Graham D. Smith

The appellants, holding unsecured crossover bonds, appealed a CCAA judge's decision that the common law 'interest stops' rule applies in CCAA proceedings, preventing them from claiming post-filing interest above their principal debt and pre-petition interest.

The Court of Appeal dismissed the appeal, confirming that the 'interest stops' rule is a fundamental tenet of insolvency law that applies to CCAA proceedings to ensure fair treatment of creditors and orderly administration.

The Court clarified that while creditors cannot legally claim post-filing interest, the rule does not preclude a negotiated CCAA plan from providing for such payments.

The appellants, representing regional airline pilots, sued Air Canada pilots for unlawful act conspiracy, alleging they unlawfully prevented the implementation of a merged seniority list.

The trial judge dismissed the claims, finding that some defendants committed no unlawful acts due to their right to dissent, and that the unlawful acts of others did not cause the loss of a chance to implement the list because Air Canada would never have agreed to it.

The Court of Appeal upheld the trial judge's findings, concluding that the rank-and-file members did not breach their union contracts and that the chance of implementing the merged list was de minimis.