Domenico N. Magisano

The court granted the Monitor's application to assign John Aquino into bankruptcy and continued the Mareva order against him.

The decision addresses the requirements for a bankruptcy order under the Bankruptcy and Insolvency Act, the discretion to dismiss or stay such an application, and the standards for continuing a Mareva injunction post-judgment.

The court found that John Aquino had committed an act of bankruptcy, was unable to pay his debts, and that there was no bona fide dispute with the Monitor.

The court also rejected arguments that the application was brought for a collateral purpose and found the continuation of the Mareva order appropriate.

This endorsement addresses two motions within a Companies' Creditors Arrangement Act (CCAA) proceeding concerning 2039882 Ontario Limited, a modular home community developer.

The Monitor sought approval of its reports, fees, and the termination of the CCAA proceedings.

The Receiver sought approval of a sale agreement (a credit bid by KHL Investments USA Inc.), authorization to disclaim certain Homebuyer Contracts due to unresolved water/sewage issues preventing construction, and approval of its reports and fees.

The court granted both motions, finding the sale transaction to be the best available outcome and the disclaimer of contracts necessary, despite the unfortunate impact on prospective purchasers who lost their deposits.

The court also approved sealing certain confidential exhibits.

Trade Capital Finance Corp. (TC) and Buduchnist Credit Union Limited (BCU) filed opposing motions in an insolvency appeal.

TC sought an extension of time and leave to appeal a lower court's final disposition order concerning the distribution of receivership proceeds, arguing the order allowed BCU to enforce judgments arising from transactions in breach of a Mareva order.

BCU sought to lift the automatic stay of proceedings and security for costs.

The Court of Appeal granted TC's motions for extension of time and leave to appeal, finding the appeal prima facie meritorious and raising issues of general importance regarding Mareva orders and creditor enforcement in insolvency.

The court denied BCU's motions to lift the stay and for security for costs, concluding that the BIA governed the appeal and that lifting the stay would render TC's appeal moot, and that security for costs was not fitting given BCU was the applicant below and TC's insolvency stemmed from the alleged fraud.

The Receiver of Bridging Finance Inc. sought court approval to terminate a sale and investment solicitation process (SISP) and proceed with an orderly liquidation ("Status Quo Option"), and to seal confidential appendices.

An unnamed unitholder opposed, requesting further consultation, a unitholder vote, and a new solicitation process for liquidation management.

The court denied the unitholder's adjournment request, finding no evidence to support it.

The court granted the Receiver's requests, deferring to the Receiver's business judgment, which was supported by Representative Counsel and a substantial majority of unitholders.

The Second Mortgagees (Janodee Investments Ltd. and Meadowshire Investments Ltd.) brought a motion seeking an order for 1482241 Ontario Limited to pay an over-holding fee of $63,900, as stipulated in a second mortgage agreement.

The fee was triggered because the mortgage was not repaid or renewed by its maturity date. 1482241 Ontario Limited, which had filed a notice of intention to file a proposal under the Bankruptcy and Insolvency Act, argued that the fee constituted an interest penalty contrary to section 8 of the Interest Act.

The court, applying principles from Dunlop Pneumatic Tyre Co. v. New Garage & Motor Co., found the over-holding fee to be an unenforceable penalty.

The court reasoned that the fee was arbitrary, not a genuine pre-estimate of damage, and would overcompensate the Second Mortgagees while depleting assets available to other creditors.

Consequently, the motion was dismissed.

The appellant appealed from a motion judge's order denying her motion to set aside a summary judgment award of $466,420.22 granted against her for fraud and theft.

The appellant argued she was not properly served with the Statement of Claim and therefore lacked an opportunity to defend.

The Court of Appeal upheld the motion judge's decision to deny the motion to set aside, finding the appellant was responsible for failing to update her address for service and had actual notice of the proceedings.

However, the Court of Appeal found merit in the appellant's challenge to the quantification of damages and reduced the award to $289,740.39 by correcting three calculation errors relating to the appellant's fractional ownership interest in property and personal expense claims.