Adrienne Ho

Appeal and cross-appeal arising from a bankruptcy trustee's proof of claim, the chair's rulings at the first meeting of creditors, and subsequent voting at a reconvened second meeting.

The court held that the chair erred in law by entirely preventing a creditor with an objected and allegedly non-arm's length claim from voting, because ss. 108(3) and 109(6) of the Bankruptcy and Insolvency Act require the vote to be taken subject to later invalidation or redetermination.

The court further held that filing the appeal did not automatically stay the effect of the vote or prohibit a second meeting under s. 115.1, but found that the second meeting nevertheless should not have been convened while the first appeal was pending.

The appeal was not moot, the second meeting resolutions were not nullities, and the court confirmed the uncontested resolutions nunc pro tunc while redetermining the contested vote to appoint the appellant trustee's representative as an inspector.

This decision concerns an appeal by Zeifman Partners Inc., as Trustee in Bankruptcy of Oragin Foods Inc., from the disallowance by KPMG Inc., as Trustee in Bankruptcy of Organic Garage (Canada) Ltd., of a proof of claim for $6,760,280.89.

The claim was based on alleged intercompany loans and a note payable.

The court allowed the appeal in part, admitting the "Current Liability Component" ($2,917,423.11) as a proven unsecured claim, but dismissed the appeal regarding the "Long Term Liability Component" and "Note Payable Component" finding insufficient evidence that these were debts rather than equity contributions.

The decision provides a detailed analysis of the distinction between debt and equity in the context of related-party transactions in insolvency, and the applicable standards of review.

The Receiver sought an order for discharge and release, approval of its Third Report, statement of receipts and disbursements, and fees.

The Court declined to grant the discharge, citing CBJ’s unauthorized commencement of actions in Ontario and Alberta in breach of the Receivership Order.

The Court found CBJ’s disregard for court orders troubling and noted the lack of contrition or proper procedure to regularize its actions.

The motion for discharge was adjourned to allow for a more complete record and for the Receiver to advise on the value of the Ontario and Alberta actions to the estate.

The applicant, Waygar Capital Inc., as agent for Ninepoint Canadian Senior Debt Master Fund LP, sought the appointment of a receiver over the property of the respondents, El Mocambo Entertainment Inc. and related companies, under section 243 of the Bankruptcy and Insolvency Act and section 101 of the Courts of Justice Act.

The court reviewed the legal test and relevant factors for appointing a receiver, including the rights of secured creditors and the conduct of the parties.

Although the respondents did not oppose the application, the court, with the parties' agreement, adjourned the receivership to allow the proposed receiver to act as monitor for a short interim period to explore the possibility of maintaining the business as a going concern.

The application may be brought back on an urgent basis if necessary.

The court-appointed receiver brought a motion seeking a declaration that the debtor had no automatic right of appeal from an Approval and Vesting Order under the Bankruptcy and Insolvency Act, and an order denying leave to appeal.

The debtor argued it had an automatic right of appeal under s. 193(a) or (c) of the BIA, or alternatively sought leave under s. 193(e).

The Court of Appeal held that the debtor had no automatic right of appeal, as the order did not affect future rights or result in a direct loss exceeding $10,000.

The Court also denied leave to appeal, finding the proposed appeal lacked merit, did not raise an issue of general importance, and would unduly hinder the insolvency proceedings.

This motion addressed a receiver's application for an approval and vesting order (AVO) for the sale of properties, which was opposed by the debtors asserting their equitable right of redemption.

The debtors sought to delay the sale to secure financing, but their efforts were deemed highly conditional and uncertain.

The court applied the Soundair test, finding that the receiver conducted a robust and fair marketing process that yielded the best price.

The court emphasized that the debtors' inability to present a complete and unconditional financing package at the time of the motion was fatal to their request, distinguishing this case from precedents where redemption was allowed due to the debtor's immediate ability to pay.

The receiver's motion for the AVO was granted, and the debtors' cross-motion was dismissed.

The appellant owner appealed a summary judgment finding it liable to pay a subcontractor directly for amounts owed by the contractor, pursuant to a termination agreement.

The Divisional Court dismissed the appeal on the merits, finding the motion judge made no palpable and overriding error in concluding the owner agreed to pay the subcontractor's outstanding balance.

However, the court set aside the motion judge's award of 24% interest, finding the issue was not properly addressed, and directed the parties to provide further written submissions on the proper calculation of interest.

The moving party sought an extension of time to serve and file a notice of appeal from a judgment under the Construction Act.

The moving party's former counsel mistakenly believed the appeal period was 30 days under the Rules of Civil Procedure, rather than the 15 days prescribed by the Construction Act.

The court granted the extension, finding that the moving party had a bona fide intention to appeal, the 14-day delay was explained by counsel's inadvertence, there was no prejudice to the responding parties, and the proposed appeal was not devoid of merit.

The Applicant, a licensed life insurance agent, failed to maintain continuous errors and omissions (E&O) insurance coverage for a period of approximately nine months.

The Superintendent of Financial Services issued a Notice of Proposal to impose an administrative monetary penalty of $1,600.

The Applicant requested a hearing, acknowledging the contravention but seeking a reduction in the penalty.

The Financial Services Tribunal found that the contravention was intentional, the Applicant derived an economic benefit by avoiding premiums, and the proposed penalty was appropriate to deter non-compliance.

The Tribunal ordered the Superintendent to impose the $1,600 penalty.