Fred Tayar

The bankrupt applied for discharge from bankruptcy.

On the first day of the hearing, the bankrupt raised preliminary issues regarding the standing of an opposing creditor, whether an alleged undue preference could be considered, and the admissibility of documents.

The court held that the opposing creditor had standing because its proof of claim had not been disallowed.

The court deferred the undue preference issue, noting a separate proceeding had been scheduled to determine it, and ordered that the discharge hearing be deferred until that issue was resolved.

The court declined to rule on document admissibility in advance.

Following earlier rulings on motions involving Mareva injunctions, fraudulent conveyance allegations, and summary judgment on promissory notes, the court determined the appropriate costs awards among multiple parties across two related actions.

Certain defendants who were unsuccessful targets of fraud allegations sought substantial indemnity costs after the claims against them were dismissed.

The court held that allegations of fraud justified substantial indemnity costs where the plaintiffs failed to establish the claims.

In the Klein action, the court balanced mixed success by awarding costs to both sides and setting them off.

In the Finkelstein action, substantial indemnity costs were awarded to certain defendants in the cause.

A bankrupt applied for an absolute discharge nearly nine years after being adjudged bankrupt under the Bankruptcy and Insolvency Act.

Creditors and the trustee opposed an unconditional discharge, alleging the bankrupt failed to satisfactorily account for significant pre‑bankruptcy assets and had not fully disclosed financial information.

The court found the bankrupt had not adequately explained the disappearance of substantial assets including cash, RRSPs, securities, and real property, engaging s. 173(1)(d) of the Bankruptcy and Insolvency Act.

The court also found the bankrupt had remained voluntarily unemployed while living comfortably through financial support from family.

While the court concluded the bankruptcy itself arose from circumstances for which the bankrupt was not justly responsible, the failures of disclosure and conduct during bankruptcy warranted a conditional discharge requiring payment to the estate.

During a contested bankruptcy discharge hearing under the Bankruptcy and Insolvency Act, an issue arose regarding whether information held by the bankrupt’s former matrimonial lawyer about the bankrupt’s pre‑bankruptcy assets was protected by solicitor‑client privilege.

An opposing creditor sought production of the lawyer’s file to determine whether the bankrupt had disclosed the existence of a family trust or other assets prior to bankruptcy.

The court reviewed the scope of solicitor‑client privilege in bankruptcy proceedings and the duty of a bankrupt to disclose property under the Act.

It held that while communications seeking legal advice remain privileged, factual information regarding the existence and location of the bankrupt’s property is not protected.

The former solicitor could therefore be compelled to disclose such information and access her file to refresh her memory.

The defendants moved to set aside ex parte Anton Piller orders and Mareva injunctions obtained by the plaintiff in a fraud action involving alleged misappropriation of corporate funds and improper commissions.

The court reviewed the strict legal requirements for such extraordinary remedies and emphasized the obligation of full, fair, and frank disclosure on without‑notice motions.

It found the plaintiff failed to disclose material facts, including ongoing communications with certain defendants, repayment negotiations, employment relationships, and other contextual facts that could have influenced the original decision.

The court also found insufficient evidence that certain defendants possessed incriminating documents or posed a real risk of asset dissipation.

As a result, the Anton Piller orders and Mareva injunctions were set aside against all defendants.

A related motion by one defendant to strike portions of the statement of claim was dismissed.

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.

The applicants sought an order directing that funds collected by a court‑appointed receiver from proceeds payable to the respondent be paid to them.

The evidence established that one of the applicants was a creditor of the respondent for more than $1.2 million arising from a loan guarantee and secured by a general security agreement.

The respondent withdrew its opposition at the hearing, while a third-party creditor requested that the successful applicant’s payment be held in court pending potential litigation.

The court held that the applicant’s creditor claim clearly ranked ahead of any shareholder interest and rejected the request to hold the funds as premature security for an uncommenced action.

The motion was granted directing payment of most of the fund to the creditor applicant.

The moving party brought a motion to strike an affidavit filed by an opposing party in advance of summary judgment motions.

The affidavit was challenged on the basis that the deponent was allegedly incompetent when swearing the affidavit, refused cross‑examination, and later became unavailable.

The court held that, as a general rule, motions to strike affidavits should be heard by the judge presiding over the main motion or application because that judge must determine issues of admissibility, competency, credibility, and weight of the evidence.

Pre‑emptive motions to strike should occur only in the rarest and most extraordinary circumstances due to the inefficiency and proliferation of interlocutory motions.

The judge reserved the decision on the motion and directed that it would be determined at the commencement of the hearing of the main motions.

A secured lender applied for the appointment of a receiver over companies engaged in sub‑prime vehicle financing, while the debtor companies brought a cross‑application seeking protection under the Companies’ Creditors Arrangement Act.

The court considered the statutory tests under the Bankruptcy and Insolvency Act and the Courts of Justice Act for appointing a receiver and assessed the parties’ conduct, the deterioration of the secured creditor’s collateral, and the lack of available operating financing.

The debtor companies had made material misrepresentations regarding their financial position and had repeatedly failed to meet repayment deadlines despite forbearance arrangements.

The court found that appointing a receiver was just and convenient to preserve and realize on the secured creditor’s collateral.

The court also refused CCAA relief because the debtors had no restructuring plan or “germ of a plan,” and the major secured creditors opposed any arrangement.