Scott McGrath

The Receiver brought a motion under the Bankruptcy and Insolvency Act to recover payments made by the insolvent debtor company to various parties, primarily family members and a former employee, in the year prior to bankruptcy.

The court found that the company was insolvent during the relevant period.

Payments to several family members and a non-arm's length salesperson were ordered to be repaid as they were found to be either transfers at undervalue or preferential payments.

Claims against a landlord, an independent contractor, and a long-time manager were dismissed as the transactions were either supported by consideration or were arm's length.

The appellant, a foreign trustee based in Liechtenstein, appealed the dismissal of its motions to stay or dismiss two actions for lack of jurisdiction simpliciter or forum non conveniens.

The actions alleged that the principals of Bridging Finance Inc. misappropriated funds and transferred them to a trust managed by the appellant.

The Court of Appeal upheld the motion judge's finding that Ontario had jurisdiction simpliciter because the tort of fraud was committed in Ontario and contracts connected to the dispute were made in Ontario.

The appellant failed to rebut these presumptive connecting factors, and the appeal was dismissed.

The appellant appealed an Associate Justice's order striking its statement of defence and counterclaim due to a years-long pattern of delay and non-compliance with court orders, including a peremptory 'last-chance' order.

The appellant argued that only the counterclaim should have been struck, as the outstanding production orders related solely to it.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the Associate Justice's application of the Falcon Lumber principles and concluding that the 'nuclear option' of striking the pleadings was a proportionate response to the appellant's deliberate and repeated defaults.

The moving party plaintiff brought a motion to strike the defences of multiple defendants who had repeatedly failed to comply with court orders requiring payment of costs and delivery of affidavits of documents.

The court applied the test from Falcon Lumber, considering whether the failures were deliberate, clear and unequivocal, whether reasonable explanations were provided, and whether the remedy was proportionate.

The court found the failures of four defendants — including a corporate defendant whose sole director is not a lawyer and who had not retained counsel as ordered — to be deliberate and unexcused, warranting the striking of their defences.

One defendant whose obligations had been fulfilled on the eve of the motion was spared.

The defendants whose defences were struck were ordered to pay costs jointly and severally.

The moving party sought an extension of time to seek leave to appeal a prior decision.

The Divisional Court granted the extension of time on consent but dismissed the motion for leave to appeal.

Costs were awarded to the responding party in the amount of $1,900.

The appellants brought motions under Rule 59.06 to set aside a 2018 Divisional Court judgment that upheld securities fraud findings and sanctions against them.

In response, the Ontario Securities Commission moved for security for costs and to strike out seven expert reports filed by the appellants.

The Divisional Court granted the Commission's motions, ordering the appellants to post $100,000 in security for costs due to unpaid prior costs awards.

The court also struck out all seven expert reports, finding they improperly opined on matters of domestic law and factual findings that are the exclusive province of the court, failing the necessity criterion for expert evidence.

The decision addresses motions by First Trust Management AG, as Trustee of The Salus Rete Trust, to stay or dismiss two related actions on the basis that Ontario lacks jurisdiction or is not a convenient forum.

The court finds that the claims are adequately pleaded, that Ontario has jurisdiction simpliciter based on several presumptive connecting factors (including contracts made in Ontario and torts committed in Ontario), and that Ontario is the most appropriate and convenient forum for the actions.

The motions are dismissed.

The defendant trustee of a Liechtenstein trust moved to stay or dismiss two related Ontario actions alleging fraud and misappropriation of funds, arguing that Ontario lacked jurisdiction or was an inconvenient forum.

The plaintiffs resisted the motions, asserting that the funds used to settle the trust originated from Ontario and were transferred in breach of fiduciary duties.

The court found that Ontario had jurisdiction simpliciter because contracts connected to the dispute were executed in Ontario and the underlying torts of misappropriation occurred within the province.

The court also declined to stay the actions on the basis of forum non conveniens, concluding that Ontario was the most appropriate and efficient forum to resolve the claims.

This decision sanctions the CCAA Plans of Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, JTI-Macdonald Corp., and Rothmans, Benson & Hedges Inc., effecting a global settlement of all tobacco-related claims in Canada.

The court reviews the structure, allocation, and fairness of the plans, including the creation of a $1 billion Cy-près Foundation, and addresses objections from social stakeholders.

The court finds the plans fair, reasonable, and in the public interest, and grants the requested relief, including third-party releases and the appointment of plan administrators.

Several moving parties sought leave to appeal decisions of Dineen J. and Dow J. The Divisional Court dismissed the motions for leave to appeal brought by Nantu Kumar Ghosh, Christian Levasseur, and Tinku Ghosh because they were filed past the deadline without any request for an extension of time, and in some cases relied on unsworn materials or failed to explain the basis for leave.

Costs were awarded to the responding party.

This supplementary endorsement addresses a request from JTI-Macdonald Corp. regarding the adequacy of notice elements in the Claims Procedure Order within the ongoing Companies' Creditors Arrangement Act (CCAA) proceedings.

The court confirmed its satisfaction that the notice elements in the Claims Procedure Orders are reasonable in the circumstances, addressing an oversight from previous submissions.

The Superior Court of Justice addressed multiple motions within the complex Companies’ Creditors Arrangement Act (CCAA) proceedings of JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted a stay extension until January 31, 2025, and approved Meeting Orders and Claims Procedure Orders.

These orders facilitate the advancement of comprehensive Plans of Arrangement, developed by the court-appointed Mediator and Monitors, aiming for a Pan-Canadian global settlement of tobacco claims totaling $32.5 billion.

The court found the plans were not "doomed to fail" despite outstanding issues regarding financial allocation among the Tobacco Companies and the creditor status of JTI-Macdonald TM Corp.

The appellant, 2649360 Ontario Inc., appealed a motion decision that granted Grant Thornton Limited, as Trustee in Bankruptcy for Aiden Pleterski and AP Private Equity Limited, relief from forfeiture of a $500,000 real estate purchase deposit.

The deposit was paid by Pleterski using misappropriated investor funds for a property that was subsequently not purchased due to bankruptcy.

The motion judge applied the two-part test for relief from forfeiture (disproportionate to damages and unconscionable to retain) and ordered the deposit returned to the Trustee for the benefit of creditors.

The appellant argued the motion judge erred by considering creditor interests and by characterizing Grant Thornton as "innocent." The Court of Appeal dismissed the appeal, affirming that the motion judge was entitled to consider the full commercial context, including the source of funds and the benefit to creditors, and that a party causing breach is not absolutely barred from relief from forfeiture.

The court found no error in the discretionary decision.

The court determined the scale and quantum of costs following previous motions.

Primont Homes (Vaughan) Inc. sought substantial indemnity costs, arguing delay and unproven fraud allegations by the defendants, Maplequest (Vaughan) Developments Inc. and 2373480 Ontario Inc. The defendants argued for reduced partial indemnity costs due to mixed success and over-lawyering by Primont.

The court found partial indemnity was appropriate, rejecting substantial indemnity as the fraud allegations were not adjudicated on their merits.

The court also reduced Primont's requested quantum due to its unsuccessful abuse of process argument and duplicative work by its multiple timekeepers, ultimately awarding $140,000.00 in partial indemnity costs.

The plaintiffs brought a motion seeking the appointment of an interim receiver over the shares of one of the defendants in several companies involved in land development projects.

The parties, who are shareholders in these companies, had a significant falling out, leading to defaults on secured loans.

The plaintiffs argued that a receiver was necessary to refinance debt and maximize value.

The court determined that the appropriate test for the interlocutory receiver appointment was the RJR MacDonald test, with an elevated 'strong prima facie case' standard due to the Mareva-like nature of the relief.

The court found that the plaintiffs failed to meet the merits requirement, as they asserted no legal or beneficial interest in the defendant's shares and the memorandum of understanding did not obligate the defendant to contribute further funds.

Furthermore, the court found no irreparable harm and that the balance of convenience did not favor the appointment, concluding that a receivership was not an appropriate remedy for a shareholder dispute where the moving party sought to eliminate the other party's control over their own shares.

The plaintiff, Primont Homes (Vaughan) Inc., sought an interlocutory injunction to prevent the defendants, Maplequest (Vaughan) Developments Inc. and 2373480 Ontario Inc., from dealing with certain land lots, asserting a contractual right to acquire them.

The defendants moved to dissolve an existing interim injunction, arguing the plaintiff failed to provide an adequate undertaking as to damages and made material non-disclosures.

The court dismissed the defendants' motions to dissolve the interim injunction, finding them precluded by Rule 2.02 due to significant delay.

The court then granted the plaintiff's motion for an interlocutory injunction, determining there was a serious issue to be tried regarding the enforceability of the agreement and entitlement to specific performance, that the plaintiff would suffer irreparable harm due to the primary defendant's inability to satisfy a damages award, and that the balance of convenience favored maintaining the injunction.

The court also found the plaintiff's undertaking as to damages sufficient given the defendants' failure to quantify their potential damages from delay.

The Court of Appeal for Ontario heard an appeal and cross-appeal concerning the interpretation of an easement.

The primary issue was whether an easement for "vehicular and pedestrian access and egress" included the right to park.

The application judge had ruled it did not.

The appellant (Friuli Long Term Care) argued the application was speculative and that parking rights were ancillary or an easement of necessity.

The cross-appellant (Primont (Castelmont) Inc.) sought an additional declaration regarding redevelopment.

The Court of Appeal dismissed both the appeal and the cross-appeal, affirming the application judge's finding that the easement did not include parking rights and that parking was a contractual matter.

The court also upheld the refusal of the additional declaration due to procedural issues.