CITATION: Cash Store Financial Services Inc. (Re), 2026 ONSC 3421
COURT FILE NO.: CV-14-00010518-00CL DATE: 2026-06-10
ONTARIO SUPERIOR COURT OF JUSTICE
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 THE CASH STORE FINANCIAL SERVICES INC., THE CASH STORE INC., TCS CASH STORE INC., INSTALOANS INC., 7252331 CANADA INC., 5515433 MANITOBA INC., 1693926 ALBERTA LTD. DOING BUSINESS AS "THE TITLE STORE"
Applicants
BEFORE: FL Myers J
COUNSEL: Trevor Courtis and Meena Alnajar, for FTI Consulting Canada Inc., Monitor Dan Murdoch, Sinziana Hennig, and Shannon Jickling, for Cassels, Brock & Blackwell LLP Gerald L.R. Ranking and Jesse R. Harper, for KPMG LLP John Finnigan and James Hardy, for the Litigation Trustee of Cash Store Brendan O’Neill, for the Ad Hoc Committee of Noteholders Paul Jasper, for Computershare Trust Company of Canada Joshua Hearn, for Augusta Pool 4 Canada Limited
HEARD: June 4, 2026
ENDORSEMENT
The Motion
1This motion involves an interpretation of Cash Store’s approved plan of arrangement or compromise and related agreements. It is a case of contract interpretation involving a unique set of contracts.
The Relevant Terms of the Plan
2Under s. 6.4 (d) of the Plan, the Monitor is required to distribute funds that it receives to the Secured Noteholders through an account referred to as, “Subsequent Cash on Hand.”
3Subsequent Cash on Hand is defined to include any cash but excluding funds held in defined reserve accounts. However, once funds are released from the reserves, they are no longer excluded from Subsequent Cash on Hand.
4The Litigation Funding and Indemnity Reserve is one of the reserve funds excluded from the definition of Subsequent Cash on Hand.
5Under s. 6.3 (j) of the Plan, this reserve fund is to pay for the prosecution of the litigation between the Cash Store (represented by the Litigation Trustee), as plaintiff, and each of KPMG, Cassels, Brock, and Canaccord. Cash Store sued each of these professional service firms in a separate action. Except for funding the three pieces of litigation, the funds in the Litigation Funding and Indemnity Reserve are required to be held in trust for the Secured Noteholders and contributed to Subsequent Cash on Hand to be paid out to the Secured Noteholders under s. 6.4 (d) cited above.
The Litigation Funding and Indemnity Reserve
6The Monitor, the Litigation Trustee, the Secured Noteholders, and counsel for Cash Store, as plaintiff in the contemplated litigation against the three professional services firms, constituted the Litigation Funding and Indemnity Reserve by an agreement dated November 5, 2015. The agreement was approved by the court on notice to the professional service firm defendants.
7All parties agree that the agreement constituting the Litigation Funding and Indemnity Reserve is to be read with the Plan.
8The agreement provides that the Litigation Funding and Indemnity Reserve is to be used solely and exclusively to pay for the prosecution of the litigation, to pay or reimburse Cash Store for adverse costs awards, and to satisfy any security for costs orders made against Cash Store in the litigation.
9Para. 8 of the Litigation Funding and Indemnity Reserve agreement provides that the Litigation Trustee may make alternative arrangements for funding the litigation obligations (including paying costs and security for costs).
10The last sentence of that paragraph provides that if such alternative arrangements are implemented, then the Monitor is to pay the remaining funds in the Litigation Funding and Indemnity Reserve to Subsequent Cash on Hand for release to the Secured Noteholders.
11Unless the Litigation Funding and Indemnity Reserve is replaced with alternative funding under para. 8, then paras. 5 and 7 of the agreement require the Monitor to keep the reserve funded appropriately for all litigation costs and to return funds to Subsequent Cash on Hand only after payment of all litigation costs.
12So, unless replaced, the Litigation Funding and Indemnity Reserve is to be paid first to litigation costs (including adverse costs awards and security for costs) before being returned to the Secured Noteholders through the Subsequent Cash on Hand account.
Cash Store Posts Security for Costs
13By order dated June 5, 2017, reported at, 2017 ONSC 3448, I required Cash Store to post security for costs in each of the three lawsuits in the amount of $533,333 or $1.6 million in the aggregate.
14On that motion, the professional service firm defendants delivered a chart setting out their predicted costs of the full proceedings. I mentioned in my endorsement that the defendants predicted that they would incur aggregate costs of more than $10 million for all three actions.
15I made no finding on the defendants’ total costs nor recognizing the $10 million figure asserted by the defendants. Rather, as is customary, I made an order for staged posting of instalments of security as the actions progressed.
16The defendants’ chart set out the aggregate amount of $1.846 million for the first three steps in the litigation. I reduced that amount to $1.6 million and then divided that amount among the three actions.
17I found that further security should be posted before examinations for discovery and then again before the pretrial conference. I left the amounts of the future instalments of security for costs to negotiation among the parties or orders of a judge if required.
The New Funding Agreement for Augusta
18In 2021, the Litigation Trustee, Cash Store, the Monitor, and their respective counsel obtained additional funding for the litigation from Augusta Pool 4 Canada Limited.
19The terms applicable to this new funding are contained in a funding agreement among those parties dated September 8, 2021.
20The new funding agreement was approved by the court on notice to the professional service firm defendants. It too must be read with the Plan.
21Under the new funding agreement, Augusta agrees to pay up to $8.5 million in costs orders in favour of the three professional service firm defendants from and after the date of the CCAA plan approval.
22The new funding agreement amends the terms of the prior agreement governing the Litigation Funding and Indemnity Reserve. Moreover, the new funding agreement provides that in the event of conflict between the two agreements, the new litigation funding agreement governs.
23Para. 3.4 of the new agreement provides that where sums already posted for security for costs are released by the court, they are to be paid entirely to Cash Store for distribution to its stakeholders.
24Para. 2.5.2 of Schedule “A” to the new agreement provides that Augusta will pay “Court Ordered Costs.” That term is defined in the same Schedule to include both costs orders and orders requiring Cash Store to post security for costs.
25The new agreement also adds a para. 8A to the prior Litigation Funding and Indemnity Reserve agreement. The new added term says :
8A. The parties acknowledge and agree that the [New] Litigation Funding Agreement satisfies the criteria for the alternative arrangements contemplated by paragraph 8 of this Agreement and, for such time as the [New] Litigation Funding Agreement remains in force, paragraph 7 of this Agreement shall have no force or effect.
26The parties were clear and precise that the new agreement is an alternative funding agreement as contemplated in the Litigation Funding and Indemnity Reserve agreement. During the hearing of this motion, there was some debate about whether the new agreement met all the conditions of the Litigation Funding and Indemnity Reserve agreement which requires a new funding agreement to provide for all “Litigation Obligations.” That term is defined in para. 1 (b) of the Litigation Funding and Indemnity Reserve agreement to consist of Cash Stores’ costs, its liability for adverse costs awards, and to post security for costs.
27The new funding agreement qualifies as an alternative funding agreement under para. 8 of the original Litigation Funding and Indemnity Reserve agreement. On review of the definition of “Court Ordered Costs” in the new funding agreement, it is apparent that the new agreement does provide for payment of both costs awards and security for costs. A separate facility is provided by Augusta to fund the plaintiff’s own litigation costs
28Para 8A added to the Litigation Funding and Indemnity Reserve agreement by the new funding agreement leaves no doubt. It is an alternative form of funding that replaces the prior funding agreement.
29As a result, the Litigation Trustee was no longer bound by the obligation to keep the Litigation Funding and Indemnity Reserve funded for all costs liabilities under para. 7 of the old agreement. Rather, Augusta’s funding obligations replace the reserve (except to the extent that reserve continued to hold $325,000 as recognized in the new funding agreement).
30There could be a conflict between para. 3.4 of the new agreement and para. 5 of the initial Litigation Funding and Indemnity Reserve agreement. The conflict concerns what happens if funds posted for security for costs are released. Under para. 5 of the Litigation Funding and Indemnity Reserve agreement, the Monitor may only return funds from the reserve through Cash on Hand to the Secured Noteholders after payment of costs orders. But para. 3.4 of the new funding agreement provides that when security for costs is released by the court, the funds are to be paid to Cash Store for distribution to stakeholders.
31And that is the subject matter of this motion.
Facts
32Just before trial, Cash Store settled with Canaccord. The remaining security for costs that had been posted for that action has been released back to Cash Store. It was not deposited into the Litigation Funding and Indemnity Reserve. There was no requirement for that to be done. Moreover, on the motion approving the settlement and the release of the security for costs, neither KPMG nor Cassels, Brock asked for the funds to be paid to them or held for them. At that time, the trial had not yet been held.
33The trial of the actions against KPMG and Cassels, Brock was then held last year. By judgment dated October 14, 2025, Black J. dismissed both claims at 1511419 Ontario Inc. (formerly known as The Cash Store v. KPMG LLP, and Canaccord Genuity Corp., and Cassells Brock & Blackwell LLP, 2025 ONSC 5796.
34In a further decision dated November 18, 2025, reported at 2025 ONSC 7176, Black J. awarded the costs of the actions to the defendants KPMG and Cassels, Brock.
35Black J. ordered Cash Store to pay costs of $5,569,377.65 to Cassels, Brock and $8,556,303.00 to KPMG. The aggregate of these costs awards far exceeds the $8.5 million funding for costs that Cash Store’s Litigation Trustee obtained from Augusta.1
36On consent, Black J. ordered the amounts still held as security for costs for KPMG and Cassels, Brock with accrued interest to be released to those successful defendants.
37Today, Cassels, Brock and KPMG ask the court to require the Monitor to pay them the piece of security for costs that was released to Cash Store in relation to the settled Canaccord action. They submit that under the Plan and the two ancillary funding agreements, their costs must be paid before sums are released to the Secured Noteholders.
The Successful Defendants’ Submissions
38KPMG and Cassels, Brock focus on s. 7.5 of Cash Stores’ Plan as sanctioned by the court. It provides, in part:
Notwithstanding anything else to the contrary in this Plan, nothing in this Plan precludes the Remaining Defendants from asserting:…(e) claims for legal costs against the Applicants in respect of their defences of the Remaining Estate Actions, provided that the validity, effect and priority of any such claims will be determined by the CCAA Court.
39KPMG and Cassels, Brock submit that they have priority claims to costs as a post-filing claim under the CCAA. They submit further that the claims trump the secured claim of the Secured Noteholders because the Plan also provides that all security is released by the Plan. The Secured Noteholders take under the Plan rather than by dint of their security.
40Since the costs claims take priority notwithstanding anything else in the Plan, the successful defendants submit that the Canaccord funds in the hands of Cash Store must be paid to them.
41Mr. Murdoch submits further that the terms of the original Litigation Funding and Indemnity Reserve agreement continue to apply to the release of the original security for costs. Why else was that agreement kept alive? He submits that the quantum of security for costs ordered of $1.6 million plus the $8.5 million funded by Augusta provide the $10 million initially sought by the Defendants. Therefore, he postulates, there are two separate regimes in play: the Litigation Funding and Indemnity Reserve agreement for dealing with the security for costs posted in 2017, and the new funding agreement dealing with events subsequent to its execution in 2021.
42Mr. Murdoch puts weight on the fact that para. 3.4 of the new funding agreement that require funds released from security for costs to be paid to Cash Store for “stakeholders” confirms his argument. The essence of the clause, he submits, is to keep the funds posted as security for costs out of the mechanisms set up to deal with funding payable by Augusta and repayable to it.
43Mr. Murdoch puts weight on the fact that para. 3.4 speaks of paying the funds to “Cash Store” for “stakeholders” rather than to the “Monitor” for treatment as Subsequent Cash on Hand. He submits that the new funding agreement would have used the latter terminology if it meant that funds released from security for costs were to go to the Secured Noteholders. Instead, he submits, it allows for Cash Store to pay the funds as costs to the successful defendants who remain “stakeholders” given the generic meaning of that term.
Analysis
44In my respectful view, as clever and creative as Mr. Murdoch’s submissions are, they cannot overcome the plain and ordinary meaning of the words used in the Plan and the subsequent agreements.
45The obligations under the Litigation Funding and Indemnity Reserve agreement have been replaced by the new funding agreement. The two regimes were not both kept ongoing. If para. 5 of the Litigation Funding and Indemnity Reserve agreement requires funds released from posted security for costs be paid to the Secured Noteholders, then it is in conflict with para. 3.4 of the new funding agreement that requires those funds to be paid to Cash Store for stakeholders.
46The new agreement is also explicit that in cases of inconsistency, its terms trump the prior agreement.
47But there are more reasons to prefer the Monitor’s position than that. First, the notion that the amount of funding obtained from Augusta of $8.5 million was meant to be read in addition to and separate from the $1.6 million in security already posted so as to reach the $10 million claimed by the defendants in 2017 cannot be accepted as a basis for interpretation of either agreement. As I said above, the $10 million figure was an approximation or prediction of future costs made by the defendants for security for costs purposes in 2017. It was not accepted as a fact or reliable. There was no finding of a maximum or full amount of the defendants’ costs of the proceedings. I did not order the $10 million figure to be used for calculating security for costs then or for future instalments of security for costs. I based the first instalment on the pieces of the chart that were largely already historical and even then I adjusted it for reasonableness.
48Since 2017, Canaccord settled and the costs of the remaining two defendants exceed $13 million due to enhanced entitlement found due by Black J. Giving credence or a status to the $10 million prediction from 2017 is not warranted. It is not a recital in the funding agreement. There is no evidence that it played any role at all in the funding deal with Augusta. I do not interpret the two regimes as separate or not separate as a result of the $10 million costs prediction. It is a red herring.
49Second, there is actually no inconsistency between pars. 5 of the original Litigation Funding and Indemnity Reserve agreement and para 3.4 of the new funding agreement with Augusta. Para. 5 speaks of paying funds out of the reserve account. The funds posted as security for costs came out of the reserve account in 2017 when they were paid into court as ordered. Nothing required that they go back into the reserve on the security for costs being released. And they did not go back into the reserve. The funds went to Cash Store pursuant to an order of the court obtained on notice to the professional service firm defendants.
50Para. 5 of the Litigation Funding and Indemnity Reserve agreement has no application to the release of security for costs by the court after the litigation is over. Security for costs posted in court is not “any amount remaining in the LFIR Account,” as set out in para. 5.
51It is para. 3.4 of the new funding agreement that expressly deals with security for costs being released by the court. It is the only term that applies.
52Third, there is no basis in law to find that a post-filing claim for costs necessarily has priority over the payments required by the Plan itself. While it is often considered fairer to view post-filing claims as being priority payables, that is because a debtor cannot require people to give it fresh credit while under CCAA protection. However, absent a term of an agreement, a representation, a court order, or perhaps proof of fraud, I am not aware of any basis to grant enhanced priority to post-filing claims generally. See: Pike v. Bel-Tronics Co..
53Finally, while s. 7.5 of the Plan preserves the defendants’ rights to claim costs and to ask the court to determine priority of the claim, I cannot see how or why the priority should be superior to the express terms of the Plan and funding agreements referable to the very funds in issue.
54The successful defendants appeal to the court’s sense of equity. They submit that they have endured and succeeded against very serious allegations made against them and their professional reputations. Black J. was critical of the claims and awarded enhanced costs (although much of that came from the provisions of Rule 49). They submit that the court should not make them suffer the underfunding of Cash Store for litigation by or on behalf of the Secured Noteholders. They submit that the Noteholders should be required to pay the costs of the litigation that was solely for their benefit.
55If I had a general authority to change priorities just because I thought it might be fairer, I still would not do so here. The successful defendants had the authority to come back to the court before discoveries and then again before the pretrial conference to seek more security for costs. They did not need to prove entitlement. I held they were entitled to additional instalments. Nothing limited them to $10 million in total or to any maximum amount as time passed. If a judge required Cash Store to post more money as security than it could obtain from Augusta, it would have been up to the Secured Noteholders to decide if they would support the further funding needed to go to trial. I did not limit the first tranche of security for costs to what I was told was the limit of the funding that was available to the plaintiff at that time either. Allowing a plaintiff to underfund itself would indeed be inequitable.
56The successful defendants had the ability to come back to court, while there were still three of them in the litigation, and obtain fair security for their costs.
57Security for costs was the tool available to balance the structural inequity that I identified in my prior decision. The successful defendants chose not to avail themselves of the relief available to them. Coming back now to seek relief against security that was posted for Canaccord and has already been released is not an equivalent or even a logical substitute in my view.
58Para. 3.4 of the new funding agreement with Augusta calls for such funds to be released to Cash Store for stakeholders. However, the only place to find stakeholder treatment is in the Plan unless the court accepts a separate priority is applicable – which I do not.
59The new litigation funding agreement provided funding for costs and security for costs. It replaced the initial Litigation Funding and Indemnity Reserve agreement except as to the $325,000 that remained in the reserve fund and had to be dealt with. The funds posted for security for costs in 2017 were no longer in the reserve fund in 2021 when the new funding agreement came into force. The new agreement deals explicitly with how the funds posted for security for costs are to be treated if released by the court. They never go back into the Litigation Funding and Indemnity Reserve.
60The submission of the successful defendants requires too many steps to get around the plain wording of the new funding agreement. I have to separate and keep alive the two funding regimes through the $10 million estimate in 2017. But the terms of the agreements make clear that the new funding replaces the original funding regime. Then, I have to find that para. 5 of the Litigation Funding and Indemnity Reserve agreement applies to funds released from the court that do not go back into the reserve and that the section continues to apply despite para. 8A being added to explicitly making the new agreement applicable. Then I have to find that there is a meaningful and intentional difference between the release of funds to the Monitor under the original agreement and to Cash Store under the new funding agreement. But there is no Cash Store except the Monitor operating under Super-Monitor authority. Then I have to find a priority for post-filing costs claims that is not provided for in the Plan or in the general law.
61In interpreting the various documents, I am attracted to a non-legal principle known as “Occam’s Razor.” Occam’s Razor postulates that when presented with competing explanations or hypotheses for the same phenomenon, you should generally prefer the one that makes the fewest assumptions and is the most straightforward. This is such a case.
62When faced with a clear answer on unambiguous wording of documents approved by the court on notice to all, I am not willing or able to search for an alternative that requires me to accept a number of interpretations that simply are not consistent with the facts or the words used.
63Accordingly, I find that funds released from Canaccord’s security for costs are to be treated as Subsequent Cash on Hand under the Plan as asked by the Monitor.
Monitor Fees and Disbursements
64I have reviewed the affidavits delivered on behalf of the Monitor and its counsel. I have skimmed the detailed invoices filed seeking costs from October 1, 2015 to April 26, 2026 (and April 27, 2026 for counsel). The costs come from the recovery that would otherwise be payable under the Plan to the Secured Noteholders. They consent to the costs claimed. On that basis, I find the costs claimed are reasonable and are approved.
Approval of Activities
65The Monitor invites me to review and approve its activities listed in:
i. the Twenty-First Report of the Monitor dated November 16, 2015; ii. the Twenty-Second Report of the Monitor dated May 11, 2016; iii. the Twenty-Third Report of the Monitor dated November 7, 2016; iv. the Twenty-Fourth Report of the Monitor dated November 7, 2017; v. the Twenty-Fifth Report of the Monitor dated November 9, 2018; vi. the Twenty-Sixth Report of the Monitor dated November 6, 2019; vii. the Twenty-Seventh Report of the Monitor dated November 9, 2020; viii. the Twenty-Eighth Report of the Monitor dated October 26, 2021; ix. the Twenty-Ninth Report of the Monitor dated November 9, 2021; x. the Thirtieth Report of the Monitor dated October 26, 2022; xi. the Thirty-First Report of the Monitor dated March 23, 2023; xii. the Thirty-Second Report of the Monitor dated September 20, 2023; xiii. the Thirty-Third Report of the Monitor dated March 18, 2024; xiv. the Thirty-Fourth Report of the Monitor dated October 16, 2024; xv. the Thirty-Fifth Report of the Monitor dated September 25, 2025, and xvi. the Thirty-Sixth Report of the Monitor dated April 29, 2026.
66As joyful and elucidating as the prospect of undertaking the journey of self-educated through sixteen reports sojourning over more than a decade of activities might promise to be, I respectfully decline.
67For reason discussed by Morawetz RSJ (as he then was) in Target Canada Co. (Re), 2015 ONSC 7574, the Monitor seeks approval, “in its personal capacity and only with respect to its own personal liability.”
68The limitation periods for the activities listed in almost all the reports have already expired; in most cases long ago. There is no real concern left for the Monitor’s personal liability. In Target, Morawetz RSJ also discussed the benefits of approving activities in a more general sense:
[23] By proceeding in this manner, Court approval serves the purposes set out by the Monitor above. Specifically, Court approval:
(a) allows the Monitor to move forward with the next steps in the CCAA proceedings;
(b) brings the Monitor’s activities before the Court;
(c) allows an opportunity for the concerns of the stakeholders to be addressed, and any problems to be rectified,
(d) enables the Court to satisfy itself that the Monitor’s activities have been conducted in prudent and diligent manners;
(e) provides protection for the Monitor not otherwise provided by the CCAA; and
(f) protects the creditors from the delay and distribution that would be caused by:
(i) re-litigation of steps taken to date, and
(ii) potential indemnity claims by the Monitor.
69Apart from (e) related to the Monitor’s protection from liability, all the purposes of the approval of activities relate to mechanisms to enhance the efficiency and transparency of the proceedings as they progress in real time. When a Monitor reports on steps and activities in real time, interested parties with a concern are forced to come forward or forever hold their peace. This prevents people from sitting on their rights or from springing concerns about prior steps later at a time when causing delay or complicating the process may be more to their tactical advantage.
70None of the purposes of approving activities in real time apply to approving activities after 10 years have run from plan approval and after the contemplated litigation has ended. There is no point in undergoing the exercise as there is no beneficial purpose to be achieved at this late date. I acknowledge that Monitor’s cost concerns. It says that while the litigation was ongoing among Cash Store and the three professional service firm defendants, there was not much to report. Then there is not much worth approving either.
71In addition to the limitation periods, the Monitor has protections in its appointment order, in the CCAA, and in the release it seeks as part of its discharge below. I cannot see how approving an old list of generally expressed activities will materially or practically add anything to the level of the Monitor’s protection. It will do nothing to promote the efficient management of the proceeding.
Discharge
72After one last motion, dealing with the scope of liability of Augusta as I understand it, the Monitor will be in a position to make the final distributions under the Plan. It asks for approval of the distributions in the priorities and quantum’s recognized today and in the next order and then a mechanism to terminate the CCAA proceeding without the need for a further motion. The termination will also include discharges of the Monitor and the Litigation Trustee.
73The remaining motion will let the Monitor conclude the calculations to make the final distributions. I see no reason to require it to bring yet another motion after that.
74The release of the Monitor and counsel in a discharge order is routine. Often it is just a reiteration of the limited liability terms already applicable from the initial CCAA order and the statute. There is a salutary effect to repeating those terms in the discharge order for those who may not know to look elsewhere before considering suing.
75The release of the Monitor on its discharge, it seems to me, is different than granting broad third-party releases as I am asked here. While I am concerned about the scope of third-party releases in a discharge order – as opposed to a plan approval – none of the Secured Noteholders or successful defendants raised a concern. Realistically, they are the only people affected in the last many years. The releases remain subject to wilful misconduct and gross negligence exceptions. Moreover, they did not purport on their face to release any claims for fraud. I see them as largely inconsequential but perhaps symbolically important to the releasees after living through this lengthy and, at times difficult, process.
76Order signed as asked except for para. 3 regarding approval of the Monitor’s activities that I have crossed out.
FL Myers J
Date: June 10, 2026