Carillion Canada Inc. brought a motion within its CCAA proceedings for an order directing HSBC Bank Canada to return $6.8 million that HSBC had unilaterally debited from Carillion's operating account to set off obligations under letters of credit.
The court found that while HSBC breached the initial stay order by exercising self-help without seeking leave, the funds were legally available for set-off.
Applying the Supreme Court's guidance in Montréal, the court held that HSBC's claim was a valid 'pre-pre' set-off preserved under section 21 of the CCAA.
The motion was dismissed, but HSBC was ordered to pay $50,000 in costs due to its conduct in breaching the stay.
