Jessica Kimmel

Chalice Brands Ltd., a vertically integrated cannabis company, sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) due to an urgent liquidity crisis.

The court granted the Initial Order, extending the CCAA stay of proceedings to its non-filing US-based affiliates, which are integral to its operations, and approved a first-ranking Administration Charge.

This cross-border restructuring is coordinated with a planned Oregon receivership, as US federal law precludes bankruptcy protection for cannabis companies.

The decision emphasizes the integrated nature of the business and the necessity of the stay to preserve value and pursue a going-concern sale.

Mattamy (Downsview) Limited sought to set aside an arbitration award under s. 46 of the Arbitration Act, 1991, arguing the arbitrator exceeded jurisdiction and committed procedural unfairness by refusing to admit relevant evidence.

The court found the arbitrator did not exceed jurisdiction as the "New Issue" fell within the broad scope of the arbitration.

However, the court found procedural unfairness and a failure of natural justice due to the arbitrator's refusal to admit the "REALPAC Handbook" evidence, which was relevant to the "New Issue" he himself raised, especially given the respondents did not object and no formal motion was allowed.

The court emphasized that procedural fairness is an independent right, and its denial invalidates the decision regardless of the likely outcome.

The respondents were previously found in civil contempt for failing to comply with multiple court orders requiring disclosure, accounting, and tracing of assets.

At the sentencing hearing, the court found that the respondents had still not purged their contempt.

The court ordered a 30-day custodial sentence for one respondent, stayed for approximately one month to provide a final opportunity to comply, and ordered the respondents to pay $30,000 in substantial indemnity costs.

The applicants sought urgent interim relief against a respondent for alleged misappropriation of corporate assets of a company undergoing court-ordered winding-up.

The court addressed jurisdiction, finding the issues had not merged in a prior final order.

While a strong prima facie case for some alleged improper payments was found, the court determined no irreparable harm was established, declining to grant immediate mandatory repayment.

Instead, it clarified rules for future expenses and expanded the Sales Officer's powers to investigate and reconcile the disputed payments as part of the ongoing winding-up process.

The defendant lawyers, Emond Harnden LLP, Porter W. Heffernan, and Sebastien Huard (the “EH Defendants”), moved for summary judgment to dismiss an action brought by their former clients, OZ Optics Ltd. and Omur Sezerman.

The plaintiffs alleged that the EH Defendants were in a conflict of interest while representing them in an earlier proceeding, specifically regarding a joint retainer with their insurer, XL Insurance PLC, and the plaintiffs' insistence on a non-monetary settlement term (an apology).

The court found no inherent conflict in the joint retainer and determined that a reasonable apprehension of conflict did not arise until the plaintiffs' non-monetary term was definitively rejected by the opposing party.

The court concluded that the EH Defendants withdrew in a timely and justified manner due to a breakdown in the solicitor-client relationship, not a conflict of interest.

The motion for summary judgment was granted, dismissing the plaintiffs' claims, and costs were awarded to the EH Defendants.

The plaintiffs sought the appointment of a receiver over the DMCC Group of companies to oversee the winding-up and termination of a Trust and the distribution of its assets.

The motion was brought after the Trust Administrator issued a wind-up notice.

The court applied the "just and convenient" test under s. 101 of the Courts of Justice Act, finding that the individual defendants' conflicts of interest and lack of meaningful progress in the wind-up process warranted an independent receiver.

The receivership was granted but limited to specific key entities (the Administrator, General Partner, and DMCC Americas (Canada)), with the possibility of expansion.

The court declined to appoint a receiver under the oppression remedy at this stage.

This is the third installment of a trial to determine the fair value of a corporate entity and other damages owed by an estate, following previous findings of oppression.

The court addressed complex accounting issues, including the outstanding balance of a shareholder loan, financing fees, and the ownership interests and loan obligations of added parties in related entities.

The court made specific findings on these financial adjustments, leading to a significant payment ordered from the estate to the applicant.

The decision also clarified the application of res judicata in multi-stage proceedings and emphasized the consequences for parties responsible for poor financial record-keeping.

This costs endorsement addresses the allocation of costs following the dismissal of motions by UD Trading Group and Rutmet for intervention and consolidation, and a cross-motion by TransAsia Private Capital Ltd. (TAP) for vexatious litigation.

The court had previously ordered a stay of proceedings on its own initiative.

The UD Group sought costs from TAP, while TAP primarily argued for each party to bear their own costs, or alternatively, sought partial indemnity costs in the cause.

The court rejected the relevance of a subsequent Singapore judgment to the costs determination and ultimately ordered that all participating parties bear their own costs of the dismissed motions and cross-motion.

This application sought court approval for a plan of arrangement under section 182 of the Ontario Business Corporations Act, involving the acquisition of Magnet Forensics Inc. by Morpheus Purchaser Inc. The arrangement included the acquisition of all issued and outstanding shares, options, DSUs, and RSUs of Magnet, with different pricing for 'Rolling Shareholders' who would maintain an equity interest in the combined entity.

The court applied the three-part test for approving arrangements, assessing whether statutory procedures were met, the application was in good faith, and the arrangement was fair and reasonable.

Despite some shareholder dissent, which was below the termination threshold, the arrangement was approved, satisfying all legal requirements.

This endorsement addresses a plaintiff's motion for leave to amend its statement of claim and the costs of both this motion and an earlier motion to dismiss/stay.

The court had previously stayed claims related to the recovery of subordinated indebtedness due to a standstill provision but allowed other claims, such as those for fraud and conspiracy related to unauthorized agreements, to proceed with leave.

The plaintiff sought to include claims for damages from unauthorized loan transactions, knowing assistance, breach of fiduciary duty, fraud, conspiracy, punitive damages, and oppression remedy.

The court permitted claims for damages from unauthorized transactions, knowing assistance, breach of fiduciary duty, fraud, and conspiracy, finding they fell outside the standstill provision.

However, claims for punitive damages equal to the subordinated indebtedness were disallowed as a disguised attempt to recover prohibited amounts.

The oppression remedy claim was also denied, as the plaintiff failed to establish a proper complainant status independent of its prohibited creditor capacity.

The Mizrahi Defendants, as the overall successful parties on the stay motion and more successful on the leave to amend motion, were awarded partial indemnity costs for both motions.

The applicant sought recognition and enforcement of a foreign arbitral award from the Shenzhen Court of International Arbitration against the respondents, totaling over $120 million.

The respondents opposed on grounds of improper notice and inability to present their defense, and also moved to admit fresh evidence regarding a related U.S. enforcement proceeding.

The court dismissed the fresh evidence motion, finding it not sufficiently probative.

On the main application, the court found that the respondents did not receive proper notice of the arbitration proceedings and were unable to present their case, despite prior Chinese court decisions deeming service sufficient.

Consequently, the application for recognition and enforcement of the foreign arbitral award was dismissed.

The plaintiffs moved for default judgment against the Developer Defendants for alleged misappropriation of $9 million.

Concurrently, the Developer Defendants sought to set aside their noting in default and obtain leave to file a Statement of Defence, asserting they had purged previous contempt orders related to a Mareva and Disclosure Order.

The court reviewed the Developer Defendants' efforts to provide an accounting and disclosure, acknowledging remaining gaps but finding that they had done all that was reasonably possible given the circumstances and passage of time.

The court emphasized that perfect compliance was not required to purge contempt.

Consequently, the Developer Defendants' motion to set aside default and for leave to file defences was granted, and the plaintiffs' motion for default judgment was dismissed.

No costs were awarded to either party, as the plaintiffs were justified in bringing their motion given the history of non-compliance.

The Proposal Trustee sought directions from the court regarding the procedure for determining a complex proof of claim filed by Maria Athanasoulis, comprising a wrongful dismissal claim and a significant profit share claim, within the context of a court-approved proposal under the Bankruptcy and Insolvency Act.

The motion addressed disagreements among stakeholders (Athanasoulis, Sponsor, and Limited Partners) on how to proceed with the claim's determination and subsequent appeal, particularly concerning the scope of evidence, the nature of the appeal (true appeal vs. de novo), and the standing of the Limited Partners.

The court provided detailed directions to ensure procedural fairness and efficiency, deferring the valuation of future-oriented damages until after the provability of the profit share claim is determined on appeal, and limiting the Limited Partners' standing to specific issues.

The court-appointed receiver brought a motion for an approval and vesting order (AVO) to sell a real estate development property to a third-party purchaser.

A second mortgagee and joint venture participant brought a cross-motion to redeem the property or, alternatively, for approval of its credit bid.

The court dismissed the cross-motion, finding that allowing a redemption after a court-approved sale process had concluded would undermine the integrity of the process.

The court granted the receiver's motion, holding that the proposed sale satisfied the Soundair principles, as the receiver acted providently, considered all stakeholders' interests, and conducted a fair and commercially efficacious process.

The applicants, holding approximately nine percent of the units of First Capital Real Estate Investment Trust, requisitioned a special meeting to replace four trustees.

The board scheduled the meeting for May 16, 2023, five months after the requisition.

The applicants sought an order compelling the meeting to be held earlier.

The court found that the board's decision to delay the meeting was not deserving of deference, as the justifications provided—cost savings, allowing a business plan to unfold, and providing more time for unitholder consideration—were not compelling and prejudiced the requisitioning unitholders.

The application was granted, and the trust was ordered to hold the meeting as soon as practicable after March 1, 2023.

The Blankenstein and Fialkov families, joint owners of a 168-unit apartment building through corporate entities, sought to separate their interests due to an irreconcilable breakdown in their relationship, exacerbated by an internal dispute within the Fialkov family.

The Blankensteins applied for a winding-up of Godstone Limited and a court-ordered buy-out of the Fialkovs' 50% interest at fair market value.

The primary contentious issue was the valuation date for the buy-out, with the Blankensteins seeking a current date (January 2023 or later) to reflect a market downturn, and the Fialkovs advocating for March 2022 (the market peak).

The court found that a buy-out was appropriate under s. 207 of the OBCA and determined the fairest valuation date to be November 3, 2022, the date of the application hearing, balancing the parties' expectations and the market fluctuations.

The court also addressed the applicants' alternative request for a public sale, finding it unnecessary given the buy-out order.

The moving parties sought to enforce a settlement agreement entered into by three brothers to separate their financial interests in a family excavation and construction business.

One brother opposed the motion, arguing the agreement was merely an 'agreement to agree' and lacked essential terms.

The court found that the parties had reached a binding settlement on all essential terms, evidenced by the clear language of the agreement, their subsequent conduct, and partial performance.

The court declined to exercise its discretion to refuse enforcement, noting the strong public policy favouring settlements and the lack of any unconscionability or prejudice.

The motion was granted, and the settlement was ordered to be implemented with the assistance of an associate judge if necessary.

The Royal Bank of Canada initiated an application for receivership against Peace Bridge Duty Free Inc. (PBDF) due to lease defaults, leading to the appointment of a monitor to facilitate a resolution with its landlord, Buffalo & Fort Erie Public Bridge Authority.

After a year without resolution, the Landlord moved to lift the stay on proceedings, arguing PBDF failed to pay "normal rent" as required by the Appointment Order.

The court declined to immediately lift the stay, finding the term "normal rent" in the Appointment Order ambiguous given the prolonged period of reduced payments due to COVID-19 restrictions.

The court ordered mandatory mediation between the Landlord and Tenant by March 31, 2023, to facilitate a business resolution, requiring the Tenant to provide a new proposal with financial information.

Further directions will be provided post-mediation.

The applicant, a minority shareholder in a single-purpose real estate holding company, brought a third oppression application against the majority shareholders, seeking to force the sale of the company's property and its winding-up.

He alleged that the respondents oppressively withheld distributions and paid themselves unjustified salaries and special fees.

The respondents brought a cross-application to declare the applicant a vexatious litigant.

The court dismissed the oppression application, finding that the respondents' actions were justified and did not breach the applicant's reasonable expectations.

The court also dismissed the vexatious litigant cross-application but ordered that the applicant must seek leave before commencing any further proceedings against the company or its shareholders.

The parties have been engaged in ongoing litigation regarding a commercial lease.

The tenant and its principal brought a motion under Rule 59.06 to introduce fresh evidence, alleging the landlord fraudulently omitted pre-lease emails that would have altered prior court decisions regarding rent arrears and construction allowances.

The landlord brought a motion to terminate the lease for non-payment of rent.

The court dismissed the tenant's motion, finding the proposed fresh evidence inadmissible as it constituted pre-contractual negotiations that did not clearly contradict the landlord's evidence or the final lease terms.

The court granted the landlord's motion to terminate the lease due to the tenant's ongoing default, but stayed the termination pending a companion oppression application, conditional on the payment of ongoing rent into trust.