Paul Steep

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.

The plaintiffs sought to certify a class action against CIBC Mortgages Inc. regarding the calculation of prepayment penalties on residential mortgages.

The plaintiffs alleged that the prepayment penalty clauses were illegal, contrary to public policy, unconscionable, and void for uncertainty, and that the defendant miscalculated the penalties by failing to apply a present value discount and using a shortened amortization period.

The court found that the pleadings did not disclose causes of action for illegality, unconscionability (as pleaded), uncertainty, or failure to apply a present value discount.

However, the court found a valid cause of action regarding the use of a shortened amortization period and certified the action as a class proceeding on that narrowed basis.

The plaintiffs brought a motion seeking an interim stay and an adjournment of a scheduled certification motion in Ontario.

The purpose was to pursue certification of a national class in a parallel class proceeding in British Columbia, citing the death of lead counsel in BC and anticipated legislative changes allowing opt-out national classes there.

The court denied the motion, finding the request was a late-stage tactical shift amounting to forum shopping, inefficient, and unfair to the defendant and class members, especially given the Ontario action's advanced stage and prior agreements on scheduling.

This addendum corrects an error in a previous costs decision (2018 ONSC 4862) regarding the amount of costs requested by Brewers Retail Inc. The original decision mistakenly stated Brewers Retail requested $600,000 on a partial indemnity basis, when the correct amount, based on an amended bill of costs, was $744,396.42, all inclusive, comprising fees, HST, and disbursements.

The court confirmed the costs award subject to this correction.

Following the dismissal of the plaintiffs' proposed class action on summary judgment, the successful defendants sought costs on a partial indemnity basis totalling approximately $2.3 million.

The plaintiffs and the Class Proceedings Fund argued that the costs should be reduced to $600,000 in the aggregate, asserting that the case was not complex, was in the public interest, raised novel points of law, and that a large costs award would have a chilling effect on class actions.

The court rejected these arguments, finding that the litigation was primarily commercial, involved complex issues, and that the normal costs rules should apply.

The court awarded the defendants their requested costs, subject to a reduction of one expert witness's fee.

The appellant brought a proposed class action asserting statutory claims for secondary market misrepresentation under Part XXIII.1 of the Securities Act and common law negligent misrepresentation against a foreign banking corporation.

The motion judge dismissed the statutory claim and stayed the common law claim, finding that Ontario courts lacked jurisdiction simpliciter and that Ontario was forum non conveniens.

The Court of Appeal dismissed the jurisdiction appeal but allowed the costs appeal in part, reducing the costs award from $1,000,455.22 to $800,000.

The court held that the common law test for "real and substantial connection" applies to the definition of "responsible issuer" under the Securities Act, and that the defendant did not have such a connection to Ontario merely because the plaintiff accessed disclosure documents from his home computer in Ontario.

A Teva employee fraudulently requisitioned and deposited 63 cheques into accounts under names matching or resembling real customers.

The majority held the collecting banks were liable in conversion because the payees were neither fictitious nor non-existing under s. 20(5) of the Bills of Exchange Act.

The Court restored the motions judge’s decision and rejected the banks’ false-payee defence.

Staff of the Ontario Securities Commission alleged that the RBC Registrants failed to establish sufficient controls and supervision, resulting in certain clients paying excess fees.

The RBC Registrants promptly self-reported the inadequacies, cooperated with Staff, and entered into a no-contest settlement agreement.

Under the settlement, the RBC Registrants agreed to pay over $21 million in compensation to affected clients, make a voluntary payment of $925,000 to the Commission, and pay $50,000 for costs.

The Commission approved the settlement, finding it to be in the public interest given the prompt self-reporting, cooperation, and comprehensive corrective actions taken by the registrants.

The moving parties sought leave to appeal a CCAA judge's decision dismissing their motion to reinstate other post-employment benefits (OPEBs) to retirees of U.S. Steel Canada Inc. The CCAA judge had dismissed the motion but ordered a one-time payment of $2.7 million towards benefits.

The Court of Appeal applied the stringent test for leave to appeal in CCAA proceedings and found no prima facie merit to the appeal.

The court emphasized the broad discretion of the CCAA judge and the fact-specific nature of the decision, which did not raise issues of significance to insolvency practice.

Leave to appeal was denied with costs fixed at $2,500.

In the CCAA proceedings of U.S. Steel Canada Inc., the applicant sought an order declaring Bedrock Industries Canada LLC as the Successful Bidder under a sales and investment solicitation process.

The applicant also sought authorization to enter into a Plan Sponsor Agreement and a support agreement with the Province of Ontario.

Several parties, including a union local, the City of Hamilton, and individual retirees, objected to the motion, raising concerns about pensions, taxes, and the fairness of the proposed transaction.

The court granted the requested relief, finding that the proposed transaction was the best available option, the agreements were necessary to facilitate the restructuring, and the rights of the objecting parties to vote on or oppose the ultimate plan of arrangement were preserved.

The applicant, U.S. Steel Canada Inc. (USSC), sought approval for a second key employee retention plan (KERP 2), while a group of unions and representative counsel (Moving Parties) sought an order to terminate the suspension of other post-employment benefits (OPEBs).

The court granted the KERP 2 motion, finding it fair and reasonable for business stability and restructuring efforts.

The OPEB motion was denied, as the court found no fundamental improvement in USSC's profitability to warrant OPEB reinstatement, and that USSC's proposed one-time contribution of $2.7 million to a transition fund for retired employees appropriately balanced competing interests during the ongoing sales and investor solicitation process (SISP).

In a Companies' Creditors Arrangement Act (CCAA) proceeding, the applicant, U.S. Steel Canada Inc., sought an extension of the stay of proceedings, authorization and approval of a second amending and extension agreement for DIP financing, and approval of a second key employee retention plan (KERP).

United States Steel Corporation (USS) sought a shorter stay period.

The court granted the applicant's motion to extend the stay of proceedings to November 30, 2016, finding the applicant acted in good faith and with due diligence, and that a shorter, court-imposed deadline was not necessary or useful at that time.

The court also authorized and approved the Second Extension Agreement for DIP financing, noting its importance as a cash buffer and for maintaining business stability.

Motions regarding post-employment benefit plans and KERP were adjourned or granted separately.

The applicant, U.S. Steel Canada Inc. (USSC), brought a motion seeking approval of a claims process for the identification and determination of intellectual property claims asserted by United States Steel Corporation (USS) against USSC within ongoing CCAA proceedings.

USSC argued the process was necessary to provide clarity for potential purchasers in its Sales and Investment Process (SISP) and facilitate a going concern bid.

USS opposed, arguing the process was impractical and burdensome.

The court granted the motion, subject to certain excisions from the claim form, finding the process beneficial for the restructuring and for maximizing recoveries for stakeholders, and that it had the authority under section 11 of the CCAA to do so.

The applicant, U.S. Steel Canada Inc., sought an extension of the stay of proceedings under the Companies’ Creditors Arrangement Act (CCAA) to July 28, 2016.

United States Steel Corporation (USS) opposed, seeking a shorter extension and the imposition of conditions for disclosure of Phase II bids and an updated liquidation analysis.

The court granted the extension as requested by the applicant, finding that the applicant acted in good faith and with due diligence, and that a longer stay furthered the prospect of a successful restructuring.

The court denied USS's requests for a shorter extension and conditions, deeming them premature and potentially detrimental to the restructuring process, and found insufficient evidence of value destruction.

The applicants (Representative Counsel for non-unionized employees and retirees, USW Locals 1005 and 8782, and the City of Hamilton) sought "for counsel's eyes only" disclosure of a confidential settlement agreement between United States Steel Corporation (USS), U.S. Steel Canada Inc. (USSC), and the Government of Canada.

The motion was brought in the context of CCAA proceedings, with applicants arguing procedural fairness and a minor exemption from settlement privilege.

The court dismissed the motion, finding that the applicants failed to demonstrate how they would be prejudiced without access to the specific details of the undertakings in the agreement, or how the information was material to their claims or negotiations.

The court emphasized that there is no exemption from settlement privilege for the purpose of reviewing a document to determine if a public interest exists that would displace the privilege.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.

Following dismissal of a securities class action leave motion under s. 138.8 of the Securities Act, the successful defendant sought substantial partial indemnity costs.

The plaintiff argued that the case raised a novel legal issue and that no costs should be awarded under s. 31(1) of the Class Proceedings Act, 1992.

The court rejected this characterization, finding the claim to be a conventional secondary market misrepresentation action and concluding that the leave motion lacked merit.

Applying the Civil Rules Committee Grid rates and reducing certain disbursements, the court fixed costs at $170,000 all-inclusive payable by the plaintiff.

Various parties brought motions seeking reconsideration or clarification of a prior joint allocation decision determining the distribution of $7.3 billion in escrow among debtor estates in multinational insolvency proceedings.

The moving parties argued that aspects of the allocation methodology—including treatment of bond guarantee claims, certain asset sale proceeds, intercompany claims, tax claims, and settled claims—required amendment or clarification.

The court reiterated that reconsideration is an exceptional remedy and rejected most requests because the issues either had been addressed at trial or could have been raised earlier.

Limited clarification was granted regarding the treatment of bondholder claims against guarantors and recognition of certain court‑approved settled pre‑filing claims that had been paid.

Other requested clarifications or amendments were denied.