Sean F. Dunphy

In an insolvency appeal, the Court addressed when environmental remediation orders issued by a provincial regulator constitute provable monetary claims under the Companies’ Creditors Arrangement Act.

The majority held that orders not framed in monetary terms may still be compromised where the statutory and factual context shows sufficient certainty that compliance will ripen into a financial liability to the regulator.

Applying that framework, the majority found the remediation orders fell within the claims process and dismissed the appeal.

The dissenting judges would have required evidence approaching certainty that the province would itself perform remediation before treating most orders as contingent monetary claims.

Following dismissal of a commercial action, the successful defendant sought substantial indemnity costs after making a Rule 49 offer to settle.

The court held that where a defendant’s settlement offer involves payment and the action is dismissed entirely, Rule 49 does not automatically permit substantial indemnity costs.

Relying on appellate authority limiting earlier jurisprudence, the court concluded substantial indemnity costs are only appropriate where egregious conduct is demonstrated.

While the defendant’s legal rates were reasonable, the court found some time spent excessive.

Applying the factors in Rule 57.01, the court fixed a reduced partial indemnity costs award including disbursements.

The respondent entered into a Tax Refund Agreement with Grant Forest Products Inc. (GFPI) to purchase income tax refunds.

GFPI failed to deliver the required transfer document before seeking CCAA protection.

The motion judge applied the equitable maxim that equity considers done what ought to be done, declaring the transfer had taken place.

The appellant, representing secured lenders, appealed.

The Court of Appeal dismissed the appeal, holding that the motion judge correctly applied the maxim to cure GFPI's breach and that doing so did not inequitably rewrite the contract or create an unlawful preference.

The applicants, minority shareholders of MI Developments Inc. (MID), brought applications under sections 104 and 127 of the Securities Act alleging that MID failed to comply with Multilateral Instrument 61-101 (MI 61-101) by not obtaining minority shareholder approval for a series of related party transactions with Magna Entertainment Corp. (MEC).

The transactions included loans, loan extensions, and debtor-in-possession financing.

The Ontario Securities Commission dismissed the applications, finding that section 104 does not apply to related party transactions.

While the Commission permitted the applications under section 127, it concluded that MID was entitled to rely on the downstream transaction exception and the market capitalization exemption under MI 61-101.

The Commission also found no prima facie case of insider trading in connection with a related trust transaction.

The appellant appealed an order of the Superior Court of Justice.

The Court of Appeal agreed with the reasons of the lower court judge and dismissed the appeal.

Costs were awarded to the respondents in the fixed amount of $5,000.

In a complex CCAA restructuring of Stelco Inc., four appeals were brought regarding the distribution of assets among creditors.

The Court of Appeal upheld the motion judge's findings that Senior Debt Holders could enforce subordination and turnover provisions against Noteholders via trust principles, and that post-filing interest was payable.

However, the Court reversed the motion judge on two key issues: it found that a massive IT outsourcing contract was not in the 'ordinary course of business', thereby elevating its assignee to Senior Debt status, and it ruled that the distributed securities must be valued at the 'Plan value' ($5.50 per share) rather than the post-emergence market value.

In the context of Air Canada's CCAA restructuring, the appellant sought leave to appeal an order approving an equity investment agreement with Trinity Time Investments Limited and denying an adjournment to consider a competing proposal.

The Court of Appeal dismissed the motion for leave, finding no error in the supervising judge's decision to approve the agreement, which contained a 'fiduciary out' clause allowing the board to consider superior proposals.

The court held that the test for leave to appeal in CCAA proceedings—requiring serious and arguable grounds of real and significant interest—was not met.

Following a decision affirming the Superintendent's Notice of Proposal regarding a partial wind-up report, the interested party sought an award of costs against the company.

The interested party argued that the company was wholly unsuccessful and caused unreasonable delays by advancing frivolous positions.

The Tribunal dismissed the request for costs, finding that the company's arguments were reasonable and necessary for the hearing, and that its conduct was consistent with its fiduciary duty as plan administrator.

The applicant company initiated a voluntary partial wind-up of its pension plan following a plant closure and restructuring.

The company excluded its former President and CEO from the wind-up group, arguing he was terminated for cause following a corporate takeover, not as a result of the plant closure.

The Superintendent of Financial Services issued a Notice of Proposal refusing to approve the wind-up report unless the former executive was included.

The Financial Services Tribunal affirmed the Superintendent's proposal, finding that the executive was terminated during the defined partial wind-up period and the company failed to demonstrate his termination was not a result of the restructuring.

The Tribunal also rejected the company's argument that the Superintendent was functus officio.

The appellant appealed the dismissal of his claims regarding the distribution of proceeds from two estate-freeze trusts.

The appellant was a potential beneficiary, but the trustees exercised their broad discretion to deny him any benefit.

The appellant argued there was a triable issue of breach of trust and fraud on a power.

The Court of Appeal dismissed the appeal, finding no triable issue of breach of trust given the trustees' broad discretion.

The Court further held that even if the distribution were set aside for fraud on a power, the trustee would retain discretion and had made it clear he would not exercise it in favour of the appellant.

The appellant appealed the dismissal of its negligent misrepresentation action arising from purchases of Confederation Life commercial paper through the respondent bank.

The court held that, in the context of dealings between sophisticated commercial parties, the bank's duty of care was limited to accurately supplying the specific information requested in the quoting exercise, not broader investment-related information.

The court further held that stating the D.B.R.S. rating as R1 low was not inaccurate or misleading merely because the rating had been placed under review with negative implications.

The appeal was dismissed with costs.