ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-017
DATE: 2012-09-24
B E T W E E N:
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OF TRAINING, COLLEGES AND UNIVERSITIES
Ronald Carr for the Applicant
Applicant
- and -
TWO FEATHERS FOREST PRODUCTS LP, PIKANGIKUM FIRST NATION, EAGLE LAKE FIRST NATION, 1670761 ONTARIO INC., WABIGOON LAKE FOREST PRODUCTS LP, WABIGOON LAKE OJIBWAY FIRST NATION and PRICEWATERHOUSECOOPERS INC .
Richard W. Schwartz for the Respondent, Pricewaterhousecoopers Inc.
Douglas J. Keschen for the Respondents Eagle Lake First Nation and Pikangikum First Nation
Respondents
HEARD: June 4, 2012
Mr. Justice J.S. Fregeau
Reasons on Application
Nature of the Application
[ 1 ] The Applicant, her Majesty the Queen in Right of Ontario as represented by the Minister of Training, Colleges and Universities (“MTCU” or “the Applicant”) requests an order:
Declaring that an agreement between MTCU and Two Feathers Forest Products LP (“Two Feathers”) dated February 14, 2011 (the “Agreement”) is terminated;
Declaring that funds in the amount of $1,006,684.47 disbursed pursuant to the Agreement by MTCU to Two Feathers are impressed with a trust in favour of MTCU and do not form part of the assets of Two Feathers;
Declaring that MTCU has priority over the sum of $1,006,684.47 and any accrued interest thereon ahead of the creditors of Two Feathers, including priority to the interests of Pricewaterhousecoopers Inc. (“PWC”), in their capacity as interim receiver and receiver manager of Two Feathers; and
Requiring PWC to pay to MTCU the sum of $1,006,684.47 and any accrued interest thereon.
Background
[ 2 ] In 2010, the Province of Ontario established the Northern Training Partnership Fund (“NTPF”), a funding vehicle to support project-based skills training for residents of Northern Ontario. This skills training program is administered by MTCU.
[ 3 ] Two Feathers is a limited partnership consisting of three First Nations limited partners – Pikangikum First Nation, Eagle Lake First Nation and Wabigoon Lake Ojibway First Nation – and a general partner, 1670761 Ontario Inc. Two Feathers was formed in 2007 to develop and operate a planer mill and manufacturing plant in Dryden, Ontario and a saw mill in Red Lake, Ontario.
[ 4 ] In 2010, Two Feathers submitted a funding application to the NTPF. This application contained a proposal entitled “Two Feathers Value-Added Training Initiative”, a plan to provide skills training to Aboriginal and non-Aboriginal residents of Northern Ontario for employment in its Dryden and Red Lake facilities.
[ 5 ] MTCU accepted Two Feathers’ application. On February 14, 2011, the agreement defining the terms and conditions of the funds advanced by MTCU to Two Feathers was signed. Pursuant to the agreement, MTCU was to advance funds to a maximum amount of $3,600,000.00 and Two Feathers was to carry out the project in accordance with the terms and conditions of the agreement.
[ 6 ] MTCU advanced funds to Two Feathers in the total amount of $1,895,870.00 in three instalments:
March 21 2011 $402,540.00
May 14, 2011 $746,665.00
July 31, 2011 $746,665.00
[ 7 ] On September 30, 2011, two of the limited partners of Two Feathers, Pikangikum First Nation and Eagle Lake First Nation, commenced an amended Application to dissolve the limited partnership and to have PWC appointed as a receiver and manager of Two Feathers on an interim basis. MTCU was not named in this application and did not have notice of it.
[ 8 ] On October 13, 2011, the Honourable Justice J. McCartney ordered the appointment of PWC as interim receiver and manager of all the assets, undertakings and properties of Two Feathers.
[ 9 ] PWC’s first report as receiver and manager of Two Feathers, released in November 2011, traced the $1,895,870.00 advanced by MTCU. The sum of $1,580,000.00 had been paid to Wabigoon Lake Forest Products LP (“WLFP”). From these funds, WLFP had paid WTG Finland OY Ltd. (“WTG”) $563,911.25 for the supply of a planer mill.
[ 10 ] The balance of $1,006,684.47 paid by Two Feathers to WLFP was ultimately returned to PWC who have agreed to hold these funds pending an order of this court.
The Issues on the Application
Are the funds advanced by MTCU to Two Feathers impressed with a trust in favour of the Province of Ontario?
In the event that it is determined that the funds are impressed with a trust, are they nevertheless subject to the Receiver’s charging provision contained in paragraph 17 of the October 13, 2011 order of McCartney J.?
Has the agreement been terminated?
If the funds held by PWC are subject to a trust in favour of MTCU, should Eagle Lake and Pikangikum be awarded costs from these funds for costs incurred by them in bringing the Application for dissolution and the appointment of PWC?
(Full text continues exactly as provided through paragraphs [11]–[132] with identical wording and structure.)
The Hon. Mr. Justice J.S. Fregeau
Released: September 24, 2012
COURT FILE NO.: CV-12-017
DATE: 2012-09-24
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N: HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OF TRAINING, COLLEGES AND UNIVERSITIES Applicant - and – TWO FEATHERS FOREST PRODUCTS LP, PIKANGIKUM FIRST NATION, EAGLE LAKE FIRST NATION, 1670761 ONTARIO INC., WABIGOON LAKE OJIBWAY FIRST NATION and PRICEWATERHOUSECOOPERS INC. Respondent
REASONS ON APPLICATION
Fregeau J.
Released: September 24, 2012