Stephanie De Caria

The defendants, McCarney Group LLP et al., sought summary judgment to set aside transactions restructuring an accounting firm ("Oldco") under various insolvency and fraudulent conveyance statutes.

The plaintiffs, former partners and an affiliate of Oldco, alleged the restructuring was a transfer at undervalue designed to defeat their claims.

The court denied the defendants' motion for summary judgment, finding genuine issues for trial regarding Oldco's insolvency at the time of the restructuring and whether the assets (accounts receivable, work-in-process, and goodwill) were transferred at an undervalue.

The court emphasized that expert reports are not strictly required to establish an undervalue, and that oral testimony and cross-examination were necessary to resolve factual disputes regarding asset valuation and the existence of goodwill.

This endorsement provides reasons for granting an initial order under the Companies’ Creditors Arrangement Act (CCAA) to Trinity Ravine Community Inc., a registered charitable organization developing a senior citizens' life lease community project.

The applicant faced insolvency due to escalating construction costs and demands for deposit refunds from purchasers.

The court found the applicant met the CCAA requirements, including insolvency and good faith, and that a CCAA process was appropriate despite it being a real estate development, given its charitable purpose and the potential for maximizing creditor recoveries through a dual-track sale and investment solicitation process (SISP).

An initial administration charge was also granted to secure professional fees.

The plaintiff Receiver sued the defendant purchaser for damages after the purchaser failed to close a $12.2 million agreement of purchase and sale for a luxury residential property.

The purchaser argued he was entitled to terminate the agreement and receive his deposit back because the property suffered substantial water and mould damage prior to closing, and that the Receiver anticipatorily breached the agreement by refusing to extend the closing date.

The court found that the damage was not substantial, the Receiver did not repudiate the agreement, and the purchaser breached the contract by failing to close.

The Receiver was awarded over $5.3 million in damages, including the deficiency in the resale price, auction fees, and holding costs.

The appellants appealed two orders made by a case management judge authorizing the sale of an estate property and setting the terms of the sale.

The respondent Estate Trustee During Litigation brought a motion to quash the appeal on the basis that the orders were interlocutory and leave to appeal had not been obtained.

The Divisional Court held that the orders were interlocutory because they did not finally determine the substantive rights of the parties to the net proceeds of the sale.

The court further held that leave to appeal is required for interlocutory orders under s. 10(1) of the Estates Act.

As the appellants did not seek leave, the appeal was quashed.

The court also noted that the appeal would have been dismissed on the merits in any event.

The moving party sought the release of escrow funds following the sale of a distressed condominium project.

The dispute centered on whether the Minutes of Settlement required the property owner to pay property taxes that accrued prior to closing.

The court applied principles of commercial contractual interpretation and found that the plain language of the agreement only required the owner to continue paying operating expenses it was already paying at the time of execution.

Since property taxes had been deferred for months prior to the agreement, the owner was not obligated to pay them.

The court ordered the disputed funds released to the moving party.

The appellant, David Aiello, appealed the dismissal of his motion to set aside a default judgment and noting in default.

The Court of Appeal found that the motion judge erred in principle and made palpable and overriding errors of fact in applying the factors for setting aside default judgment from Mountain View Farms Ltd. v. McQueen.

Specifically, the motion judge misapplied the first and second factors by considering the entire litigation history, ignored relevant facts regarding the appellant's default, and applied too high a standard for an arguable defence, failing to consider the quantum of damages as a viable defence.

The Court concluded that it would be unjust to prevent the appellant from having his day in court, given the significant prejudice of a multi-million dollar judgment and the overarching principle of determining proceedings on their merits.

The moving party sought an extension of time to serve and file a notice of appeal from an order dismissing a motion to set aside a default judgment.

The notice of appeal was served one day late due to inadvertence of counsel.

The respondent opposed the motion, arguing prejudice, the moving party's pattern of breaches of court orders, and lack of merit of the proposed appeal.

The court granted the extension, finding that the one-day delay was minimal and explained, that no real prejudice resulted from the delay itself, that the moving party's prior defaults had been addressed through costs orders, and that the proposed appeal was not so devoid of merit as to warrant denial of the right to appeal.

The Estate Trustee During Litigation brought a motion to quash an appeal in a matter involving the estate of Elias Gefen.

The appeal involved multiple parties including the estate trustee, family members, and various institutions.

The motion to quash was granted on March 14, 2019.

The court awarded costs of the motion and appeal to the Estate Trustee During Litigation in the amount of $30,000 inclusive of disbursements and applicable taxes, payable jointly by the appellant and respondents to the motion.

The Estate Trustee During Litigation (ETDL) moved to quash an appeal on the grounds that it should have been brought to the Divisional Court under section 28 of the Estates Act.

The respondents argued that the ETDL's appointment was made under Rule 75 of the Rules of Civil Procedure or the court's inherent jurisdiction, not the Estates Act.

The Court of Appeal held that the appointment order was made pursuant to the Estates Act and that the allegation of a constructive trust "touches on" the validity of the will or grant of administration within the meaning of section 28.

The appeal was quashed and the matter was directed to the Divisional Court.

The defendant, David Aiello, brought a motion to set aside a default judgment and the striking of his statement of defence.

The default judgment arose from his failure to close on a property purchase and subsequent repeated non-compliance with court orders, including deadlines for undertakings and retaining counsel.

The court applied the five-factor test from *Mountain View Farms Ltd. v. McQueen* to determine if setting aside the default judgment was in the interests of justice.

The motion was dismissed, as Aiello failed to provide a plausible excuse for his numerous breaches of court orders and did not establish an arguable defence on the merits.

The Estate Trustee During Litigation (ETDL) for the estate of Elias Gefen brought a motion seeking payment of his significant fees and disbursements from disputed estate assets, a priority charge on these assets, and permission for interim payments.

The motion was supported by Harry Gefen and the estate of Yehuda Gefen, and opposed by Henia Gefen, Harvey Gefen, and a non-party co-tenant.

The court found that the ETDL was entitled to payment from the 'Property Interest' (disputed assets) and a charge on it, interpreting the original appointment order broadly to include assets with contingent estate interests.

The court denied the ETDL's request to further mortgage the properties to raise funds, citing potential adverse effects on non-parties.

The ETDL was granted the right to make interim payments from available distributions, subject to a final passing of accounts.

Costs were awarded against the opposing parties personally and the balance from the Estate.

The applicant sought to set aside an arbitral award under the International Commercial Arbitration Act.

The court found that the arbitrator committed a reviewable error by deciding the issue on a theory not argued by the parties, which amounted to the applicant being unable to present its case.

However, the court declined to exercise its discretion to set aside the award.

The court found that the arbitrator's ultimate decision on the merits was reasonable, the contract interpretation involved mixed fact and law subject to deference, and remitting the matter for a rehearing would serve no practical purpose.

The defendant, a cosmetic plastic surgeon, brought a motion to set aside a default judgment obtained by the plaintiff for unpaid anesthesiology services.

The defendant argued he failed to respond to the statement of claim because he was negotiating with the plaintiff, and raised defences of economic duress and potential violations of the Bankruptcy and Insolvency Act.

Applying the five-part test from Mountain View Farms, the court found the defendant moved promptly, had an arguable defence on the merits, and that the balance of prejudice and the interests of justice favoured having the action defended on its merits.

The motion was granted and the default judgment was set aside.