Maya Poliak

The court considered whether to dismiss a bankruptcy application brought by Bioventus, LLC against Trindent Consulting Management International Inc. under section 43(7) of the Bankruptcy and Insolvency Act, in light of Trindent’s prior U.S. Chapter 7 bankruptcy.

The court found that Canadian law allows for concurrent insolvency proceedings and that the statutory remedies under the BIA are not property of the debtor’s estate.

The motion to dismiss was denied, and the bankruptcy application may proceed.

These two appeals arise from a receivership order under the Bankruptcy and Insolvency Act.

The motion judge found both the debtor and its management, as well as United Group of Companies and its management, in civil contempt of the receivership and asset recovery orders.

The Court of Appeal dismissed the appeals, finding no error in the motion judge’s reasoning or exercise of discretion, and confirmed the costs awards and sentences imposed.

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.

The Applicants, a group of cannabis companies, sought various relief in their CCAA proceedings, including amending a prior order, increasing debtor-in-possession (DIP) financing, extending a stay of proceedings, approving professional fees, and approving a Sale and Investor Solicitation Process (SISP) with a stalking horse bid.

Certain creditors, CJ Marketing Ltd. and Arthur Minh Tri Nguyen-Cao, opposed the commitment fee for the DIP financing and the break fee for the stalking horse bid.

The court approved all requested relief, finding the DIP facility terms fair and reasonable given the challenging cannabis sector and the necessity of funding.

The SISP and its associated break fee were also approved, with the court noting the fee was a reasonable reimbursement of costs and did not appear to have a chilling effect on other potential bidders.

In a Companies’ Creditors Arrangement Act (CCAA) proceeding, the applicants sought an Amended and Restated Initial Order (ARIO) to extend a stay of proceedings, approve debtor-in-possession (DIP) financing, and increase court-ordered priority charges.

A central issue was whether Ernst & Young Inc. (E&Y) should continue as Monitor, given that an affiliate had acted as the applicants' auditor within the two-year restricted period under CCAA s. 11.7(2).

The court granted the stay extension, approved the DIP financing, and increased the charges, finding these necessary for the restructuring.

However, the court denied E&Y's continuation as Monitor, emphasizing a stricter interpretation of CCAA s. 11.7(2).

The court found no "extenuating or unique circumstances" to override the general rule against appointing a former auditor within the restricted period, despite arguments of cost-effectiveness and existing knowledge.

FTI Consulting Canada Inc. was appointed as the new Monitor.

The applicant, Romspen Investment Corporation, sought the appointment of a receiver over the respondents' property and approval of an agreement of purchase and sale (the "Times Transaction").

A fifth-ranking mortgagee, Sow Capital Ontario Limited, brought a competing motion to approve its own power of sale transaction (the "281 Transaction") and sought to suspend the receiver's powers.

The respondents opposed both sale transactions, arguing for a receiver-conducted auction.

The court appointed Ernst & Young Inc. as receiver, approved the Times Transaction, and granted a sealing order, finding that the Times Transaction offered the best outcome for all stakeholders and that a further sales process was unnecessary.

The court dismissed Sow's motion to suspend receivership powers and the respondents' request for an auction or a reservation of rights to claim improvident sale.

This appeal arose from a failed business venture to revive a bankrupt manufacturing company, involving a secured loan and asset transfer via a Quitclaim Deed.

The Court of Appeal heard two appeals: one concerning the enforceability of the Quitclaim Deed for asset transfer, and another regarding compensation for a former operator based on unjust enrichment.

The Court dismissed the appeal concerning the assets, affirming the Quitclaim's unenforceability due to lack of certainty.

However, it allowed the appeal regarding the former operator's salary, finding that unjust enrichment was not established and that the corporate veil could not be pierced to hold the appellant company liable for work done for a subsidiary.

The plaintiff factor moved for summary judgment against the defendants on personal guarantees they signed for a corporate borrower's debts.

The defendants argued they subjectively understood the guarantees only applied to the first factoring draw, and later claimed the plaintiff's president orally confirmed this limitation.

Applying the Hryniak framework, the court found no genuine issue requiring a trial, holding that subjective intentions cannot contradict the plain wording of a continuing guarantee and utilizing enhanced fact-finding powers to reject the defendants' late-raised oral evidence as incredible.

Summary judgment was granted to the plaintiff.

The Trustee in bankruptcy sought court orders for access to the bankrupt's leased premises and an extension of the three-month period under s. 38(2) of the Commercial Tenancies Act to elect to retain or assign the lease.

The Landlord opposed, arguing the Trustee had no right to access or assign the lease, and no legal basis existed to extend the period.

The court found that the Trustee, distinct from the Receiver, retained its rights under the CTA, including access for marketing the lease.

The court also held it had jurisdiction to extend the s. 38(2) period, not through inherent jurisdiction, but by applying s. 2 of Ontario Regulation 73/20 (the COVID-19 Suspension Order), which suspends periods for steps in proceedings.

The court granted a 90-day extension, subject to conditions regarding occupation rent, and ordered the parties to bear their own costs due to the mixed result.

The applicants sought a declaration of ownership over certain equipment and assets ("BuiltRite Assets") and an order compelling respondents to release them, asserting a first-ranking security interest.

The dispute centered on whether a Quitclaim effectively transferred ownership of "Trailered Assets" to Strongco Plastics Ltd. The respondents argued the Quitclaim lacked certainty and consideration, and that claims against the Hernandezes were stayed due to bankruptcy.

Marcelo Hernandez also cross-applied for compensation for work performed.

The court found the Quitclaim unenforceable due to lack of certainty and consideration, dismissing the applicants' claims regarding asset ownership.

The court also found ESC Enterprises Inc. unjustly enriched by Marcelo Hernandez's services and awarded him compensation.

The MGMIC Receiver sought a declaration that a second mortgage on Dovercourt Road was valid and enforceable, allowing distribution of sale proceeds to MGMIC investors.

The non-party A13MG argued the mortgage was invalid due to lack of shareholder consent and alleged fraud by MGMIC's directors.

The court found the mortgage valid, citing evidence of consent through email exchanges and the "Indoor Management Rule" under the OBCA.

The court also held that even if invalid, an equitable mortgage would exist to prevent injustice to innocent investors.

A13MG's fraud action was deemed a nullity due to failure to obtain leave.

This case involved two motions within a bankruptcy proceeding.

The bankrupt, Dennis Wing, sought to lift a freeze direction imposed by the Ontario Securities Commission (OSC) on his registered retirement saving plan (RRSP) and locked-in retirement accounts (LIR), arguing they were exempt assets under the Bankruptcy and Insolvency Act (BIA).

The OSC, in turn, sought a declaration that a monetary penalty and costs ordered against Wing for violating a cease trade order (CTO) were not claims provable in bankruptcy, allowing them to enforce the claims post-discharge.

The court dismissed Wing's motion, finding the freeze direction served a purpose given potential opposition to his discharge.

The court granted the OSC's motion, applying the three-part test from AbitibiBowater and Orphan Well Association, concluding that the OSC was not a creditor, the obligation was not incurred before bankruptcy, and the claim's monetary value was too speculative at the date of bankruptcy.

The court also found that a subsequent settlement agreement superseded an earlier undertaking by the OSC regarding enforcement.

The court-appointed receiver, Grant Thornton Limited, brought a motion to disallow approximately $105.5 million in claims made by companies owned or controlled by Enzo Mizzi (the "Claimants") against the Silverfern Secured Mortgage Fund and GTA Private Capital Income Fund (the "Mortgage Investment Funds").

The Claimants alleged damages for loss of profit due to the Mortgage Investment Funds' failure to advance loan amounts and for costs of development services.

The court determined that the motion should proceed summarily, with the onus on the Claimants to prove the Receiver made an error of law or palpable and overriding error of fact.

The court found no evidence that the Mortgage Investment Funds were parties to the loan agreements or had an obligation to advance funds, nor any agreement to pay for development costs.

Consequently, all disputed claims were disallowed.

The Receiver for the Paramount Group sought an order to appoint itself as receiver over Virk Hospitality Corp.'s assets due to alleged defaults on a $21 million loan.

The court found Virk in default for failing to repay the loan on its two-year maturity date, breaching a postponement agreement by misdirecting funds, and failing to pay property taxes.

The court granted the motion, finding it just and convenient to appoint the Receiver over Virk's property, assets, and undertakings.

The appellants appealed a judgment of the Superior Court of Justice dated October 7, 2016.

The appeal was abandoned by the appellants.

Costs of the appeal were fixed in the amount of $4,250.00 all inclusive against the Gottardos and Kleinridge.

An appeal by 2346193 Ontario Limited from a judgment of the Superior Court of Justice dated October 7, 2016, was stayed pursuant to the Bankruptcy and Insolvency Act.

The court declined to make an order for costs.

The plaintiff and third party brought motions for summary judgment against the defendant regarding an equipment lease for a commercial printer.

The defendant had stopped making lease payments, alleging the printer was defective, but had signed agreements containing broad exclusion clauses.

The court found the exclusion clauses were neither unconscionable nor contrary to public policy, noting the defendant was a sophisticated commercial entity that chose not to read the contracts.

The court granted summary judgment for both the plaintiff and third party, awarding damages and costs, and strongly criticized the defendant's failure to file a factum.

The plaintiff bank brought a motion for summary judgment against two guarantors of a commercial loan after the borrowers defaulted.

The guarantors raised numerous defences, including alleged inducement, alleged oral representations that the guarantee would be removed after certain payments, discovery complaints, and arguments relating to receivership proceedings and an alleged forbearance agreement.

The court held that none of the defences raised a genuine issue requiring a trial and that the plaintiff had established its claim on a balance of probabilities.

Applying the principles from Hryniak v. Mauldin, the court concluded that summary judgment was appropriate and granted judgment against the guarantors for their 30% liability under the guarantee together with contractual interest.

Costs were awarded to the plaintiff.

A court-appointed receiver sought summary judgment for payment under a manufacturing contract after the defendant failed to pay the contract price for equipment that had been delivered and for which the defendant had already been paid by its own customer.

The defendant asserted legal and equitable set-off based on alleged claims arising from earlier contracts and potential future warranty liabilities.

The court held that the prior claims were unliquidated and unrelated to the contract at issue and therefore could not ground legal or equitable set-off.

The alleged contingent warranty claims were speculative and unsupported by evidence.

Summary judgment was granted in favour of the receiver.

The plaintiff sought summary judgment to enforce a credit agreement allegedly imposing personal liability on a corporate officer for approximately USD $750,000 in debts owed by a corporation.

The respondent argued the agreement was ambiguous, that he did not knowingly assume personal liability, and that key elements of contract formation—including consensus ad idem and consideration—were in dispute.

The court held that the standard form credit application was incomplete, ambiguous, and embedded with potentially onerous personal liability language that had not been clearly brought to the respondent’s attention.

Applying the summary judgment principles articulated by the Court of Appeal, the court found that the evidentiary record did not permit a full appreciation of the factual matrix surrounding the agreement’s formation.

As a result, genuine issues requiring a trial existed regarding the execution, interpretation, and enforceability of the alleged personal guarantee.