Ian J. Klaiman

The appellants defaulted on a commercial loan secured by a collateral mortgage.

The respondent lender invoked an acceleration clause to demand the outstanding principal and unaccrued future interest.

The appellants argued the contract did not permit accelerating future interest and that section 17 of the Mortgages Act capped their liability.

The Court of Appeal dismissed the appeal, holding that the contract's plain language included future interest in the accelerated indebtedness.

Furthermore, the Court clarified that section 17 of the Mortgages Act only applies to defaults in the payment of principal occurring after the contractual maturity date, not to defaults during the term of the mortgage.

The applicant bank sought to appoint a receiver over two residential properties in Burlington owned by the respondent corporations, which had defaulted on a loan agreement.

The respondents challenged the venue, arguing the application should be transferred from Hamilton to the Central West Region where the properties and respondents were located.

The court addressed procedural issues regarding venue transfer motions under the Rules of Civil Procedure and Practice Directions, finding that the parties had improperly circumvented the prescribed transfer process.

On the merits, the court appointed a receiver, finding that the respondents were in material default, had failed to cure defaults despite multiple opportunities, and that appointment was just and convenient under the applicable statutory framework.

A motion for default judgment brought by a financial institution against a corporate borrower and personal guarantor who obtained a $250,000 loan under a fund designed to support Black business owners and entrepreneurs.

The defendants represented that the loan proceeds would be used to purchase a Freightliner truck but instead misappropriated the funds for personal use.

The court found the defendants liable for fraud, awarded punitive damages, granted a non-dissipation order and tracing order, and ordered full indemnity costs.

A commercial loan dispute involving a bus company's default on a $559,250 equipment financing agreement.

The lender sought judgment for the full remaining balance plus interest and enforcement costs after the borrower ceased payments, failed to maintain insurance, and secretly sold the financed bus without notice.

The court determined that the acceleration clause, not the prepayment clause, applied following the borrower's multiple defaults.

The court rejected the borrower's arguments that section 17 of the Mortgages Act or section 8 of the Interest Act capped the lender's recovery, finding these provisions inapplicable to commercial loan agreements.

The court awarded judgment to the lender for the net amount owing after crediting the bus sale proceeds and security deposit.

The moving party sought to set aside a judgment obtained by the trustee in bankruptcy declaring a transfer of funds at undervalue under section 96(1)(b)(i) of the Bankruptcy and Insolvency Act.

The moving party argued he did not receive adequate notice of the motion and was unaware it was proceeding.

The court found that the moving party received multiple attempts at service via email, regular mail, process servers, and postings on his door, and that he deliberately evaded service and ignored the notices.

The court held that the first prerequisite for setting aside the judgment—proof of accident, mistake, or insufficient notice—was not met, and dismissed the motion.

The Court of Appeal for Ontario dismissed the appeal of Shahin Songhorigakien from a summary judgment ordering her to pay $500,000 plus interest and costs to the Bank of Montreal under a personal guarantee for a corporate overdraft facility.

The court found no error in the motion judge’s conclusion that there was no genuine issue requiring trial, that the bank owed no special duty to Songhorigakien, and that her non est factum defence had no air of reality.

The court also rejected arguments of procedural unfairness.

The moving parties (respondents in the bankruptcy applications) sought to stay the bankruptcy applications brought by the responding party bank.

The bank had demanded repayment of personal lines of credit that were used to fund the moving parties' corporate entities, which were under CCAA protection.

The court granted the stay, finding that the bank was acting as a single creditor without special circumstances justifying a bankruptcy order.

Furthermore, the court held that the claims were captured by the broad stay of proceedings issued in the CCAA proceedings.

On a s. 37 Bankruptcy and Insolvency Act appeal/motion, the moving parties sought to strike or expunge a transcript from a s. 163 examination and obtain a fresh examination on the basis that the trustee had not disclosed prior unserved actions concerning certain properties.

The court held that the trustee's investigative powers under s. 163 are broad, that no duty of advance disclosure arose on these facts, and that the examined party was not then a defendant in the prior actions.

The court further held that neither moving party was an aggrieved person within s. 37, the challenge was not brought within a reasonable time, and there was no basis to interfere with the trustee's discretionary decisions.

The appeal/motion was dismissed with partial indemnity costs to the trustee.

The applicant, Metropolitan Partners Group Administration, LLC, sought an order appointing a receiver over the property of the respondent, International Credit Experts Inc., due to the respondent's defaults on a financing agreement.

The respondent opposed the appointment and requested a third adjournment, arguing for a private sale of its loan portfolio.

The court denied the adjournment, finding the matter urgent given the procedural history and the respondent's conduct, including a disputed guarantee and asset transfer.

The court determined it was just and convenient to appoint a receiver, emphasizing the respondent's continued defaults, lack of financial transparency, and the need for a court-supervised sale process to maximize stakeholder recovery.

A sealing order for commercially sensitive information was also granted.

The appellant seller appealed from a Court of Appeal decision that held exclusion clauses in a contract for the sale of topsoil were insufficient to oust the implied condition under s. 14 of the Sale of Goods Act that goods must correspond with their description.

The buyer had waived its right to test the topsoil before shipment, and the contract contained clauses providing that the seller would not be responsible for the quality of the material if the buyer waived those rights.

The Supreme Court held that the exclusion clauses constituted an express agreement under s. 53 of the Sale of Goods Act, applying modern contractual interpretation principles from Sattva and Tercon.

The majority restored the trial judge's judgment, finding the objective intention of the parties was for the buyer to accept the risk that the topsoil would not meet the previously supplied specifications if it failed to test the soil.

Côté J. dissented, concluding the word 'quality' in the exclusion clauses could not be expanded to cover defects in description or identity.

This appeal concerned the distribution of proceeds from a property sale, specifically regarding the priority of a third mortgage, an alleged equitable fourth mortgage, and a writ of execution.

The appellants, lenders, sought recognition of an equitable fourth mortgage and a specific interest calculation for their third mortgage.

The respondents, execution creditors, challenged the third mortgage's interest rate.

The Court of Appeal allowed the appeal, declaring the existence of an equitable fourth mortgage, but dismissed the appellants' claim for interest to run until full payout.

The respondents' cross-appeal regarding the third mortgage interest rate was dismissed.

The plaintiffs sued the Bank for $80 million, alleging it unlawfully froze their accounts.

The Bank counterclaimed for $4.581 million, representing loans advanced under the HASCAP and CEBA COVID-19 relief programs, alleging the loans were obtained through fraudulent misrepresentation.

The Bank moved for summary judgment to dismiss the plaintiffs' action and grant its counterclaim.

The court denied the plaintiffs' last-minute adjournment request, finding it was a deliberate delay tactic.

The court granted summary judgment, finding the plaintiffs fabricated financial statements and businesses to obtain the loans, which were then improperly transferred to personal investment accounts.

The plaintiffs' action was dismissed, and the Bank was awarded $4.581 million plus substantial indemnity costs.

The moving defendant sought to set aside a noting in default and default judgment obtained against him by the plaintiff bank in an action to enforce a corporate guarantee.

The plaintiff had inadvertently noted the defendant in default before the 20-day deadline to defend had expired.

The court admitted a portion of a settlement-privileged email to assess when the defendant learned of the claim.

Applying the five-factor test, the court found the defendant moved promptly, had a plausible excuse for the default, and raised an arguable misrepresentation defence.

The court set aside the default judgment, concluding it was in the interests of justice to allow the defendant to defend the claim on its merits.

The applicants sought to determine their entitlement to the proceeds of sale of a property, claiming priority based on a third mortgage and an equitable fourth mortgage.

The execution creditors challenged the interest rate on the third mortgage and the validity of the equitable fourth mortgage.

The court held that the interest rate on the third mortgage was governed by the underlying promissory note, which clearly set out an annual rate of 20% after maturity, complying with the Interest Act.

However, the court declined to grant an equitable fourth mortgage, finding that the terms were uncertain and the debtor had no intention of registering a mortgage when the right crystallized.

The appellant debtor appealed a motion judge's declaration that his debt to the respondent mortgagee was not released by his discharge from bankruptcy due to fraud, pursuant to s. 178(1)(e) of the Bankruptcy and Insolvency Act.

The appellant argued that fraud was not sufficiently pleaded in the original statement of claim and that consenting to judgment did not constitute an admission of fraud.

The Court of Appeal dismissed the appeal, affirming that specific reference to s. 178 or particularized pleading of fraud is not required for a debt to survive bankruptcy.

The court found that the motion judge correctly determined the nature of the debt by examining the pleadings, which clearly suggested fraudulent conduct, and that the consent judgment was broad enough to encompass fraud.

The moving party bank brought a motion for an interlocutory Mareva injunction against the responding parties, a group of corporate entities and their sole director, who had obtained over $4.5 million in COVID-19 relief loans.

The bank discovered the corporate entities were previously dissolved and revived shortly before applying for the loans, and that the loan proceeds were diverted to personal investment accounts rather than used for eligible business expenses.

The court found the bank established a strong prima facie case of a fraudulent scheme and a real risk of asset dissipation.

The motion for a Mareva injunction was granted, and costs were awarded to the bank on a partial indemnity scale.

The appellant, an undischarged bankrupt, appealed a bankruptcy judge's order interpreting a trust.

The Royal Bank of Canada, as an assignee of the Trustee in Bankruptcy's rights, sought to recover proceeds from the sale of a property held in trust for the appellant.

The appellant argued his interest was suspended during bankruptcy under a specific trust provision.

The Court of Appeal upheld the bankruptcy judge's finding that a mandatory distribution provision overrode the suspension clause, concluding the property vested in the appellant at the "Time of Division" and thus formed part of his bankrupt estate, available to creditors.

The moving party sought an extension of time to appeal an order dismissing its cross-motion for production of financial documents.

The court first determined that the underlying order was interlocutory, not final, as it arose from a discovery motion and did not finally determine substantive rights.

Consequently, the appeal lay to a single judge of the Superior Court rather than the Divisional Court.

Applying the test for an extension of time, the court found that the justice of the case warranted granting the extension, noting the moving party's bona fide intention to appeal and the lack of significant prejudice to the respondent.

The Court of Appeal for Ontario reversed a motion judge's decision that a debt arising from misappropriation of trade secrets would survive bankruptcy under s. 178(1)(e) of the Bankruptcy and Insolvency Act (BIA).

The motion judge erred by interpreting "false pretences" too broadly, including lying during discovery and generally morally objectionable conduct, rather than requiring a deceitful statement by which the debtor obtained property or services.

The Court clarified that s. 178(1)(e) requires a direct causal link between a deceitful statement and the obtaining of property/services.

The appeal was allowed, setting aside the declaration regarding s. 178(1)(e) and varying the stay of proceedings to allow quantification of claims for bankruptcy purposes and enforcement of injunctive relief, but not monetary judgments outside of bankruptcy.

Following summary judgment motions where the Bank successfully enforced a personal guarantee against one defendant (Kechichian) but faced triable issues against another (Jarada), the court determined costs.

The Bank was awarded substantial indemnity costs of $23,459.52 against Kechichian based on the terms of the guarantee.

Jarada, who succeeded on her crossclaim for indemnity against Kechichian, sought substantial indemnity costs but was awarded partial indemnity costs fixed at $7,500.

The court also commented on the inappropriate practice of filing voluminous compendia for routine costs submissions.