Legal Blog:

Debt Surviving Bankruptcy

Royal Bank of Canada v. Bedard 2022 Ont CA

The Court overturned an order stating that the debt survived bankruptcy. Although fraud was involved, there were other issues that would affect a survival order and these should be dealt with by the Bankruptcy Court when and if the debtor became bankrupt.

Off Title Objections – Contract Interpretation

2651171 Ontario Inc. v. Brey 2022 Ont CA

The clause allowing the purchaser to search for, and object to, work orders and building and zoning use stated that the purchaser had from the earlier of:  alternative (1) (a) the later of 30 days from the requisition date (Oct 16) and (b) 30 days from the date on which the conditions in the agreement were waived (Aug 26), and alternative (2) 5 days before closing (Sep 26) . Closing was scheduled for Oct 1 and the purchaser objected to a zoning problem on Sept 26. The motion judge ignored the (1a) Oct 16 date because, she said, this would yield an absurd result; Oct 16 was after the closing date. She therefore used Aug 26 as the alternative 1 date. Finally she chose Aug 26 as the objection date because it was earlier than the alternative 2 date. The Court of Appeal reversed. Alternative 1 gave a choice of the later of two dates, one of which and the later of which would be Oct 16. This date would then be compared to the alternative 2 Sep 26 date and the earlier date would be chosen. This date for objections was therefore Sep 26 and the purchaser’s objection was timely.

Accelerated Mortgage Interest

First National Financial GP Corporation v. Golden Dragon Ho 10 Inc. 2022 Ont CA

There is no common law right to an acceleration of interest on a debt default. That right is either in the mortgage or it is not. In this case, the court interpreted the mortgage to limit the acceleration clause to situations in which the mortgagor wanted to redeem rather than a situation of default and a mortgage sale of the property.

Partial Summary Judgment

NDrive, Navigation Systems S.A. v. Zhou 2022 Ont CA

A person (the rep) who was supposed to be assisting the plaintiffs in an arbitration did all sorts of nasty things; in particular, he kept the plaintiff’s settlement money without even notifying the plaintiff of the settlement. The plaintiffs commenced an action against the rep and the lawyers who had acted for the plaintiffs in the arbitration. The plaintiffs moved for and obtained partial summary judgment against the rep for the amount improperly retained and punitive damages. The court agreed that partial summary judgment was proper. There was no risk of duplicative or inconsistent decisions in the remaining portion of the action and the issues regarding the remaining defendant were factually related, but not legally similar, to the issues dealt involving the rep.

Oppression

Wisser v. CEM International Management Consultants Ltd. 2022 Alta QB

Employee was dismissed without proper notice. He brought an action against his old employer and its principals and a new corporation that the principals had incorporated to carry on the old employer’s business. He brought his action against the principals and the new corporation under the oppression section of the Alberta Business Corporations Act. The court held all defendants liable, holding in particular that the transfer of all assets for minimal consideration to the new corporation was oppressive conduct.

Renewed Certainty

The Mortgages Act contains many provisions governing the relationship between mortgagors and mortgagees and, additionally, some provisions protecting purchasers of property under power of sale. However, can a breach of a provision protecting a mortgagor create havoc with what would normally seem to be an ordinary real estate transaction? In 2544176 Ontario Limited v. 2394762 Ontario Inc, a 2022 decision of the Ontario Court of Appeal, an application judge said yes; the Court of Appeal said no.