Percy Ostroff

This endorsement addresses a request for costs following the dismissal of Gary Beach's motion for leave to appeal and Heliotrope Investment Corporation's related motion being dismissed as moot.

Heliotrope sought $15,000 in costs, payable jointly and severally by Mr. Beach and three corporations in receivership.

The court awarded Heliotrope $15,000 in costs, payable solely by Gary Beach, declining to impose liability on the corporations due to a lack of apparent authority for Mr. Beach to act on their behalf and the absence of consent from their receiver.

Gary Beach, spouse of a bankrupt, sought leave to appeal a receivership order concerning three corporations where his wife was the sole shareholder and director.

The order had appointed MNP Ltd. as receiver under both the Bankruptcy and Insolvency Act (BIA) and the Courts of Justice Act.

Beach, who had participated in the original receivership motion, filed an appeal without leave, which is required under s. 193 of the BIA.

He subsequently moved for leave to appeal and an extension of time.

Heliotrope Investment Corporation, the party that obtained the receivership order, opposed the motion.

The Court of Appeal dismissed the motion for leave to appeal, finding that none of Beach's proposed grounds of appeal (lack of identified test, absence of reasons, issues with order settlement, unreflected assurances) were prima facie meritorious, and no issues of general importance were raised.

This is a costs endorsement following an appeal.

The respondent, Heliotrope Investment Corporation, provided costs submissions as requested, while the appellants, Jonathan Gary Beach and Martha Lorraine Beach, chose not to make any submissions.

The court awarded costs to the respondent in the amount of $20,000, inclusive of disbursements and relevant taxes.

The appellants, Jonathan Gary Beach and Martha Lorraine Beach, appealed a bankruptcy judgment.

They sought to introduce fresh evidence, which the Court of Appeal denied, finding it could have been presented earlier or lacked evidentiary value.

The Court found no error in the application judge's findings that the appellants owed a debt of $1,000 or more and had generally ceased to meet their liabilities.

The application judge also correctly exercised discretion in not refusing or staying the bankruptcy order.

The appeal was dismissed.

The bankrupt applicants and their corporation brought a motion to remove protective orders registered on title by the respondent.

The protective orders restricted the applicants from dealing with their property without providing notice and details to the bankruptcy trustee.

The applicants argued the registration was contrary to their agreement and added an oversight requirement.

The court dismissed the motion, finding that the orders were properly registered under the Land Titles Act, remained in full force, and did not impose any additional oversight beyond what was already ordered.

This decision addresses a preliminary issue in an application for an oppression remedy: whether Neu Solutions Inc. (NSI) remained a 50% shareholder of eSolutions MN Inc. after July 2016.

The respondents argued that NSI had relinquished its shares through an agreement.

The court applied contract law principles, including the requirement for a meeting of the minds and certainty of essential terms, and found no enforceable agreement to transfer shares.

The court also noted the lack of compliance with the share transfer restrictions in eSolutions' Articles of Incorporation.

Consequently, the court ruled that NSI remained a 50% shareholder of eSolutions.

The court-appointed Receiver and certain plaintiffs brought motions to interpret or amend a 2017 costs order made by Justice Kane.

The costs order, as drafted, appeared to make Carleton Condominium Corporation No. 396 (CCC 396) jointly and severally liable with the Burdet Group defendants to pay $410,000 in costs to the plaintiffs.

However, the same order also awarded CCC 396 $220,000 in costs payable by the plaintiffs.

The court found that the costs order contained an accidental omission and was inconsistent with Justice Kane's written costs decision.

Applying Rule 59.06 of the Rules of Civil Procedure, the court amended the costs order to explicitly exclude CCC 396 from the defendants liable to pay costs to the plaintiffs.

The applicant creditor, Heliotrope Investment Corporation, applied for bankruptcy orders against the respondents, Martha and Gary Beach.

The applicant alleged the respondents owed debts exceeding $1,000 and had committed an act of bankruptcy by ceasing to meet their liabilities generally as they became due.

The respondents opposed the applications, arguing they had sufficient assets, the debts were disputed in related civil proceedings, and the applications were brought for an improper purpose.

The court found that the applicant established the debts and the act of bankruptcy.

The court rejected the respondents' arguments, finding no sufficient cause to dismiss or stay the applications, and issued the bankruptcy orders.

This motion concerned the entitlement to funds held in court, initially part of a beneficiary's share of an estate, which were subject to a condition (provision of a letter of credit) that was never met.

The beneficiary, now an undischarged bankrupt, purported to assign his interest in these funds to a charitable foundation for his children before his bankruptcy.

The Estate Trustee and Trustee in Bankruptcy sought an order directing the funds to be paid out according to their settlement.

The court addressed the standing of the bankrupt and the foundation, the application of the Law of Assent regarding the transfer of estate assets, and whether the purported assignment was a reviewable transaction under the Bankruptcy and Insolvency Act.

The court found that neither the bankrupt nor the foundation had standing, that the Estate Trustee had never assented to the transfer of the funds to the bankrupt, and that the purported assignment was a reviewable transaction made for nominal consideration to non-arm's length parties with inferred intent to defraud creditors.

The motions brought by the Estate Trustee and Trustee in Bankruptcy were granted, directing the funds to be paid to the bankruptcy estate and the estate creditors.

The bankrupt, a 42-year-old second-time bankrupt, applied for a discharge.

The Canada Revenue Agency opposed the discharge on the grounds that it was a tax-driven bankruptcy, with the bankrupt owing over $660,000 in personal income taxes.

The court found that the bankrupt failed to cooperate with a CRA audit, transferred his business to his sister to avoid paying taxes, and artificially lowered his income to avoid surplus income payments.

The court ordered a conditional discharge requiring the payment of $150,000 and suspended the discharge for 18 months.

The Toronto-Dominion Bank (TD) was successful in its application to enforce guarantees against Anwar Fares and Maya Bakhos, and in opposing the guarantors' application for a declaration that the guarantees were invalid.

The court, therefore, addressed the issue of costs.

TD sought substantial indemnity costs based on contractual provisions in the loan agreement and guarantees.

The court, exercising its discretion under section 131 of the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure, found TD entitled to substantial indemnity costs.

However, the court adjusted the claimed amount, disallowing certain disbursements (flights to Ottawa, unexplained courier/taxi fees) and assessing fees based on proportionality and the unsuccessful party's reasonable expectation, ultimately ordering the guarantors to pay TD $25,723.03.

The Toronto-Dominion Bank sought judgment against a corporation and its personal guarantors for a defaulted small business loan.

The guarantors, a married couple, sought a declaration that their personal guarantees were invalid, arguing they were misled about the extent of their liability (believing it was limited to 25% of the outstanding loan, not unlimited as indicated by an 'x' in the form).

The court found the guarantees were unlimited, rejected arguments based on CSBFA regulations as irrelevant to the bank-customer relationship, and dismissed the non est factum defence due to the guarantors' failure to read the documents and the presence of a "no representations" clause.

Judgment was granted in favour of the bank.

The Trustee in Bankruptcy was successful in obtaining an order annulling the debtor's proposal in bankruptcy and defeating a cross-motion for permission to sue the Trustee for $10 million.

The Trustee sought costs of $82,958.01.

The court awarded the requested amount on a full indemnity basis, noting the factual complexity, unfounded allegations of professional negligence against the Trustee, and the fact that the Trustee would ordinarily recover its full costs.

The costs were ordered to be recoverable as a priority claim under section 136(1)(b) of the Bankruptcy and Insolvency Act against the funds held in the failed proposal.

Creditors applied for a bankruptcy order under s. 45 of the Bankruptcy and Insolvency Act against a corporate debtor that had failed to pay debts exceeding the statutory minimum.

The court found the debtor had committed an act of bankruptcy and was operationally insolvent, with accounts payable nearing $300,000 and limited liquid assets.

Although the debtor argued bankruptcy would be futile and harm future revenue prospects tied to intellectual property royalties, the court held that no concrete restructuring proposal or recapitalization plan had been presented.

The court concluded that vague promises of future payment were insufficient to avoid bankruptcy but granted a brief stay to allow the parent corporation an opportunity to inject capital and satisfy the debts.