David M. Brown

Two related companies filed notices of intention to make proposals under the Bankruptcy and Insolvency Act and sought administrative consolidation of their proceedings, approval of an administrative professionals’ charge, and authorization for the proposal trustee to act as foreign representative in Chapter 15 proceedings in the United States.

The court considered the integrated operations of the companies and the shared secured lender and held that administrative consolidation would promote efficient and cost‑effective management of the insolvency proceedings without merging the estates.

The court also approved a $250,000 administrative charge securing professional fees, noting compliance with statutory service requirements and the absence of opposition from the senior secured creditor.

Finally, the proposal trustee was authorized to act as foreign representative and seek recognition of the Canadian proceedings in the United States Bankruptcy Court.

The applicants brought a motion in an oppression proceeding under the Ontario Business Corporations Act seeking interim costs and related relief.

The court reviewed the legal test under OBCA s. 249(4), requiring a complainant to demonstrate a case of sufficient merit and financial circumstances that would preclude pursuit of the claim without funding.

The court found that the individual complainant established an arguable oppression claim involving alleged expulsion from corporate management, cessation of compensation, and disputes under a shareholders’ agreement.

However, the trust applicant failed to disclose relevant financial information.

The court concluded that the individual complainant met the financial hardship requirement but reduced the interim costs award to reflect the trust’s failure to disclose its financial circumstances.

In complex commercial litigation involving a Mareva injunction motion, counsel attended the court without following the Commercial List’s procedure for requesting an urgent appointment.

The court emphasized that counsel must contact the Commercial List Office before appearing urgently before a judge and may not bypass the process by attending unannounced in an attempt to vary a prior order.

Although the parties agreed to adjourn the Mareva motion and vary certain procedural timelines, the court criticized the improper attendance and ruled that the plaintiffs would not be entitled to claim costs for the unnecessary appearances.

The court granted the adjournment on consent with modifications and provided further scheduling directions for cross-examinations and the motion return.

The interim injunction remained in effect pending the rescheduled hearing.

The plaintiff employer sought ex parte relief against an employee alleged to have breached contractual and fiduciary duties by participating in a competing business and misusing confidential information.

The court applied the four-part test for Anton Piller orders set out in Celanese Canada Inc. v. Murray Demolition Corp. and found a strong prima facie case of breach of loyalty and confidentiality obligations, a risk of serious harm to the employer’s customer relationships, convincing evidence that relevant documents likely existed in the defendant’s possession, and a real risk of destruction of evidence.

The court granted an Anton Piller order with a shortened duration and appointed independent supervising solicitors.

An interim injunction restraining disclosure of confidential information and solicitation of customers or employees was also granted applying the RJR‑MacDonald test.

The court further ordered that the motion materials be sealed under the Sierra Club test pending execution of the order.

The moving party brought a motion under Rule 57.07 of the Rules of Civil Procedure seeking to hold opposing counsel personally liable for litigation costs allegedly caused by misconduct, including advancing false evidence, suppressing documents, and encouraging clients to give perjured testimony.

The court conducted a detailed review of the history of the litigation and the governing principles for imposing personal cost liability on counsel.

While the court found that counsel had made some serious litigation errors, including failing to properly list privileged documents in an affidavit of documents and mishandling document preservation, it held that the conduct did not cause costs to be incurred without reasonable cause within the meaning of Rule 57.07.

The court emphasized the adversarial nature of civil litigation, the extreme caution required before awarding costs personally against lawyers, and the availability of procedural remedies to address discovery issues.

The motion was dismissed.

The plaintiff bank sought leave under s. 215 of the Bankruptcy and Insolvency Act to continue an action against a trustee in bankruptcy for damages arising from an unpaid overdraft.

The bank alleged the trustee breached its duty of care by failing to provide notice of the debtor's proposal, sale of assets, and bankruptcy.

The court found that the bank's claim was not frivolous or vexatious and disclosed a factual foundation, particularly regarding the trustee's failure to notify the bank of the bankruptcy when the debtor's accounts held a positive balance.

Leave to continue the action was granted.

In CCAA proceedings involving several affiliated corporate applicants, the monitor sought court approval of a settlement resolving competing priority claims over estate funds among pension plans, a U.S. bankruptcy trustee, secured lenders, and other creditors.

The settlement provided for partial distributions to pension beneficiaries and retired executives, with the remaining funds payable to the U.S. trustee for the bankruptcy estates of related U.S. debtors.

The court held the settlement was a reasonable and proportionate resolution that avoided costly and protracted litigation over competing statutory deemed trusts and secured claims.

A related motion by the pension plan administrator sought amendment of the salaried pension plan to implement the settlement distribution scheme.

Relying on its broad discretionary authority under s. 11 of the Companies’ Creditors Arrangement Act, the court ordered the amendment where notice had been given and no affected party objected.

The plaintiffs moved under Rule 32.01 of the Rules of Civil Procedure for an order permitting inspection of a biofuel production plant owned by a defendant corporation.

The plaintiffs argued the inspection would allow their experts to assess whether the plant was operational in connection with a forthcoming Mareva injunction motion and claims relating to allegedly fraudulent transactions designed to defeat enforcement of anticipated U.S. judgments.

The court held that inspection orders require necessity for the proper determination of an issue in dispute and must reveal something useful or probative for the trier of fact.

Because the operational status of the plant was not relevant to the plaintiffs’ pleaded claim that certain funds were used to acquire the plant, the inspection was not necessary and that part of the motion was dismissed.

However, the court ordered production of written documents referred to in an affidavit pursuant to Rule 30.04(2).

The applicants, dissident shareholders of Oremex Silver Inc., requisitioned a shareholders' meeting.

The directors called a meeting for November but later postponed it to December, setting a new record date.

Just before the new record date, the directors issued 34.5 million shares to a third party in escrow, significantly diluting the applicants' voting power.

The applicants sought to confirm a meeting they held in November or, alternatively, to change the record date for the December meeting.

The court found the directors validly postponed the November meeting but improperly issued shares to manipulate the voting process for the December meeting.

The court ordered a new record date prior to the share issuance and appointed an independent chair for the December meeting.

The applicant sought directions regarding a creditor claims and distribution process under the Bulk Sales Act for residual net sales proceeds of $5,458.91.

The motion was unopposed.

The court approved the order but expressed significant discomfort with the applicant's use of the Bulk Sales Act, noting that the statute is designed to protect creditors 'in full', whereas in this case, trade creditors would receive virtually nothing after professional fees and priority claims were paid.

The court suggested that the Bulk Sales Act should be limited to situations where creditors will be paid in full, with insolvency legislation used otherwise.

Judgment creditors brought an application seeking approval of a proposed agreement of purchase and sale for a commercial property or, alternatively, the appointment of a receiver in aid of execution to facilitate enforcement of a monetary judgment.

The court reviewed the governing principles for appointing an equitable receiver, including the requirement for special circumstances where traditional execution mechanisms would be ineffective or impractical.

The evidence demonstrated that the judgment debtors failed to comply with settlement timelines requiring sale or refinancing of the property and did not adequately cooperate with the sales process.

Given delays, conflicting interests among stakeholders, and concerns that the existing listing process did not satisfy the Soundair principles for court-supervised asset sales, the court concluded that a receiver-controlled sales process was necessary.

A receiver was therefore appointed with authority to market and sell the property, and partial indemnity costs were awarded to the applicants.

In an action brought under s. 38 of the Bankruptcy and Insolvency Act seeking to recover alleged debts and set aside transactions under ss. 95 and 96, the plaintiff brought a refusals motion following the examination for discovery of a former chairman of the bankrupt corporation.

The court considered several refusals relating to questions about payments received from the bankrupt and communications with other directors and related parties.

The court held the questions were relevant to pleaded issues, including the defendant’s receipt of payments and whether certain parties were dealing at arm’s length with the debtor.

The defendant was ordered to re-attend for examination to answer the specified questions and any arising from those answers.

Costs of the motion were fixed in favour of the plaintiff.

During a Commercial List case management conference in a complex multi‑party securities and investment dispute, the court issued procedural directions governing ongoing litigation steps.

The court addressed the potential settlement motion involving certain defendants, confirmed the status of examinations for discovery, and ordered timelines for answering undertakings.

The judge provided structured options for handling refusals motions and warned that costs may be assessed per refusal to discourage unnecessary motions.

Additional directions were given regarding the timing of expert reports, a possible future summary judgment motion, and scheduling of the next case management conference.

In a Commercial List action approaching trial, the court addressed procedural steps necessary to complete trial preparation, including refusals arising from examinations for discovery.

The judge dispensed with a formal pre‑trial conference due to credibility issues and low settlement prospects.

Directions were provided regarding amendment of the statement of claim, timelines for expert reports, and procedures for resolving discovery refusals.

The court offered structured options for handling refusals motions, including a cost framework calculated per refusal to discourage unnecessary motions and confine disputes to material issues.

The appellant appealed a Registrar's order that suspended the bankrupt's discharge for one day without imposing any financial conditions, despite her significant income tax debt.

The Superior Court of Justice found that the Registrar erred in law by questioning the validity of the Crown's proven tax claim, which had not been disallowed by the Trustee.

The appeal was allowed, and the bankrupt was ordered to pay $8,000 as a condition of her discharge, balancing the policy objectives of the Bankruptcy and Insolvency Act with her current financial and family circumstances.

Investors sought the appointment of an investigative receiver over the defendant’s assets after transferring $3 million for foreign currency trading and alleging misappropriation and fraud when funds were not returned.

The defendant opposed the request and moved to set aside a default judgment previously granted against him.

The court held that although the defendant had not fully explained what happened to all funds during examinations and productions, the extraordinary remedy of appointing an investigative receiver before trial was not justified.

Existing discovery mechanisms and potential procedural sanctions were sufficient to address any non‑compliance.

The default judgment was set aside on consent, and the court directed the action to proceed to an expedited hybrid trial to determine liability and the disposition of the invested funds.

A bankrupt applied for an absolute discharge nearly nine years after being adjudged bankrupt under the Bankruptcy and Insolvency Act.

Creditors and the trustee opposed an unconditional discharge, alleging the bankrupt failed to satisfactorily account for significant pre‑bankruptcy assets and had not fully disclosed financial information.

The court found the bankrupt had not adequately explained the disappearance of substantial assets including cash, RRSPs, securities, and real property, engaging s. 173(1)(d) of the Bankruptcy and Insolvency Act.

The court also found the bankrupt had remained voluntarily unemployed while living comfortably through financial support from family.

While the court concluded the bankruptcy itself arose from circumstances for which the bankrupt was not justly responsible, the failures of disclosure and conduct during bankruptcy warranted a conditional discharge requiring payment to the estate.

Following extensive trial reasons in complex bankruptcy and fraud proceedings, the court issued a second case conference memorandum addressing outstanding procedural and remedial issues.

The court directed that issues concerning damages recoverable by a creditor, tracing relief, and costs orders against certain defendants be scheduled before the associate chief justice who presided over related contempt proceedings.

The memorandum also clarified that a previously ordered constructive trust over the bankrupt’s property should be incorporated into the final order without further submissions.

The court established a timetable for written submissions on post‑judgment interest relating to an earlier judgment and on the terms of a Mareva injunction in aid of execution.

The decision functioned primarily as case management to finalize remaining issues in the litigation.

The case management judge issued directions regarding the scheduling and sequencing of outstanding issues in a complex bankruptcy proceeding.

The court ordered written submissions for issues concerning the disclosure of the Trustee's report and the release of funds, while deferring other matters, including examinations and discharge hearings, until the trial judge releases supplementary reasons and determines contempt sentencing.

The plaintiff, a court-appointed receiver, brought an action to enforce a 2004 Settlement Agreement against the defendants.

The settlement was nominally entered into by a numbered company (129) controlled by the late Sylvia Hyde's husband, Edwin, and later by Sylvia herself.

The plaintiff sought to bind Sylvia's estate and two other companies she controlled (Glen Grove and Spendthrift) to the settlement's obligations, which included providing a mortgage and guarantee.

The court found that Sylvia had used her common control over the three corporations to secure a court-approved benefit from the settlement and could not subsequently use their separate legal personalities to avoid the obligations.

The action was allowed against Glen Grove and Spendthrift, but dismissed against Sylvia's estate as there was no basis to pierce the corporate veil.