Dan Murdoch

The Cash Store Financial Services Inc. operated a payday loan business from 2002 until it sought CCAA protection in April 2014.

The company's estate sued its auditor KPMG LLP and counsel Cassels Brock & Blackwell LLP, alleging negligence and breach of fiduciary duty.

The plaintiff claimed that the defendants knew or ought to have known that Cash Store was misrepresenting its business as a broker when it was actually a direct lender bearing credit risk, and that this misrepresentation caused a deepening of insolvency from late 2011 until the CCAA filing in 2014.

The plaintiff sought damages ranging from $119 million to $177 million, plus disgorgement of legal fees.

The court dismissed all claims against both defendants, finding that Cash Store was properly characterized as a broker during the relevant period, that the defendants met applicable professional standards, and that the plaintiff failed to prove causation and damages.

The court also found the claims were statute-barred.

This case involves a Companies' Creditors Arrangement Act (CCAA) proceeding where the Applicants sought approval of a Sales and Investment Solicitation Process (SISP) including a stalking horse bid.

Green Acre Capital LP, a minority shareholder and creditor, opposed the SISP and brought a cross-motion to replace the previously approved Debtor-in-Possession (DIP) financing facility with an alternative one.

The court approved the SISP, finding it broad enough to explore various restructuring options beyond just a sale, and dismissed Green Acre's cross-motion, emphasizing the need to minimize instability by not replacing a recently approved DIP facility for minor financial benefits.

The plaintiff purchaser brought a motion for judgment against the defendant vendors for breach of an agreement of purchase and sale for seven apartment buildings.

The defendants failed to discharge mortgages on title prior to closing, breaching the agreement.

The plaintiff sought damages for sunk costs and over $56 million for lost capital appreciation, based on the defendants' subsequent sale of the properties 2.5 years later.

The court awarded the sunk costs but dismissed the claim for lost profits, holding that damages must be assessed at the closing date and that the plaintiff, an international real estate investor, had mitigated its losses by deploying its funds elsewhere.

The respondent, 1034179 BC Ltd., brought a motion to stay an application by Real Crowd Capital Inc. in Ontario, arguing that Ontario lacked jurisdiction and that British Columbia was the more convenient forum.

The application concerned a claim for commissions under an Engagement Letter for securing real estate financing.

The Master determined that she had jurisdiction to decide both jurisdiction simpliciter and forum non conveniens.

The Master found that the contract was formed in Ontario, establishing a real and substantial connection, and that the respondent failed to rebut this presumption.

Furthermore, the Master concluded that British Columbia was not clearly the more convenient forum, considering factors such as the location of parties, witnesses, applicable law, and litigation costs.

The motion to stay was dismissed, and costs were awarded to the applicant.

In a proceeding under the Companies’ Creditors Arrangement Act, the applicants sought several restructuring-related orders, including increased priority for certain court-ordered charges, suspension of special pension payment obligations under an individual pension plan, and approval of an engagement letter for a financial advisor.

The court held that it had jurisdiction under ss. 11.2, 11.4, 11.51 and 11.52 of the CCAA to grant super‑priority charges and accepted the applicants’ submissions regarding critical suppliers, DIP lenders, and a directors’ charge.

The court also approved the suspension of special pension payments and the engagement of the proposed financial advisor on specified terms.

Certain issues relating to a key employee incentive plan were deferred for later determination.

An order was issued granting the requested relief.