Harvey G. Chaiton

This decision concerns three motions to approve class counsel fees in the context of insolvency proceedings under the Companies' Creditors Arrangement Act involving three major tobacco companies.

The court approved the Quebec Class Action Plaintiffs' counsel fee request of approximately $901 million (representing 22% of the $4.119 billion allocated to the Quebec class members), the Knight Class Counsel fee request of $5 million plus disbursements, and the Tobacco Producers' counsel fee request of $3.75 million.

The court found that the fees were fair and reasonable given the exceptional risks assumed, the unprecedented outcome achieved, and the unique circumstances of the case.

A $50 million reserve was established from the Quebec counsel fees to protect against any pro-rata reduction in class member compensation due to actual take-up rates or other factors.

The Ontario Securities Commission sought the appointment of a receiver over the assets of Traders Global Group Inc. and related entities based on allegations of fraud and unregistered securities trading.

The receiver was appointed in January 2024.

More than nineteen months later, the respondents brought a motion to discharge the receiver, and the receiver sought directions regarding disclosure of data to the Commission.

The court found that significant changes in circumstances had occurred since the appointment, including the dismissal of related U.S. proceedings due to misconduct by CFTC staff whose evidence had supported the receivership appointment, the discovery of a Nova Scotia decision that undermined the novelty of the Commission's legal theory, and substantial delay in the investigation without issuance of an Application for Enforcement Proceeding.

The court granted the respondents' alternative request to vary the appointment order, reducing the frozen assets from tens of millions to $10 million in escrow, while retaining the receiver to administer the escrow and act as intermediary for data disclosure.

The court also confirmed the receiver's authority to share non-privileged data with the Commission under the appointment order.

The applicants, QM GP Inc. and Highpoint Environmental Services Inc., sought an initial order under the Companies' Creditors Arrangement Act and a lien regularization order.

The applicants sought protection to address acute liquidity crisis, interim financing, and relief to stabilize operations.

The court granted the initial order with certain modifications, approving interim debtor-in-possession financing, appointment of a monitor, administration and directors' charges, and a lien regularization order.

The court also granted a temporary stay on performance bond calls and certain indemnity obligations, with the Kingsdale Letter of Credit issue deferred to the comeback hearing.

This endorsement grants several orders sought by the Applicants in ongoing Companies' Creditors Arrangement Act (CCAA) proceedings, including approval of the Monitor’s reports and activities, amendment of reporting obligations, addition of Block 6 Holding Inc. as an Applicant, approval of a property sale and related distributions, and the appointment of a mediator to address cost allocation issues among financiers.

The court finds all relief appropriate and supported by the record.

The court voided six promissory notes and struck out related mortgages registered by the plaintiffs against the defendants' properties, finding that the notes were materially altered without consent, contrary to the Bills of Exchange Act.

The court also declined to grant equitable mortgages or certificates of pending litigation, citing the plaintiffs' inequitable conduct and failure to meet statutory tests.

The decision addresses issues of forged notes, after-acquired property, corporate personality, and the application of the Family Law Act to matrimonial homes.

This decision concerns the approval of a sale process and a motion to appoint the sales officer as receiver in the context of a deadlocked insurance brokerage business.

The court approves the sale process and related ancillary relief, including the appointment of an interim broker and non-solicitation orders, but dismisses the motion to appoint the sales officer as receiver.

The ruling addresses issues of conflict of interest, compliance with prior orders, and the preservation of assets pending winding up.

This decision sanctions the CCAA Plans of Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, JTI-Macdonald Corp., and Rothmans, Benson & Hedges Inc., effecting a global settlement of all tobacco-related claims in Canada.

The court reviews the structure, allocation, and fairness of the plans, including the creation of a $1 billion Cy-près Foundation, and addresses objections from social stakeholders.

The court finds the plans fair, reasonable, and in the public interest, and grants the requested relief, including third-party releases and the appointment of plan administrators.

Gray Jay Estates Inc. sought a court order to vary the “Payment Amount” under an assignment of indebtedness and security agreement, which would have increased the amount payable by NE SPC II LP (Blacksail) by approximately $1 million.

The dispute centered on whether cash on hand should have been used to repay a DIP facility before closing, and whether a term should be implied into the agreement to require such repayment.

The court found no basis to imply such a term, holding that the contract’s language was clear and that the parties had not agreed to the adjustment sought.

The motion was dismissed, and costs were awarded to Blacksail.

This supplementary endorsement addresses a request from JTI-Macdonald Corp. regarding the adequacy of notice elements in the Claims Procedure Order within the ongoing Companies' Creditors Arrangement Act (CCAA) proceedings.

The court confirmed its satisfaction that the notice elements in the Claims Procedure Orders are reasonable in the circumstances, addressing an oversight from previous submissions.

The Superior Court of Justice addressed multiple motions within the complex Companies’ Creditors Arrangement Act (CCAA) proceedings of JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted a stay extension until January 31, 2025, and approved Meeting Orders and Claims Procedure Orders.

These orders facilitate the advancement of comprehensive Plans of Arrangement, developed by the court-appointed Mediator and Monitors, aiming for a Pan-Canadian global settlement of tobacco claims totaling $32.5 billion.

The court found the plans were not "doomed to fail" despite outstanding issues regarding financial allocation among the Tobacco Companies and the creditor status of JTI-Macdonald TM Corp.

The appellant investors, who participated in a Ponzi scheme operated by a one-person corporation, sought to have the trustee in bankruptcy's unjust enrichment claims statute-barred under Ontario's Limitations Act, 2002 by attributing the directing mind's knowledge of illegal interest and commission payments to the corporation.

The majority held that the corporate attribution doctrine applies to one-person corporations on the same purposive, contextual, and pragmatic basis as to other corporations, and that courts retain discretion to decline attribution when it would undermine the purposes of the laws engaged — here, the limitations and bankruptcy regimes.

In concurrence, a separate judge held that resort to the common law corporate attribution doctrine was unnecessary because the codified agency rules in s. 12 of the Limitations Act, 2002 provided a complete answer, and that the claims were not discoverable until the trustee was authorized by the court to bring them.

All judges agreed that the investors were disentitled from equitable set-off for lack of clean hands, that the referral agreements were illegal contracts at common law, and that one appellant was not dealing at arm's length with the corporation.