Matthew R. Harris

The appellant appealed a judgment dismissing a motion for a declaration that a debt arising from a 2016 default judgment survived the respondent's bankruptcy discharge under s. 178(1)(d) of the Bankruptcy and Insolvency Act.

While it was undisputed that the respondent fraudulently embezzled funds from their shared corporation, the motion judge found no evidence that the respondent owed the appellant a fiduciary duty as a co-director or shareholder.

The Court of Appeal found no reviewable error in the motion judge's conclusion that there was no power imbalance requiring absolute loyalty, and dismissed the appeal.

The moving party creditor brought a motion to annul the consumer debtor's consumer proposal.

The creditor had failed to file a proof of claim within the statutory time periods, resulting in the proposal being deemed accepted and approved.

The creditor also commenced actions against the debtor and the administrator without obtaining leave of the court, breaching the stay of proceedings under the Bankruptcy and Insolvency Act.

However, the debtor was ineligible to file a consumer proposal because her aggregate debts, including the creditor's judgment, exceeded the $250,000 statutory limit.

Balancing the factors, including the debtor's ineligibility and the massive disparity between the proven claims and the creditor's claim, the court exercised its discretion to annul the consumer proposal, despite the creditor's misconduct.

The plaintiffs, Gary and Jennifer McKenzie, brought two claims: one for breach of contract against Fabco Holdings Inc. and Jaymor Specialty Housing General Partner Inc. (Fabco/Jaymor) arising from an aborted real estate purchase agreement, and another for slander of title/injurious falsehood against Gerald Anthony, a neighbour, regarding a disputed property boundary.

The court found that Fabco/Jaymor breached the purchase agreement, not due to a legitimate title issue, but because the property was unsuitable for their development plans.

Fabco had assigned its obligations to Jaymor, and the court held Jaymor solely responsible for the breach, releasing Fabco from liability per the contract's assignment clause.

The court awarded the plaintiffs substantial damages against Jaymor for loss of bargain and associated costs.

Regarding the title claim, the court found Anthony liable for slander of title/injurious falsehood for registering a caution and application on title without bona fide grounds, which delayed the subsequent sale of the property.

However, Anthony was not held liable for damages related to the initial aborted sale, as that was attributed to Fabco/Jaymor's independent reasons.

The court awarded damages against Anthony for losses incurred due to the delay in the second property sale.

The defendants' counterclaim was dismissed, and the plaintiffs were found to have reasonably mitigated their damages.

The Trustee in Bankruptcy sought an order for the repayment of $20,005.37 from the undischarged bankrupt and her son, representing an overpayment of surplus funds due to an erroneous interest calculation by the Office of the Superintendent in Bankruptcy.

The funds, initially paid to the bankrupt, were subsequently transferred multiple times and were ultimately held in an account controlled by the son.

The court found that the funds were paid under a mistake of fact and that neither the bankrupt nor her son had a legal or equitable right to retain them.

The court granted the Trustee's application, ordering the repayment of the funds.

The bankrupt applied for a discharge after being in bankruptcy for 17 years.

The discharge was opposed by the Trustee and several creditors, including the Canada Revenue Agency, on the basis of multiple facts under section 173 of the Bankruptcy and Insolvency Act.

The court found that the bankrupt had misappropriated over $9 million, spent the funds on an extravagant lifestyle, failed to account for the loss of assets, and breached his duties to report income and expenses.

The court also found the bankrupt breached the duty of good faith under section 4.2 of the BIA.

Concluding that the bankrupt was not an honest and unfortunate debtor, the court refused an absolute discharge and instead granted a conditional discharge requiring the bankrupt to pay $100,000 to the estate and fulfill all outstanding tax and reporting obligations.

Winning Brands Corporation (WBC), a Delaware corporation, brought a motion to strike or permanently stay a bankruptcy application filed against it by creditor Charles Perlman.

WBC argued it lacked a sufficient nexus to Canada, claiming it operated exclusively in the U.S. and had no business or property in Canada.

The court dismissed WBC's motion, finding overwhelming evidence that WBC carried on business and resided in Ontario, including public filings listing an Ontario principal office, a Toronto facility, and its CEO residing and controlling the company from Ontario.

The court also noted that WBC had previously attorned to Ontario jurisdiction in the underlying loan agreements and judgment.

The appellant, Gurdeep Nagra, appealed an order from a motion judge that had dismissed his appeal from a Registrar in Bankruptcy's decision.

The Registrar had reduced Nagra's claim in Verinder Malhotra's bankruptcy by expunging a promissory note.

The Court of Appeal found no error in the motion judge's decision, noting the deference owed to the Registrar's ruling and that the appellant's arguments, which were not raised before the Registrar, were unsuccessful.

The appeal was dismissed with costs.

The appellant creditor appealed an order from the Registrar in Bankruptcy that significantly reduced his proof of claim against the bankrupt.

The claim, initially for $5.99 million and accepted by the Trustee at $2.58 million, was reduced to $85,000 by the Registrar.

The core of the dispute was a $3.5 million promissory note, which the bankrupt argued was contingent on a surplus from hotel sales that never materialized, and was part of a "Governing Agreement" made to influence the creditor's criminal sentencing in the US.

The court dismissed the appeal, upholding the Registrar's decision, finding that the Registrar properly considered extrinsic evidence (the factual matrix) in determining the note's contingency, and that the appellant's repeated attempts to re-introduce previously struck evidence constituted an abuse of process.

The appellant appealed a motion judge's order annulling the bankruptcy of a company (1947755 Ontario Ltd.) on two grounds: insolvency and abuse of process.

The appellant sought to introduce fresh evidence regarding the company's solvency.

The Court of Appeal dismissed the appeal, finding that the motion judge's conclusion of abuse of process was supported by the evidence and was sufficient to justify the annulment, rendering the fresh evidence on solvency irrelevant to the outcome.

The creditor, Baoling Zhang, brought a motion for an order under subsection 38(1) of the Bankruptcy and Insolvency Act, authorizing her, nunc pro tunc, to commence a proceeding against the bankrupt, Xiuzhen Guan, to challenge fraudulent conveyances of real property.

Zhang also sought leave to issue and register a certificate of pending litigation (CPL) on title to one of the properties.

The court granted the section 38 motion, finding that Zhang met all preconditions and that a nunc pro tunc order was warranted.

However, the request for a CPL was adjourned sine die, as the registrar in bankruptcy lacked jurisdiction to grant a CPL under the Courts of Justice Act and Rules of Civil Procedure for actions under the Fraudulent Conveyances Act.

The court did grant an interim preservation order for 45 days to prevent the property from being conveyed, allowing Zhang time to amend her claim to seek relief under section 96 of the BIA.

Johnstone & Cowling Management Inc. (JCM) brought a motion under section 69.4 of the Bankruptcy and Insolvency Act to lift the stay of proceedings against Hour Media Group Inc. (the bankrupt) and its principal, Carolyn Michele Hourigan, to commence an action for fraud, breach of trust, and conversion.

The bankrupt and Ms. Hourigan did not oppose the motion.

The court adjourned the motion, directing JCM to serve the Office of the Superintendent in Bankruptcy (OSB), emphasizing that the OSB is an interested party in all bankruptcy motions and applications due to its supervisory and intervention powers under the BIA and Bankruptcy Rules.

The court indicated it would grant the order if the OSB did not contact counsel or the court within 10 days of service.

The Administrator brought a motion under the Bankruptcy and Insolvency Act (BIA) to revive a consumer proposal that had been deemed annulled due to the debtor's default.

The primary legal question was whether the court had jurisdiction to revive a consumer proposal after the statutory five-year performance period had expired.

The court, relying on prior jurisprudence, including *Shareef Zahrawi*, affirmed its jurisdiction, citing BIA subsections 66.31(9) and 187(11).

Considering factors such as the proposal being near completion, the reason for default (insufficient work hours), and the absence of creditor opposition, the court granted the motion, waiving the debtor's defaults and allowing payments to resume.

The appellant's property was sold under power of sale.

She initiated an action alleging conspiracy to defraud and moved to set aside the sale, claiming fraud and improvidence.

The motion judge dismissed all claims except for an accounting by the mortgagee.

The Court of Appeal dismissed the appeal, finding no direct or circumstantial evidence of fraud, and that the sale was not improvident, especially considering the appellant's history of default and delay.

This is an appeal from a motion judge's order setting aside the appellant's discharge from bankruptcy and vesting shares of a corporation (Bindaas Capital) in the trustee.

The motion judge found that the appellant, while an undischarged bankrupt, owned and operated Bindaas Capital, failed to disclose this asset, and fabricated documents to conceal his ownership.

The Court of Appeal dismissed the appeal, affirming the motion judge's findings and the discretionary decision to annul the discharge.

The court found no palpable and overriding error in the factual findings or the exercise of discretion, and upheld the trustee's authority to pursue the after-acquired property.

Erich Genseberger moved to annul the bankruptcy of Kate Alexander under s. 181(1) of the Bankruptcy and Insolvency Act, alleging insolvency was not met or that the assignment was an abuse of process due to her conduct in ongoing family law proceedings and asset dissipation.

The Trustee and other creditors opposed, arguing the Debtor was insolvent at the time of assignment and her past conduct, while problematic, did not constitute an abuse of process for annulment purposes.

The court dismissed the motion, finding the Debtor was insolvent at the time of assignment and her conduct, while frustrating, did not meet the high bar for abuse of process required for annulment.

The family law stay was lifted to allow the equalization claim to proceed, and the matrimonial home was ordered to be sold by the Trustee for the benefit of all creditors.

The plaintiff was successful on an unopposed motion to amend the statement of claim to substitute the names of previously unidentified defendants.

The defendant Torrecampo opposed the motion without evidence of prejudice, leading to unnecessary cross-examinations and wasted time.

The court awarded the plaintiff partial indemnity costs of $9,000 plus HST and disbursements, finding the amount reasonable and proportionate under the Rules of Civil Procedure.

The appellant sought to set aside a Registrar's order dismissing her appeal for delay and to extend time to perfect the appeal.

The underlying appeal concerned a motion judge's decision to dismiss the appellant's action via reverse summary judgment, which sought to set aside a property transfer under power of sale due to alleged fraud and conspiracy.

The Court of Appeal granted the appellant's request, finding that despite some delay, she maintained an intention to appeal and had arguable grounds, particularly regarding the motion judge's assessment of "badges of fraud" in the context of a power of sale and the chargee's duties.

The court also clarified that a writ of possession requires a pre-existing order for possession, which the purchaser lacked.

The plaintiff brought a motion for summary judgment against the corporate defendant and its director for repayment of two loans and associated fees.

The court found that the fees charged on the loans amounted to effective interest rates of 150% and 180%, which exceeded the criminal rate of interest under the Criminal Code.

The court set aside the fees under the Unconscionable Transactions Relief Act but granted summary judgment for the principal amount of the loans.

The court also found the director personally liable as a guarantor, as she signed the promissory note without indicating she was signing solely in a corporate capacity.

The claimant and the bankrupt appealed two decisions of the Registrar in Bankruptcy that refused to extend the time for the claimant to appeal the Trustee's Notice of Disallowance of her claim to a beneficial interest in a property, and subsequently granted the Trustee's motion to sell the property.

The Superior Court found that the bankrupt had standing to appeal.

The Court held that the Registrar made palpable and overriding errors of fact in applying the test for an extension of time, specifically by ignoring evidence that the claimant formed an intention to appeal within the prescribed time and had a reasonable explanation for the delay.

The appeals were allowed, the Registrar's decisions were set aside, and the time to appeal the disallowance was extended.