D.J. Miller

A consumer debtor, Muhammed Salman Pathan, sought an order compelling Western University to confer an MBA degree upon him, arguing his outstanding tuition debt was discharged by his consumer proposal.

Western opposed, asserting the debt constituted a student loan under section 178(1)(g) of the Bankruptcy and Insolvency Act, thus surviving the proposal, and that the conferral of a degree was solely within its discretion.

The court found the debt was indeed a student loan under a provincial enactment, not released by the consumer proposal, and affirmed Western's discretionary power to withhold a degree for non-payment of fees, concluding that this policy did not conflict with the "fresh start" principle of bankruptcy law.

The debtor's motion was dismissed.

The Monitor in the CCAA proceedings of Nortel Networks Corporation brought a motion to pass its accounts and those of its legal counsel for the period from January 2009 to May 2016.

The fees sought totaled over $250 million CAD and USD combined.

The court applied the Belyea factors to assess the fairness and reasonableness of the fees.

Despite the unprecedented size of the fees, the court found them justified given the massive scale, complexity, and duration of the cross-border insolvency, the extraordinary powers granted to the Monitor, and the highly successful results achieved for the Canadian estate.

The accounts were approved in full.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.

The applicants sought approval of a sale of substantially all of their assets to a newly incorporated entity owned by their first lien lenders pursuant to a credit bid, effectively wiping out the second lien lenders.

RBC, a first and second lien lender, opposed certain ancillary relief.

The court approved the sale transaction, finding the pre-filing sales process reasonable under the Soundair principles and s. 36(3) of the CCAA.

However, the court declined to grant a broad third-party release by the first lien lenders, refused to bind RBC to a shareholders' agreement, and dismissed RBC's motions for pre-filing interest, fees, and a share of a consent fee.

Various parties brought motions seeking reconsideration or clarification of a prior joint allocation decision determining the distribution of $7.3 billion in escrow among debtor estates in multinational insolvency proceedings.

The moving parties argued that aspects of the allocation methodology—including treatment of bond guarantee claims, certain asset sale proceeds, intercompany claims, tax claims, and settled claims—required amendment or clarification.

The court reiterated that reconsideration is an exceptional remedy and rejected most requests because the issues either had been addressed at trial or could have been raised earlier.

Limited clarification was granted regarding the treatment of bondholder claims against guarantors and recognition of certain court‑approved settled pre‑filing claims that had been paid.

Other requested clarifications or amendments were denied.

In CCAA proceedings involving an educational publisher, the secured lender sought full indemnity costs following a successful motion resulting in the replacement of the monitor and related relief.

The court considered a contractual costs provision in the second lien credit agreement permitting recovery of enforcement costs, subject to the court’s supervisory discretion to ensure fairness and reasonableness.

The court confirmed that contractual provisions for full indemnity costs are generally enforceable where reasonable and declined to defer determination of costs.

Canadian counsel fees were found fair and reasonable, while the claim for U.S. counsel fees was reduced due to insufficient justification.

Costs of $194,091.59 were ordered payable to the secured lender.

In a comeback motion under the CCAA, the second lien agent challenged the appointment of the proposed monitor on the basis that its affiliate had acted for the debtor for more than two years, directed the pre-filing SISP, and participated in negotiations concerning the restructuring that would eliminate second lien recoveries.

The court held that a monitor must be independent and be seen to be independent, and found the proposed monitor could not impartially advise the court on the central issue of the reliability of the pre-filing sales process.

The court replaced the proposed monitor with another insolvency firm.

The court also ordered that, pending further order, the debtor could not pay interest or other expenses to the first lien lenders unless the same payments owing to the second lien lenders were made.

In a joint cross-border insolvency trial concerning the allocation of approximately $7.3 billion in lockbox funds from the sale of global business lines and residual intellectual property, the court interpreted the Master R&D Agreement as an operating transfer-pricing document that granted limited licence rights but did not govern post-insolvency allocation.

The court rejected both the position that one Canadian debtor owned all sale proceeds by virtue of legal title and the position that the EMEA debtors jointly owned all intellectual property by operation of law.

Applying unjust enrichment principles and the broad remedial jurisdiction available in CCAA proceedings, the court held that a just result required a pro rata allocation among debtor estates based on allowed claims.

The court further directed that duplicate claims be counted only once for allocation purposes, that intercompany claims be included, and that interim distribution proposals be brought forward.

Following a civil jury trial arising from a sexual assault of a student by another student at school, the plaintiffs sought judgment in accordance with the jury verdict and the school board resisted on the basis that the jury's narrative reasons identified policy and procedure provisions allegedly unsupported by the evidence.

The court held that a trial judge may disregard a civil jury verdict only where there is no evidence to support it or the answers cannot in law found judgment, and that jury answers must be read fairly and liberally.

Reading the verdict in context, there was some evidence of post-incident failures under the board's safety procedures and some evidence supporting causation and the damages awarded.

Judgment was therefore entered on the jury verdict, later increased by corrigendum to reflect a settled loss of income amount.

In the context of the global insolvency of Nortel Networks, the UK Pension Claimants (UKPC) asserted multiple claims against the Canadian debtors (NNC and NNL).

The UKPC claimed for a contingent Financial Support Direction (FSD) under UK pension law, amounts under a Funding Guarantee and a Swift Guarantee, and remedies for oppression and unjust enrichment.

The court dismissed the FSD claim as too remote and speculative to constitute a provable claim in the CCAA proceedings.

The court also dismissed the claims under the Swift Guarantee, oppression, and unjust enrichment.

However, the court allowed the UKPC's claim under the Funding Guarantee, finding NNL liable for £339.75 million.

In CCAA proceedings, the court issued a supplementary costs endorsement following an earlier costs decision.

The issue concerned whether the full amount of a law firm disbursement account should be added to the cost award.

After reviewing detailed particulars, the court found the discounted account represented fair value for services rendered and that the disbursements were reasonable.

The court approved inclusion of the full amount of the account as a disbursement and revised the total costs award accordingly.

The EMEA Debtors sought leave to appeal an order approving an Allocation Protocol that provided for a joint trial by the Ontario Superior Court of Justice and the US Bankruptcy Court for the District of Delaware to allocate over US$7 billion in proceeds from the sale of Nortel assets.

The moving parties argued the joint trial violated the Ontario court's independence and that the parties had previously agreed to binding arbitration.

The Court of Appeal dismissed the motion for leave to appeal, finding the proposed appeal lacked prima facie merit as the joint trial did not infringe judicial independence and the relevant agreement did not mandate arbitration.

Former directors sought declarations that claims advanced in a Quebec class action concerning pension losses were barred by releases granted during Companies’ Creditors Arrangement Act proceedings.

The court held that it had jurisdiction to determine the motion because the dispute concerned the effect of orders and releases issued within the CCAA restructuring.

The contractual releases executed by the union on behalf of beneficiaries were broadly worded and applied to all claims relating to facts existing at the time of the release, whether known or unknown.

The court found that the claims process and releases extinguished any potential claims against the directors relating to the pension deficit.

Accordingly, the Quebec class action claims against the directors were fully and irrevocably released.

The appellants appealed an order finding them in contempt of a previous court order and sought leave to appeal a costs order of approximately $92,000.

The Court of Appeal upheld the motion judge's finding that the appellants knowingly and intentionally ignored the previous order and attempted to hide assets to frustrate the respondent's rights as a creditor.

The court also found no basis to interfere with the motion judge's exercise of discretion in awarding costs on a full indemnity basis.

The appeal was dismissed.

The appellant landlord appealed an order permitting a receiver to take over the tenant's position under a commercial lease.

The landlord argued the motion judges exercised their discretion in an unprincipled way and that there was material non-disclosure on a without notice motion.

The Court of Appeal dismissed the appeal, finding the receivership order justly balanced the interests of the employees and the landlord, as the landlord was receiving rent and had not shown prejudice.

The court also found no palpable and overriding error in the finding of no material non-disclosure.

The applicant union applied for certification to represent employees at a newly opened nursing home in Etobicoke.

The intervener union claimed it already represented the employees based on a voluntary recognition agreement with the employer.

The Board held that under section 60(1) of the Labour Relations Act, a voluntary recognition agreement that expands an existing bargaining unit to include new employees is subject to challenge if entered into before the employees are hired or aware of the union representation.

Since the intervener did not demonstrate majority support among the new employees at the time they were hired, the Board declared the intervener was not entitled to represent them, and the applicant's certification application was timely.