Erin Michelle Craddock

The applicant appealed a Proposal Trustee's disallowance of its proof of claim against the respondent's estate.

The claim arose from the respondent's alleged breach of a settlement agreement prohibiting the diversion of salon-only products to unauthorized retailers.

The court drew inferences from circumstantial evidence that the respondent had diverted products to a grey market store in Macau, constituting a material breach of the agreement.

The court upheld the liquidated damages clause as a genuine pre-estimate of damages and enforced the applicant's contractual right to reasonable attorneys' fees, allowing the proof of claim in full.

The moving parties brought a motion for leave to appeal a lower court decision dated July 28, 2025.

The Divisional Court dismissed the motion for leave to appeal and ordered the moving parties to pay costs of $5,000 all-inclusive to the responding parties.

The Court of Appeal for Ontario considered whether an order consolidating two actions and dismissing a summary judgment motion was final or interlocutory, and whether to stay the operation of the schedule in the motion judge’s order pending appeal.

The court found the order to be final, as it disposed of the limitation defence under the Real Property Limitations Act, and stayed the order pending appeal.

Morrocanoil, Inc. brought a motion seeking leave to supplement the evidentiary record in its appeal from the disallowance of its proof of claim in the insolvency proceedings of Conforti Holdings Limited (CHL).

The motion concerned the inclusion of "Confidential Documents" (depositions) that were referenced in Morrocanoil's proof of claim but not fully provided to the Proposal Trustee due to a New Jersey confidentiality order.

While Morrocanoil argued the documents were already part of the record, CHL disagreed.

The court found that excerpts had been provided by both parties, but the full extent was unclear.

The motion was adjourned to allow the parties to further review the record, determine if additional excerpts were needed, and ascertain if relief from the New Jersey court was required before providing the confidential documents.

Following a successful motion to approve a proposal to creditors under the Bankruptcy and Insolvency Act, the Proposal Trustee and the debtor sought costs against the sole opposing creditor.

The opposing creditor argued that costs should not be awarded against creditors in insolvency proceedings on policy grounds.

The court rejected this argument, finding that the creditor was not relieved from paying costs after unsuccessfully opposing the motion.

The court awarded partial indemnity costs of $20,000 to the Proposal Trustee and $20,226.44 to the debtor.

The moving party, having successfully obtained an order declaring that no secured indebtedness was owing by the debtor to a related company, sought costs of the motion.

The moving party sought costs on a substantial indemnity scale, arguing it undertook actions that benefited all creditors.

The court declined to award substantial indemnity costs, finding no reprehensible conduct.

The court fixed costs on a partial indemnity scale at $89,339.63, payable jointly and severally by the debtor and the related company, as both had actively opposed the motion.

The Proposal Trustee brought a motion for court approval of the debtor company's amended proposal to creditors under s. 58 of the Bankruptcy and Insolvency Act.

An opposing creditor argued the proposal should be rejected under s. 59(3) because the debtor failed to perform its statutory duties by initially omitting the creditor's claim and a related party's secured debt from its statement of affairs.

The court found the debtor had failed in its duties but exercised its discretion to approve the proposal, noting the debtor provided reasonable security for the payments, the proposal offered a better return than bankruptcy, and it was supported by the vast majority of creditors.

The Proposal Trustee brought a motion for advice and directions, seeking an order to not undertake the adjudication of a proof of claim filed by Moroccanoil and a cross-motion by the insolvent Company, and instead lift the stay of proceedings to allow the claims to be determined in ongoing U.S. litigation.

The Court dismissed the motion, finding that section 135(1.1) of the Bankruptcy and Insolvency Act unambiguously requires the Proposal Trustee to determine and value the claim, and the Court's inherent jurisdiction does not extend to displacing this mandatory statutory process.

In a bankruptcy proposal proceeding, a creditor (Moroccanoil) moved for an order declaring that no secured indebtedness was owing by the debtor (CHL) to a related company (BEI) and prohibiting a credit bid based on that debt.

The court found that the alleged debt, which consisted of management fees agreed to in 2019 for services rendered in previous years, was based entirely on past consideration.

Applying the rule that past consideration is not good consideration, the court held the agreement unenforceable and granted the order prohibiting the credit bid.

The applicant sought to set aside an arbitration award of $625,551.19 in favour of the respondent partnership, arguing a denial of natural justice and procedural fairness.

The applicant claimed the arbitrator failed to apply common law principles requiring dissolution and an accounting before a partnership can sue a partner, and improperly denied documentary productions.

The Superior Court of Justice dismissed the motion, finding the arbitrator's decisions were reasonable, the applicant was estopped from changing his legal position late in the arbitration, and the production rulings were procedural matters within the arbitrator's jurisdiction.

The Bank of Montreal applied for a receiver over a group of fitness clubs (the Crunch Group) following defaults on credit facilities.

The parties reached an agreement where the debtors' nominee would purchase the debt and security.

The Bank accepted the offer but subsequently refused to provide a fully executed copy of the agreement, causing the purchaser to lose financing and fail to close on the scheduled date.

The court found the Bank's actions, including abruptly closing the debtors' bank accounts and unreasonably refusing to deliver the executed agreement, breached the duty of good faith.

The court ordered the Bank to close the transaction.

CIM Bayview filed a Notice of Intention to Make a Proposal under the BIA and sought to disclaim an Amended Option Agreement that granted Bryton Creek the right to purchase a development property.

CIM Bayview argued the option could be disclaimed, vested out, or was void for imposing a criminal rate of interest or violating the Interest Act.

The court dismissed CIM Bayview's motion, finding the option created an immediate interest in land that could not be disclaimed or vested out.

The court also found the option did not constitute a criminal rate of interest or a penalty.

The court lifted the stay of proceedings to allow Bryton Creek to exercise its option.

Bella Senior Care Residences Inc. (Bella) sought a declaration that certain correspondence and evidence related to discussions with The Canada Life Assurance Company (Canada Life) and Stonebridge Financial Corporation (Stonebridge) were admissible and not protected by settlement privilege.

Canada Life asserted settlement privilege over these communications, which concerned Bella's defaults under a Credit Agreement and Canada Life's subsequent demands.

The court applied a three-part test for settlement privilege, finding that while a litigious dispute existed, Canada Life's communications did not constitute genuine attempts to negotiate a settlement but rather ultimatums to enforce or expand its rights.

Consequently, the court declared the documents not subject to settlement privilege and allowed Bella's motion, awarding costs.

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

The Kraus group of companies, a vertically integrated carpet manufacturer and flooring distributor, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA) due to significant financial difficulties and insolvency.

The application sought a stay of proceedings, appointment of Deloitte Restructuring Inc. as Monitor, and the granting of an Administration Charge and a Directors’ Charge.

The court granted the initial order, finding that the applicants met the CCAA threshold, a stay was appropriate for the business and its directors/officers, the proposed Monitor was qualified, and both the Administration Charge and Directors’ Charge were justified to secure essential services and ensure continued director involvement.

A sealing order for sensitive commercial information was also granted.

The appellant insurance company appealed a Superior Court judgment dismissing its motion to recover $600,000 held back from distribution by a receiver.

The insurance company argued the funds were paid based on mistake of fact, lack of consideration, unjust enrichment, equitable subrogation, and constructive trust.

The Court of Appeal upheld the lower court's decision, finding that the trustee lawfully received the funds to reduce a legitimate outstanding debt and had altered its position in good consideration by deferring its receivership application.

The appellant failed to establish the defence of mistake of fact.

The defendant moved to set aside a default judgment arising from a personal injury action after a pedestrian tripped on an access ramp at a commercial plaza.

The court considered the established factors governing whether a default judgment should be set aside, including promptness of the motion, explanation for the default, existence of an arguable defence, prejudice to the parties, and the interests of justice.

The evidence showed the defendant had repeated notice of the claim, the motion for default judgment, and subsequent enforcement steps but failed to respond for several years.

The court found the delay unexplained, the asserted defence unsupported, and concluded the defendant had deliberately ignored the proceedings while taking a calculated risk.

In the interests of justice, the default judgment was allowed to stand.