Neil Rabinovitch

This case involved two applications heard together, stemming from a share purchase transaction.

Sudhir Thomas, as Seller Representative, sought the release of an indemnity escrow account.

Accenture Inc. brought a cross-application seeking a declaration that Thomas was responsible to indemnify Accenture for potential damages from a wrongful dismissal claim by Tania Prsa, to be paid from the escrow.

A mini-trial was conducted to determine the characterization of "bonus" payments made to Prsa (as employment income or shareholder profit distributions) and her entitlement to unreimbursed business expenses.

The court found that the "bonus" payments were shareholder profit distributions, not employment compensation, and that Prsa's expense claims were barred by a comprehensive release clause in the Share Purchase Agreement.

Consequently, the Indemnity Escrow Account was ordered released to the Seller Representative.

In a CCAA proceeding, the Functionary and Terra Firma brought a motion to late file a claim and to approve a settlement agreement between them regarding the distribution of the debtor's funds.

The court allowed the late filing of the claim but ruled the Functionary's unsworn report inadmissible.

The court dismissed the motion to approve the settlement, finding that a settlement of claims against the debtor requires the consent of the debtor or the Monitor, neither of which had agreed to the settlement.

In a receivership proceeding, the court considered a motion by a court-appointed receiver seeking a contempt finding against an individual who had taken possession of gold bars purchased by the debtor companies shortly before the receivership.

The receiver alleged that the respondent failed to comply with court orders requiring delivery of the precious metals and disclosure of information about their whereabouts.

Applying the three-part test for civil contempt, the court found beyond a reasonable doubt that the respondent knowingly breached both orders by failing to return at least some of the gold bars under his control and by withholding contact information for individuals involved in their distribution.

The court emphasized that contempt proceedings serve both punitive and coercive purposes to uphold the rule of law and enforce compliance with court orders.

The respondent was sentenced to six months’ imprisonment in Canada unless he purged his contempt within seven days by delivering available gold bars and providing the required information.