David S. Ward

CS Capital Limited, a secured creditor and mortgagee, brought a motion seeking a declaration that its mortgage had priority over construction lien claims on a property.

The court dismissed the motion, finding that the mortgage was not registered prior to the time the first lien arose in respect of the overall improvement project.

Furthermore, the court determined that the mortgage was a collateral mortgage securing a guarantee of a separate debt, and therefore no "advance" was made in respect of it for the purposes of priority under the Construction Act.

The Liquidator of Northumberland General Insurance Company brought an unopposed motion to pass its accounts, approve its activities and fees, and obtain a declaration regarding the ownership of the company's shares.

The company had been in liquidation since 1985.

The Court approved the accounts and fees, finding them reasonable.

The Court also found it had jurisdiction under the Winding-Up and Restructuring Act and the Courts of Justice Act to issue a declaratory order regarding share ownership to assist in the potential distribution of a surplus.

After reviewing the complex corporate history and two alternative chains of ownership, the Court declared that Brian Reeve is the owner of 100% of the share capital of Northumberland.

The Applicants in a CCAA proceeding sought approval of an amended Share Purchase Agreement (SPA) and a reverse vesting order (RVO) to facilitate the sale of their business as a going concern.

The transaction aimed to preserve cannabis licenses, maintain business operations, and retain approximately 95% of employees.

The motion was unopposed, receiving strong support from the two senior secured creditors (2125028 Ontario Inc. and Marzilli) and the Monitor.

The court found the RVO appropriate, satisfying the factors under CCAA section 36, the Soundair Principles, and the Harte Gold framework.

Ancillary relief, including third-party releases for parties crucial to the restructuring, such as the stalking horse bidder (Cardinal) who provided interim financing and waived fees, was also granted.

The stay period was extended to allow for post-closing matters.

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 an amended and restated initial order under the CCAA, including approval of a stalking horse sales process, a Key Employee Retention Plan, an increased administration charge, and an extension of the stay of proceedings.

The court granted most of the requested relief, finding it necessary for the restructuring and supported by the Monitor.

However, the court dismissed the applicants' request to stay a creditor's action against three directors on their personal guarantees, ruling that section 11.03(2) of the CCAA expressly prohibits staying actions against directors on guarantees relating to the company's obligations.

Hazleton Development Corporation, an insolvent company constructing a condominium complex, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA).

The application sought a stay of proceedings, approval of Grant Thornton Limited as Monitor, permission for pre-filing payments to critical trades, approval of a Debtor-in-Possession (DIP) financing facility, an administration charge, and a directors’ charge.

The court granted the initial order, finding the company met the CCAA's statutory requirements, the stay was appropriate for a 10-day period, the Monitor was qualified, pre-filing payments were beneficial to stakeholders, the DIP facility was essential and reasonably necessary, and both the administration and directors’ charges were warranted.

The order was granted without prejudice to the secured creditors' rights for a subsequent hearing.

Bella Senior Care Residences Inc. (Bella) sought a declaration that certain correspondence and evidence related to discussions with The Canada Life Assurance Company (Canada Life) and Stonebridge Financial Corporation (Stonebridge) were admissible and not protected by settlement privilege.

Canada Life asserted settlement privilege over these communications, which concerned Bella's defaults under a Credit Agreement and Canada Life's subsequent demands.

The court applied a three-part test for settlement privilege, finding that while a litigious dispute existed, Canada Life's communications did not constitute genuine attempts to negotiate a settlement but rather ultimatums to enforce or expand its rights.

Consequently, the court declared the documents not subject to settlement privilege and allowed Bella's motion, awarding costs.

The Kraus group of companies, a vertically integrated carpet manufacturer and flooring distributor, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA) due to significant financial difficulties and insolvency.

The application sought a stay of proceedings, appointment of Deloitte Restructuring Inc. as Monitor, and the granting of an Administration Charge and a Directors’ Charge.

The court granted the initial order, finding that the applicants met the CCAA threshold, a stay was appropriate for the business and its directors/officers, the proposed Monitor was qualified, and both the Administration Charge and Directors’ Charge were justified to secure essential services and ensure continued director involvement.

A sealing order for sensitive commercial information was also granted.

The appellant insurance company appealed a Superior Court judgment dismissing its motion to recover $600,000 held back from distribution by a receiver.

The insurance company argued the funds were paid based on mistake of fact, lack of consideration, unjust enrichment, equitable subrogation, and constructive trust.

The Court of Appeal upheld the lower court's decision, finding that the trustee lawfully received the funds to reduce a legitimate outstanding debt and had altered its position in good consideration by deferring its receivership application.

The appellant failed to establish the defence of mistake of fact.

The applicants in CCAA proceedings sought an extension of the Stay Period to April 15, 2016, as they prepared an Amended and Restated Plan of Compromise.

The court found the parties were working in good faith and with due diligence, and granted the extension.

The court also approved an agreement to lift the Co-Tenancy Stay on acceptable terms and extended the Notice of Objection Bar Date.

The Trustee in Bankruptcy sought an order under s. 164 of the Bankruptcy and Insolvency Act compelling the former Chief Restructuring Officer (CRO) and a secured creditor to produce documents.

The respondents claimed solicitor-client and litigation privilege over the documents.

The Trustee argued that the CRO could not assert privilege against the Trustee and that any common interest privilege was dissolved upon the CRO's appointment.

The court dismissed the motion, holding that the CRO could assert privilege regarding its specific duties and that the common interest privilege between the secured creditor and the CRO (acting as a consultant prior to appointment) was not dissolved.

The appellant, who purchased a portion of the bankrupt company's business, appealed the Trustee's disallowance of various claims totaling over $3 million.

The claims sought reimbursement of expenses and damages allegedly resulting from misrepresentations in unaudited internal financial statements provided prior to the sale.

The court upheld the Trustee's disallowance, finding that the Asset Purchase Agreement contained 'as is, where is' and entire agreement clauses, and that the claims were barred by res judicata due to prior court orders approving the sale and discharging the Chief Restructuring Officer.

The appeal was dismissed.