Barbara Conway

The foreign representative of a Chapter 11 debtor group brought a motion for recognition in Canada of a US Bankruptcy Court confirmation order approving a reorganization plan.

The motion was unopposed.

A group of co-defendants in Canadian opioid litigation sought a bar order (Pierringer-type protection) as a term of the recognition order, which was opposed by a provincial government.

The court granted the recognition order, finding no public policy grounds under s. 61(2) of the CCAA to refuse recognition and that the new plan's consensual-only third-party releases were consistent with Canadian insolvency law.

The court declined to impose the bar order, distinguishing the applicable authorities and holding that the co-defendants' position arose from the plan's releases — not from a prior government stipulation — and that the co-defendants had already received bar order protection in a separate settlement.

The court granted the Monitor's application to assign John Aquino into bankruptcy and continued the Mareva order against him.

The decision addresses the requirements for a bankruptcy order under the Bankruptcy and Insolvency Act, the discretion to dismiss or stay such an application, and the standards for continuing a Mareva injunction post-judgment.

The court found that John Aquino had committed an act of bankruptcy, was unable to pay his debts, and that there was no bona fide dispute with the Monitor.

The court also rejected arguments that the application was brought for a collateral purpose and found the continuation of the Mareva order appropriate.

In Companies’ Creditors Arrangement Act (CCAA) proceedings, LoyaltyOne, Co. and its Monitor sought a declaration that a Tax Matters Agreement (TMA) was not binding or was void as a transfer at undervalue (TUV), and sought to disclaim the TMA to secure a $96 million tax refund.

Bread Financial Holdings, Inc. (formerly ADS) cross-moved to set aside the disclaimer, asserting its entitlement to the refund under the TMA.

The court ruled that LoyaltyOne was bound by the TMA, the TMA was not void as a TUV, and the disclaimer was not approved.

The court found it premature to determine the specific nature of Bread's rights to the refund.

The Moving Parties (First Nations and Municipalities) sought to stay the implementation of a $150 million settlement between Purdue Canada and Canadian Governments, arguing it might be unlawful, prejudicial, preferential, or an abuse of process, and sought financial disclosure from Purdue Canada.

The court dismissed the motion, finding it lacked a basis to compel disclosure or stay the settlement.

The court affirmed its jurisdiction over Purdue Canada was limited to the CCAA recognition proceedings, not general supervision, and found no evidence of bad faith or insolvency to warrant the requested orders.

The Moving Parties brought a jurisdiction motion seeking to dismiss or stay Senvion's Ontario action and motion for lack of jurisdiction or on the basis of forum non conveniens, arguing that Quebec was the more appropriate forum.

Senvion's proceedings concerned an alleged breach of a Companies’ Creditors Arrangement Act (CCAA) stay order issued by the Ontario court, specifically regarding the draw down of a letter of credit.

The court dismissed the Moving Parties' motion, holding that the Ontario court, as the issuer of the CCAA recognition orders and stay, was the appropriate forum to determine whether its order had been breached, irrespective of contractual choice of law or forum clauses.

The court explicitly stated it was not making a determination on the merits of the stay violation.

This motion concerned the interpretation of the Wage Earner Protection Program Act (WEPPA) regarding Service Canada's subrogation rights to recover payments made to employees from an insolvent employer's distribution.

Metroland Media Group Ltd. made a proposal to its creditors, entitling unsecured creditors to a 17% distribution.

Service Canada had approved payments to former non-unionized employees under WEPPA for unpaid severance pay.

The issue was whether Service Canada was entitled to recover these payments on a dollar-for-dollar basis from the employees' distribution or only a pro-rata share (17 cents on the dollar) as an unsecured creditor.

The court held that Service Canada is entitled to a dollar-for-dollar recovery, up to the amount of the WEPP payment, from the employee's distribution before the employee receives any balance.

Following a successful trial where the plaintiff was awarded approximately $8.9 million, the plaintiff sought costs of $3.49 million based on a Rule 49.10 offer.

The defendant argued the offer was not a true compromise and challenged the proportionality of costs and specific disbursements.

The court found the Rule 49.10 offer was a genuine compromise, entitling the plaintiff to partial indemnity costs to the offer date and substantial indemnity costs thereafter.

The court allowed disbursements for fact witness preparation and e-discovery, but disallowed fees for an expert who did not testify.

Costs were fixed at $2.8 million.

The plaintiff, Wiener Städtische Versicherung AG (VIG), a reinsurer, sought to recover funds from the defendant, Infrassure Ltd., a retrocessionaire, under a retrocession agreement.

VIG had paid its portion of a $140 million settlement to Zurich Insurance Company Ltd. (Zurich) for a business interruption claim by Vale (Canada) Limited.

Infrassure denied liability, arguing it was not contractually bound to follow the settlement and that Zurich failed to take proper and businesslike steps.

The court found that Infrassure was contractually bound by the "follow the settlements" clause and that Zurich had taken proper and businesslike steps in reaching the settlement.

Judgment was granted in favour of VIG for the settlement amount and loss adjustment costs, with the court denying VIG's claim for punitive damages.

The plaintiff, Shanghai Lianyin Investment Co., Ltd. (SLIC), brought a motion for an interim preservation order under Rule 45.01(1) of the Rules of Civil Procedure concerning two Ontario properties registered in the name of the defendant Lichun Guo, alleging they were held in resulting trust for her husband, Charles Lu, against whom SLIC held a CAD$233 million arbitral award.

Concurrently, Ms. Guo brought a cross-motion for security for costs.

The court dismissed SLIC's preservation order motion, ruling that Rule 45.01 is not the appropriate mechanism for preventing asset dissipation before judgment where the plaintiff does not assert a legal right to the specific assets, but rather seeks to satisfy a general monetary judgment.

Such relief requires meeting the stricter test for a Mareva injunction or a certificate of pending litigation.

The court granted Ms. Guo's motion for security for costs, finding that SLIC, as an out-of-province corporation with insufficient Ontario assets, did not demonstrate a "good chance of success" on the merits of its complex resulting trust claim, particularly given the unsettled legal question in Ontario regarding a creditor's ability to enforce a judgment against property held by a spouse in resulting trust without an allegation of fraudulent conveyance.

The Receiver sought costs of a contempt motion against the respondent on a full indemnity basis.

The respondent had been found in civil contempt for breaching an appointment order and sentenced to 30 days' imprisonment.

The court awarded costs on a full indemnity basis, finding the respondent's conduct egregious and highly disrespectful to the court and its appointed officer.

The quantum was fixed at $563,485, with a minor reduction for time spent on irrelevant facts.

The Receiver brought a contempt motion against the respondent for breaching an appointment order by interfering with the Receiver's exclusive authority and supporting a criminal complaint against the Receiver's representatives in Panama.

Having previously found the respondent in civil contempt, the court determined the appropriate penalty.

Finding that the respondent's conduct was a blatant and deliberate breach that undermined the court's authority, and that a fine would be insufficient for deterrence, the court ordered the respondent to be imprisoned for 30 days.

In a Commercial List receivership arising from judgment enforcement, the receiver moved for contempt after the respondent swore a declaration used to support a criminal complaint in Panama challenging the receiver's replacement of directors of a Panamanian subsidiary.

The court held it had jurisdiction because the alleged misconduct had a real and substantial link to Ontario, including the Ontario receivership order, the Ontario corporation in receivership, and the enforcement of an Ontario judgment.

Applying the civil contempt framework, the court found the appointment order was clear and unequivocal, the respondent knew of it, and he intentionally breached it by purporting to act for the debtor and by supporting foreign proceedings against the receiver without leave.

The court declined to find criminal contempt because the notice of motion did not provide sufficient particulars.

The applicants subscribed for flow-through shares in mining companies, which renounced Canadian exploration expenses to them.

The CRA later reassessed the companies and the applicants, disallowing the expenses.

The applicants sought immediate indemnification from the respondent under their subscription agreements for the taxes paid under the reassessments.

The court dismissed the applications, finding that the indemnities were not payable until the amount of taxes was 'definitively determined' or 'determined', which had not yet occurred as the respondent's appeal of the CRA reassessment was still pending.

The respondents (Purchaser) brought a motion to stay an application by the applicant (Vendor) for production of documents related to post-closing adjustments in a share purchase agreement.

The core issue was whether a clause in the SPA, which referred unresolved matters to an "Independent Accountant" for a binding determination, constituted an arbitration agreement under the Arbitration Act, 1991, or merely an expert determination clause.

Applying the indicia from Sport Maska Inc. v. Zittrer, the court found that the clause was an arbitration agreement because it involved a formulated dispute, required the Independent Accountant to exercise a judicial function based on party submissions, and resulted in a final and binding decision.

Consequently, the court granted the stay of the Production Application, holding that all issues related to the working capital adjustment, including document production, should be determined by the Independent Accountant (arbitrator) in the first instance.

The applicant, 908593 Ontario Limited (Eagle Travel Plaza) by its receiver, brought a motion seeking coverage under a credit risk insurance policy issued by Atradius.

The core dispute was the interpretation of Article 23300 of the policy, specifically whether a $100,000 maximum liability limit for "Discretionary Credit Limit" (DCL) Buyers applied per DCL Buyer or as an aggregate limit for all DCL Buyers per insurance year.

The court found the policy language clear and unambiguous, concluding that the $100,000 limit was an aggregate for all DCL Buyers per insurance year, not per individual DCL Buyer.

The applicant's motion was dismissed.

JH Whittaker & Sons Limited (Whittaker's) brought a motion to stay an action commenced by Husky Food Importers & Distributors Ltd. (Husky) and to refer Husky's claims to arbitration in New Zealand.

The motion was brought pursuant to the International Commercial Arbitration Act, 2017 and the UNCITRAL Model Law.

Husky argued that no valid arbitration agreement existed or that it was inoperative due to an inconsistency with a non-exclusive jurisdiction clause.

Applying the Haas framework, the court found it arguable that an arbitration agreement existed and that the dispute fell within its scope.

The court determined that the alleged inconsistency was not apparent and that the interpretation of the contract required a thorough review of the factual matrix, which is best left to the arbitrator.

The court also rejected the argument that a multiplicity of proceedings (arbitration against Whittaker's and litigation against another defendant) was a reason to refuse the stay, as the Model Law's stay provision is mandatory.

The motion to stay the action and refer it to arbitration was granted.

This case involved four consolidated applications concerning arbitrations over construction defects at two hospitals.

PCL Constructors Canada Inc. challenged the arbitrators' jurisdiction, arguing non-compliance with procedural prerequisites and a limited scope of the arbitrators' power to award remedies.

Johnson Controls Canada LP sought declaratory relief regarding the nature of a contractual "Reconsideration Right" of the arbitrators' decisions, specifically whether it entailed a de novo hearing or an appeal.

The court dismissed all four applications, upholding the arbitrators' jurisdiction and declining to rule on the hypothetical future reconsideration right, stating the issue had not yet crystallized.

Cineplex and Cineworld entered into an Arrangement Agreement for Cineworld to acquire Cineplex for $2.8 billion.

Following the outbreak of the COVID-19 pandemic and mandated theatre closures, Cineplex deferred payments to landlords and suppliers to manage liquidity.

Cineworld terminated the agreement, alleging Cineplex breached the ordinary course covenant.

The court found that Cineplex's cash management measures were commercially reasonable and did not breach the agreement, noting that the pandemic risk was allocated to Cineworld under the Material Adverse Effect clause.

Cineworld's termination was a repudiation, and Cineplex was awarded $1.24 billion in damages for lost synergies and transaction costs.

The joint liquidators of Stanford International Bank (SIB) and a group of investors brought actions against TD Bank, SIB's primary U.S. dollar correspondent bank, for knowing assistance in breach of fiduciary duty and negligence.

The plaintiffs alleged that TD Bank should have detected and prevented the massive Ponzi scheme orchestrated by SIB's owner, Allen Stanford.

The Superior Court of Justice dismissed the actions, finding that TD Bank had no actual knowledge of the fraud and was not reckless or wilfully blind.

The court also held that TD Bank did not owe a novel duty of care to protect its customer from insider abuse, and even if it did, it met the standard of care of a reasonable banker during the relevant period.

The applicant's employer was investigated by the Ontario Securities Commission.

The applicant was summoned to give evidence but refused to answer questions about their employment, citing a confidentiality clause in their employment agreement.

The applicant applied for directions and a declaration that the information was privileged.

The Commission cross-applied for declarations that the applicant must answer the questions.

The court dismissed the application and allowed the cross-application, finding that the information did not meet the Wigmore criteria for case-by-case privilege and that the applicant was required to attend the examination and answer all relevant questions, subject only to valid claims of privilege.