Philip Cho

The City of Toronto sought the appointment of a receiver and manager over the property, assets, and undertaking of Harry Sherman Crowe Housing Co-operative Inc. due to operational, financial, and governance challenges.

The court addresses the Receiver’s motion for approval of its activities, fees, and a proposed process (RFEIQ) for identifying and qualifying future board members to transition the Co-op out of receivership.

The court approves the Receiver’s activities and fees, and partially approves the RFEIQ process, requiring further reporting and court oversight before any subjective vetting of board candidates.

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.

The DIP Agent sought the appointment of a non-possessory Receiver and approval of a Sale Solicitation Process (SSP) for iSpan Systems LP, which had filed a Notice of Intention to Make a Proposal and subsequently defaulted on its Amended Proposal payments.

The motion also sought to suspend the Claims Adjudication Process and Mediation.

The court found the appointment of a receiver appropriate to maximize value for stakeholders, as bankruptcy would destroy much of the business's value.

The proposed SSP was approved, with the court deferring to the Receiver's recommendations on timeline and deposit amount, despite objections from two unsecured creditors regarding these terms.

The Claims Adjudication Process was also suspended.

The appellants, a group of subcontractors and a bank, appealed an application judge's decision that rescission of surety bonds might be possible even if it affects innocent third parties.

The bonds were issued by Zurich Insurance Company Ltd. for a large construction project, but Zurich later discovered alleged fraudulent misrepresentations and collusion that induced it to issue the bonds.

The appellants sought a declaration that rescission was unavailable as a matter of law due to the involvement of innocent third parties.

The Court of Appeal dismissed the appeal, affirming that prejudice to third parties is not an absolute bar to rescission, especially in cases of fraudulent misrepresentation, and that such a determination requires a full factual record at trial.

The applicants, a syndicate of lenders and various construction trades, sought declarations that the respondent surety could not rescind performance and payment bonds issued for a hospital redevelopment project.

The surety had discovered alleged fraud and collusion in the procurement process and commenced a separate action for rescission.

The applicants argued they were innocent third parties whose rights under the bonds could not be defeated by the alleged fraud of the principals.

The court dismissed the applications, finding that the applicants' rights were derivative of the principals and that rescission remained a possible equitable remedy that must be determined on a full factual record at trial.

The tenant brought a motion for various relief against the landlord, including setting aside a distress sale and lease termination, and seeking relief from paying rent during COVID-19 lockdowns.

The court previously granted the tenant's requests regarding the termination and distress sale but required the tenant to pay post-NOI rent.

On the issue of costs, both parties sought costs.

The court found that success was divided and, given the tenant's continued significant default in rent payments, ordered that no costs be payable by either party.

The tenant filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act.

The landlord attempted to terminate the commercial lease for non-payment of post-NOI rent and claimed to have completed a distress sale of the tenant's chattels just prior to the NOI filing.

The tenant brought a motion to set aside the lease termination and the distraint, and sought relief from paying rent during the COVID-19 shutdown.

The court set aside the lease termination, finding the landlord acted precipitously without giving the tenant reasonable time to deliver promised rent cheques.

The court also set aside the distraint, finding the sale was not completed prior to the NOI and did not comply with the Commercial Tenancies Act.

However, the court held the tenant was not relieved from paying post-NOI rent due to the pandemic shutdown.

The plaintiff, who suffered catastrophic injuries in an automobile accident, sought a Certificate of Pending Litigation (CPL) against the defendant's residence to secure potential future damages exceeding the defendant's limited insurance coverage.

The court denied the motion, finding that the plaintiff did not establish a reasonable claim to an interest in the land, a prerequisite for a CPL.

The court distinguished the case from situations involving fraudulent conveyance and noted the plaintiff had already received substantial accident benefits.

The court issued an endorsement following the dismissal of the plaintiff's summary judgment motion on a mortgage guarantee.

This endorsement addresses the costs of that motion and the plaintiff's subsequent request for a mini-trial or expedited trial.

The court reserved the costs of the summary judgment motion to the trial judge, finding it more just given that the claims and defences remained live and the work done would reduce trial costs.

The plaintiff's request for a mini-trial was denied, as it would not allow for proper development of defences due to prior evidentiary deficiencies and lack of discovery.

The court reiterated the need for a case conference to address the action's progress, particularly in light of a key individual's failing health, and to consider an expedited trial.

The plaintiff, 2383431 Ontario Inc., sought summary judgment against individual defendants who guaranteed a mortgage for Rose of Sharon (Ontario) Retirement Community.

The defendants argued the guarantee was limited to interest only and raised equitable defences related to construction defects and the relationship between the original mortgagee (IWOK) and the builder (Unimac).

The court dismissed the motion for summary judgment, finding that the complex factual matrix, including the disputed scope of the guarantee and the relationships between the parties, presented genuine issues requiring a trial.

The judge emphasized that the record did not allow for confident findings of fact or a proportionate resolution of the dispute.

The defendant Global Safety & Equipment Inc. brought a motion to set aside service of the Statement of Claim and to stay or dismiss the action, arguing that Ontario was not the proper forum.

The plaintiff, Integrity Worldwide Inc., opposed the motion.

The court found that service outside Ontario was authorized under Rules 17.02(f), (g), and (i) as the claim related to a contract breached in Ontario, torts committed in Ontario (specifically, conspiracy where harm was suffered), and sought injunctive relief affecting Ontario.

The court further determined that Ontario had a real and substantial connection to the dispute, satisfying presumptive connecting factors for jurisdiction, and was the most convenient forum, as the defendant failed to identify a more convenient alternative.

The motion was dismissed.

The defendant, a cosmetic plastic surgeon, brought a motion to set aside a default judgment obtained by the plaintiff for unpaid anesthesiology services.

The defendant argued he failed to respond to the statement of claim because he was negotiating with the plaintiff, and raised defences of economic duress and potential violations of the Bankruptcy and Insolvency Act.

Applying the five-part test from Mountain View Farms, the court found the defendant moved promptly, had an arguable defence on the merits, and that the balance of prejudice and the interests of justice favoured having the action defended on its merits.

The motion was granted and the default judgment was set aside.

A creditor moved to dismiss a trustee’s fraudulent preference motion under s. 95 of the Bankruptcy and Insolvency Act as statute‑barred.

The trustee argued that the two‑year limitation period under the Limitations Act, 2002 was suspended while an appeal from the bankruptcy order was pending due to the automatic stay under s. 195 of the BIA.

The court held that the BIA stay pending appeal does not suspend or extend the limitation period under the Limitations Act, 2002.

Because the trustee commenced the preference motion more than two years after the bankruptcy order, the claim was statute‑barred.

In obiter, the court further held that if the settlement payments had been voided as preferences, the creditor would have been entitled to file a proof of claim for the full amount of its original judgment rather than the compromised settlement amount.

The defendants brought a motion under Rule 56.01(1) of the Rules of Civil Procedure seeking security for costs against a corporate plaintiff in an action arising from a liquidation agreement and alleged shortfall in auction proceeds.

The defendants argued the plaintiff corporation lacked sufficient assets in Ontario to satisfy a potential costs award.

The court held that defendants who voluntarily initiated a summary judgment motion should not obtain security for the costs of that motion from the opposing party.

The court also found it unjust to rely on the plaintiff’s alleged lack of assets where that circumstance arguably arose from the defendants’ failure to remit sale proceeds owed to the plaintiff.

Applying proportionality principles under Rule 1.04(1.1), the court dismissed the motion without prejudice to seeking security after the pending summary judgment motion is decided.

The applicants brought a motion to amend a statement of claim in a personal injury action arising from a motor vehicle accident to add Family Law Act claims after the expiry of the two‑year limitation period.

The primary action had been commenced within the limitation period by the injured plaintiff.

Following the plaintiff’s death, her spouse and mother sought to be added as plaintiffs under s. 61 of the Family Law Act for loss of care, guidance, and companionship.

The court held that the derivative claims could be added because the main action had been commenced in time and there was no compensable prejudice to the defendant.

Alternatively, the court found an evidentiary basis that the claims were not discoverable until the plaintiff’s death when the damages exceeded the statutory threshold.