Miranda Spence

The moving parties (Vendors) sought to lift an automatic stay of an order requiring the responding party (Purchaser) to pay €855,155 pending the hearing of an application regarding an earn-out payment dispute.

The Purchaser had appealed the order, triggering an automatic stay under Rule 63.01(1).

The Court of Appeal granted the motion to lift the stay under Rule 63.01(5), finding that the Purchaser's financial instability created a material risk of non-payment, which constituted financial hardship for the Vendors.

To balance the risk to the Purchaser, the stay was lifted on the condition that the Vendors pay an equivalent amount into court as security pending the appeal.

The plaintiff, Ari Lesser, brought a motion under Rule 30.10 of the Rules of Civil Procedure seeking an order requiring third party Cogeco Connexion Inc. to disclose basic subscriber information associated with a specific IP address.

The court distinguished between Norwich orders and Rule 30.10 orders, finding that as an Associate Judge, it could not grant equitable relief but could grant the requested order under Rule 30.10.

The court found the information sought was relevant and necessary, and that the plaintiff had established a prima facie case against the unknown defendants.

The motion was granted.

This decision concerns an appeal by Zeifman Partners Inc., as Trustee in Bankruptcy of Oragin Foods Inc., from the disallowance by KPMG Inc., as Trustee in Bankruptcy of Organic Garage (Canada) Ltd., of a proof of claim for $6,760,280.89.

The claim was based on alleged intercompany loans and a note payable.

The court allowed the appeal in part, admitting the "Current Liability Component" ($2,917,423.11) as a proven unsecured claim, but dismissed the appeal regarding the "Long Term Liability Component" and "Note Payable Component," finding insufficient evidence that these were debts rather than equity contributions.

The decision provides a detailed analysis of the distinction between debt and equity in the context of related-party transactions in insolvency, and the applicable standards of review.

The plaintiff, Ari Lesser, brought a motion for a Norwich order compelling Change.org to produce subscriber information identifying the creator of a petition that allegedly defamed him.

The court reviewed the legal test for granting a Norwich order, including the necessity of the information, the relationship between the applicant and the third party, and the interests of justice.

The court found that all criteria were met and granted the order, allowing the plaintiff to obtain the requested information from Change.org.

The Ontario Securities Commission (OSC) applied for the appointment of a receiver over the respondents under section 129 of the Securities Act.

The parties sought directions from the court regarding non-disclosure obligations under sections 16 and 17 of the Act, particularly concerning the production and use of investigation materials.

The court endorsed a protocol allowing redacted and unredacted affidavits to be filed, balancing the need for confidentiality with the respondents’ right to make full answer and defence.

The court also addressed scheduling and adjournment of the application, confirming the interim monitorship and setting a new hearing date.

This decision addresses three motions in the receivership of the Bridging Funds: (1) the Receiver’s motion for an interim distribution to unitholders, (2) approval of a settlement with the BlackRock Parties, and (3) the unitholders’ motion for a constructive trust.

The court approved the interim distribution but required a sufficient reserve for the disputed Cerieco claim until its final determination.

The BlackRock settlement was approved.

The constructive trust motion was deferred pending resolution of the Cerieco claim.

The decision provides detailed guidance on the treatment of creditor and unitholder claims in a complex receivership under the Securities Act.

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 court-appointed Receiver sought approval for the sale of a property owned by the Debtor, 253 Queen Street Inc., and an Administration Order.

The sale was supported by secured creditors Homedale-Eagle Corporation and Sky Mortgage Corporation but opposed by the Debtor and its equity holders.

The opposing parties argued the purchase price was too low, the environmental indemnity was not assumed by the purchaser, and their beneficial interest in the property was not recognized.

The court applied the Soundair principles for approving sales in receivership, finding the Receiver acted providently and fairly.

The court rejected the claims of beneficial ownership based on trust law and the Land Titles Act, affirming the priority of registered mortgages over unregistered beneficial interests.

The Receiver's motion for approval of the sale and the Administration Order was granted.

The applicant, Appili Therapeutics Inc., brought a motion for an interim order in connection with a proposed plan of arrangement under section 182(5) of the Ontario Business Corporations Act (OBCA).

The arrangement involved the acquisition of Appili's shares by Aditxt, Inc. through its subsidiary Adivir, Inc. The interim order sought to approve the procedure for a special meeting of shareholders to vote on the arrangement.

The court found the arrangement, negotiated by a special committee with independent advisors, provided a significant premium and included minority shareholder protections.

The court also addressed the company's continuance from the Canada Business Corporations Act (CBCA) to the OBCA, finding it transparent and without prejudice to stakeholders.

The court granted the interim order.

This is a supplementary endorsement on costs following a fair value application.

The applicant, 1843208 Ontario Inc., was largely successful in the underlying application, with the court determining the fair value of shares at $1.50, significantly lower than the $8.91 sought by the dissenting shareholders.

The dissenting shareholders argued against paying costs, citing that the determined value exceeded the company's initial formal offer and their success on the interest issue.

The court found the dissenting shareholders' valuation position unreasonable and unrealistic, and their success on interest minor.

Applying the principles of costs, particularly that dissenting shareholders do not get a "free ride" in valuation proceedings, the court awarded the applicant $1,075,000 in costs, inclusive of fees, disbursements, and taxes, payable by the dissenting shareholders.

The Receiver brought an unopposed motion for an order approving a Claims Adjudication Process, appointing a Claims Officer, and approving its Twentieth Report.

The court granted the motion but modified the proposed order to remove limitations on appeal rights and standard of review, noting that such issues remain to be determined by the court hearing any appeal, not by the Claims Officer.

This case involved a dispute between a mother and son over the division of proceeds from the sale of a jointly-owned cottage property.

The mother sought an equal 50/50 division, while the son claimed entitlement to a larger share based on significant renovations and maintenance he undertook, arguing unjust enrichment.

The court found an enforceable oral agreement where the son received a joint tenancy interest in exchange for undertaking renovations at his own expense.

Alternatively, the court determined that an equal division was not unjust, as the son's contributions were offset by the benefit of his ownership interest and use of the property, and there was no reasonable expectation that the joint tenancy would not be severed or the property sold during the mother's lifetime.

This is a costs endorsement following an application where the applicants sought a declaration that a s. 244 BIA Notice was void due to the respondent taking an enforcement step (sending Notices of Sale under the Mortgages Act) contemporaneously.

The court previously found that the respondent's action contravened s. 244 BIA, but declined to void the notice due to a lack of demonstrated prejudice to the applicants.

In this costs decision, both parties sought costs.

The applicants claimed partial success, while the respondent claimed full success.

The court, exercising its discretion under s. 131 of the Courts of Justice Act and Rule 57, determined that neither party should be awarded costs, considering the respondent's contravention of the BIA and the applicants' failure to provide evidence of prejudice.

The applicant, Heather Miller, sought to enforce an undertaking given by the respondents, Telemaco Matrundola and 1000125576 Ontario Inc., concerning the applicability of Harmonized Sales Tax (HST) to the sale of real property.

The parties had agreed that the purchase price would be readjusted based on a tax ruling from the Canada Revenue Agency (CRA).

The applicant obtained a CRA ruling confirming the transaction was HST exempt, but the respondents refused to comply, alleging the ruling request contained inaccurate or incomplete information regarding commercial activity on the property and the applicant's HST registration status.

The court found that the applicant had complied with the undertaking and that the information provided to CRA was accurate and complete for the purpose of the ruling.

The court emphasized its limited jurisdiction in tax matters, which fall under the Tax Court of Canada.

The application was granted, ordering the respondents to pay the withheld portion of the purchase price to the applicant with interest.

The applicants sought a declaration that the respondent's Notice of Intention to Enforce Security under s. 244 of the Bankruptcy and Insolvency Act (BIA) was void because the respondent concurrently issued Notices of Sale under the Mortgages Act.

The applicants argued that the Notices of Sale constituted an enforcement step taken within the BIA's ten-day notice period, which is prohibited.

The court found that the issuance of the Notices of Sale was indeed an enforcement step taken in contravention of s. 244(2) of the BIA.

However, the court declined to declare the s. 244 BIA Notice void, as there is no statutory prescription for such an outcome and no evidence of actual prejudice to the borrowers was demonstrated.

The court emphasized that the best practice is to issue notices of sale only after the BIA's ten-day notice period expires.

The Business Development Bank of Canada (the bank) brought a motion to quash an appeal initiated by 170 Willowdale Investments Corp. (the appellant).

The appellant subsequently abandoned its appeal.

The court found that a contractual term between the parties entitled the bank to full indemnity costs.

Consequently, the bank was awarded its costs of the abandoned appeal in the amount of $19,791.95.

The applicant, 1843208 Ontario Inc., sought to fix the fair value of shares of dissenting shareholders of Baffinland Iron Mines Corporation at $1.50 per share following a plan of arrangement.

The Dissent Group argued for a fair value of $8.91 per share.

The court found that the market price of $1.50, established through a contested takeover bid process, was the best objective evidence of fair value, rejecting the Dissent Group's higher valuation which relied on a discounted cash flow analysis based on unproven mineral resources and overly optimistic projections.

The court also awarded interest to the Dissent Group for the entire period, including a significant delay caused by a stay of proceedings related to a class action.

The Bank of Montreal (Applicant) sought approval of the Receiver's (KSV) conduct, fees, and discharge, along with an order for costs against the Respondents (Can United Consulting Corporation, Facilitate Settlement, and other related debtor corporations) and personally against Mr. Kai Wu, the directing mind of the debtor corporations.

The Debtors had borrowed $2.1 million under a federal pandemic assistance program (HASCAP) and failed to repay.

The Business Development Bank of Canada (BDC) repaid the principal to BMO and stepped into BMO's shoes for enforcement.

The Debtors and Mr. Wu showed limited cooperation with the Receiver, failed to provide financial records, and transferred significant funds for personal use.

The court approved the Receiver's conduct, fees, and discharge.

Crucially, the court found Mr. Wu's conduct amounted to an abuse of process due to his persistent failure to comply with court orders and cooperate with the Receiver, despite repeated adjournments and undertakings.

Consequently, the court awarded $50,000 in costs against the Respondents and personally against Mr. Wu.

The plaintiff brought a motion seeking three orders: production from non-party Meta Platforms, Inc. under Rule 30.10, transfer of the action to Ottawa, and validation of service on defendants Roger Beit and Kris Singh.

The court dismissed the production motion as premature, noting that pleadings had not closed and discovery had not occurred.

The motion to transfer was dismissed because it was brought in the wrong jurisdiction (Toronto instead of Ottawa, as per practice direction).

The motion to validate service was granted for Roger Beit (unopposed) but dismissed for Kris Singh due to non-compliance with Rule 17.04(1) regarding service outside Ontario.

The plaintiff was ordered to pay Meta nominal costs.

The SMA 2 Unitholders sought a declaration that substantive consolidation does not apply to Bridging SMA 2 LP and approval for a second interim distribution.

The Receiver and Unitholder Representative Counsel opposed, arguing the motion was premature as various distribution issues, including the full economic impact of consolidation, remained unresolved.

The court dismissed the motion, deferring to the Receiver's position that a determination on substantive consolidation and further distributions was premature given the incomplete factual record and outstanding distribution issues.