Peter Joseph Cavanagh

The appellant advanced a commercial loan to the respondent with an effective annual interest rate exceeding 90 percent, violating the criminal interest rate provisions of the Criminal Code.

The respondent sought a declaration that the agreement was illegal.

The application judge applied 'notional severance' to reduce the interest rate to the legal maximum of 60 percent.

The Court of Appeal reversed this, applying the traditional 'blue-pencil' test to strike out the interest provision entirely.

The Supreme Court of Canada allowed the appeal, holding that notional severance is available as a remedy for statutory illegality under s. 347 and was appropriate in this case given the commercial context and the parties' intentions.

The appellant purchased stock in bulk from a company in financial difficulty but failed to comply with the Bulk Sales Act.

The seller applied the proceeds of the sale against its debts owed to its two highest-ranking secured creditors.

The respondent, an unsecured creditor, commenced proceedings against the appellant seeking an accounting under s. 16(2) of the Act.

The Supreme Court of Canada allowed the appeal, holding that the buyer's duty to account must be interpreted purposively.

Since the proceeds were paid to priority-ranking creditors and the respondent was not deprived of any money it would have received on a ratable distribution, the appellant was not liable to account to the respondent.

H & R Block purchased stock in bulk from Tax Time without complying with the Bulk Sales Act, instead paying the entire proceeds to secured creditors.

National Trust, an unsecured creditor, sought an accounting under s. 16(2) of the Act.

The Court of Appeal held that H & R's unilateral decision to pay certain creditors was not a proper accounting under the Act, making H & R liable to National Trust for the debt existing at the time of the bulk sale.

However, the Court allowed the appeal in part, finding H & R was not liable for the costs of subsequent litigation between National Trust and Tax Time, as those were post-sale debts.

The appellants appealed an order striking their third-party claim for contribution and indemnity against a securities dealer after the respondents commenced a second action alleging damages attributable to the appellants' negligence in the loss of share certificates.

The court held that, because the statement of claim expressly limited damages to the portion attributable to the appellants' negligence, there was no basis for a claim-over under the Negligence Act or under rule 29.01.

The court also upheld the refusal to preserve the third-party claim for declaratory relief, finding no prejudice and noting the appellants were not pursuing such relief on appeal.

The appeal was dismissed with costs, rendering the cross-appeal moot.