Court File and Parties

Court File No.: CV-21-00668388-00CL Estate File Nos.: 33-165772, 11-254353 Date: 2023-06-12 Superior Court of Justice – Ontario – Commercial List (IN BANKRUPTCY AND INSOLVENCY)

In the Matter of the Bankruptcy of 3 SIXTY SECURE CORP. OF THE TOWN OF SMITH FALLS, IN THE PROVINCE OF ONTARIO

Application Under: Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended, and Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended

Re: Pillar Capital Corp, Applicant And: 3 Sixty Secure Corp. and 3 Sixty Risk Solutions Ltd., Respondents

Before: Peter J. Osborne J.

Counsel: Colin Pendrith, Counsel for Canopy Growth Corporation Tim Duncan, Counsel for the Court-appointed Receiver

Heard: June 12, 2023

Endorsement

[1] This lift stay motion proceeds on an unopposed basis. Counsel confirmed and the affidavit of service filed reflects, that all parties have been served. In particular, both 3 Sixty and the Trustee consent to the order sought.

[2] Canopy Growth seeks an order pursuant to section 69.4 of the Bankruptcy and Insolvency Act (“BIA”) to lift the stay of proceedings to pursue a claim issued on September 22, 2022 (Court File No. CV-22-00687675-0000) against 3 Sixty Secure Corporation and 3 Sixty Risk Solutions Ltd., (Collectively “3 Sixty”) relating to a fire at Canopy’s property in Delta, British Columbia.

[3] The Court has recognized circumstances in which it is appropriate to lift a stay of proceedings when an action is brought to establish judgment against a bankrupt, in order to enable the plaintiff to seek recovery on a contract of insurance: Paterson City of Oshawa, 2023 ONSC 2287 (“Paterson”), citing with approval Re Advocate Mines, [1984] 52 C.BR. (N.S.) 277, 1984 CarswellOnt 156.

[4] It is not necessary to lift the stay that the plaintiff establish that the insurance policy is applicable, but only that it may possibly be available to the creditor to satisfy its claim. The court hearing the underlying civil action can determine whether or not the policy applies: Paterson at para. 34. See also Hemeon v. West Hants (District), 2008 NSSC 234 at para. 19-22.

[5] I am satisfied here that there is no prejudice to the company or other creditors, since the proceeds of the insurance, if any, would not be available to all creditors but only to third parties, including Canopy, that suffered a loss as a result of the breach of contract and/or negligence by 3 Sixty if so proven.

[6] Accordingly, I am satisfied that it is just and equitable to lift the stay for the limited purpose as set out above and in accordance with the terms of the draft order submitted.

[7] Order to go in the form signed by me today, which is effective immediately and without the necessity of issuing and entering.

Osborne J.