Bankruptcy and Insolvency Law - ONCA

The moving party law firm sought an order under Rule 15.04 of the Rules of Civil Procedure to be removed as the lawyer of record for the appellant in a receivership proceeding.

The firm had filed a notice of appeal on behalf of the appellant to prevent the sale of two condominium units, despite intending to have no further involvement.

The Court of Appeal dismissed the motion, finding that the firm had launched a 'zombie appeal' that jeopardized the receivership proceedings and abused its status as an officer of the court.

The firm was ordered to remain on the record until the final disposition of the receiver's motion to quash the appeal, prioritizing the administration of justice over the firm's interests.

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 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 appellants, a second mortgagee and a tenant of a commercial property, appealed a motion judge's order regarding the distribution of a holdback from a receiver's sale.

The appellants argued that rent arrears owed by the tenant merged in a prior judgment and did not vest in the purchaser, that the second mortgagee had priority over the purchaser's claim for rent arrears, and that the tenant was entitled to a credit for a payment made under a side agreement.

The Court of Appeal dismissed the appeal, finding that the vesting order explicitly transferred the lease and rent arrears to the purchaser, that the motion judge properly adjusted the accounts between the parties, and that the purchaser was not bound by the side agreement.

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 appellant appealed a preservation order requiring him to deliver luxury vehicles or their sale proceeds to the respondent trustee in bankruptcy, and freezing his bank accounts.

The appellant argued he only acquired a beneficial interest in the vehicles when a court declared a trust agreement valid, years after his bankruptcy.

The Court of Appeal dismissed the appeal, finding the appellant's beneficial interest existed at the time of his bankruptcy pursuant to the trust agreement, and the motion judge made no error in principle in exercising his discretion to make the preservation order.

Following a successful appeal setting aside a series of ex parte 'investigative receivership' orders, the successful appellants sought costs against both the original applicant and the court-appointed receiver.

The Court of Appeal held that both were liable for costs.

The applicant was liable on a partial indemnity scale because he initiated and supported the proceedings.

The receiver was held personally liable for costs on a substantial indemnity scale because it acted as a 'real litigator' and pursued an impermissibly overreaching roving receivership, losing its objectivity as an officer of the court.

The Court also clarified that substantial indemnity costs are calculated as 1.5 times partial indemnity costs under Rule 1.03, rather than as a percentage of full indemnity costs.

The appellant Superintendent of Financial Services appealed a CCAA judge's order lifting a stay of proceedings and ordering the debtor companies into bankruptcy.

The appellant argued that a deemed trust arose under the Pension Benefits Act upon the wind up of two pension plans during the CCAA proceedings, and that this trust should have priority over secured creditors.

The Court of Appeal dismissed the appeal, holding that the CCAA judge reasonably exercised his discretion to transition the proceedings to bankruptcy under the BIA, where provincial deemed trusts are rendered inoperative by the doctrine of federal paramountcy.

The appellant appealed a motion judge's discretionary decision refusing to set aside a noting of default.

The motion judge had considered the appellant's failure to comply with an outstanding production order, which could prejudice the respondents.

The Court of Appeal found no basis to interfere with the motion judge's exercise of discretion.

Furthermore, the Court held that Rule 11 of the Rules of Civil Procedure did not apply because the respondents had obtained an order to proceed under section 69 of the Bankruptcy and Insolvency Act.

The appeal was dismissed with costs.

The moving parties, representing non-union active employees and retirees of a company in separate CCAA proceedings, sought leave to intervene in an appeal after oral arguments had concluded and judgment was reserved.

The appeal involved issues under the Pension Benefits Act and the Personal Property Security Act that could significantly impact the moving parties' interests.

The Court of Appeal granted the motion to intervene, finding the moving parties would provide a useful perspective.

To prevent injustice, the intervention was limited to existing issues and the record, and the moving parties were ordered to pay the responding party's reasonable costs for responding to their factum.

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.

Following a successful appeal, the court received submissions regarding the costs of the proceedings below before the Registrar in Bankruptcy and the Superior Court.

The parties had previously agreed to fix those costs at $20,000 when the respondent was successful.

The Court of Appeal found no reason to depart from the agreed amount or to deny the successful appellant its costs, ordering the respondent to pay $20,000 inclusive of disbursements and HST.

The appellant, a court-appointed receiver, appealed a motion judge's decision refusing to approve the full amount of legal fees requested on behalf of its counsel.

The motion judge had reduced the fees, finding them disproportionate to the size and complexity of the receivership.

The Court of Appeal dismissed the appeal, holding that the court must ensure compensation is fair and reasonable, focusing on the value provided rather than just the mathematical calculation of hours multiplied by hourly rates.

The motion judge's assessment of the fees as excessive was upheld.

The moving parties sought an extension of time to appeal an order dismissing their motion for a declaration that a civil judgment for assault survives the responding party's bankruptcy.

The motion judge had relied on a lower court decision that was subsequently reversed by the Court of Appeal after the appeal period expired.

Applying the test for extending time, the court found that despite an unsatisfactory explanation for part of the delay, the strong merits of the proposed appeal and the interests of justice warranted granting the extension.

The motion was allowed, with costs awarded to the responding party for the indulgence.

The appellant appealed a decision declaring that the respondent's debt would be released by his discharge from bankruptcy.

The respondent had acted as a 'straw borrower' and co-signed a mortgage application, unaware that the primary borrower had made fraudulent misrepresentations.

The appellant argued the debt should survive bankruptcy under s. 178(1)(e) of the Bankruptcy and Insolvency Act due to false pretences.

The Court of Appeal dismissed the appeal, holding that s. 178(1)(e) requires a causal connection between the bankrupt's false pretences or fraudulent misrepresentation and the obtaining of the property.

The trial judge correctly found the mortgage funds were advanced based on the primary borrower's misrepresentations, not the respondent's.