On November 8, 2018, in a decision delivered unanimously from the bench, the Supreme Court of Canada confirmed that the Crown’s superpriority over unremitted Goods and Services Tax/Harmonized Sales Tax (GST/HST) is ineffective against a secured creditor who received, prior to a tax debtor’s bankruptcy, proceeds from that taxpayer’s assets.1

One of the most delicate balancing acts that the Courts are asked to perform in Canada is balancing all of the disparate and competing interests in an insolvency process. The Ontario Court of Appeal was asked to review one iteration of this balancing act in Reciprocal Opportunities Incorporated v.

​The Québec Superior Court recently rendered a judgment (Francis v. Adobe 2018 QCCS 2547) confirming that a bankrupt's debt may be declared non-releasable by a discharge order pursuant to section 178 of the Bankruptcy and Insolvency Act (the "Act"), even when said discharge order has not yet been rendered or when the bankrupt's discharge has been suspended or granted conditionally pursuant to section 173 of the Act.

The Pension Protection Fund (PPF) has published guidance on company voluntary arrangements (CVAs), setting out the issues that it expects to be considered and addressed. The new guidance will be relevant to companies who are considering a CVA which could affect a DB pension scheme, and to advisers working with those companies or with pension scheme trustees.

In 2002 the Supreme Court of Canada, in Bank of Montreal v Dynex Petroleum Ltd, 2002 SCC 7 (Dynex) affirmed that gross overriding royalty interests (GOR) could constitute interest in land provided the parties so intended and that intention was sufficiently evidenced in an agreement.

The government has published a consultation paper looking at ways to improve the framework surrounding companies in or approaching insolvency. The policy objective is to reduce the risk of major company failures and their impact on a wider range of stakeholders, including employees and company pension scheme beneficiaries.

The plaintiffs in the underlying action, Art and Wendy Douglas, owned property in Kingston where there was an oil leak in January of 2008. The defendants, who had supplied the oil, sent an environmental clean-up company to remediate the property after being alerted of the leak. The plaintiffs' insurer, State Farm Fire and Casualty Company (the "Insurer"), ultimately indemnified the plaintiffs in full and paid for repairs, remediation, additional living expenses of Mr. Douglas, personal property and related damages totaling more than $800,000.

​Canada v Callidus Capital Corporation

In an article that first appeared in the Winter 2017 issue of RECOVERY, Matthew Tait, Partner at BDO, and Matt Hill, Senior Associate at Osborne Clarke, put together a blueprint for practitioners considering turnaround work.

Spanish Congress debates a legislative proposal (Propuesta de Ley) to reinforce the fight against late payment in response to the European Union demand for the correct implementation of the Insolvency Directive (2011/7/EU). This proposal would establish a penalty system against defaulting companies.