R. Paul Steep

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.

In the context of CCAA proceedings for U.S. Steel Canada Inc., three former employees brought a motion seeking payment of lump sum retention bonuses under their severance agreements.

The respondent argued the payments were pre-filing obligations subject to the CCAA stay.

The court found the bonuses were compensation for post-filing services, as they were contingent on the employees remaining available to work during the notice period.

The court exercised its discretion to order payment, finding it fair and equitable as it would not create an unfair priority over other employees and the amounts were de minimus.

In a bifurcated class action certification motion, the court considered whether unit-holders of a publicly traded real estate investment trust had pleaded viable causes of action arising from an allegedly conflicted property transaction that was later rescinded, causing a sharp drop in unit value.

The court held it was plain and obvious that officers and trustees did not owe fiduciary duties directly to unit-holders in the circumstances pleaded, and struck the fiduciary duty claims.

However, the breach of trust claims against certain trustees, grounded in the declaration of trust and the arguable ability of unit-holders to sue for dishonest or negligent breach of trustee obligations, were allowed to proceed.

The knowing assistance claim survived only against the former CEO, while similar claims against the vendor parties and their solicitors were struck for failure to plead active assistance in the trustee's breach.

Certification was dismissed as against the vendor parties and their solicitors.

The plaintiff, a unit-holder in a real estate investment trust (REIT), brought a proposed class action alleging that the REIT's former CEO and trustees breached their fiduciary duties and duties of trust by entering into an undisclosed related-party transaction.

On a bifurcated certification motion to determine if the pleadings disclosed a reasonable cause of action under s. 5(1)(a) of the Class Proceedings Act, the court struck the breach of fiduciary duty claims, finding that the defendants owed duties to the REIT but not to the unit-holders.

However, the court allowed the breach of trust claims against the trustees and the knowing assistance claim against the former CEO to proceed, while striking the knowing assistance claims against the vendor and the vendor's solicitors.

In a joint cross-border insolvency trial concerning the allocation of approximately $7.3 billion in lockbox funds from the sale of global business lines and residual intellectual property, the court interpreted the Master R&D Agreement as an operating transfer-pricing document that granted limited licence rights but did not govern post-insolvency allocation.

The court rejected both the position that one Canadian debtor owned all sale proceeds by virtue of legal title and the position that the EMEA debtors jointly owned all intellectual property by operation of law.

Applying unjust enrichment principles and the broad remedial jurisdiction available in CCAA proceedings, the court held that a just result required a pro rata allocation among debtor estates based on allowed claims.

The court further directed that duplicate claims be counted only once for allocation purposes, that intercompany claims be included, and that interim distribution proposals be brought forward.

In ongoing restructuring proceedings under the Companies’ Creditors Arrangement Act, the debtor company sought court approval of a coke conversion agreement with its parent corporation.

The motion was brought on an urgent basis due to operational deadlines relating to coal shipments and winter shipping constraints on the Great Lakes.

The monitor supported the agreement and reported that it would be cash‑flow positive, would recall employees from temporary layoff, and would not interfere with the ongoing sales and restructuring process.

The court held that it had jurisdiction under s. 11 of the CCAA and found the agreement appropriate in the circumstances.

A sealing order was also granted to protect confidential commercial information contained in an unredacted version of the agreement.

A dissident unitholder sought declarations allowing it to nominate trustees at a real estate investment trust’s annual meeting despite the trust’s advance notice policy.

The dispute turned on the interpretation of a proviso stating that adjournment or postponement of a meeting would not commence a new nomination period.

The court held that the nomination window is triggered by the actual date of the meeting, not the originally scheduled date, and that the proviso merely prevents previously valid nominations from becoming stale after postponement.

Interpreting the declaration of trust according to contractual principles and favouring unitholder electoral rights where ambiguity exists, the court concluded that the applicant’s nomination notice was timely.

The applicant was therefore entitled to nominate trustees at the meeting.

Following a major appellate decision regarding the tolling of limitation periods in securities class actions, the successful parties in two of the appeals sought their costs.

The opposing parties argued for reduced costs on the basis of public interest, over-lawyering, and the fact that the court had overruled its own prior jurisprudence.

The Court of Appeal rejected these arguments, finding the claimed amounts to be fair and reasonable given the complexity and significance of the proceedings.

Costs of $151,250 and $100,000 were awarded to the respective successful parties on a partial indemnity scale.

The plaintiff brought a proposed class action against the former and current trustees of the Nortel Health and Welfare Trust, alleging fraud and constructive fraud in the administration of the trust.

The defendants moved to strike the claim under Rule 21, arguing that the claims were barred by a release granted in Nortel's CCAA proceedings and were statute-barred under the Limitations Act, 2002.

The court held that the CCAA release barred the constructive fraud claims, and that the plaintiff failed to plead a tenable claim for common law fraud.

Furthermore, the court found that the claims were discovered outside the two-year limitation period.

The action was dismissed.

In three related securities class action appeals, the court reconsidered whether a statutory secondary-market misrepresentation claim under s. 138.3 of the Securities Act is time-barred unless leave is obtained within the s. 138.14 limitation period.

The court overruled Timminco and held that, for purposes of s. 28 of the Class Proceedings Act, 1992, the statutory claim is asserted when the representative plaintiff pleads the statutory cause of action, the supporting facts, and an intention to seek leave within a timely commenced class proceeding.

The court also upheld the motion judge's interpretation of the s. 138.8 leave standard as screening out hopeless claims, while holding that the Green certification decision erred in failing to consider certifying common negligent misrepresentation issues other than reliance.

The plaintiffs' appeal in Green was allowed in part and the defendants' appeals in Silver and Celestica were dismissed.

The applicant beer distributor sought an interlocutory injunction preventing the respondent brewer from terminating a long-standing licence agreement granting exclusive Canadian distribution rights for certain beer brands.

The respondent issued a termination notice based on the applicant’s failure to meet contractual volume targets after an amendment to the licence agreement terminated automatically when industry regulatory changes did not occur.

The court held that serious issues existed regarding the continued effect of a contractual waiver of termination rights and whether the respondent was required to engage in good faith negotiations before exercising termination rights.

The court also found that the applicant would suffer irreparable harm through disruption of its product portfolio, damage to customer relationships, and potential harm to brand equity.

Balancing the parties’ respective harms and favouring preservation of the status quo pending trial, the court granted the interlocutory injunction.

The tax debtor owed tax to the federal government.

The Minister of National Revenue issued requirements to pay to the appellant bank, seeking to intercept funds from cheques drawn by the tax debtor on his trust account and deposited into a joint account held by the tax debtor and a third party.

The Supreme Court of Canada held that the bank was not liable to make a payment to the tax debtor personally.

When the bank received the cheques for deposit into the joint account, it acted as a collecting bank for the joint account holders, not as an agent for the payee.

Therefore, the requirements to pay under s. 224(1) of the Income Tax Act were not triggered.

The moving party sought leave to appeal a decision dismissing its motion to vary the terms of an injunction.

The moving party argued the decision conflicted with other cases and there was good reason to doubt its correctness.

The court dismissed the motion, finding no conflict in principle, no reason to doubt the correctness of the order, and that the proposed appeal did not involve matters of general public importance.

Costs of $5,000 were awarded to the responding party.

The appellants, an investment management firm and minority shareholder, appealed the dismissal of their oppression application against the respondent corporation and its directors.

The application judge had found that the challenged related-party transactions were within the reasonable expectations of shareholders and protected by the business judgment rule.

The Divisional Court dismissed the appeal on the merits, finding no palpable and overriding error in the application judge's factual findings or application of the law.

The court upheld the award of substantial indemnity costs due to the appellants' unfounded allegations of misconduct and misuse of the court process, but allowed the costs appeal in part to deduct pre-application costs.

The applicant physician sought judicial review to quash a motion by the hospital's Medical Advisory Committee (MAC) requiring him to undergo independent conduct and clinical assessments before the MAC would make a recommendation on his reappointment application.

The applicant argued the MAC's process lacked procedural fairness and was tainted by bias due to a history of conflict and a failure to provide timely disclosure of complaints.

The Divisional Court dismissed the application as premature, finding that the hospital had a statutory duty to assess qualifications and that the applicant had adequate alternative remedies, including a full hearing before the hospital board and an appeal to the Health Professions Appeal and Review Board, to address any procedural unfairness.

Following a successful appeal, the appellant sought clarification on whether the $85,000 costs award included the costs of the respondents' motions for leave to appeal to the Divisional Court.

The Court of Appeal confirmed that these costs were inadvertently omitted and fixed them at $22,000 and $12,000 respectively.

The court declined to determine the scale of costs for the underlying summary judgment motions, leaving that issue to the motion judge.

The appellant bank sued several financial institutions and insurers for approximately $100 million arising from a massive equipment leasing fraud involving forged endorsements.

The respondent financial institutions successfully moved for summary judgment dismissing the appellant's claims for negligence, unjust enrichment, and money had and received.

The Court of Appeal allowed the appeal and set aside the summary judgment, finding that the motion judge committed two fundamental errors: reversing the onus by requiring the responding party to establish a genuine issue for trial, and deciding the motions on the assumed fact that the endorsements were forged.

The Court ordered the entire action to proceed to trial, noting that novel claims should be decided on a full evidentiary record.

The moving parties, several banks and a financial institution, sought leave to appeal a motions judge's refusal to grant summary judgment dismissing the plaintiff's claims in conversion and preclusion.

The underlying action involved a fraudulent scheme where a customer forged endorsements on cheques and bank drafts, deposited them with the plaintiff collecting bank, and the moving parties subsequently reverse-cleared the instruments.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the motions judge's decision that the conversion and preclusion claims raised genuine issues for trial, and noting the issues were of general importance to the banking industry.

The appellant, a major shareholder of Financial Models Company, moved for a stay of a Commercial List decision and an injunction preventing other shareholders from tendering their shares to a competing take-over bid by Linedata Services S.A., pending an expedited appeal.

The motion judge had ruled that the appellant's acceptance of a sell offer was invalid under the Securities Act and that the other shareholders could include a 'superior proposal' condition.

The Court of Appeal granted the stay and injunction, finding that the balance of convenience favoured the appellant, who provided an undertaking as to damages, and ordered an expedited appeal.

The appellant, Starr Toof, appealed a trial judgment finding it liable for negligent misrepresentation in connection with the sale of a used printing press to the respondent, J B Printing Limited.

During a pre-purchase inspection, Starr Toof's representatives made positive statements about the press's condition and failed to disclose damage to an important component.

The Court of Appeal dismissed the appeal, holding that the trial judge applied the correct legal principles and that his findings of mixed fact and law regarding duty of care, reasonable reliance, and misrepresentation were entitled to deference absent palpable and overriding error.

A dissenting opinion argued that no duty of care existed and that the trial judge made palpable and overriding errors of fact.