David P. Preger

The decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

This endorsement grants a brief adjournment in the Companies’ Creditors Arrangement Act (CCAA) proceedings involving Hudson’s Bay Company ULC and related entities, following ongoing discussions between the applicants and stakeholders.

The court extends the stay of proceedings, increases the Directors’ Charge, amends the relative priorities of charges, and approves the engagement of Reflect Advisors, LLC as financial advisor.

The court finds the requested relief appropriate, unopposed, and supported by the Monitor, and orders the requested amendments to the Initial Order.

The court-appointed Receiver sought approval for the sale of a property owned by the Debtor, 253 Queen Street Inc., and an Administration Order.

The sale was supported by secured creditors Homedale-Eagle Corporation and Sky Mortgage Corporation but opposed by the Debtor and its equity holders.

The opposing parties argued the purchase price was too low, the environmental indemnity was not assumed by the purchaser, and their beneficial interest in the property was not recognized.

The court applied the Soundair principles for approving sales in receivership, finding the Receiver acted providently and fairly.

The court rejected the claims of beneficial ownership based on trust law and the Land Titles Act, affirming the priority of registered mortgages over unregistered beneficial interests.

The Receiver's motion for approval of the sale and the Administration Order was granted.

The Court-Appointed Receiver sought an administration order, approval of its First Report, a vesting order for the sale of the Debtor's property, and sealing relief for confidential appendices.

The Debtor, through its principal, initially indicated opposition and sought an adjournment to obtain legal advice and present evidence of purported second mortgages.

The court denied the adjournment, finding no evidence of other registered mortgages or a basis to compromise the first mortgage.

The court approved the sale, administration, and sealing orders, concluding the property was widely exposed and the sale was in the best interest of the estate.

The applicant, Romspen Investment Corporation, sought the appointment of a receiver over the respondents' property and approval of an agreement of purchase and sale (the "Times Transaction").

A fifth-ranking mortgagee, Sow Capital Ontario Limited, brought a competing motion to approve its own power of sale transaction (the "281 Transaction") and sought to suspend the receiver's powers.

The respondents opposed both sale transactions, arguing for a receiver-conducted auction.

The court appointed Ernst & Young Inc. as receiver, approved the Times Transaction, and granted a sealing order, finding that the Times Transaction offered the best outcome for all stakeholders and that a further sales process was unnecessary.

The court dismissed Sow's motion to suspend receivership powers and the respondents' request for an auction or a reservation of rights to claim improvident sale.

The appellant, Bon-Star Inc., appealed an order declaring its mortgage a closed mortgage with no prepayment privileges and requiring compensation for lost interest upon prepayment.

The Court of Appeal allowed the appeal in part, varying the declarations to clarify that prepayment privileges were absent in favour of the mortgagor and that compensation for lost interest was required for the specific transaction where the "Due on Sale" clause was not invoked.

The court found the application judge erred in making a broad declaration regarding prepayment without compensation, as specific mortgage terms like the "Due on Sale" clause could alter prepayment conditions.

The court also upheld the application judge's discretionary decisions regarding adjournments and counsel appointment.

Santokh Mahal sought a declaration that his security interest in Golden Miles Food Corporation's personal property was valid and had priority, securing $2,182,914 in advances.

The Applicant, Skymark Finance Corporation, and the Receiver, KSV Restructuring Inc., opposed the motion.

The court granted Mahal a secured claim for $281,600, representing direct personal advances, but dismissed the remaining $1,901,314 claimed for advances made by corporations controlled by Mahal.

The court found that these corporate advances were not indirect debts secured by Mahal's General Security Agreement due to insufficient documentation and lack of PPSA registration by the advancing corporations.

The Applicants in a CCAA proceeding moved for a reverse vesting order to approve a transaction with a purchaser related to a secured creditor, Marzilli.

The transaction would vest out the first-ranking security interest of another creditor, 212, and transfer its debt to a residual entity with no assets. 212 opposed the motion, arguing its debt assumption was part of the stalking horse bid that set the floor for the sales process.

The court applied the Third Eye and Harte Gold factors, finding that 212 had not consented to the vesting out of its interest and that the equities favoured 212.

The court dismissed the motion for the reverse vesting order, concluding it was not equitable to extinguish 212's first-ranking security interest under the circumstances.

The applicants sought a declaration that a 2001 easement and restrictive covenant registered on title to a former golf course prohibited the respondent from developing the lands for residential use.

The respondent argued the covenant only protected storm water management access and did not prevent development.

The court applied contract interpretation principles and found the plain language of the restrictive covenant, read in context, constituted a complete prohibition on building structures on the golf course lands.

By operation of the Land Titles Act, the covenant was deemed to expire 40 years after registration, prohibiting residential development until 2041.

The applicants and respondents, involved in a joint venture for a condominium development, experienced an irrevocable breakdown in their relationship.

Both sides agreed the property should be sold but disagreed on the mechanism: the applicants sought the appointment of a receiver, while the respondents sought a signing officer with limited powers.

The court found it just and convenient to appoint a receiver to conduct the sales process, concluding that a receivership would not stigmatize the property and that the receiver's powers could be appropriately tailored to consider existing offers.

Two groups of landowners appealed the Surveyor General's confirmation of a survey that extended road allowances to the water's edge of Georgian Bay, separating their properties from the beach.

The appellants argued the Surveyor General erred by ignoring a previous Divisional Court decision, misapplying common law principles of accretion, and rejecting estoppel arguments.

The Divisional Court dismissed the appeals, finding the Surveyor General made reasonable findings of fact supported by evidence, including that no accretion had occurred and that the original 1820s survey intended the road allowances to reach the water.

The court held the standard of review was correctness for law and palpable and overriding error for fact, and found no such errors.

The applicant mortgagee brought an application for declarations that a commercial mortgage registered against the respondent's property was a closed mortgage with no prepayment privilege, that it was entitled to all lost interest to maturity upon any early prepayment, and that forced insurance coverage costs were recoverable.

The respondent corporate mortgagor argued it should be entitled to pay out the mortgage upon a sale without paying interest to maturity.

The court granted the declarations, finding that the mortgage terms clearly prohibited early prepayment and that corporate borrowers do not have a statutory right to redeem a mortgage with only a three-month interest penalty under the Mortgages Act.

The court also found the insurance costs were properly recoverable under the mortgage terms.

This appeal arose from a failed business venture to revive a bankrupt manufacturing company, involving a secured loan and asset transfer via a Quitclaim Deed.

The Court of Appeal heard two appeals: one concerning the enforceability of the Quitclaim Deed for asset transfer, and another regarding compensation for a former operator based on unjust enrichment.

The Court dismissed the appeal concerning the assets, affirming the Quitclaim's unenforceability due to lack of certainty.

However, it allowed the appeal regarding the former operator's salary, finding that unjust enrichment was not established and that the corporate veil could not be pierced to hold the appellant company liable for work done for a subsidiary.

This urgent motion before the Court of Appeal addressed whether a non-party, John Kavanagh, had an automatic right to appeal or should be granted leave to appeal two approval and vesting orders related to the sale of properties in a mortgage enforcement and insolvency proceeding.

The Receiver brought the motion to prevent automatic stays of the property sales.

The court found no automatic right of appeal under s. 193(c) of the Bankruptcy and Insolvency Act (BIA) because the orders were procedural and no loss exceeding $10,000 was demonstrated.

The court also denied leave to appeal under s. 193(e) of the BIA, concluding that the issues raised were not of general importance, lacked prima facie merit, and granting leave would unduly hinder the insolvency proceedings.

Consequently, Kavanagh's notices of appeal were quashed, and his motions for leave to appeal were dismissed, ensuring the property sales could proceed without automatic stays.

The Receiver brought a motion seeking approval of its activities, approval of a sales process for two properties, and an order requiring a tenant to disclose tenancy documentation.

The court declined to grant a generic approval of the Receiver's activities, finding it unnecessary.

The court ordered the tenant to comply with its disclosure obligations, rejecting the tenant's confidentiality objections.

The court approved the proposed sales process and listing agreements, subject to conditions including a time-limited sealing order for appraisals and the circulation of redacted listing proposals to the parties.

The moving parties, Thomas Patrick Farrell and The Midas Investment Corporation, appealed an order dismissing their action concerning the validity of two mortgages and sought a stay of the declaration of validity and enforcement of the mortgages pending the outcome of the appeal.

The court applied the three-part RJR-MacDonald test for stays pending appeal.

While a serious issue was found to exist (though barely), the court determined there would be no irreparable harm to the moving parties and that the balance of convenience did not favour granting a stay.

The motion for a stay was dismissed.

This is a costs endorsement following an appeal.

The appellant, Yong Yeow Tan, was ordered to pay costs to the respondents, C & K Mortgage Services Inc. and the Receiver for Camilla Court Homes Inc. and Elite Homes Inc. C & K Mortgage Services Inc. was awarded $20,000, and the Receiver was awarded $7,500, inclusive of taxes and disbursements.

The appellant entered into an agreement of purchase and sale for a residential unit in a condominium project and paid a $500,000 deposit, mostly directly to the developer.

The developer was subsequently placed into receivership by the first mortgagee.

The receiver disclaimed the appellant's agreement of purchase and sale.

The appellant sought an order requiring the receiver to complete the sale, arguing he had an equitable interest in the property.

The Court of Appeal upheld the motion judge's dismissal, finding that the agreement explicitly subordinated the purchaser's interest to any mortgages and that the appellant's equitable claims could not defeat the mortgagee's prior secured legal interest.

Jereemy Tan, the moving party, sought an extension of time to file a notice of appeal against a Superior Court decision that authorized a Receiver to disclaim an agreement of purchase and sale for a property.

The moving party's counsel inadvertently missed the 10-day appeal deadline, believing it was 30 days.

The Court of Appeal granted the extension, finding the delay was short and excusable, prejudice to respondents negligible, and the proposed appeal met the low threshold for merit.

The court also determined the appeal was "as of right" under sections 193(b) and (c) of the Bankruptcy and Insolvency Act, as the decision could affect other similar cases and involved property exceeding $10,000 in value.

The moving party purchaser entered into an agreement of purchase and sale for a pre-construction condominium and paid a $500,000 deposit, $400,000 of which went directly to the developer.

The developer defaulted on its first mortgage, and a receiver was appointed.

The receiver sought to disclaim the purchaser's agreement.

The purchaser brought a motion to compel the receiver to complete the sale, arguing he had an equitable interest in the property.

The court dismissed the motion, finding that the purchaser's interest was contractually subordinate to the first mortgagee and that the equities did not justify overriding the mortgagee's legal priority.