Bankruptcy and Insolvency Law - OCA

The bankrupt brought a motion to quash the trustee's appeal from the dismissal of a contempt motion, arguing the order was interlocutory and should be appealed to the Divisional Court.

The Court of Appeal dismissed the motion to quash, finding that under s. 193 of the Bankruptcy and Insolvency Act, an appeal from an order of a bankruptcy judge lies to the Court of Appeal regardless of whether it is final or interlocutory.

The Court also granted leave to appeal under s. 193(e) if required, given the serious allegations and issues of general importance to bankruptcy practice.

The Court of Appeal for Ontario issued a costs endorsement following an appeal and motion for leave to appeal under the Companies' Creditors Arrangement Act.

The court fixed the costs of the appeal and the motion for leave to appeal at $25,000, inclusive of disbursements and taxes, payable by the appellant union to the respondent.

The applicants sought leave to appeal a supervising judge's partial summary judgment dismissing their $86 million claim for disgorgement of profits against the debtor companies.

The claim arose from the unauthorized transfer of the applicants' software source code during the sale of the debtors' assets in CCAA proceedings.

The Court of Appeal denied leave, finding that the proposed appeal turned on factual findings regarding the lack of evidence that the debtors profited from the infringement, which were entitled to deference.

The court also noted the need to avoid further delay in the long-running insolvency proceedings.

The appellant trustee in bankruptcy appealed the dismissal of its motions for summary judgment and to strike portions of the respondent's claim.

The respondent, an interim receiver, sued the appellant for breach of fiduciary duty.

The appellant argued the claim was statute-barred and an abuse of process.

The Court of Appeal upheld the motion judge's finding that the limitation period did not begin until the respondent received withheld reports containing material facts, and found no error in the dismissal of the abuse of process motion.

The appeal was dismissed.

The appellant appealed a motion judge's order regarding the distribution of funds following the sale of a property by a court-appointed receiver.

The appellant argued that the entire first mortgage ranked in priority to the receiver's charge for fees and expenses.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the receiver's charge was subordinate only to the specific financial interest of the assignee who held the mortgage as security for a loan, rather than the entire principal amount of the first mortgage.

The appellant sought leave under s. 215 of the Bankruptcy and Insolvency Act to sue a litigation committee for defamation regarding a report sent to s. 38 litigation participants.

The motion judge dismissed the motion, finding the words were not defamatory and were protected by qualified privilege.

On appeal, the appellant sought to introduce fresh evidence that the report was sent to non-participants.

The Court of Appeal dismissed the appeal and the fresh evidence application, upholding the finding that the words were not defamatory and noting the appellant had no reputation to protect among the recipients.

The appellant union appealed a decision finding that the CCAA judge had no jurisdiction to apply the American doctrine of equitable subordination to subordinate the claims of the respondent parent company.

The Court of Appeal dismissed the appeal, holding that the CCAA does not provide express or implied authority to apply equitable subordination, and that the doctrine does not fall within the scheme of the statute, which focuses on the implementation of a plan of arrangement or compromise rather than legislating a scheme of priorities.

The respondent obtained a money judgment against the appellant and secured an order compelling him to attend an examination in aid of execution with specified documents.

The day before the examination, the appellant made an assignment in bankruptcy.

He attended the examination but brought a Notice of Stay of Proceedings instead of the documents.

The motion judge allowed the respondent's contempt motion to proceed.

The Court of Appeal allowed the appeal, holding that the examination was stayed by section 69.3 of the Bankruptcy and Insolvency Act upon the bankruptcy, and therefore the failure to bring documents could not found contempt.

The moving party, a director of the debtor companies, sought leave to appeal orders approving the sale of a lawsuit commenced by the debtors against their secured creditor.

The receiver had accepted a credit bid from the secured creditor to purchase the action.

The Court of Appeal dismissed the motion for leave to appeal, finding that the receiver's authority to sell the action was already determined in prior unappealed orders (res judicata) and that the proposed appeal lacked prima facie merit.

The appellant receiver sought to appeal an interlocutory order refusing to cancel a letter of credit posted as security in a civil action.

The receiver argued the Court of Appeal had jurisdiction under s. 193 of the Bankruptcy and Insolvency Act because the motion was styled in both the civil action and the receivership proceedings.

The Court of Appeal quashed the appeal, holding that the substance of the order was a refusal to vary an order in a civil action, not an order in bankruptcy proceedings.

The proper route of appeal was to the Divisional Court with leave.

The moving party brought a motion to quash an appeal from a lower court judgment on the basis that the judgment was an interlocutory order.

The lower court had ruled that contempt proceedings against the responding party were not stayed by his filing for bankruptcy under the Bankruptcy and Insolvency Act, but adjourned the contempt motion to a later date.

The Court of Appeal held that because the lower court's ruling deprived the responding party of a substantive defence that could have resolved the proceedings, the order was final.

The motion to quash the appeal was dismissed.

The appellant father appealed a motion judge's order regarding child support, spousal support, and custody arrangements.

The father had declared bankruptcy after failing to pay an equalization payment and costs to the respondent mother.

The motion judge had ordered the father to pay lump sum spousal support equal to the unpaid equalization payment and imposed a charging order on his assets.

The Court of Appeal allowed the appeal in part, setting aside the lump sum spousal support and charging order because the motion judge failed to properly consider the implications of the father's bankruptcy and the principles governing lump sum support.

The Court also ordered the mother to pay prospective child support for the daughter residing with the father.

The parties reached a settlement in principle regarding the bankruptcy proposal of Enroute Imports Inc. but required time to finalize specific terms.

The Court of Appeal adjourned the appeal on consent, to be restored to the list if the settlement was not finalized by December 23, 2015.

The respondent, an undischarged bankrupt, brought an application for a declaration that his professional liability insurer was required to indemnify him for a class action.

The insurer brought a motion to strike the application, arguing the respondent lacked legal capacity.

The motion judge dismissed the motion.

On appeal, the Court of Appeal held that the order was final and that the right to receive an indemnity under an insurance contract is a chose in action that vests in the trustee in bankruptcy.

The appeal was allowed and the application dismissed.

The appellant, a court-appointed interim receiver, filed a proof of claim with the respondent trustee in bankruptcy for its fees and disbursements.

The trustee disallowed the claim, and the application judge dismissed the appellant's appeal of that disallowance.

The Court of Appeal dismissed the appeal, holding that an interim receiver cannot bypass the procedural requirement of passing its accounts by submitting unliquidated and non-approved fees to a trustee in the form of a proof of claim.

The appellant, an undischarged bankrupt, appealed a motion judge's decision striking his claim.

He argued that a master's order authorized him to pursue the action nunc pro tunc.

The Court of Appeal dismissed the appeal, confirming that an undischarged bankrupt lacks the capacity to launch and pursue a civil action, and noting that the master's order did not purport to lift this disability.

The appellant unsecured creditor appealed a decision dismissing an appeal from a Deputy Registrar's refusal to lift a stay of proceedings under s. 69.4 of the Bankruptcy and Insolvency Act.

The Court of Appeal dismissed the appeal, finding that the Deputy Registrar had properly considered the equitable grounds to lift the stay and applied the correct test.

The appellant, an assignee of a second mortgage, appealed an order on the sole basis that the motion judge erred by refusing to grant an adjournment on the hearing date.

The appellant claimed it had no notice of the hearing and had only retained counsel the day before.

The Court of Appeal dismissed the appeal, holding that the decision to grant or refuse an adjournment is discretionary and entitled to deference, and found no basis to interfere with the motion judge's decision.

The appellant appealed an order declaring that the respondent had priority over any other interest claimed in certain retirement community units, except for valid construction lien claims.

The appellant argued the motion judge erred by determining the priority motion separately from the lien reference and by not giving effect to its security and equity interests.

The Court of Appeal dismissed the appeal, finding that the bifurcation of issues flowed from a previous unappealed court order and that the motion judge's order specifically preserved the construction lien issues.

The moving party, a construction lien claimant, sought an extension of time to appeal an order that granted priority to a mortgagee over the proceeds of sale of a property in receivership.

The notice of appeal was filed 18 days late, after the receiver had already distributed the funds.

The Court of Appeal dismissed the motion, finding no bona fide intention to appeal within the time limit, no adequate explanation for the delay, and no merit to the proposed appeal.

The Court also noted that leave to appeal would have been required under the Bankruptcy and Insolvency Act and would not have been granted.