David T. Ullmann

The Receiver brought a motion for an order approving an interim cash distribution of $78 million to the two institutional unitholders in Bridging SMA 2 LP.

The court found it appropriate to make an interim distribution but reduced the amount to $46 million to account for the potential impact of substantively consolidating the various Bridging Funds, an issue that had yet to be determined.

The Court of Appeal for Ontario heard a motion by The Globe and Mail Inc. to quash an appeal brought by John Aquino.

The appeal challenged an order that set aside a sealing order previously obtained by Aquino.

The court applied principles for distinguishing final from interlocutory orders, affirming that an order is interlocutory if it does not determine the substantive rights in dispute.

The court found that the order setting aside the sealing order was interlocutory, as the alleged privacy rights were collateral to the main action (a family dispute over a real estate company, including claims for winding up and shareholder declaration).

The court rejected the argument that the nature of the underlying corporate proceeding changed the interlocutory character of the order.

Consequently, the appeal was quashed for lack of jurisdiction.

Laurentian University brought an unopposed motion within its CCAA proceedings for an order extending the stay period to September 30, 2022, and an order approving a Pension Participation Agreement with the University of Sudbury.

The court found that the applicant had acted in good faith and with due diligence, justifying the stay extension.

The court also approved the pension agreement, finding it to be a fair and reasonable settlement that provided substantial benefits to stakeholders and was consistent with the purpose of the CCAA.

The appellant, a mortgagee, appealed a motion judge's decision that granted priority to construction lien claimants over his registered third mortgage.

The Court of Appeal dismissed the appeal, affirming that the advances made by the mortgagee did not fall within the exceptions of s. 78(2) or s. 78(6) of the Construction Act.

The court held that advances must be "made in respect of" the mortgage and the intention to secure financing must operate prospectively to gain priority over liens.

The decision reinforces the general principle of priority for lien claimants and the onus on mortgagees to clearly fall within statutory exceptions.

The Receiver brought a motion to extend the appointment of limited partner advisory committees, approve its activities, and approve a process for appointing Representative Counsel for the Unitholders.

The Ad Hoc Committee of Retail Investors raised concerns about the independence of the proposed appointment process.

The court approved the Receiver's activities and the extension of the committees, but modified the Representative Counsel appointment process to include an independent third party to evaluate proposals and make a recommendation to the court.

The Receiver brought a motion for an order approving a proposed sale and investment solicitation process (SISP) and authorizing the disclosure of Borrower Information to Qualified Bidders.

The court found that the proposed SISP satisfied the test for approval, as it was fair, transparent, and optimized the chances of securing the best price.

The court also authorized the disclosure of Borrower Information, finding that the best interests of investors could be jeopardized without such disclosure, and noting that all borrower concerns had been resolved and confidentiality obligations would apply to bidders.

The motion was granted.

In the receivership proceedings of Bridging Finance Inc. and related entities, the Receiver brought a motion seeking approval of a Key Employee Retention Plan (KERP), a tolling order for limitation periods, a sealing order for confidential appendices, and the formation of Limited Partner Advisory Committees (LPACs).

An Ad Hoc Group of Retail Investors brought a cross-motion seeking the appointment of Representative Counsel.

The court granted the Receiver's requests, finding the KERP necessary, the sealing order justified under the Sherman Estate test, and the LPACs appropriate for providing input during the strategic review.

The court time-limited the LPACs to 60 days and dismissed the motion for Representative Counsel with leave to reassess in 60 days, prioritizing the portfolio review before addressing allocation issues.

The receiver brought a motion for directions to determine whether an appeal from a priority dispute order in a receivership lies to the Court of Appeal under the Bankruptcy and Insolvency Act or to the Divisional Court under the Construction Act.

The Court of Appeal held that because the motion judge's order was granted in reliance on jurisdiction under the Bankruptcy and Insolvency Act, specifically a receiver's application for directions under s. 249, the appeal route is to the Court of Appeal.

The Receiver brought a motion for directions to determine whether the Court of Appeal or the Divisional Court has jurisdiction over an appeal concerning a priority dispute between registered lien claimants and a registered mortgage in a receivership.

The motions judge held that a single judge of the Court of Appeal lacks jurisdiction to decide whether an appeal lies within the court's jurisdiction, as this must be decided by a three-judge panel.

The motion was adjourned to be heard by a panel.

In the context of CCAA proceedings for Sears Canada, the Monitor brought a motion to enforce a settlement agreement with several former landlords regarding the valuation of their claims.

The landlords disputed the Monitor's calculation of their claims under the agreed Landlord Claim Formula and sought disclosure of the underlying calculations.

The court held that the landlords were entitled to the disclosure and could dispute the calculations, but only using the sources permitted by the formula.

Additionally, the court ordered one landlord, Primaris, to repay $10,000 it had unilaterally withheld for legal fees when returning a mistaken payment.

Following a trial where the respondent was completely successful, the respondent sought costs on a substantial indemnity basis.

The court declined to award substantial indemnity costs, finding no bad faith or unreasonable conduct by the appellants.

Applying the factors under Rule 57.01 and section 131 of the Courts of Justice Act, the court fixed costs on a partial indemnity basis at $79,000, finding this to be a fair and reasonable amount.

Domfoam International Inc., an applicant in CCAA proceedings, sought leave under Rule 39.02(2) of the Rules of Civil Procedure to examine the president (Terry Pomerantz) and an employee (John Howard) of Domfoam Inc. (the Purchaser) as witnesses in relation to the Purchaser's motion to set aside a distribution order.

The core dispute concerned whether proceeds from an anti-trust class action (Dow Proceeds) were conveyed to the Purchaser in a prior transaction.

The court applied a four-part test for granting leave, finding that the examination of Pomerantz was relevant and responsive to matters raised during cross-examination of the Purchaser's lawyer, and that Domfoam provided a reasonable explanation for the delay.

However, leave to examine Howard was denied as the relevant issues concerning him were known prior to the initial cross-examination, and proportionality weighed against it.

The appellants appealed the disallowance of their claims in a bankruptcy proposal proceeding.

They claimed a 20% beneficial interest in the proceeds of a commercial property sale based on an amended trust declaration, and advanced an unsecured claim for damages alleging oppressive conduct.

The court dismissed the appeal, finding no certainty of intention to create an express trust, no basis for a constructive trust, and no evidence of oppressive conduct by the bankrupt corporation.

Oxford Properties Group brought a motion seeking the appointment of a specific arbitrator to determine the current value of the Newmarket Property under an option agreement.

Sears Canada Inc. and its Monitor brought a cross-motion requesting the appointment of a different arbitrator, who was already acting as a Claims Officer in the CCAA proceedings, to determine both the property's value and Oxford's related disputed claims.

The court found the issues to be inextricably linked and that separate proceedings would lead to additional cost and delay.

The court granted the cross-motion, appointing the arbitrator proposed by Sears and the Monitor to resolve all outstanding issues related to the property in a single, consolidated proceeding, thereby dismissing Oxford's motion.

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 applicant sought recognition of various interim orders, including an Interim DIP ABL Order, in a cross-border insolvency proceeding under the CCAA.

The court granted most of the requested relief but declined to recognize the Interim DIP ABL Order and the associated DIP ABL Lenders’ Charge.

The refusal was based on the lack of adequate protection for Canadian landlords, who would be detrimentally affected by the Canadian entities guaranteeing and collateralizing the DIP facility without receiving comparable security or the benefit of marshalling, unlike other creditor groups.

The applicant subtenant sought an interlocutory injunction to restrain the respondent sublandlord from terminating a commercial sublease.

The respondent had issued a notice of termination after police searched the premises and laid criminal charges against the sons of the applicant's operators.

Applying the RJR-MacDonald test, the court found a serious issue to be tried, irreparable harm if the applicant was evicted, and that the balance of convenience favoured the applicant, who had $1.5 million in inventory and was current on rent.

The court granted the injunction, allowing the applicant supervised access pending the main application.

Following dismissal of a creditor’s motion seeking to compel a court‑appointed receiver to answer extensive questions and pay funds relating to a claim under s. 81.1 of the Bankruptcy and Insolvency Act, the court addressed the receiver’s entitlement to costs.

The responding creditor argued costs should await determination of a separate request to unseal confidential documents and contended it had achieved partial success.

The court rejected those submissions, holding the creditor had been entirely unsuccessful and that delaying costs would improperly leave their determination in the creditor’s control.

Finding the motion constituted an unwarranted fishing expedition that unnecessarily increased the receivership’s expenses, the court concluded the conduct was sufficiently improper to justify substantial indemnity costs.

The receiver’s costs were assessed at $23,236.76 inclusive of disbursements and HST.

The court heard two motions in a receivership proceeding.

The Receiver moved for its discharge and release from liability, having completed its mandate to close a sale transaction.

A creditor brought a motion to compel the Receiver to answer 114 questions, unseal confidential appendices, and pay out funds held in trust for its s. 81.1 claim.

The court dismissed the creditor's requests for answers and payment, finding the questions to be an unreasonable fishing expedition and the payment premature as the claim was not yet determined.

The request to unseal documents was adjourned to allow the affected party to respond.

The court granted the Receiver's discharge, finding no evidence of improper conduct.

In a receivership proceeding on the Commercial List, the receiver sought approval of a sale of a dormant condominium development project and related vesting relief.

The receiver and secured creditors also sought a declaration confirming the validity of mortgage amendments that increased the secured debt amounts, where the amendments had been registered using Land Titles instruments titled “Notice” and “Application (General)” rather than the standard Charge/Mortgage form.

The court held that registration under s. 71 of the Land Titles Act provided effective notice of the amended security interests and rendered the amendments valid.

The court approved the sale as the highest and best offer obtained through a fair and transparent sale process and granted the requested declarations and sealing order.