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Desjardins Ducharme Stein Monast v. Empress Jewellery (Canada) Inc., 2004 CanLII 15737 (QC C.S.)
the interests of a major unsecured creditor are considered to be unfairly prejudiced in a case where there is a closely-held corporation in which the directors and shareholders gain a personal advantage or a reduction in liability by keeping funds or assets out of such creditor's reach
Chisum Log Homes & Lumber Ltd. v. Investment Saskatchewan Inc., 2007 SKQB 368 (CanLII)
Section 219 of The Business Corporations Act does not establish a limitation period. Rather it permits actions to be brought against dissolved companies without the necessity of reviving those companies.
Danylchuk et al. v. Wolinsky et al. and Feierstein and Fishman Medical Corporation v. Wolinsky et al., 2007 MBQB 65 (CanLII)
since the directors have been sued in their personal capacity it is irrelevant whether or not the corporation was in existence at the time of the application
Desjardins Ducharme Stein Monast v. Empress Jewellery (Canada) Inc., 2004 CanLII 15737 (QC C.S.)
[37] In the Court's opinion, the interests of a major unsecured creditor are considered to be unfairly prejudiced in a case where there is a closely-held corporation in which the directors and shareholders gain a personal advantage or a reduction in liability by keeping funds or assets out of such creditor's reach. The Court is satisfied that the repayment of the shareholder loans, the payment of dividends, the payment of bonuses as well as the disposal of most of Empress' inventory and equipment were not reasonable and legitimate business decisions on behalf of Empress, but rather a form of self-dealing by Mr. and Mrs. Dubrovsky and Mr. Azran.
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While lack of good faith can constitute oppressive or unfairly prejudicial
conduct, it is not a necessary prerequisite for a remedy under section
241 CBCA or its provincial equivalents
Yukon and Canada v. B.Y.G. Natural Resources Inc., 2007 YKSC 2 (CanLII)
Canada granted leave to pursue oppression action for environmental cleanup costs
Apotex Inc. v. Laboratoires Fournier S.A., 2006 CanLII 38354 (ON S.C.)
If the oppressive conduct alone was enough to create the status of a creditor-complainant for the purposes of the oppression remedy, then the oppression remedy could be used by any plaintiff in any case where a corporation has caused damage through an otherwise conventional breach of contract or through tortious conduct.
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The law is clear that the
creditor-complainant has to be a creditor at the time of the alleged oppression: -
It is not
enough that the complainant became a creditor as a result of the allegedly
oppressive conduct, as was the case here. If this were the law, then it
would be “unsatisfactorily circular.”
Piller Sausages & Delicatessens Ltd. v. Cobb International Corp., 2003 CanLII 35795 (ON S.C.)
The complaint relates to the fact that, regardless of the amount of profit, CIC sold assets otherwise available to satisfy the applicant’s claim to a related company who in turn resold those assets at a profit, was paid, and yet has not yet paid CIC for the supply of such assets in circumstances where payment would provide CIC with the financial ability to honour the debt it has been found to owe to the applicant
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“Oppressive” has been
interpreted as meaning burdensome, harsh or wrongful: Scottish
Cooperative Wholesale Society Ltd. v. Meyer, [1959] A.C. 324; Burnett v. Tsang reflex, (1985), 29 B.L.R. 196. - 10 more annotations...
Levy-Russell Ltd. v. Shieldings Inc., 1998 CanLII 14685 (ON S.C.)
[37] The creditor respondents have clearly met the criteria of (1) having a legitimate interest in the affairs of the corporation and (2) being analogous to that of a minority shareholder. They also may have met the criterion of having a reasonable expectation that the company’s affairs would be conducted with a view to protecting their interests as judgment creditors.
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[18]
The courts, have, in some cases, found that a
creditor has standing to assert an oppression action. In all such cases the
courts invoked their discretionary powers pursuant to s. 245(c) of
the O.B.C.A. which defines a “complainant” as (other than security holders past
or present and directors and officers past and present) any other person who, in
the discretion of the court, is a proper person to make an application under
this part: -
[19]
However, it has been held that debt actions should
not be routinely turned into oppression actions: see Royal Trust Corp. of
Canada v. Hordo reflex, (1993), 10
B.L.R. (2d) 86 (Ont. Gen. Div.). - 2 more annotations...
Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68, [2004] 3 S.C.R. 461
directors owe a duty of care to creditors, but that duty does not rise to a fiduciary duty
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Section 241 of
the CBCA provides a possible mechanism for creditors to protect their interests
from the prejudicial conduct of directors. In our view, the availability
of such a broad oppression remedy undermines any perceived need to extend the
fiduciary duty imposed on directors by s. 122(1)(a) of the CBCA to
include creditors
Stone Sapphire Ltd. v. Transglobal Communications Group Inc., 2008 ABQB 575 (CanLII)
Bank's security interest trumps inventory suppliers' claim on money paid into court
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a security agreement with a licence to sell
creates “…a defeasible interest; but the event of defea
Re Seeley (Bankruptcy), 2008 NWTSC 77 (CanLII)
the Bank did nothing after the release was given by the Trustee. Had it started foreclosure proceedings, payment of the secured amount thereafter might be considered a redemption. But in my view, where, as here, the Bank did nothing with the release it was given and instead stood by while the Trustee continued with the agreement for sale in the context of the bankruptcy, what occurred is not a redemption.
Seeley (Trustee of) v. Canadian Imperial Bank of Commerce (2008), Superintendent’s Levy deducted from repayment of bank’s mortgage
Seeley (Trustee of) v. Canadian Imperial Bank of Commerce (2008), the Bankruptcy Court determined that the Superintendent’s Levy was payable on the amount paid to a secured creditor by a Trustee in bankruptcy.
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Add Sticky NoteSeeley (Trustee of) v. Canadian Imperial Bank of Commerce (2008),
D & K Horizontal Drilling (1998) Ltd. (Trustee of) v. Alliance Pipeline Ltd., 2002 SKQB 86 (CanLII)
Provincial Business Lien Act creates valid secured interest under the BIA for contractors.
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The central issue is whether funds paid into
Court by Alliance are, upon being paid into Court, the property of the Bankrupt
divisible among its creditors in accordance with the scheme of distribution
provided in the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”) free of any lien or charge in favour
of the lien claimants. -
if a lien is registered against the work or the site arising out of the work
performed by the Bankrupt or any of its subcontractors, the contract further
provides that Alliance may, at its option, post or deposit security to have the
lien removed or have the lien discharged and deduct the amount posted as
security and the cost of obtaining the discharge of the lien from any money
payable or which thereafter may become payable to the Bankrupt - 2 more annotations...
Dartmouth (City) v. Barclay's Bank of Canada, 1996 CanLII 5620 (NS C.A.)
BIA overturns municipal lien for business taxes on machinery and equipment. "the City of Dartmouth does not claim a security interest"
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In Husky Oil the provincial legislation did not directly create a charge
on the bankrupt's property; it made a third party personally liable. That is the
situation that exists in the case before us. -
Furthermore, in Husky Oil and in the case we have under consideration the
personal liability of the third parties had been triggered before the assignment
in bankruptcy. - 5 more annotations...
Canada (Attorney General of) v. Vecchio, 1991 CanLII 476 (BC S.C.)
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"There can be no doubt about the general principle that if there are a number
of creditors of equal degree and the Crown is one of them, then subject to
contrary legislation, the Crown is entitled to be paid in priority to the other
creditors: -
However, there are a number of exceptions to the general principle.
- 4 more annotations...
Carbopego-Abastecimento De Combustiveis S.A. v. AMCI Export Corporation; Nova Scotia Power Inc. v. AMCI Export Corporation, 2007 NSSC 118 (CanLII)
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In this case, the applicant is a judgment creditor of AMCI pursuant to the
Creditors’ Relief Act, while NSPI is not. Furthermore, the registration
of notice of the judgment pursuant to s. 2A(1) prevails over any conflicting
provision of the Creditors’ Relief Act, the Judicature Act, or
the Civil Procedure Rules, pursuant to s. 2E
143858 Canada inc. v. Ginsberg Gingras & associés inc., 1994 CanLII 5522 (QC C.A.)
In the result, I conclude that Hydro-Quebec was a secured creditor in the bankruptcy, that since its security was provided in provincial legislation the sole purpose of which was securing a debt due to Hydro-Quebec as an agent of the Crown, and since the security was validly registered prior to the date of the assignment in bankruptcy by the debtor, the claim of Hydro-Quebec remained valid as a secured claim in the bankruptcy.
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Under
the Hydro-Quebec Act (R.S.Q.
ch. H-5),
Hydro-Quebec is an agent of the Crown in right of Quebec (Sec. 13) and
its property is Crown property (Sec. 14). Under Sec. 31(4)
of the Act, Hydro-Quebec had a privilege, for the price of power supplied to a
debtor exploiting an industrial or commercial undertaking, upon the moveable and
immoveable property of its debtor:
Farm Credit Corp. v. Holowach (Trustee of), 1988 CanLII 143 (AB C.A.)
s. 41 of the Law of Property Act of Alberta which precludes deficiency claims against individuals in foreclosure actions applies to the Crown (and by implication, FCC)
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10. The Corporation is, for all purposes of this Act, an agent of Her Majesty in
right of Canada. -
All parties argued this appeal on the basis that the mortgagee was entitled to
raise any immunity of the federal Crown. - 2 more annotations...
Cameron v. National Bank of Canada, 2008 CanLII 23235 (ON S.C.)
There is no duty of diligence upon a creditor imposed by the doctrine of latches owed to a surety, to ensure the performance of the principal to a guarantee.
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Latches
[33]
There is no duty of
diligence upon a creditor imposed by the doctrine of latches owed to a surety,
to ensure the performance of the principal to a guarantee.
Blue Range Resource Corp. (Re), 2000 ABQB 4 (CanLII)
57] Based on my characterization of the claim, the equitable principles and considerations set out in the American cases, the general expectations of creditors and shareholders with respect to priority and assumption of risk, and the basic equitable principle that claims of defrauded shareholders should rank after the claims of ordinary creditors in a situation where there are inadequate assets to satisfy all claims, I find that Big Bear must rank after the unsecured creditors of Blue Range in respect to the alleged share exchange loss, the claim for transaction costs and the claim for cash share purchase damages
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in common law shareholders are not entitled to share in the assets of an
insolvent corporation until after all the ordinary creditors have been paid in
full: -
the comments made by the American courts in these cases relating to the policy
reasons for subordinating defrauded shareholder claims to those of ordinary
creditors are persuasive, as they are rooted in principles of equity that are
very similar to the equitable principles used by Canadian court - 2 more annotations...
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