Category: Creditors’ Remedies Page 1 of 2

What Are “Unrelated Assets” When It Comes to Environmental Reclamation Obligations? The Lending Industry Needs to Know

On November 15, 2023

In Corporate / Commercial, Creditors’ Remedies, Environmental, Insolvency, Oil & Gas

By: Jassmine Girgis

Case Commented On: Mantle Materials Group, Ltd v Travelers Capital Corp, 2023 ABCA 302 (CanLII)

PDF Version: What Are “Unrelated Assets” When It Comes to Environmental Reclamation Obligations? The Lending Industry Needs to Know

In recent years, the courts have seen many cases dealing with unfunded environmental reclamation obligations. Although these obligations have long raised issues, the Supreme Court of Canada’s decision in Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 (CanLII) (“Redwater”) commenced a new era for determining the priority for environmental end-of-life obligations in Canadian insolvencies (see my earlier post on Redwater, Lessons from Redwater: Disregard the AbitibiBowater Test and Legislate Super Priority for the Regulator).

The Oppression Remedy Tests: Oppression v Unfair Prejudice & Unfair Disregard

By Jassmine Girgis

On October 31, 2022

In Creditors’ Remedies, Remedies

By: Jassmine Girgis

Case commented on: Wisser v CEM International Management Consultants Ltd, 2022 ABQB 414 (CanLII)

PDF Version: The Oppression Remedy Tests: Oppression v Unfair Prejudice & Unfair Disregard

This blog broadly addresses how creditors can utilize the oppression remedy. It includes a specific discussion on the three tests in the oppression remedy. It will not address the issue of severance.

A Generalized Duty of Good Faith Applied to Disclaimer Under the CCAA

By Jassmine Girgis

On June 1, 2021

In Creditors’ Remedies

By: Jassmine Girgis

PDF Version: A Generalized Duty of Good Faith Applied to Disclaimer Under the CCAA

Case Commented On: Laurentian University v Sudbury University, 2021 ONSC 3392 (CanLII)

In this case, the court considered the new generalized duty of good faith in relation to setting aside a disclaimer under the Companies’ Creditors Arrangement Act, RSC 1985, c C-36 (CCAA). When Laurentian University (LU), sought to disclaim agreements with the University of Sudbury (Sudbury) as part of its restructuring, Sudbury brought this motion to set the disclaimer aside, arguing that LU was using the CCAA restructuring process for a collateral or illegitimate purpose, namely to destroy a competitor (at paras 22—24). Sudbury argued that LU’s attempt to disclaim these agreements was a violation of its duty to act in good faith as per s 18.6. Concurrent to this motion, Thornloe University (Thornloe) also brought a motion against LU, dealing with the same issue – to set aside a disclaimer – using similar good faith arguments (Laurentian University of Sudbury, 2021 ONSC 3272 (CanLII) [Laurentian University]). Each motion was dismissed.

Must Creditors be “Analogous to Minority Shareholders” to Obtain Standing for Oppression?

By Jassmine Girgis

On February 17, 2021

In Contracts, Creditors’ Remedies

By: Jassmine Girgis

PDF Version: Must Creditors be “Analogous to Minority Shareholders” to Obtain Standing for Oppression?

Case Commented On: Pricewaterhouse Coopers Ltd v Perpetual Energy Inc, 2021 ABCA 16 (CanLII)

A creditor seeking an oppression remedy must qualify as a “proper person” to make an application. While deciding whether to grant standing, courts have at times maintained that a creditor must be in a position analogous to a minority shareholder. In Pricewaterhouse Coopers Ltd v Perpetual Energy Inc, 2021 ABCA 16 (CanLII) (Perpetual Energy), the Alberta Court of Appeal objected to the shorthand of that analogy while appearing to confirm its substance. This post will address when and how creditors can get complainant status under the oppression remedy, and the effect of the comment in Perpetual Energy on that understanding.

Section 6 of the Federal Interest Act is Obsolete

By Jonnette Watson Hamilton

On August 20, 2015

In Creditors’ Remedies

By: Jonnette Watson Hamilton

PDF Version: Section 6 of the Federal Interest Act is Obsolete

Case Commented On: David v Premiere Canadian Mortgage Corporation, 2015 ABQB 505 (CanLII)

In this decision, Justice Robert A. Graesser makes an interesting policy argument about section 6 the Interest Act, R.S.C. 1985, c. I-15, using it to bolster his conclusions about the application of the doctrine of precedent. As a result, this decision is useful for teaching about precedents, the principle of stare decisis, and how to use policy in making legal arguments. This decision also illustrates the need for reform of the 135 year old federal Interest Act.

Section 6 of the federal Interest Act provides that if a mortgage is repayable in one of three ways — on a “sinking fund plan”, by blended payments of principal and interest, or involving “an allowance of interest on stipulated repayments” — then the mortgage must contain a statement of the interest payable calculated annually or semi-annually and not in advance. If the mortgage does not contain that statement, then “no interest whatever shall be chargeable, payable or recoverable”. The consequences of not complying with section 6, if it applies, are therefore significant. In this particular case, the interest paid by the Davids, which they were seeking to have returned to them, amounted to more than $83,000. (This was not a mortgage foreclosure case. The Davids had satisfied all of their obligations under the mortgage and were suing the mortgagee for non-compliance with section 6 of the Interest Act.)