Guneev Bhinder

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 decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

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.

This endorsement addresses motions by the court-appointed Monitors in the ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings involving JTI-Macdonald Corp., Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The Monitors sought approval for amendments to the CCAA Plans to resolve the allocation of a $750 million working capital holdback among the Tobacco Companies.

The only opposition came from the Heart and Stroke Foundation, which objected as a social stakeholder but was found to lack standing.

The court granted the motions, finding the amendments did not adversely affect any creditors and were appropriate in the circumstances.

The moving parties brought a motion for leave to appeal the decision of Centa J. dated May 29, 2024.

The Divisional Court dismissed the motion for leave to appeal and awarded costs to the responding party fixed at $5,000.

Citibank, N.A. commenced an application seeking the appointment of an investigative receiver for Rodrigo Lebois Mateos' assets, inspection of records for Terralpa Investment Fund I Limited Partnership and Araterra Inversiones, and compliance with the Limited Partnerships Act.

The respondents brought a motion to permanently or temporarily stay the application in favour of ongoing proceedings in the United States District Court for the Southern District of New York.

The court granted a temporary stay of Citibank's application for a receiver, finding a substantial overlap with the U.S. proceedings and potential for duplication of resources.

However, the court ordered Terralpa LP and Araterra Inversiones to comply with the record-keeping and disclosure requirements of the Limited Partnerships Act, as this relief was outside the U.S. court's jurisdiction.

A sealing order was also granted for sensitive financial information to maintain comity with the U.S. proceedings.

The applicant sought recognition and enforcement of a foreign arbitral award from the Shenzhen Court of International Arbitration against the respondents, totaling over $120 million.

The respondents opposed on grounds of improper notice and inability to present their defense, and also moved to admit fresh evidence regarding a related U.S. enforcement proceeding.

The court dismissed the fresh evidence motion, finding it not sufficiently probative.

On the main application, the court found that the respondents did not receive proper notice of the arbitration proceedings and were unable to present their case, despite prior Chinese court decisions deeming service sufficient.

Consequently, the application for recognition and enforcement of the foreign arbitral award was dismissed.

The applicant tenant sought the court's appointment of a single arbitrator to determine the fair market rent for a lease renewal term.

The respondent landlord opposed, challenging the sufficiency of the applicant's evidence regarding the proposed arbitrator's availability and consent, and arguing the arbitration clause was invalid due to its optional wording ("may be referred"), lack of specified rules, and absence of a "seat" for the arbitration.

The court, applying the competence-competence principle, deferred the jurisdictional challenges to the arbitrator, finding the issues were not clearly invalidating.

The court interpreted the arbitration clause as mandatory once initiated by notice, and dismissed arguments that the lack of specific rules or a seat rendered the agreement invalid.

The motion was granted, conditional on the applicant providing the arbitrator's consent and confirmation of availability.

Costs were awarded to the applicant.

Following the dismissal of the plaintiff's motion for the production of documents prior to a leave motion under the Securities Act, the successful defendants sought their costs.

The court awarded partial indemnity costs to the corporate defendant and one individual defendant.

The court awarded substantial indemnity costs to the other individual defendant, finding that the plaintiff's conduct in pursuing the motion against him and making unfounded allegations of deliberate misconduct was unreasonable and warranted sanction.

The plaintiff was ordered to pay a total of $36,603.87 in costs.

The plaintiff in a putative class action for secondary market misrepresentation brought a motion for the production of documents referenced in the defendants' affidavits prior to serving his reply record.

Alternatively, the plaintiff sought to strike the portions of the affidavits referencing those documents.

The court dismissed the motion, holding that the plaintiff has no right to documentary discovery at the leave stage under section 138.8 of the Securities Act, and that the proper mechanism for production is through cross-examination after the reply is served.

The court also declined to strike the affidavits, noting that hearsay is permitted on motions.

The plaintiff security company brought a Simplified Procedure action against the defendants for unpaid standby security services provided during a potential labour strike at the Sheraton hotel.

The court found that a contract was formed based on email exchanges between the parties and that the plaintiff performed the standby services.

The court awarded the plaintiff $32,950.80 in damages for the unpaid invoice.

However, the court dismissed the plaintiff's claims for punitive damages, personal liability against the individual defendant, and the tort of deceit, finding insufficient evidence of dishonesty or an independent actionable wrong.

Laurentian University brought a motion within its CCAA proceedings seeking the appointment of a Chief Redevelopment Officer, an increase in the fee cap for the Board of Governors' independent counsel, and approval of a claims process.

The court approved the appointment of the CRO and the fee increase.

Regarding the claims process, TD Bank proposed amendments to require consultation on claims over $5 million.

Balancing the need for efficiency with creditor involvement, the court modified the claims process to establish an 'Inspector Group' to authorize the compromise of material claims, drawing on principles from the Bankruptcy and Insolvency Act.

BSMW Financial Inc. moved to convert an application brought by Triumph Capital Limited into an action, and sought alternate relief to strike certain paragraphs of Triumph's affidavit.

The court considered factors for converting an application to an action, including material facts in dispute, complex issues, need for discovery, and impact of relief.

Finding significant material facts in dispute, issues beyond document interpretation, and credibility concerns requiring viva voce evidence, the court granted the motion to convert Triumph's application into an action.

BSMW's cross-application was also converted to an action to be heard concurrently due to intermingled and interdependent issues.

The applicant sought an interlocutory injunction to enforce a restrictive covenant preventing the respondent from operating a retirement home.

The court applied the RJR-MacDonald test, finding that while a serious question existed, the applicant failed to demonstrate irreparable harm.

The balance of convenience also weighed against granting the injunction due to the potential harm to vulnerable third-party residents.

The application for an interlocutory injunction was dismissed, and the balance of the application was adjourned.

Costs were fixed at $35,000.00 for the respondent.

This initial case conference for a proposed class action addressed the scheduling of proceedings leading to a certification motion.

The primary issue was whether the defendant's challenge to the plaintiff's cause of action should proceed as a pre-certification motion under Rule 21 of the Rules of Civil Procedure or be raised within the certification motion under section 5(1)(a) of the Class Proceedings Act.

The court, emphasizing the avoidance of 'litigation by instalments,' determined that the cause of action challenge should be made during the certification motion to prevent piecemeal litigation and potential delays from pre-certification appeals.

A schedule for the certification motion was subsequently set.

The Ontario Securities Commission (OSC) brought a motion for security for costs against the appellants, who were appealing a merits and sanctions decision that found they orchestrated a massive fraud at Sino-Forest Corporation.

The OSC sought $100,000 in security, arguing the appeal was frivolous and vexatious and the appellants lacked assets in Ontario.

The Divisional Court found that while the appeal did not appear vexatious, the grounds of appeal appeared frivolous.

Furthermore, the court found 'other good reason' to order security under Rule 61.06(1)(c) due to the strong findings of fraud and evidence that the appellants had put assets out of reach.

Applying a holistic approach, the court concluded it was just to order the appellants to post $100,000 as security for costs.