Linda Galessiere

In a landmark CCAA proceeding involving Hudson's Bay Company, the court declined to approve the assignment of 25 major retail department store leases across Canada to a new tenant, Ruby Liu Commercial Investment Corp., despite the transaction representing the highest bid and generating approximately $50 million in net proceeds for creditors.

The court found that the proposed assignee failed to meet the reasonableness standard under section 11.3(3) of the CCAA, particularly regarding its ability to perform the substantial and ongoing obligations under the leases.

The decision emphasizes that section 11.3 is an extraordinary power that must be exercised sparingly, and that the court must balance the interests of all stakeholders, including the contractual counterparties (landlords) who would be compelled into a long-term relationship with an untested and undercapitalized purchaser.

The court also rejected the applicants' arguments that certain lease provisions constituted ipso facto clauses violating the anti-deprivation rule and section 34 of the CCAA.

The defendant Rhonda Niles brought a motion under Rule 42.02 to discharge a certificate of pending litigation (CPL) registered against her property at 55 Avenue Road, Toronto.

The CPL was obtained ex parte by the plaintiff in December 2017.

Ms. Niles argued that the plaintiff failed to provide full and frank disclosure of material facts when obtaining the CPL.

The court found three instances of material non-disclosure: (1) the affiant asserted personal knowledge when the evidence was based on information and belief; (2) the affiant mischaracterized the defendant's financial independence and income sources; and (3) the affiant failed to disclose material facts regarding the property's acquisition and financing.

Although Ms. Niles delayed seven years before bringing the motion, the court exercised its equitable discretion to grant relief, considering the plaintiff's failure to make full and frank disclosure, the plaintiff's lack of diligence in prosecuting the action, and the tenuous connection between the defendant's property and the alleged misappropriated funds.

The CPL was discharged and costs awarded to the defendant.

In this CCAA proceeding, the court granted multiple orders sought by Hudson's Bay Company and related entities, including approval of lease assignment agreements with YM Inc. and Ivanhoe Cambridge, sealing of confidential bid information, extension of the stay of proceedings to October 31, 2025, and approval of the Monitor's reports and activities.

The court rejected requests for adjournment and conditional distributions, finding the lease monetization process was fair and transparent, and that the proposed transactions represent a positive development for stakeholders.

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.

Following a ten-day trial regarding a commercial lease dispute, the court issued an endorsement to finalize the calculation of damages.

The court held that the landlord's claims for unpaid common area maintenance (CAM) charges from 2009 to 2011 were statute-barred under the Real Property Limitations Act.

The court declined to order equitable set-off for either party, finding the tenant solely responsible for its rent overpayments and the landlord guilty of misfeasance regarding CAM charges.

The court also rejected the landlord's 'Rent Paid Theory' for recalculating rent, awarding the tenant a total of $1,359,799.88 in damages.

The plaintiff, 1080977 Ontario Inc. operating as Stevans Sales and Marketing, sought leave to continue its action for breach of contract and unjust enrichment, despite having operated for 30 years without registering its business name under the Business Names Act.

The defendants opposed, arguing the failure to register was not inadvertent and that they were misled.

The court granted leave, finding the failure to register was inadvertent, there was no evidence the public was deceived, and the plaintiff had since registered the name.

The court also noted a residual discretion to grant leave to prevent an unfair outcome, emphasizing that denying leave would be a disproportionate punishment for a technical breach, especially given the underlying dispute was about unpaid invoices for goods and services received.

The Body Shop Canada Limited (TBS Canada) brought a motion seeking three orders: authorization to continue its Bankruptcy and Insolvency Act (BIA) proposal proceeding under the Companies' Creditors Arrangement Act (CCAA), approval of a Sale and Investor Solicitation Process (SISP), and a Discharge and Termination Order for the Proposal Trustee.

The court granted all requested relief, finding that the conversion to CCAA was appropriate given the company's insolvency, the ongoing UK sale process for its parent company, and the CCAA's flexibility to maximize stakeholder value and preserve the going concern.

The court also approved the SISP, the continuation of existing charges (administration, D&O, KERP), and the fees and releases for the Proposal Trustee and counsel.

The plaintiff tenant brought an action against the defendant landlord regarding a commercial lease for a grocery store.

The parties disputed the calculation of rent, responsibility for a roof replacement, and the calculation of Common Area Maintenance (CAM) charges.

The court found that the landlord knowingly inflated CAM invoices by charging for non-common areas, manipulating the gross leasable area, and charging unrecoverable management fees.

The court also held that the lease allocated the cost of replacing the roof to the landlord, awarding the tenant $331,746.03.

Furthermore, the court agreed with the tenant's interpretation of the rent calculation provisions and found that the tenant had overpaid rent.

The tenant was awarded $493,269.66 in restitution for unjust enrichment.

The landlord's counterclaim for unpaid rent and CAM charges was dismissed.

This decision concerns a motion for costs brought by the defendants, Alexander Gerstein and Ethan Gerstein (the "Moving Defendants"), after the plaintiffs discontinued their action and agreed to vacate a certificate of pending litigation (CPL) on the Moving Defendants' property.

The Moving Defendants sought full indemnity costs, alleging egregious conduct by the plaintiffs, including material misrepresentations and omissions when obtaining the ex parte CPL, unfounded fraud allegations, and uncooperative conduct during the motion.

The court found that the plaintiffs' numerous and significant failures to make full and fair disclosure, coupled with their belated and uncooperative conduct, amounted to a material misrepresentation.

The court awarded full indemnity costs of $115,000 to the Moving Defendants, finding the plaintiffs' conduct sufficiently egregious and reprehensible.

The applicant, BBB Canada Ltd., sought court approval under the Companies' Creditors Arrangement Act (CCAA) for an Omnibus Assignment and Assumption of Leases, FF&E and Trade Fixtures Agreement with DKB Capital.

The motion also requested orders for the assignment of certain leases under section 11.3 of the CCAA and a temporary sealing order for the unredacted agreement.

The court found the marketing process comprehensive, the consideration fair and reasonable, and the agreement beneficial to stakeholders.

The assignments were unopposed.

The court applied the Sherman Estate test for the sealing order and found it appropriate given its limited scope and time.

The motion was granted in its entirety.

This endorsement addresses the costs of a motion brought by Metro Ontario Real Estate Limited ("Metro") to strike paragraphs from Hillmond Investments Ltd.'s ("HIL") Reply and Defence to Counterclaim.

The motion was settled on consent, with the issue of costs deferred.

Metro sought $10,944.63 on a partial indemnity scale, while HIL argued for no costs.

The Master found that HIL's refusal to engage in discussions regarding amendments until the day before the motion necessitated the motion and was the primary factor contributing to the costs incurred.

Considering the proportionality and the conduct of the parties, the Master awarded Metro fixed costs of $4,000.

A reporter for the Toronto Star requested access to the names of the top 100 physician billers to the Ontario Health Insurance Program for fiscal years 2008 to 2012, along with their medical specialties and billing amounts.

The Information and Privacy Commissioner's adjudicator ordered disclosure, finding that physicians' names in this context were not personal information under the Freedom of Information and Protection of Privacy Act.

The Divisional Court upheld this decision.

The Ontario Medical Association and two groups of physicians appealed, arguing that physicians' names constitute personal information and are therefore exempt from disclosure.

The Court of Appeal dismissed the appeal, holding that the adjudicator's decision was reasonable and that the billing information, representing gross professional revenue before business expenses, did not reveal something of a personal nature about the physicians.

Following a successful appeal of a Master's motion, the appellant sought costs of the proceeding below in the amount of $47,735.55 on a partial indemnity basis.

The appellant argued for a higher-than-usual calculation (87% of actual fees) due to the respondent's delay tactics throughout the litigation.

The court declined to use the costs award to punish the respondent for general litigation conduct, noting that substantial indemnity costs were not warranted.

Applying standard partial indemnity principles, the court awarded the appellant $32,500, matching the amount the parties had previously agreed was reasonable for the Master's motion.

This motion concerned the approval of fees and conduct of Ernst & Young Inc. (EY), a court-appointed expert, and its counsel, Norton Rose Fulbright Canada LLP, after the underlying dispute between the plaintiffs and defendants settled.

The defendants challenged the substantial fees, alleging EY's mandate was impossible, it made false statements, was careless, and biased.

The court applied the test for reviewing receiver's fees, finding that the defendants' persistent lack of cooperation significantly increased the complexity and cost of EY's investigative work.

The court dismissed all defendant complaints, approved EY's conduct and fees, and awarded EY full indemnity costs for the motion due to the defendants' unsubstantiated allegations of misconduct.

The appellant appealed a Master's decision granting the respondent leave to amend its pleading to withdraw admissions.

The appellant argued the Master committed a palpable and overriding error by allowing amendments that were not based on newly discovered facts but rather on improving the respondent's litigation position, particularly in the context of a pending summary judgment motion.

The court found the Master misapprehended the evidence by confusing factual matters with advocacy positions and that there was no reasonable explanation for the late and strategic withdrawal of admissions.

The appeal was allowed, the Master's order set aside, and the respondent's motion to amend dismissed.

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.

Following a successful motion for partial summary judgment, the plaintiff sought costs on a substantial indemnity basis.

The court found that the defendants' conduct, which included oppressive actions, breach of fiduciary duty, and failure to cooperate with the court-appointed investigator, warranted an elevated costs award.

The court fixed costs at $170,000, inclusive of disbursements and taxes, payable by the defendants.

The applicants in CCAA proceedings sought an extension of the Stay Period to April 15, 2016, as they prepared an Amended and Restated Plan of Compromise.

The court found the parties were working in good faith and with due diligence, and granted the extension.

The court also approved an agreement to lift the Co-Tenancy Stay on acceptable terms and extended the Notice of Objection Bar Date.

The plaintiff, a minority shareholder, previously obtained a judgment setting aside a transfer agreement and declaring a constructive trust over her one-third interest in corporate assets diverted by the defendants.

Following the appointment of an expert to trace the diverted assets, the plaintiff brought a motion for an interim payment under section 248 of the OBCA and Rule 20.

The court found that the defendants had improperly used corporate funds to pay their legal fees and the expert's costs, and had diverted several real estate properties and sale proceeds.

The court ordered the defendants to pay the plaintiff $6,098,427 as an interim payment representing her undisputed one-third interest in the diverted assets and improperly paid expenses.