Summit Glen Waterloo/2000 Developments Inc. (Bankrupt), Re, 2016 ONCA 407

• Judge: Cronk, Pepall and Lauwers, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 30, 2016
• Jurisdiction: Ontario
• Citations: 2016 ONCA 407;(2016), 351 O.A.C. 267 (CA)

Summit Glen Waterloo/2000 Dev., Re (2016), 351 O.A.C. 267 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. MY.028

In the Matter of the Bankruptcy of Summit Glen Waterloo/2000 Developments Inc., of the City of Toronto, in the Province of Ontario

A. Farber & Partners Inc., the Trustee of the Bankruptcy Estate of Montor Business Corporation, Annopol Holdings Limited and Summit Glen Brantford Holdings Inc. (applicant/appellant/respondent by way of cross-appeal) v. Morris Goldfinger, Goldfinger Jazrawy Diagnostic Services Ltd., Summit Glen Bridge Street Inc., Mahvash Lechcier-Kimel, Annopol Holdings Limited and Summit Glen Brantford Inc. (respondents)

(C57898; 2016 ONCA 407)

Indexed As: Summit Glen Waterloo/2000 Developments Inc. (Bankrupt), Re

Ontario Court of Appeal

Cronk, Pepall and Lauwers, JJ.A.

May 30, 2016.

Summary:

The Community Trust Company (CTC) held two charges on property owned by Summit Glen Waterloo/2000 Developments Inc. (SG Waterloo). One of the charges secured guarantees provided by SG Waterloo in support of two promissory notes in favour of CTC, one from an investor (Goldfinger) and one from SG Waterloo's principal (Lechcier-Kimel). SG Waterloo was placed in receivership on December 1, 2008. SG Waterloo, Goldfinger and Lechcier-Kimel defaulted on the CTC loans. CTC sued Goldfinger and Lechcier-Kimel on the promissory notes and commenced a second action against SG Waterloo. CTC obtained default judgment against SG Waterloo and Lechcier-Kimel. In 2009, Goldfinger, Lechcier-Kimel and a number of Lechcier-Kimel's companies, including SG Waterloo, entered into a settlement agreement, As a part of the settlement, the parties entered into a full and final release (the Release). Goldfinger negotiated a settlement of CTC's action against him. As part of that settlement, CTC assigned its two charges on the Property and the default judgment to Goldfinger's newly incorporated company (1830994 Ontario Ltd (183)). As a result, 183 became a creditor of Goldfinger, SG Waterloo and Lechcier-Kimel. 183 asserted claims in the bankruptcy proceedings. The trustee objected. 183 and Goldfinger moved to have 183's claims valued under s. 135 of the Bankruptcy and Insolvency Act and to require that SG Waterloo's estate satisfy the claims. The claims were addressed in a hybrid trial, together with the subject matter of two other court files.

The Ontario Superior Court, in a decision reported at [2013] O.T.C. Uned. 6635, allowed 183's claims. The trustee appealed, asserting that 183's claims were caught by the terms of the Release. The trustee asserted that the trial judge did not give effect to the Release's purpose, which was to end all disputes relating to the sale proceeds from the Property and to CTC's action. The trustee asserted that the definition of "Goldfinger" in the Release should have been interpreted so as to bar claims by any corporations under Goldfinger's control, including 183. The Release defined Goldfinger as including "successors corporations under his control and on behalf of any party or parties who claim a right or interest through him". The trustee asserted that the judge should have read a comma into that definition between the words "successors" and "corporations". Instead, the judge read out the "s" in "successors". 183 asserted that it was not a party to the Release and was not even incorporated when the Release was entered into. 183 asserted that the Release was restricted to certain matters that did not extend to it or to its secured claims.

The Ontario Court of Appeal allowed the trustee's appeal. The language of the Release had to be reviewed, construed, and assigned a meaning. It had to considered as a whole. Such an exercise or review was not evident from the judge's reasons. That was an error. When considered as a whole, the Release applied to companies controlled by Goldfinger, including 183, and to the subject matter of 183's claims.

Editor's note: For decisions in two companion appeals see 351 O.A.C. 241 and 351 O.A.C. 277.

Contracts - Topic 7401

Interpretation - General principles - Intention of parties (incl. reasonable expectations) - See paragraph 34.

Contracts - Topic 7407

Interpretation - General principles - Whole contract to be considered - See paragraphs 27 to 48.

Contracts - Topic 7416

Interpretation - General principles - Most commercially reasonable interpretation - See paragraph 34.

Contracts - Topic 7428

Interpretation - Ambiguity - Relevant considerations - See paragraphs 27 to 48.

Contracts - Topic 7468

Interpretation - Interpretation of words - Whole of contract to be considered - See paragraphs 27 to 48.

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge - Contractual interpretation - See paragraphs 26 to 28.

Releases - Topic 4021

Operation - Scope of matters released - General - See paragraphs 26 to 48.

Releases - Topic 5001

Interpretation - General - See paragraphs 26 to 48.

Counsel:

Patrick Shea and Brent Arnold, for the appellant/respondent by way of cross-appeal;

Maurice J. Neirinck and Michael McQuade, for the respondent/appellant by way of cross-appeal, 1830994 Ontario Ltd.

This appeal was heard on October 14 and 15, 2015, by Cronk, Pepall and Lauwers, JJ.A., of the Ontario Court of Appeal. Pepall, J.A., released the following judgment for the court on May 30, 2016.