Richard B. Swan

The plaintiffs, representing a class of donors to a failed charitable tax shelter program, brought an action for professional negligence against the law firms and valuation firm that provided services to the program's promoter.

The professional defendants moved for summary judgment, arguing the claims were statute-barred and that they owed no duty of care to the non-client class members.

The court held the claims were not statute-barred, as the limitation period did not begin to run until the Tax Court declared the program a sham.

The court granted summary judgment to the law firms, finding they explicitly limited their undertakings to their client and owed no duty of care to the class members.

However, the court denied summary judgment to the valuation firm, finding a triable issue existed regarding whether it undertook a duty to the class members by authorizing its valuation report to be used in their tax appeals.

The plaintiff condominium corporation brought a motion to amend its Statement of Claim to add the manufacturer of a heat pump sensor as a defendant in a subrogated claim for water damage.

The proposed defendant opposed the motion, arguing the two-year limitation period had expired and the plaintiff failed to exercise due diligence in identifying it.

The court granted the motion, finding the plaintiff provided a reasonable explanation for the delay in discovering the manufacturer's identity, which raised a triable issue of discoverability to be determined at trial or on summary judgment.

The proposed defendant was permitted to plead a limitation defence.

No costs were awarded.

The Estate Trustee During Litigation (ETDL) brought a motion for approval of the sale of a commercial property co-owned by the insolvent estate and a third party.

The sale was opposed by certain beneficiaries who argued the sale price was improvident and the ETDL failed to follow court-ordered sales processes.

The co-owner initially opposed the sale but later consented.

The court applied the Soundair principles and approved the sale, finding that the property had been adequately marketed, the price was not improvident given the property's derelict state and ongoing operating losses, and the co-owner had waived any procedural irregularities.

The court considered a motion by the Defendants for security for costs against the Plaintiff Beijing Hehe Fengye Investment Co. Limited (BHF) in a high-value commercial litigation.

The court reviewed the legal framework under Rule 56.01(1) of the Rules of Civil Procedure, including the justness of ordering security, the merits of the claim, and the financial circumstances of the parties.

The court found that BHF did not have sufficient assets in Ontario, and the claims of BHF and co-plaintiff Rong Kai Hong were not joint such that one could satisfy the other's costs.

The court ordered BHF to post $140,000 as security for costs, balancing the interests of both parties and ensuring access to justice.

Following a trial in which the plaintiff's claims were dismissed and the defendant's counterclaim was granted, the court determined the scale and quantum of costs.

The defendants sought costs on a full indemnity basis, pointing to the plaintiff's misconduct, including the fabrication of a letter and breach of a witness exclusion order.

The court agreed that the plaintiff's egregious conduct warranted full indemnity costs, while the corporate co-defendants by counterclaim were liable on a partial indemnity scale.

Ultimately, the court awarded total costs of $2,178,814.60, with 90% payable by the plaintiff on a full indemnity basis and 10% payable by the corporate co-defendants on a partial indemnity basis.

This decision concerns a dispute between two brothers, David Ang and Mark Ang, over the ownership and management of Bolt Technologies Incorporated (formerly Second Closet Incorporated).

David Ang claimed an equal share in the company based on an alleged oral agreement and representations by Mark Ang, as well as claims of wrongful dismissal and oppression under the Canada Business Corporations Act.

The court found no enforceable oral agreement or representation, held that the executed Unanimous Shareholders Agreement (USA) governed the parties' rights, and dismissed David's claims.

The court also found that David had engaged in misconduct, including fabricating evidence and breaching fiduciary duties, and allowed Bolt's counterclaim for damages and punitive damages.

This decision addresses whether Cushman & Wakefield ULC (C&W), as real estate broker, is entitled to a commission in respect of Stelco’s purchase of the Stakeholders’ limited partnership units and other equity in the Legacy Lands LP, under the Companies’ Creditors Arrangement Act proceedings.

The court finds that C&W is not entitled to a commission, as the relevant brokerage agreements had expired or were never executed for the properties in question, and the transaction at issue was not contemplated by the commission provisions.

The court also dismisses C&W’s alternative claim for unjust enrichment.

The applicant, Grant Allen McDonald, sought a declaration that the respondent estate trustees breached an agreement of purchase and sale after a fire destroyed the subject property before closing.

The applicant wanted to proceed with the sale, subject to a guarantee of minimum insurance proceeds.

The court found that the applicant’s insistence on a guaranteed amount of insurance proceeds constituted a repudiation of the agreement, entitling the respondents to terminate the agreement and retain the deposit.

The application for specific performance or relief from forfeiture was dismissed.

The appellant, 2557904 Ontario Inc. (the stalking horse bidder), appealed a motion judge's order that dismissed the receiver's motion for an approval and vesting order (AVO) and instead approved the debtor's (1000093910 Ontario Inc.) motion to redeem a first mortgage.

The Court of Appeal found the motion judge erred by not ensuring 255 received compensation for costs thrown away and by granting provisional enforcement of the order after an appeal notice was filed.

The appeal was allowed in part, varying the order to require the debtor to pay $300,000 in compensation to 255 and setting aside the provisional execution.

The court also ordered that if the refinancing transaction does not close, the AVO for 255 will be granted.

The Court of Appeal heard motions in an appeal concerning the receivership of a debtor's property.

The appellant, a successful bidder, appealed two lower court orders that terminated its Stalking Horse Agreement and approved the debtor's refinancing transaction.

The motion judge referred several issues to a panel, including the appellant's standing and right to appeal, and whether the lower court erred in terminating the agreement and granting provisional enforcement.

The Court of Appeal continued the stay of provisional execution of the lower court orders, emphasizing the importance of maintaining the integrity of court-approved sale processes, especially given the absence of reasons from the motion judge for his initial decision.

The applicant, Coach USA Inc., as proposed foreign representative of several Canadian debtors, sought an Initial Recognition Order and a Supplemental Order under Part IV of the Companies’ Creditors Arrangement Act (CCAA) and the Courts of Justice Act.

The relief included recognizing US Chapter 11 cases as foreign main proceedings, recognizing US First Day Orders, granting a stay of proceedings in Canada, appointing an Information Officer, and granting priority charges (Administration, D&O, DIP).

The court granted the unopposed application, finding that the US Chapter 11 cases were foreign main proceedings, rebutting the presumption of COMI in Canada due to the integrated nature of the operations.

The court also approved the stay, recognition of US orders, appointment of Alvarez & Marsal Canada Inc. as Information Officer, and the proposed charges.

1000093910 Ontario Inc., a company in receivership, appealed the motion judge’s decision to decline hearing its cross-motion and to grant the receiver’s proposal for a public auction of its primary asset.

The cross-motion sought to vary the receivership order and enforce an earlier agreement of purchase and sale (APS).

The Court of Appeal dismissed the appeal, finding that the motion judge's discretionary decision not to hear the cross-motion was not erroneous, given the appellant's late service of materials and the low chance of success for the earlier APS.

The court also found no error in principle in the motion judge's approval of the receiver's proposed sales process, which included a "stalking horse" agreement, as it was fair, transparent, and aimed at optimizing the asset's price.

The moving parties brought a motion for leave to appeal an order dated November 20, 2023.

The Divisional Court dismissed the motion for leave to appeal and awarded costs to the responding party on a full indemnity basis in the amount of $8,213.01.

This motion before the Court of Appeal for Ontario concerned whether an order made in a receivership proceeding, which approved bidding procedures and a stalking horse agreement for the sale of a property, and the motion judge's refusal to hear a cross-motion to approve an earlier agreement of purchase and sale, constituted an appealable order as of right under s. 193(c) of the Bankruptcy and Insolvency Act (BIA) or required leave under s. 193(e).

The Court applied the "operative effect" test, finding that the refusal to hear the cross-motion, despite being procedural, effectively jeopardized the property's value by depriving the Debtor of the ability to enforce a higher-value original agreement, thereby triggering the automatic right of appeal.

The motion for leave was dismissed as unnecessary, and the appeal was expedited.

In the context of CCAA proceedings, the court-appointed Monitor sought a Mareva injunction against a former executive, his company, and his spouse.

The Monitor alleged that the executive had misappropriated millions of dollars from the insolvent companies for personal use, including purchasing a yacht, private jet fractional interests, and real estate, while failing to remit significant taxes.

The court found a strong prima facie case of fraud and breach of fiduciary duty against the executive and his company, and inferred a real risk of asset dissipation given their ties to St. Lucia.

An uncapped Mareva injunction was granted against them.

However, the court found insufficient evidence of actual knowledge to establish a strong prima facie case of knowing assistance or receipt against the spouse, and instead ordered her to provide a statement of worldwide assets.

The applicant, Micheline Boutin, brought a motion to transfer and consolidate a civil proceeding commenced by the respondent, Victor Boutin, and his companies in Toronto with an existing family law proceeding in Brampton.

The Toronto proceeding alleged improvident sale of properties by the applicant, an issue previously addressed by the court as an adjustment to equalization in the family law case.

The court found that the Toronto proceeding's venue choice was unreasonable and that consolidation was desirable to avoid multiplicity of proceedings, promote expeditious resolution, and prevent inconsistent findings, given the substantial factual and legal overlap between the two cases.

Tacora Resources Inc. sought an amended and restated initial order (ARIO) and a solicitation order under the Companies’ Creditors Arrangement Act (CCAA) to facilitate its restructuring, including approval for a $75 million debtor-in-possession (DIP) financing facility from Cargill.

An ad hoc group of senior noteholders (AHG) opposed the Cargill DIP facility, alleging a flawed process and material prejudice, and brought a cross-motion for approval of their own competing DIP proposal.

The court found that Tacora's Board exercised reasonable business judgment in selecting the Cargill DIP facility, which was financially superior and less prejudicial to creditors overall than the AHG's proposal.

The court dismissed the AHG's cross-motion, finding no evidence of improper conduct by Cargill or the Board, and granted Tacora's requested ARIO and Solicitation Order, including approval of the Cargill DIP facility, an extended stay period, a Key Employee Retention Plan (KERP), and a sealing order for KERP details.

DGAP Investments Ltd. sought a stay pending leave to appeal an order from the supervising judge in a CCAA proceeding.

The order authorized Stelco Inc. to acquire partnership units in a Land Vehicle, which DGAP argued would obstruct its prior agreement to purchase land from the Land Vehicle.

The Court of Appeal applied the RJR-MacDonald test for a stay, finding that DGAP's case for leave to appeal was weak on the merits, there was no irreparable harm given the supervising judge's measures to protect DGAP's interests, and the balance of convenience favoured dismissing the stay to allow the CCAA proceeding to conclude and benefit aging stakeholders.

The motion for a stay was dismissed, and the leave to appeal motion was expedited.

The Ontario Superior Court of Justice (Commercial List) heard two motions within a long-standing Companies’ Creditors Arrangement Act (CCAA) proceeding concerning U.S. Steel Canada Inc. (now Stelco Inc.).

Stelco Inc. sought approval for a Securities Purchase Agreement (SPA) to acquire the remaining ownership interest in a Land Vehicle from various Stakeholders (employees, retirees, pensioners).

DGAP Investments Ltd., a defendant, brought a cross-motion seeking a strict timetable for the completion of a separate land sale agreement (DGAP Sale Agreement) before the SPA could close, alleging bad faith by Stelco.

The court granted Stelco's motion, finding the SPA beneficial to the Stakeholders by providing immediate monetization and extricating them from ongoing litigation.

DGAP's motion was dismissed, as the court found no evidence of bad faith by Stelco sufficient to delay the SPA, and determined that the SPA and DGAP Sale Agreement were not mutually exclusive.

The court emphasized continued judicial supervision and the Monitor's role in future transactions.

Stelco Inc. sought leave to appeal an order from the Superior Court of Justice requiring it to complete the severance and conveyance of a parcel of land (the "Reconveyance Parcel") to Legacy Lands Limited Partnership's nominee, in accordance with a 2018 reconveyance agreement.

Ernst & Young Inc., as court-appointed Monitor in the U.S. Steel Canada Inc. CCAA proceeding, and DGAP Investments Ltd., a purchaser of the land, opposed the motion.

The Court of Appeal dismissed Stelco's motion for leave to appeal, finding that the motion judge did not err in concluding the CCAA applied, and that the proposed appeal was not prima facie meritorious nor did it raise issues of significance to insolvency practice.

The court upheld the motion judge's discretionary decision to grant specific performance and his finding regarding waiver of MOECC consent.