Bankruptcy and Insolvency Law - OCA

The appellant commenced a fraudulent conveyance action against the respondent, which was stayed when the respondent filed for bankruptcy.

The appellant later obtained an order under s. 38 of the Bankruptcy and Insolvency Act to bring proceedings in its own name.

The motion judge dismissed the action as statute-barred, finding that the trustee's discoverability date governed.

The Court of Appeal allowed the appeal, holding that under s. 12(1) of the Limitations Act, 2002, the relevant discoverability date is the earlier of the trustee's or the creditor's.

Since the creditor discovered the claim before the new Limitations Act came into force, no limitation period applied.

The appellant law firm appealed an order dismissing its motion to set aside the respondent's automatic discharge from bankruptcy.

The Court of Appeal upheld the decision, agreeing that the appellant would not discover anything new and material through the bankruptcy process and that a discharge hearing would not have led to terms with practical significance for recovery.

The court noted the appellant could seek an order under s. 38 of the Bankruptcy and Insolvency Act to pursue a receivable owed to the respondent.

The appeal was dismissed with no costs.

The appellant landlord appealed a decision dismissing its appeal from a claims officer's ruling in a receivership proceeding.

The appellant argued the claims officer erred in characterizing certain assets as chattels rather than fixtures, improperly placed the burden of proof on the appellant, rejected expert evidence regarding how the assets were secured, and erred in assessing damages.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the factual determination of chattels versus fixtures, and no error in principle regarding the burden of proof or damages assessment.

The appellant appealed a bankruptcy order.

The Court of Appeal upheld the application judge's findings that the respondents were owed more than $1,000 due to a prior costs order and that the appellant was unable to pay his debts as they came due within six months of the application.

The appeal was dismissed.

The respondent on appeal moved to lift the automatic stay pending appeal and for security for costs against the appellants, a corporation and its sole shareholder.

The corporate appellant had filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act, triggering a stay of proceedings under s. 69(1)(a).

The court declined to make an order against the corporation due to the bankruptcy stay.

However, the court lifted the automatic stay against the individual appellant for the undisputed principal amount of $620,000 and ordered her to post $150,000 as security for costs, citing the trial judge's negative findings regarding her dishonesty and knowing assistance in the corporation's breach of fiduciary duty.

Following an appeal in which the respondents were largely successful, the Court of Appeal for Ontario issued a costs endorsement.

The court ordered the appellants to pay the respondents' costs of the appeal, fixed at $50,000 inclusive of disbursements and GST.

The appellants, representing unionized and non-unionized former employees of Nortel, appealed a decision dismissing their motions for directions to compel Nortel to pay severance, termination, and retirement benefits during its CCAA restructuring.

The appellants argued that the payments were protected under s. 11.3(a) of the CCAA as compensation for ongoing services, and that the CCAA stay could not override provincial Employment Standards Act obligations.

The Court of Appeal dismissed the appeals, holding that the payments were for past services and that the doctrine of federal paramountcy allowed the CCAA stay to suspend the immediate payment obligations under the provincial legislation to facilitate the restructuring.

The appellants appealed an order regarding a claim by Investors Group Trust Co. Ltd. The Court of Appeal dismissed the appeal, agreeing with the motion judge that the respondent's claim was a personal tort action for damages against the appellants and did not assert a claim against an asset of the bankrupt.

The Trustee would only have an interest if a specific asset belonging to the bankrupt was identified.

The moving party, 2205305 Ontario Inc., was unsuccessful on an urgent motion to stay an order approving a receiver's sale of properties.

The respondents sought costs against the moving party's parent corporation, Romspen Investment Corporation, arguing it was the real moving party and the moving party was a shell corporation.

The Court of Appeal dismissed the request for costs against the non-party, finding no fraud or abuse of process to justify lifting the corporate veil, and fixed costs against the moving party on a partial indemnity scale.

The appellant appealed an order striking his counterclaim in a 2008 action.

The respondents had previously brought a 2006 action against the appellant, which was settled.

The respondents then brought the 2008 action under s. 38 of the Bankruptcy and Insolvency Act, advancing overlapping claims.

The Court of Appeal allowed the appeal, finding that the appellant's counterclaim did not attempt to relitigate the 2006 action, but rather sought to prevent the relitigation of the settled claims.

The order striking the counterclaim was set aside.

The appellant appealed a trial judgment that found no wrongdoing or improper conduct by the respondents.

The Court of Appeal dismissed the appeal, holding that the trial judge properly applied the relevant legal test and that the factual findings did not support the application of s. 178(1)(d) of the Bankruptcy and Insolvency Act.

Costs were awarded to the respondents.

The appellant, an unsuccessful prospective purchaser of the debtor's assets, sought to appeal an order appointing an interim receiver and approving the sale of the debtor's assets to another party.

The Court of Appeal quashed the appeal, holding that the appellant lacked standing.

The court reaffirmed that an unsuccessful bidder does not have a legal or proprietary right in the property being sold and therefore does not have a direct interest sufficient to challenge a sale approval order.

The appellants appealed the dismissal of their motion for leave nunc pro tunc under s. 215 of the Bankruptcy and Insolvency Act to commence a claim against the former interim receiver and trustee in bankruptcy.

The Court of Appeal found no error in the motion judge's conclusion that the appellants failed to provide sufficient affidavit evidence to demonstrate a prima facie case.

The appeal was dismissed with costs.

The moving party, an approved purchaser of the debtor's assets, sought to cancel the automatic stay pending appeal of orders appointing a receiver and approving the asset sale.

The responding party, an unsuccessful bidder and software licensee, opposed the motion and appealed the sale order.

The Court of Appeal (in chambers) granted the motion to cancel the stay under s. 195 of the Bankruptcy and Insolvency Act, finding that the responding party likely lacked standing to appeal the sale order as a disappointed bidder and would not suffer undue harm if the stay was lifted, as its contractual rights to software source codes remained intact.

The appellant appealed an order requiring him to sell his taxi licence to satisfy an equalization payment, but filed for bankruptcy two days later.

The respondent moved to dismiss the appeal.

The trustee in bankruptcy advised it would not pursue the appeal, and the appellant failed to obtain an order to continue within a reasonable time under Rule 61.13.1.

The Court of Appeal granted the motion and dismissed the appeal, noting the assets were now part of the bankrupt estate.

The appellant appealed a motion judge's decision, arguing that there were material facts in dispute and a trial of the issue should have been directed.

The Court of Appeal dismissed the appeal, noting that the appellant had previously taken the position that no material facts were in dispute and could not now seek a trial of an issue.

The court further held that, in any event, there were juristic reasons for the deprivation in the context of the insolvency proceedings.

The appellant appealed an order fixing the trustee's remuneration and declining to appoint a substitute trustee.

The Court of Appeal dismissed the appeal, finding that s. 39(5) of the Bankruptcy and Insolvency Act provided the motion judge with the authority to fix the remuneration.

The court also agreed that there was no basis to appoint a substitute trustee, as the appellant was permitted and capable of carrying a claim against the bankrupt.

The appeal was dismissed with costs.

The appellants appealed a summary judgment decision, arguing that the receiver conducted an improvident sale of hydrofoil vessels.

The Court of Appeal dismissed the appeal, finding that the appellants presented no substantial evidence to support their defence and merely criticized the receiver's marketing efforts.

The court held that summary judgment was appropriate as there were no facts in dispute and the issue of an improvident sale was a question of law.

The appellant debtor appealed an order relating to the sale of a property in a bankruptcy proceeding.

The Court of Appeal dismissed the appeal, noting that the appellant did not appear before the motion judge and the issue of occupation rent was not raised below.

The court found no error in the motion judge's analysis or conclusion regarding the sale of the property.

The appellant appealed a bankruptcy order, arguing the motion judge erred in refusing an adjournment, finding she could not meet her debts, and failing to stay a receivership order pending other litigation.

The Court of Appeal dismissed the appeal, finding the refusal of the adjournment was a proper exercise of discretion and the finding of insolvency was supported by the record.

The court also noted the appellant had not sought a stay of the receivership order before the motion judge and the pending litigation was speculative.