David P. Preger

The applicant sought a declaration regarding the amount owed to discharge a commercial mortgage.

The mortgage had a face value of $3 million, but the net amount advanced was approximately $2.6 million after deducting the lender's financing costs.

The applicant argued it was only required to repay the net amount advanced.

The court held that the express terms of the Mortgage Financing Agreement required the applicant to repay the full $3 million face value, displacing the general equitable rule that a mortgagee can only recover the amount actually advanced.

A court-appointed receiver sought directions regarding the distribution of proceeds from the sale of a property.

The Applicants, who held a second mortgage, claimed priority over the alleged first mortgagee, Pillar Capital Corporation, arguing that the first mortgage had been paid in full and therefore the subsequent assignment to Pillar Capital was a nullity.

The court found that the first mortgage was indeed paid in full on August 15, 2014, and there was no contemporaneous agreement to assign it.

Consequently, the May 5, 2015, assignment of charge to Pillar Capital was deemed a nullity.

The Applicants' claim for priority was upheld, and the Receiver was directed to pay the remaining amount due on the second mortgage from the sale proceeds.

Claims by Pillar Capital for property management fees, maintenance fees, and certain legal fees were rejected due to lack of proof and contractual basis.

A motion judge approved a receiver's sale of a partially constructed property (Birchmount Property) for $3.45 million, free and clear of all mortgages.

The third mortgagee, World Finance Corporation, sought to appeal, claiming an appeal as of right under section 193(b) of the Bankruptcy and Insolvency Act, or alternatively, leave to appeal under section 193(e).

The Court of Appeal held that section 193(b) did not apply because the order pertained only to one bankruptcy proceeding, not multiple similar cases within the same proceeding.

Leave to appeal was also denied because the proposed appeal lacked prima facie merit, did not raise an issue of general importance, and would unduly hinder the bankruptcy proceedings.

The sale was approved to proceed.

The appellants, owners of waterfront properties on Nottawasaga Bay, appealed a decision of the Coordinator in the Office of the Surveyor General confirming a municipal resurvey under the Surveys Act.

The resurvey extended two road allowances straight across accreted lands to the water's edge, effectively cutting off the appellants' water access.

The Divisional Court allowed the appeals, finding that the Coordinator's decision was unreasonable.

The Court held that the Surveys Act does not displace the common law principles of accretion, which dictate that accreted lands attach to riparian properties and should be equitably allocated.

The matter was remitted for a trial of an issue regarding whether the survey should be confirmed with or without amendments.

A receiver sought to defeat an appeal from a court order approving the sale of real property (a residential condominium project for seniors) to Pinnacle International One Lands Inc. The appellant, Fortress, had competed for the property through a stalking horse bidding process and subsequently submitted competing offers.

The receiver accepted Pinnacle's offer.

Fortress appealed, relying solely on section 193(c) of the Bankruptcy and Insolvency Act, which provides an automatic right of appeal if property involved exceeds $10,000 in value.

The Court of Appeal held that the approval order did not "result in a loss" within the meaning of section 193(c) because the receiver could not have obtained a better deal than Pinnacle's offer.

The court found that Pinnacle's offer had superior practical value due to a higher deposit, all-cash financing, support from the first mortgagee, and the integrity of the sale process.

The union sought leave to proceed with a certification application and unfair labour practice complaint before the Ontario Labour Relations Board following the appointment of a receiver over the debtor company.

The motion judge dismissed the union's motion, finding that the stay imposed by the receivership order prevented the certification application from proceeding and that the union could not pursue an unfair labour practice complaint without a valid certification application.

The Court of Appeal allowed the appeal, holding that the motion judge erred in refusing to lift the stay.

The court found that the motion judge's concerns about the certification application were speculative and unsupported by evidence, and that employees' labour rights should not be unduly inoculated against by insolvency proceedings.

The court granted leave to proceed with both the certification application and the unfair labour practice complaint.

A motion was brought by 40 purchasers of residential units from various Urbancorp entities in CCAA and BIA NOI proceedings.

The purchasers sought the appointment of Dickinson Wright LLP as their representative counsel and an order for their legal fees, capped at $150,000, to be paid and secured by an administrative charge against the four properties.

The properties were vacant land, and the significant deposits received by Urbancorp companies were not held in trust and had been spent.

The motion was supported by Tarion but opposed by the Monitor, the Foreign Representative of Urbancorp Inc., the Urbancorp entities, and certain other purchasers and a secured lender for one project.

The court granted the appointment of Dickinson Wright as representative counsel, but stipulated an opt-in process for purchasers rather than an opt-out.

The court denied the request for an administrative charge for legal fees, ruling that fees and disbursements could be paid by the estates from the distributions made to those purchasers who chose to be represented by Dickinson Wright.

TIF Mechanical Limited claimed a construction lien of $471,312.17 against the Owners for renovation work.

The Owners denied the claim, alleging overpayment, incomplete and unauthorized work, and counterclaimed for $500,000.

The court found that the parties had a series of individual contracts, initially fixed-price, then primarily verbal time-and-material agreements, rather than an overarching fixed-price general contract as alleged by the Owners.

The court largely accepted TIF's invoices as reflecting the agreed-upon price and found the Owners' credibility lacking regarding a budget limit.

While some deficiencies were found, the Owners' counterclaim for unauthorized work, zoning variance costs, completion costs, general damages, bad faith, and loss of opportunity was dismissed.

TIF was awarded $377,277.82 plus prejudgment interest.

The International Union of Operating Engineers, Local 793 (the "Union") brought a motion seeking to lift a stay of proceedings imposed by a receivership order.

The Union intended to proceed with a certification application and a related unfair labour practice complaint before the Ontario Labour Relations Board (OLRB) against Courtice Auto Wreckers Limited (the "Debtor") and its court-appointed receiver, Rosen Goldberg Inc. The court denied the motion, finding that the certification application was a nullity as it was commenced without prior leave of the court, in contravention of the receivership order.

Consequently, the unfair labour practice complaint, being dependent on the validity of the certification application, also lacked a prima facie basis.

The court emphasized that allowing the certification would create new rights for employees, contrary to the purpose of a stay in receivership, and could diminish the proceeds from the sale of the Debtor's assets.

Following a successful summary judgment motion where the plaintiff recovered her deposit on a failed condominium purchase, the plaintiff sought costs of $483,236 on a substantial indemnity basis.

The court found the plaintiff's Rule 49 offers did not contain a clear, understandable compromise, disentitling her to substantial indemnity costs.

Applying the factors under Rule 57.01, the court noted the plaintiff's scattergun approach, unnecessary proceedings, and excessive billing.

The court fixed partial indemnity costs at $225,000, reflecting a fair and reasonable amount the defendant could expect to pay.

The applicants, a group of mortgage investors, applied to appoint a receiver over the property of the respondent, a not-for-profit corporation operating a church and school, due to an outstanding loan balance of approximately $11.5 million.

The respondent had previously commenced an action against the applicants alleging conspiracy and seeking restitution.

The court dismissed the application, finding it was not just and convenient to appoint a receiver because the respondent raised triable issues, the property value greatly exceeded the debt, and a receivership would effectively end the ongoing litigation and negatively impact the church and school.

The appellant factor appealed a decision regarding the interpretation of an 'Acceptance of Goods' document.

The appellant argued the document contained a promise by the respondent debtor to pay the amounts in the referenced invoices, characterizing it as an estoppel certificate.

The Court of Appeal dismissed the appeal, finding the document was merely an acknowledgement that the respondent would direct payments owed to its supplier to the appellant without set-off or deduction, but did not constitute a promise to pay the face amount of the invoices regardless of the actual amount owing.

The moving party, a construction lien claimant, sought an extension of time to appeal an order that granted priority to a mortgagee over the proceeds of sale of a property in receivership.

The notice of appeal was filed 18 days late, after the receiver had already distributed the funds.

The Court of Appeal dismissed the motion, finding no bona fide intention to appeal within the time limit, no adequate explanation for the delay, and no merit to the proposed appeal.

The Court also noted that leave to appeal would have been required under the Bankruptcy and Insolvency Act and would not have been granted.

Following an earlier endorsement in a commercial dispute, the court issued a corrigendum to correct two matters raised by counsel.

First, the formal endorsement had omitted the judge’s decision striking a specific paragraph of the applicants’ amended amended application, which had previously been recorded only in a handwritten endorsement.

Second, the reasons incorrectly stated that a newly constituted board had approved the sale of a 10% share in a corporation to a respondent, when in fact the scheduled board meeting had not proceeded because the application had already been commenced.

The court clarified both issues and amended the reasons accordingly.

The applicants brought an oppression application regarding a family investment company, Naim Investments Limited.

They alleged that the proposed sale of a 10% shareholding by an estate to a third party, Dr. Low, was a disguised sale to a rival family branch that would breach an unwritten control agreement and a written ownership restriction agreement.

The court found no evidence of a control agreement, determined that Dr. Low was an arm's length purchaser, and concluded that the election of a new board to approve the sale was a proper exercise of corporate governance to resolve a deadlock.

The application was dismissed with costs.

The purchaser brought a motion for summary judgment in litigation arising from a failed commercial real estate transaction, seeking dismissal of the vendor’s action and return of a $250,000 deposit.

The purchaser argued it was justified in refusing to close due to alleged breaches including lease modifications without consent, misrepresentation of the rent roll, failure to deliver estoppel certificates, and absence of required personal guarantees.

The court held that the alleged deficiency regarding guarantors did not justify refusal to close and that the individual signatory purchaser had been released from liability through a valid assignment to a corporate purchaser.

However, genuine issues requiring a trial remained regarding alleged contractual breaches, the forfeiture or return of the deposit, and related claims including a third-party claim against the purchaser’s lawyers.

Partial summary judgment was granted dismissing the action against the individual purchaser, but the remaining issues were directed to trial.

A reference under the Construction Lien Act required the court to determine whether the contractual relationship between a developer and a construction company was one of owner and construction manager (agent) or owner and general contractor.

The written agreement used a construction management form contract but included amendments allowing the contractor to contract directly with trades and assume risk for cost overruns beyond a specified threshold.

The court found ambiguity in the contract language and admitted extrinsic evidence to interpret the parties’ relationship.

Examining the contractual provisions and the parties’ conduct, including direct contracting with trades and liability for payment and cost overruns, the court concluded the arrangement functioned in substance as a general contracting structure.

Accordingly, the contractor was treated as a general contractor for purposes of determining priorities and holdback obligations under the Construction Lien Act.

The first mortgagee, BDC, successfully applied for the appointment of a receiver over the debtor's assets.

The debtor and the second mortgagee sought to appeal the order, arguing the second mortgagee was entitled to exercise its rights under s. 22 of the Mortgages Act to put the first mortgage in good standing without paying HST arrears.

The Court of Appeal held that there is no automatic right to appeal a receivership order under s. 193 of the Bankruptcy and Insolvency Act.

The Court clarified the test for granting leave to appeal under s. 193(e) and denied leave, finding the proposed appeal was not prima facie meritorious and would unduly hinder the timely sale of the property.

Secured creditors sought the appointment of a receiver over a debtor company pursuant to s. 243 of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act following repeated loan defaults and concerns that assets might be removed from the premises.

Evidence indicated ongoing payment defaults and recent activity suggesting potential removal of items from the business location.

The respondent acknowledged default but requested a short period to obtain refinancing sufficient to satisfy secured creditors.

The court concluded that supervision was necessary to protect the debtor’s assets and the secured creditors’ interests.

An interim receiver with limited monitoring powers was appointed pending a further hearing on whether a full receivership should be ordered.

The applicants, a group of companies owned by Dondeb Inc., sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) to enable an orderly liquidation of their assets.

The application was opposed by approximately 75% of the secured creditors, who argued for individual receiverships due to a lack of confidence in the applicants' principal and the burden of CCAA administrative costs.

The court dismissed the CCAA application, finding it unlikely that a successful plan could be developed and approved by the creditors.

Instead, the court issued a Global Receivership Order, which was supported by the opposing creditors, to achieve an orderly liquidation at a lower cost.