Tony Van Klink

The Court of Appeal for Ontario dismissed the appeal of 170 Willowdale Investments Corp. regarding the distribution of proceeds from the sale of its hotel assets in receivership.

The appellant argued that Royal Bank of Canada (RBC), as an unsecured creditor with respect to the real property, should not receive a distribution from the net proceeds of the sale.

The court held that the Approval and Vesting Order (AVO) did not preclude payment to unsecured creditors after secured creditors were paid, and that the motion judge properly authorized the distribution to RBC, including for a loan not yet due, as there was no prejudice to the debtor.

The Court-appointed Receiver sought approval of its second report, activities, professional fees, and proposed distributions, including a significant distribution to RBC as a secured creditor.

The Debtor, 170 Willowdale Investments Corp., opposed the distribution to RBC, arguing that RBC lacked a registered security interest in the real property whose sale generated the proceeds, and thus had no priority claim to those proceeds.

The court found that the Debtor was in default of its obligations to RBC, and that RBC's general security agreement (GSA) granted a valid and perfected security interest in all of the Debtor's present and after-acquired personal property, including money and proceeds from the sale of any assets.

The court-appointed receiver of Crystal Farms Limited sought approval for the sale of two real properties.

Despite a late, slightly higher conditional offer from a third party, the court applied the principles from Royal Bank of Canada v. Soundair Corp. to approve the original sale agreements.

The court found the receiver had made sufficient efforts to obtain the best price, acted with efficiency and integrity, and that the original transactions were in the best interests of all stakeholders, dismissing the respondent's request to reopen the sale process.

The Bank of Montreal applied for a receiver over a group of fitness clubs (the Crunch Group) following defaults on credit facilities.

The parties reached an agreement where the debtors' nominee would purchase the debt and security.

The Bank accepted the offer but subsequently refused to provide a fully executed copy of the agreement, causing the purchaser to lose financing and fail to close on the scheduled date.

The court found the Bank's actions, including abruptly closing the debtors' bank accounts and unreasonably refusing to deliver the executed agreement, breached the duty of good faith.

The court ordered the Bank to close the transaction.

The plaintiff bank brought a motion for summary judgment regarding three commercial loans to the defendants.

The defendants argued that the loan restructuring agreement was unauthorized, signed under duress, and that potential insurance coverage precluded judgment.

The court rejected these defences, finding that the corporate defendant's director had ostensible authority, there was no illegitimate pressure amounting to duress, and no evidence of relevant insurance existed.

Summary judgment was granted in favour of the plaintiff for the full amount of the debts.

The appellants appealed a motion judge's order staying an action for damages for conspiracy to injure.

The motion judge found that the essence of the dispute was an unfair labour practice under section 76 of the Labour Relations Act, 1995, and that the Labour Relations Board therefore had exclusive jurisdiction.

The appellants argued that the essence of their claim was conspiracy to injure, with labour relations matters being merely incidental.

The Court of Appeal upheld the motion judge's decision, finding that an examination of the statement of claim did not support the appellants' characterization and that the tribunal would need to decide matters clearly within the Board's purview, such as the propriety of a grievance filed by the union.

The appellant receiver sought to appeal an interlocutory order refusing to cancel a letter of credit posted as security in a civil action.

The receiver argued the Court of Appeal had jurisdiction under s. 193 of the Bankruptcy and Insolvency Act because the motion was styled in both the civil action and the receivership proceedings.

The Court of Appeal quashed the appeal, holding that the substance of the order was a refusal to vary an order in a civil action, not an order in bankruptcy proceedings.

The proper route of appeal was to the Divisional Court with leave.

The plaintiff bank brought a motion for summary judgment against a co-borrower on two demand loans, while the defendant brought a cross‑motion seeking dismissal of the claim.

The defendant argued the claim relating to a revolving loan was statute‑barred under the Limitations Act, 2002 and asserted defences of change of position, estoppel, and breach of a duty of good faith.

The court held that interest payments automatically debited from a co‑borrower’s account constituted acknowledgements extending the limitation period for a demand loan.

The court further held that internal bank documentation errors and statements by tellers did not amount to representations releasing the defendant from liability, and the change of position defence was unavailable in a contractual debt claim.

Summary judgment was granted in favour of the bank.

Following the granting of summary judgment in favour of a bank against a defendant borrower, the court considered submissions on costs.

The successful plaintiff sought costs of the action and the summary judgment motion on a partial indemnity basis totaling $21,991.01 inclusive of disbursements and HST.

The defendant accepted that costs were payable but argued the amount was excessive due to the absence of discoveries or cross-examinations and suggested a reduced amount.

The court held that the amount sought was reasonable, noting the need to prepare for several pleaded defences and the lack of duplication of effort in counsel’s work.

Applying the criteria under Rule 57.01, the court awarded the full amount requested.

The plaintiff bank moved for summary judgment against the defendant guarantor for the balance owing on commercial loans.

The defendant argued that the bank's receiver sold the mortgaged property improvidently, thereby raising a genuine issue for trial.

The court found that the receiver took reasonable precautions to obtain the true market value of the property, including obtaining an appraisal and listing it on the MLS for a reasonable period.

The court concluded there was no genuine issue requiring a trial and granted summary judgment to the bank.

The appellants appealed a summary judgment decision of the Superior Court of Justice.

The Court of Appeal dismissed the appeal, finding no error in the motion judge's conclusion that there was no genuine issue for trial.

Costs were awarded to the respondent in the amount of $4,000.

The appellants appealed a trial judgment regarding a forbearance agreement.

At the opening of the appeal, the appellants abandoned a motion alleging reasonable apprehension of bias by the trial judge.

The Court of Appeal dismissed the appeal, finding that the trial judge's findings of fact on misrepresentation, parol evidence, and reasonable notice were supported by the evidence.

The court also rejected a new argument based on the forbearance agreement, as it contemplated future terms rather than past representations.

The appellants appealed a decision finding that a transaction involving cows was an option to purchase rather than a security interest.

The Court of Appeal upheld the applications judge's finding that the substance of the transaction was an option to purchase, which does not create a security interest under the Personal Property Security Act.

The court also declined to review the procedural issue of whether a trial of an issue should have been directed, as the parties had agreed to the procedure followed.

The appeal was dismissed with costs.

The respondent was hired as a bingo hall manager and later signed an employment contract stating she could not be dismissed.

After being fired, she sued for wrongful dismissal.

The trial judge found the contract was for life and awarded $712,000 in damages, including lost wages until age 65 and lost profits from lottery ticket sales.

On appeal, the Court of Appeal held that the contract lacked the explicit language required for a lifetime guarantee and interpreted it as an indefinite term contract.

The court reduced the damages to $30,800, representing a 12-month reasonable notice period, and excluded damages for lottery ticket sales as too remote.

The Canada Customs and Revenue Agency (CCRA) served a tax debtor and its account debtors with Requirements to Pay for unremitted GST prior to the tax debtor's assignment in bankruptcy.

The appellant, a secured creditor of the tax debtor, argued that the bankruptcy stayed the CCRA's right to receive the payments.

The Court of Appeal dismissed the appeal, holding that under s. 317(3) of the Excise Tax Act, the funds became the property of Her Majesty upon receipt of the Requirement to Pay.

Consequently, the tax debtor had no residual right in the funds, and they did not become the property of the trustee in bankruptcy.

The appellant appealed the trial judge's decision granting a bankruptcy petition.

The Court of Appeal dismissed the appeal, finding ample evidence to support the trial judge's conclusion that acts of bankruptcy were established.

The Court also rejected the appellant's argument that the trial judge made improper interventions during the proceedings, noting the interventions were appropriate to assist the proper conduct of the trial.

The bankrupt transferred the balance of his English bank account to his wife's offshore account prior to making an assignment in bankruptcy.

The respondent bank successfully applied to set aside the transfer as a 'settlement' under section 91 of the Bankruptcy and Insolvency Act.

The wife appealed.

The Court of Appeal allowed the appeal, holding that the established legal meaning of 'settlement' from Re Bozanich—requiring an intention that the property be retained in original or traceable form—was not displaced by the 1992 amendments to the Act.

The court directed a trial of an issue, finding the paper record insufficient to determine if the transfer met this test.