Neil S. Rabinovitch

A case conference was held to address the scheduling of several outstanding motions after the plaintiffs dismissed their counsel.

The court rescheduled the motions to the week of November 7, 2022, to be heard virtually.

The hearing of the motions was marked peremptory against the plaintiffs and their corporate entities, giving them time to retain new counsel without further delaying the proceedings.

A case conference was held to address multiple related actions.

On consent, the claims against Shahzad Siddiqui and Borden Ladner Gervais LLP were dismissed with prejudice and without costs.

The court directed counsel to confer regarding the potential release of individual defendants and established a timetable for scheduling upcoming dispositive motions.

A case conference was held to manage multiple related proceedings.

Counsel for the plaintiffs indicated a recommendation for the plaintiffs to agree to dismissals without costs in most cases, except potentially the claim against Grant Thornton LLP Canada, which requires leave to proceed.

The court directed that a new class action issued by one of the plaintiffs be case managed together with the existing matters.

Counsel were directed to advise on dismissals or agree on a timetable for dispositive motions by a specified date.

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.

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.