Robert William Staley

The moving parties brought a motion to remove the responding parties' counsel of record due to an alleged conflict of interest.

The moving parties argued that the law firm had previously acted for a jointly owned corporation and possessed confidential information relevant to the current shareholder dispute, specifically regarding a project called AllianceCare.

The court found that the law firm had a prior solicitor-client relationship with the jointly owned corporation and that the new retainer was sufficiently related to the past work, raising a rebuttable presumption of prejudice.

Because the responding parties refused to answer questions about AllianceCare during cross-examination, the court drew an adverse inference and found the presumption was not rebutted.

The motion was granted and the law firm was removed as counsel of record.

In the CCAA proceedings of U.S. Steel Canada Inc., its parent company, United States Steel Corporation, sought approval of several proofs of claim totaling over $2 billion.

Various stakeholders objected, arguing that the intercompany loans should be re-characterized as 'equity claims' under the CCAA and that the security granted for certain advances was void as a fraudulent preference or unenforceable for lack of consideration.

The court rejected the objections, finding that the parent company had a reasonable expectation of repayment when the advances were made, and that the security was validly granted for fresh consideration and did not constitute a fraudulent preference.

The claims were confirmed as debt claims.

The applicants, trustees of Central GoldTrust and Silver Bullion Trust, brought an application to the Ontario Securities Commission regarding unsolicited take-over bids by Sprott.

The applicants argued the bids violated the identical consideration requirement of the Securities Act and were contrary to the public interest due to misleading statements, confusing structure, and a variation amending powers of attorney.

The Commission found it had jurisdiction to hear the application but concluded the bids did not violate the identical consideration requirement.

However, the Commission found the disclosure regarding the variation to the powers of attorney was inadequate and ordered Sprott to issue a notice of change in information providing clear disclosure to unitholders before proceeding with the bids.

In a securities class action arising from the collapse of a forestry company, the plaintiffs sought approximately $2.6 million in costs following certification and leave motions brought under the Class Proceedings Act, 1992 and the Securities Act.

Several defendants argued that costs should not be awarded because the plaintiffs had already recovered legal expenses through settlements with other defendants and because the claimed costs were excessive.

The court held that the plaintiffs were largely successful but not entirely successful due to an unresolved assignment issue affecting certain class members.

The court also ruled that disbursements could not be recovered again because they had already been indemnified through settlements.

Exercising its discretion, the court ordered a hybrid costs award: part payable immediately and part payable in the cause.

In the context of CCAA proceedings for U.S. Steel Canada Inc. (USSC), the applicant sought approval for Transition Arrangements with its parent company, a Business Preservation Plan involving significant cash conservation measures (including suspension of pension, OPEB, and municipal tax payments), and Amended DIP Financing.

The court approved the motions, finding that the Transition Arrangements were fair and reasonable, and that the Business Preservation Plan and DIP financing were necessary to allow USSC to continue operations and pursue a restructuring solution, despite objections from the union and municipalities regarding the suspension of benefits and taxes.

The applicants, Central GoldTrust and Silver Bullion Trust, sought declarations and injunctive relief to stop hostile takeover bids by the respondents.

The applicants argued the bids violated advance notice by-laws, proxy solicitation rules, and withdrawal rights under the Securities Act.

The respondents cross-applied to invalidate defensive amendments made by the applicants' boards to their declarations of trust.

The court dismissed the applicants' requests to enjoin the bids, finding no violation of proxy rules or advance notice by-laws, but ordered a minor amendment to the powers of attorney regarding withdrawal rights.

The court granted the respondents' cross-application, invalidating the defensive amendments as they were enacted primarily to thwart the takeover bids.

Trinity Western University (TWU) applied for judicial review of the Law Society of Upper Canada's decision to deny accreditation to its proposed law school.

The Law Society denied accreditation because TWU's community covenant, which prohibits sexual intimacy outside of heterosexual marriage, was found to be discriminatory against LGBTQ individuals.

The Divisional Court dismissed the application, finding that the Law Society's decision was reasonable.

The Court held that while the decision infringed TWU's freedom of religion, the Law Society proportionately balanced this right against its statutory mandate to protect the public interest and the equality rights of its future members.

In a contested shareholder proxy fight arising from a requisitioned special meeting, the applicants sought court supervision over meeting procedures under the Business Corporations Act, including appointment of an independent chair and invalidation of the management proxy form.

The court held that an independent chair would not be imposed absent evidence of demonstrated impropriety or a likelihood the proposed chair would act unfairly, and speculation about associations with incumbent management was insufficient.

The court also declined to invalidate the current proxy, finding it reflected the requisitioned resolutions, did not conflict with the governing statute or securities requirements, and better avoided voter confusion.

Issues relating to compliance of the dissident slate with the corporation's by-laws and proxy inspection logistics were left to be addressed in context if necessary after the meeting.

The moving parties sought leave to appeal a decision dismissing their Rule 21 motion.

They argued that the action brought by the litigation trust was barred by a Bar Order issued in related class actions, specifically under the phrase 'other claims over'.

The Divisional Court dismissed the motion for leave to appeal, finding that the claims were independent and did not seek contribution or indemnity for damages owed to the class action plaintiffs.

The motion judge's interpretation of the Bar Order was correct and consistent with prevailing case law.

In CCAA proceedings involving a debtor company whose assets had already been sold and where no plan of arrangement was contemplated, the representative plaintiff in a proposed securities class action moved to lift the stay of proceedings and to amend the claims procedure order after failing to file a proof of claim by the claims bar date.

The directors argued that the claims procedure barred the class action against them and extinguished related claims, including access to insurance proceeds.

The court held that both the stay and the claims bar order are discretionary tools intended to facilitate restructuring or liquidation objectives under the CCAA.

Because the restructuring process had effectively concluded and no plan was forthcoming, using the claims bar order to extinguish the class action would serve no functional purpose under the CCAA.

The court exercised its discretion to lift the stay and modify the claims procedure order to permit the plaintiff to proceed with the class action.

In CCAA restructuring proceedings, shareholder class action plaintiffs sought to limit the scope of a stay of proceedings so that certification, leave, and amendment motions in related Ontario and Quebec securities class actions could proceed against auditors, underwriters, and former directors.

The court applied the established test for lifting a CCAA stay, considering relative prejudice, balance of convenience, and the merits.

Given the pending appeal concerning whether shareholder claims constituted “equity claims” under the Companies’ Creditors Arrangement Act and the imminent creditor meeting regarding a proposed plan of arrangement, the court found that maintaining the stay temporarily would avoid prejudice and promote orderly proceedings.

The court held that the balance of convenience favoured maintaining the stay so that the auditors and underwriters could focus on the appeal and restructuring process.

The motion to limit the stay was dismissed without prejudice to renewal after the creditor meeting.

Following a merits decision finding that Coventree Inc. and its senior officers, Geoffrey Cornish and Dean Tai, failed to disclose material changes in breach of the Securities Act, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission emphasized the fundamental importance of timely disclosure to the integrity of capital markets.

While noting mitigating factors such as the respondents' lack of intent to mislead and their cooperation with Staff, the Commission imposed significant administrative penalties to achieve specific and general deterrence.

Coventree was ordered to pay a $1 million penalty and $250,000 in costs, while Cornish and Tai were each ordered to pay a $500,000 penalty and were prohibited from acting as directors or officers of a reporting issuer for one year.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and Research In Motion Limited (RIM) and several of its directors and officers regarding the improper backdating and repricing of stock options over a ten-year period.

The misconduct resulted in an undisclosed benefit of approximately $66 million and misleading public disclosure.

The Commission approved the settlement agreement, finding it to be in the public interest.

The settlement included substantial financial contributions to RIM, administrative penalties totaling $8 million, costs of $1.05 million, reprimands, and various prohibitions and educational requirements for the individual respondents.

The interim receiver of a bankrupt company sought to distribute funds from operating assets to a secured creditor.

The pension plan administrator opposed, claiming priority under a statutory lien for unpaid pension contributions pursuant to s. 57(5) of the Pension Benefits Act.

The Ministry of the Environment also opposed, arguing funds should be retained for environmental remediation.

The Court of Appeal dismissed both appeals, holding that the pension administrator is not a secured creditor under the Bankruptcy and Insolvency Act because the unpaid contributions are not a debt due to the administrator.

The Court also held that the MOE was an unsecured creditor regarding the operating assets and that the BIA's specific provisions for environmental claims governed.

In a complex CCAA restructuring of Stelco Inc., four appeals were brought regarding the distribution of assets among creditors.

The Court of Appeal upheld the motion judge's findings that Senior Debt Holders could enforce subordination and turnover provisions against Noteholders via trust principles, and that post-filing interest was payable.

However, the Court reversed the motion judge on two key issues: it found that a massive IT outsourcing contract was not in the 'ordinary course of business', thereby elevating its assignee to Senior Debt status, and it ruled that the distributed securities must be valued at the 'Plan value' ($5.50 per share) rather than the post-emergence market value.

The Court of Appeal issued an addendum to correct an error in paragraph 11 of its reasons for judgment released on November 17, 2005.

The court amended the reasons to replace the reference to 'Subordinated Debenture Holders' with 'Senior Debt Holders' in the first two sentences of the paragraph.

The appellants, holders of Convertible Notes of Stelco, appealed an order establishing an expedited claims process to determine inter-creditor subordination claims in a CCAA restructuring.

The appellants argued they were entitled to a full civil trial process.

The Court of Appeal dismissed the appeal, finding that the CCAA plan explicitly contemplated a timely process to determine entitlements to the turnover proceeds, and the supervising judge's discretionary scheduling order was entitled to deference.

The moving party, THICC, sought a stay of a Master's order requiring the Minister of Health to file a section 10 record that included THICC's allegedly confidential information, pending an appeal of that order.

The underlying judicial review challenged the Minister's approval of hospital infrastructure plans.

Applying the RJR-MacDonald test, the court found a serious issue to be tried regarding the interpretation of a prior consent confidentiality order, irreparable harm if the information was disclosed before the appeal, and that the balance of convenience favoured granting the stay to preserve the appeal's utility.

In a CCAA restructuring of Stelco Inc., the appellants, representing subordinated debenture holders, sought to be classified as a separate class of creditors for voting purposes on the proposed plan.

They argued their interests conflicted with senior debt holders due to a turnover payment provision requiring them to remit distributions to senior debt holders until the senior debt was paid in full.

The supervising judge dismissed the motion, finding no material distinction in their legal rights vis-à-vis the debtor company.

The Court of Appeal granted leave but dismissed the appeal, affirming that creditor classification under the CCAA is determined by the creditors' legal rights in relation to the debtor company, not their rights as creditors in relation to each other.

In a CCAA proceeding regarding Stelco Inc., the Informal Independent Converts' Committee appealed an order denying them a separate class of creditors.

The Court of Appeal granted leave but dismissed the appeal, finding no legal error or error in principle in the motion judge's conclusion that the appellants lacked a different legal or practical interest from other unsecured creditors vis-à-vis the debtor.