John Langen Finnigan

The Cash Store Financial Services Inc. operated a payday loan business from 2002 until it sought CCAA protection in April 2014.

The company's estate sued its auditor KPMG LLP and counsel Cassels Brock & Blackwell LLP, alleging negligence and breach of fiduciary duty.

The plaintiff claimed that the defendants knew or ought to have known that Cash Store was misrepresenting its business as a broker when it was actually a direct lender bearing credit risk, and that this misrepresentation caused a deepening of insolvency from late 2011 until the CCAA filing in 2014.

The plaintiff sought damages ranging from $119 million to $177 million, plus disgorgement of legal fees.

The court dismissed all claims against both defendants, finding that Cash Store was properly characterized as a broker during the relevant period, that the defendants met applicable professional standards, and that the plaintiff failed to prove causation and damages.

The court also found the claims were statute-barred.

The Monitor of the Applicants in a Companies’ Creditors Arrangement Act (CCAA) proceeding brought a motion to extend the Stay Period to allow Remaining Estate Actions to proceed and to continue administering the Plan.

The court reviewed the Monitor's Thirty-Fourth Report and submissions, finding that the Applicants continued to operate in good faith and with due diligence.

The motion was granted, extending the Stay Period until September 29, 2025, to allow for the determination of the Remaining Estate Actions.

The Trustee of the Alexander Morris Sharpe Trust sought the court's advice and directions on whether legal fees for David and Natasha Sharpe could be paid from the trust, which was established for the "sole and exclusive" benefit of their minor son, Alexander Morris Sharpe.

The Office of the Children's Lawyer opposed, arguing the trust language was clear and restrictive.

The court ruled that the trust funds could not be used to pay the legal fees, as such payments would not be for the "sole and exclusive" benefit of the minor beneficiary, even if there was a collateral benefit.

The Monitor of The Cash Store Financial Services Inc. and related entities brought a motion seeking an extension of a stay of proceedings to October 25, 2024, under the Companies’ Creditors Arrangement Act.

The Monitor's Thirty-Third Report detailed the status of remaining estate actions and confirmed sufficient liquidity to fund activities.

The motion was unopposed and granted, with the court satisfied that the parties were acting in good faith and with due diligence.

The Court of Appeal considered appeals regarding the priority of claims in the receivership of Bridging Finance Inc. and its investment funds.

The motion judge had previously granted priority to Statutory Rescission Claims but denied it to Redemption Claims.

The Court of Appeal dismissed the appeal by Redemption Claimants, affirming that their claims had not crystallized and were subject to Bridging's discretion, thus lacking priority.

It allowed the appeal by General Unitholders, reversing the priority granted to Statutory Rescission Claims.

The court held that neither the language of the Ontario Securities Act (s. 130.1) nor the inherent nature of the rescission remedy provided a basis for statutory or de facto priority.

Consequently, the court ordered that all Unitholders, including Redemption Claimants, Statutory Rescission Claimants, and General Unitholders, shall rank pari passu with respect to the distribution of proceeds from the Bridging Funds.

The Ontario Securities Commission (OSC) brought a motion seeking an order for the issuance of Letters of Request in Commissions under section 152 of the Securities Act.

The OSC required evidence from two individuals, one residing in British Columbia and one in Massachusetts, USA, for a proceeding before the Capital Markets Tribunal concerning Bridging Finance Inc. and its respondents.

The respondents did not oppose the motion.

The court granted the order, finding that the proposed witnesses had relevant evidence and that the Letters of Request and Commissions accorded with Rule 34.07(2) of the Rules of Civil Procedure.

The SMA 2 Unitholders sought a declaration that substantive consolidation does not apply to Bridging SMA 2 LP and approval for a second interim distribution.

The Receiver and Unitholder Representative Counsel opposed, arguing the motion was premature as various distribution issues, including the full economic impact of consolidation, remained unresolved.

The court dismissed the motion, deferring to the Receiver's position that a determination on substantive consolidation and further distributions was premature given the incomplete factual record and outstanding distribution issues.

The Receiver of Bridging Finance Inc. sought court approval to terminate a sale and investment solicitation process (SISP) and proceed with an orderly liquidation ("Status Quo Option"), and to seal confidential appendices.

An unnamed unitholder opposed, requesting further consultation, a unitholder vote, and a new solicitation process for liquidation management.

The court denied the unitholder's adjournment request, finding no evidence to support it.

The court granted the Receiver's requests, deferring to the Receiver's business judgment, which was supported by Representative Counsel and a substantial majority of unitholders.

The Plaintiffs (Bondfield Construction Company Limited and Zurich Insurance Company Ltd.) brought a motion to stay summary judgment motions initiated by PricewaterhouseCoopers LLP (PwC) in complex professional negligence actions against auditors, which also involved significant fraud allegations and discoverability issues.

The court, acting as case management judge, granted the stay, determining that full documentary and oral discoveries were essential to ensure a fair and efficient process.

The decision highlighted the complexity of the case, the substantial damages sought, the allegations of long-standing fraudulent activities, and the potential for inconsistent findings if the summary judgment motions proceeded on a limited record.

The court emphasized the flexibility of judges in case-managed matters and the necessity of a comprehensive record for a just adjudication of limitation period issues.

The defendants, a lawyer and his law firm, brought a summary judgment motion seeking the dismissal of a professional negligence action.

They argued the action was statute-barred, lacked expert evidence on negligence, and lacked evidence on damages.

The court dismissed the motion, finding genuine issues for trial regarding the existence and nature of the solicitor-client relationship, whether a duty of care was breached by failing to disclose environmental and archaeological reports, and the discoverability of the claim for limitation purposes.

The court also addressed the evidentiary burden on summary judgment motions, particularly concerning expert evidence in professional negligence cases, and reconciled conflicting Court of Appeal decisions.

The defendants, KPMG, Canaccord Genuity Corp., and Cassels Brock & Blackwell LLP, brought motions for summary judgment to dismiss actions initiated by 1511419 Ontario Inc. (formerly The Cash Store Financial Services Inc.) on the grounds that the claims were statute-barred by the two-year limitation period.

The actions related to professional services provided concerning a January 2012 loan purchase and note offering.

The court dismissed the motions, finding that there were genuine issues requiring a trial regarding the discoverability of the claims, given the complex factual pattern, allegations of professional negligence, and the limited evidentiary record presented.

The plaintiffs brought a cross-motion for leave to introduce a supplementary affidavit in response to the defendants' summary judgment motion.

The affidavit addressed two issues: a conversation regarding legal representation and the plaintiffs' financial losses, including an accounting opinion.

Applying Rule 39.02(2) and Rule 1.04 of the Rules of Civil Procedure, the court granted leave for both aspects of the supplementary affidavit, finding the evidence relevant and necessary for a just determination on the merits, particularly given the complexity and potential value of the case, and that the defendants were not surprised by the accounting opinion.

The plaintiff, a shell company representing substantial commercial creditors, conceded it lacked sufficient assets to cover the defendants' costs if unsuccessful in three complex commercial actions seeking over $150 million in damages.

The plaintiff also failed to demonstrate impecuniosity.

The defendants sought over $10 million in security for costs.

The court, finding the merits of the underlying claims neutral for the purpose of the motion, determined it was fair and just for the plaintiff to post security.

An initial aggregate sum of $1.6 million was ordered to be paid into court, staged across the three actions, with further amounts to be determined later.

The defendant moved to stay or dismiss an Ontario action seeking recognition and enforcement of a U.S. judgment, arguing that Ontario lacked jurisdiction because there was no real and substantial connection between the defendant and Ontario.

The plaintiff brought a cross‑motion to amend its statement of claim to add grounds for service ex juris.

The court held that in recognition and enforcement proceedings the applicable test is that set out in Beals v. Saldanha, requiring a real and substantial connection between the foreign court and the underlying dispute, not between the defendant and Ontario.

The court found the Beals criteria were satisfied, including a final foreign judgment for a fixed sum and no applicable defences.

The defendant’s motion was dismissed and the plaintiff’s amendment was allowed in part to clarify service outside Ontario.

In CCAA proceedings involving the debtor corporations, a significant creditor sought a declaration imposing a constructive trust and super‑priority over litigation proceeds to recover payments it made to a strategic advisor who served as a director and litigation committee chair.

The creditor argued that the payments justified a solicitor’s lien, unjust enrichment, constructive trust, or oppression remedy.

The court held the advisor’s work was performed in the capacity of a director and business advisor rather than as a solicitor, precluding a solicitor’s lien.

The court further held that the criteria for unjust enrichment and constructive trust were not satisfied and that imposing a proprietary remedy would disrupt the established CCAA priority regime.

The motion seeking super‑priority status was dismissed.

Co-owners of a Toronto property brought an application under the Partition Act seeking an order for sale and directions regarding the method of sale.

While all parties agreed the property should be sold, they disagreed on whether the sale should proceed by public auction or by sealed bid.

The court discounted partisan affidavit evidence from the parties and professional firms with financial interests in the process.

Emphasizing the need to safeguard the integrity of the sales process and maximize value, the court concluded that a sealed-bid process was preferable in circumstances where some co-owners intended to bid on the property.

The court ordered the sale to proceed by sealed bid under the supervision of an independent sales officer, with final process terms subject to court approval.

In a receivership over a commercial condominium development, the receiver sought approval of a marketing and sale process allowing the property to be sold free and clear of unregistered unit purchase agreements and leases.

A group of purchasers argued their agreements should be honoured and that the project should proceed to condominium registration so their units could close.

The court held that the first mortgagee’s registered security had legal priority over the purchasers’ and tenants’ interests, which were unregistered and expressly subordinated by contract.

The receiver was not required to borrow funds or complete construction to facilitate specific performance of the agreements.

Finding that the equities did not favour the purchasers, the court approved the marketing process and authorized termination and vesting out of the agreements and leases if required for a sale.