Sean Dunphy

The respondent entered into a Tax Refund Agreement with Grant Forest Products Inc. (GFPI) to purchase income tax refunds.

GFPI failed to deliver the required transfer document before seeking CCAA protection.

The motion judge applied the equitable maxim that equity considers done what ought to be done, declaring the transfer had taken place.

The appellant, representing secured lenders, appealed.

The Court of Appeal dismissed the appeal, holding that the motion judge correctly applied the maxim to cure GFPI's breach and that doing so did not inequitably rewrite the contract or create an unlawful preference.

In a complex CCAA restructuring of Stelco Inc., four appeals were brought regarding the distribution of assets among creditors.

The Court of Appeal upheld the motion judge's findings that Senior Debt Holders could enforce subordination and turnover provisions against Noteholders via trust principles, and that post-filing interest was payable.

However, the Court reversed the motion judge on two key issues: it found that a massive IT outsourcing contract was not in the 'ordinary course of business', thereby elevating its assignee to Senior Debt status, and it ruled that the distributed securities must be valued at the 'Plan value' ($5.50 per share) rather than the post-emergence market value.