Wojtek Jaskiewicz

The debtor applicants sought court approval for a pre-packaged sale ('quick flip') of their assets to a new company owned by existing management, pursuant to section 36 of the CCAA.

The proposed transaction was supported by the senior secured creditor but opposed by a subordinate secured creditor, BDC Capital Inc., who was excluded from the sales process and given minimal notice.

The Superior Court of Justice dismissed the motion, finding that the debtor failed to meet its burden under sections 36(3) and 36(4) of the CCAA.

The court held that the sales process lacked transparency, failed to make good faith efforts to sell to unrelated parties after the senior debt was purchased at a discount, and did not demonstrate that the proposed consideration was superior to other potential offers.

Lien claimants sought orders protecting their construction lien claims from dismissal under sections 37 and 46 of the Construction Act due to claims not being set down for trial within two years of commencement.

The claims had been stayed by receivership orders.

The court granted the orders sought, finding that the processes employed were not undermining the policy of the Construction Act and that the circumstances warranted protection of the lien claims while the receivership proceeded.

The court emphasized the importance of balancing insolvency principles with the statutory intent of the Construction Act to deal with liens expeditiously.

The City of Toronto sought the appointment of a receiver and manager over the property, assets, and undertaking of Harry Sherman Crowe Housing Co-operative Inc. due to operational, financial, and governance challenges.

The court addresses the Receiver’s motion for approval of its activities, fees, and a proposed process (RFEIQ) for identifying and qualifying future board members to transition the Co-op out of receivership.

The court approves the Receiver’s activities and fees, and partially approves the RFEIQ process, requiring further reporting and court oversight before any subjective vetting of board candidates.

The court considered an application by Cannect International Mortgage Corporation and related parties to enforce a costs order against Condoman Developments Inc. and related parties, following failed attempts by Condoman to challenge a mortgage and avoid payment.

The court reviewed the history of the dispute, Condoman’s arguments of impecuniosity, and the legal principles governing enforcement of costs orders, ultimately dismissing Condoman’s action and striking its defence to counterclaim for non-payment of costs.

This costs endorsement addresses the appropriate scale and quantum of costs following the dismissal of an injunction motion brought by Condoman Developments and related parties to restrain enforcement of a $46 million mortgage by Cannect and related defendants.

The court upholds the contractual right to full indemnity costs in favour of the mortgagees, finding the mortgage terms binding and the amount claimed reasonable given the scale and complexity of the litigation.

The court distinguishes prior cases and awards Cannect $268,500 in costs.

This endorsement addresses the aftermath of a dismissed injunction motion by Howard Youhanan and his companies against their mortgagees, Marcus Tzaferis and his companies.

The court clarifies that its interim injunction is no longer in force and that Cannect is free to exercise its mortgage remedies.

The court admonishes Mr. Youhanan for providing false information to the Landlord-Tenant Board regarding the status of the court’s orders, directs him to correct the record, and warns of possible contempt proceedings if such conduct continues.

This endorsement addresses the scope and effect of a prior scheduling order regarding the sale of properties subject to a blanket mortgage, clarifying that the Ontario court’s direction did not extend to properties outside Ontario or interfere with a Quebec court’s order authorizing a sale in Montreal.

The court emphasizes the limits of its jurisdiction and the principles of comity and deference to other courts, particularly in the context of cross-jurisdictional property disputes.

The appellants, an investment syndicate holding a first mortgage, appealed an order denying their priority over a second mortgagee (Greenpath) for certain disputed amounts from a power of sale.

The application judge found these amounts were not properly part of the first mortgage and constituted prohibited penalties under s. 8(1) of the Interest Act.

The Court of Appeal dismissed the appeal, affirming that the forbearance agreement was separate from the first mortgage and not enforceable against the second mortgagee, and that the disputed prepayment and default fees were unlawful penalties under the Interest Act due to lack of evidence proving they were legitimate costs.

The Joseph Lebovic Charitable Foundation (appellant) appealed the dismissal of its bankruptcy application against the Jewish Foundation of Greater Toronto (respondent).

The appellant had donated over $19 million to a Donor Advised Fund (DAF) with the respondent, which it considered an irrevocable gift.

After the founder's death, his executor sought to direct the remaining DAF funds to specific charities, which the respondent did not follow.

The appellant initiated bankruptcy proceedings, alleging the respondent ceased to meet liabilities.

The motion judge dismissed the application, finding no debt, no act of bankruptcy, and no special circumstances for a single-creditor application, and that the application was an abuse of process.

The Court of Appeal upheld the motion judge's decision, finding no palpable and overriding error of fact or errors of law, and affirmed the elevated costs award due to the abuse of process.

Two related applications were brought to determine the priority and validity of $283,508.64 in disputed fees claimed by the first mortgagees following a power of sale.

The second mortgagee argued the fees were not part of the first mortgage and violated s. 8(1) of the Interest Act.

The court held that the forbearance agreement containing the fees did not form part of the first mortgage and could not be enforced in priority to the second mortgage.

Furthermore, the court found the default and prepayment fees constituted unenforceable penalties under s. 8(1) of the Interest Act, meaning they could not be claimed against the mortgagor or guarantor either.

The moving party brought a motion for leave to appeal an order dated July 11, 2022.

The Divisional Court dismissed the motion for leave to appeal.

Costs were awarded to the respondents in the fixed amount of $21,000 all inclusive.

The moving party sought to set aside a registrar's order dismissing its appeal for delay and to extend the time to perfect the appeal.

The delay was caused by counsel's inadvertent failure to include an issued and entered copy of the order appealed from in the appeal book, exacerbated by a nationwide internet outage.

The Court of Appeal granted the motion, finding the delay was short, adequately explained by counsel's inadvertence, caused no prejudice to the responding party, and the appeal met the low threshold for merit.

The plaintiff foundation, established by a deceased donor, brought a motion for an interlocutory injunction or an order under Rule 45.02 to prevent the defendant charitable foundation from making distributions from a donor-advised fund.

The plaintiff sought to compel the defendant to make distributions according to the plaintiff's instructions.

The court dismissed the motion, finding no serious issue to be tried because a valid charitable gift requires the donor to divest all power and control over the property to the donee.

The plaintiff conceded it could not compel specific donations, and failed to establish irreparable harm or that the balance of convenience favoured an injunction.

The Jewish Foundation of Greater Toronto (Foundation) moved to dismiss or stay a bankruptcy application brought by The Joseph Lebovic Charitable Foundation (JLCF).

JLCF alleged the Foundation was indebted to it for over $15 million from a Donor Advised Fund (DAF) and had failed to meet its liabilities.

The court found no debtor/creditor relationship, as the funds were irrevocable gifts, not debts.

It also found no evidence the Foundation was unable to pay its debts, noting its excellent financial health.

The court determined that no act of bankruptcy occurred and that the JLCF's application, brought as a single creditor, lacked special circumstances.

The court further found the bankruptcy application to be an abuse of process, brought for the collateral purpose of pressuring the Foundation to distribute funds, rather than for a legitimate bankruptcy purpose.

The Foundation's motion to dismiss was granted, and the bankruptcy application was dismissed.

This is a costs endorsement on appeal from a Superior Court of Justice decision.

The Court of Appeal upheld the lower court judgment and ordered the appellant to pay costs to the respondent in the amount of $10,906.06, inclusive of taxes and disbursements.

The appellant appealed a judgment granting the respondent's application for enforcement of a 2013 settlement agreement concerning the sale of a veterinary clinic property.

The settlement agreement provided that following a five-year lease extension, the appellant would transfer title to the property to the respondent for $1,250,000 plus HST.

The appellant refused to close the sale in 2018, arguing that the application was procedurally improper, that the agreement was frustrated due to a significant increase in property value, and that specific performance was not an appropriate remedy.

The Court of Appeal dismissed the appeal and upheld the order for specific performance.

The plaintiff, as assignee of a trustee in bankruptcy, brought a motion for summary judgment to recover $217,500 from the bankrupt's spouse.

The bankrupt had used his share of the proceeds from the sale of a jointly owned property to pay down the mortgage on a property purchased solely by his spouse.

The court found that the transfer was a transfer at undervalue under s. 96 of the Bankruptcy and Insolvency Act.

The court rejected the spouse's argument that they were dealing at arm's length, noting that spouses are presumed not to act at arm's length and her self-serving affidavit lacked supporting detail to rebut the presumption.

Summary judgment was granted.

The appellant appealed a motion judge's order regarding the distribution of funds following the sale of a property by a court-appointed receiver.

The appellant argued that the entire first mortgage ranked in priority to the receiver's charge for fees and expenses.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the receiver's charge was subordinate only to the specific financial interest of the assignee who held the mortgage as security for a loan, rather than the entire principal amount of the first mortgage.

Following the discontinuance of a counterclaim against one of several defendants, the moving party sought recovery of litigation costs incurred defending the claim.

The court applied the justified action test governing costs after discontinuance under Rule 23.05(1) of the Rules of Civil Procedure.

The respondents provided no affidavit or evidentiary record demonstrating a bona fide cause of action or justification for commencing the claim against the moving party.

While the court accepted that some costs were incurred as a result of being named in the action, the bill of costs did not clearly identify work performed solely for that defendant.

Exercising its discretion under s.131 of the Courts of Justice Act and Rule 57.01, the court awarded a modest fixed amount of costs.

On a summary judgment motion, the moving defendants argued that claims arising from alleged overpayments, fraud, breach of fiduciary duty and oppression were barred by a two-year limitation period.

The court held that the plaintiffs' action, as framed, was an action to enforce a prior Court of Appeal order and that no limitation period applied to such enforcement proceedings.

Judgment was granted to permit recovery of the overpayments made by the trustee to itself and to the law firm in the amounts previously determined.

In a later amended endorsement, the court clarified the earlier ruling and accepted the responding parties' position on the identified clarification issues.