David S. Ward

Following the dismissal of the moving parties' motion on June 24, 2026, the Court of Appeal for Ontario ordered the moving parties to pay the trustee in bankruptcy costs in the all-inclusive amount of $7,551.23.

Investors in a bankrupt's Ponzi scheme moved for leave to amend their notice of appeal to seek leave to appeal a $180,000 costs order arising from an unsuccessful cross-motion in the bankruptcy proceeding.

The motion judge held that the substance of the costs order was procedural and that it was made under the Bankruptcy and Insolvency Act, so the appeal route was governed by s. 193 of the BIA rather than the Courts of Justice Act.

Applying the narrow approach to appeals as of right under s. 193(c), the court found the order did not engage the bankrupt's property or produce a qualifying loss and therefore required leave under s. 193(e).

Leave was denied because the proposed appeal raised no issue of general importance, lacked prima facie merit, and would hinder the progress of the bankruptcy.

The court heard competing motions by a court-appointed receiver and a third-party purchaser (BJC) regarding the sale of a commercial property.

The property was subject to a mortgage that fell into default, prompting the mortgagee to exercise its statutory power of sale and enter into an agreement with BJC.

Subsequently, a receiver was appointed over the mortgagor corporation in an oppression action and sought to sell the same property en bloc with another property to a different purchaser.

The court held that the receivership order under the Business Corporations Act and Courts of Justice Act did not suspend or supersede the mortgagee's pre-existing statutory power of sale under the Mortgages Act.

The receiver's motion to approve its sale was dismissed, and the mortgagee was permitted to complete its sale to BJC.

The trustee in bankruptcy moved for a phase-one determination that profit payments made by Douglas Grozelle to net winners in a fraudulent Ponzi scheme were void as against creditors and recoverable for the estate.

The court found the hallmarks of a Ponzi scheme, held insolvency and fraudulent intent could be inferred globally, and concluded the payments were void under the Fraudulent Conveyances Act and not saved by good-faith or good-consideration defences.

The court approved a two-stage insolvency process: common liability issues resolved summarily now, with individualized quantum determinations in phase two.

The winners’ cross-motion for broad directions attacking the trustee’s process and authority was dismissed.

On a CCAA motion, the moving parties sought approval of a reverse vesting transaction and ancillary relief following a court-approved SISP with a stalking horse credit bid.

The court applied the s. 36(3) criteria and found the process was transparent, adequately marketed, monitor-supervised, and fair and reasonable in the circumstances.

The court accepted the monitor’s evidence that a going-concern outcome would produce materially better stakeholder outcomes than liquidation and would preserve enterprise value while reducing restructuring costs.

Applying the Harte Gold framework, the court held the reverse vesting structure was necessary, economically superior to viable alternatives, non-prejudicial to stakeholders relative to alternatives, and reflective of fair value for preserved intangibles.

The motion was granted and both the Reverse Vesting Order and Ancillary Order were approved.

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.

The applicant sought to set aside an arbitration award of $625,551.19 in favour of the respondent partnership, arguing a denial of natural justice and procedural fairness.

The applicant claimed the arbitrator failed to apply common law principles requiring dissolution and an accounting before a partnership can sue a partner, and improperly denied documentary productions.

The Superior Court of Justice dismissed the motion, finding the arbitrator's decisions were reasonable, the applicant was estopped from changing his legal position late in the arbitration, and the production rulings were procedural matters within the arbitrator's jurisdiction.

The Bank of Montreal applied for a receiver over a group of fitness clubs (the Crunch Group) following defaults on credit facilities.

The parties reached an agreement where the debtors' nominee would purchase the debt and security.

The Bank accepted the offer but subsequently refused to provide a fully executed copy of the agreement, causing the purchaser to lose financing and fail to close on the scheduled date.

The court found the Bank's actions, including abruptly closing the debtors' bank accounts and unreasonably refusing to deliver the executed agreement, breached the duty of good faith.

The court ordered the Bank to close the transaction.

CIM Bayview filed a Notice of Intention to Make a Proposal under the BIA and sought to disclaim an Amended Option Agreement that granted Bryton Creek the right to purchase a development property.

CIM Bayview argued the option could be disclaimed, vested out, or was void for imposing a criminal rate of interest or violating the Interest Act.

The court dismissed CIM Bayview's motion, finding the option created an immediate interest in land that could not be disclaimed or vested out.

The court also found the option did not constitute a criminal rate of interest or a penalty.

The court lifted the stay of proceedings to allow Bryton Creek to exercise its option.

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 plaintiffs appealed an order of a Master dismissing their action for delay following a status hearing under Rule 48.14.

The litigation, which commenced in 2000, involved allegations of mortgage mismanagement by the defendants.

The Master found an unacceptable explanation for at least seven years of delay, primarily related to document scanning, and concluded that the defendants would suffer non-compensable prejudice due to the unavailability of key witnesses.

The Divisional Court found no palpable and overriding error in the Master's contextual analysis and dismissed the appeal.

The Receiver of a bankrupt masonry contractor sought directions to distribute remaining funds to a secured creditor.

A subcontractor opposed the distribution, arguing the funds were subject to a deemed trust under the Construction Lien Act and excluded from the bankruptcy estate.

The court found that the funds did not meet the certainty of subject matter required for a trust under general trust principles, as all funds were commingled in a single account.

The court ordered the funds distributed to the secured creditor.

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.