Bankruptcy and Insolvency Law - ONCA

The appellant, 1461043 Ontario Limited c.o.b. as Nuvo Iron, appealed the dismissal of its motion to vary a default judgment to add declarations of intentional breach of trust and that the judgment survived the respondents’ discharge from bankruptcy under s. 178(1)(d) of the Bankruptcy and Insolvency Act.

The Court of Appeal upheld the motion judge’s decision, finding no basis in the record for the declarations sought and confirming that a mere breach of trust, even if negligent or incompetent, is insufficient to support a such an order.

The appeal was dismissed with costs to the respondents.

The Court of Appeal for Ontario considered whether Seabrook Bros.

Mechanical Ltd., a subcontractor and lien claimant, was entitled to a revised assessed value for its security in the insolvency proposal of North House Foods Ltd. The court held that there was no appeal as of right under s. 193(a)-(c) of the Bankruptcy and Insolvency Act, but granted leave to appeal under s. 193(e) due to the importance of the issue.

The appeal was dismissed, as the motion judge had not erred in finding that the appellant's security (a lien on a leasehold interest) had no realizable value in the circumstances.

The court clarified the onus on dissatisfied creditors under s. 50.1(4) of the BIA and the limited recourse for lien claimants in insolvency.

The Court of Appeal for Ontario denied leave to appeal from an order appointing a receiver over the property of 11977636 Canada Inc. at the request of the Bank of Montreal.

The debtor argued that the application judge made a factual error regarding the closing date of a property sale, which allegedly affected the decision to refuse an adjournment and appoint a receiver.

The Court found that the error was not determinative, as the appointment was justified by the debtor’s lack of accountability and transparency.

None of the three "Pine Tree" considerations for granting leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act were met.

The Court of Appeal for Ontario dismissed the appellants’ motion for a stay of a receivership order appointing a receiver under section 129 of the Securities Act.

The court found that while there was a serious issue to be tried, the appellants failed to establish irreparable harm and the balance of convenience did not favour a stay.

The decision reviews the background of the receivership, the test for a stay, and the evidence presented, ultimately concluding that the public interest and interests of third parties, including mortgagees, would be harmed by a stay.

The Court of Appeal for Ontario allowed the appeal of RPG Receivables Purchase Group Inc., finding that the bankruptcy judge erred in concluding that payments made by Specialty Chemical Industries Inc. to American Pacific Corporation were not void as preferences under section 95 of the Bankruptcy and Insolvency Act.

The Court held that an insolvent debtor’s intention to continue in business can only rebut the statutory presumption of intent to prefer if there is a reasonable basis to believe that the business continuation will benefit creditors generally.

Here, there was no such reasonable basis, and the payments must be repaid.

This decision concerns a motion for leave to appeal an order approving the sale of a property in receivership.

The moving parties, owners of the property, sought an adjournment to arrange financing to redeem the first mortgage and continue their affordable housing project.

The motion judge denied the adjournment and approved the sale.

On motion for leave to appeal, the Court of Appeal found that the proposed appeal did not raise issues of general importance, had little merit, and that granting leave would unduly hinder the receivership process.

The motion for leave to appeal was dismissed.

These two appeals arise from a receivership order under the Bankruptcy and Insolvency Act.

The motion judge found both the debtor and its management, as well as United Group of Companies and its management, in civil contempt of the receivership and asset recovery orders.

The Court of Appeal dismissed the appeals, finding no error in the motion judge’s reasoning or exercise of discretion, and confirmed the costs awards and sentences imposed.

The Court of Appeal for Ontario dismissed the appeal of 170 Willowdale Investments Corp. regarding the distribution of proceeds from the sale of its hotel assets in receivership.

The appellant argued that Royal Bank of Canada (RBC), as an unsecured creditor with respect to the real property, should not receive a distribution from the net proceeds of the sale.

The court held that the Approval and Vesting Order (AVO) did not preclude payment to unsecured creditors after secured creditors were paid, and that the motion judge properly authorized the distribution to RBC, including for a loan not yet due, as there was no prejudice to the debtor.

Stelco Inc. sought leave to appeal an order from the CCAA supervisory judge concerning the reconveyance of land (the "DGAP Parcel") to LandCo, a precondition for DGAP Investments Ltd. to purchase the land.

Stelco had previously been ordered to specifically perform this obligation but failed to do so.

The motion judge affirmed the court's authority to impose terms for reconveyance if the parties could not agree.

The Court of Appeal dismissed the motion for leave to appeal, finding that the proposed appeal was not prima facie meritorious, given prior judicial determinations and Stelco's previous concession that the court could determine the agreements.

The court also considered the significance of the issues to practice and the action, and the undue hindrance that an appeal would cause to the progress of the CCAA proceeding.

The appellant, Mr. Flight, appealed two orders from a motion judge concerning three issues: whether the transfer of a "Trustee Action" to him required the Trustee's consent, the Trustee's production of documents, and the motion judge's costs award.

The Court of Appeal dismissed the appeal, finding no reversible error in the motion judge's conclusions regarding document production or the costs award.

The court also noted that the issue of Trustee consent for the action transfer had been previously addressed in a prior decision and was currently under reserve by another motion judge, thus requiring no further comment from the Court of Appeal.

The appellant, Juan Guillermo Gutierrez, appealed three orders from the Superior Court of Justice: a finding of civil contempt, a 30-day imprisonment sentence, and a full indemnity costs award of $563,485.00.

The contempt finding stemmed from his interference with a court-appointed receiver by signing a false declaration in Guatemala to initiate a criminal complaint against the receiver's representatives.

The Court of Appeal dismissed all three appeals, affirming the lower court's jurisdiction based on a "real and substantial link" to Ontario, upholding the contempt finding due to intentional breach of the receivership order, confirming the 30-day sentence as fit given the egregious nature of the contempt and lack of remorse, and upholding the full indemnity costs award due to the seriousness of the conduct and the financial burden placed on the judgment creditor.

The Debtors (Ten 4 System Ltd., 1000043321 Ontario Inc., and 1000122550 Ontario Inc.) sought leave to appeal an order appointing a receiver over their assets, pursuant to s. 193(e) of the Bankruptcy and Insolvency Act.

The Royal Bank of Canada, the creditor, opposed the motion.

The court dismissed the motion for leave to appeal, finding that the proposed grounds of appeal lacked prima facie merit, did not raise issues of general importance, and that granting leave would unduly hinder the receivership administration.

Costs were awarded to RBC.

DGAP Investments Ltd. sought a stay pending leave to appeal an order from the supervising judge in a CCAA proceeding.

The order authorized Stelco Inc. to acquire partnership units in a Land Vehicle, which DGAP argued would obstruct its prior agreement to purchase land from the Land Vehicle.

The Court of Appeal applied the RJR-MacDonald test for a stay, finding that DGAP's case for leave to appeal was weak on the merits, there was no irreparable harm given the supervising judge's measures to protect DGAP's interests, and the balance of convenience favoured dismissing the stay to allow the CCAA proceeding to conclude and benefit aging stakeholders.

The motion for a stay was dismissed, and the leave to appeal motion was expedited.

The Bank of Montreal, a creditor, sought to set aside a fraudulent conveyance of real property by Roufat Iskenderov to Elena Lazareva.

The motion judge applied a ten-year limitation period under the Real Property Limitations Act.

The appellants appealed, arguing the two-year limitation period under the Limitations Act, 2002 applied.

The Court of Appeal for Ontario allowed the appeal, holding that the two-year limitation period from the date of discovery under the Limitations Act, 2002 applies to fraudulent conveyance actions, not the ten-year period under the Real Property Limitations Act.

The court found its previous decision in Anisman (ONCA) was wrongly decided due to a lack of historical context.

The discoverability issue was ordered to be tried together with the fraudulent conveyance claim.

The appellants appealed a motion judge's order lifting a stay of proceedings under the Bankruptcy and Insolvency Act (BIA) and amending a default judgment to declare the debt non-dischargeable in bankruptcy under s. 178(1)(d) BIA, on the basis that it arose from misappropriation or defalcation while acting in a fiduciary capacity.

The underlying action involved breach of statutory trust under the Construction Act for unpaid construction materials.

The Court of Appeal affirmed the motion judge's decision, finding no error in the refusal to admit extrinsic evidence contradicting deemed admissions from the default judgment, nor in considering the appellants' non-compliance with enforcement orders.

The court upheld the finding that the judgment debt arose from misappropriation or defalcation, emphasizing that the deemed admissions, including an award of punitive damages, demonstrated intentional wrongdoing and conduct markedly departing from ordinary standards of decent behaviour, satisfying the "moral turpitude or dishonesty" threshold for s. 178(1)(d) BIA.

This is an appeal from an order of the Commercial List judge concerning insolvency proceedings.

The appellants, Bryton, sought to exercise an option to purchase a property and obtain orders declaring the option valid and immune from challenge by other creditors under various acts (Fraudulent Conveyances Act, Assignments and Preferences Act, Canada Business Corporations Act oppression remedy, and Bankruptcy and Insolvency Act).

The application judge dismissed Bryton's request for a vesting order and declaratory relief, finding that the claims were not res judicata and that declaratory relief was not the appropriate vehicle to pre-emptively bar unadjudicated creditor claims.

The Court of Appeal upheld the application judge's decision, confirming that the validity of the option was not res judicata and that the refusal to grant declaratory relief was a proper exercise of discretion, as the application procedure was not suitable for dismissing unproven claims.

The appellants, The Rehill Company Limited and its owners, appealed a summary judgment that enforced their personal guarantees for corporate debt owed to Castle Building Centres Group Ltd. and dismissed their counterclaim.

The Court of Appeal dismissed the appellants' motion to introduce fresh evidence, finding a lack of due diligence and that the evidence would not have affected the outcome.

The court upheld the motion judge's findings that the debt was owed to the respondent, the rebate claim was not a genuine issue for trial, there was no breach of a subordination agreement, and the personal guarantees were continuing and enforceable.

The appeal was dismissed, and costs were awarded to the respondent.

This is an appeal from a motion judge's order setting aside the appellant's discharge from bankruptcy and vesting shares of a corporation (Bindaas Capital) in the trustee.

The motion judge found that the appellant, while an undischarged bankrupt, owned and operated Bindaas Capital, failed to disclose this asset, and fabricated documents to conceal his ownership.

The Court of Appeal dismissed the appeal, affirming the motion judge's findings and the discretionary decision to annul the discharge.

The court found no palpable and overriding error in the factual findings or the exercise of discretion, and upheld the trustee's authority to pursue the after-acquired property.

Thorneloe University sought leave to appeal a CCAA judge's decision that allowed Laurentian University to disclaim federation agreements and approved a debtor-in-possession (DIP) loan amendment.

Thorneloe argued the disclaimer would cause its insolvency, provided minimal financial benefit to Laurentian, and was motivated by anti-competition.

The Court of Appeal dismissed the leave motion, finding the proposed appeal was not prima facie meritorious, not of significance to the practice, and would unduly hinder the progress of the CCAA restructuring.

The court upheld the CCAA judge's balancing of interests under s. 32(4) of the CCAA, emphasizing the high deference owed to supervising judges in CCAA proceedings.

This appeal arose from a long-standing, high-conflict family law dispute.

The appellants challenged a motion judge's order that clarified spousal support obligations, addressed the impact of bankruptcy on an equalization payment secured by a letter of credit, and apportioned trial costs.

The Court of Appeal dismissed the appeal, affirming the motion judge's clarifications that periodic support continued due to the husband's failure to exercise a lump sum option, that the letter of credit securing equalization and support created an equitable trust not extinguished by bankruptcy, and that the allocation of trial costs was appropriate.