Nicholas Kluge

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.

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.

In the context of CCAA proceedings, the applicants sought a Funding Order to compel Securitization Parties and other secured lenders to fund a $40 million wind-down of the remaining entities.

The court dismissed the motion for the Funding Order, finding that section 11.01(b) of the CCAA expressly prohibits orders requiring the further advance of money or credit.

Consequently, the court also declined to approve a Key Employee Retention Plan, as it was dependent on the unavailable funding.

The court did, however, grant a temporary sealing order for the KERP details and extended the stay of proceedings to November 29, 2024.

In the context of ongoing CCAA proceedings, the applicants and various equipment financiers reached an impasse regarding the wind-down plan and a proposed going-concern sale of the logistics business.

The applicants sought a monetization order, an increase in the administration charge, and lien regularization, which were unopposed and granted by the court to maintain operations.

Due to significant disputes over the sale and liquidation of assets, the court adjourned the contested motions, including several lift-stay motions brought by creditors, and ordered the parties to attend mandatory mediation before a former Commercial List judge.

The applicant, Metropolitan Partners Group Administration, LLC, sought an order appointing a receiver over the property of the respondent, International Credit Experts Inc., due to the respondent's defaults on a financing agreement.

The respondent opposed the appointment and requested a third adjournment, arguing for a private sale of its loan portfolio.

The court denied the adjournment, finding the matter urgent given the procedural history and the respondent's conduct, including a disputed guarantee and asset transfer.

The court determined it was just and convenient to appoint a receiver, emphasizing the respondent's continued defaults, lack of financial transparency, and the need for a court-supervised sale process to maximize stakeholder recovery.

A sealing order for commercially sensitive information was also granted.

This case involved four consolidated applications concerning arbitrations over construction defects at two hospitals.

PCL Constructors Canada Inc. challenged the arbitrators' jurisdiction, arguing non-compliance with procedural prerequisites and a limited scope of the arbitrators' power to award remedies.

Johnson Controls Canada LP sought declaratory relief regarding the nature of a contractual "Reconsideration Right" of the arbitrators' decisions, specifically whether it entailed a de novo hearing or an appeal.

The court dismissed all four applications, upholding the arbitrators' jurisdiction and declining to rule on the hypothetical future reconsideration right, stating the issue had not yet crystallized.

The Court of Appeal for Ontario issued a costs endorsement regarding a motion for leave to amend a notice of appeal in a bankruptcy matter.

The moving parties had sought to add an alternative request for leave to appeal under s. 193(e) of the BIA.

Due to the moving parties' lengthy delay in applying for the amendment without reasonable explanation, and the court's need to address concerns about the material filed by both parties (ultimately striking portions), the court ordered that both the moving parties and the responding party bear their own costs of the motion.

The appellants, Adamson & Associates Inc. and John Adamson, brought a motion to amend their notice of appeal to add an alternative request for leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act.

The original appeal relied on sections that did not require leave.

The motion judge granted the amendment despite the appellants' lack of a reasonable explanation for the delay, finding no prejudice to the respondent, Brian Wayne Flight, and noting the merits of the proposed leave request.

The decision also addressed the striking of inadmissible and non-compliant affidavit material filed by the responding party, emphasizing strict compliance with evidentiary rules for serious allegations.

The plaintiff brought motions to discontinue the action against an individual defendant, to certify the action as a class proceeding, and for partial summary judgment.

The court approved the discontinuance as it did not prejudice the class and secured the corporate defendant's consent to certification.

The court certified the class action against the remaining defendants, finding that the pleadings disclosed causes of action under the Consumer Protection Act and Competition Act, and that a class proceeding was the preferable procedure.

However, the court dismissed the plaintiff's motion for partial summary judgment, concluding that the nature of the relationship between the defendants and the interpretation of the statutory provisions raised genuine issues requiring a full trial.

The plaintiffs moved to enforce an alleged settlement agreement with the defendant Seven Hills Group LLC, while Seven Hills brought a cross-motion for summary judgment to dismiss the negligence claim against it.

The court found no binding settlement agreement existed, as the parties had not agreed on essential terms regarding the scope and indemnity provisions of the release.

The court granted Seven Hills' motion for summary judgment, concluding that Seven Hills owed no duty of care to the plaintiffs, as its engagement letter with Xtreme Labs expressly limited its duties and prohibited reliance by third parties like the plaintiffs for the purpose of a management buyout.

The action against Seven Hills was dismissed, and costs were awarded to Seven Hills.

This is a costs endorsement on appeal from a Superior Court judgment.

The unsuccessful appellants (Essar entities and GIP entities) were ordered to pay costs to the successful respondents (the Monitor and Algoma Steel).

The parties agreed on the quantum of costs but disagreed on whether liability should be several or joint and several.

The court awarded costs on a several basis, allocating 25% to GIP and 75% to Essar, finding that GIP had a more limited role with different issues and less oral argument time than Essar.

A CCAA monitor brought an oppression action under the Canada Business Corporations Act against the parent company (Essar Global) and related entities, alleging that a port transaction transferring critical assets to an Essar-controlled entity was oppressive to Algoma's stakeholders (trade creditors, employees, pensioners, and retirees).

The trial judge found the monitor had standing as a complainant, the action was properly brought as an oppression remedy rather than a derivative action, and the port transaction and its change of control provision were oppressive.

The court granted a remedy modifying the transaction to remove the change of control veto and provide Algoma with termination rights after GIP's loan was repaid.

The appellants appealed on multiple grounds, including standing, characterization of the claim, reasonable expectations analysis, and the appropriateness of the remedy.

The Court of Appeal upheld the trial judgment in all respects.

The defendant abandoned its motion for an interlocutory injunction after failing to obtain interim relief.

The plaintiff sought substantial indemnity costs, arguing it had made an offer to settle that it beat due to the abandonment.

The court held that under Rule 49, a responding party is not automatically entitled to substantial indemnity costs upon beating an offer, and such an award requires reprehensible conduct, which was absent here.

The court awarded the plaintiff partial indemnity costs fixed at $17,500.

Following an oppression action within CCAA proceedings, the court determined costs claims by Algoma and GIP.

The Essar Defendants agreed to pay $1.7 million in costs to the Monitor.

Algoma sought partial indemnity costs against the Essar Defendants, largely for extensive e-discovery disbursements.

The court rejected the argument that Algoma should be denied costs because it was aligned with the Monitor, finding Algoma's participation and document production were critical to the case.

The court awarded Algoma $1,138,809.19 in costs.

GIP's claim for costs against the Monitor was dismissed with no order as to costs, as the court found success between the Monitor and GIP was divided.

The applicants (Algoma) sought two declarations: (i) that amounts owing under a promissory note from Portco to Algoma had been set off against amounts Algoma owed to Portco under a Cargo Handling Agreement; and (ii) that Algoma's right to terminate related Port Agreements was not subject to Portco's payment of the GIP Loan, which was tied to the set-off amounts.

The court granted the first declaration, finding that equitable set-off applied given the close connection between the parties and transactions, and the manifest inequity of requiring Algoma to pay Portco while the parent company (EGFL) failed to pay the promissory note.

However, the court denied the second declaration, holding that it would contradict a prior oppression judgment and an assignment agreement which explicitly required the GIP Loan to be paid in full in cash before Algoma could terminate the Port Agreements.

GIP Primus, L.P. and Brightwood Loan Services LLC ("GIP"), along with Portco, brought motions seeking orders for Essar Steel Algoma Inc. ("Algoma") to resume payments under a Cargo Handling Agreement, including arrears, and for a priority charge in the alternative.

The motions were based on section 11.01(a) of the CCAA, arguing that Portco provided critical services or licensed property.

The court dismissed the motions, reiterating previous findings that Portco did not provide services or a license, and that the arguments were previously decided.

The court also declined to grant a critical supplier charge under section 11.4 or the general discretion of section 11 of the CCAA, citing lack of application by the debtor, prior rulings, and potential breach of DIP loan terms and prejudice to other creditors.

The CCAA monitor of Algoma brought an oppression action under the CBCA against Algoma's parent company, Essar Global, regarding a transaction that transferred Algoma's critical port facilities to a related entity.

The court found that the monitor had standing to bring the action on behalf of creditors.

The court held that the port transaction and a change of control clause giving Essar Global a veto over any buyer of Algoma violated the reasonable expectations of creditors and were oppressive.

The court rejected the business judgment rule defence and ordered the deletion of the change of control clause and amended the agreements to allow Algoma to terminate them after a third-party loan is repaid.

Following a successful motion by the receiver to approve the sale of the respondent's assets to the applicant, and the dismissal of a cross-motion by a third party claiming royalty rights, the court determined the costs payable by the third party.

The court rejected the applicant's request for substantial indemnity costs, awarding partial indemnity costs instead.

The court found the applicant's claimed fees reasonable given the importance and complexity of the issues, and ordered the third party to pay $29,705 to the applicant and $3,996.81 to the Monitor.

The representative plaintiff in a class action regarding the financial deterioration of a pension plan moved for approval of two settlements totaling $1,050,000.

The settlements depleted the remaining insurance limits of the settling defendants.

The court found the settlements to be fair, reasonable, and in the best interests of the class, noting that no class members opposed them.

The court approved the settlements, the distribution protocol, and granted leave to discontinue the action against two impecunious defendants without costs.