D. M. Brown

A motion was brought in a receivership proceeding to lift a stay of proceedings to permit continuation of a construction lien action and allow the lien claimant to set the action down for trial before the statutory expiry of the lien.

The receiver did not oppose lifting the stay but sought conditions, including setting aside a default judgment and noting in default entered against the debtor shortly after the receivership order.

The court held that the default judgment had been obtained contrary to the stay imposed by the appointment order and therefore had no force or effect.

Applying principles governing the lifting of insolvency stays and balancing prejudice to the parties, the court concluded that it was appropriate to lift the stay subject to conditions.

The court ordered that the noting in default and default judgment be set aside and permitted the receiver to defend the lien action.

The defendant, Impark, brought a motion to enforce an interim settlement agreement regarding the remittance of parking lot revenues by the plaintiff, Precise.

The dispute centered on whether the settlement agreement's fee deduction arrangement applied retroactively to the months of September and October 2012.

The court applied principles of contractual interpretation, considering the factual matrix and the specific language used in the agreement.

The court concluded that the future-looking language and the reference to Precise altering its 'current practice' indicated the parties intended the arrangement to apply prospectively from November onwards.

The motion was dismissed.

The plaintiff railway company brought an ex parte motion for an interim injunction to restrain protesters from blocking its Spur Line on the Chippewa of Sarnia First Nation Reserve.

The protesters were blocking the tracks to protest federal legislation (Bill C-45).

The court applied the RJR-MacDonald test and found a serious issue to be tried regarding trespass, irreparable harm due to significant economic disruption, and that the balance of convenience favoured the plaintiff since the protest was directed at the federal government, not the property owner.

The court granted the interim injunction for a limited duration.

The judgment creditor sought the appointment of a receiver in aid of execution over the debtor’s assets after the debtor failed to pay a substantial judgment arising from a settlement agreement.

The court found extensive evidence that the debtor had structured his financial affairs through closely‑held corporations and family arrangements to obstruct enforcement, including placing mortgages on assets, refusing to produce financial records, and channeling benefits through corporations while claiming little personal income.

The court also found troubling evidence suggesting that the debtor’s spouse participated in attempts to create secured claims and judgments designed to defeat other creditors.

Given the debtor’s obstruction of examinations, failure to comply with garnishment obligations, and complex corporate arrangements shielding assets, the court held that ordinary enforcement mechanisms would be ineffective.

A receiver in aid of execution was therefore appointed with investigative powers to examine the debtor’s interests and financial dealings.

In an ongoing oppression application, the applicants moved under s. 249(4) of the OBCA for an order requiring the respondent corporation to pay their interim legal fees.

The respondent moved for documentary production.

The court dismissed the applicants' motion, finding they failed to provide sufficient independent evidence of their financial difficulty or the quantum of costs sought.

The court refused to hear the respondent's motion because he had failed to comply with a previous court order regarding the funding of independent counsel.

The court also ordered the parties to prepare a trial preparation plan.

The trustee administering the HCV Fund established under a Companies’ Creditors Arrangement Act plan for the Canadian Red Cross Society sought directions regarding approximately $483,983 in settlement funds represented by uncashed cheques issued to class members who could not be located.

The court considered three potential approaches: redistributing the funds to known partially paid claimants, transferring the funds to governmental and institutional bodies to attempt to locate missing beneficiaries, or adopting a hybrid approach.

Emphasizing proportionality and the objective of maximizing compensation to class members, the court held that redistributing the funds to known partially paid claimants provided the greatest certainty of placing the funds with eligible victims.

The court therefore approved redistribution of the unclaimed funds among partially paid claimants and authorized the trustee to donate any residual amounts to a charity if further distribution would be impractical.

A creditor applied for a bankruptcy order against the debtor under the Bankruptcy and Insolvency Act, alleging acts of bankruptcy including ceasing to meet liabilities generally as they became due and exhibiting a statement of assets and liabilities showing insolvency.

The court held that the applicant established a prima facie case that the debtor had ceased to meet liabilities generally, based on an unsatisfied judgment debt and unpaid tax arrears to the Canada Revenue Agency within the relevant six‑month period.

The debtor failed to provide independent evidence demonstrating the ability to meet liabilities or establishing a binding arrangement with the tax authority that would negate the inference of general non‑payment.

The court rejected the argument that the bankruptcy application was brought for an improper purpose.

The debtor was adjudged bankrupt and a trustee appointed.

On a Commercial List motion, the moving party sought an order under Rule 57.07 of the Rules of Civil Procedure requiring a former solicitor for the opposing parties to personally pay costs of the action on a substantial indemnity basis.

The hearing was scheduled to proceed but the respondent sought an adjournment due to medical issues following recent cardiovascular surgery.

The court granted the adjournment but addressed the issue of costs thrown away resulting from the late notice of the health issue.

The court held that parties must promptly communicate medical conditions that may affect scheduled hearings to reduce unnecessary costs.

Partial indemnity costs of $10,000 were ordered payable by the respondent to compensate the moving party for preparation costs rendered useless by the last‑minute adjournment.

The defendants brought motions for summary judgment to dismiss the plaintiffs' action arising from a shotgun buy-sell offer in a partnership dispute.

The plaintiffs claimed the offer was invalid, and alleged breach of contract, breach of fiduciary duty, and oppression.

The court found that the shotgun buy-sell offer was valid and complied with the partnership agreement.

The court also dismissed the claims for breach of fiduciary duty and oppression, finding that the defendants were entitled to exercise their contractual rights.

However, the court directed a trial on three specific breach of contract issues relating to closing arrangements and the calculation of net earnings.

Vexatious litigants sought once again to obtain leave to commence proceedings despite prior court orders refusing such leave.

After earlier decisions had found similar requests to be an abuse of process, the applicants attempted to circumvent Motions Scheduling Court by delivering materials directly to the judge’s chambers without notice to the opposing party.

The court refused to consider the materials and directed that any such communications be forwarded to the Civil Motions Office.

The judge reiterated that previous orders restricting the applicants’ litigation activities remained in force and warned that further correspondence to the court would be ignored.

Investor plaintiffs alleged fraud, knowing receipt, and unjust enrichment against the principal of an investment company and related parties following the company’s bankruptcy.

They brought a motion seeking ex parte Mareva injunctions and, alternatively, Norwich orders against financial institutions holding accounts of the defendants.

The court held that ex parte relief requires strict full and frank disclosure and evidence of extraordinary urgency.

Because the motion record contained inaccuracies regarding the state of the pleadings and omitted a filed statement of defence, and because the defendants had long been aware of the litigation and potential asset-freezing relief, the plaintiffs failed to justify proceeding without notice.

The court therefore declined to hear the motion ex parte and required that notice be given to the responding parties.

The respondents sought an adjournment of an application due to the sudden illness of their counsel.

A law clerk for the respondents emailed the court requesting the adjournment, implying it would be on consent, without copying the applicants' counsel.

In reality, the applicants opposed the adjournment without specific terms, leading to an unexpected contested hearing.

The court expressed strong displeasure at the misleading communication and failure to copy opposing counsel.

The court granted the adjournment but largely denied the applicants' requested terms, as they amounted to interim relief not previously sought.

However, the court awarded $500 in costs to the applicants due to the unnecessary hearing time caused by the respondents' poor communication.

In Companies’ Creditors Arrangement Act proceedings, the applicant sought an extension of the stay period, an increase to debtor-in-possession financing, authorization to honour pre-filing prepayments made by merchant customers for loyalty program points, and a variation of the initial order to defer statutory notice to certain creditors.

The court granted the stay extension and approved the increased DIP facility, finding the debtor had acted in good faith and required additional financing to continue operations during the sale and investor solicitation process.

The court also authorized the debtor to honour prepayments for loyalty points where doing so would preserve customer relationships and enhance prospects for a going‑concern sale, applying a cost‑benefit approach consistent with earlier CCAA jurisprudence permitting payment of certain pre‑filing obligations.

However, the court refused to vary the statutory notice requirements under s. 23 of the CCAA, emphasizing that transparency and creditor notification are foundational principles of CCAA proceedings.

The court-appointed receiver of a non-profit housing co-operative moved for approval of an agreement of purchase and sale with a non-profit corporation.

The sale would preserve the property as affordable housing but required an increase in occupancy fees to fund necessary repairs.

A competing bidder submitted a revised offer after the bid deadline, matching the financial terms and offering a one-year freeze on occupancy fees, but without a long-term commitment to affordable housing.

Applying the Soundair test and considering the special factors for co-operative housing, the court found the receiver's process was fair and the recommended offer was not improvident.

The motion to approve the sale was granted.

A creditor applied for a bankruptcy order against the respondent debtor under s. 43 of the Bankruptcy and Insolvency Act based on multiple unpaid judgments exceeding $5 million.

The debtor conceded that an act of bankruptcy had occurred but argued the application should be dismissed under s. 43(7) because it was brought for an improper purpose and because bankruptcy would produce no benefit for creditors.

The court rejected allegations that the application was motivated by malice, finding it was a legitimate attempt by a judgment creditor to enforce a debt, particularly given the existence of additional unpaid judgments.

The court also rejected the debtor’s unsupported claim of having no assets, concluding that a trustee’s investigation could uncover realizable assets.

The application was granted and the debtor was adjudged bankrupt.

The applicant corporation sought an Initial Order under the Companies’ Creditors Arrangement Act to obtain protection from creditors and pursue restructuring options.

The evidence showed the corporation owed more than $11 million to creditors, had a significant working capital deficit, and faced termination of a key commercial agreement that generated most of its revenue.

The court found the statutory requirements of the CCAA were met, including insolvency and claims exceeding $5 million.

The court granted a 30‑day stay of proceedings, appointed a monitor, and approved administrative, directors’, and DIP lender charges to facilitate restructuring efforts.

The moving parties sought reconsideration of case management scheduling orders that set hearing dates for a bankruptcy application and a receiver’s motion to pass accounts on the Commercial List.

They argued the hearings should be adjourned until the Court of Appeal determined a separate appeal relating to a solicitor’s file delivery order.

The court reviewed the procedural history, including prior adjournments, disclosure orders, and repeated failures by the moving parties to comply with deadlines for filing objections and conducting examinations.

Finding that the evidentiary materials had long been available and that no concrete prejudice was demonstrated, the court concluded further delay was unwarranted.

The request to adjourn the scheduled hearings was refused.

In a bankruptcy proceeding involving the estate of a bankrupt developer, the moving parties sought determination of priorities among claims.

During the hearing, counsel requested that transcripts of viva voce evidence be provided in a fully searchable electronic format for use in the continuation of the hearing.

The court found the request reasonable in modern litigation practice, noting the increasing reliance on electronic transcripts by both counsel and judges.

Given the lack of standardized electronic transcript formats prescribed by the Ministry of the Attorney General, the court ordered that the transcripts be produced in a fully word-searchable electronic format.

Following an earlier refusal to schedule the plaintiff’s motion for summary judgment, the court directed the parties to develop a trial preparation plan.

The parties submitted a proposed plan addressing production, examinations for discovery, undertakings, interlocutory motions, witness evidence, mediation, and trial management.

The court issued detailed case management directions establishing timelines for documentary production, discoveries, undertakings, and mediation, and provided guidance on the conduct of witness evidence and trial scheduling.

The decision also required the parties to schedule discovery-related motions and a further case conference to determine time limits for the anticipated two-week trial.

A secured creditor applied for judgment on a promissory note and the appointment of a receiver over the debtor company’s assets under a general security agreement.

The debtor alleged it had made advance payments toward the note and counter‑applied for the return of equipment seized by the creditor.

The court found the alleged payments were unrelated to the promissory note and that the debtor had defaulted on the required installment.

Because assets of the purchased company had been transferred contrary to the note’s terms, the entire debt became immediately due.

Judgment for $100,000 was granted, a receiver‑manager was appointed, and the debtor’s claim for return of seized equipment was dismissed.