I. Jamie Arabi

The moving defendants, KenzoKai Metal Finishing Inc. and Cristian Bran, sought to set aside a default judgment obtained by Ampere Metal Finishing Inc. The court found that service of the statement of claim was defective as against both defendants, and that the default judgment was therefore irregularly obtained.

The court set aside the default judgment, the noting in default, and all related enforcement steps, including garnishments, and ordered the return of any garnished funds.

The court also found that, even if service had been proper, the Mountain View criteria would have justified setting aside the judgment on the merits.

This decision resolves a dispute between the Canadian and American branches of the Islamic Food and Nutrition Council regarding the voting membership structure of the Canadian not-for-profit corporation.

The court found that the 2015 by-law, which created two classes of members with the U.S. entity as the sole voting member, remains in force.

The 2021 attempt to change the membership structure via federal articles of continuance was invalid, as it was not authorized by a special resolution of members.

The application by the Canadian company was dismissed, and a declaration was issued confirming the U.S. entity as the sole voting member.

The Trustee, KSV Restructuring Inc., sought substantive consolidation of the estates of ProEx Logistics Inc., Guru Logistics Inc., and 1542300 Ontario Inc., as well as authorization to accept claims by Paul Randhawa and to approve the Trustee’s reports.

The court granted substantive consolidation and approved the Trustee’s reports, but declined to authorize the Trustee’s acceptance of Paul’s claims, holding that the Bankruptcy and Insolvency Act provides a comprehensive code for the allowance and disallowance of claims, and that equity owners such as Rana Randhawa have no standing to challenge the Trustee’s decision to accept a claim.

The decision also addresses the effect of outstanding costs awards on standing and the finality of proceedings.