Richard B. Swan

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 moving party law firm sought an order under Rule 15.04 of the Rules of Civil Procedure to be removed as the lawyer of record for the appellant in a receivership proceeding.

The firm had filed a notice of appeal on behalf of the appellant to prevent the sale of two condominium units, despite intending to have no further involvement.

The Court of Appeal dismissed the motion, finding that the firm had launched a 'zombie appeal' that jeopardized the receivership proceedings and abused its status as an officer of the court.

The firm was ordered to remain on the record until the final disposition of the receiver's motion to quash the appeal, prioritizing the administration of justice over the firm's interests.

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 respondent, KingSett Mortgage Corporation, moved to quash an appeal brought by 30 Roe Investments Corp. from an order appointing a receiver over nine condominium units. 30 Roe argued it had an appeal as of right under s. 193(c) of the Bankruptcy and Insolvency Act and alternatively sought leave to appeal under s. 193(e).

The Court of Appeal granted the motion to quash, confirming that no appeal as of right exists from a receivership order under s. 193(c).

The Court also dismissed the motion for leave to appeal, finding the proposed appeal lacked merit, did not raise an issue of general importance, and would unduly hinder the receivership proceedings.

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.

The applicants, affiliated companies in the oil and gas sector, sought approval of a reverse vesting order (RVO) under the Companies' Creditors Arrangement Act.

The RVO was opposed by several municipalities because it would extinguish significant outstanding municipal tax liabilities.

The court approved the RVO, finding that it met the requirements of section 36 of the CCAA and the Soundair principles.

The court concluded that the RVO was the only commercially viable alternative to a bankruptcy, which would have disastrous consequences for all stakeholders and leave no funds for environmental obligations or municipal taxes.

The appellant property owner entered into a contract with the respondent builder for the construction of a luxury home, paying a $3.8 million non-refundable deposit.

After the appellant failed to pay over $10.4 million in interim invoices, the respondent obtained summary judgment.

The appellant appealed solely on the issue of whether the deposit should be credited against the judgment.

The Divisional Court dismissed the appeal, holding that the deposit was intended to secure completion of the contract and was forfeit due to the appellant's breach, rather than acting as a prepayment for interim invoices.

The plaintiffs brought a motion for summary judgment against the defendants Elko and its principal for knowing receipt and knowing assistance, alleging they participated in a scheme to divert business from a family company to avoid a prior judgment.

Elko brought a motion to stay the action because the plaintiffs failed to disclose settlement agreements with co-defendants that changed the adversarial landscape.

The court dismissed the plaintiffs' motion and granted summary judgment in favour of Elko, finding no evidence that Elko had actual or constructive knowledge of the breach of fiduciary duty.

In the alternative, the court held it would have permanently stayed the action due to the plaintiffs' failure to immediately disclose the settlement agreements, which prejudiced Elko.

This endorsement addresses the issue of costs following the dismissal of an application.

The respondent, The Kraft Heinz Company, sought substantial indemnity costs, arguing that they had made a more favourable offer to settle and that the applicant, The Corporation of the Township of South Stormont, had been less than fully candid.

The Township conceded costs but disputed the substantial indemnity scale, arguing the offer was not Rule 49 compliant and denying any sanctionable conduct.

The court awarded partial indemnity costs, finding the offer not sufficiently fixed or understandable for Rule 49.10 consequences and no conduct worthy of sanction.

The court also found the time claimed by both sides somewhat excessive and the hourly rates suggested by the respondent's counsel too high for the Ottawa region.

The applicant municipality sought an order to recommence an arbitration and appoint a new arbitrator to resolve a dispute over wastewater treatment costs.

The parties had previously executed Minutes of Settlement that included a specific dispute resolution process for issues arising from data collection.

The court found that the current dispute regarding allegedly flawed data fell squarely within the contemplation of the settlement agreement.

The application was dismissed, and the matter was directed to the specific individual granted exclusive jurisdiction under the settlement.

The applicant, a former officer and shareholder of the respondent corporation, brought an oppression application after his termination.

In the context of that proceeding, he moved to remove the law firm representing the respondents as counsel of record, alleging a disqualifying conflict of interest based on prior joint representation and the likelihood that the firm's lawyers would be called as witnesses.

The court dismissed the motion, finding that the firm's retainer clearly stated it represented only the corporation, not its officers or shareholders.

Furthermore, the court held that it was premature and speculative to remove counsel on the basis that its lawyers might be called as witnesses, as the applicant had not yet determined whether he would call them or convert his application into an action.

The moving parties, trustees of a family trust, sought to consolidate or temporarily stay an application for a passing of accounts and declarations of breach of fiduciary duty, pending the outcome of a complex related action concerning the ownership of family businesses.

The court dismissed the motion, finding that the two proceedings did not share common questions of fact or law, and that delaying the application would prejudice the beneficiaries' right to a timely accounting and preservation of trust assets.

The Monitor sought court advice and directions regarding a proposed extension of an Asset Purchase Agreement (APA) closing date and alleged material breaches of confidentiality obligations by the purchaser, Lagasco Inc., in a Companies' Creditors Arrangement Act (CCAA) proceeding.

The court authorized the Monitor to agree to a final three-week extension of the APA, noting the purchaser's good faith in dealing with unexpected financing issues, but expressed serious concerns about the confidentiality breaches.

The court directed the Monitor to ensure the extension was without prejudice to rights arising from these breaches and to prepare for a potential resumption of the sales process if the APA failed to close.

Minority shareholders in a family-owned company appealed a trial judgment dismissing their oppression and conspiracy claims.

The appellants alleged that the director diverted property interests to his benefit through a series of transactions and that respondents conspired to allow the company to default on a mortgage so that a controlled company could acquire the property.

The trial judge rejected all claims, finding that the appellants' conduct was unclean and that the director's actions were justified to protect the company's interests.

The appellants failed to establish reasonable expectations or damages.

The appeal was dismissed with costs awarded to the respondents.

This endorsement addresses a procedural issue arising from the defendant's attempt to seek an order in Family Court to consolidate a civil action with a Family Law Proceeding, despite prior case management orders in the civil action deferring consideration of such a motion.

The court found the defendant's action to be improper and in non-compliance with its orders, directing the defendant to withdraw the consolidation relief sought in the Family Law Proceeding.

The decision emphasizes the importance of adhering to case management directions and preventing forum shopping between different court lists.

The plaintiff in a civil action regarding beneficial ownership of corporate properties sought to implement a comprehensive discovery plan.

The defendant argued for limited production tailored to an early mediation and suggested holding the action in abeyance pending a motion in a related family law proceeding.

The case management judge held that the action should not remain in abeyance, emphasizing the need for efficiency and proportionality under Rule 1.04.

A timetable was set for a motion on the discovery plan and subsequent documentary production.

Self-represented long-term disability beneficiaries sought leave to appeal a sanction order from the Superior Court of Justice in the Nortel Networks CCAA proceedings.

The applicants challenged their binding status under the 2009 Representation Order for Disabled Employees and the 2010 Employee Settlement Agreement.

The Court of Appeal dismissed the motion for leave to appeal, finding that the stringent test for leave in CCAA proceedings was not met.

The proposed appeal lacked merit, the applicants were bound by the settlement agreement, and further delays in the protracted litigation were to be avoided.

The court also rejected a late-filed notice of constitutional question challenging sections 6(1) and 11 of the CCAA.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.