Michael A. Penny

In the context of a CCAA restructuring, the respondent was previously ordered to specifically perform its obligation to reconvey certain lands to a special purpose entity, which had agreed to sell a portion of those lands to the moving party.

The respondent refused to complete the reconveyance, arguing that the parties had not agreed on the terms of 'shared facilities and/or reciprocal easement agreements' required under the reconveyance agreement.

The moving party brought a motion for the court to interpret the agreement and impose terms.

The court held it had jurisdiction to determine the terms of the reconveyance and found that the respondent's demanded easements (including for undefined future utilities, carbon sequestration, and emissions) were not valid easements at common law and did not meet the contractual requirement of being 'shared' or 'reciprocal'.

The court directed the parties to attempt one final negotiation before it would impose the final terms of the easement agreement.

The applicant, Competition Motors Limited (CML), sought to set aside an arbitral award from an Appeal Panel under the National Automobile Dealer Arbitration Program (NADAP) Rules, pursuant to sections 46(1)3 and 6 of the Arbitration Act, 1991.

CML argued the Appeal Panel exceeded its jurisdiction by applying an incorrect standard of review (correctness on facts without deference, akin to a de novo hearing) when reversing an initial arbitral decision that found Toyota Canada Inc. (TCI) unreasonably withheld consent to CML's dealership sale.

The court dismissed CML's application, finding that the issue raised was not one of true jurisdiction under s. 46(1)3, and even if it were, the Appeal Panel acted within its mandate by interpreting and applying the NADAP Rules' unique correctness standard for both law and fact, which allows for a re-evaluation of evidence to reach a "better" conclusion without conducting a full de novo trial.

The court also dismissed the procedural fairness argument as it was contingent on the jurisdictional claim.

The Court-appointed liquidator of Morrison Laurier Mortgage Corporation sought approval for the sale of the Corporation's last non-cash asset, an office building.

The motion was opposed by a preferred shareholder who proposed an alternative transaction involving share redemption.

The court granted the liquidator's motion, affirming the deference owed to a liquidator's business judgment and the integrity of the court-approved sales process.

The court found the alternative proposal was not properly submitted within the process and lacked sufficient detail and financial backing.

The plaintiffs moved for an interlocutory injunction to prevent the defendant from terminating an agreement for the supply of water and wastewater treatment services.

The defendant had threatened to terminate the services on 60 days' notice unless the plaintiffs paid a massive retroactive price increase.

The court found that the injunction was prohibitory, but that the plaintiffs had met the higher standard of a strong prima facie case regardless.

The court held that the defendant's use of the termination clause to extort a unilateral price increase was a strong prima facie breach of the duty of good faith performance.

Finding irreparable harm and a balance of convenience favouring the plaintiffs, the court granted the injunction for nine months to allow the plaintiffs to build their own water recycling facilities.

The court addressed two pretrial motions: one seeking to stay a counterclaim based on abuse of process due to delayed disclosure of a cooperation agreement, and another seeking leave for third-party discovery.

The motion to stay was dismissed, as the immediate disclosure rule for settlement agreements was found not to apply to agreements with non-parties.

The motion for third-party discovery was granted, with the court finding the non-party's evidence critical and that the cooperation agreement constituted a constructive refusal to provide information, making a pretrial examination necessary for trial fairness.

The plaintiff moved to disqualify Norton Rose Fulbright LLP (NRF) from acting as lawyers of record for the K2 defendants.

The plaintiff argued that it was a current client of NRF for patent applications, and that NRF's representation of the K2 defendants in this litigation, which involved allegations that the plaintiff's core technology did not exist, created a disqualifying conflict of interest.

The court found that the two mandates were substantially related and that the bright line rule applied, rendering the advance waiver in NRF's engagement letter ineffective.

The motion to disqualify NRF was granted.

The plaintiffs sought to enforce an "Outline of Terms of Settlement" reached during mediation, arguing it constituted a binding agreement.

The defendants contended that the Outline was not intended to be enforceable and lacked essential terms.

The court found that the Outline did not objectively reflect a mutual intention to create a binding agreement and that numerous material issues, including debt reallocation, minority shareholder rights, and tax implications of asset transfers, remained unresolved.

The court dismissed the motion, emphasizing that it cannot create a contract for parties where essential terms are missing.

The plaintiffs sued the Bank for $80 million, alleging it unlawfully froze their accounts.

The Bank counterclaimed for $4.581 million, representing loans advanced under the HASCAP and CEBA COVID-19 relief programs, alleging the loans were obtained through fraudulent misrepresentation.

The Bank moved for summary judgment to dismiss the plaintiffs' action and grant its counterclaim.

The court denied the plaintiffs' last-minute adjournment request, finding it was a deliberate delay tactic.

The court granted summary judgment, finding the plaintiffs fabricated financial statements and businesses to obtain the loans, which were then improperly transferred to personal investment accounts.

The plaintiffs' action was dismissed, and the Bank was awarded $4.581 million plus substantial indemnity costs.

The responding parties brought an application seeking declaratory relief regarding the moving parties' alleged failure to retain an operator for a light rail transit project.

The moving parties brought a motion to stay the application in favour of arbitration, relying on a dispute resolution clause in prior Minutes of Settlement.

The court granted the stay, applying the competence-competence principle and finding that the moving parties established an arguable case that the dispute fell within the arbitration agreement.

The court also found no undue delay by the moving parties in seeking the stay.

The plaintiffs, representing a class of small to medium-sized businesses, sought coverage under their business interruption insurance policies for losses sustained due to the COVID-19 pandemic and related civil authority orders.

The court held a common issues trial to determine whether the presence of the SARS-CoV-2 virus or government lockdown orders could cause 'physical loss or damage to property' within the meaning of the policies.

The court concluded that the virus does not physically alter or damage inanimate surfaces, and that the loss of use of the premises due to government orders does not constitute physical loss or damage.

Consequently, the court answered the certified common issues in the negative, finding no coverage under the business interruption provisions.

The Applicants, minority shareholders, sought to enforce a "shotgun" buy/sell provision in a unanimous shareholders agreement (USA) against the Respondent, the majority shareholder.

The Respondent failed to exercise his option to buy or sell within the stipulated 15-day period, arguing the Applicants' buy/sell notice was invalid due to alleged threats of mass resignation by management, bad faith, oppression, and breach of implied terms.

The court found the buy/sell notice strictly complied with the USA and rejected the Respondent's arguments, finding no evidence of unlawful threats or breaches of duty.

The court also denied the Respondent's request to convert the application into a trial and consolidate it with a separate action, emphasizing the purpose of buy/sell provisions for expeditious resolution.

The application was granted, deeming the Respondent to have accepted the offer to sell his shares.

This endorsement concerns a motion by Acerus Pharmaceuticals Corporation and its subsidiaries (the Applicants) under the Companies’ Creditors Arrangement Act (CCAA) for approval of a Subscription Agreement, a reverse vesting order (ARVO), releases for various parties, a sealing order, and an extension of the stay of proceedings.

The proposed transaction involves First Generation Capital (FGC), the majority shareholder and secured creditor, acquiring the Applicants' business via a credit bid and share transaction, with excluded assets and liabilities vested out to Residual Cos.

The court analyzed the necessity and fairness of the ARVO structure, the sales process, the benefit to creditors compared to bankruptcy, and the appropriateness of the releases, ultimately granting all requested relief.

This is an appeal from a commercial arbitration award that found a metal purchase and sale agreement between Franco-Nevada and Taseko had been frustrated due to the denial of federal environmental approvals for a gold mine project.

The Superior Court of Justice, applying a reasonableness standard of review, found the arbitrator's conclusion unreasonable.

The court held that the arbitrator misapplied the test for frustration by failing to properly consider foreseeability and by misinterpreting the contract as project- and timeline-specific, despite provisions allowing for changes and a long term.

The appeal was granted, overturning the frustration finding.

A motion for a sealing order for confidential information was also granted.

This endorsement addresses two motions in a complex litigation involving allegations of misappropriation of confidential information and trademark infringement.

The first motion, brought by the plaintiffs, sought further document production from the defendants and leave to amend the claim.

The second motion, brought by certain defendants, sought forensic examination of specific electronic documents and production of network access records from the plaintiffs, and also proposed bifurcation of a key issue.

The court ordered reciprocal production of relevant confidential business documents under a protective order, denied bifurcation due to lack of consent, ordered the plaintiffs to undertake a forensic search for disputed electronic documents and produce network access records, and largely granted the motion to amend the claim, with the exception of a plea to pierce the corporate veil.

This application sought court approval for a plan of arrangement under the Business Corporations Act (Ontario) and the Trustee Act, involving Noranda Income Fund, 1884699 Ontario Inc., and Glencore Canada Corporation.

The arrangement facilitated Glencore's acquisition of all issued and outstanding priority units of the Fund for $1.98 per unit.

The court addressed the jurisdictional question regarding arrangements involving trusts, concluding it had jurisdiction under section 60 of the Trustee Act, applying an analogous test to corporate arrangements.

The court found the arrangement met the three requirements for approval: compliance with statutory and court-ordered requirements, good faith, and fairness and reasonableness, supported by independent advice, strong unitholder approval, and no dissent.

The application was granted.

In a CCAA restructuring proceeding, the applicant debtors brought a motion to extend phase 2 of the Sale and Investment Solicitation Process (SISP), increase the DIP loan limit, approve a Key Employee Retention Plan (KERP), and extend the stay of proceedings.

The primary secured creditor opposed the motion, arguing the debtors had already had their chance at restructuring.

The court balanced the potential prejudice to the secured creditor against the public interest in preserving jobs and the debtors' role in serving remote communities.

The court granted partial relief, approving a modest DIP loan increase of $170,000, a KERP of $70,000, and a shorter SISP extension to March 21, 2023, while denying the stay extension at this time.

The applicant, Growthworks Canadian Fund Ltd. (the Fund), sought an order in CCAA proceedings that its former manager, Growthworks WV Management Ltd. (the former manager), as the sole Class C shareholder, was not entitled to further dividends or payments upon the Fund's dissolution.

The former manager claimed entitlement to $672,390.61 as an incentive payment (IPA payment) on dissolution, arguing it was a debt or payable under specific share conditions.

The court dismissed the former manager's claim, finding the payment was not a debt and that the conditions for payment under the Class C share articles, specifically the performance tests, were not met as of the dissolution date due to the Fund's negative annualized rate of return.

Fletcher’s Fields Limited (FFL) sought the court's opinion and direction regarding the sale of its rugby fields and the distribution of proceeds.

FFL argued the fields were held in a non-charitable purpose trust for promoting rugby.

The court confirmed the existence and validity of this non-charitable purpose trust, finding that FFL held the fields as trustee for the promotion and playing of rugby.

The court also determined that FFL was unambiguously entitled to the sale proceeds and, upon dissolution, was obliged and entitled to distribute the remaining net proceeds to its shareholders, all of whom are not-for-profit corporations, as a return of share capital.

The applicant, Marmak Holdings Inc., brought a motion to compel an independent accountant (Baker Tilly Vaughan/KPMG) to produce its complete working file and underlying information related to a report prepared as part of a litigation settlement.

The report determined financial obligations between joint venture parties.

The court interpreted the original consent order, which granted access to "any and all information provided to" the accountant, and considered professional accounting standards.

The court dismissed the request for the complete file and working papers, finding them to be the accountant's work product.

However, it ordered the production of specific financial information akin to client property, such as starting trial balances, adjusting entries, accounts receivable/payable lists, and a schedule of rental income, as well as information supporting a market adjustment made in the report.

The court also ordered the parties to pay the accountant's outstanding invoice and fixed costs for the motion.

The Receiver sought approval of its activities, fees, and a determination of priority over three leased trucks.

The dispute was between the senior lender, RBC, which held a perfected general security agreement, and Paccar, which leased the trucks to the debtor but failed to perfect its security interest.

Paccar argued that as a 'true' lessor, it retained ownership and was exempt from the enforcement provisions of the Personal Property Security Act.

The court held that the 2007 amendments to the PPSA brought true leases of more than one year into the registration system.

Because Paccar failed to perfect its interest, it was subordinate to RBC's perfected security interest.

The court ordered Paccar to return the truck in its possession to the Receiver.