Deborah E. Palter

In an insolvency receivership involving Yorkdale leasehold interests, the court considered whether to approve a receiver-negotiated sublease entered without landlord consent and whether ancillary relief should issue.

Applying the contractual framework under the Head Lease and Commercial Tenancies Act, and considering insolvency discretion under the Bankruptcy and Insolvency Act, the court held the landlord had not unreasonably withheld consent.

The court further held that s. 84.1 of the BIA did not apply directly or by analogy to the proposed sublease structure.

On a broader stakeholder-balancing analysis, the court found unfairness in the process and insufficient commercial soundness to justify discretionary approval.

The motion to approve the new sublease was dismissed, and ancillary relief was not addressed.

HSBC Bank Canada appealed a summary judgment decision in its favour against Antonio Guido on a personal loan guarantee.

Guido, the principal of Royal Canadian Bedrock Inc., had defaulted on a loan and was bound by a personal guarantee.

Guido's principal defence was that HSBC was bound by a side agreement allegedly engineered by Bruno Campoli, who was retained as an exclusive agent for both Guido and RCB.

Guido claimed Campoli and Michael Thomas & Associates Inc. were also acting as agents for HSBC and made misrepresentations that HSBC would not enforce the guarantee.

Guido also alleged a conspiracy to extract unlawful fees.

The motion judge granted summary judgment to HSBC and dismissed Guido's counterclaim.

The Court of Appeal upheld the decision, finding no genuine issue requiring trial and no evidentiary support for Guido's allegations after five years of litigation.

This costs endorsement follows the court’s summary judgment decision in favour of HSBC Bank Canada against Antonio Guido, enforcing a guarantee and dismissing Guido’s $11 million counterclaim.

The court reviews the parties’ submissions on the scale and quantum of costs, ultimately awarding HSBC substantial indemnity costs, but in a reduced amount, having regard to proportionality, fairness, and reasonableness under Rule 57.01 of the Rules of Civil Procedure.

The decision addresses the contractual entitlement to substantial indemnity costs, the complexity and conduct of the litigation, and the appropriate adjustment of costs claimed.

The plaintiff financial institution sought summary judgment on a guarantee provided by the defendant guarantor and dismissal of the guarantor's counterclaim.

The guarantor alleged breach of contract, negligent misrepresentation, conspiracy, unjust enrichment, and unconscionability, primarily based on the assertion that a third-party agent was also an agent of the financial institution and conspired with its executives.

The court found no genuine issue requiring a trial regarding the financial institution's claim on the guarantee or the guarantor's defenses and counterclaim.

The court determined there was no evidence to support the agency assertion or the alleged conspiracy, and that the non-reliance and non-waiver clauses in the guarantee were enforceable.

Partial summary judgment was deemed appropriate as the claims against the financial institution were discrete from the guarantor's continuing claims against other parties.

The moving party, AutoLoans, sought a declaration of ownership over four vehicles, asserting a purchase agreement with Clonsilla Auto Sales and Leasing.

The court-appointed Receiver, Deloitte Restructuring Inc., opposed, arguing the transaction was a financing arrangement and, alternatively, a preferential transfer under the Bankruptcy and Insolvency Act.

The court found that the executed Fixed Rate Installment Notes (FRINs) constituted a binding financing transaction that was not legally displaced by subsequent backdated purchase documents.

Consequently, the vehicles remained property of the debtors, and AutoLoans' motion was dismissed.

The Limited Partners of YG Limited Partnership appealed a motion judge's order denying them standing to oppose a creditor's (CBRE Limited) appeal of a disallowed proof of claim under s. 135(4) of the Bankruptcy and Insolvency Act (BIA).

The Court of Appeal for Ontario dismissed the appeal, holding that limited partners do not possess a direct economic interest in the claim sufficient for common law standing, nor are they granted standing under s. 135(4) or s. 37 of the BIA.

The court emphasized that the BIA is a complete code designed for expeditious resolution of bankruptcy matters, and equity owners are generally excluded from direct participation in creditor claim appeals.

The appellants, Limited Partners of a debtor in a bankruptcy proposal, appealed an order for directions regarding the process for an appeal of a proof of claim.

The Court of Appeal dismissed the appeal as premature, finding that the motion judge had not made any final orders regarding the appellants' standing in the anticipated claim appeal, but rather had made directions "subject to the discretion of the judge hearing the appeal." The court held that the possibility of influence or an incorrect underlying conclusion on discretionary standing was not a basis for appeal.

The appellant tenant, Hudson's Bay Company (HBC), appealed a motion judge's decision regarding relief from forfeiture under s. 20 of the Commercial Tenancies Act, seeking rent abatement due to COVID-19 impacts.

The respondent landlords (Oxford and affiliates) cross-appealed the deferral of rent payments and reduction of interest rates.

The Court of Appeal dismissed HBC's appeal, affirming that s. 20 does not permit rent abatement or reduction as it would rewrite the lease.

The court allowed the landlords' cross-appeal, finding that deferrals should only be granted to allow the tenant to comply, not to mitigate economic harm, and that the interest rate should not have been varied from the lease terms.

The plaintiff brought a motion for summary judgment seeking repayment of $195,000 in unsecured loans advanced to the defendant corporation.

The defendant argued that the loans were not proven and, alternatively, that a Proceeds Sharing and Priorities Agreement subordinated the plaintiff's unsecured debt to secured investors, preventing judgment.

The court found no genuine issue requiring trial, concluding the loans were advanced and remained unpaid, and that the Priorities Agreement did not apply to the unsecured loans.

Summary judgment was granted in favour of the plaintiff.

A consumer debtor, Muhammed Salman Pathan, sought an order compelling Western University to confer an MBA degree upon him, arguing his outstanding tuition debt was discharged by his consumer proposal.

Western opposed, asserting the debt constituted a student loan under section 178(1)(g) of the Bankruptcy and Insolvency Act, thus surviving the proposal, and that the conferral of a degree was solely within its discretion.

The court found the debt was indeed a student loan under a provincial enactment, not released by the consumer proposal, and affirmed Western's discretionary power to withhold a degree for non-payment of fees, concluding that this policy did not conflict with the "fresh start" principle of bankruptcy law.

The debtor's motion was dismissed.

The applicant in a dismissed bankruptcy application sought costs, alleging the respondent was a fiduciary and acted improperly.

The respondent sought substantial indemnity costs, claiming the application was an abuse of process.

The court denied both parties' cost claims, finding no judicial determination of fiduciary duty or improper conduct by the respondent, and no bad faith by the applicant in commencing the bankruptcy application.

Each party was ordered to bear their own costs.

The applicants brought a motion for the production of documents subject to solicitor-client privilege relating to the negotiation of a tax indemnification provision in an agreement.

The applicants sought rectification of the agreement, arguing the parties had a common understanding that was mistakenly omitted.

The respondent relied on affidavits from its principal and its former legal counsel to assert its intention regarding the provision.

The court held that by relying on these affidavits, which implicitly put the respondent's state of mind and legal advice in issue, the respondent had waived solicitor-client privilege.

The court ordered reciprocal disclosure of all solicitor-client communications relating to the negotiation of the agreement.

The plaintiffs, former employees of the defendant, sought a determination of their entitlement to monies under a carried interest plan related to a private equity fund.

They argued that their entitlements should be calculated based on their points at the time of each distribution and that the award of additional points after their departure was unduly dilutive and contravened the plan.

The court found that the plan's terms, including subsequent letters agreed to by the plaintiffs, contemplated calculating entitlements based on total points at the end of the plan.

The court also held that the defendant had broad discretion to award points and did not contravene the plan by awarding points after the plaintiffs' departure to reward other participants for their contributions.