Ian Klaiman

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.

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 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 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.

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.

The applicant credit union sought an order appointing a receiver and manager over the property and assets of the respondent hotel franchisee and its owner due to significant loan defaults.

The respondents opposed the application, arguing they had a plan to sell the property and refinance to pay off their creditors.

The court found the respondents' proposed sale agreement was not firm and lacked evidence of financial viability.

Concluding that the applicant's security was at risk and a receiver was necessary to stabilize the business, the court granted the application and appointed the receiver, though it declined to authorize an immediate assignment into bankruptcy.

The plaintiff bank brought a motion for summary judgment to enforce personal guarantees signed by the defendant for corporate loans.

The defendant opposed the motion, arguing non est factum and undue influence by the third party, who controlled the corporations and assured her she would face no personal liability.

The court dismissed the bank's motion, finding genuine issues for trial regarding the defendant's carelessness and the lack of independent legal advice.

The court granted partial summary judgment to the defendant on her third-party claim for indemnity against the third party.

The plaintiff Bank brought a motion for summary judgment to enforce personal guarantees given by the defendants in respect of a corporate borrower's obligations.

The defendant guarantor did not dispute the default but argued the Bank failed to mitigate its damages by properly protecting its security.

The court rejected this defence, noting the Bank had taken steps to protect its security in related insolvency proceedings, and granted summary judgment against the guarantor for the principal amounts owing plus contractual interest.

The plaintiff employer sought an interlocutory injunction to restrain a former employee from competing, soliciting customers, or using confidential information.

The court applied the strong prima facie case standard because the injunction would restrict the employee's livelihood.

The court found the restrictive covenant had expired years prior, the employee was not a fiduciary, and the customer list was not proprietary confidential information.

The motion for an injunction was dismissed, but a sealing and protective order was granted on consent.

The plaintiff brought a motion to find the defendants in contempt of an interim order requiring them to deliver up confidential information.

The former employee defendant had retained some confidential information on his personal computer and cellphone, but disclosed this fact and subsequently deleted the computer files.

The court found that while there was non-compliance, the plaintiff failed to prove beyond a reasonable doubt that the breach was intentional.

The contempt motion was dismissed, but the court ordered the defendant to delete remaining contacts from his cellphone and submit to cross-examination.

The plaintiff brought a motion for a declaration that the defendant's liability for misappropriating trade secrets would not be released upon his discharge from bankruptcy, and for an order lifting the bankruptcy stay to proceed with the damages trial.

The court found that the defendant's conduct in knowingly using the plaintiff's confidential information to manufacture competing products constituted 'false pretences' under section 178(1)(e) of the Bankruptcy and Insolvency Act.

The court granted the declaration and lifted the stay without terms, allowing the plaintiff to proceed with the damages phase of the trial.

The applicant sought a declaration that a prior court order, which directed the respondent's share of matrimonial home sale proceeds be held in trust as security for spousal support claims, made her a secured creditor under the Bankruptcy and Insolvency Act.

The respondent subsequently made an assignment in bankruptcy.

The court held that the prior order was merely a preservation order and did not create a secured creditor interest.

Consequently, the respondent's share of the proceeds vested in the Trustee in Bankruptcy, and a previous costs award paid to the applicant from those proceeds was set aside.

The defendants successfully resisted a portion of the plaintiff's motion for summary judgment regarding a fraudulent conveyance claim.

The successful defendant sought costs on a substantial indemnity basis, relying on an offer to settle that reflected the procedural result but contained no financial proposal.

The plaintiff argued for costs in the cause or a reduced partial indemnity award.

The court awarded the defendant costs on a partial indemnity basis, fixed at $7,500 inclusive of disbursements and taxes.

The plaintiff bank brought a motion for summary judgment against the defendants for debts owed on guarantees and to set aside a property transfer as a fraudulent conveyance.

The defendants acknowledged the debt but opposed summary judgment on the fraudulent conveyance claim, arguing the transfer to the spouse was done for estate planning and financing purposes following a severe cancer diagnosis.

The court granted summary judgment for the debt but dismissed the motion regarding the fraudulent conveyance, finding that a trial was necessary to properly assess credibility and intent.

The plaintiff brought a motion under section 103 of the Courts of Justice Act and Rule 42.01 of the Rules of Civil Procedure seeking leave to issue a certificate of pending litigation over residential property allegedly transferred to defeat creditors.

The court found the plaintiff demonstrated a high probability of success on its guarantee claim against the individual defendant following the corporation’s default.

Evidence suggested the transfer of the property to the defendant’s spouse for no consideration bore several badges of fraud, including the intention to place assets beyond the reach of creditors while continuing to benefit from the property.

The court concluded the balance of convenience favoured preserving the property pending resolution of the action.

Leave to issue the certificate of pending litigation was granted and a litigation timetable was imposed.

The applicant sought to continue an interim injunction over an aircraft owned by the respondent, an agency of the Kingdom of Swaziland, claiming a non-possessory lien under the Repair and Storage Liens Act for funds advanced for refurbishment.

The court found the respondent was not immune under the State Immunity Act due to the commercial activity exception.

However, the court dismissed the motion, finding the applicant was not a 'repairer' under the Act, the limitation period had expired, and there was no irreparable harm to justify an injunction.

A motion by proposed intervenors was also dismissed.

The aircraft was ordered released to the respondent, with a seven-day stay pending appeal.

The applicant appealed an order requiring it to post $175,000 as security for costs under r. 56.01 of the Rules of Civil Procedure.

The motion judge found that the master made palpable and overriding errors in concluding that the corporation was ordinarily resident outside Ontario and lacked sufficient assets in the province.

Evidence showed that the corporation’s directors and officers resided in Ontario and that it held approximately $1.2 million in a trust account in Ontario that was available to satisfy potential costs.

The court held the master misapprehended the evidence and drew unwarranted adverse inferences regarding the accessibility of the trust funds.

The appeal was allowed and the security for costs order set aside.