Jason DiFruscia

Gray Jay Estates Inc. sought a court order to vary the “Payment Amount” under an assignment of indebtedness and security agreement, which would have increased the amount payable by NE SPC II LP (Blacksail) by approximately $1 million.

The dispute centered on whether cash on hand should have been used to repay a DIP facility before closing, and whether a term should be implied into the agreement to require such repayment.

The court found no basis to imply such a term, holding that the contract’s language was clear and that the parties had not agreed to the adjustment sought.

The motion was dismissed, and costs were awarded to Blacksail.

The bankrupt applied for a discharge after being in bankruptcy for 17 years.

The discharge was opposed by the Trustee and several creditors, including the Canada Revenue Agency, on the basis of multiple facts under section 173 of the Bankruptcy and Insolvency Act.

The court found that the bankrupt had misappropriated over $9 million, spent the funds on an extravagant lifestyle, failed to account for the loss of assets, and breached his duties to report income and expenses.

The court also found the bankrupt breached the duty of good faith under section 4.2 of the BIA.

Concluding that the bankrupt was not an honest and unfortunate debtor, the court refused an absolute discharge and instead granted a conditional discharge requiring the bankrupt to pay $100,000 to the estate and fulfill all outstanding tax and reporting obligations.

This endorsement follows a case conference in a long-standing dispute concerning surface water drainage and contempt of court orders.

The plaintiff sought urgent directions regarding the defendant's refusal to allow proper access for mandated remedial work on his property.

Although the immediate access dispute was resolved prior to the conference, the court clarified that there is no ongoing formal proceeding (`lis pendens`) and that any future enforcement, such as further contempt findings, would require the plaintiff to initiate new formal motions.

The court reiterated the defendant's obligation to comply with previous orders and warned of potential escalated sanctions, including imprisonment, for continued non-compliance.

The appellant, Timothy Rodger, appealed an order dismissing his action for delay under Rule 24.01 of the Rules of Civil Procedure.

The action, a negligence claim against London Hydro Inc., had seen no steps taken for over four years after examinations for discovery.

The motion judge dismissed the action, citing the passage of over five years since commencement, the lack of an affidavit explaining the delay, and the presumption of prejudice.

The Court of Appeal upheld the motion judge's decision, finding no error in the exercise of discretion to dismiss the action and deny a further adjournment.

The appeal was dismissed with costs awarded to the respondent.

The plaintiff was entirely successful in a bifurcated civil contempt proceeding against the defendant for failing to comply with a 2011 judgment regarding surface water drainage.

The plaintiff sought costs of $131,214.95 on a full indemnity basis.

The court found that the defendant's conduct was reprehensible, obstinate, and uncooperative, justifying an elevated scale of costs.

The court reviewed the factors under Rule 57.01 and awarded the plaintiff her full requested costs of $131,214.95.

The appellant, Ayerswood Development Corporation, appealed a Superior Court order directing that funds paid to Sirius Concrete Inc. shortly before its bankruptcy formed part of the bankrupt estate.

Ayerswood argued the funds were subject to a constructive trust due to Sirius's deceit and unjust enrichment.

The Court of Appeal found the bankruptcy judge erred in summarily dismissing the constructive trust claim, holding that Ayerswood's uncontradicted evidence, if true, could legally support such a trust.

The appeal was allowed, and the matter remitted for a proper determination of entitlement to the funds.