Russell Bennett

The applicants sought judgment against the respondents, who were previously found in civil contempt for failing to comply with court orders.

The respondents had misappropriated trust funds intended for a cannabis retail business, using them for personal expenses and gambling.

The court found the respondents liable for breach of fiduciary duty, oppression, and fraud (against Pacheco only).

Judgment was granted in favour of the applicants, including an award of $25,000 in punitive damages against Pacheco and full indemnity costs.

The respondents were previously found in civil contempt for failing to comply with multiple court orders requiring disclosure, accounting, and tracing of assets.

At the sentencing hearing, the court found that the respondents had still not purged their contempt.

The court ordered a 30-day custodial sentence for one respondent, stayed for approximately one month to provide a final opportunity to comply, and ordered the respondents to pay $30,000 in substantial indemnity costs.

The applicants sought an amended and restated initial order under the CCAA, including approval of a stalking horse sales process, a Key Employee Retention Plan, an increased administration charge, and an extension of the stay of proceedings.

The court granted most of the requested relief, finding it necessary for the restructuring and supported by the Monitor.

However, the court dismissed the applicants' request to stay a creditor's action against three directors on their personal guarantees, ruling that section 11.03(2) of the CCAA expressly prohibits staying actions against directors on guarantees relating to the company's obligations.

The applicant, a commercial subtenant operating a cannabis store, sought an urgent order for relief from forfeiture after being shut down by her landlord during the COVID-19 pandemic.

The court found that the application met the urgency criterion set out in the Notice to the Profession.

A case conference was scheduled for the same day, and the court urged the parties to cooperate and agree on interim measures pending a full determination.

The plaintiffs brought a motion under s. 69.4 of the Bankruptcy and Insolvency Act seeking declarations regarding the scope of the statutory stay following the bankruptcy of one defendant and requesting that the stay be lifted for certain claims.

The court held that claims for injunctive and declaratory relief and claims for monetary damages arising after the bankruptcy were not claims provable in bankruptcy and therefore were not subject to the stay under s. 69.3.

With respect to claims for pre-bankruptcy monetary damages, the court found that the test for lifting the stay was met because the allegations involved fraud and fiduciary breaches potentially falling within s. 178 and the action involved complex, multi-party claims requiring full civil procedure.

The bankrupt defendant was a central participant whose involvement was necessary for a complete adjudication.

The stay was lifted for pre-bankruptcy claims, although enforcement of any resulting monetary award remained stayed.