Kevin D. Sherkin

This appeal concerns the effectiveness of a statutory trust under s. 9(1) of Ontario's Construction Lien Act (CLA) in Companies' Creditors Arrangement Act (CCAA) insolvency proceedings.

Unpaid contractors (appellants) claimed a trust over proceeds from the sale of condominium units by the insolvent developer (Cumberland Group).

The motion judge denied the trust, relying on Re Veltri Metal Products Co., reasoning that the CCAA Monitor's involvement prevented the trust from arising.

The Court of Appeal allowed the appeal, clarifying that a s. 9(1) CLA trust can be effective in CCAA sales processes and is only displaced by federal paramountcy if it conflicts with a specific CCAA priority.

The court distinguished Veltri, stating it did not prevent a s. 9(1) trust when proceeds exceed mortgage debt and expenses, and confirmed the "deemed receipt" rule.

The appellant appealed a motion judge's decision that reduced a Master's awards for an extra invoice, prejudgment interest, and costs in a construction lien dispute.

The motion judge had found that the Master made a palpable and overriding error regarding the date of a supplier's invoice, which tainted the Master's overall negative assessment of the respondents' credibility.

The Divisional Court allowed the appeal, holding that while the Master's factual error was palpable, it was not overriding, as the credibility findings were supported by numerous other significant factors.

The motion judge erred in law by reassessing credibility and substituting his own findings.

The respondents' cross-appeal for a new trial was dismissed.

The Monitor of a CCAA-protected company appealed a motion judge's decision dismissing its motion to disallow a creditor's claim secured by a guarantee.

The creditor, Speedy Electrical Contractors Ltd., had provided a personal loan and performed electrical work for Urbancorp entities.

When Speedy threatened legal proceedings and held a construction lien, the parties entered into a debt extension agreement whereby Speedy agreed to discharge its lien and extend the loan in exchange for a secured guarantee from King Residential Inc. (a related Urbancorp entity) over condominium units.

The Monitor argued the guarantee was a transfer at undervalue under section 96 of the Bankruptcy and Insolvency Act and a fraudulent conveyance under the Fraudulent Conveyances Act.

The motion judge found Speedy and KRI were dealing at arm's length and that fraudulent intent was not established.

The Court of Appeal dismissed the appeal, upholding the motion judge's findings.

The applicant sought to recognize and enforce a default judgment of $1,500,000 obtained in Israel against the respondent.

The respondent opposed, arguing the action should be heard in Ontario, the Israeli judgment offended natural justice, or the application should be stayed pending his efforts to set aside the judgment in Israel.

The court found a real and substantial connection to Israel, rejected the natural justice defence as the respondent had opportunity to defend and Israeli courts provide mechanisms to set aside default judgments, and denied a stay due to the respondent's lack of diligence.

The court granted the recognition and enforcement, with a term that enforcement would be stayed if the Israeli judgment is set aside.

This is a costs endorsement following an appeal from orders of the Superior Court of Justice.

The appeal involved four consolidated actions concerning personal liability of corporate directors and officers in the context of real estate development and mortgage transactions.

The Court of Appeal upheld the motion judge's conclusions on the legal issue of personal liability based on pleaded allegations and legal principles.

The costs decision addresses the appropriate costs awards for the successful and unsuccessful parties across the multiple appeals.

The applicant sought an order declaring the City's removal of a rooftop sign illegal and a referral to a Master for damages.

The City argued the removal was lawful due to the sign's conversion to an "Off Premise Sign" without proper permits under provincial and municipal by-laws, and that the sign was not "lawfully erected" for grandfathering purposes.

The court found the application raised complex issues of statutory interpretation, Charter rights concerning commercial expression, and evidentiary needs that were unsuitable for an application.

The court ordered the application to be converted into an action to allow for full discovery, expert evidence, and a proper adjudication of liability and damages.

Four consolidated class actions brought by small investors who invested in syndicated mortgages promoted by Fortress Real Capital Inc. and Fortress Real Developments Inc. The investors alleged misrepresentation, breach of fiduciary duty, breach of contract, and negligence.

The motion judge struck claims against individual respondents Jawad Rathore and Vincenzo Petrozza, and dismissed claims to enforce syndicated mortgages against Empire Pace (1088 Progress) Ltd. and ADI Developments entities.

The appellants appealed.

The Court of Appeal upheld the dismissal of personal claims against Rathore and Petrozza but reversed the dismissal of mortgage enforcement claims against Empire Pace and ADI, finding that the motion judge erred in applying Rule 21 to matters requiring evidentiary findings regarding contract interpretation and disclosure.

The applicant sought judicial review of a decision by the respondent board refusing to grant him a second appeal hearing after he failed a clinical skills equivalency exam.

The applicant argued that the initial appeal panel did not have his typodonts before it and that he was denied procedural fairness when the board rejected his request for a second appeal based on new procedural and medical issues.

The Divisional Court dismissed the application, finding that the panel had the proper materials and that the applicant should have raised his procedural and medical concerns during the exam or in his initial appeal.

Following an appeal regarding reduced security under the Construction Lien Act, the court issued a costs endorsement.

The appellant was awarded $7,000 in partial indemnity costs for a successful stay motion.

The respondent, having been successful on the main appeal, was awarded $15,000 in partial indemnity costs.

Following a successful appeal that reduced the plaintiff's damages award in a construction lien trial, the court considered written submissions on the costs awarded by the Master.

The Master had originally awarded the plaintiff $485,000 in costs based on an erroneous application of Rule 49.

The court found that the plaintiff's second offer to settle implicitly withdrew its first offer, and since the reduced damages award was less than the second offer, Rule 49 did not apply.

The court reduced the Master's costs award to $236,500 on a partial indemnity scale to reflect proportionality and the reduced damages award.

The appellant contractor appealed a motion judge's order vacating its construction lien upon the respondent owner posting security in an amount significantly less than the lien claim.

The appellant argued the motion judge erred by resolving complex factual issues regarding unapproved change orders and an extended duration claim on a summary motion under s. 44(2) of the Construction Lien Act.

The Divisional Court dismissed the appeal, finding the motion judge correctly applied the law by reducing security only where the evidence failed to establish a reasonable basis for the amounts claimed, though it varied the order to correct a conceded mathematical error.

The appellants retained Birkshire Group Inc. to perform home renovation work.

After the relationship deteriorated, Birkshire registered a construction lien and sued for the balance owing.

The appellants counterclaimed and sued other respondents.

At trial, the judge awarded Birkshire damages and recognized a lien.

The appellants appealed, arguing the trial judge failed to address evidence from two witnesses called after the close of evidence.

The trial judge had determined this evidence was material to credibility issues but made no reference to it in his reasons.

The Court of Appeal found the trial judge's reasons deficient and allowed the appeal, ordering a new trial.

The appellant condominium corporation appealed a Superior Court decision that dismissed its negligence claim against multiple defendants for delay in service.

The claim involved construction defects discovered in 2012 and issued in 2014 but not served within the required six-month period.

The appeal judge reversed the master's decision, finding palpable and overriding errors of fact and law.

However, the Court of Appeal found that the appeal judge's decision was based on a transcription error in the master's reasons (where "institutional" was incorrectly transcribed as "individual"), which created a false inconsistency.

The Court of Appeal allowed the appeal and restored the master's decision, finding that the master properly applied the legal principles regarding delay and prejudice.

Following the defendant's unsuccessful motion to transfer and consolidate the action, the successful plaintiff sought costs of $7,082.73 on a partial indemnity basis.

The defendant argued costs should be in the cause or parties should bear their own costs.

The court rejected the defendant's arguments, finding the plaintiff entitled to costs payable forthwith.

Applying the factors under Rule 57.01(1) of the Rules of Civil Procedure, the court fixed the plaintiff's costs at $6,000 inclusive.

The Monitor in a CCAA proceeding brought a motion to disallow a $2.3 million secured claim filed by a creditor.

The Monitor argued the secured guarantee given by the insolvent debtor was a transfer at undervalue under s. 96 of the BIA or a fraudulent conveyance.

The court dismissed the motion, finding that the debtor and creditor were operating at arm's length and that the Monitor failed to prove the debtor granted the guarantee with the intent to defraud, defeat, or delay creditors.

The defendants brought a motion to transfer the action from Newmarket to Toronto to be heard immediately after a related action commenced by the plaintiff in Toronto.

The court dismissed the motion, finding that transferring the action would delay the Toronto action, which was already set down for trial.

The court noted the plaintiff's advanced age and the fact that she had been financing the Toronto litigation for five years.

The court held that the plaintiff's choice of venue was entitled to deference and there was no risk of inconsistent findings.

The defendants brought a motion to oppose the confirmation of a Master's report following a 29-day trial on a construction lien reference.

The Master had awarded the plaintiff $243,325.20 plus costs and elevated pre-judgment interest, largely based on adverse credibility findings against the defendants.

The Superior Court found that the Master made a palpable and overriding error by misreading the date on a key invoice, which tainted his credibility assessment and led to an erroneous $72,000 award for 'extra' design work.

The court deducted the $72,000 from the judgment and reduced the pre-judgment interest to the statutory rate, but upheld the Master's findings on commissions for builder upgrades, price reductions, and post-termination items.

The defendants were awarded $19,000 in costs for the motion.

The moving party, a condominium corporation, sought an order under s. 44(2) of the Construction Lien Act to vacate a construction lien registered by the respondent contractor upon posting security in an amount significantly less than the $2,744,377 claimed.

The dispute arose from a fixed-price contract for condominium renovations where the scope of work expanded, leading to unapproved change orders and an extended duration claim.

The court reviewed the evidence and found that while many factual disputes required a trial, certain portions of the lien claim, including specific unapproved change orders and most of the extended duration claim, lacked a proper evidentiary foundation.

The court ordered the lien vacated upon the posting of security reduced by $1,181,833.79 plus HST, along with $50,000 for costs.

This is a costs endorsement following an appeal where the Court of Appeal set aside the order of the application judge dated October 5, 2015.

The parties had contested two issues on the application with divided success.

The application judge had reduced the respondent's costs from an agreed amount of $42,500 to $30,000 due to partial success.

On appeal, the Court of Appeal determined that the appellant succeeded on both issues argued at the application and therefore was entitled to the full agreed costs amount of $42,500 for the application below, in addition to $20,000 for the costs of the appeal.

The applicant and respondent, corporate entities controlled by a son and father respectively, jointly owned a commercial property.

The applicant sought an order for the sale of the property under the Partition Act, which the respondent opposed, citing malicious conduct and a contractual right of first refusal.

The respondent also claimed unpaid rental income.

The court held that the applicant had a prima facie right to sell the property and had not acted maliciously, but was bound by the right of first refusal.

The court ordered that the applicant's prior offer to sell its interest to the respondent remain open for an additional 60 days, after which the property could be sold on the open market if no agreement was reached.

The court also ordered the applicant to pay the respondent its share of outstanding rental payments.