John A. MacDonald

The applicants, Pride Group Holdings Inc. et al., sought an amended and restated initial order under the CCAA, including an extension of the stay period, approval of a debtor-in-possession (DIP) facility, elevation of charge priorities, confirmation against set-off, and approval of governance, real estate monetization, and intercompany/unsecured claims preservation protocols.

The court granted the requested stay extension to June 30, 2024, approved the $30 million DIP facility, and approved all proposed protocols.

The court declined to add an exception to the paramountcy provision as requested by certain securitization funders and approved a carve-out for Triumph Business Capital but limited it to CDN $3 million.

This endorsement concerns three tobacco companies (JTI-MacDonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc.) operating under the Companies’ Creditors Arrangement Act (CCAA).

Each applicant sought an extension of their stay period until September 30, 2024, to continue formulating plans of arrangement.

Imperial also requested authorization to terminate a retirement plan and post security for a vaping product license.

RBH sought a procedural amendment for employee grievances.

The court, finding no opposition and satisfied with the applicants' good faith, diligence, and sufficient resources, granted all requested relief, noting significant progress in ongoing mediation.

IBM Canada Inc. appealed a summary judgment in a wrongful dismissal claim, challenging the 26-month reasonable notice period and the award of damages for Restricted Stock Units (RSUs).

The Court of Appeal dismissed the appeal, affirming that non-transferrable skills and the COVID-19 pandemic constituted exceptional circumstances justifying a notice period exceeding 24 months.

The court also upheld the RSU damages, finding the termination clause ambiguous and thus ineffective in limiting common law rights.

This endorsement concerns the Companies' Creditors Arrangement Act (CCAA) proceedings for JTI-MacDonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted an unopposed motion to extend the stay period until March 29, 2024.

Recognizing the complexity and the four-and-a-half-year duration of negotiations, the court directed the three court-appointed Monitors, in conjunction with the court-appointed Mediator, to collaborate and develop comprehensive Plans of Compromise or Arrangement.

The objective is to finalize plans that are fair and reasonable to all applicants and creditors, moving from observable activity to meaningful action.

The creditor, RZCD Law Firm LLP, brought a motion seeking to enforce a notice of garnishment against the garnishee, IBM Canada Ltd., for an outstanding debt owed by the debtor, Victor Brian Choo-Shee-Nam.

The creditor asserted that the garnishee failed to remit payments as directed and did not serve a garnishee's statement.

The garnishee argued that the original notice of garnishment did not apply to the debtor's subsequent period of re-employment and that garnishment proceedings were stayed by a consumer proposal.

The court dismissed the creditor's motion, finding that the garnishee was not obligated to file a garnishee's statement within 10 days as it initially remitted payments, nor was it required to provide notification when the debtor's employment ended.

Crucially, the court held that the original notice of garnishment did not apply to the debtor's re-employment period due to Rule 60.08(13)(b), which excludes debts arising from employment commencing after the notice is served.

Her Majesty the Queen in right of Ontario sought to lift a stay on its $330 billion health care cost recovery action against three tobacco companies (JTI-Macdonald Corp., Imperial Tobacco, Rothmans, Benson & Hedges Inc.) and eleven co-defendants, which was imposed under CCAA proceedings.

Ontario proposed to temporarily stay the effects of any judgment.

The court dismissed the motion, emphasizing the need to preserve the status quo in CCAA proceedings to facilitate a global resolution of significant claims.

Allowing Ontario's action to proceed would alter the level playing field, distract from restructuring efforts, and impose significant costs, prejudicing other stakeholders.

The applicants, JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc., sought protection under the Companies' Creditors Arrangement Act (CCAA) following a $13.5 billion judgment from the Quebec Court of Appeal and other ongoing litigation.

JTI-Macdonald Corp. and Rothmans, Benson & Hedges Inc. moved for orders to file Supreme Court of Canada (SCC) leave applications but suspend further proceedings.

Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited sought a blanket stay of all proceedings and limitation periods.

The Quebec class action plaintiffs opposed the motions and sought to partially lift the stay.

The court affirmed its broad jurisdiction under CCAA s. 11 to stay all actions, including appellate proceedings and limitation periods.

The court dismissed the motion by JTI-Macdonald Corp. and Rothmans, Benson & Hedges Inc., and granted Imperial Tobacco's motion, finding that a blanket stay best preserved the status quo and facilitated a global resolution for all stakeholders.

The applicants, Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited, sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) following a $13.5 billion judgment against them in Quebec.

The court granted the Initial Order, including a stay of proceedings, finding the applicants insolvent and that a stay was necessary to prevent serious harm to stakeholders and maintain the status quo.

The court also extended the stay to non-applicant affiliates and approved several charges, including an Administration Charge, a Tobacco Claimant Coordinator Charge, a Directors' and Officers' Charge, and a Sales and Excise Taxes Charge.

The applicants (Algoma) sought two declarations: (i) that amounts owing under a promissory note from Portco to Algoma had been set off against amounts Algoma owed to Portco under a Cargo Handling Agreement; and (ii) that Algoma's right to terminate related Port Agreements was not subject to Portco's payment of the GIP Loan, which was tied to the set-off amounts.

The court granted the first declaration, finding that equitable set-off applied given the close connection between the parties and transactions, and the manifest inequity of requiring Algoma to pay Portco while the parent company (EGFL) failed to pay the promissory note.

However, the court denied the second declaration, holding that it would contradict a prior oppression judgment and an assignment agreement which explicitly required the GIP Loan to be paid in full in cash before Algoma could terminate the Port Agreements.

The applicant landlord sought a declaration that harmonized sales tax (HST) must be added to settlement payments made by the respondent under a settlement agreement.

The agreement, negotiated during Companies' Creditors Arrangement Act (CCAA) proceedings, quantified the landlord's claim after the tenant disclaimed a lease.

The court found the settlement agreement ambiguous regarding the obligation to pay HST.

Applying principles of contractual interpretation, including objective factual matrix, commercial common practice in real estate, and the parties' post-execution conduct, the court determined that the settlement payments were exclusive of HST, and the respondent was required to pay HST in addition.

The Applicants, a group of Essar Steel Algoma entities, brought two motions in their CCAA proceedings: (i) for approval of a DIP extension agreement with existing DIP lenders, and (ii) for the appointment of a restructuring committee.

The DIP extension was opposed by various stakeholders including the USW, retirees, and GIP Primus, LP, who argued against the short term and potential leverage of the existing DIP lenders who were also Term Lenders.

The court dismissed the DIP extension motion, finding it would not enhance the prospects of a viable restructuring outcome, citing concerns about the alignment of interests between DIP and Term Lenders and the short-term nature of the proposed extension.

The motion for a restructuring committee was also dismissed, as the court found it would create unnecessary overlap with the existing Chief Restructuring Advisor and would not effectively address the core issues preventing restructuring, primarily labour negotiations.

The plaintiff, Larry Patterson, was successful in his motion for summary judgment for wrongful dismissal against IBM Canada Limited.

This endorsement addresses the issue of costs.

The plaintiff sought partial indemnity costs.

The defendant had made an offer to settle which the plaintiff failed to beat, but the offer was made only four days before the hearing, falling short of the seven-day requirement under Rule 49.10.

The court exercised its discretion under Rule 49.13, acknowledging the defendant's offer despite its late delivery and the minimal difference from the judgment amount.

The court awarded the plaintiff partial indemnity costs of $16,209.16, less a $2,500 credit to the defendant (comprising a $1,500 credit for the offer to settle and $1,000 for the plaintiff's hearing costs), plus $500 for assessing costs, for a total of $14,209.16.

The damages award was also revised by agreement to $57,427.46 due to a calculation error.

The applicant sought recognition of various interim orders, including an Interim DIP ABL Order, in a cross-border insolvency proceeding under the CCAA.

The court granted most of the requested relief but declined to recognize the Interim DIP ABL Order and the associated DIP ABL Lenders’ Charge.

The refusal was based on the lack of adequate protection for Canadian landlords, who would be detrimentally affected by the Canadian entities guaranteeing and collateralizing the DIP facility without receiving comparable security or the benefit of marshalling, unlike other creditor groups.

Payless Holdings LLC, as foreign representative for itself and other Chapter 11 Debtors, applied for recognition of its U.S. Chapter 11 proceedings as foreign main proceedings under the CCAA in Canada.

The application also sought recognition of certain First Day Orders and a stay of proceedings.

The court granted the Initial Recognition Order, finding the U.S. proceedings to be foreign main proceedings based on the integrated operations and U.S. center of main interest for the Canadian entities.

Certain stay provisions were also granted, with remaining issues adjourned.

Essar Capital Limited and USW Local 2251 brought motions within a Companies’ Creditors Arrangement Act (CCAA) proceeding.

Essar Capital sought to re-open the Sale and Investment Solicitation Process (SISP) and compel the disclosure of information to Essar Global for a potential bid.

Local 2251 sought court advice on engaging in discussions with Ontario Steel Investments Ltd. regarding potential transactions.

The court dismissed both motions, finding no basis to interfere with the established SISP, noting Essar Global's prior failure to demonstrate financial capability and the lack of a formal bid from Ontario Steel.

The court emphasized the need to maintain the integrity of the court-ordered process and avoid delays detrimental to the restructuring.

In a wrongful dismissal summary judgment motion, the court determined the reasonable notice period and assessed damages.

The plaintiff, a 67-year-old IT Specialist with 22 years of service, was terminated without cause.

The court fixed reasonable notice at 18 months, including a contingency discount for future earnings.

The plaintiff was awarded employer contributions to his defined contribution pension plan but denied claims for an incentive bonus and supplementary health benefits due to lack of evidence and program subjectivity.

The court also discussed the preferred 'discounted approach' over 'trust and accounting' for future mitigation.

In the context of a CCAA proceeding, Port of Algoma Inc. (Portco) brought a motion seeking an order compelling the debtor, Essar Steel Algoma Inc., to make post-filing payments under a Cargo Handling Agreement and for an administrative charge.

The court dismissed the motion, finding it premature as the Monitor was directed to commence an oppression proceeding regarding the underlying related party transactions.

The court also rejected Portco's renewed arguments under section 11.01(a) of the CCAA, noting they had been decided in a prior motion, and declined to lift the stay of proceedings, emphasizing that doing so would be contrary to the interests of the stakeholders and the restructuring process.

The Corporation of the City of Sarnia brought a motion seeking to set aside or vary a previous decision, declare an equitable right to indemnity, and obtain an interim mandatory order against Bluewater Health regarding the maintenance of the Mitton site.

The core issue was whether the court had jurisdiction to hear the motion under Rule 59.06, given that the City was attempting to introduce new causes of action (tort claims) that were not pleaded in the original application, which was premised on a trust relationship.

The court found that it lacked jurisdiction, emphasizing the principle of finality in litigation and that re-opening a case for new arguments would foster litigation in stages, thus dismissing the motion.

Portco sought orders for immediate and future payments under a Cargo Handling Agreement, and a US$5 million charge on Algoma's assets, arguing the payments were required post-filing in a CCAA proceeding.

The CCAA Applicants (Algoma) and DIP lenders opposed, citing the DIP Agreement's budget approval requirement and an arguable right to equitable set-off against a promissory note owed by Portco's parent company (EGFL) to Algoma.

The court found that the DIP Agreement and Initial Order did not mandate payments without DIP lender approval and that an arguable case for equitable set-off existed.

The motion was dismissed as premature, pending determination of the set-off issue and other concerns raised by the Monitor regarding the Portco transaction and recapitalization.

The City of Sarnia applied for a declaration that it held legal title to the "Mitton site" properties in trust for Bluewater Health, either as a bare trust or a constructive trust, and sought an equitable right to indemnity for ongoing maintenance costs.

The court dismissed the application, finding no certainty of intention to establish a bare trust from the relevant statutes (1920 Act and 1989 Act) or the parties' conduct.

Furthermore, the court found no basis for a constructive trust, as the City was seeking to impose a burden (decommissioning costs) rather than remedy an unjust enrichment or condemn a wrongful act by Bluewater.

The court emphasized that constructive trusts are typically used to provide a proprietary remedy for a party's loss or to prevent wrongful gain, not to transfer liabilities.