Leanne M. Williams

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.

A case conference was held in a CCAA proceeding, requested by the Purchaser of the Applicants' business, to seek directions on the interpretation of a vesting order concerning a pre-filing personal injury claim.

The parties agreed that any necessary motion for interpretation should be heard by the supervising CCAA court.

They also cooperatively discussed limiting recoveries in the personal injury actions to available general liability insurance proceeds and lifting the stay for that limited purpose, working towards a consent order.

The tenant, a duty-free store operator at the Peace Bridge, brought a cross-motion seeking a declaration that it was not required to pay base rent during the 18-month period its store was closed due to COVID-19 border restrictions.

The tenant argued the landlord breached a lease provision requiring consultation on regulatory changes and breached its duty of good faith by making unreasonable demands.

The court dismissed the motion, finding the landlord engaged in good faith negotiations and offered reasonable accommodations.

The court held it cannot rewrite the lease or impose a new rent structure where the parties failed to reach an agreement, as the lease lacked objective benchmarks for such an adjustment.

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 Trustee in Bankruptcy of Aiden Pleterski and AP Private Equity Limited moved for relief from forfeiture of a $500,000 deposit paid by the bankrupt for a property purchase.

The deposit originated from funds misappropriated from investors.

The vendor, 2649360 Ontario Inc., sought to retain the deposit and a $300,000 surplus from the property's resale.

The court applied the two-part test for relief from forfeiture under section 98 of the Courts of Justice Act, considering whether the forfeited amount was disproportionate to damages and if retention would be unconscionable.

The court found that the vendor had suffered minimal proven damages ($138,500) and that retaining the deposit in addition to the resale surplus would result in an unconscionable windfall, especially given the massive losses suffered by the innocent investors.

The motion was granted, ordering the deposit to be paid over to the Trustee.

The appellant, TS Pharmaceuticals Ltd., appealed the dismissal of its motion for damages against the court-appointed Receiver, A. Farber & Partners Inc. TS alleged the Receiver failed to use "best efforts" to maintain a Health Canada cannabis licence, which lapsed, leading to the termination of a Share Purchase Agreement.

The Court of Appeal upheld the motion judge's finding that the Receiver had no positive obligation or authority to maintain the licence, nor could it have done so in the short timeframe between the SPA execution and licence expiry.

The appeal was dismissed.

Hazleton Development Corporation, an insolvent company constructing a condominium complex, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA).

The application sought a stay of proceedings, approval of Grant Thornton Limited as Monitor, permission for pre-filing payments to critical trades, approval of a Debtor-in-Possession (DIP) financing facility, an administration charge, and a directors’ charge.

The court granted the initial order, finding the company met the CCAA's statutory requirements, the stay was appropriate for a 10-day period, the Monitor was qualified, pre-filing payments were beneficial to stakeholders, the DIP facility was essential and reasonably necessary, and both the administration and directors’ charges were warranted.

The order was granted without prejudice to the secured creditors' rights for a subsequent hearing.

Following the dismissal of a motion brought by the purchaser against the Receiver for alleged breaches of an Asset Purchase Agreement, the court determined the quantum of costs payable to the Receiver.

The Receiver claimed $134,188.17, while the purchaser argued for $60,000.

The court deducted the Receiver's own non-legal professional staff time and reduced the overall amount based on proportionality and reasonableness, fixing the costs payable by the purchaser at $105,000 inclusive of disbursements and HST.

The moving party purchaser sought damages or a $350,000 abatement of the purchase price, alleging the court-appointed Receiver breached an Asset Purchase Agreement and a Share Purchase Agreement by failing to act in good faith and use best efforts to preserve a cannabis license.

The court dismissed the motion, finding the Receiver had no authority over the excluded cannabis assets under its appointment order, the purchaser failed to discover the license's expiry date during its own due diligence, and the Receiver fully complied with its contractual obligations to negotiate and assist with a change of control.

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.

JTI-Macdonald Corp. (JTIM) sought an Initial Order under the Companies’ Creditors Arrangement Act (CCAA) following a $13.5 billion judgment from the Quebec Court of Appeal and other significant health care costs recovery actions.

The court granted the Initial Order, including a stay of proceedings against JTIM and other defendants, appointment of Deloitte Restructuring Inc. as Monitor, approval of administrative, directors', and tax charges, authorization to pay pre-filing and post-filing obligations, appointment of Blue Tree Advisors Inc. as Chief Restructuring Officer, and authorization to appeal the Quebec Judgment to the Supreme Court of Canada.

The court found JTIM to be an insolvent company to which the CCAA applies, and that a stay of proceedings was appropriate to facilitate a collective solution for all stakeholders.

The Attorney General of Ontario (AGO) objected to fee requests from Emmanuel Village Residence Inc. (EVR) and its counsel, and BDO Canada Inc. (the Receiver) and its counsel, for work performed in a receivership and forfeiture proceeding.

The AGO argued that an administration charge should cap fees, that section 5 of the Civil Remedies Act, 2001 (CRA) applied requiring proof of no other funding source, and that hourly rates were too high.

The court dismissed the AGO's objections, finding that the administration charge was not a cap, section 5 of the CRA did not apply, and the hourly rates were reasonable and previously approved.

The court approved the fees and disbursements, emphasizing the complexity caused by the joinder of receivership and forfeiture proceedings.

The applicant in a receivership proceeding sought approval of its counsel's fees to be paid from an administration charge.

The Attorney General opposed, arguing that the fees should only cover work related to the receivership and not the concurrent forfeiture proceedings.

The court rejected this distinction, finding that the forfeiture application created barriers to the sale of the business that counsel had to address.

The court found the fees reasonable and approved them.

The moving party sought leave to appeal an order in a CCAA proceeding regarding a priority claim for reimbursement of fees and the imposition of a constructive trust.

The Court of Appeal applied the four-part test for leave to appeal in the CCAA context and denied leave.

The court found that the proposed appeal lacked sufficient merit and involved well-settled matters of law that were not of significance to the practice.

In CCAA proceedings involving the debtor corporations, a significant creditor sought a declaration imposing a constructive trust and super‑priority over litigation proceeds to recover payments it made to a strategic advisor who served as a director and litigation committee chair.

The creditor argued that the payments justified a solicitor’s lien, unjust enrichment, constructive trust, or oppression remedy.

The court held the advisor’s work was performed in the capacity of a director and business advisor rather than as a solicitor, precluding a solicitor’s lien.

The court further held that the criteria for unjust enrichment and constructive trust were not satisfied and that imposing a proprietary remedy would disrupt the established CCAA priority regime.

The motion seeking super‑priority status was dismissed.

The appellant appealed an order finding its bid in a receivership sale process to be invalid.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the agreed process required parties to submit their final and best offer by a specified date and that the bids were to remain confidential.

As such, an auction was not contemplated, and the appellant's bid was properly ruled invalid.