Jason Albert Wadden

The applicant sought to enforce a $1 million USD arbitral award obtained in China against the respondent for unpaid brake pads.

The respondent sought an adjournment of the enforcement application and an order for security for costs, while the applicant cross-moved for an order requiring the respondent to pay the arbitral award into court.

The motion judge ordered the applicant to post security for costs and dismissed the cross-motion.

On appeal to the Divisional Court, the court found that the motion judge erred in principle by failing to undertake a holistic analysis of the justness of the security for costs order, and set it aside.

However, the court upheld the refusal to order the advance payment of the arbitral award into court, as Article 36(2) of the International Commercial Arbitration Act was not engaged because the respondent had not applied to set aside the award in China.

The applicant sought leave to appeal orders that dismissed its cross-motion requiring the respondent to post the amount of a foreign arbitral award and ordered the applicant to post security for costs.

The Divisional Court granted leave to appeal, finding reason to doubt the correctness of the application judge's decision because it failed to consider Article 36 of the International Commercial Arbitration Act, which governs the grounds for refusing recognition of an award and the specific circumstances for ordering security for costs.

The court noted the matter's importance to international comity.

This appeal addressed a dispute arising from an asset purchase agreement concerning a director's resignation under a majority voting policy and a claim for contractual set-off.

The Court of Appeal found that the application judge erred in concluding that Baylin's majority voting policy did not comply with TSX requirements and in finding oppression against the respondent director.

The court also found error in the denial of contractual set-off for indemnity claims against unreleased shares.

The appeal was allowed, upholding the majority voting policy, requiring the director's resignation, and permitting the set-off of shares.

The applicants sought an order requiring the respondent credit union to return approximately $5,000,000 that had been held in their accounts.

The credit union, under administration by the regulator, had unilaterally collapsed the applicants' term deposits and appropriated the funds, claiming a right of set-off under the Credit Unions and Caisses Populaires Act, 1994 for unliquidated damages related to alleged fraud and breach of fiduciary duty.

The court held that the statutory right of set-off does not permit a financial institution to unilaterally appropriate funds for unliquidated and disputed claims without judicial determination.

The court ordered the credit union to restore the accounts to their previous state and compensate the applicants for lost interest.

The receiver of a film animation studio brought a motion for directions regarding the distribution of approximately $1,150,000 in tax credits.

A priority dispute arose between the studio's secured creditor, who held a registered general security agreement, and several film producers who claimed the tax credits were assigned to them or held in trust pursuant to their production services agreements.

The court held that the producers' interests in the tax credits were, in substance, security interests under the Personal Property Security Act (PPSA).

Because the producers failed to register their interests under the PPSA, the secured creditor's prior registered security interest took priority.

The court declined to impose a constructive or Quistclose trust, noting that sophisticated commercial parties should not be relieved of their obligation to register security.

The moving party sought leave to appeal an order requiring it to pay $874,107.08 to the responding party.

The funds had been mistakenly paid to the moving party by a third-party customer of the responding party.

The moving party argued it was entitled to retain the funds as a set-off against debts owed by the responding party, who was under CCAA protection.

The Court of Appeal refused leave to appeal, finding the proposed appeal was not prima facie meritorious because set-off did not constitute a juristic reason to retain mistakenly paid funds under the unjust enrichment framework.

The applicants, Spacebridge Inc. and David Gelerman, sought an order allowing Gelerman to complete his term as a director of Baylin Technologies Inc. and for the release of share certificates held in trust.

Baylin and 2385796 Ontario Inc. brought a cross-application seeking a declaration that Gelerman breached Baylin’s Majority Voting Policy and an order for his resignation.

The court found Baylin’s Majority Voting Policy to be oppressive, unfairly prejudicial, and in unfair disregard of the applicants' reasonable expectations, as it deviated materially from TSX requirements and was designed to remove Gelerman.

The court also found that Baylin was not entitled to set-off the share certificates against indemnity claims, as the shares had already been "paid" by delivery to the trustee.

The application was allowed, setting aside Baylin's policy and ordering the release of shares, and the cross-application was dismissed.

The defendants/plaintiffs by counterclaim (NAD) brought a motion to strike the plaintiff's (HTS) pleadings for delay and failure to produce documents, and sought an interlocutory injunction to prevent HTS from using NAD's trademarks or confusingly similar marks to sell air diffusers.

The court declined to strike HTS's pleadings, giving them one final opportunity to produce a complete Affidavit of Documents.

However, the court granted the interlocutory injunction, finding that NAD established a strong prima facie case of passing off, irreparable harm due to potential market loss and unquantifiable damages, and that the balance of convenience favoured granting the injunction despite NAD's delay in bringing the motion.

In the context of Target Canada's CCAA proceedings, the Monitor sought advice and directions on whether to accept amended claims filed by Bell Canada and Bell Nexxia.

Bell sought to increase its original claims by approximately $4.1 million due to inadvertent calculation errors discovered after the claims bar date and after the original claims were admitted.

Target Corporation opposed the amendment.

Applying the Blue Range test, the court found that Bell acted in good faith, the errors were inadvertent, and admitting the amended claims would not cause relative prejudice to other creditors.

The court directed the Monitor to accept the amended claims for review, with Bell to bear the reasonable costs incurred by the Monitor and Target Canada due to the error.

The moving party, Zayo Inc., previously had its motion dismissed.

The motion sought an order for the Monitor to pay Zayo $1,228,799.81 from the proceeds of the sale of the applicants' assets.

In this costs endorsement, Zayo argued that costs are not the norm in CCAA proceedings.

The court disagreed, finding this to be an exceptional case where the normal rule of costs should apply, as the real opponents (the secured lenders and the purchaser) were not insolvent.

The court awarded costs against Zayo, fixing them at $30,000 each for Primus and BMO, and $20,000 each for Birch and the Monitor.

One hundred and fifteen former Nortel employees brought a motion seeking to impose personal liability on the former directors of Nortel Networks Limited (NNL) and Nortel Networks Corporation (NNC) for unpaid severance payments under section 119 of the Canada Business Corporations Act (CBCA).

The employees argued that the severance payments were akin to retention payments for services performed.

The directors raised defenses including that severance payments are not covered by section 119, they exercised due diligence, and some claimants were employed by a different subsidiary (NNTC).

The court dismissed the motion, finding that severance payments are not for 'services performed' under CBCA s. 119, but rather compensation for loss of employment.

The court also found that the directors had a valid due diligence defense and that the 'true employer' test would have identified NNL as the employer for all employees, despite payroll being handled by NNTC.

The court also noted that releases signed by some employees would have covered the claim.

Zayo Inc. brought a motion seeking an order for FTI Consulting Canada Inc., as Monitor for the Primus Entities, to pay Zayo $1,228,799.81 from asset sale proceeds.

This amount represented pre-CCAA filing arrears owed to Zayo under contracts assigned to Birch Communications Inc. Zayo argued the consent process for assignment was not transparent or fair, alleging it was misled into consenting without realizing it could have leveraged Section 11.3(4) of the CCAA to demand full payment of arrears.

The court dismissed the motion, finding the consent process fair and transparent, noting Zayo's sophistication and lack of due diligence.

The court also found that granting the order would cause prejudice to secured lenders and Birch, as it would require varying existing orders and disrupt a closed transaction.

On a Commercial List motion, the plaintiff liquidator sought to strike from the responding defendants' statement of defence the allegation that the action had been commenced for an improper purpose.

The court held the motion was not barred by delay and that leave was not required under the Rules of Civil Procedure in the circumstances of Commercial List trial scheduling.

Applying the plain and obvious test for striking a defence, the court held that improper motive is not a defence, while an improper purpose defence can survive only if the improper purpose was the sole purpose of commencing the action.

The impugned plea was permitted to stand only on a narrow factual basis, and other evidence directed to improper motive or unrelated allegations was ruled inadmissible for trial.

In the context of the global insolvency of Nortel Networks, the UK Pension Claimants (UKPC) asserted multiple claims against the Canadian debtors (NNC and NNL).

The UKPC claimed for a contingent Financial Support Direction (FSD) under UK pension law, amounts under a Funding Guarantee and a Swift Guarantee, and remedies for oppression and unjust enrichment.

The court dismissed the FSD claim as too remote and speculative to constitute a provable claim in the CCAA proceedings.

The court also dismissed the claims under the Swift Guarantee, oppression, and unjust enrichment.

However, the court allowed the UKPC's claim under the Funding Guarantee, finding NNL liable for £339.75 million.

The appellant, an unsuccessful prospective purchaser of the debtor's assets, sought to appeal an order appointing an interim receiver and approving the sale of the debtor's assets to another party.

The Court of Appeal quashed the appeal, holding that the appellant lacked standing.

The court reaffirmed that an unsuccessful bidder does not have a legal or proprietary right in the property being sold and therefore does not have a direct interest sufficient to challenge a sale approval order.

The moving party, an approved purchaser of the debtor's assets, sought to cancel the automatic stay pending appeal of orders appointing a receiver and approving the asset sale.

The responding party, an unsuccessful bidder and software licensee, opposed the motion and appealed the sale order.

The Court of Appeal (in chambers) granted the motion to cancel the stay under s. 195 of the Bankruptcy and Insolvency Act, finding that the responding party likely lacked standing to appeal the sale order as a disappointed bidder and would not suffer undue harm if the stay was lifted, as its contractual rights to software source codes remained intact.

The appellant bank sued several financial institutions and insurers for approximately $100 million arising from a massive equipment leasing fraud involving forged endorsements.

The respondent financial institutions successfully moved for summary judgment dismissing the appellant's claims for negligence, unjust enrichment, and money had and received.

The Court of Appeal allowed the appeal and set aside the summary judgment, finding that the motion judge committed two fundamental errors: reversing the onus by requiring the responding party to establish a genuine issue for trial, and deciding the motions on the assumed fact that the endorsements were forged.

The Court ordered the entire action to proceed to trial, noting that novel claims should be decided on a full evidentiary record.

The Superintendent of Financial Services appealed an order lifting a CCAA stay and permitting bankruptcy petitions to proceed against the insolvent Ivaco companies.

The Superintendent argued that unpaid pension contributions subject to a deemed trust under the Pension Benefits Act should have been paid or segregated before bankruptcy.

The Court of Appeal dismissed the appeal, holding that the CCAA and BIA create a comprehensive federal insolvency scheme that leaves no gap for provincial deemed trusts to operate outside of bankruptcy.

The court also upheld the motions judge's discretionary decision to lift the stay and his order transferring the companies' head offices to Toronto under the Canada Business Corporations Act.

The moving parties, several banks and a financial institution, sought leave to appeal a motions judge's refusal to grant summary judgment dismissing the plaintiff's claims in conversion and preclusion.

The underlying action involved a fraudulent scheme where a customer forged endorsements on cheques and bank drafts, deposited them with the plaintiff collecting bank, and the moving parties subsequently reverse-cleared the instruments.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the motions judge's decision that the conversion and preclusion claims raised genuine issues for trial, and noting the issues were of general importance to the banking industry.