A summary of recent Canadian insolvency-focused court decisions.
Can a law firm appeal an order requiring the repayment of professional fees in a bankruptcy? In three related bankruptcy proceedings and two related civil actions, the Trustee and its counsel (the “Law Firm”) filed notices of appeal from orders of the trial judge requiring…
In what circumstances should the court exercise its discretion to dismiss a bankruptcy application? The respondents brought an application for a bankruptcy order against the appellant, Medcap, pursuant to s. 43(1) of the Bankruptcy and Insolvency Act. The application judge granted the application and made a…
Should a defendant who has evaded formal service be able to set aside default judgment? Northern Protocol and its principal, Aaron Weston, were the parties to several loan agreements with On Deck Capital. Northern Protocol was the borrower, and Weston provided a personal guarantee of…
Can a non-lawyer represent a creditor before the courts in an insolvency matter? In December 2021, the Court heard three motions by MCI for orders pursuant to rule 15.01(2) of the Rules of Civil Procedure that MCI, a corporation, be granted permission to be represented by a…
Can municipal property taxes be vested out? In January 2019, the Receiver was appointed in relation to a property located in the Township of Augusta, which was then owned by 190 Ontario. The property consists of 27 acres, including event space, apartment townhouses, a boutique, storage…
Do builders' liens take priority over abandonment and reclamation obligations? Manitok Energy Inc. was an oil and gas company that became insolvent. The respondent, Prentice Creek Contracting, provided equipment and services to Manitok related to the reclamation and cleanup of certain oil and gas well…
What is the test for attributing a principal's fraudulent intent to the company? John Aquino was the directing mind of Bondfield Construction Company Limited and its affiliate, Forma-Con Construction. Bondfield was a construction company that operated in the Greater Toronto Area and elsewhere. Its affiliate…
Which bankruptcy tasks are claimable disbursements, and which ones are non-claimable overhead charges? A trustee’s fees are afforded priority over other claims by s. 136 of the Bankruptcy and Insolvency Act. However, priority of payment does not mean that a trustee is free to treat the recovery…
Does the bank or a bona fide purchaser for value take priority over a unit in an insolvent condominium? Brightstar developed a 78-unit condominium building in Newcastle, Ontario. Centurion loaned Brightstar $5.965 million to finance the project, secured by a mortgage on the project. When…
Can a receiver be appointed when the underlying debt is in dispute? The Appellant Ward Western acquired a placer gold mine located in British Columbia. The Appellant Westrike owned the permits and mining claims for the mine. Before June 2020, most of the shares of…