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 bankrupt, a former real estate developer, sought an absolute discharge from bankruptcy.

The discharge was opposed by the Trustee, the Canada Revenue Agency, and several creditors, who argued that the bankrupt's assets were less than 50 cents on the dollar for reasons he could be held responsible for, and that he failed to perform his duties under the Bankruptcy and Insolvency Act.

The court found that the bankrupt had engaged in an asset protection strategy, incurred significant personal liabilities without the means to pay them, and failed to disclose his true post-bankruptcy lifestyle and use of a corporate credit card.

The court declined to refuse the discharge entirely but imposed a substantial conditional order requiring the bankrupt to pay $960,000 and fulfill various outstanding duties.

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 a CCAA proceeding brought an unopposed motion to extend the stay period, approve its activities, and approve its fees and those of its counsel.

The court found that the applicants had acted in good faith and with due diligence, and that the applicants had sufficient cash flow to operate during the proposed stay period.

The motion was granted, extending the stay period to January 31, 2024, and approving the Monitor's activities and fees.

The Monitor in CCAA proceedings brought an unopposed motion to extend the stay of proceedings, approve a settlement agreement with a condominium corporation and another party, and approve its activities and fees.

The court found the settlement agreement reasonable and necessary, providing immediate benefits to stakeholders and a path to reducing a bond.

The court extended the stay to March 3, 2023, and approved the Monitor's activities and fees.

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.

The Monitor sought an order authorizing distributions from the sale of Geothermal Assets.

KTNI disputed the Monitor's recommended disallowance of its claim to a portion of the proceeds based on a transfer provision in the Berm Lease.

The court found that the plain language of the lease reserved the transfer value to KTNI and that the provision was not invalidated by the pari passu or anti-deprivation rules.

The Monitor was directed to distribute $2,049,000 to KTNI, but no funds were to be distributed to Doreen Saskin until her claim in the bankruptcy of KTNI's parent company was accepted.

The Applicants brought an unopposed motion in their CCAA proceedings to extend the Stay Period to August 31, 2021, assign certain letters of credit to the Israeli Functionary, and approve the Monitor's Forty-Sixth Report along with professional fees.

The court found the Applicants were acting in good faith and with due diligence, and that they had sufficient resources to continue functioning during the proposed stay period.

The motion was granted in its entirety.

The Applicants brought an unopposed motion in their CCAA proceedings seeking an extension of the Stay Period to August 31, 2021, and authorization for the Monitor to effect the return of trust property to Lien Claimants and Trust Claimants.

The court found the Applicants were acting in good faith and with due diligence, and that the return of trust property did not constitute a distribution or dividend under the Bankruptcy and Insolvency Act.

The court granted the stay extension, authorized the distributions, and approved the Monitor's activities and fees.

The court heard competing applications regarding the insolvent Urbancorp Management Inc. (UMI).

The Monitor sought a Bankruptcy Order, while a secured creditor sought the appointment of a receiver.

The court granted the Bankruptcy Order, appointing the Monitor as trustee, finding that the bankruptcy administration would provide a codified route to assess the secured creditor's non-arm's length claim.

The receivership application was stayed pending the trustee's review of the secured claim.

In the context of CCAA proceedings for the Urbancorp entities, the Monitor brought a motion for an order approving and directing distributions from the sale of geothermal assets.

The court approved two unopposed distributions recommended by the Monitor in its Forty-Fifth Report, specifically regarding VII - Curve and UNKI.

The balance of the requested relief was adjourned to a date to be set.

The moving parties, Project Spokane, LLC and Sean Walsh, brought a motion for leave to appeal an October 8, 2020 order of Conway J. in a bankruptcy proceeding.

The Divisional Court dismissed the motion for leave to appeal and awarded costs of $5,000 to the responding parties.

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 Receiver sought a discharge order, addressing the enforceability of an indemnity agreement and entitlement to an HST refund.

The Indemnifying Parties argued the receivership proceeding was an improper venue for contract breach claims and raised misrepresentation defenses regarding the indemnity agreement, as well as a potential claim for the Receiver's alleged mismanagement of life insurance policies.

The court found the receivership proceeding an appropriate venue, granted summary judgment on the enforceability of the indemnity agreement, and denied a stay of enforcement.

The court also deferred the HST refund issue for further clarification.

Following the dismissal of the Crown's appeal from costs ordered against it in forfeiture proceedings under the Controlled Drugs and Substances Act, the respondents sought costs of the appeal.

The Court of Appeal declined to award costs, noting that costs are generally not awarded against the Crown in criminal proceedings absent a Charter infringement, serious Crown misconduct, or exceptional circumstances.

The court found no serious misconduct by the Crown on the appeal itself, and no exceptional circumstances justifying a costs award.

Furthermore, the court noted that section 683 of the Criminal Code precludes a costs award on the appeal.