Frank A. Highley

A bankruptcy trustee sought directions regarding priority disputes over proceeds of sale from the bankrupt’s property.

The dispute concerned competing claims by a judgment creditor and two mortgage holders.

The court considered the validity of a mortgage granted to an accounting firm for tax services and a later mortgage granted to a lawyer securing unpaid legal fees.

Applying the Bankruptcy and Insolvency Act and the Assignments and Preferences Act, the court held that the earlier mortgage was valid and enforceable but that the later mortgage constituted a preferential transfer granted when the debtor was on the eve of insolvency.

The preferential mortgage was declared void and the proceeds of sale were ordered distributed accordingly.

The appellant appealed the dismissal of his action against the respondent bank regarding the sale of four properties.

The Court of Appeal dismissed the appeal, finding that the bank had authority to sell the properties, did not sell them imprudently, and properly applied the sale proceeds to the outstanding mortgages.

Furthermore, the court agreed with the trial judge that the appellant's action was barred by the Statute of Limitations.

The applicant union sought a declaration that the respondent, More Groceteria Limited, was a successor employer bound by a collective agreement with Loblaws Limited.

Loblaws had closed a neighbourhood store, transferred its employees, and subleased the premises to the respondent, who also purchased the store's fixtures.

The Ontario Labour Relations Board held that the transaction constituted a sale of a part of Loblaws' business under section 55 of the Labour Relations Act.

The Board emphasized that in the retail food industry, goodwill often inheres in the premises themselves, and the direct commercial dealings between the parties supported a finding of a sale rather than a mere asset disposition.

The application was granted, with one member dissenting.