On October 3, 2013, the Court of Appeal for Ontario issued two significant decisions1 on the interplay between provincial environmental remediation and federal insolvency orders. The cases are of interest to environmental and insolvency lawyers across Canada. They are equally of interest to taxpayers who foot remediation costs shifted through insolvency.

Background

An “Administration Charge” under the CCAA

The Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (“CCAA”) permits a court having jurisdiction over proceedings for the restructuring of an insolvent company to make certain orders, to secure payment of the fees of certain officials involved in those proceedings, including the Monitor of the insolvent company appointed for the restructuring proceeding.

A surprising judgment re the “Administration Charge”

Waterside Management Company Limited v Brendan Kelly and Asta Kelly^[1]

Punj Lloyd Ltd (PLL), the ultimate parent of Simon Carves Ltd (SCL), provided 'letters of support' (what would in North America be called 'comfort letters') indicating to the board of SCL that PLL would 'provide the necessary financial and business support to ensure that [SCL] continues as a going concern'. This is precisely what SCL did not do: it went into administration, leaving invoices unpaid and unsecured creditors largely out of luck.

In a long awaited landmark judgment, The European Court of Justice has today found in favour of ten former Waterford Crystal workers who alleged the Irish State had failed in their obligations to correctly implement European Directive 2008/94EC ('The Directive’) on the protection of employees in the event of the insolvency of their employer.

Yesterday the Minister for Justice, Alan Shatter, and Director of the Insolvency Service of Ireland (“ISI”), Lorcan O’Connor, launched the ISI’s public information campaign, which includes guides to the three new personal insolvency arrangements, its website and an information helpline for queries.

Morris Kaiser’s trustee in bankruptcy, Soberman Inc., thought it smelled a rat: while claiming to be impecunious, Kaiser appeared to be living a life of ‘some means’, which included trips to casinos in the US. Kaiser claimed he was drawing advances on the credit card of a buddy, Cecil Bergman, but the trustee suspected the whole thing was a front to shield Kaiser’s assets from his creditors.

The central question in Rubin v Eurofinance SA, [2012] UKSC 46, was whether the English courts ought to recognise the order or judgment of a foreign court to set aside transactions determined to be preferential or to have been at an undervalue, in circumstances where the defendant in the foreign proceedings was not present in the foreign jurisdiction or had not voluntarily submitted to its courts.

The BLG Monthly Update is a digest of recent developments in the law which Neil Guthrie, our National Director of Research, thinks you will find interesting or relevant – or both.

In Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, the Supreme Court of Canada was called upon to consider whether orders issued by a regulatory body with respect to environmental remediation work are “provable claims” in a proceeding commenced under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36 (the “CCAA”).