A summary of recent Canadian insolvency-focused court decisions.

M.O.S. MortgageOne Solutions Ltd. v. Heidary, 2022 ONCA 561

Does a consent judgment fall within section 178 of the BIA and survive a discharge? The appellant Heidary granted a mortgage to the respondent M.O.S. MortgageOne Solutions, which ranked third in priority, behind the first mortgage held by Manulife Financial and various Minister of National…

Sirius Concrete Inc. (Re), 2022 ONCA 524

Can a payment made to the debtor one day before bankruptcy be returned on the basis of a constructive trust? Ayerswood was the general contractor on an apartment building project in Guelph, Ontario. Sirius, a concrete forming company, was hired by Ayerswood in 2018 to…

Flight (Re), 2022 ONCA 526

Is leave required to sue a trustee in bankruptcy in a personal capacity? The Debtor made assignments in bankruptcy on four occasions: in 2004, 2006, 2011, and 2016. The appellant firm, Adamson Inc., was the trustee in respect of each of these bankruptcies. The individual appellant, Adamson,…

Golden Oaks Enterprises Inc. v. Scott, 2022 ONCA 509

When will the court refuse to apply the corporate attribution doctrine? Golden Oaks was a Ponzi scheme operating in Ottawa between 2009 and 2013. It was publicly advertised as a “rent-to-own” business, but was promoted to certain individuals as a way to turn a quick…

In the Matter of the Bankruptcy of Mai Anh Tran

Does a single creditor need to prove special circumstances to petition a debtor into bankruptcy? The Creditor held a judgment against the Debtor in the amount of $488,871.04 plus costs and post-judgment interest. Despite the Creditor’s demand for payment, the Debtor paid nothing. On August…

KingSett Mortgage Corporation v. 30 Roe Investments Corp., 2022 ONCA 479

Does a debtor have an appeal as of right from a receivership order? KingSett advanced a non-revolving demand loan to 30 Roe of $1.875 million, which was secured, in part, by a second mortgage on nine residential condominium units owned by 30 Roe in a 397-unit…

Antchipalovskaia v. Guestlogix Inc., 2022 ONCA 454

How is reasonable notice calculated where an employee is fired then rehired immediately after a court-approved sale under the CCAA? The appellant was a technology company operating in the air travel space. The respondent first started her employment with the appellant in July 2011 as…

Re Vonic (Ontario Superior Court of Justice File No. 32-1983170)

What factors are relevant to the approval of a proposal trustee's fees in the absence of time dockets? The trustee applied for taxation of its Statement of Receipts and Disbursements for fees of $9,973.46 plus HST. The taxation raised the issue as to how a…

1057863 B.C. Ltd. (Re), 2022 BCSC 759

Can a party be forced to mediate its claim as part of a CCAA proceeding? The Petitioners owned and operated a pulp mill in Pictou County, Nova Scotia. On January 31, 2020, the Petitioners were required to shut down the mill, resulting in a complete cessation of their business…