ONTARIO

SUPERIOR COURT OF JUSTICE

( COMMERCIAL LIST )

Court File No.: 07-CL-7120
Date: 20121211

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT , R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF A PROPOSED PLAN OF COMPROMISE OR ARRANGEMENT WITH RESPECT TO HOLLINGER INC., 4322525 CANADA INC., and SUGRA LIMITED, Applicants

BEFORE: C. CAMPBELL J.

HEARD: December 7, 2012

SUPPLEMENTARY REASONS

[ 1 ] An issue arose on the settlement of the form of order arising from the decision in this matter dated September 12, 2012. An in-person conference to settle the terms of competing drafts was conducted with me on November 20, 2012.

[ 2 ] Following that case conference a form of order was forwarded to me. On the assumption that the draft forwarded reflected agreement between counsel as to the form I signed the draft and it was subsequently issued.

[ 3 ] Counsel for the Black defendants took issue with counsel for the applicant on the basis that the order as entered did not reflect the inclusion of a “comeback” clause which Black counsel was of the view would be included as a result of the November 20, 2012 case conference.

[ 4 ] Counsel for the Applicant concurred by counsel for Torys and KPMG were and are of the view that the terms of the order as signed reflect what was discussed and agreed to at the November 20, 2012 case conference and no further language particularly as opposed by the Black interests is either necessary or appropriate.

[ 5 ] At my request a further telephone conference call was held on December 7, 2012 preceded by letter submissions in advance.

[ 6 ] These Supplementary Reasons is my decision on the dispute that has arisen.

[ 7 ] When the draft order following the November 20 conference was forwarded for signature, I assumed, as is my usual practice, that it reflected an agreement as to form on the part of all counsel.

[ 8 ] It is now apparent that this was not the case.

[ 9 ] What would in other circumstances be a difference of little consequence I now recognize may be a matter of significance to the ongoing management of this case within the CCAA proceeding of Hollinger.

[ 10 ] The order that I signed assumed incorrectly as it now turns out that the parties could agree on the process of ongoing management.

[ 11 ] Paragraphs 108 to 112 of the September 12, 2012 reasons reflect my concern for the need for ongoing management of the discovery process may be to relate to the Settling Defendants Torys and KPMG’s.

[ 12 ] The recognition for the need of ongoing management was the reason that the action was assigned to the process and procedures of the Commercial List and its judges and not in the first instance the Masters office.

[ 13 ] The formulation of the Commercial list and its management regime envisages cooperation, civility and the application of common sense.

[ 14 ] There is no question in my mind that had I been aware when the order was signed that the parties were not in agreement with the nature of management I would not have signed the same without a “comeback” clause.

[ 15 ] The comeback clause is a normal and usual feature of a CCAA process until its conclusion in order to provide for orderly management. In my view this is all the more the case in this instance since the claim in the subject action is the major asset of the Applicant in the CCAA proceeding.

[ 16 ] My reasons of September 12, 2012 reflects a recognition that there would be ongoing dispute about the nature and scope of production and discovery from the Settling Defendants.

[ 17 ] What I had not expected and now appears to be the case is that Hollinger and the Settling Defendants seek to rely on a “line in the sand” test of Rules 30 and 31 as opposed to what I addressed in paragraphs 108-112 which anticipated ongoing practical management.

[ 18 ] I am satisfied that the only way that the underlying premise of the settlements approved can be effective is with the kind of management and direction that is envisaged in a comeback clause.

[ 19 ] To condemn the action to the kind of formalized motion culture without judicial supervision that is too often the hallmark of civil litigation would undermine the premise for approval of the settlements in the first place.

[ 20 ] The orders signed will be amended to include the following language:

“THIS COURT ORDERS that any affected party may apply to the Court for directions in respect of the ongoing process that the Court will continue to supervise”.

C. CAMPBELL J.

Released: December 11, 2012