Richard B. Swan

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.

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.

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.

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.

The court-appointed receiver, KSV Restructuring Inc., moved to quash an appeal by the debtor, 30 Roe Investments Corp., from orders approving the sale of two condominium units. 30 Roe argued the units should be sold en bloc, not individually, and that the sales diminished the "Enterprise" value.

The Court of Appeal found no appeal as of right under BIA s. 193(a)-(c) as the appeal did not involve future rights, did not directly involve property value loss (as the sales were at market price and the en bloc argument was a collateral attack on prior unappealed orders), and was not likely to affect other similar cases.

The court also denied leave to appeal under BIA s. 193(e), finding the issue not of general importance, not prima facie meritorious, and unduly hindering the receivership.

The appeal was quashed, and leave to appeal denied.

The applicants sought the appointment of an Inspector to investigate the management and affairs of two companies, Morris Kerbel Holdings Limited and Paladium Construction Limited, alleging oppressive and unfairly prejudicial conduct by the respondents under the Ontario Business Corporations Act.

The court dismissed the applications, finding that the applicants had not met the second and third parts of the three-part test for appointing an inspector, specifically regarding the necessity and appropriateness of such an extraordinary remedy given that information could be obtained through ordinary litigation tools like an oppression proceeding.

The court also noted concerns about the broad scope, unknown costs, and lack of company resources to fund the investigation.

The Monitor brought a motion within a CCAA proceeding seeking an order directing Stelco to complete a land severance and convey a parcel of land (the Reconveyance Parcel) to LandCo's nominee pursuant to a Reconveyance Agreement.

Stelco opposed, arguing that LandCo missed timelines in the agreement, entitling Stelco to purchase the land instead, and brought a cross-motion.

The dispute arose after Stelco learned the land was to be sold to a developer for a large residential community near its steel plant.

The court found that Stelco breached the Reconveyance Agreement, as the conditions triggering its right to purchase had not occurred.

The court held that LandCo could waive the requirement for environmental consent and ordered specific performance, requiring Stelco to complete the severance and transfer the land.

The applicant, a second mortgagee, sought the appointment of a receiver and manager over the respondent's real property due to a matured and defaulted mortgage loan.

The respondent requested a further adjournment to complete refinancing, which was denied due to a non-binding commitment letter and the respondent's lack of diligence in retaining counsel and pursuing refinancing.

The court found the appointment of a receiver to be just and convenient, particularly as the security documents contractually permitted such an appointment upon default.

The court rejected the respondent's claim of bad faith by the applicant.

The appellants appealed a motion judge's decision dismissing their summary judgment motion and granting summary judgment and a permanent stay to the respondents.

The core issue was the appellants' failure to immediately disclose settlement agreements with other defendants, which altered the litigation's adversarial landscape.

The Court of Appeal affirmed the motion judge's finding that these contingent settlement agreements, which included provisions for private evidence gathering and financial incentives for cooperation, changed the adversarial relationship into a cooperative one, triggering the immediate disclosure rule from Handley Estate.

The court reiterated that immediate disclosure is mandatory, regardless of contingencies or confidentiality clauses, and that a stay of proceedings is the appropriate remedy for such an abuse of process.

The appeal was dismissed.