Michael A. Penny

The Ontario Nurses Association (ONA) brought a motion under the CCAA seeking an order to restructure the Victorian Order of Nurses for Canada (VON Canada) pension plan.

The ONA proposed transferring assets and liabilities related to VON Ontario employees into a new pension plan and sought a declaration that VON Ontario was not jointly and severally liable for any pension deficits.

The court dismissed the motion, finding that the ONA's proposal did not advance the CCAA's policy objectives of fostering going concern restructuring and avoiding liquidation.

The court also applied the business judgment rule, deferring to VON Canada's board decision to maintain the status quo, and deemed the request for a declaration on future liabilities premature and speculative.

Zayo Inc. brought a motion seeking an order for FTI Consulting Canada Inc., as Monitor for the Primus Entities, to pay Zayo $1,228,799.81 from asset sale proceeds.

This amount represented pre-CCAA filing arrears owed to Zayo under contracts assigned to Birch Communications Inc. Zayo argued the consent process for assignment was not transparent or fair, alleging it was misled into consenting without realizing it could have leveraged Section 11.3(4) of the CCAA to demand full payment of arrears.

The court dismissed the motion, finding the consent process fair and transparent, noting Zayo's sophistication and lack of due diligence.

The court also found that granting the order would cause prejudice to secured lenders and Birch, as it would require varying existing orders and disrupt a closed transaction.

The defendant brought a motion for a commission to take evidence in Hong Kong for himself and five non-party witnesses.

The plaintiff opposed on grounds of jurisdiction, the test under Rule 36, and the open court principle.

The court granted the motion for the non-party witnesses, with the trial judge acting as commissioner, finding it necessary for a fair trial as these witnesses were not compellable in Ontario.

However, the motion for the defendant's own evidence to be taken on commission was dismissed, as he failed to demonstrate a sufficient reason for not attending in Toronto, given his status as a party who had attorned to the court's jurisdiction and the significant costs involved.

The court also found that the commission evidence process, with the trial judge acting as commissioner, did not offend the open court principle or jurisdictional boundaries.

The Toronto-Dominion Bank (TD) brought an application under the Personal Property Security Act for an order authorizing a private receiver to take possession and sell property of The Hockey Academy Inc. (the debtor).

The central dispute was whether rink equipment installed by the debtor became fixtures owned by the landlord, Champagne Centre Ltd. (CCL), or remained the debtor's property subject to TD's security interest.

The court interpreted the lease amendments, finding that the debtor was required to remove the rink equipment upon lease termination, which implied continued ownership by the debtor.

Consequently, TD's security interest had priority over CCL's claim.

The court granted TD possession of the equipment and ordered a reference to determine the value CCL owed TD for its wrongful use of the equipment.

The applicants sought to declare invalid a meeting of Torah V’Avodah Congregation (TVA) members held on November 13, 2013, which purported to remove existing trustees and close membership, arguing a lack of proper notice.

The court found that the applicants, including the incumbent trustees and Mizrachi Organization of Canada, had a demonstrable interest and were deliberately denied effective notice.

Consequently, the meeting and its resolutions, including the removal of trustees and changes to property title and mortgage, were declared invalid.

The court declined to make a declaration of ownership of the Wilson property, deeming it premature due to unresolved factual disputes regarding membership, trusteeship, and beneficial ownership claims.

The status quo was ordered to be preserved, with applicant trustees continuing administration but restricted from major transactions without court sanction.

The applicant sought to invalidate a Continuing Power of Attorney for Property granted by his mother to his brother, alleging lack of capacity and undue influence.

The applicant also sought to replace his brother with a professional interim guardian.

The court found that the mother had the requisite capacity to grant the power of attorney and that there was no evidence of coercion or suspicious circumstances to establish undue influence.

The application to replace the attorney was dismissed, but the brother was ordered to pass his accounts annually to ensure transparency.

Greenfix Golf Inc. sued Sportcover International Inc. for breach of a distribution agreement, alleging unpaid minimum royalties.

Sportcover defended by arguing the minimums were not payment obligations but protection against early termination, and counterclaimed for negligent misrepresentation.

The court found that the distribution agreement clearly stipulated annual minimum royalty payments and rejected Sportcover's interpretation.

The court also dismissed Sportcover's defenses of estoppel and waiver, and its counterclaim for negligent misrepresentation, finding no detrimental reliance or valid misrepresentation.

Damages were awarded to Greenfix based on the unpaid minimum royalties, and the court found no duty to mitigate under the "lost volume" principle given the non-exclusive nature of the agreement.

This case involves a dispute among seven siblings over the equal distribution of their deceased parents' assets, held in part through an estate freeze vehicle, 1280584 Ontario Inc. The applicants sought an order for production of additional financial records or the appointment of an inspector under the Ontario Business Corporations Act, arguing that the respondent's accounting was inaccurate and incomplete.

The court found deep distrust and obstruction from the respondents, warranting independent review.

The Bank of Montreal moved for summary judgment to dismiss an action brought by The Midas Investment Corporation, which alleged negligence by the Bank in allowing fraudulent account activity.

Midas claimed the Bank was negligent in opening and operating an account used by two individuals, Kavanaugh and Commisso, to defraud Midas of over $3 million, arguing the Bank should have been put on inquiry due to irregularities, thus disentitling it from relying on the indoor management rule.

The court dismissed the motion for summary judgment, finding a genuine issue requiring a trial regarding whether the Bank was put on inquiry by inconsistencies in corporate documentation and account activity, and noting incomplete document production and the absence of expert evidence.

The plaintiff sought specific performance of an agreement of purchase and sale for a 75% interest in 200 acres of land and shares in a bare trustee corporation.

The agreement failed to close due to disputes over directors' resolutions for share transfers and extensions.

The court found the defendant vendors breached their good faith obligation to close and failed to deliver a valid directors' resolution.

The defendants' arguments of no agreement to extend, no obligation to extend, mutual mistake, and the purchaser not being in funds were rejected.

Specific performance was deemed the appropriate remedy due to the uniqueness of the property.

The third-party claim against the vendors' lawyers for negligence was dismissed, as their advice was consistent with a proper interpretation of the joint venture agreement.

Gabor Horvath, founder and majority shareholder of Securefact Inc., brought an application under the Ontario Business Corporations Act to rescind a resolution removing him as a director.

Horvath had previously agreed to vote his shares as instructed by the principal lender, 2283074 Ontario Inc. (228), with an exception for matters "relating to the redemption" of 228's Class A shares.

Horvath argued that the resolution to remove him, and his counter-proposals, related to a potential transaction that would redeem 228's shares, thus falling under the exception.

The court dismissed the application, finding that the "relating to" exception was not intended to gut the primary purpose of the voting undertaking, which was to give 228 control over the company's management.

The court also found the oppression remedy claim premature.

The applicant, a customer of a bankrupt securities firm, sought to establish a claim against the bankrupt estate's general fund for post-bankruptcy increases in the value of liquidated foreign futures contracts.

The court held that while Part XII of the Bankruptcy and Insolvency Act does not preclude a customer from making a claim against the general fund as an ordinary creditor, the applicant only had a provable claim for contracts that vested in the trustee on the date of bankruptcy, not for those liquidated prior to bankruptcy due to subagent insolvency.

The court also dismissed the applicant's request for an equitable priority over other general creditors.

The plaintiffs, shareholders in several real estate corporations, sought leave to commence a derivative action and amended their statement of claim to add new causes of action following the discovery of a multi-million dollar fraud by a co-investor.

The defendants moved to strike the new claims and opposed the derivative action.

The court held that the motion for leave to commence a derivative action was statute-barred under the Limitations Act, 2002, applying the Supreme Court's reasoning in CIBC v. Green regarding the unavailability of nunc pro tunc orders to circumvent expired limitation periods.

The court also struck the new claims for breach of contract, breach of fiduciary duty, and negligence as statute-barred, but allowed the unjust enrichment and oppression claims to proceed.

Danier Leather Inc. filed a Notice of Intention to make a proposal under the Bankruptcy and Insolvency Act.

The company brought a motion to approve a stalking horse agreement, a Sale and Investment Solicitation Process (SISP), and various priority charges including an Administration Charge, a Directors and Officers (D&O) Charge, and a Key Employee Retention Plan (KERP) Charge.

The court applied the Nortel criteria and found the SISP and stalking horse agreement were warranted to maximize value.

The court also approved the requested charges and granted a sealing order over the KERP details and the stalking horse offer summary.

The plaintiffs brought a motion for further document production, including an independent search of a defendant's emails, and costs thrown away due to a trial adjournment.

The defendants brought motions for leave to amend a statement of defence and for production of settlement agreements between the plaintiffs and other defendants.

The court dismissed the plaintiffs' discovery motion, finding they had declared readiness for trial despite knowing of the alleged document deficiencies.

The defendants' motion for production of settlement agreements was granted in part, with individual settlement amounts ordered redacted.

The applicants, a group of integrated telecommunications companies operating in Canada and the US, sought an initial order under the CCAA.

Facing declining revenues and defaults on secured credit agreements, the companies required protection to implement a pre-filing sales process.

The court granted the initial order, finding the applicants were insolvent debtor companies.

The court also approved an Administration Charge of $1 million, a Directors' and Officers' Charge of $3.1 million, and authorized FTI Consulting Canada Inc. to act as the foreign representative to seek recognition of the proceedings in the United States under Chapter 15 of the Bankruptcy Code.

Applicants sought an initial order under the Companies’ Creditors Arrangement Act to obtain court protection while restructuring a national not‑for‑profit healthcare organization suffering significant liquidity shortfalls.

The court found the applicants insolvent and satisfied that the statutory requirements for CCAA protection were met.

The court granted a stay of proceedings, approved a modified cash management system, appointed a monitor and chief restructuring officer, and approved administration and directors’ charges and a key employee retention plan.

The court also appointed a receiver over certain intellectual property and goodwill to enable terminated employees to access benefits under the Wage Earner Protection Program Act.

A comeback hearing was scheduled to permit creditors to raise concerns.

Judgment creditors appealed under s. 81 of the Bankruptcy and Insolvency Act from a trustee’s disallowance of their proof of claim asserting that funds in a segregated “Accumulating Account” were held in trust for their benefit.

The account had been created pursuant to terms imposed by the Ontario Securities Commission requiring the bankrupt investment dealer to accumulate assets sufficient to satisfy a judgment while an appeal was pending.

The appellants argued the regulatory arrangements and segregation of funds established the three certainties necessary to form a trust.

The court held that the regulatory conditions were intended to preserve assets pending resolution of the judgment rather than to create a trust conferring beneficial ownership on the judgment creditors.

As certainty of intention to create a trust was not established, the funds formed part of the bankrupt estate.

The moving defendants sought dismissal of the plaintiffs’ action for delay under Rule 24.01(c) of the Rules of Civil Procedure.

The court examined whether the delay was inordinate and inexcusable and whether it created a substantial risk that a fair trial was no longer possible.

The action had been commenced in 1987 and had not been set down for trial for more than 25 years, with long periods of inactivity attributable to the plaintiffs.

The court held the explanations offered, including related insolvency proceedings, settlement discussions, and financial constraints, were insufficient.

Presumed prejudice was not rebutted and actual prejudice was established due to unavailable key witnesses.

The action was dismissed for delay.

The moving defendants sought summary judgment dismissing a fraudulent conveyance and knowing assistance action as statute-barred under the Limitations Act, 2002.

The action arose from efforts to enforce a substantial divorce judgment where assets were allegedly transferred through corporate structures to defeat execution.

The court held that the material facts underlying the claims were not discoverable until an equitable receiver, appointed in aid of execution, obtained corporate records in 2010 that had previously been withheld.

The action commenced in 2012 was therefore within the limitation period.

The court also ruled that the defendant named as estate trustee of a deceased individual was not in fact the estate trustee but appointed her as litigation administrator of the estate under Rule 9.03(2).