Neil Rabinovitch

The Applicants brought an unopposed motion in their CCAA proceedings seeking an extension of the Stay Period to August 31, 2021, and authorization for the Monitor to effect the return of trust property to Lien Claimants and Trust Claimants.

The court found the Applicants were acting in good faith and with due diligence, and that the return of trust property did not constitute a distribution or dividend under the Bankruptcy and Insolvency Act.

The court granted the stay extension, authorized the distributions, and approved the Monitor's activities and fees.

The Applicants brought an unopposed motion in their CCAA proceedings to extend the Stay Period to August 31, 2021, assign certain letters of credit to the Israeli Functionary, and approve the Monitor's Forty-Sixth Report along with professional fees.

The court found the Applicants were acting in good faith and with due diligence, and that they had sufficient resources to continue functioning during the proposed stay period.

The motion was granted in its entirety.

In the context of CCAA proceedings for the Urbancorp entities, the Monitor brought a motion for an order approving and directing distributions from the sale of geothermal assets.

The court approved two unopposed distributions recommended by the Monitor in its Forty-Fifth Report, specifically regarding VII - Curve and UNKI.

The balance of the requested relief was adjourned to a date to be set.

The plaintiffs brought motions to compel the examination of a defendant on behalf of a corporate defendant and for further and better affidavits of documents from several defendants.

The parties agreed to dismiss the examination motion and portions of the production motion without prejudice.

The court ordered one defendant to produce certain financial documents relevant to personal enrichment and an itemized Schedule B list, but dismissed the remaining requests for further documents and better email descriptors, finding insufficient evidence of missing documents and that the current descriptors were proportionate.

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.

The Court of Appeal for Ontario issued a costs endorsement following an appeal hearing related to the Companies’ Creditors Arrangement Act (CCAA) proceedings of Urbancorp Cumberland 2 GP Inc. and related entities.

The panel reviewed the costs requests from the appellants and respondents and found the amounts reasonable.

Specific costs were ordered to be paid out of the Estate of the Cumberland Group to the appellants (Toro Aluminum, Speedy Electrical, Dolvin Mechanical) and two respondents (Guy Gissin, Tarion Warranty Corporation).

The Monitor and the Attorney General of Ontario did not seek costs.

This appeal concerns the effectiveness of a statutory trust under s. 9(1) of Ontario's Construction Lien Act (CLA) in Companies' Creditors Arrangement Act (CCAA) insolvency proceedings.

Unpaid contractors (appellants) claimed a trust over proceeds from the sale of condominium units by the insolvent developer (Cumberland Group).

The motion judge denied the trust, relying on Re Veltri Metal Products Co., reasoning that the CCAA Monitor's involvement prevented the trust from arising.

The Court of Appeal allowed the appeal, clarifying that a s. 9(1) CLA trust can be effective in CCAA sales processes and is only displaced by federal paramountcy if it conflicts with a specific CCAA priority.

The court distinguished Veltri, stating it did not prevent a s. 9(1) trust when proceeds exceed mortgage debt and expenses, and confirmed the "deemed receipt" rule.

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.

The appellants sought leave to appeal a CCAA judge's order extending the stay period, approving the Monitor's report, declaring the litigation trustee was not in a conflict of interest, and staying litigation against the appellants.

The appellants challenged the extension of the stay, the appointment of the litigation trustee, and alleged bad faith by the respondents.

The Court of Appeal dismissed the leave to appeal application, finding the proposed appeal failed to meet the test for leave and that the CCAA judge's decision was well-reasoned and entitled to deference.

The Foreign Representative of Urbancorp Inc. (UCI) moved to set aside the Monitor's disallowance of UCI's $6 million promissory note claim against Bay LP and sought a declaration confirming the validity of a companion $2 million note.

The notes were issued in connection with management fees and replaced an earlier $8 million note.

The court found that the notes were not independent obligations but were issued for tax purposes, and the underlying management fees had been paid through intercompany accounting entries.

The court rejected the argument that UCI was a holder in due course, noting that the notes were not intended to be binding and the assignees (UCI and Realtyco), controlled by the same individual, had actual notice of the intercompany affairs and payment status.

The motions were dismissed.

The appellants appealed an interlocutory order regarding the waiver of solicitor-client privilege and document production.

By the time the appeal was heard, the trial had already commenced.

The Divisional Court dismissed the appeal as moot, holding that the trial judge is best positioned to determine issues of privilege, fairness, and production mid-trial.

On a refusals motion arising from two related civil actions over a settlement agreement resolving a car dealership dispute, the moving parties sought production of solicitor-client communications and legal files concerning settlement negotiations.

The responding parties alleged they entered the agreement in reliance on misrepresentations and sought to set it aside, but did not plead reliance on legal advice.

The court adopted the two-part implied waiver analysis requiring that legal advice be material to the lawsuit and affirmatively put in issue by the party claiming privilege.

It held that merely placing state of mind in issue was insufficient, and that disclosure of a single email did not amount to selective disclosure waiving privilege over the broader solicitor-client communications.

The motion was dismissed.

The defendants moved to adjourn a commercial trial for at least ninety days after the plaintiffs produced late backup financial documents affecting the quantification of damages and expert evidence.

The court held that fairness in civil procedure must be read through the proportionality, timeliness, and affordability principles emphasized in Hryniak, and that perfect disclosure is not required before trial can proceed.

The defendants had sufficient time to take practical steps, including limited further discovery and expert review, and had not shown that a lengthy adjournment was necessary.

The motion was dismissed, limited additional discovery and trial management directions were ordered, and the plaintiffs received costs of $3,000.

The appellants appealed an order establishing a sale process for two corporations involved in an oppression remedy claim.

The motion judge ordered that the two corporations being sold could no longer be parties to the litigation to facilitate the sale.

The appellants argued this would cause tax prejudice, but the Court of Appeal found that any tax consequences could be addressed through expert calculation without flowing damages through the corporations.

The appeal was dismissed.

The trustee in bankruptcy suspected the bankrupt was hiding assets using a third party.

The trustee sought an order compelling the bankrupt and his lawyer to disclose the identity of the person paying the bankrupt's legal fees for a previous motion.

The motion judge granted the order, finding the information was not privileged.

On appeal, the Court of Appeal allowed the appeal, holding that administrative information relating to the solicitor-client relationship, including the identity of the person paying the lawyer's bills, is presumptively privileged.

The court found the presumption was not rebutted because the information was relevant to the merits of the underlying dispute and its disclosure would reveal confidential communications.

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.

The Court of Appeal for Ontario issued a costs endorsement following an appeal.

The respondent was ordered to pay the appellant's costs fixed at $5,000, inclusive of GST and disbursements.

The appellant appealed a trial judgment awarding the respondent damages for breach of a contract to operate an off-track betting facility.

The trial judge had found the agreement was perpetual and awarded damages for an 11-year period without deducting the cost of sales from the loss of profits calculation.

The Court of Appeal allowed the appeal, finding the trial judge erred in her analysis of whether the contract was perpetual and in her calculation of damages.

A new trial was ordered to determine the appropriate notice period and recalculate damages.

The appellant appealed a judgment fixing a rent increase.

The appellant conceded that the application judge was entitled to reject the evidence of its appraiser.

The Court of Appeal found that a substantial increase in rent was justified based on the respondent's appraiser's evidence, noting that fixing the exact amount is more art than science.

The appeal was dismissed with costs.

Following the dismissal of the main appeal, the successful third parties and defendants sought costs on a full indemnity basis, relying on prior releases and indemnity agreements.

The Court of Appeal found the claimed amounts excessive due to duplication of effort among the multiple respondents.

The Court fixed costs in reduced amounts, awarding a total of $72,000 across the various third parties and the defendant law firm.