Law360 Canada ( April 16, 2026, 9:43 AM EDT) -- Appeal by 2668602 Ontario Inc. (266) from the dismissal of its conversion claim regarding a racking system (Racking) located in a distribution centre/warehouse leased by the respondent landlords (Landlord). Cross‑appeal by the Landlord on damages. The matter arose in bankruptcy proceedings in which the Tenants obtained a court-approved Liquidation Process Order (Order) authorizing the sale of Merchandise and FF&E in accordance with an Agreement and attached Sale Guidelines. The Agreement defined “Stores” to include the warehouse. The Sale Guidelines provided that any fixtures or personal property left in a Store after the Sale Termination Date, where the Lease had been disclaimed, shall be deemed abandoned and the Landlord could dispose of them without liability. 266 purchased all FF&E in the warehouse, including the Racking, and agreed to remove it by Jan. 15, 2019. The Lease was disclaimed effective Jan. 22, 2019. Despite knowing dismantling would take six to eight weeks, 266 made no arrangements, failed to remove the Racking by any relevant deadline and effectively ceased communicating with the Landlord. After warning 266, the Landlord proceeded to remove and sell the Racking. 266 sued for conversion and the Landlord defended based on deemed abandonment, actual abandonment and trespass. The judge found the Sale Guidelines governed that the warehouse was a “Store,” that the Racking was FF&E, that the deeming provision applied and was irrebuttable and that 266’s inaction further demonstrated actual abandonment. On appeal, 266 argued misinterpretation of the Order, that the deeming provision was rebuttable, that its communications negated abandonment and that the judge erred in finding trespass and in her damages comments. The Landlord responded that the judge correctly interpreted the Order in its insolvency context that the deeming provision was irrebuttable, that 266’s conduct supported abandonment and that damages were moot because 266’s appeal lacked merit....