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 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.