixed trust accounts and partially applied to reduce the payroll processor’s indebtedness to the bank or transferred to a related entity.

The bank opposed the representation order, arguing that two separate transactions created distinct issues among claimants.

The court held that common issues existed because liability for the alleged breaches of trust would affect all claimants collectively and distribution of any recovery would be shared.

A representation order was granted and a related unopposed motion concerning distribution of funds held by a government agency was also authorized.

A creditor in a bankruptcy proceeding sought a declaration permitting set-off of a substantial costs award owed to the bankrupt against the creditor’s proven unsecured claim in the bankruptcy estate.

The court considered whether the claim satisfied the requirements for legal or equitable set-off under the Bankruptcy and Insolvency Act.

It held that legal set-off was unavailable because the costs debt arose after the bankruptcy and lacked the necessary mutuality with the creditor’s claim against the estate.

Equitable set-off was also unavailable because the adverse costs award related to a discrete tort claim and was not sufficiently connected to the contractual debt forming the creditor’s proven claim.

The motion for set-off was dismissed, and the court granted the bankrupt’s counsel a charging order over the costs award pursuant to the Solicitors Act, giving the solicitor priority as a secured creditor.

The moving parties sought orders staying two Ontario proceedings pending a determination by the Quebec Superior Court regarding jurisdiction and forum in a parallel creditors’ action.

The actions arose from the collapse of an offshore bank alleged to have operated a multibillion-dollar Ponzi scheme, with claims that the defendant bank was liable for wrongful acts or omissions in providing correspondent banking services.

The court granted an interim stay of the Ontario “placeholder” action commenced by joint liquidators to preserve limitation periods, finding that parallel proceedings justified holding the Ontario action in abeyance pending the Quebec court’s determination.

The court also temporarily stayed a separate Ontario action brought by a small group of creditors to avoid duplicative litigation until the jurisdictional dispute in Quebec was resolved.

Costs were awarded to the joint liquidators as moving parties.

Following reasons on motions and cross-motions, the court addressed costs submissions in a commercial dispute involving enforcement issues and procedural dismissal arguments.

The defendants argued divided success and relied on an offer to settle, but the court found the offer irrelevant because the judgment amount substantially exceeded it.

The court held the plaintiff was substantially successful, particularly regarding outstanding costs awards and resisting dismissal of the claim under Rules 48.14 and 48.15 of the Rules of Civil Procedure.

Although a Mareva injunction was vacated, the court held that this occurred on the court’s own initiative and did not alter the overall success analysis.

The plaintiff was awarded partial-indemnity costs fixed at $20,000 payable forthwith.

The applicants sought an order directing that funds collected by a court‑appointed receiver from proceeds payable to the respondent be paid to them.

The evidence established that one of the applicants was a creditor of the respondent for more than $1.2 million arising from a loan guarantee and secured by a general security agreement.

The respondent withdrew its opposition at the hearing, while a third-party creditor requested that the successful applicant’s payment be held in court pending potential litigation.

The court held that the applicant’s creditor claim clearly ranked ahead of any shareholder interest and rejected the request to hold the funds as premature security for an uncommenced action.

The motion was granted directing payment of most of the fund to the creditor applicant.

A court-appointed receiver brought a motion seeking approval of settlements reached in efforts to enforce a substantial family law judgment and recover assets allegedly concealed by the respondent.

The receiver also sought approval of significant professional fees incurred during forensic investigations and asset recovery.

The court approved certain settlements and ordered an immediate distribution to the judgment creditor but adjourned the determination of professional fees and related matters to future hearings.

The court emphasized concerns that professional fees could significantly reduce the creditor’s ultimate recovery and directed that no further fee payments be made pending further consideration.

The defendants moved for a declaration that the plaintiff’s action was deemed dismissed as abandoned under Rule 48.15(6) of the Rules of Civil Procedure.

The plaintiff brought a cross‑motion seeking declarations that the action was not abandoned, recovery of unpaid costs with interest, and related relief concerning a Mareva injunction.

The court held that Rule 48.15(6) does not apply to defended actions and therefore the action was not deemed dismissed.

The court also found that interest continued to accrue on unpaid costs and ordered payment of the outstanding amount, with the defendants’ defence and counterclaim to be struck if payment was not made.

The Mareva injunction was ordered vacated following payment or dismissal of the defence and counterclaim.