Christopher Yung

In a landmark CCAA proceeding involving Hudson's Bay Company, the court declined to approve the assignment of 25 major retail department store leases across Canada to a new tenant, Ruby Liu Commercial Investment Corp., despite the transaction representing the highest bid and generating approximately $50 million in net proceeds for creditors.

The court found that the proposed assignee failed to meet the reasonableness standard under section 11.3(3) of the CCAA, particularly regarding its ability to perform the substantial and ongoing obligations under the leases.

The decision emphasizes that section 11.3 is an extraordinary power that must be exercised sparingly, and that the court must balance the interests of all stakeholders, including the contractual counterparties (landlords) who would be compelled into a long-term relationship with an untested and undercapitalized purchaser.

The court also rejected the applicants' arguments that certain lease provisions constituted ipso facto clauses violating the anti-deprivation rule and section 34 of the CCAA.

In this CCAA proceeding, the court granted multiple orders sought by Hudson's Bay Company and related entities, including approval of lease assignment agreements with YM Inc. and Ivanhoe Cambridge, sealing of confidential bid information, extension of the stay of proceedings to October 31, 2025, and approval of the Monitor's reports and activities.

The court rejected requests for adjournment and conditional distributions, finding the lease monetization process was fair and transparent, and that the proposed transactions represent a positive development for stakeholders.

The court granted the motion by the defendants Mario Cortis and MediHub International Inc. for security for costs, ordering $80,000 to be posted by the plaintiff, John Davis, but stayed the order for 90 days due to evidence that Davis may imminently return to Ontario.

The decision reviews the legal test for security for costs, the relevance and admissibility of new evidence, and the balancing of interests between the parties.

The court found that Davis had not demonstrated that an order for security for costs would be unjust, and that the amount sought by the defendants was excessive, setting a lower amount.

The ruling also addresses delay, bad faith allegations, and the complexity of the case.

This costs endorsement followed a decision on an appeal and cross-appeal.

Given the divided success of the parties on both the appeal and cross-appeal, the Court of Appeal ordered that each party bear its own costs.

The parties entered into a contract in 1999 for the provision of market pricing data.

The appellant, a custodial bank, redistributed the data to its numerous affiliates without authorization.

The respondent discovered the breach in 2016 and sued.

The trial judge found the appellant breached the contract and awarded damages based on a rateable approach, but also awarded damages for sharing data with a specific affiliate.

On appeal, the Court of Appeal upheld the liability finding, concluding the contract only authorized the appellant itself to access the data.

The Court also upheld the trial judge's decision to change his unentered judgment and rejected the appellant's limitations defence.

On damages, the Court struck the award relating to the specific affiliate as double compensation but otherwise upheld the damages assessment, including an adverse inference drawn against the appellant for spoliation of evidence.

The plaintiff developer entered into agreements of purchase and sale with the defendant for commercial properties, which included a mutual lease condition for a leaseback arrangement.

As the condition deadline approached, the defendant assured the plaintiff it would continue negotiating the leases but secretly sought board approval to sell the properties to a third party.

The defendant then terminated the agreements.

The court found the defendant breached its duty of good faith and honest performance, and was liable for negligent misrepresentation.

Applying promissory estoppel, the court held the defendant could not rely on its strict contractual rights to terminate.

The plaintiff was awarded $15.5 million in damages for lost profits.

Citibank, N.A. commenced an application seeking the appointment of an investigative receiver for Rodrigo Lebois Mateos' assets, inspection of records for Terralpa Investment Fund I Limited Partnership and Araterra Inversiones, and compliance with the Limited Partnerships Act.

The respondents brought a motion to permanently or temporarily stay the application in favour of ongoing proceedings in the United States District Court for the Southern District of New York.

The court granted a temporary stay of Citibank's application for a receiver, finding a substantial overlap with the U.S. proceedings and potential for duplication of resources.

However, the court ordered Terralpa LP and Araterra Inversiones to comply with the record-keeping and disclosure requirements of the Limited Partnerships Act, as this relief was outside the U.S. court's jurisdiction.

A sealing order was also granted for sensitive financial information to maintain comity with the U.S. proceedings.

This case involves a Companies' Creditors Arrangement Act (CCAA) proceeding where the Applicants sought approval of a Sales and Investment Solicitation Process (SISP) including a stalking horse bid.

Green Acre Capital LP, a minority shareholder and creditor, opposed the SISP and brought a cross-motion to replace the previously approved Debtor-in-Possession (DIP) financing facility with an alternative one.

The court approved the SISP, finding it broad enough to explore various restructuring options beyond just a sale, and dismissed Green Acre's cross-motion, emphasizing the need to minimize instability by not replacing a recently approved DIP facility for minor financial benefits.

The appellants sought to stay an action in favour of arbitration, arguing that two share purchase agreements contained arbitration clauses.

The motion judge refused to stay the action, finding that one of the agreements (National Trade Agreement) never existed due to lack of incorporation and consideration, thus no arbitration agreement.

The Court of Appeal dismissed the appeal, affirming that where an agreement is void ab initio (never existed), the arbitration clause within it also does not exist and cannot survive under s. 17(2) of the Arbitration Act.

The Court also found the motion judge correctly limited his analysis to the National Trade Agreement.

The plaintiff brought a motion during trial for leave to withdraw an admission of fact contained in the Agreed Statement of Facts.

The admission was based on a handwritten note produced by the defendant.

Midway through the trial, the defendant produced new documentary evidence, including emails, that contradicted the handwritten note and the admission.

Applying the tripartite test under Rule 51.05 of the Rules of Civil Procedure, the court found that the new evidence raised a triable issue, provided a reasonable explanation for the withdrawal, and would not result in non-compensable prejudice to the defendant.

The motion was granted.

The appellants, The Bank of New York Mellon Corporation and CIBC Mellon Global Securities Services Company, sought an order staying a lower court judgment pending appeal.

They argued that the application judge's amendments to his reasons for judgment created a reasonable apprehension of bias.

The motion judge, Lauwers J.A., dismissed the motion, finding that the appellants failed to demonstrate a real likelihood or probability of bias.

The court applied the three-part test for a stay (serious issue, irreparable harm, balance of convenience) and the overarching interests of justice, concluding that a stay was not warranted.

Leave was granted to file a Supplementary Notice of Appeal.

The plaintiff, a minority shareholder and employee of a closely held construction management company, brought an action for wrongful dismissal and oppression after a contentious meeting where the majority shareholders claimed he resigned.

The court found the plaintiff was terminated without cause, as his emotional outburst did not constitute a clear and unequivocal resignation.

The court also found the majority shareholders engaged in oppressive conduct by unilaterally removing him as a director, withholding his shareholder loan, and failing to value his shares upon termination.

To rectify the oppression, the court valued the plaintiff's shares at the subsequent fiscal year-end, awarding $440,100 for the shares, $100,000 for pay in lieu of notice, and $75,000 in punitive damages for the defendants' high-handed conduct.

The applicant sought to vary a previous judgment regarding contract beneficiaries and liability for knowing receipt.

The court declined to change the finding on beneficiaries (para 19) as it was an intentional commercial interpretation.

The court did remove an erroneous finding of breach of contract against CIBC Mellon, but declined to substitute it with a finding of knowing receipt, as that relief was not sought in the initial application.

The court granted the applicant's request to introduce evidence of damages related to data sharing by all custodial entities of Mellon Financial Corporation at the time of the agreement, despite the previous finding that those entities were entitled to receive the data.

The Court of Appeal heard a motion to review a single motion judge's order that dismissed requests to expedite an appeal and waive the requirement to file a formal liability order.

The panel upheld the motion judge's decision not to expedite the appeal, finding no error in principle or misapprehension of evidence.

However, the panel varied the order to relieve the moving parties from the obligation of filing a formal liability order to perfect their appeal, noting that the liability order was a final order.

The motion was otherwise dismissed, and costs were fixed to be awarded to the successful party on the appeal.

The appellants moved to expedite their appeal of a liability decision and to be relieved from filing a formal order, arguing that an early appeal could render a subsequent damages trial unnecessary.

The respondent opposed, contending that the appeal should not be scheduled until the damages trial was adjudicated, allowing for a single, comprehensive appeal.

The court dismissed the motion, emphasizing the principle of judicial economy and the ordinary practice of pursuing a single appeal encompassing both liability and damages.

The court found that fragmenting the appeal would likely delay the overall administration of justice and that any potential costs thrown away could be addressed in a costs award.

The respondents in the underlying application (BNY) brought a motion to adjourn a damages trial until after the disposition of their pending appeal on liability, to adduce further evidence, and to settle the form of judgment on liability.

The court had previously found BNY liable for breach of contract and ordered a viva voce trial on damages due to the complexity of the record.

The court dismissed the motion, finding that an adjournment would effectively impose a bifurcation not agreed to by the parties, contrary to Rule 6.1.01, and that the balance of convenience favoured proceeding with the damages trial to allow a single appeal on both liability and damages.

The court also declined to allow new evidence or settle the form of judgment at this stage.

The plaintiff brought a motion seeking production of damages documents, specifically client engagement communications, client-by-client contribution margins, and underlying documents for client sales summaries.

The defendants brought a cross-motion seeking a further affidavit of documents, answers to outstanding undertakings, and answers to questions refused on discovery.

The court granted the plaintiff's requests for client engagement communications and underlying sales summary documents, but denied the request for client-by-client contribution margins due to proportionality.

For the defendants' motion, the court ordered clarification on undertakings and answers to numerous refused discovery questions concerning employee departures, lost clients, employee benefits, redacted documents, customer reports, and profit and loss statements.

The defendants' request for a further affidavit of documents was denied based on proportionality.

The plaintiffs in a wrongful dismissal action brought a motion to compel answers to a refused question from the defendant's examination for discovery.

The plaintiffs sought underlying financial source documents to test the defendant's unaudited financial statements, which were relevant to their claims for bonus shares and share valuation.

The Master granted the motion, finding the documents relevant to the pleadings and not disproportionate given the defendant's significant gross revenue, while excluding projections and forecasts for periods after the valuation date.

Following the dismissal of the plaintiff's summary judgment motion, the successful defendant sought partial indemnity costs of approximately $255,000.

The plaintiff argued the costs should be reserved to the trial judge as the motion's efforts would reduce trial preparation.

The court rejected reserving all costs, noting the motion should not have been brought, but recognized that some work would be useful for trial.

The court issued a hybrid costs order: $100,000 payable forthwith, $77,500 payable in any event of the cause, and $77,500 payable in the cause.

The plaintiff brought a motion for summary judgment against the defendant for over $25 million USD in a complex action involving allegations of breach of contract and conspiracy.

The court dismissed the motion, finding a surfeit of genuine issues requiring a trial, including highly contested facts regarding pre-contract representations, alleged collusion, and the interpretation of multiple contracts created in a convoluted factual nexus.

The court concluded it would not be in the interests of justice to decide the action summarily.