Gavin Finlayson

In the receivership of the Bridging Funds, the Receiver brought a motion to determine whether unitholders with Potential Statutory Rescission Claims (based on misrepresentations in offering memoranda) or Potential Redemption Claims (based on unfulfilled redemption requests) were entitled to priority over General Unitholder Claims.

The court held that Potential Redemption Claims were not entitled to priority because the redemption requests had not been completed prior to the receivership.

However, the court held that Potential Statutory Rescission Claims were entitled to priority, finding that the statutory right of rescission under s. 130.1(1) of the Securities Act creates a de facto priority and justifies the imposition of a constructive trust over the invested funds.

The parties, two brothers who jointly own a cement delivery business through separate corporations, reached a settlement in their oppression applications involving a shotgun buy-sell agreement.

A dispute arose regarding the payment of legal fees incurred by one brother (DN) from the business's revenues, which had been the historical practice.

The other brother (GN) refused to transfer funds to pay a $364,346.96 legal invoice, arguing the fees were unreasonable and disproportionate to his own.

The court found that GN's refusal breached the status quo agreed upon in the settlement and ordered GN to transfer the funds.

The court also dismissed GN's request to refer the legal accounts for assessment, finding he lacked standing under section 9 of the Solicitors Act.

The parties, equal shareholders in a real estate business, underwent a court-ordered sales process overseen by a Sales Officer.

The moving party brought a motion for the distribution of $10 million from the net proceeds of the sale.

The responding party opposed, arguing the funds should be frozen until trial to secure his claims.

The court held that the prior Appointment Order did not function as a Mareva injunction and there was no basis to freeze the funds.

However, due to a lack of evidence regarding potential corporate tax liabilities, the court approved a reduced distribution of $8 million, split equally between the parties.

The plaintiff in two proposed class actions alleging a price-fixing conspiracy in the canned tuna industry brought a motion for approval of a third-party litigation funding agreement.

The plaintiff could not bear the financial burden of funding the required expert evidence.

After extensive negotiations and due diligence, the plaintiff entered into an agreement with Lake Whillans Fund.

The court applied the four-factor test for approving third-party funding agreements and found the agreement to be necessary for access to justice, fair, reasonable, and protective of the defendants' interests.

The motion to approve the funding agreement was granted.

Following a summary judgment motion in a class proceeding where the plaintiff succeeded on four of five common issues, the plaintiff sought an elevated partial indemnity costs award of $1,287,296.

The defendant argued for partial indemnity costs capped at $500,000 due to divided success.

The court rejected the elevated scale, applied the recommended Grid rates for hourly fees, and reduced the fees by one-quarter to reflect the divided success.

Costs were fixed at $775,000 all-inclusive, payable within 30 days.

In CCAA proceedings arising from the liquidation of a multinational telecommunications company, bondholders claimed entitlement to post‑filing interest exceeding US$1.6 billion in addition to principal and pre‑filing interest of approximately US$4.092 billion.

The court considered whether the common law "interest stops rule" applies in CCAA proceedings, particularly in a liquidating CCAA context.

Applying insolvency principles of pari passu distribution and relying on Supreme Court guidance emphasizing the integrated nature of the CCAA and BIA regimes, the court held that post‑filing interest does not accrue against the insolvent estate.

The court rejected arguments that contractual entitlement to interest survives the filing or that distributions require a negotiated plan recognizing such interest.

Accordingly, crossover bondholders were limited to principal and pre‑petition interest claims.

In long‑running insolvency proceedings under the Companies' Creditors Arrangement Act, the court was asked to determine whether unsecured bondholders were entitled to claim post‑filing interest on crossover bonds after the debtor companies entered CCAA protection.

The court considered the common law “interest stops” rule, the pari passu principle governing distribution to unsecured creditors, and the relationship between the CCAA and the Bankruptcy and Insolvency Act.

The court held that the interest stops rule applies in CCAA proceedings and prevents unsecured creditors from claiming post‑filing interest absent a negotiated plan providing for such payments.

Allowing interest to accrue for some creditors during the stay period would undermine the status quo and distort equality among creditors.

The court further held it had jurisdiction to determine the issue even without a proposed plan of arrangement.