Case Background:
H & R Block Canada, Inc. applied for the appointment of an interim receiver over the assets of Anwar & Anwar Consulting Inc. (AAC) and 102050413 Saskatchewan Inc., collectively referred to as the Debtors. The Debtors operated tax preparation franchises under agreements with H & R Block, which were terminated due to breaches and outstanding payments.

Legal Issues:

• Breaches of franchise agreements, including failure to pay royalties ($1.05M) and term loans ($1.01M).

• Unauthorized use of proprietary software, ownership misrepresentation, and competitive activities.

• Risk of improper use of client files containing sensitive personal information, violating PIPEDA and provincial privacy laws.

Court Findings:

• The Debtors were insolvent and unable to repay debts.

• Immediate appointment of an interim receiver was warranted under the Bankruptcy and Insolvency Act and The King’s Bench Act, to preserve assets and protect client information.

• The court emphasized preventing reputational damage to H & R Block and resolving customer complaints caused by unreturned tax files.

Outcome:
The court granted Ernst & Young Inc. powers as interim receiver to protect assets, manage leases, and secure client data. Costs and further awards were not detailed in the decision but would depend on subsequent judicial reviews within the receivership period.

Key Costs/Award:
No explicit monetary award or costs determination for H & R Block Canada, Inc. was included in the interim decision, though preservation of assets valued over $2M was secured.