Gabrielle Serene Schachter

The applicants, a group of companies undergoing CCAA proceedings, sought to extend the existing stay of proceedings to DAK Capital Inc., a non-debtor third-party guarantor involved in an arbitration with Canopy Growth Corporation.

Canopy opposed, arguing that CCAA s. 11.04 prohibits such an extension for guarantors.

The court, relying on the broad inherent jurisdiction under CCAA s. 11 and recent Ontario precedents, found that s. 11.04 is a clarifying provision, not a prohibitive one, and granted the temporary stay against DAK Capital to prevent distraction from the ongoing restructuring efforts.

This appeal concerned the interpretation of a comprehensive liability insurance policy regarding coverage for legal costs incurred by an insured (Houghton) in a public judicial inquiry and by the corporate insured (EPCOR) in indemnifying Houghton.

The Court of Appeal affirmed that the insurer (MEARIE) was obligated to cover Houghton's inquiry costs under Coverage G, as the inquiry constituted a "proceeding brought against the Insured... under any statute." However, the court reversed the lower court's finding that EPCOR's costs related to indemnifying Houghton were covered under Coverage E, ruling that EPCOR's liability arose from its corporate bylaw, not a "Wrongful Act" covered by the policy.

The court also upheld the costs award against the insurer due to its vague initial denial of coverage.