Court of Appeal for Ontario

Citation: Timminco Limited (Re), 2012 ONCA 552 Date: 2012-07-20 Docket: M41062 & M41085

Simmons, Juriansz and Epstein JJ.A.

In the Matter of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as Amended

And in the Matter of a Proposed Plan of Compromise or Arrangement with Respect to Timminco Limited and Becancour Silicon Inc.

Applicants

Counsel: Ashley J. Taylor and Erica Tait, for the applicants Douglas J. Wray and Jesse Kugler, for the Communications, Energy and Paperworkers Union of Canada Charles E. Sinclair, for the United Steelworkers

Considered in writing on: July 20, 2012

On leave to appeal from the order of Justice Geoffrey B. Morawetz of the Superior Court of Justice, dated February 9, 2012.

Endorsement

[1] Leave to appeal is denied.

[2] In the CCAA context, leave to appeal is to be granted sparingly and only where there are serious and arguable grounds that are of real and significant interest to the parties. In determining whether leave ought to be granted, this Court is required to consider the following four-part inquiry:

• whether the point on the proposed appeal is of significance to the practice;
• whether the point is of significance to the action;
• whether the proposed appeal is prima facie meritorious or frivolous; and
• whether the appeal will unduly hinder the progress of the action.

See Re Stelco (2005), 2005 42247 (ON CA), 78 O.R. (3d) 241

[3] In our view, the proposed appeals lack sufficient merit to meet this stringent test.

[4] This court’s decision in Indalex Ltd. (Re)(2011), 2011 ONCA 265, 104 O.R. (3d) 641, affirms that a CCAA court may invoke the doctrine of paramountcy to override conflicting provisions of provincial statutes where the application of provincial legislation would frustrate the company’s ability to restructure and avoid bankruptcy.

[5] Here, the motion judge recognized that in the circumstances of this case there was a conflict between the federal CCAA and the provincial PBA and SPPA. He found that, “[i]n the absence of the court granting the requested super priority, the objectives of the CCAA would be frustrated”. Further, he concluded that “to ensure that the objectives of the CCAA are fulfilled, it is necessary to invoke the doctrine of paramountcy such that the provisions of the CCAA override those of the QSPPA and the OPBA”.

[6] We see no basis on which this court could interfere with the motion judge’s decision, including his unassailable findings of fact that: (1) without DIP financing, Timminco would be forced to cease operating; (2) bankruptcy would not be in the interests of anyone, including members of the pension plan; (3) if the DIP lender did not get super priority, it would not have agreed to provide financing; and (4) there was insufficient liquidity or unfavourable terms associated with the rejected DIP proposals. In short, he found that there was “no real alternative” to approving the DIP facility and DIP super priority charge.

[7] The motion judge also addressed the union’s fiduciary arguments, primarily in his earlier reasons released February 2, 2012, that are incorporated by reference into his February 9, 2012 reasons. He concluded that it was in the best interests of all parties to proceed with the restructuring. We see no basis on which this court could interfere with this finding.

[8] Costs are to the responding parties on the motions on a partial indemnity scale fixed in the amount of $1,500 per motion inclusive of disbursements and applicable taxes.

“Janet Simmons J.A.”

“R.G. Juriansz J.A.”

“G.J. Epstein J.A.”