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.

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.

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 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.

The defendants moved for a temporary stay of an Ontario action on the basis that identical proceedings were underway in New Brunswick.

The action concerned allegations that a former employee embezzled funds and used them to purchase and improve real property, including property later acquired in another province.

The court considered the test for temporary stays where parallel proceedings exist in different jurisdictions, including whether a stay would prevent duplication of resources and whether it would cause injustice to the resisting party.

The court held that the defendants had not demonstrated that a stay would avoid unnecessary duplication, particularly where the plaintiffs did not intend to pursue the foreign action beyond preserving a certificate of pending litigation.

Granting the stay would effectively render the Ontario proceeding moot and deprive the plaintiffs of their choice of forum.

The motion was dismissed and the defendants were granted time to file a defence.