Robert J. Drake

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.

This decision is an appeal by Alan Saskin from the order of Associate Justice Ilchenko, sitting as Registrar in Bankruptcy, refusing an absolute discharge and imposing conditions under the Bankruptcy and Insolvency Act.

The court reviews the procedural history, the evidence, and the legal standards for discharge, including the meaning of "moral blameworthiness" under s. 173(1)(a) and the duties of a bankrupt under s. 173(1)(o).

The appeal is dismissed, with the court finding no error in the Registrar's factual or legal conclusions.

This endorsement grants a brief adjournment in the Companies’ Creditors Arrangement Act (CCAA) proceedings involving Hudson’s Bay Company ULC and related entities, following ongoing discussions between the applicants and stakeholders.

The court extends the stay of proceedings, increases the Directors’ Charge, amends the relative priorities of charges, and approves the engagement of Reflect Advisors, LLC as financial advisor.

The court finds the requested relief appropriate, unopposed, and supported by the Monitor, and orders the requested amendments to the Initial Order.

The Monitor in a CCAA proceeding sought an order to reject an amended claim filed by Wellesley Residences (2014) Corp., KJ Equity Inc., and Yonge-Abell Partnership.

The court applied the Blue Range test for accepting late or amended claims, which considers inadvertence, good faith, and prejudice.

The court found that the claimants failed to demonstrate inadvertence or good faith, noting that the amended claim was a new claim, not a particularization of the original placeholder, and that the claimants' principals were involved in the transactions triggering the claim but failed to disclose them for years.

The court also found relevant prejudice due to the delay impacting negotiated interim distributions.

The motion was granted, and the amended claim was rejected.

The Monitor in CCAA proceedings moved for an extension of the stay of proceedings, approval of its activities as described in its Fortieth Report, and approval of its fees and disbursements.

The motion was unopposed.

The court found that the applicants had acted in good faith and with due diligence, and that the extension was reasonable.

The court also approved the Monitor's activities and found the fees and disbursements to be reasonable.

The motion was granted.

The applicant sought a declaration that the eastern boundary of his property was governed by an 1887 plan of subdivision rather than a conflicting 1888 plan.

The discrepancy created an overlap area.

The court found that the historical fence line, previous surveys, and the parties' use of the properties all aligned with the 1887 plan.

The court granted the declaration, noting that the applicant had also established possessory title through adverse possession of the overlap area prior to the properties' conversion to the Land Titles system.

In a CCAA proceeding, the Monitor brought a motion for advice and directions seeking to challenge $2.3 million in payments in kind made by the debtor to a trade creditor as oppressive.

The court dismissed the motion, finding that the Monitor had not been empowered to bring such proceedings on behalf of the debtor corporations and that it was inappropriate for the Monitor to drop its neutrality to pit creditors against each other.

Furthermore, the Monitor failed to prove that any creditors held reasonable expectations that were breached by the transfers.

The appellant appealed a summary judgment dismissing his action for a declaration that his daughter holds assets in a numbered company in trust for him.

The motion judge had characterized the claim as involving a resulting trust and found it statute-barred.

The Court of Appeal allowed the appeal, finding that no limitation period applies to claims against a trustee of a resulting trust for property still in the trustee's possession.

The court also found it appropriate to entertain the appellant's new argument on appeal, as it raised a pure question of law and the record provided a complete evidentiary basis for determination.

The Monitor in a CCAA proceeding sought to declare void as an unjust preference $12 million in HST payments made by the insolvent debtor to the Canada Revenue Agency shortly before commencing a proposal proceeding.

The court dismissed the motion, finding that the payments were funded by an inter-company loan specifically earmarked for the tax liability, meaning the transaction was economically neutral to the debtor and did not prejudice the recovery of unsecured creditors.

The plaintiff sought specific performance of an agreement of purchase and sale for a 75% interest in 200 acres of land and shares in a bare trustee corporation.

The agreement failed to close due to disputes over directors' resolutions for share transfers and extensions.

The court found the defendant vendors breached their good faith obligation to close and failed to deliver a valid directors' resolution.

The defendants' arguments of no agreement to extend, no obligation to extend, mutual mistake, and the purchaser not being in funds were rejected.

Specific performance was deemed the appropriate remedy due to the uniqueness of the property.

The third-party claim against the vendors' lawyers for negligence was dismissed, as their advice was consistent with a proper interpretation of the joint venture agreement.

The applicant moved to disqualify a law firm from representing the respondent receiver in a funds dispute, alleging a conflict of interest.

The law firm brought a cross-motion to be removed as the applicant's counsel in other ongoing litigation.

The court found that the retainer agreement between the applicant and the law firm explicitly contemplated this scenario and permitted the law firm to continue representing the receiver if a dispute arose.

Applying the Supreme Court of Canada's jurisprudence on the bright line rule, the court held that the applicant's expectation of exclusive loyalty was unreasonable given the terms of the retainer.

The applicant's motion was dismissed, and the law firm's cross-motion was granted.

Following a 17‑day commercial trial in which the plaintiff obtained judgment for specific performance and damages exceeding its earlier settlement offer, the court determined the appropriate costs award.

The plaintiff relied on Rule 49 of the Rules of Civil Procedure, arguing that a written settlement offer transmitted by email triggered substantial indemnity costs consequences.

The court held that the email constituted a valid Rule 49 offer notwithstanding the “without prejudice” designation and rejected the defendants’ argument that such wording removed the offer from Rule 49.

In assessing quantum, the court applied the principles under s.131 of the Courts of Justice Act and Rule 57.01, emphasizing reasonableness rather than strict adherence to actual legal fees.

The court fixed costs at a lump sum reflecting partial and substantial indemnity principles and adjustments for conduct that lengthened the proceedings.

The plaintiff and defendants entered into an Option Agreement for the purchase and sale of a retro-fitted self-storage facility.

The plaintiff exercised a 'Put' option requiring the defendants to purchase the property at an appraised value.

The defendants refused to close, alleging the appraisal contained a manifest error and that the roof was defective, breaching a warranty.

The court found no manifest error in the appraisal and that the roof issues were maintenance problems which the defendants, as property managers, had failed to address.

The court granted specific performance of the sale at the appraised value of $7.3 million and awarded the plaintiff $728,080.05 in carrying costs.