David Bishop Debenham

Case conference endorsement in a civil action that had been transferred from Ottawa to Toronto on consent.

The defendants sought to vacate the case conference following the transfer order, arguing the Ottawa court lacked authority to make further decisions.

The court declined to vacate, finding nothing in the transfer order or the Rules prevented it from finalizing pending issues to ensure an orderly transition.

The court directed the parties to proceed to examinations for discovery rather than pursue further production motions, reasoning that outstanding production issues could be canvassed under oath during examinations and a timetable was established on consent.

The Court of Appeal for Ontario considered whether Seabrook Bros.

Mechanical Ltd., a subcontractor and lien claimant, was entitled to a revised assessed value for its security in the insolvency proposal of North House Foods Ltd. The court held that there was no appeal as of right under s. 193(a)-(c) of the Bankruptcy and Insolvency Act, but granted leave to appeal under s. 193(e) due to the importance of the issue.

The appeal was dismissed, as the motion judge had not erred in finding that the appellant's security (a lien on a leasehold interest) had no realizable value in the circumstances.

The court clarified the onus on dissatisfied creditors under s. 50.1(4) of the BIA and the limited recourse for lien claimants in insolvency.

The court considered whether a construction lien action was properly set down for trial within the two-year period required by section 37(1) of the Construction Act, despite the use of the wrong court file number and style of cause in the trial record.

The defendant, MP Lundy Construction Inc., sought a declaration that the lien had expired and the return of security.

The plaintiff, KE Electrical Ltd., cross-moved to amend the court file number nunc pro tunc.

The court found the error to be an irregularity curable under Rule 2.01 of the Rules of Civil Procedure, relying on the Court of Appeal’s reasoning in Foran.

The defendant’s motion was dismissed and the plaintiff’s cross-motion was granted.

This decision concerns the costs arising from an unsuccessful application brought by Seabrook Bros.

Mechanical Ltd. to challenge a proposal trustee's valuation of security under the Bankruptcy and Insolvency Act.

The proposal trustee, Doyle Salewski Inc., sought $5,000 in costs, which was granted.

The debtor, North House Foods Ltd., sought partial indemnity costs of $23,413.72.

The court reduced North House Foods' costs to $8,000, citing their failure to deliver a Costs Outline (Form 57B) in advance as required by Rule 57.01(6) and proportionality concerns, noting that the proposal trustee's arguments were largely persuasive in the underlying application.

The moving party, Seabrook Bros.

Mechanical Ltd., applied under s. 50.1(4) of the Bankruptcy and Insolvency Act to revise the Proposal Trustee's $0 valuation of its construction lien security against North House Foods Ltd.'s leasehold interest.

The court dismissed the application, finding that Seabrook failed to demonstrate that the security had any realizable value on a forced sale, despite expert reports suggesting value to the debtor.

The court emphasized that the valuation was not about the debt itself, but the enforceability and net recovery from the collateral, considering impediments like lease assignment restrictions and the theoretical nature of realizing on such security in a proposal context.

The defendants moved to transfer a complex civil action from Perth to Toronto and to assign it for case management.

The court found that the Perth courthouse lacked the necessary judicial resources to manage the case effectively, as evidenced by delays in hearing the defendants' motions.

Considering factors under Rule 13.1.02, including convenience for parties and witnesses, and the availability of case management facilities, the court determined that Toronto was a "clearly superior" venue.

The motion to transfer was granted, and the action was assigned for case management due to its complexity and anticipated need for court intervention.

The defendants brought a motion to stay a construction lien action, arguing it was commenced without proper corporate authority.

The plaintiff corporation's Unanimous Shareholders Agreement required a three-director board, but the action was authorized by a single director.

The court found that the indoor management rule did not apply because the dispute involved internal corporate governance issues rather than a simple collection matter.

The court granted the motion and stayed the action until a valid resolution is passed by a properly appointed board of directors.

The plaintiffs were beneficial owners of a property held in trust by the defendant Bertrand, who was the registered owner.

Bertrand sold the property to 670 without the plaintiffs' consent and signed a false affidavit to clear executions against his name.

The trial judge found the transfer was a 'fraudulent instrument' under the Land Titles Act, declared it void, and ordered rectification of the register.

On appeal, the Divisional Court held that the trial judge erred in law.

Bertrand was not a 'fictitious person' and did not forge the transfer, as he was the true registered owner with legal authority to convey the property.

Furthermore, 670 was a bona fide purchaser for value without notice, protected by s. 62(2) of the Act, which states that describing an owner as a trustee does not constitute notice of a trust.

The appeals by 670 and the Director of Titles were allowed, confirming 670's ownership, while Bertrand's appeal against the findings of fact was dismissed.

The matter was remitted to the trial court to assess damages against Bertrand.

This endorsement addresses costs following a mini-trial where Premier Drycleaners' claim for rectification was dismissed.

Burnford Realty Limited, the successful party on the rectification issue, sought substantial indemnity costs.

Premier sought costs payable in the cause, arguing Burnford's late clarification of its position on a 2007 document prolonged the mini-trial.

The court found that Burnford's conduct in delaying an admission fell under Rule 57.01(1)(g).

However, Premier also contributed to the mini-trial's duration by introducing an issue outside its scope, falling under Rule 57.01(1)(e).

Considering the conduct of both parties, the court ordered that there would be no costs payable for the mini-trial.

The appellants appealed a Master's decision granting partial summary judgment against them based on a 2010 personal guarantee.

The Master had found the guarantee to be a continuing guarantee covering all present and future indebtedness of the corporate borrower.

On appeal, the Divisional Court found the Master erred in law by failing to consider the surrounding circumstances, including a contemporaneous contract and promissory note, and by failing to apply the contra proferentem rule.

The Court interpreted the guarantee as limited to the initial $50,000 loan, which had already been repaid according to the rule in Clayton's case.

The appeal was allowed and the claim based on the 2010 guarantee was dismissed.

The plaintiff commercial tenant sought rectification of a 2008 lease to include a 5-year extension provision found in a 2007 document.

The court dismissed the claim for rectification, finding no common mistake in omitting the extension provision from the 2008 lease, as the plaintiff's principal was experienced and careful in negotiations.

However, the court found that the 2007 document remained a valid stand-alone agreement binding the parties.

The plaintiff brought an action claiming an interest in the defendants' property based on an alleged equitable mortgage arising from a loan to a third party.

The defendants brought a motion for summary judgment to dismiss the action against them.

The court granted the motion, finding no written evidence of an agreement to mortgage the property as required by section 1 of the Statute of Frauds, and no evidence that the defendants authorized the third party to mortgage their property.

The action against the defendants was dismissed.

Following a nine-day trial where the plaintiffs successfully obtained a declaration that a property transfer was a fraudulent instrument and vested a 72.97% interest in their names, the plaintiffs sought costs.

The plaintiffs had made an offer to settle that they matched or exceeded at trial.

The court rejected the defendants' arguments to depart from the general rule regarding offers to settle, finding the defendants' conduct reprehensible and negligent.

The court awarded the plaintiffs partial indemnity costs up to the date of the offer and substantial indemnity costs thereafter, payable jointly and severally by the defendants.

The plaintiffs, beneficial owners of a property, sought a declaration of ownership and a vesting order after the defendant bare trustee sold the property without their consent.

The trustee, who was subject to personal executions, signed a false affidavit stating he was not the execution debtor to complete the sale.

The court found the trustee was a 'fraudulent person' under the Land Titles Act and the transfer was a 'fraudulent instrument'.

The purchaser was not a bona fide purchaser without notice, as suspicious circumstances put him on inquiry.

The court declared the transfer void and ordered the title rectified to reflect the beneficial ownership interests.

This endorsement addresses the costs of a summary judgment motion where the plaintiff, Premier Drycleaners, was partially unsuccessful.

The defendant, Burnford Realty Limited, sought costs on a substantial indemnity basis, citing Rule 49 and the presumptive rule that costs follow the event.

Premier argued that costs should be payable in the cause, given that substantive issues, including liability for damages, remained unresolved and were referred to a mini-trial.

The court agreed with Premier, ordering that the costs of the summary judgment motion be payable in the cause, reserving the final determination of costs to the trial judge who would have the benefit of hindsight regarding the overall outcome of the action.

Premier Drycleaners sought summary judgment against Burnford Realty Limited for alleged breach of a commercial lease and an order compelling assignment of a new lease.

Premier argued for rectification of the 2008 lease to include a five-year extension option from a 2007 document, and claimed damages for lost profits.

The court dismissed the motion for summary judgment in its entirety, finding genuine issues requiring a mini-trial regarding the terms of the 2008 lease and the alleged breach.

The court also dismissed the request to compel assignment of the 2013 lease, ruling that the landlord's refusal to consent was reasonable given concerns about the tenant's viability and the damaged landlord-tenant relationship due to ongoing litigation.

The defendants brought a motion to prohibit the plaintiffs from calling Donald Raymond to give expert opinion evidence based on his 2005 appraisal report for the Quigley Hill property.

The defendants argued that Raymond failed to comply with Rule 53.03, did not qualify as a "participating or other expert" under Westerhof due to file destruction and lack of direct participation in the sale, and that his opinion was irrelevant.

The court found Raymond's appraisal relevant, that he qualified as a participant or non-party expert under Westerhof despite his file being inadvertently destroyed, and that any prejudice to the defendants was minimal and cured.

The court also noted both parties shared blame for not pursuing the "best efforts" undertaking more diligently.

The motion was dismissed.

The plaintiff moved for partial summary judgment against the individual defendants, seeking to hold them personally liable for a consent judgment previously obtained against their corporation.

The plaintiff relied on personal guarantees signed by the defendants.

The defendants argued the guarantees were invalid or limited, and sought a stay of proceedings based on an arbitration clause.

The court dismissed the request for a stay, finding it was brought too late and that the oppression claim fell outside the arbitration agreement.

The court granted summary judgment, finding the 2010 personal guarantee was a continuing guarantee that rendered the individual defendants personally liable for the corporate debt.

Following a successful summary judgment motion setting aside a fraudulent conveyance, the plaintiffs sought costs of up to $145,509.94.

The court found the claimed amounts excessive, particularly a $69,060.20 disbursement for an expert accounting report that was not relied upon or referred to during the motion.

Applying the principle that costs should be fair and reasonable for the unsuccessful party to pay, the court fixed costs at $31,000 all-inclusive, as suggested by the defendant.

The plaintiffs, former employers of the defendant, brought a motion for summary judgment to set aside a conveyance of RRSPs made by the defendant.

The defendant, who had embezzled over $688,000 from the plaintiffs, transferred approximately $206,000 into a creditor-proof segregated mutual fund prior to the discovery of the fraud, her conviction, and subsequent bankruptcy.

The court applied the Fraudulent Conveyances Act, finding that the defendant's transfer of stolen money into a creditor-proof fund, followed by bankruptcy, constituted a fraudulent conveyance.

The court inferred intent to defraud from the circumstances, despite no direct evidence of the defendant's awareness that the fraud was about to be discovered at the time of transfer.

The motion was granted, ordering the RRSPs to be transferred back to a general fund for execution by the plaintiffs.