Graham Smith

The plaintiff general contractor sued the Toronto Transit Commission (TTC) and other owners for approximately $193 million in damages arising from the delayed construction of the Steeles West Subway Station.

The project was delayed by 1,047 days due to incomplete designs, utility issues, and numerous changes directed by the TTC.

The court found the TTC responsible for the delay and awarded the plaintiff damages for extended contract performance, acceleration costs, underfunded change directives, and unpaid notices of intent to claim.

The court dismissed the plaintiff's attempt to flow through subcontractor claims where liquidating agreements had extinguished the plaintiff's liability.

The TTC's counterclaim for liquidated damages was dismissed as a penalty.

The plaintiff was granted a construction lien for $57,697,627.06.

The liquidator of an insolvent insurance company brought a motion to approve settlement agreements with two tobacco companies.

The settlements included a condition requiring court approval of releases that would bar third-party claims against the insurer.

Several provincial Crowns and class action representatives opposed the settlements, arguing they had direct statutory claims against the insurer and were not bound by the Winding-Up and Restructuring Act (WURA).

The court held that the WURA does not expressly or implicitly bind the Crown, nor did the Crowns waive immunity under the benefit/burden doctrine as they had not yet made claims in the liquidation.

The motion to approve the settlements was dismissed.

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 arising from the liquidation of a multinational telecommunications company, bondholders claimed entitlement to post‑filing interest exceeding US$1.6 billion in addition to principal and pre‑filing interest of approximately US$4.092 billion.

The court considered whether the common law "interest stops rule" applies in CCAA proceedings, particularly in a liquidating CCAA context.

Applying insolvency principles of pari passu distribution and relying on Supreme Court guidance emphasizing the integrated nature of the CCAA and BIA regimes, the court held that post‑filing interest does not accrue against the insolvent estate.

The court rejected arguments that contractual entitlement to interest survives the filing or that distributions require a negotiated plan recognizing such interest.

Accordingly, crossover bondholders were limited to principal and pre‑petition interest claims.

In long‑running insolvency proceedings under the Companies' Creditors Arrangement Act, the court was asked to determine whether unsecured bondholders were entitled to claim post‑filing interest on crossover bonds after the debtor companies entered CCAA protection.

The court considered the common law “interest stops” rule, the pari passu principle governing distribution to unsecured creditors, and the relationship between the CCAA and the Bankruptcy and Insolvency Act.

The court held that the interest stops rule applies in CCAA proceedings and prevents unsecured creditors from claiming post‑filing interest absent a negotiated plan providing for such payments.

Allowing interest to accrue for some creditors during the stay period would undermine the status quo and distort equality among creditors.

The court further held it had jurisdiction to determine the issue even without a proposed plan of arrangement.