Thomas J. McEwen

DGAP Investments Limited brought a motion seeking a declaration that provisions governing shared facilities and reciprocal easement agreements in a reconveyance agreement with Stelco Inc. had been complied with or were unnecessary, or alternatively, for court approval of its proposed easement agreement.

This dispute arose within the ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings involving U.S. Steel Canada Inc. The court dismissed DGAP's motion, rejecting its interpretation that the Reconveyance Date had passed and that easement obligations no longer existed.

The court affirmed its jurisdiction under section 11 of the CCAA to resolve such impasses to ensure the timely completion of the reconveyance.

While acknowledging an impasse, the court declined to impose DGAP's specific easement agreement due to an insufficiently developed record, instead ordering continued negotiations and a future case conference to schedule a motion for a judicial determination of the easement dispute.

The defendants (Moving Parties) sought an order for the issuance of two letters of request to judicial authorities in the Kingdom of Saudi Arabia to compel the examination of two witnesses, Yasir O. Al-Rumayyan and Fahad Nasser Alarfaj.

The Moving Parties argued these witnesses had relevant evidence for their motion to set aside Mareva orders, particularly regarding alleged contradictory positions taken by the plaintiffs (controlled by Saudi Arabia's Public Investment Fund) in this action versus unrelated U.S. litigation (LIV Golf Litigation) concerning PIF's independence from the KSA government.

The motion was unopposed by the plaintiffs.

The court found the proposed witnesses had prima facie relevant evidence and that the requirements under Rules 39.03 and 34.07(2) for examining non-parties and issuing letters of request for witnesses outside Canada were met.

The order for letters of request was granted.

Santokh Mahal sought a declaration that his security interest in Golden Miles Food Corporation's personal property was valid and had priority, securing $2,182,914 in advances.

The Applicant, Skymark Finance Corporation, and the Receiver, KSV Restructuring Inc., opposed the motion.

The court granted Mahal a secured claim for $281,600, representing direct personal advances, but dismissed the remaining $1,901,314 claimed for advances made by corporations controlled by Mahal.

The court found that these corporate advances were not indirect debts secured by Mahal's General Security Agreement due to insufficient documentation and lack of PPSA registration by the advancing corporations.

The Ontario Superior Court of Justice (Commercial List) heard two motions within a long-standing Companies’ Creditors Arrangement Act (CCAA) proceeding concerning U.S. Steel Canada Inc. (now Stelco Inc.).

Stelco Inc. sought approval for a Securities Purchase Agreement (SPA) to acquire the remaining ownership interest in a Land Vehicle from various Stakeholders (employees, retirees, pensioners).

DGAP Investments Ltd., a defendant, brought a cross-motion seeking a strict timetable for the completion of a separate land sale agreement (DGAP Sale Agreement) before the SPA could close, alleging bad faith by Stelco.

The court granted Stelco's motion, finding the SPA beneficial to the Stakeholders by providing immediate monetization and extricating them from ongoing litigation.

DGAP's motion was dismissed, as the court found no evidence of bad faith by Stelco sufficient to delay the SPA, and determined that the SPA and DGAP Sale Agreement were not mutually exclusive.

The court emphasized continued judicial supervision and the Monitor's role in future transactions.

The applicant, FUNG-BC Holdings Ltd., sought a bankruptcy order against Gary Man Kin Ng based on two outstanding debts: a $4 million guarantee and a $5.194 million IIROC financial penalty.

Mr. Ng disputed the guarantee debt, arguing it was covered by a prior settlement agreement and covenant not to sue with Bridging Finance Inc., and brought a cross-motion to dismiss the application as an abuse of process.

The court found the settlement documents unambiguously excluded the $4 million loan, and while the IIROC debt alone wouldn't suffice, it could be considered alongside the valid guarantee debt.

The court dismissed Mr. Ng's motion and granted the bankruptcy order, finding he had committed an act of bankruptcy by failing to meet significant liabilities.

The Attorney General of Canada applied for a winding-up order for the Canadian business of Silicon Valley Bank (SVB) and the appointment of PricewaterhouseCoopers Inc. as liquidator, pursuant to the Bank Act and the Winding-Up and Restructuring Act.

SVB, a U.S. bank with a Canadian branch, became insolvent in the U.S., leading to its assets being transferred to a bridge bank.

The Superintendent of Financial Institutions had taken control of SVB's Canadian assets.

The court found it just and equitable to grant the winding-up order, noting SVB's insolvency and the need to protect Canadian creditors and stakeholders, as the U.S. bridge bank was not authorized to operate in Canada.

The order provides broad powers to the liquidator while ensuring court supervision and protection for stakeholders.

The Applicants, Nordstrom Canada Retail, Inc. and related entities, sought an Amended and Restated Initial Order (AIRO) under the Companies’ Creditors Arrangement Act (CCAA).

The motion, unopposed and supported by the Monitor, requested an extension of the stay period, approval of a Key Employee Retention Plan (KERP) and its associated charge, and increases to the Administration and Directors' Charges.

The court granted the AIRO, finding the stay extension appropriate given the applicants' good faith and diligence in pursuing an orderly wind-down, the KERP reasonable and necessary for restructuring, and the charge increases modest and well-supported.

The defendants brought a motion to discharge Certificates of Pending Litigation (CPLs), alleging the plaintiff fraudulently obtained them by withholding a financial statement from a prior matrimonial file.

The plaintiff brought a cross-motion seeking to dismiss the defendants' motion as an abuse of process.

The court found that the defendants had prior knowledge of the "material and crucial" evidence but consciously chose not to present it at the original CPL motion.

Consequently, the court granted the plaintiff's motion, dismissing the defendants' motion to discharge the CPLs on the basis of abuse of process.

The court also criticized the defendants' litigation strategy and ordered that no further motions could be brought without leave of the Commercial List Team Lead.

The Monitor brought a motion within a CCAA proceeding seeking an order directing Stelco to complete a land severance and convey a parcel of land (the Reconveyance Parcel) to LandCo's nominee pursuant to a Reconveyance Agreement.

Stelco opposed, arguing that LandCo missed timelines in the agreement, entitling Stelco to purchase the land instead, and brought a cross-motion.

The dispute arose after Stelco learned the land was to be sold to a developer for a large residential community near its steel plant.

The court found that Stelco breached the Reconveyance Agreement, as the conditions triggering its right to purchase had not occurred.

The court held that LandCo could waive the requirement for environmental consent and ordered specific performance, requiring Stelco to complete the severance and transfer the land.

The Applicants, a group of retail energy providers under CCAA protection, brought a motion seeking approval of a going-concern sale transaction to be implemented through a reverse vesting order (RVO).

The business is highly regulated and depends on numerous non-transferable licenses across multiple jurisdictions.

The court found that the RVO was the only viable structure to preserve the going-concern value of the business and maintain necessary regulatory approvals.

Applying the Soundair principles and section 36(3) of the CCAA, the court approved the transaction and granted the RVO, along with an order granting the Monitor enhanced powers to implement the transaction.

The moving defendants brought motions to enforce settlement agreements dismissing two construction-related actions without costs.

The plaintiff opposed the motions, arguing the settlements were entered into due to misrepresentations, unconscionability, and misapprehension, and brought a cross-motion to join the actions to separate ongoing litigation.

The court found that a valid settlement was reached and rejected the plaintiff's arguments, noting that the alleged misrepresentations were based on double hearsay and the plaintiff was represented by capable counsel.

The court granted the motions to enforce the settlements and dismissed the cross-motion.

In Phase III and IV of a trial concerning a Share Purchase Agreement, the court determined whether the 'Lower Threshold' used to calculate a deferred payment could be adjusted downwards due to the constructive dismissal of employees.

The court held that the plain wording of the agreement only permitted deductions from the Target EBITDA, not the Lower Threshold, and declined to imply a term.

On costs, the court ordered the plaintiff to repay $124,708.37 in fees advanced for a derivative action, awarded the defendants $10,000 for a production motion, and ordered the parties to bear their own costs for the main actions due to mixed success.

In a CCAA proceeding, the court considered supplementary written submissions regarding the appropriateness of differential consideration offered to unsecured creditors in the proposed Plan.

The court accepted the applicants' submission that the fairness of the differential consideration, which involves providing shares to Term Loan Lenders and cash to General Unsecured Creditors, should be determined at the Sanction Hearing rather than at the Meetings Order stage, given the low threshold for a Meetings Order and the presence of conflicting expert reports.

The Applicants sought an Authorization Order and Meetings Order under the CCAA.

The primary issues in dispute concerned the voting rights and classification of Litigation Claimants, which included uncertified U.S. class actions, a certified Ontario class action, and Texas mass tort claims.

The court held that the Litigation Claimants are creditors entitled to vote, but restricted them to one vote per action to prevent them from overriding other stakeholders on numerosity grounds.

The court also ordered summary proceedings to value their claims rather than accepting the Applicants' proposal to value them at $1.

Finally, the court declined to place the Term Loan Lenders in a separate class from other unsecured creditors, finding sufficient commonality of legal interests.

In the context of CCAA proceedings, the applicants brought a motion to approve a Support Agreement, a Backstop Commitment Letter, and a Meetings Order.

The court approved the uncontested portions of the agreements and the Meetings Order.

The court also determined that there would be two classes of creditors for voting on the Plan: a Secured Creditor Class and an Unsecured Creditor Class, with the latter including Term Loan Lenders and various class action plaintiffs.

The court ordered expedited summary proceedings to value the class action claims and requested supplementary submissions on the differential consideration offered to unsecured creditors.

The Applicants, a group of Just Energy entities under CCAA protection, sought an order authorizing them, as foreign representative, to pursue claims under s. 36.1 of the CCAA (fraudulent preferences and transfers undervalue) in a U.S. Bankruptcy Court adversary proceeding against the Electricity Reliability Council of Texas (ERCOT) and the Texas Public Utilities Commission (PUCT).

ERCOT challenged the foreign representative's standing, arguing that only the Monitor had such standing under a strict reading of s. 36.1(2)(b) of the CCAA.

The court, emphasizing a broad and liberal interpretation of the CCAA and its interplay with the BIA, found that s. 36.1(1) allows for "modifications that the circumstances require." It ruled that allowing the foreign representative to pursue the claims, with the Monitor's support and supervision, was consistent with the CCAA's objectives of facilitating debtor restructuring and benefiting stakeholders.

The court granted the order, allowing the foreign representative to pursue the claims nunc pro tunc, with the Monitor assisting and supervising.

Hazleton Development Corporation, an insolvent company constructing a condominium complex, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA).

The application sought a stay of proceedings, approval of Grant Thornton Limited as Monitor, permission for pre-filing payments to critical trades, approval of a Debtor-in-Possession (DIP) financing facility, an administration charge, and a directors’ charge.

The court granted the initial order, finding the company met the CCAA's statutory requirements, the stay was appropriate for a 10-day period, the Monitor was qualified, pre-filing payments were beneficial to stakeholders, the DIP facility was essential and reasonably necessary, and both the administration and directors’ charges were warranted.

The order was granted without prejudice to the secured creditors' rights for a subsequent hearing.

The applicant sought to overturn an arbitrator's decision assuming jurisdiction over a business dispute between co-tenants of a real estate development project.

The parties were deadlocked on whether the project should include a hotel component.

The arbitrator found he had jurisdiction under a broad arbitration clause.

The Superior Court of Justice held that the dispute was a non-legal business decision that did not arise under the agreement, as the agreement required unanimous decision-making and did not provide a standard of review for this type of dispute.

The court set aside the arbitrator's decision, finding he lacked jurisdiction.

The Plaintiffs (Bondfield Construction Company Limited and Zurich Insurance Company Ltd.) brought a motion to stay summary judgment motions initiated by PricewaterhouseCoopers LLP (PwC) in complex professional negligence actions against auditors, which also involved significant fraud allegations and discoverability issues.

The court, acting as case management judge, granted the stay, determining that full documentary and oral discoveries were essential to ensure a fair and efficient process.

The decision highlighted the complexity of the case, the substantial damages sought, the allegations of long-standing fraudulent activities, and the potential for inconsistent findings if the summary judgment motions proceeded on a limited record.

The court emphasized the flexibility of judges in case-managed matters and the necessity of a comprehensive record for a just adjudication of limitation period issues.

The defendants in two related actions sought orders to compel the plaintiffs, Andrew Stronach and Selena Stronach, to undergo medical examinations to assess their mental capacities for the purpose of determining if litigation guardians were required.

The court dismissed the motion against Selena Stronach, finding insufficient evidence to rebut the presumption of capacity.

The motion against Andrew Stronach was dismissed without prejudice, as the court found it premature and suggested other discovery avenues should be pursued first.

The court also declined to order production of video recordings of Andrew's examination for discovery.