Patrick Shea

The appellant tenant operated a duty-free store that suffered a material adverse effect due to COVID-19 border closures.

The tenant invoked a lease provision requiring the landlord to consult and discuss the impact of regulatory changes.

After negotiations failed, the tenant sought a judicially imposed rent abatement.

The motion judge dismissed the request, finding the provision was an agreement to agree, and the landlord had negotiated in good faith.

The Court of Appeal dismissed the appeal, affirming that pre-contractual subjective intentions were inadmissible, the court could not impose a rent adjustment without a contractual mechanism, and the landlord was entitled to pursue its economic self-interest during negotiations.

This decision concerns the costs arising from an unsuccessful application brought by Seabrook Bros.

Mechanical Ltd. to challenge a proposal trustee's valuation of security under the Bankruptcy and Insolvency Act.

The proposal trustee, Doyle Salewski Inc., sought $5,000 in costs, which was granted.

The debtor, North House Foods Ltd., sought partial indemnity costs of $23,413.72.

The court reduced North House Foods' costs to $8,000, citing their failure to deliver a Costs Outline (Form 57B) in advance as required by Rule 57.01(6) and proportionality concerns, noting that the proposal trustee's arguments were largely persuasive in the underlying application.

The moving party, Seabrook Bros.

Mechanical Ltd., applied under s. 50.1(4) of the Bankruptcy and Insolvency Act to revise the Proposal Trustee's $0 valuation of its construction lien security against North House Foods Ltd.'s leasehold interest.

The court dismissed the application, finding that Seabrook failed to demonstrate that the security had any realizable value on a forced sale, despite expert reports suggesting value to the debtor.

The court emphasized that the valuation was not about the debt itself, but the enforceability and net recovery from the collateral, considering impediments like lease assignment restrictions and the theoretical nature of realizing on such security in a proposal context.

This motion addressed the allocation of costs incurred by the Liquidator (KPMG) in a corporate liquidation proceeding.

The Applicants sought to have specific categories of costs (trial and trial preparation, accounting/bookkeeping/tax, and the Sources and Uses Report) fully borne by the Respondents, arguing these were necessitated by the Respondents' prior misconduct and poor record-keeping.

The court found that these disputed costs were directly attributable to the Respondents' self-dealing and failure to maintain proper financial records, as established in previous judgments.

Consequently, the court ordered the Respondents to bear full responsibility for these specific costs, while general administration costs were to be shared proportionally among shareholders.

This appeal concerned the sale of Lash Point, a family cottage property owned by a non-profit corporation (LPAC).

Family members were divided between "Remainers" (who wanted to keep the property) and "Departers" (who wanted to sell their interests).

A lower court initially ordered a staged buy-out, but due to delays, a motion judge later approved an en bloc sale of the entire property to third parties, reversing the original plan.

The appellants (Remainers and LPAC) appealed, arguing the motion judge lacked jurisdiction to vary the original order and erred in approving the sale without satisfying the principles for sale approval in receivership contexts (Soundair principles).

The Court of Appeal affirmed the motion judge's jurisdiction to vary the order but found that the sale approval was flawed as it did not meet the Soundair principles, particularly regarding efforts to obtain the best price and the integrity of the sales process.

The appeal was allowed, the sale order set aside, and the Receiver was directed to develop a proper sales process for the entire property.