In Susi v. Bourke, 2014 O.J. No. 11

A Summary

In Susi v. Bourke, [2014] OJ No 11, the Ontario Superior Court of Justice held that when all of the directors of a corporation fail to comply with their fiduciary duties, none of them can seek a remedy for oppression.

Pan Canadian Mortgage Group v. 679972 B.C. Ltd., 2013 BCSC 1078 (Pan Canadian), addresses the nature and priority of a purchaser’s lien, which, in general terms, is a financial charge that results when a purchaser pays a deposit toward the purchase price under a contract of purchase and sale.

In Ontario (Training, Colleges and Universities) v.

The recent decision of the Ontario Court of Appeal in msi Spergel Inc. v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 550 (“msi Spergel”) confirms that the Court will not suspend, extend or otherwise vary the general two-year limitation period under the Limitations Act, 2002 (the “Limitations Act”) unless there is express statutory authority to do so.

On October 3, 2013, the Court of Appeal for Ontario issued two significant decisions1 on the interplay between provincial environmental remediation and federal insolvency orders. The cases are of interest to environmental and insolvency lawyers across Canada. They are equally of interest to taxpayers who foot remediation costs shifted through insolvency.

Background

An “Administration Charge” under the CCAA

The Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (“CCAA”) permits a court having jurisdiction over proceedings for the restructuring of an insolvent company to make certain orders, to secure payment of the fees of certain officials involved in those proceedings, including the Monitor of the insolvent company appointed for the restructuring proceeding.

A surprising judgment re the “Administration Charge”

During the spring of 2012, the Canadian Appeals Monitor posted a five-part series on the Supreme Court’s judgments in Van Breda, Black, and

Punj Lloyd Ltd (PLL), the ultimate parent of Simon Carves Ltd (SCL), provided 'letters of support' (what would in North America be called 'comfort letters') indicating to the board of SCL that PLL would 'provide the necessary financial and business support to ensure that [SCL] continues as a going concern'. This is precisely what SCL did not do: it went into administration, leaving invoices unpaid and unsecured creditors largely out of luck.

Morris Kaiser’s trustee in bankruptcy, Soberman Inc., thought it smelled a rat: while claiming to be impecunious, Kaiser appeared to be living a life of ‘some means’, which included trips to casinos in the US. Kaiser claimed he was drawing advances on the credit card of a buddy, Cecil Bergman, but the trustee suspected the whole thing was a front to shield Kaiser’s assets from his creditors.

Following a recent ruling of the Ontario Court of Appeal, parties may need to proceed cautiously in enforcing contractual rights and remedies in circumstances where there is a risk of the counterparty subsequently becoming insolvent.

The common law has long recognized that a contractual provision which is explicitly and directly triggered by a party’s insolvency (and which thereby causes subsequent prejudice to the rights of the insolvent party’s creditors) may be unenforceable as a matter of public policy.