Court File and Parties
Court File No.: CV-21-656040-00CL Date: 2022-10-14 Superior Court of Justice - Ontario
Re: IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY
Applicant
Before: Chief Justice G.B. Morawetz
Counsel: Ashley Taylor, Ben Muller and Maria Konyukhova, for the Court-appointed Monitor Ernst & Young Inc. D.J. Miller, Derek Harland and Mitch Grossell, for the Applicant Mitch Stephenson, Toronto-Dominion Bank Matthew Lerner, for the Board of Governors of Laurentian University Andrew Hatnay, for Thorneloe University
Heard: October 12, 2022
Endorsement
[1] Thorneloe University (“Thorneloe”) has brought a motion pursuant to paragraph 38 of the Claims Process Order dated May 31, 2021 for an order directing the Monitor to engage in a mediation before a Court-appointed Mediator in connection with the appeal of the decision of Claims Officer Ortved dated September 8, 2022. Claims Officer Ortved denied Thorneloe’s Loss of Commercial Value claim in valuing that claim at $0.00, relating to Laurentian University’s (“LU”) disclaimer of the Federation Agreements.
[2] In the alternative, Thorneloe seeks an order allowing the appeal from the decision of the Claims Officer.
[3] This endorsement solely addresses the request of Thorneloe for the court to direct a mediation. The merits of the appeal were not addressed at the hearing and this endorsement does not address the merits of the appeal.
[4] The Claims Process Order sets out the process to be followed by parties wishing to submit a claim in these proceedings. On July 30, 2021 Thorneloe submitted a Proof of Claim. Thorneloe advised that it had retained an independent expert to provide a report on the loss of its commercial value claim and subsequently, on December 17, 2021, Thorneloe submitted the expert evaluation report of Glenn Bowman, C. B. B. (the “Bowman Report”) that valued Thorneloe’s Loss of Commercial Value claim at $9.8 million.
[5] On May 25, 2022, the Monitor delivered its Notice of Revision or Disallowance, disallowing Thorneloe’s Loss of Commercial Value claim, as well as a claim for costs incurred by Thorneloe.
[6] The Monitor allowed Thorneloe’s severance pay claim for $1,481,673 that it paid to its employees and a claim for “separation” costs in the amount of $100,000.
[7] On June 8, 2022, Thorneloe delivered its Notice of Dispute of the disallowance.
[8] A hearing in writing proceeded before Claims Officer Ortved. On September 8, 2022, the Claims Officer released his decision upholding the Monitor’s disallowance of Thorneloe’s Loss of Commercial Value claim and the costs claim.
[9] On September 19, 2022, Thorneloe filed an appeal to this Court appealing the Claims Officer’s decision.
[10] At no time prior to the return of this motion did Thorneloe request a case conference or bring any motion to request that the court direct a mediation.
[11] Thorneloe puts forth four reasons why the court should direct the Monitor to attend a mediation.
A. The Bowman Report supports a Loss of Commercial Value Claim – it is not a frivolous or unsupported claim.
B. The assistance of a mediator is necessary for the parties.
C. A mediated resolution would save costs and time; and
D. A mediation would not derail or imperil LU’s CCAA plan nor its implementation.
A. The Bowman Report Supports a Loss of Commercial Value Claim – It is Not a Frivolous or Unsupported Claim
[12] For the purposes of determining this motion, I accept that the claim of Thorneloe is not frivolous.
B. The Assistance of a Mediator is Necessary for the Parties
[13] Thorneloe contends that the Monitor has rejected its claim outright and the parties are at an impasse and that, in this dynamic, it is just and fair that the court directed the Monitor to attend a mediation of the parties to try to settle Thorneloe’s claim.
[14] I do not accept this submission.
[15] There is a process in place to determine Thorneloe’s claim. It is set out in the Claims Process Order. Thorneloe has filed its claim. The Monitor delivered a Notice of Revision or Disallowance. Thorneloe delivered its Notice of Dispute of the Disallowance. A hearing was held before the Claims Officer. The Claims Officer upheld the Monitor’s disallowance of Thorneloe’s claim. Thorneloe has filed an appeal to the Superior Court appealing the disallowance. The appeal has yet to be heard. In my view, it is not necessary for the parties to attend a mediation. The issue can be determined through the existing process.
C. Mediated Resolution Would Save Costs and Time
[16] In my view, it is pure speculation to suggest that a mediated resolution will save costs. In preparing for a mediation, it is likely that the parties will have to brief the same issues that will be argued on the appeal. With respect to the saving of time, the schedule for the hearing of the appeal suggested by Thorneloe calls for the appeal to be heard during the week of November 7. The appeal cannot be heard that week but has been scheduled for the following week. The saving of time is not significant.
D. The Mediation Would Not Delay or Imperil LU’s CCAA Plan nor its Implementation.
[17] For the purposes of determining this motion, I accept that a mediation would not delay plan implementation. This is largely due to the fact that the appeal hearing is scheduled for November 18, 2022.
OTHER FACTORS
[18] In oral submissions, Thorneloe put forth the argument that appellate courts in both Québec and Ontario have, in certain circumstances, directed matters to mediation while an appeal was pending. However, no authority was cited for the proposition that such directions have been made in circumstances where one or more parties did not agree to the mediation.
[19] Further, the Monitor states that nothing in the discussions held by the parties nor the decision of the Claims Officer leads the Monitor to believe that a mediation of Thorneloe’s appeal will lead to a consensual settlement. The Monitor also contends that Thorneloe has not identified any change in circumstance or other reason to expect that a mediation might be successful at this stage.
[20] The Monitor also contends that the Claims Process Order does not provide for a mediation process of individual claims and that was a deliberate choice. The Monitor submits that the Claims Process Order is intended to provide for the streamlined resolution of all claims, and that purpose would be entirely upended if all creditors could demand a mediation process for their individual claim. I accept this submission.
[21] Thorneloe also contends that the Mediator Appointment Order provides the court with the authority to direct a court-appointed mediation. The Mediation Appointment Order was made very early on in the CCAA proceedings when Laurentian was facing a significant liquidity problem and had to resolve many issues relating to its restructuring of academic programs, the collective agreement between Laurentian and its primary labour union, and the Federated Universities model. Although the scope to appoint a mediator in the current circumstances may exist, I do not find it appropriate to do so. The Mediation Appointment Order was intended to facilitate out-of-court resolution of various restructuring initiatives and not the resolution of individual claims. The resolution of individual claims is more properly addressed through the Claims Process Order.
[22] The request of Thorneloe to have a court ordered mediation has been made very late in the day. In my view the request should have been made on or shortly after May 25, 2022, the day when the Monitor delivered its Notice of Revision or Disallowance, or at the latest, after Thorneloe delivered its Notice of Dispute of the Disallowance. Instead, Thorneloe delayed in bringing forth this request until a determination on the merits of its claim had been made by Claims Officer Ortved. In these circumstances, I do not find it to be appropriate to compel the Monitor to engage in a mediation of an issue that has already been determined in its favour, albeit pending appeal.
DISPOSITION
[23] The request of Thorneloe for a court directed mediation of this issue is denied. The appeal is scheduled for Friday, November 18, 2022 at 9 a.m. In the intervening time period, the parties, if they so wish, can explore the possibilities of a resolution of this matter. This can be done without the involvement of the court appointed mediator.
Chief Justice G.B. Morawetz
Date: October 14, 2022

