Doug Bourassa

An insolvent cannabis contract manufacturer filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act and sought orders approving DIP financing, a further stay extension, a SISP with a stalking horse bid, and related charges.

The court raised concerns about the SISP because the stalking horse agreement had not yet been executed, the milestones were abbreviated, the treatment of employees and contracts was uncertain, and a break fee was contemplated before any definitive agreement existed.

Following a standdown, the company abandoned pursuit of the full relief and requested only a brief stay extension to February 17, 2026.

The court was satisfied that the three-part test under s. 50.4(9) of the BIA was met and granted the short extension, finding no evidence of bad faith, no material prejudice to creditors, and sufficient liquidity for the brief period.

The court considered a dispute between neighbouring commercial property owners after repeated basement flooding at 1330 Gerrard Inc., attributed to a rain garden installed by Riverdale Immigrant Women Enterprises.

The court found that the rain garden, as constructed and maintained, was the proximate cause of the flooding and ordered its removal and replacement with a conventional drainpipe.

The court also addressed the application of the rule in Rylands v. Fletcher, finding strict liability appropriate due to the non-natural use of land.

The court declined to order further invasive remedies, adopting a "wait and see" approach regarding potential structural damage.

The moving party sought an extension of time and leave to appeal a lower court decision.

The Divisional Court granted the extension of time but dismissed the motion for leave to appeal.

No costs were awarded as no costs outline was filed.

The appellant investors, who participated in a Ponzi scheme operated by a one-person corporation, sought to have the trustee in bankruptcy's unjust enrichment claims statute-barred under Ontario's Limitations Act, 2002 by attributing the directing mind's knowledge of illegal interest and commission payments to the corporation.

The majority held that the corporate attribution doctrine applies to one-person corporations on the same purposive, contextual, and pragmatic basis as to other corporations, and that courts retain discretion to decline attribution when it would undermine the purposes of the laws engaged — here, the limitations and bankruptcy regimes.

In concurrence, a separate judge held that resort to the common law corporate attribution doctrine was unnecessary because the codified agency rules in s. 12 of the Limitations Act, 2002 provided a complete answer, and that the claims were not discoverable until the trustee was authorized by the court to bring them.

All judges agreed that the investors were disentitled from equitable set-off for lack of clean hands, that the referral agreements were illegal contracts at common law, and that one appellant was not dealing at arm's length with the corporation.

The applicant sought leave to appeal an order refusing to continue a stay of enforcement of a mortgage and writ of possession.

The applicant had initially appealed to the Court of Appeal but was directed to the Divisional Court.

The court granted an extension of time to file the motion for leave to appeal, as the respondent took no position.

The court declined to grant a stay pending the leave motion, noting it was premature as the respondent was still waiting to renew the writ of possession, but provided directions on how the applicant could seek an injunction if eviction became imminent.

The appellant, Juleth Dawson, appealed a motion judge's judgment for payment and possession under a mortgage, primarily challenging the calculation of interest owing.

The Court of Appeal found no error in the motion judge's decision not to reduce the contractual interest rate from 7.5% to 2% due to the respondents' failure to deliver a mortgage statement.

The court distinguished the case from Cheung v. Moskowitz Capital Mortgage, affirming that the discretion to reduce interest is fact-driven and requires evidence of the mortgagee seeking an advantage or the mortgagor suffering prejudice.

As no such advantage was sought or prejudice suffered, and payments had not been made for four years, the appeal was dismissed.

This is a panel review by the Court of Appeal for Ontario concerning an appeal regarding the amount owing on an unpaid mortgage loan and possession of property.

The appellant, Juleth Dawson, sought to restore possession of the property after a single judge of the court had previously dismissed her motion for a stay of execution and granted possession to the respondents.

The appellant did not appear for the hearing, and the appeal proceeded on written materials.

The court found no basis to interfere with the single judge's order, noting the appellant's inability to raise funds or pay the mortgage.

The motion was dismissed with costs.

The plaintiffs brought a post-trial motion to compel the defendants to cooperate in executing the sale and property management issues directed in a previous judgment, which found the plaintiffs to be 50% beneficial owners of the subject property.

At the hearing, the parties agreed on the form of the formal judgment and the mechanics for listing the property, managing it in the interim, and handling rental income.

The court ordered the defendants to cooperate with the plaintiffs in selling the property and to pay rents into court or trust, less agreed-upon expenses, with an order going as submitted by mutual agreement.

Following a successful 7-day trial regarding a commercial property dispute, the plaintiffs sought costs on a partial indemnity basis up to the date of their Rule 49 offer, and substantial indemnity thereafter.

The court found the plaintiffs' offer was more favourable to the defendants than the final judgment.

Noting the defendants' repeated failures to produce documents and delay tactics over the 9-year litigation, the court awarded the plaintiffs $650,000 in costs inclusive of disbursements and HST.

The plaintiffs and defendants brought cross-motions for relief under the oppression remedy provisions of the Business Corporations Act.

The dispute arose after the majority shareholders terminated the defendant from his role as Director of Operations and removed him as a director.

The court found that the defendant had acted oppressively by transferring over $700,000 of corporate funds to a company he solely controlled to protect his personal interests.

Applying the clean hands doctrine, the court denied the defendant's request for an oppression remedy and the appointment of an inspector, but granted the plaintiffs' motion to correct the shareholder register and restore their authority over the corporate bank accounts.

The plaintiffs and defendants, former friends, invested in real estate together.

The plaintiffs claimed a 50% beneficial interest in a property registered solely in the defendants' names, based on an oral agreement and a $69,000 contribution.

The court found the oral agreement enforceable due to part performance, overcoming the Statute of Frauds, and ordered the property sold and proceeds divided.

The court also dismissed the plaintiffs' libel claim regarding false accusations of criminal conduct, finding the publication was de minimis and caused no actual harm.

The action was held to be within the 10-year limitation period under the Real Property Limitations Act.

This endorsement addresses the costs arising from an appeal and cross-appeal concerning a dispute between appellant investors and a respondent trustee in bankruptcy of a failed financial company involved in a Ponzi scheme.

The main appeal was dismissed, and the trustee's cross-appeal was allowed in part.

The trustee sought $85,000 in partial indemnity costs, citing case complexity and novelty of arguments.

The appellants argued this was excessive, proposing $30,000.

Applying the principle that costs must be fair and reasonable, the court considered the trustee's partial success on the cross-appeal and the disparity in costs, ultimately awarding the trustee $40,000, all inclusive.

The trustee in bankruptcy of a company that operated a Ponzi scheme brought actions against investors to recover usurious interest and commission payments.

The trial judge ordered repayment of preferences and usurious interest, finding the investors knew or ought to have known the returns were too good to be true.

On appeal, the investors argued the claims were statute-barred and that the corporate attribution doctrine should impute the fraudster's knowledge to the company.

The Court of Appeal dismissed the appeal, holding that public policy grounds justified exercising discretion not to apply the corporate attribution doctrine, as doing so would perversely allow fraudsters to benefit at the expense of legitimate creditors.

The trustee's cross-appeal was allowed in part, including findings that referral agreements were illegal contracts at common law and that certain defendants were not entitled to dividends until other creditors were satisfied.

The plaintiffs brought a motion at the opening of trial to strike the defendants' statement of defence due to their failure to comply with multiple pre-trial production orders regarding financial records.

The court found that while the defendants' production was tardy and potentially incomplete, striking the defence altogether would be a disproportionate remedy.

The motion was dismissed, with the court noting that adverse inferences could be drawn at trial if the plaintiffs' ability to prove their claim was impeded by missing records.

The applicants, members of the Geneva Park community and Friends of Geneva Park, brought an urgent application seeking declarations of trust (implied, constructive, resulting, or charitable purpose trust) over the Geneva Park property, an order for directions or investigation under the Charities Accounting Act, production of the sale agreement, a Certificate of Pending Litigation, and an interim injunction to prevent the sale of the property by YMCA of Simcoe/Muskoka (YSM) to a private purchaser.

The applicants argued that their historical donations and contributions created a beneficial interest or trust.

The court dismissed the application, finding no evidence to support the creation of any trust, no misuse of charitable funds by YSM, and that granting an injunction or CPL would be unjust and inequitable, as the sale was a reasonable solution for the financially struggling charity.

The plaintiff, a minority shareholder, moved for an injunction to block the impending sale of the corporation's sole real estate asset to a third party.

The plaintiff had previously initiated an oppression action against the majority shareholders and directors, alleging mismanagement and conflicts of interest.

Applying the RJR-MacDonald test, the court found a serious issue to be tried regarding the propriety of the sale.

However, the court dismissed the motion because the plaintiff failed to establish irreparable harm, as any potential losses were quantifiable and could be compensated through a damages award against the directors personally.

The applicant sought to register a default judgment obtained in Alberta against the respondent for unpaid electrical work.

The respondent, who was served in Ontario, did not defend the Alberta action and did not appear at this application.

The court found that the Alberta court had jurisdiction, the respondent carried on business in Alberta, and no circumstances existed under section 3 of the Reciprocal Enforcement of Judgments Act to prevent registration.

The application was granted and the judgment was ordered registered in Ontario.

The trial in this matter was scheduled to commence on September 20, 2021.

Due to health issues involving counsel for the defendants, the court adjourned the trial to January 10, 2022, making the new date peremptory to the defendants.

The court also made orders regarding the re-drafting of pleadings and the production of outstanding documents by the defendants.

The issue of the plaintiffs' costs thrown away was reserved to the trial judge.

At a pre-trial conference for a property ownership dispute, the court addressed trial management issues to ensure readiness for a September 2021 trial.

The court set deadlines for the defendants to provide a redrafted statement of defence, finalize their position on the joint document brief, and answer outstanding undertakings regarding the property's income and expenses.

The court noted that failure to provide the undertakings could result in the plaintiff seeking to strike the defence at trial.

The appellant, Canada Investment Corporation (CIC), appealed an order directing that surplus proceeds held for CIC from a receivership sale be paid to the respondent creditors.

The respondents had successfully challenged the validity of CIC's pre-assignment expenses in a related action.

The Court of Appeal dismissed the appeal, finding that the claims process did not require a statement of claim, the onus correctly shifted to CIC to dispute the Receiver's recommendation, and issue estoppel precluded CIC from re-litigating the quantification of pre-assignment expenses already decided in the related action.