Fred Myers

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.

The appellants and respondent held equal interests in a limited partnership formed to develop a property.

After their relationship soured, the appellants offered to sell their interest to the respondent.

The respondent accepted the offer while secretly negotiating to sell the entire property to a third party at a profit.

The appellants sued for breach of fiduciary duty and breach of the limited partnership agreement.

The Court of Appeal upheld the motion judge's dismissal of the action, finding that the presumption of a fiduciary duty was rebutted because both parties were acting in their own self-interest with the knowledge that the partnership was ending.

In CCAA proceedings involving a mining company, competing motions were brought concerning the restructuring process.

The debtor sought directions regarding the procedure for resolving noteholder claims and the alleged misuse of confidential information by certain creditors, while the noteholders sought an order convening a meeting of creditors to vote on their proposed plan of arrangement.

The court held that calling a creditors’ meeting was premature because the proposed plan conflicted with the debtor-in-possession financing facility, had been introduced without meaningful consultation, and unresolved claims and litigation issues could affect voting rights and recoveries.

The court dismissed the noteholders’ motion without prejudice and declined to order disclosure sought by the debtor.

The stay of proceedings was extended to facilitate continued negotiations and mediation.

The applicants sought judicial review to quash a decision by the City's General Manager of Parks, Forestry and Recreation to close an off-leash dog area in Ledbury Park.

The General Manager closed the area due to unresolved conflicts between park users and adjacent residents.

The Divisional Court dismissed the application, finding that the decision was reasonable and that the General Manager appropriately balanced competing community interests.

The court also held that the applicants were accorded adequate procedural fairness given the policy nature of the decision.

The successful defendant sought substantial indemnity costs following summary judgment motions and the dismissal of the plaintiffs’ claims, arguing the allegations were akin to accusations of fraud and were unsubstantiated.

The plaintiffs argued that substantial indemnity costs are reserved for rare and exceptional cases involving reprehensible litigation conduct.

The court held that although the defendant succeeded on the motions, the plaintiffs’ conduct was not reprehensible and their cross‑motion was not unreasonable.

Applying s. 131 of the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure, the court determined that partial indemnity costs were appropriate.

The defendant was awarded $150,000 in costs for the motions and the action.

The moving party union appealed a decision of a Claims Officer in a CCAA proceeding.

The Claims Officer had determined that a motion in annulment brought by the union in Quebec regarding an arbitration award for lockout damages was not meritorious.

The Superior Court of Justice dismissed the appeal, finding that the Claims Officer applied the correct standard and made no error in principle or law in concluding that the arbitrator had properly exercised his jurisdiction.

The City of Toronto brought a motion to quash an application for judicial review regarding the cancellation of an off-leash dog park designation at Ledbury Park.

The City argued the cancellation was an administrative or political decision not subject to judicial review.

The Divisional Court dismissed the motion to quash, finding that the cancellation of the off-leash designation affected the legal rights, privileges, and immunities of dog owners, and therefore constituted the exercise of a statutory power of decision under the Judicial Review Procedure Act.

Following a decision in CCAA proceedings, the parties made written submissions on costs.

The court approved an agreement to pay the Retirees' full indemnity legal fees from the Executive Plan fund.

The court declined to make a similar order for the United Steelworkers regarding the Salaried Plan.

The court made no order as to costs for the underlying motions, following conventional CCAA practice.

For the appeal, the Retirees and the USW were awarded partial indemnity costs fixed at $40,000, payable jointly and severally by Sun Indalex and the U.S. Trustee.

Indalex Limited, while under CCAA protection, obtained a super-priority charge for DIP financing and subsequently sold its assets.

The sale proceeds were insufficient to cover both the DIP lenders and the deficiencies in Indalex's underfunded pension plans.

The Court of Appeal held that a deemed trust under s. 57(4) of the Pension Benefits Act applied to the pension deficiencies and took priority over the DIP lenders' super-priority charge, as no explicit finding of federal paramountcy had been made.

Furthermore, the Court found that Indalex breached its fiduciary duties as the pension plans' administrator by failing to protect the beneficiaries' interests during the CCAA proceedings, justifying a constructive trust over the reserve fund.

The moving party sought leave to appeal an order sanctioning the monitor's methodology for distributing funds in Nortel's Health and Welfare Trust under the CCAA.

The Court of Appeal dismissed the motion, finding that the interpretation of the specific termination clause was not of significance to the practice, the appeal was not prima facie meritorious, and granting leave would unduly hinder the progress of the restructuring.

Costs were awarded to the Monitor.

The moving parties sought leave to appeal an order approving a settlement in the CCAA proceedings of Nortel Networks.

The Court of Appeal denied leave, finding no procedural or substantive unfairness in the settlement.

The motion judge had carefully balanced the various interests at stake and made no demonstrable error.

The moving parties, Objecting LTD Beneficiaries, sought an order expediting their motion for leave to appeal and consolidating the leave motion with the appeal itself.

The responding parties consented to expediting the leave motion but opposed consolidation.

The court agreed with the responding parties, finding no urgency requiring consolidation as benefits continued until the end of the year.

A schedule for the expedited leave motion was approved.

The interim receiver of a bankrupt company sought to distribute funds from operating assets to a secured creditor.

The pension plan administrator opposed, claiming priority under a statutory lien for unpaid pension contributions pursuant to s. 57(5) of the Pension Benefits Act.

The Ministry of the Environment also opposed, arguing funds should be retained for environmental remediation.

The Court of Appeal dismissed both appeals, holding that the pension administrator is not a secured creditor under the Bankruptcy and Insolvency Act because the unpaid contributions are not a debt due to the administrator.

The Court also held that the MOE was an unsecured creditor regarding the operating assets and that the BIA's specific provisions for environmental claims governed.

The applicants sought leave to appeal a discretionary order denying them leave to file a representative claim on behalf of uncertified classes in ongoing CCAA proceedings.

The Court of Appeal found no error in the motion judge's exercise of discretion, noting she properly considered the forum of future class certification, the absence of individual claims, and the prejudice of altering the claims process after the claims bar date.

Leave to appeal was refused.

The appellant, Bank of Montreal, appealed an order granting the respondent, Royal Bank of Canada, priority over the proceeds of the sale of a property and collected rents.

The respondent's registered mortgage was void due to a violation of the Planning Act.

However, the Court of Appeal upheld the motion judge's decision that the respondent was entitled to priority based on the equitable doctrine of subrogation, as it had advanced funds to pay off prior valid encumbrances and municipal taxes.

The Court also upheld the respondent's priority regarding the assignment of rents, which was validly registered under the Personal Property Security Act.

The respondent's cross-appeal seeking an equitable mortgage was dismissed.

The Court of Appeal issued an addendum to correct an error in paragraph 11 of its reasons for judgment released on November 17, 2005.

The court amended the reasons to replace the reference to 'Subordinated Debenture Holders' with 'Senior Debt Holders' in the first two sentences of the paragraph.

In a CCAA restructuring of Stelco Inc., the appellants, representing subordinated debenture holders, sought to be classified as a separate class of creditors for voting purposes on the proposed plan.

They argued their interests conflicted with senior debt holders due to a turnover payment provision requiring them to remit distributions to senior debt holders until the senior debt was paid in full.

The supervising judge dismissed the motion, finding no material distinction in their legal rights vis-à-vis the debtor company.

The Court of Appeal granted leave but dismissed the appeal, affirming that creditor classification under the CCAA is determined by the creditors' legal rights in relation to the debtor company, not their rights as creditors in relation to each other.

In a CCAA proceeding regarding Stelco Inc., the Informal Independent Converts' Committee appealed an order denying them a separate class of creditors.

The Court of Appeal granted leave but dismissed the appeal, finding no legal error or error in principle in the motion judge's conclusion that the appellants lacked a different legal or practical interest from other unsecured creditors vis-à-vis the debtor.

The Court of Appeal dismissed the appeal and issued an endorsement on costs.

The respondents were collectively awarded costs of $15,000, inclusive of disbursements and GST, payable by the Confederation of National Trade Unions (CSN) and La Régie Des Rentes Du Québec.

The appellants, Confederation of National Trade Unions and La Régie Des Rentes Du Québec, appealed an order staying the obligation of Slater Steel to file an actuarial report and relieving the company and its directors from any resulting obligations.

The Court of Appeal dismissed the appeal, finding no error in the motion judge's reliance on evidence that further employer contributions were not due until the valuation report was filed.

The Court also noted that other parties had acted in reliance on the stay order.