Douglas Langley

A court-appointed receiver sought an order compelling several service providers to remit commissions allegedly owed under license agreements following the receivership of a home services business formerly operating under a national retailer’s brand.

The respondents argued the receiver had repudiated the license agreements by shutting down the system that generated service leads and announcing it would not continue operations, thereby relieving them of contractual obligations.

The court held that the receiver’s conduct constituted repudiation of the agreements, which the respondents accepted.

As a result, the receiver could not enforce contractual payment obligations.

Claims based on unjust enrichment and quantum meruit were also rejected, particularly given the inequitable circumstances created by the receiver’s actions and the continued enforcement of stay provisions against the respondents.

The plaintiffs brought a motion for summary judgment against the defendants Sablo and Shamrock for failing to purchase their common shares in Crown William pursuant to a 'Put-Right' option in an Asset Purchase Agreement.

The defendants argued the plaintiffs did not properly exercise the option and that the action was premature.

The court found that the plaintiffs substantially complied with the notice requirements, that a prior release by one plaintiff did not bar her claim, and that the provision for a section 116 Income Tax Act certificate was not a condition precedent.

Summary judgment was granted in favour of the plaintiffs for $600,000.

Applicants sought rectification of a restated and amended trust deed governing an employee trust that held voting shares in a Canadian research and development corporation.

The wording of the deed permitted directions to the trustee from the CEO or President of the settlor, which the tax authority interpreted as giving a non-resident effective voting control and disqualifying the corporation from Canadian-controlled private corporation status under the Income Tax Act.

The applicants argued that the clause was mistakenly drafted and that the true intention was that only the board of directors would authorize directions to the trustee.

The court applied the rectification test from Performance Industries Ltd v Sylvan Lake Golf and Tennis Club Ltd and found that the parties had a consistent intention to preserve Canadian-controlled private corporation status to maintain eligibility for research tax credits.

The court concluded that the wording error misexpressed that intention and that the proposed amendment accurately reflected the original agreement.

The applicants, a group of companies owned by Dondeb Inc., sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) to enable an orderly liquidation of their assets.

The application was opposed by approximately 75% of the secured creditors, who argued for individual receiverships due to a lack of confidence in the applicants' principal and the burden of CCAA administrative costs.

The court dismissed the CCAA application, finding it unlikely that a successful plan could be developed and approved by the creditors.

Instead, the court issued a Global Receivership Order, which was supported by the opposing creditors, to achieve an orderly liquidation at a lower cost.

Following a motion, the court determined the appropriate costs award between the parties.

The successful party sought costs on a substantial indemnity basis and relied on an earlier offer to settle under Rule 49 of the Rules of Civil Procedure.

The court rejected the argument that the motion had little chance of success and declined to award substantial indemnity costs.

It also found that the offer to settle related to the entire action rather than the summary judgment motion and therefore did not trigger Rule 49 cost consequences.

The plaintiff moved for summary judgment seeking payment of approximately $2.53 million under a promissory note issued as part of a share sale transaction.

The defendant argued that payment obligations under the note were conditional upon its compliance with financial covenants contained in a specific 2007 banking facility letter with its lender.

The court interpreted the promissory note and held that the relevant covenants were those contained in the specifically referenced 2007 facility letter, not later amendments.

Because the defendant could not make payment without breaching those original covenants, the condition precedent to payment had not been satisfied.

The motion for summary judgment was therefore denied.