COURT OF APPEAL FOR ONTARIO

CITATION: Mehedi v.
    2057161 Ontario Inc., 2015 ONCA 670

DATE: 20151006

DOCKET: C59772

Cronk, Lauwers and van Rensburg JJ.A.

BETWEEN

Golam Mehedi

Appellant

and

2057161
    Ontario Inc. (c.o.b. Job Success), M.A. Hameed,

Wendell
    Lacombe and Dale Smith

Respondents

Golam Mehedi, acting in person

Ranjan K. Agarwal and Joseph Marcus
appearing as
amicus curiae

Dale Smith, acting in person and as agent for all
    respondents

Heard: September 4, 2015

On appeal from the order of Justice Kevin Whitaker of the
    Superior Court of Justice, dated November 21, 2014.

Lauwers J.A.:

[1]

The motion judge refused an order under rule 59.06 of the
Rules of
    Civil Procedure
, R.R.O., 1990, Reg. 194 permitting the appellant to lead
    new evidence after the dismissal of his claim by the trial judge. The evidence,
    if accepted, could cast doubt on the veracity of the testimony of the
    respondents on which the trial judge relied. The circumstances are most
    unusual. For the reasons set out below, I would allow the appeal.

The Trial Decision

[2]

According to the appellant, the respondents, operating as Job Success,
    promised to find him a job paying $70,000 per year within two months; he paid
    them a fee of about $3,700.  He sued when they were unable to find him the job.

[3]

The trial judge dismissed the case for oral reasons given on June 23,
    2011. He accepted the trial testimony of the respondents Hameed and Lacombe,
    whom he found to be credible witnesses. He stated: On the evidence before me,
    there is no basis for a finding that Job Success or any of the defendants made
    any promises or commitments to Mr. Mehedi that they did not fulfill.

[4]

The trial judge added:

Mr. Mehedis understanding of the commitment he claims they
    made to him is not supported by any independent evidence and, in my view, it is
    unrealistic and unreasonable under the circumstances.  Although Mr.  Mehedi
    may honestly believe he was given the commitment he testified he had received,
    there is no reasonable basis for his belief and it is not supported by either
    the
viva voce
or documentary evidence.

[5]

The trial judge specifically found there was never a promise to find
    the plaintiff a job within any specified time frame or at any specified salary
    range.

[6]

This court dismissed  the appellants appeal from the trial judgment by
    way of endorsement on January 23, 2012:
Mehedi v. 2052761 Ontario Inc.
,
    2012 ONCA 46.

The Proposed New Evidence

[7]

Shortly after this courts decision, the CBC broadcast an episode of the
    television program
Marketplace
, which put into question the evidence
    given by the respondents at the trial.  The appellant moved before this court for
    directions on the procedure for introducing fresh evidence, since the trial
    decision had been upheld on appeal.  In his ruling on the motion, Juriansz J.A.,
    sitting in chambers, explained the situation, at paras. 5-6:

On February 17, 2012, the CBC broadcast an episode of
Marketplace
titled "Recruitment Rip-off".
Marketplace
, using hidden
    cameras, purports to expose how a recruitment agency, carrying on business as
    "Toronto Pathways", exploits vulnerable unemployed persons by
    promising to find them good jobs in exchange for fees. The clients shown in the
    program are mainly unemployed immigrants newly arrived in Canada. The program
    shows Dale Smith acknowledging that "Toronto Pathways" and "Job
    Success" are the same business. Mr. Smith, the owner, states, "It is
    the same corporation. Same address. Brand marketing is the only reason for the
    change.... Brand marketing just allows a fresh market approach." The
    program states that the company has changed business names five times in seven
    years.

The program purports to show company officials unequivocally
    promising prospective clients that they will be provided good jobs to induce
    them to enter contracts. The defendant Mr. Lacombe is shown being asked by a
Marketplace
staffer, "So you're basically guaranteeing me that I'm going to get a
    job?", and responding, "Absolutely. And we are very good at it."
    The witness Mr. MacKay is also shown in the program. The program also shows
    numerous other individuals who make essentially the same allegations as Mr. Mehedi.

See
Mehedi v. 2057161 Ontario Inc. (c.o.b. Job
    Success)
, 2014 ONCA 604.

[8]

Justice Juriansz directed the appellant to bring a motion to adduce
    fresh evidence and re-open the trial. Since the trial judge had declined to
    hear the motion because he had been assigned to criminal court, Juriansz J.A.
    directed that the motion be brought before a motion judge of the Superior Court
    in the ordinary way. The appellant then brought a motion to introduce as new
    evidence the
Marketplace

report, as well as an article in the
Metro

newspaper recounting similar statements apparently made by the respondent Dale
    Smith, to a reporter who was posing as a Job Success customer.

The Motion Judges Decision

[9]

On November 20, 2014, the motion judge dismissed the appellants motion.
    His reasons, in their entirety, read:

On July 30, 2014, Juriansz J.A. in chambers directed the
    plaintiff to bring a motion in the normal course regarding the admission of new
    evidence and a new trial as a result.  I am not persuaded that this is an
    appropriate case to exercise my discretion to reopen this matter that had already
    been tried by Justice Himel [Hainey].  Even if the new evidence was allowed, I
    do not believe that that would reasonably affect the outcome. The action [
sic
]
    is dismissed. Costs to the defendant of $500.00 payable forthwith. Order as
    appropriate.

[10]

The
    appellant appeals the motion judges dismissal of his motion, and invokes both
    rule 59.06 of the
Rules of Civil Procedure
and the courts inherent
    jurisdiction.

[11]

Rule
    59.06(2)(a) of the
Rules of Civil Procedure
provides:

A party who seeks to, (a) have an order set aside or varied on
    the ground of fraud or of facts arising or discovered after it was made;  may
    make a motion in the proceeding for the relief claimed.

The Standard of Review

[12]

A motion judges decision
    under rule 59.06(2)(a) is discretionary and attracts considerable deference
    from a reviewing court, unless
the
    motion judge errs in principle, misapprehends or fails to take account of
    material evidence, reaches an unreasonable decision (
Young v. Tyco
    International of Canada Ltd.
, 2008 ONCA 709),
    or if the reasons do not set out the judges reasoning process and reflect
    consideration of the main relevant factors:

R. v. Sheppard
, 2002 SCC 26;
Diamond Auto Collision
    Inc. v. Economical Insurance Group
, 2007 ONCA 487, at paras. 11-12;
Barbieri
    v. Mastronardi
, 2014 ONCA 416, at paras. 22-23.

Analysis

[13]

The
    test under rule 59.06(2)(a) to re-open a trial that applies
after
the
    judgment or other order has been issued and entered was set out by Doherty J.A.,
    speaking for the court, in
Tsaoussis (Litigation Guardian of) v. Baetz
(1998), 41 O.R. (3d) 257, [1998] O.J. No. 3516, at paras. 41 and 44. As he
    noted, the onus is on the moving party to show that all the circumstances justify
    making an exception to the fundamental rule that final judgments are exactly
    that, final. In particular, the moving party must show that the new evidence
    could not have been put forward by the exercise of reasonable diligence at the
    original proceedings. The court will go on to evaluate other factors such as
    the cogency of the new evidence, any delay in moving to set aside the previous
    judgment, any difficulty in re-litigating the issues and any prejudice to other
    parties or persons who may have acted in reliance on the judgment.

[14]

In this case, the motion
    judges reasons for refusing to re-open the trial are inadequate. While he briefly
    states what he views as the appropriate test, the motion judge does not
    describe the proposed new evidence or relate the test to it. He does not
    explain why the new evidence fails to meet the test, or why it would not, in
    his words,
reasonably affect the outcome,
given the critical importance of the trial testimony
    of
the respondents, Hameed and Lacombe,
to the trial judges decision. In the result, this court is unable to
    meaningfully review the basis for his dismissal of the appellants motion.

[15]

In
    my view, the appellant has met the test under rule 59.06(2)(a) as articulated
    in
Baetz
.
It is plain that the proposed new evidence was not
    available at the time of the first trial or the first appeal. The appellant did
    not delay in seeking relief.  The new evidence is cogent, in that it is
    apparently credible and, if accepted, would probably have affected the result
    at trial; the new evidence could serve to undermine the evidence given by the
    respondents and bolster that of the appellant. That is because the video shows representatives
    of Job Success apparently making the same or similar promises to others that
    the trial judge found to be unrealistic and unreasonable with respect to the
    appellant. Finally, I see no prejudice to the respondents if the trial were
    re-opened.

[16]

Amicus
submits that the motion judge erred in applying the test for re-opening a trial
    described by the Supreme Court of Canada in
671122 Ontario Ltd. v. Sagaz
    Industries Canada Inc.
,
2001 SCC 59, [2001] 2 S.C.R. 983. The
Sagaz
test was articulated in a
    case in which the judgment at issue had not yet been issued and entered. In the
    present case, while no formal judgment was taken out, the trial decision had
    been appealed.
Amicus

asserts that the motion judge ought to
    have applied the
Baetz

test, which includes the consideration
    of a number of different factors, including balancing fairness against the
    interest in finality.

[17]

In
Sagaz
, the Supreme Court accepted, at paras. 20 and 64, the motion
    judges application of the two-part test for re-opening a trial described by
    the High Court in
Scott v. Cook
, [1970] 2 O.R. 769:

First, would the evidence, if presented at trial, probably have
    changed the result?  Second, could the evidence have been obtained before trial
    by the exercise of reasonable diligence?

[18]

Courts
    citing
Sagaz
often seem to boil the test down to these two questions
    (see, for example,
1057854 Ontario Inc. v. Kara Holdings Inc
.
,
    [2005] O.J. No. 1144, at para. 40;
Wesbell Networks Inc. (Receiver of) v.
    Bell Canada
, 2013 ONSC 7814;
Irving Shipbuilding Inc. v. Schmidt
, 2014
    ONSC 5089, at para. 57;
Madock v. Grauer
, 2010 BCSC 1709). However,
    the Supreme Court, at para. 60, added this important direction: Appellate
    courts should defer to the trial judge who is in the best position to decide
    whether, at the expense of finality, fairness dictates that the trial be
    reopened. Plainly then, fairness is also an important factor, including
    prejudice to others who have acted in reliance on the judgment, as
Baetz
notes.

[19]

I
    further note that in
Sagaz
,
the Supreme Court, at para. 63, approved
    the following comments by Lord Denning in
Ladd v. Marshall
, [1954] 1
    W.L.R. 1489 (C.A.), at p. 1491:

It is very rare that application is made to this court for a
    new trial on the ground that a witness has told a lie. The principles to be
    applied are the same as those always applied when fresh evidence is sought to
    be introduced.
To justify the reception of fresh evidence or a new trial,
    three conditions must be fulfilled: first, it must be shown that the evidence
    could not have been obtained with reasonable diligence for use at the trial;
    secondly, the evidence must be such that, if given, it would probably have an
    important influence on the result of the case, though it need not be decisive;
    thirdly, the evidence must be such as is presumably to be believed, or in other
    words, it must be apparently credible, though it need not be incontrovertible
.
[Emphasis added.]

[20]

In
    my view, properly understood, the test in
Sagaz
goes beyond the two
    questions of whether the new evidence, if presented at trial, would probably
    have changed the result, and whether the evidence could have been obtained
    before trial by the exercise of reasonable diligence. It includes
    considerations of finality, the apparent cogency of the evidence, delay, fairness
    and prejudice, factors that were articulated by this court in its decision in
Baetz
.
    The error in this case was not in the motion judges decision to apply
Sagaz

rather than
Baetz
, but in his application of the test, as I have
    already described. In this case, the new evidence meets both the
Baetz
and
    the
Sagaz
tests for re-opening a trial

assuming there is any real distinction between the two.

Disposition

[21]

Because
    of the nature of the inquiry, a motion under rule 59.06(2)(a) to reopen a trial
    decision based on fresh evidence should be brought before the trial judge, who
    is in the
best
position to contextualize the fresh evidence and to direct the trial of an
    issue if appropriate:
Janjua v. Khan
, 2014 ONCA 5 at para. 11. See
Sagaz
,
    at para.60. This is the practice that should be followed unless there is some
    real impediment to the trial judge dealing with the motion.

[22]

I
    would allow the appeal, re-open the trial and remit the matter to the trial
    judge for reconsideration in light of the fresh evidence.  It will be for the
    trial judge to determine the admissibility of the new evidence and its effects,
    if any, on the merits of the case.

[23]

In
    the circumstances, I would set aside all previous cost orders against the
    appellant in this matter, including the costs of the first trial, the appeal to
    this court from the first trial judgment and the costs of the motion before the
    motion judge. It will be for the trial judge to determine appropriate costs
    dispositions, based on his reconsideration of the case.

[24]

I
    would also award the appellant $2,000 for the costs of this appeal, inclusive
    of disbursements and all applicable taxes.

Released:  October 6, 2015 PL

P.
    Lauwers J.A.

I
    agree E.A. Cronk J.A.

I
    agree K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Must v.
    Shkuryna, 2015 ONCA 665

DATE: 20151001

DOCKET: C60018

Feldman, Juriansz and Brown JJ.A.

BETWEEN

Robert Must

Appellant

and

Yana Shkuryna

Respondent

Robert Must, acting in person

Emily Griffith, for the respondent the Public Guardian
    and Trustee

Annie Kenet, for the respondent Yana Shkuryna

Heard and released orally: September 28, 2015

On appeal from the order of Justice Meredith Donohue of
    the Superior Court of Justice, dated February 9, 2015.

ENDORSEMENT

[1]

The appellant seeks to appeal an order appointing the Public Guardian
    and Trustee as his legal representative consequent to the courts finding he is
    a special party.

[2]

The order relates to a procedural question and is not related to the
    merits of the proceeding and so is interlocutory. The court is without
    jurisdiction to hear the appeal.

[3]

The appeal is quashed. There shall be no order as to costs.

K. Feldman J.A.

R.G. Juriansz J.A.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Nelson v. Livermore, 2015 ONCA 688

DATE: 20151013

DOCKET: C59963

Gillese, Epstein and Roberts JJ.A.

IN THE MATTER OF an appeal from the Consent
    and Capacity Board, pursuant to the
Mental Health Act
, R.S.O. 1990, c.
    M.7, as amended

AND IN THE MATTER OF Rodney Nelson, a patient
    at Waypoint Centre for Mental Health Care  Oak Ridge Site, Penetanguishene, Ontario

AND IN THE MATTER OF the
Canadian Charter
    of Rights and Freedoms
, Part I of the
Constitution Act, 1982
, being
    Schedule B to the
Canada Act 1982
(U.K.), 1982, c. 11

BETWEEN

Rodney Nelson

Appellant

and

Dr. Craig Livermore and the Attorney General for
    Ontario

Respondents

Suzan E. Fraser, for the appellant

Janice Blackburn, for the respondent Dr. Craig Livermore

Yashoda Ranganathan and Hayley Pitcher, for the
    respondent the Attorney General for Ontario

Heard: September 22, 2015

On appeal from the order of Justice Peter H. Howden of
    the Superior Court of Justice, dated December 30, 2014, with reasons reported
    at 2014 ONSC 7477, dismissing an appeal from the Consent and Capacity Board,
    with reasons reported at 2013 CanLII 33987.

Gillese J.A.:

OVERVIEW

[1]

Rodney Nelson has been continually detained under certificates of
    involuntary admission and sequential renewals since his admission to hospital in
    March 2005. He appealed to the Superior Court from a March 15, 2013, decision
    of the Consent and Capacity Board (the Board) that confirmed his civil
    committal pursuant to s. 20(5) of the
Mental Health Act
, R.S.O. 1990, c. M.7
(the Appeal). The
    Board found that Mr. Nelson suffers from a mental disorder, the nature or
    quality of which will likely result in serious bodily harm to another person
    unless he is detained, and that he is not suitable to be a voluntary patient in
    a psychiatric facility.

[2]

The appeal judge dismissed the Appeal on the basis that this courts
    decision in
P.S. v. Ontario
, 2014 ONCA 900, 123 O.R. (3d) 651 rendered
    it moot.

[3]

On further appeal to this court, Mr. Nelson submits that he does not
    meet the criteria for involuntary admission, that he is unlawfully detained,
    and that his ongoing detention breaches his rights under ss. 7, 9, 11(h) and 12
    of the
Canadian Charter of Rights and Freedoms
. He asks that this
    court make findings to that effect, rescind the certificate of renewal of
    involuntary admission dated March 1, 2013, and order his release.

[4]

All the parties agree that the appeal judge erred in finding the entire
    Appeal to be moot and that he committed reversible legal error in declining to
    adjudicate on the matters that remained live. Mr. Nelson submitted that this
    court should nonetheless proceed to hear his appeal.  Alternatively, he asked
    that the matter be remitted to the Superior Court of Justice to be reheard.  Dr.
    Livermore and the Attorney General submitted that the more appropriate course
    was for this court to allow the appeal and remit the matter to the Superior
    Court of Justice for rehearing.

[5]

Following oral argument, this court allowed the appeal and remitted the
    matter to the Superior Court to be heard on an expedited basis, with reasons to
    follow. These are those reasons.

FACTS

[6]

Mr. Nelson has a lengthy history of criminal convictions for various
    offences including assault, sexual assault causing bodily harm, and gross indecency.
    He has also been convicted of breaches of probation, misrepresentation of his
    identity, and escape from custody. He has spent most of his time since at least
    1990 either incarcerated or in a maximum secure psychiatric facility.

[7]

Mr. Nelsons current detention commenced on March 10, 2005, when he was involuntarily
    committed to Waypoint (then called the Oak Ridge division of the
    Penetanguishene Mental Health Centre) pursuant to a Form 1 under the
Mental
    Health Act
, upon the expiry of a prison term for assault.

[8]

Since that time, the Board has reviewed Mr. Nelsons detention on a
    regular basis as required under the
Mental Health Act
. The Boards
    March 15, 2013, decision confirming his civil committal is the subject of this
    appeal.

THE BOARDS DECISION

[9]

The Board found that, as of the hearing date, Mr. Nelson exhibited
    symptoms associated with two types of mental disorder: paraphilia and
    antisocial personality disorder with psychopathy. It also found that Mr. Nelson
    maintained there was, and is, nothing wrong with him. The Board found that Mr.
    Nelson lacked insight into the fact that some of his behaviours, statements and
    actions are wrong and unacceptable to others.

[10]

Testing
    indicated that Mr. Nelsons rate of sexual and violent recidivism was 2.5 times
    higher than the average sexual offender. He refused to take any sex drive reduction
    medication, yet sought immediate discharge into the community. The Board found
    that until Mr. Nelson accepted and received this medication, behaviour
    modification therapy, and supervision in the presence of women, he posed a risk
    of harm to others, particularly young and vulnerable females. The Board also
    found that, if made a voluntary patient, Mr. Nelson would leave the hospital.

[11]

The
    Board concluded that Mr. Nelson suffered from a mental disorder of a nature or
    quality that would likely result in serious bodily harm to others unless he
    remained in the hospital and that he was not suitable for admission as a
    voluntary patient.

THE APPEAL TO THE SUPERIOR COURT

[12]

Mr.
    Nelson appealed the Boards decision to the Superior Court. The appeal judge
    dismissed the Appeal on the basis that this courts decision in
P.S. v.
    Ontario

rendered it moot, so it no longer matter[ed] whether the [Board]
    got it right in this one instance: at para. 4.

[13]

In
P.S. v. Ontario
, which was released in December 2014 while the Appeal
    was under reserve, this court held, at para. 3, that the provisions of the
Mental
    Health Act
dealing with involuntary committal violate s. 7 of the
Charter
by allowing for indeterminate detention without adequate procedural protection
    of the liberty interests of long-term patients. The court suspended the
    declaration of invalidity for 12 months.

ANALYSIS

[14]

It
    is clear that there are live issues to be decided in this matter and that the
    judge below erred in finding the Appeal to be moot.
P.S. v. Ontario
proceeded
    by way of application for
habeas corpus
and does not speak directly to
    the reasonableness of the Boards decision to confirm Mr. Nelsons civil committal,
    which was the core issue on the Appeal.

[15]

There
    is no final decision (other than that of mootness) before this court. Hence,
    there are no rulings or reasoning on any of the substantive issues that Mr. Nelson
    raised in the Appeal and, therefore, nothing upon which this court can
    reasonably adjudicate.

[16]

This
    court will ordinarily be reluctant to make any order concerning a matter that
    has not been the subject of an order appealed from:
Schaeffer v. Wood
,
    2011 ONCA 716, 107 O.R. (3d) 721, at para. 51, appeal to S.C.C. dismissed and
    cross-appeal allowed on other grounds, 2013 SCC 71, [2013] S.C.R. 1053. While
    this court did decide the matter in
Schaeffer
on its merits, it is
    important to note that the issues in
Schaeffer
raised questions of
    pure law and statutory interpretation. There were no factual issues in dispute
    before this court:
Schaeffer
, at para. 52.  By contrast, the Appeal
    requires that factual determinations be made and questions of mixed fact and
    law be decided.  For example, the Appeal requires a determination of whether
    the Form 1 was validly executed and whether Mr. Nelsons ongoing detention
    violates his
Charter

rights.

[17]

Thus,
    while this court has jurisdiction to hear the Appeal pursuant to s. 134 of the
Courts
    of Justice Act
, R.S.O. 1990, c. C.43, the appropriate relief is to remit
    the Appeal to the Superior Court of Justice for the performance by that court
    of its statutory review obligation set out in s. 80 of the
Health Care
    Consent Act, 1996
, S.O. 1996, c. 2, Sched. A.

DISPOSITION

[18]

Accordingly,
    the appeal is allowed and the Appeal is remitted to the Superior Court of
    Justice for rehearing, on an expedited basis.

Released: October 13, 2015 (E.E.G.)

E.E. Gillese
    J.A.

I agree. Gloria Epstein J.A.

I agree. Lois Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Nguyen v. Economical Mutual Insurance Company, 2015
    ONCA 828

DATE: 20151130

DOCKET: M45641 M45765

Hourigan J.A. (In Chambers)

BETWEEN

Binh Thi Nguyen

Plaintiff

(Moving Party)

and

Economical Mutual Insurance Company,

and Dr. Monte Bail

Defendants

(Respondent Parties)

Binh Thi Nguyen, acting in person

Catherine Korte and Matthew W. Malcolm, for the
    respondent Economical Mutual Insurance Company

Jacqueline Cole and Elder C. Marques, for the respondent
    Dr. Monte Bail

Heard:Â  November 27, 2015

ENDORSEMENT

Introduction

[1]

The moving party, Binh Thi Nguyen, brings a motion for an extension of
    time to serve and file her notice of appeal. The putative respondents to the
    appeal, Economical Mutual Insurance Company (âEconomicalâ) and Dr. Monte Bail,
    resist the motion. Dr. Bail brings a cross-motion seeking a stay of the appeal
    and/or security for costs, if the motion for an extension is granted.

[2]

In considering Ms. Nguyenâs motion, I review below: the background facts
    of the case, the legal principles applicable to a motion to extend the time to
    serve and file a notice of appeal, and the application of those legal
    principles to the facts of this case.

Background Facts

[3]

Ms. Nguyen commenced an action against Economical and Dr. Bail alleging
    that, in the context of a claim she made for statutory accident benefits, they
    prepared an Insurerâs Assessor report which libelled her. This claim is one of
    several legal proceedings she has commenced against Economical and related
    entities arising from the denial of her statutory accident benefits claim.

[4]

The parties were unable to agree to a discovery plan and Ms. Nguyen
    brought a motion before Justice Stinson on November 21, 2014 to impose a
    discovery plan. She was unsuccessful on that motion. Justice Stinson accepted
    the discovery plan proposed by Dr. Bail, with two minor exceptions. Ms. Nguyen
    delivered a notice of appeal from that order, but the appeal was later abandoned.

[5]

Ms. Nguyen did not comply with Justice Stinsonâs order and counsel for Economical
    and Dr. Bail advised her that they would bring a motion to stay/dismiss her
    action for non-compliance with that order. Ms. Nguyen refused to provide her
    availability for such a motion, so a case conference was held in front of
    Master Pope on May 7, 2015 to set a timetable. Ms. Nguyen did not attend the
    case conference and a timetable was ordered by the master in her absence.

[6]

On June 3, 2015, Ms. Nguyen brought an unsuccessful motion before
    Justice Perell to vary or set aside Justice Stinsonâs order. The defendants
    were awarded costs of $2,000 each, in any event of the cause.

[7]

On June 24, 2015 the defendantsâ motion to stay/dismiss the action was
    heard before Justice Faieta. On the morning of the motion, Ms. Nguyen advised
    that she would not attend because she âshe had been legally advisedâ not to do
    so. The motion proceeded in her absence and an order was made that Ms. Nguyenâs
    action would be dismissed unless she complied with Justice Stinsonâs order and
    paid each defendant $2,000 costs by July 17, 2015. Pursuant to that order, the
    action would be dismissed if the defendants provided an affidavit after July
    17, 2015 advising the court that Ms. Nguyen remained non-compliant with Justice
    Stinsonâs order. Copies of the endorsement and Justice Faietaâs order were
    provided to Ms. Nguyen.

[8]

Rather than comply with the order of Justice Faieta, Ms. Nguyen brought
    an emergency motion before Justice Corrick on July 15, 2015 to set aside
    Justice Stinsonâs order. In support of that motion she swore an affidavit that
    included a claim that she was in financial hardship. A notice of examination
    was served upon Ms. Nguyen to cross-examine her on her affidavit. Ms. Nguyen
    failed to attend for cross-examination. Justice Corrick dismissed the motion,
    finding that it was an abuse of process, and ordered Ms. Nguyen to pay costs of
    $3,000 to each defendant.

[9]

On July 21, 2015, Dr. Bailâs counsel filed an affidavit with the court,
    sworn July 20, 2015, confirming that Ms. Nguyen remained non-compliant with
    Justice Stinsonâs order. Justice Faieta dismissed Ms. Nguyenâs action by order
    dated August 26, 2015, which was entered the next day. On August 28, 2015,
    counsel for Dr. Bail sent a copy of Justice Faietaâs issued and entered order
    to Ms. Nguyen by email.

[10]

On
    September 3, 2015, Ms. Nguyenâs daughter wrote to opposing counsel to canvass
    dates for a motion to set aside Justice Faietaâs order of August 26, 2015. She
    was advised by counsel that the action was dismissed.Â  A similar exchange of
    emails occurred on September 9, 2015 and September 29, 2015. In both cases, Ms. Nguyenâs
    daughter attempted to set a date for a motion to set aside Justice Faietaâs
    order and she was told by counsel that the action had been dismissed.

[11]

On
    October 7, 2015, Ms. Nguyen wrote to counsel seeking their consent for the late
    filing of her notice of appeal of Justice Faietaâs order dated October 26,
    2015. That consent was not forthcoming, necessitating this motion.

Legal Principles

[12]

With
    that factual background in mind, I turn to the test for an extension of time
    for the service and filing of a notice of appeal. Pursuant to r. 3.02(1), the
    court may order an extension or abridgment of time on such terms as are just.
    The following five factors are relevant
:

(1) whether the appellant formed an intention to
    appeal within the relevant period;

(2) the length of, and explanation for delay;

(3) the prejudice to respondent;

(4) the merits of the appeal; and

(5) whether the âjustice of the caseâ requires it.

See
Enbridge Gas Distribution Inc. v. Froese
,
    2013 ONCA 131
, at para. 15
, and
Howard v. Martin
,
2014 ONCA 309
, at
    para. 26.

[13]

When
    considering the merits of the appeal, it is not with a view to determining
    whether the appeal will succeed, but only with a view to determining whether
    the appeal has so little merit that the court could reasonably deny the
    important right of appeal:
Issai v. Rosenzweig
,
2011 ONCA 112
, at
    para. 10, and
Duca Community Credit Union Ltd. v. Giovannoli

(2001), 142 O.A.C. 146 (C.A.)
,
    at para. 14. The merits of a proposed appeal can be decisive on a motion to
    extend the time for filing. Even if the other factors militate against
    extending time, the merits may be so significant as to justify extending time:
Howard
,
    at para. 36.Â  Similarly, even if other factors militate in favour of granting
    an extension, where the appeal is clearly without merit the motion will be denied:
1250264 Ontario Inc. v. Pet Valu Canada Inc., 2015 ONCA 5
, at para.7.

Application of Legal Principles

[14]

There
    is no evidence that Ms. Nguyen intended to appeal Justice Faietaâs order of
    August 26, 2015 within 30 days of the making of that order. It is clear that
    she understood that an appeal was the appropriate course of action. She had
    previously delivered a notice of appeal from the order of Justice Stinson,
    which appeal she later abandoned. Moreover, at the hearing before Justice
    Corrick on July 13, 2015, Justice Corrick told Ms. Nguyen repeatedly that a
    motion to set aside an order was not the correct procedure and that if she
    disagreed with an order the proper course of action was to appeal. Despite her
    knowledge that an appeal was the appropriate remedy, Ms. Nguyen declined to
    pursue that remedy within the time period in which to do so. Â Instead, she
    sought to schedule a motion to set aside Justice Faietaâs order.

[15]

Â With
    respect to length of the delay, it was relatively short. However, no explanation
    was offered to explain the delay. This is similar to the situation in
Ontario
    Wealth Management v. Sica Masonry and General Contracting Ltd.
, 2014 ONCA
    500, where the court dismissed a motion for a time extension to appeal where no
    explanation for the delay was provided.

[16]

I
    am satisfied that there is prejudice to the respondents if the relief is
    granted. To date, there are four costs orders against her by four different
    Justices of the Superior Court. There is a real risk that the respondents will
    not recover the existing costs awards or any future costs awards. In addition,
    the respondents ought not to be required to continue in litigation in which Ms. Nguyen
    refuses to abide by the court process.

[17]

With
    respect to the merits of the appeal, there is nothing in the material filed on
    this motion that discloses the grounds of the purported appeal. Justice Faieta
    made his order of June 24, 2015, exercising his discretion on a full record. On
    my view of the record, there is nothing to suggest that he made any error in
    the exercise of his discretion. To the contrary, his order appears to have been
    well justified given Ms. Nguyenâs refusal to comply with Justice Stinsonâs
    order. The order of August 26, 2015, was simply the logical follow up from his
    earlier order. I note as well that Ms. Nguyen has not filed any material
    suggesting that her underlying appeal is meritorious. While the merits test on
    this motion is not a high threshold, it has not been met in this case.

[18]

In
    summary, none of the first four factors militate in favour of granting an
    extension. The question becomes whether the justice of the case favours an
    extension? The answer to that question is no. Ms. Nguyen has engaged in a
    course of conduct throughout the litigation that demonstrates a lack of respect
    for court orders and the court process. Costs orders remain outstanding. To
    date, she is still not in compliance with the order of Justice Stinson,
    including the production of documents that the court identified as relevant in
    the discovery plan it imposed on the parties.Â  She has failed to attend,
    without good reason, for cross-examination and on a case conference. She has repeatedly
    brought motions in the Superior Court that are clearly collateral attacks on
    orders that she has not appealed and ignored the warnings of the court that the
    motions are an abuse of process. This conduct is relevant to whether the
    justice of the case favours an extension:
Howard
at para. 54. In my
    view, nothing in Ms. Nguyenâs conduct supports the granting of an indulgence by
    this court and the justice of the case does not favour an extension.

Disposition

[19]

The
    motion is dismissed. Given my ruling on the motion, it is unnecessary to
    consider the cross-motion, which is dismissed.

[20]

The
    respondents, as the successful parties, are entitled to their costs of the
    motion.Â  Ms. Nguyen submitted that she has no money to pay a costs award.
    However, given her refusal to attend on a cross-examination on this point, it
    is not possible for me to assess the accuracy of that statement.Â  I fix costs at
    $1,500, for each of Economical and Dr. Bail, inclusive of fees, disbursements,
    and applicable taxes.Â  These sums are entirely reasonable and well below the
    costs actually incurred by Economical and Dr. Bail. The costs are payable by
    Ms. Nguyen within 30 days. Ms. Nguyenâs approval of the form and content of
    the draft order is dispensed with.

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  âC.
    W. Hourigan J.A.â


COURT OF APPEAL FOR ONTARIO

CITATION: Nortel
    Networks Corporation (Re), 2015 ONCA 681

DATE: 20151013

DOCKET: C59703

Simmons, Gillese and Rouleau JJ.A.

In
    the Matter of the
Companies Creditors Arrangement Act
,

R.S.C. 1985, c. C-36, as
    amended

And in the Matter of a Plan of Compromise or
    Arrangement of Nortel Networks Corporation, Nortel Networks Limited, Nortel
    Networks Global Corporation, Nortel Networks International Corporation and
    Nortel Networks Technology Corporation

Richard B. Swan, S. Richard Orzy and Gavin H. Finlayson,
    for the appellant
Ad Hoc
Group of Bondholders

Andrew Kent and Brett Harrison, for the respondent The
    Bank of New York Mellon

Edmond Lamek, for the respondent Law Debenture Trust
    Company of New York

Benjamin Zarnett and Graham D. Smith, for the Monitor
    and the respondent Canadian Debtors

Kenneth D. Kraft and John J. Salmas, for the respondent Wilmington
    Trust, National Association

Kenneth T. Rosenberg and Ari N. Kaplan, for the respondent
    Canadian Creditors Committee

Tracy Wynne, for the Joint Administrators (EMEA)

Scott A. Bomhof and Adam M. Slavens, for Nortel Networks
    Inc./U.S. Debtors

Heard: April 29, 2015

On appeal from the order of Justice Frank J.C. Newbould of
    the Superior Court of Justice, dated August 19, 2014, with reasons reported at
    2014 ONSC 4777, 121 O.R. (3d) 228.

Rouleau J.A.:

A.

overview

[1]

This appeal represents another chapter in the Nortel proceeding under
    the
Companies Creditors Arrangement Act
, R.S.C. 1985, c. C-36 (
CCAA
),
    which has been on-going since January 2009. A parallel proceeding under Chapter
    11 of the United States
Bankruptcy Code
has also been on-going in
    Delaware since that time.

[2]

The
Ad Hoc
Group of Bondholders (the appellant) brings this
    appeal with leave. The group represents substantial holders of crossover bonds,
    which are unsecured bonds either issued or guaranteed by certain of the Canadian
    Nortel entities. The relevant indentures provide for the continuing accrual of
    interest until payment, at contractually specified interest rates, as well as
    other post-filing payment obligations, such a make-whole provisions and trustee
    fees.

[3]

In contrast, the claims of other claimants, such as Nortel pensioners
    and former employees, do not have a provision for interest on amounts owing to
    them.

[4]

Holders of the crossover bonds have filed claims for principal and
    pre-filing interest in the amount of US$4.092 billion against each of the
    Canadian and U.S. Nortel estates. They also claim they are entitled to
    post-filing interest and related claims under the terms of the crossover bonds.
    As of December 31, 2013, the amount of this claim was approximately US$1.6
    billion. The total of these two amounts represents a significant portion of the
    proceeds generated from the worldwide sale of Nortels business lines and other
    Nortel assets, totalling approximately $7.3 billion. This latter amount is
    apparently not growing at any appreciable rate because of the conservative
    nature of the investments made with it pending the outcome of the insolvency proceedings.

[5]

In the context of a joint allocation trial, the
CCAA
judge
    directed that two issues be argued:

1. whether the holders of the crossover
    bond claims are legally entitled  to claim or receive any amounts under the
    relevant indentures above and beyond the outstanding principal debt and
    pre-petition interest (namely, above and beyond US$4.092 billion); and

2. if it is determined that the crossover
    bondholders are so entitled, what additional amounts are such holders entitled
    to so claim and receive.

[6]

The
CCAA
judge answered the first question in the negative and
    so he did not need to answer the second question. In reaching that conclusion,
    he accepted that the common law interest stops rule, which has been held to
    be a fundamental tenet of insolvency law, applies in the
CCAA
context.
    He disagreed with the appellants submission that the Supreme Court of Canadas
    decision in
Canada 3000 (Re)
;
Inter-Canadian (1991) Inc. (Trustee
    of)
, 2006 SCC 24, [2006] 1 S.C.R. 865, and this courts subsequent
    decision in
Stelco (Re)
, 2007 ONCA 483, 35 C.B.R. (5th) 174, are
    binding authority that the interest stops rule does not apply in the
CCAA
context.

[7]

On appeal, the appellant raises two related issues  whether the
CCAA
judge erred in concluding that an interest stops rule applies in
CCAA
proceedings and, if not, whether he erred in concluding that the holders of
    Crossover Bond Claims are not legally entitled to claim or receive any amounts
    under the relevant indentures above and beyond the outstanding principal debt
    and pre-petition interest.

[8]

I would dismiss the appeal. As I will explain, there are sound legal and
    policy reasons for applying the interest stops rule in the
CCAA
context, and as I read
Stelco
and
Canada 3000,
they do not
    preclude such a result. Nor do I see a basis for varying the order that he
    made.

B.

background

[9]

In the
CCAA
courts initial order of January 14, 2009, the
    Canadian Debtors
[1]
were directed, subject to certain exceptions, to make no payments of principal
    or interest on account of amounts owing by the Canadian Debtors to any of their
    creditors as of the filing date, unless approved by the Monitor. Further, all
    proceedings and enforcement processes, and all rights and remedies of any
    person against the Canadian Debtors were stayed absent consent of the Canadian Debtors
    and the Monitor, or leave of the court.

[10]

In
    accordance with a claims procedure order dated July 30, 2009, claims against
    the Canadian Debtors were required to be filed by a claims bar date. Under a
    subsequent claims resolution order dated September 16, 2010, a disputed claim
    could be brought before the
CCAA
court for final determination.

[11]

As
    previously noted, holders of the crossover bonds filed proofs of claim that
    included not only the principal amount of the debt and interest accrued to the
    date of insolvency but also contractual claims for interest and other amounts
    post-filing.

[12]

In
    May 2014, a joint allocation trial, conducted by way of video-link by the
CCAA
judge in Ontario and Judge Gross in Delaware, commenced on the issue of the
    allocation of the sale proceeds among the debtor estates, including the
    Canadian and U.S. estates. In his 2015 decision, the
CCAA
judge, citing
    the fundamental tenet of insolvency law that all debts shall be paid
pari
    passu
 and that all unsecured creditors receive equal treatment held
    that the $7.3 billion in funds generated from the Nortel liquidation should be
    allocated on a
pro rata
basis as among the estates: 2015 ONSC 2987, 23
    C.B.R. (6th) 249, at para. 209. He ordered, at para. 258, that the funds be
    allocated among the debtor estates in accordance with a number of principles,
    including the principle that each debtor estate is to be allocated that
    percentage of the [liquidation proceeds] that the total allowed claims against
    that Estate bear to the total allowed claims against all Debtor Estates. A
    number of parties have sought leave to appeal that decision.

[13]

It
    was on June 24, 2014, while the joint allocation trial was proceeding, that the
CCAA
judge directed that the two issues set out above be decided.

C.

DECISION BELOW

[14]

The
CCAA
judge began his analysis with a review of cases applying the
    interest stops rule in the bankruptcy and winding-up context. He noted the
    relationship between the interest stops rule and the
pari passu
principle, which he described as a fundamental tenet of insolvency law that requires
    equal treatment of unsecured creditors. He found there was no reason to not apply
    the [common law] interest stops rule to a CCAA proceeding because the CCAA does
    not expressly provide for its application. The issue was whether the rule
    should apply to this CCAA proceeding.

[15]

He
    went on to conclude that [t]here is no controlling authority in Canada in a
    case such as this in which there is a contested claim being made by bondholders
    for post-filing interest against an insolvent estate under the CCAA, let alone
    under a liquidating CCAA process, or in which the other creditors are mainly
    pensioners with no contractual right to post-filing interest. In reaching this
    conclusion, he distinguished
Stelco
and
Canada 3000
and found
    that the application of the interest stops rule was supported by the more
    recent decisions in
Century Services Inc. v. Canada (Attorney General)
,
    2010 SCC 60, [2010] 3 S.C.R. 379, and
Sun Indalex Finance, LLC v. United
    Steelworkers
, 2013 SCC 6, [2013] 1 S.C.R. 271.

[16]

The
CCAA
judge thus ordered that holders of Crossover Bond Claims are not
    legally entitled to claim or receive any amounts under the relevant indentures
    above and beyond the outstanding principal debt and pre-petition interest
    (namely, above and beyond US$4.092 billion).

D.

issues on appeal

[17]

The
    appellant raises two related issues:

1.

Did the
CCAA
judge err in concluding that an interest stops rule applies in
CCAA
proceedings?

2.

If the
CCAA
judge did not err in concluding that an interest stops rule applies in
CCAA
proceedings, did he err in holding that holders of Crossover Bonds Claims are
    not legally entitled to claim or receive any amounts under the relevant
    indentures above and beyond the outstanding principal debt and pre-petition
    interest?

E.

analysis

(1)

Did the
CCAA
judge err in concluding that an interest stops
    rule applies in
CCAA
proceedings?

[18]

The
    appellant, supported by the Bank of New York Mellon and the Law Debenture Trust
    Company of New York as indenture trustees, submits that the
CCAA
judge
    erred in concluding that the interest stops rule applies.

[19]

First,
    the appellant submits he applied inapplicable case law and misinterpreted case
    law in concluding that the rule did and should apply. Among other things, the
    appellant criticizes the
CCAA
judges application of the Supreme Court
    of Canadas decisions in
Century Services
and
Indalex
, which
    deal with the inter-play between the
CCAA
and the
Bankruptcy and
    Insolvency Act
, R.S.C. 1985, c. B-3 (the
BIA
).

[20]

The
    appellant also submits that the application of the interest stops rule in the
CCAA
context is inconsistent with the
CCAA
and would have negative
    practical consequences.

[21]

Finally,
    the appellant submits that
Canada 3000
and
Stelco
are binding
    authority that preclude the application of the interest stops rule in the
CCAA
context and that the
CCAA
judge violated the principle of
stare
    decisis
in refusing to follow them.

[22]

I
    will deal with these submissions in turn, beginning with a discussion of the
    interest stops rule and the related
pari passu
principle.

(a)

Should the interest stops rule apply in
CCAA
proceedings?

(i)

Origin and scope of the interest stops rule

[23]

It
    is well settled that the
pari passu
principle applies in insolvency
    proceedings. This principle, to the effect that the assets of the insolvent
    debtor are to be distributed amongst classes of creditors rateably and equally,
    as those assets are found at the date of insolvency is said to be one of the
    governing principles of insolvency law in Canada:
Canada (Attorney
    General) v. Confederation Life Insurance Co.
, [2001] O.T.C. 486, at para.
    20 (S.C.),
per
Blair J.
[2]
In fact, the
pari passu
principle has been said to be the foremost
    principle in the law of insolvency not just in Canada but around the world:
    Rizwaan J. Mokal Priority as Pathology: The
Pari Passu
Myth (2001)
    60:3 Cambridge L.J. 581, at p. 581. According to an article in the Cambridge
    Law Journal, [c]ommentators claim to have found [the
pari passu
]
    principle entrenched in jurisdictions far removed  in geography and time: Mokal,
    at pp. 581-582.

[24]

The
pari passu
principle is rooted in the need to treat all creditors
    fairly and to ensure an orderly distribution of assets.

[25]

As
    explained in
In

re Humber Ironworks and Shipbuilding Co.
(1869), L.R. 4 Ch. App. 643, nearly 150 years ago, a necessary corollary of the
pari passu
principle is the interest stops rule. Absent the interest
    stops rule, the fairness and orderly distribution sought by the
pari passu
principle could not be achieved. Selwyn L.J. explained the rationale for the
    interest stops rule, at pp. 645-646:

In the present case we have to consider what are the positions
    of the creditors of the company, when, as here, there are some creditors who
    have a right to receive interest, and others having debts not bearing interest.

.

It is very difficult to conceive a case in which the assets of
    a company could be  immediately realized and divided; but suppose they had a
    simple account at a bank, which could be paid the next day, that would be the
    course of proceeding. Justice, I think, requires that that course of proceeding
    should be followed, and that no person should be prejudiced by the accidental
    delay which, in consequence of the necessary forms and proceedings of the
    Court, actually takes place in realizing the assets; but that, in the case of
    an insolvent estate, all the money being realized as speedily as possible,
    should be applied equally and rateably in payment of the debts as they existed
    at the date of the winding-up. I, therefore, think that nothing should be
    allowed for interest after that date.

[26]

Giffard
    L.J. similarly stated, at p. 647-648:

That rule  works with equality and fairness between the
    parties; and if we are to consider convenience, it is quite clear that, where
    an estate is insolvent, convenience is in favour of stopping all the
    computations at the date of the winding-up.

I may add another reason, that I do not see with what justice
    interest can be computed in favour of creditors whose debts carry interest,
    while creditors whose debts do not carry interest are stayed from recovering
    judgment, and so obtaining a right to interest.

[27]

Thus,
    the primary purpose behind the common law interest stops rule is fairness to
    creditors. Another purpose is to achieve the orderly administration of an
    insolvent debtors estate.

[28]

The
    common law interest stops rule has been consistently applied in proceedings
    under bankruptcy and winding-up legislation. In fact, as explained by Blair J.
    in
Confederation Life Insurance Co.
at paras. 22-23, the rule has been
    applied even when the legislation might be read to the contrary:

This common law principle has been applied consistently in
    Canadian bankruptcy and winding-up proceedings. This is so notwithstanding the
    language of subsection 71(1) of the
Winding-Up Act
and section 121 of
    the
BIA
, which might be read to the contrary, in my view.

Yet, the interest stops principle has always applied to the
    payment of post-insolvency interest, and the provisions of subsection 71(1)
    have never been interpreted to trump the common law insolvency interest stops
    rule.

[29]

I
    will now turn to the question of whether the interest stops rule should be
    applied in the
CCAA
context.

(ii)

Should the interest stops rule apply in
CCAA
proceedings?

[30]

The
    respondents
[3]
maintain that one would expect the interest stops rule to apply in
CCAA
proceedings given that
CCAA
proceedings are insolvency proceedings to
    which the common law
pari passu
principle applies. Consistent with the
pari passu
principle and the related interest stops rule, creditors in
CCAA
proceedings must surely expect to be treated fairly and not see creditors
    with interest entitlements have their claims grow, post-insolvency,
    disproportionately to those with no, or lesser, interest entitlements. In the respondents
    submission, the same reasoning used by courts to conclude that the interest
    stops rule applies in winding-up and bankruptcy proceedings leads to the
    conclusion that the interest stops rule applies in
CCAA
proceedings.

[31]

The
    appellant, on the other hand, submits that
CCAA
proceedings are
    different from other insolvency proceedings in that they do not immediately or
    permanently alter the rights of creditors. The filing is intended to give the
    debtor breathing space so that a plan of compromise or arrangement can be
    negotiated with creditors and the business can continue. The objective of a
CCAA
proceeding is a consensual, statutory compromise in the form of a
CCAA
plan. Such a
CCAA
plan can provide for any kind of distribution,
    provided it is approved by the requisite majority of creditors and the court.

[32]

In
    the appellants submission, until a plan is negotiated or the proceeding is
    converted to bankruptcy or winding-up, the rights of creditors are not altered;
    rather, their rights to execute on them are simply stayed. In the appellants
    view, therefore, unless and until this sought-after compromise of rights is
    negotiated, only the exercise of the rights is stayed. The
CCAA
filing
    does not affect the right to accrue interest; it only stays the collection of
    that interest.

[33]

The
    appellant further argues that the
CCAA
judges decision is contrary to
    the established
CCAA
practice and the reasonable expectations of the
    parties in this proceeding. In particular, the appellant notes that a
CCAA
plan may, and often does, provide for the recovery of post-filing interest. The
    appellant also submits that the application of the interest stops rule would
    allow debtors to obtain a permanent interest holiday simply by filing for
CCAA
protection, even if the filing were later withdrawn, causing a permanent
    prejudice to the creditors not contemplated by the
CCAA
. And, the
    appellant submits that an interest stops rule would create a disincentive for
    creditors to participate in
CCAA
proceedings since they would not be
    compensated for delays under the
CCAA
even if there were ultimately
    assets available to do so

[34]

I
    do not accept the appellants submissions on this point. Admittedly, there are
    differences between the
CCAA
and other insolvency schemes, including
    that the
CCAA
does not provide for a fixed scheme of distribution. Further,
    assuming a plan of compromise or arrangement under the
CCAA
is
    negotiated it may or may not result in a distribution to creditors.
    Nevertheless, in my view, the same principles that underpin the conclusion that
    the interest stops rule is necessary in bankruptcy and winding-up proceedings
    namely, the fair treatment of creditors and the orderly administration of an
    insolvent debtors estate - apply with equal force to
CCAA
proceedings.
    I say so for several reasons.

[35]

First,
    the
CCAA
is part of an integrated insolvency regime, which also includes
    the
BIA
. The Supreme Court of Canada in
Century Services
considered
    the
CCAA
regime and opined, at para. 24, that [w]ith parallel
CCAA
and
BIA
restructuring schemes now an accepted feature of the
    insolvency landscape, the contemporary thrust of legislative reform has been
    towards harmonizing aspects of insolvency law common to the two statutory
    schemes to the extent possible and encouraging reorganization over liquidation.
    The court went on to explain, at para. 78, that the
CCAA
and
BIA
are related and no gap exists between the two statutes which would allow the
    enforcement of property interests at the conclusion of
CCAA
proceedings that would be lost in bankruptcy.

[36]

Consistent
    with the notion of harmonization, because the common law interest stops rule
    applies upon bankruptcy under the
BIA
, it should follow that the
    common law rule also applies in a
CCAA
proceeding unless, of course,
    the rule is ousted by the
CCAA
. The
CCAA
does not address
    entitlement to claim post-filing interest let alone oust the common law rule
    with clear wording.

[37]

Second,
    if the interest stops rule were not to apply in
CCAA
proceedings, the
    creditors who do not have a contractual right to post-filing interest would, as
    the Supreme Court explained in
Century Services
at para. 47, have skewed
    incentives against reorganizing under the
CCAA
 and this would only
    undermine that statutes remedial objectives and risk inviting the very social
    ills that it was enacted to avert. This concern over skewed incentives was
    confirmed in
Indalex
where the Supreme Court held, at para. 51, that [i]n
    order to avoid a race to liquidation under the
BIA
, courts will favour
    an interpretation of the
CCAA
that affords creditors analogous
    entitlements to those they would receive under the
BIA
.

[38]

Without
    an interest stops rule under the
CCAA
, the creditors with no claim to
    post-filing interest would have an incentive to proceed under the
BIA
or the
Winding-up and Restructuring Act
, R.S.C. 1985, c. W-11, where
    the interest stops rule operates to prevent creditors, such as the appellant, who
    have a contractual right to interest from improving their proportionate claim
    against the debtor at the expense of other creditors.

[39]

Third,
    as recognized by the Supreme Court in
Century Services
at para. 77,
    the
CCAA
creates conditions for preserving the
status quo
while attempts are made to find common ground amongst stakeholders for a
    reorganization that is fair to all. This is achieved through grouping all
    claims within a single proceeding and staying all actions against the debtor,
    thus putting creditors on an equal footing:
Century Services
, para.
    22.

[40]

As
    submitted by the Canadian Creditors Committee, if post-filing interest is
    available to one set of creditors while the other creditors are prevented from
    asserting their rights to sue the debtor and obtaining a judgment that bears
    interest, the
status quo
has not been preserved.

[41]

Fourth,
    if the interest stops rule were not to apply in
CCAA
proceedings, the key
    objective of that statute  to facilitate the restructuring of corporations
    through flexibility and creativity  may be undermined. This is because of the
    asymmetrical entitlement to interest that would be created. Creditors with an
    entitlement to post-filing interest may be less motivated to compromise than those
    creditors without such an entitlement. Using the case under appeal as an
    example, if post-filing interest is allowed to accrue, the delay and failure to
    reach a compromise will see the appellants proportionate claim against the
    assets of the debtors rise very significantly at the expense of other
    creditors. One could well understand that if the urgency for reaching a
    compromise and the incentive to compromise are significantly lower for one
    group of unsecured creditors than for the balance of the unsecured creditors,
    restructuring will be more difficult to achieve and the ability to reach creative
    solutions will be lessened.

[42]

Furthermore,
    if the amount of an unsecured creditors legal entitlement is constantly
    shifting as post-filing interest accrues, the ability to find a compromise that
    is acceptable to all creditors at any one point in time will pose a greater
    challenge than if the entitlements are fixed as of the date of filing.

[43]

Fifth,
    the principle of fairness supports the application of the interest stops rule.
    Insolvency proceedings are intended to be fair processes for liquidating or restructuring
    insolvent corporations. How, one may ask, is it fair if the appellant, an
    unsecured creditor, sees its claim against the assets of the debtor balloon
    from $4.092 billion to $5.692 billion (as of December 31, 2013) because of
    contractual provisions when the claims of unsecured creditors, who have no such
    contractual provisions and who have been prevented for almost seven years by
    the
CCAA
stay from converting their claims into court judgments that
    would bear interest, have seen no increase at all? Delays in liquidating the Nortel
    assets have helped the Monitor achieve the very significant recoveries made
    ($7.3 billion) and, in fairness, this achievement should be for the benefit of
    all creditors.

[44]

Finally,
    I wish to respond to the appellants concerns.

[45]

As
    to past practice and the reasonable expectations of the parties, I do not view
    the existence of an interest stops rule as being contrary to established
CCAA
practice or as preventing a
CCAA
plan from providing for post-filing
    interest. Parties may negotiate for a plan that provides for payments of more
    or less than a creditors legal entitlement in lieu of the foregone interest. Thus,
    I do not accept the appellants submission that there would be a disincentive
    to participate in
CCAA
proceedings, which is based on the premise that
    post-filing interest may not be recovered under a
CCAA
plan.

[46]

The
    appellant also raised the concern that a debtor company could obtain a
    permanent interest holiday, resulting in unfairness. The appellant says that if
    there are proceeds over and above the amounts needed to satisfy the pre-filing
    claims of creditors, those proceeds would be for the benefit of the
    shareholders of the debtor. This follows from the fact that the
CCAA
contains no provision for the payment of a surplus to creditors and the
    interest stops rule would prevent the unsecured creditors from recovering any post-filing
    interest. The debtor could therefore resort to the
CCAA
to stop
    interest from accruing and operate his business interest free.

[47]

This
    hypothetical raises the same concern about the loss of post-filing interest but
    in a somewhat different way. The concern is that a debtor may seek
CCAA
protection to avoid the obligation to pay interest.

[48]

There
    may well be exceptional situations where, at some point in a
CCAA
proceeding, the common law interest stops rule risks working an unfairness of
    some sort. I leave for another day what orders, if any, might be made by a
CCAA
judge in cases such as the hypothetical presented by the appellant where a
    debtor might be considered to benefit unfairly as a result of the common law
    interest stops rule. I note, however, that in order to achieve the remedial
    purpose of the
CCAA
,
CCAA
courts have been innovative in
    their interpretation of their stay power and in the exercise of their authority
    in the administration of
CCAA
proceedings. This approach has been
    specifically endorsed by the Supreme Court of Canada in
Century Services
and would no doubt guide the court should the need arise: see, for example,
    paras. 61 and 70.

[49]

In
    conclusion, there are sound reasons for adopting an interest stops rule in the
CCAA
context. I now turn to the argument that
Canada 3000
and
Stelco
preclude the application of the rule.

(b)

Are
Canada 3000
and
Stelco
binding authorities to the
    effect that the interest stops rule does not apply in
CCAA
proceedings?

[50]

The
    appellant vigorously maintains that the
CCAA
judge was bound by
Canada
    3000
and
Stelco
, which both confirm that the interest stops rule
    does not apply in
CCAA
proceedings.

[51]

I
    would not give effect to this submission. As I will explain, both of these
    decisions should be read narrowly and do not constitute a precedent with
    respect to the issue raised in this appeal  whether the common law interest
    stops rule applies in
CCAA
proceedings.

(i)

Canada 3000

Background and lower court decisions

[52]

The
    decision in
Canada 3000
arose out of the collapse of three airlines
    Canada 3000 Airlines Ltd. and Royal Aviation Inc. (collectively Canada 3000),
    and Inter-Canadian (1991) Inc. (Inter-Canadian). Canada 3000 filed for
    protection under the
CCAA
and, three days later, filed for bankruptcy.
    Inter-Canadian filed a
BIA
proposal but the proposal ultimately failed
    and so it too was placed into bankruptcy effective as of the date it filed its
    notice of intention to make a proposal.

[53]

At
    the time the airlines collapsed, they owed significant amounts in unpaid
    airport and navigation charges. As a result, various airport authorities and NAV
    Canada sought remedies under the
Airport Transfer (Miscellaneous Matters)
    Act
, S.C. 1992, c. 5 (
Airports Act
) and the
Civil Air
    Navigation Services Commercialization Act
, S.C. 1996, c. 20 (
CANSCA
).
    In particular, they sought orders seizing and detaining aircraft leased by the
    bankrupt airlines. While the lessors of the planes retained legal title to the
    aircraft, the bankrupt airlines were the registered owner for the purposes of
    the
Aeronautics Act
, R.S.C. 1985, c. A-2.

[54]

The
    airport authorities and NAV Canada brought proceedings in Ontario and Quebec.

[55]

In
    Ontario, Ground J. dismissed motions for orders permitting the airport
    authorities and NAV Canada to seize and detain the aircraft leased by Canada
    3000:
Canada 3000 (Re)
(2002), 33 C.B.R. (4th) 184 (S.C.). On the
    question of interest, he concluded, at para. 73, that the airport authorities
    and NAV Canada were entitled to charge interest on the unpaid charges up to the
    date of payment or the posting of security for payment.

[56]

On
    appeal from Ground J.s decision, this court held that the interest question
    need not be determined since the airport authorities and NAV Canada did not
    have the right to detain the aircraft:
Canada 3000 (Re)
(2004), 69
    O.R. (3d) 1, at para. 197.

Supreme Courts decision

[57]

On
    appeal to the Supreme Court of Canada, the court determined that the airport
    authorities and NAV Canada had the right to detain the aircraft leased and
    operated by the bankrupt airlines. The issue of post-filing interest was,
    therefore, an issue the court had to decide.

[58]

In
    deciding that issue, Binnie J. made the following comment at para. 96:

While a CCAA filing does not stop the
    accrual of interest
, the unpaid charges remain an unsecured claim
    provable against the bankrupt airline. The claim does not accrue interest after
    the bankruptcy: ss. 121 and 122 of the [
BIA
]. [Emphasis added.]

[59]

The
    appellant submits that the underlined words are binding
ratio
and must
    be followed in this case.

[60]

While
    I agree that Binnie J.s comment about the
CCAA
is not
obiter
,
    I am not convinced that it should be read as broadly as the appellant contends.
    In
R. v. Henry
, 2005 SCC 76, [2005] 3 S.C.R. 609, Binnie J. warned, at
    para. 57, against reading each phrase in a judgment  as if enacted in a
    statute. Rather, the question to be asked is what did the case decide?.

[61]

To
    answer what
Canada 3000
decided about post-filing interest under the
CCAA
,
    it is important to consider the context in which Binnie J. made his comment,
    including the facts of the case, the issues before the court, the structure of
    his reasons, the wording he used, and what he said as well as what he did not
    say.

[62]

At
    para. 40., Binnie J. defined the two major questions raised by the appeals as
    follows: (1) are the
legal titleholders
liable for the debt incurred
    by the registered owners and operators of the failed airlines to the service
    providers? and (2) even if they are not so liable, are
the aircraft
to which they hold title subject on the facts of this case to judicially issued
    seizure and detention orders to answer for the unpaid user charges incurred by
    Canada 3000 and Inter-Canadian? (emphasis in original). The answer to those
    two questions turned on the interpretation of the
Airports Act
and
CANSCA
.
    As Binnie J. noted at para. 36, the case was from first to last an exercise in
    statutory interpretation.

[63]

After
    engaging in a lengthy exercise of statutory interpretation, he concluded that:
    (1) under s. 55 of
CANSCA
, the legal titleholders were not jointly and
    severally liable for the charges due to NAV Canada; and (2) under s. 56 of
CANSCA
and s. 9 of the
Airports Act
, the airport authorities and NAV Canada
    were entitled to apply for an order detaining the aircraft operated by the
    failed airlines.

[64]

Binnie
    J. then addressed eight additional arguments made by the parties and just
    before his last paragraph on disposition, he included a section simply entitled
    Interest, starting at para. 93.

[65]

He
    began his analysis of the interest issue by outlining the statutory authority
    for charging interest: s. 9(1) of the
Airports Act
expressly provided
    for the payment of interest, and while
CANSCA
did not explicitly
    provide for interest, a regulation under
CANSCA
imposed interest:
    para. 93.

[66]

The
    question then, said Binnie J. at para. 95, was how long the interest can
    run. He addressed that question as follows, at paras. 95-96:

The airport authorities and NAV Canada have possession of the
    aircraft until the charge or amount in respect of which the seizure was made is
    paid. It seems to me that this debt must be understood in real terms and must
    include the time value of money.

Given the authority to charge interest, my view is that
    interest continues to run to the first of the date of payment, the posting of
    security or bankruptcy. If interest were to stop accruing before payment has
    been made, then the airport authorities and NAV Canada would not recover the
    full amount owed to them in real terms. Once the owner, operator or titleholder
    has provided security, the interest stops accruing. The legal titleholder is
    then incurring the cost of the security and losing the time value of money. It
    should not have to pay twice.
While a CCAA filing does
    not stop the accrual of interest
, the unpaid charges remain an unsecured
    claim provable against the bankrupt airline. The claim does not accrue interest
    after the bankruptcy: ss. 121 and 122 of the [
BIA
]. [Emphasis added.]

[67]

Significantly,
    Binnie J. made no mention in his reasons of the common law interest stops rule
    or the related
pari passu
principle. Nor did he cite any case law
    dealing with those issues. In fact, even though it is well established that the
    interest stops rules applies under the
BIA
, he did not rely on the
    common law rule in support of his finding that interest stopped on bankruptcy.
    Instead, he relied on ss. 121 and 122 of the
BIA
in concluding that
    the interest payable under the
Airports Act
and the regulation under
CANSCA
did not accrue post-bankruptcy.

[68]

Binnie
    J.s analysis of the issue is rooted in the factual and statutory context of
    the case. In discussing the accrual of interest under the
CCAA
, he
    specified that the interest was on unpaid charges, namely charges under
CANSCA
and the
Airports Act
. Binnie J. was not answering an abstract legal
    question but rather deciding how long interest ran in the particular factual
    and statutory context.

[69]

In
    effect, I read Binnie J. as saying that a
CCAA
filing does not stop
    the accrual of interest under
CANSCA
or the
Airports Act
but
    the statutory provisions of the
BIA
ss. 121 and 122 do. He was not
    deciding whether, in the absence of the right to interest under
CANSCA
and the
Airports Act
, interest would have accrued or been stopped by
    the common law interest stops rule.

[70]

Let
    me add that I agree with the
CCAA
judges comment that Binnie J.s
    statement in
Canada 3000
should now be construed in light of
Century
    Services
and
Indalex
. In fact, one can well imagine that the courts
    interpretation of
CANSCA
and the
Airports Act
as allowing the
    accrual of interest in a
CCAA
proceeding but not in a
BIA
proceeding might have been different had it reached the Supreme Court after
    these two more recent cases. That question, however, is for another day. For
    now, I turn to this courts decision in
Stelco
.

(ii)

Stelco

Background and motion judges decision

[71]

The
    post-filing interest issue in
Stelco
arose in the final chapter of
    the financial restructuring of Stelco under the
CCAA
:
Stelco (Re)
(2006), 24 C.B.R. (5th) 59, at para. 1 (S.C.). The final chapter involved
    competing claims to a portion of the amount payable to the holders of
    subordinated notes (the Junior Noteholders) pursuant to Stelcos plan of
    arrangement (the Plan). The claim to these funds (Turnover Proceeds) was
    made by the Senior Debentureholders.

[72]

The
    dispute over the Turnover Proceeds arose after Stelcos Plan had been
    sanctioned and Stelco had emerged from restructuring with its debt reorganized.
    The Senior Debentureholders claimed the Turnover Proceeds on the basis of
    subordination provisions contained in the Note Indenture under which Stelco had
    issued convertible unsecured subordinated debentures to the Junior Noteholders.

[73]

Under
    the terms of the Note Indenture, the Junior Noteholders expressly agreed that,
    in the event that the debtor became insolvent, they would subordinate their
    right of repayment until after repayment in full of Senior Debt.

[74]

The
    plan of arrangement that had been approved was a no interest plan, meaning
    that distribution from Stelco to the creditors did not include or account for
    post-filing interest. The Plan, however, provided that the rights as between
    the Senior Debentureholders and the Junior Noteholders were preserved. The Senior
    Debentureholders, who had not received payment of post-filing interest from
    Stelco under the Plan, demanded payment of it from the Junior Noteholders
    pursuant to the terms of the Note Indenture. The Junior Noteholders argued,
    among other things, that the subordination provisions did not survive the Plans
    implementation and that the Senior Debentureholders were not entitled to claim
    post-filing interest from them.

[75]

The
    motion judge, and on appeal, this court ruled in favour of the Senior Debentureholders.
    The courts found that the Plan was expressly drafted to preserve the
    subordination provisions and that the
CCAA
does not purport to affect
    rights as between creditors to the extent that they do not directly involve the
    debtor.

How to read
Stelco
?

[76]

The
    appellant and the respondents offer different readings of
Stelco
.

[77]

The
    appellant argues that this courts decision is binding authority for the
    proposition that the interest stops rule does not apply in the
CCAA
context. The passages relied on by the appellant include para. 67:

[T]here is no persuasive authority that supports an Interest
    Stops Rule in a
CCAA
proceeding. Indeed, the suggested rule is
    inconsistent with the comment of Justice Binnie in [
Canada 3000
]

at
    para. 96, where he said:

While a
CCAA
filing does not stop the accrual of
    interest, the unpaid charges remain an unsecured claim provable against the
    bankrupt airline. The claim does not accrue interest after the bankruptcy: ss.
    121 and 122 of the [
BIA
].

[78]

The
    respondents, for their part, read the case more narrowly as a resolution of an
    inter-creditor dispute. They submit that the
ratio
of the case is that
    there was no rule that prohibited giving effect to the agreed upon inter-creditor
    postponement. To the extent that this court discussed the interest stops rule
    in the abstract, its comments are
obiter
.

[79]

I
    agree with the respondents. In my view, the court in
Stelco
did not
    need to decide whether the interest stops rule applies in
CCAA
proceedings for it to decide the inter-creditor dispute before the court and so
    its statements about the rules application are not binding.

[80]

This
    court expressly noted, at para. 44, that it was dealing with an inter-creditor
    dispute. The Junior Noteholders had accepted the subordination terms in the
    Note Indenture. They had agreed not to be paid anything, in the event of
    insolvency, until those who held Senior Debt were paid principal and interest
    in full. The court affirmed, at para. 44, that the
CCAA
does not
    change the relationship among creditors where it does not directly involve the
    debtor.

[81]

As
    noted, this was a no interest plan, meaning that the Senior Debentureholders
    received no post-filing interest from Stelco. Rather, they sought and
    eventually received payment of post-filing interest from the Junior
    Noteholders share of the proceeds. The court found that the Stelco Plan
    contemplated the continued accrual of interest to Senior Debentureholders for
    the purpose of their rights as against the Junior Noteholders after the
CCAA
filing date: paras. 59 and 70. It noted that
CCAA
plans can and
    sometimes do provide for payments in excess of claims filed in
CCAA
proceedings. There was no rule precluding the payment of post-filing interest
    to the Senior Debentureholders in accordance with the Stelco Plan: para. 70.

[82]

The
    courts conclusion that the Junior Noteholders could not rely on the interest
    stops rule is consistent with the traditional interest stops rule. The interest
    stops rule relates to claims by creditors against the debtor. It does not deal
    with arrangements as between creditors. In other words, whether or not the
    interest stops rule applies in
CCAA
proceedings did not need to be
    decided because the agreement between creditors fell outside the scope of that
    rule.

[83]

The
    appellant makes two further submissions based on its interpretation of s.
    6.2(1) of the Note Indenture. That paragraph reads as follows:

6.2     Distribution on Insolvency or
    Winding-up.

(1) the holders of all Senior Debt will first be entitled to
    receive payment in full of the principal thereof, premium (or any other amount
    payable under such Senior Debt), if any, and interest
due
    thereon
, before the Debentureholders will be entitled to receive any
    payment or distribution of any kind or character, whether in cash, property or
    securities,
which may be payable or deliverable in any
    such event in respect of any of the Debentures
; [Emphasis added.]

[84]

The
    first argument is that the Senior Debentureholders were only entitled to
    receive principal, premium and interest which may be payable or deliverable in
    any such event, the event being insolvency or bankruptcy proceedings. Therefore,
    the court must have concluded, at least implicitly, that the Senior
    Debentureholders would have been entitled to maintain their claim for
    post-filing interest against Stelco.

[85]

The
    second argument is that, by the terms of s. 6.2(1), the Senior Debentureholders
    were only entitled to interest due thereon and so they could not claim
    post-filing interest from the Junior Noteholders unless they could claim
    post-filing interest from Stelco.

[86]

I
    would not give effect to either submission.

[87]

In
Stelco
, the court did not address either argument and we do not have a
    copy of the entire agreement nor do we have the other agreements that form part
    of the factual matrix. Without that context, this court is not in the position
    to interpret s. 6.2(1).

[88]

In
    my view, the key question for this court is not how to properly interpret s. 6.2(1)
    but, rather, how we should read the reasons in
Stelco
. What did the
Stelco
court decide, and specifically, should we read the panel as implicitly deciding
    that the Senior Debentureholders could not recover post-filing interest from
    the Junior Noteholders unless they could claim post-filing interest against
    Stelco?

[89]

In discussing post-filing interest, the courts only mention of
    the Senior Debentureholders claim as against Stelco is found at paras. 57-59,
    where the panel expressly rejected the argument that
any
    claim the Senior [Debentureholders] have for interest must be based on a
    claim [as defined in the Plan] they have against Stelco for such interest
    and that [i]f the Senior Debt does not include post-filing interest, there can
    be no claim against the [Junior] Noteholders for such amounts: see paras. 58-59.

[90]

Admittedly, the panel made this comment in
    discussing the effect of the Stelco Plan as opposed to the effect of the
    interest stops rule. However, as I read the section on post-filing interest as a
    whole, the court is saying that the Junior Noteholders agreed to be bound by
    the deal they made. They had agreed to the subordination provisions that
    guaranteed full payment to the Senior Debentureholders in the event of
    insolvency, and the Plan affirmed that the Senior Noteholders could claim the
    full amount that would have been owing had there been no
CCAA
filing. In this courts words at para. 70, there is no interest
    stops rule that precludes such a result. In my view, therefore, this court did
    not make an implicit finding that the Senior Debentureholders had to be able to
    claim post-filing interest from Stelco in order to claim post-filing interest
    from the Junior Noteholders.

[91]

In conclusion, I consider the comment that there
    is no persuasive authority that supports an interest stops rule in
CCAA
proceedings to be
obiter
.
Stelco
dealt with the effect of an agreement as between creditors as to
    how, between them, they would share distributions. Whether or not interest
    stops upon a
CCAA
filing was of no import in
    answering that question.

(2)

If the
CCAA
judge did not err in concluding that an interest
    stops rule applies in
CCAA
proceedings, did he err in holding that
    holders of Crossover Bonds Claims are not legally entitled to claim or receive
    any amounts under the relevant indentures above and beyond the outstanding
    principal debt and pre-petition interest?

[92]

The appellant objects to the wording of the
CCAA
judges order.
It provides that holders of Crossover Bond
    Claims are not legally entitled to claim
or receive
any amounts under
    the relevant indentures above and beyond the outstanding principal debt and
    pre-petition interest (emphasis added). While the appellant asked the
CCAA
judge to amend his order to delete or receive, he refused. The appellant
    submits that, to the extent this precludes the bondholders from receiving
    post-filing interest under a
CCAA
plan, the
CCAA
judge erred.
    The appellant notes that all the parties in this proceeding agree that a
CCAA
plan may provide for post-filing interest.

[93]

As
    I explained above, the interest stops rule does not preclude the payment of
    post-filing interest under a plan of compromise or arrangement.

[94]

As
    I read the
CCAA
judges reasons and order, he did not decide
    otherwise. His decision confirms that the common law interest stops rule
    applies in
CCAA
proceedings. If a plan of compromise or arrangement is
    concluded, it should not, for example, be read as limiting any right to recover
    post-filing interest creditors may have as amongst themselves, as existed in
Stelco,
or from non-parties. Nor does it dictate what any creditor may seek in
    bargaining for a fair plan of compromise or arrangement. In that regard, I do
    not interpret the
CCAA
judges use of the words or receive as
    preventing the appellant from seeking and obtaining such a result in a
    negotiated plan. In particular, I note the
CCAA
judges comment at
    para. 35 of his reasons that the parties would of course be free to include
    post-filing interest payments in a plan of arrangement, as is sometimes done.

[95]

The
    appellant also seeks clarification as to the effect of the words
any
    amounts
under the relevant indentures above and beyond the outstanding principal
    debt and pre-petition interest (emphasis added). The appellant notes that,
    without clarification, the wording of the order could potentially preclude the
    recovery of other contractual entitlements under the relevant indentures, such
    as costs and make-whole provisions, even though no arguments were advanced
    before the
CCAA
judge with respect to any amounts other than
    post-filing interest.

[96]

The
    issue the
CCAA
judge was directed to answer was whether the holders
    of the crossover bond claims  [were] legally entitled  to claim or receive any
    amounts under the relevant indentures above and beyond the outstanding principal
    debt and pre-petition interest. As indicated in the appellants factum, the
    only arguments advanced before the
CCAA
judge related to post-filing
    interest and not any other amounts under the indentures. The appellant does not
    appear to have made submissions to the
CCAA
judge with respect to the
    costs and make-whole fees it now raises in its factum. This court is in no
    position to deal with the new argument raised by the appellant. Further, beyond
    making the broad submission noted above, the appellant did not expand on that
    submission and direct the court to the specific claims or indenture provisions
    it relies on in support of its argument or explain why the claims should not be
    caught by the order.

[97]

As
    I have already indicated, the
CCAA
judges order confirms that the
    interest stops rule, and the limits imposed by the rule, apply in
CCAA
proceedings.
    To the extent that the appellant maintains that there are other contractual
    entitlements under the relevant indentures not covered by the interest stops
    rule, it is up to the
CCAA
court to decide if those can now be raised
    and ruled upon.

F.

FINAL COMMENTS

[98]

I
    acknowledge that the Nortel
CCAA
proceedings are exceptional, particularly
    with respect to the length of the delay. The amount the appellant claims for
    post-filing interest and related claims under the indentures, and the resulting
    impact on other unsecured creditors is so great because of the length of that
    process. The principle, however, is the same whether the
CCAA
process
    is short or long. After the imposition of a stay in
CCAA
proceedings,
    allowing one group of unsecured creditors to accumulate post-filing interest,
    even for a relatively short period of time, would constitute unfair treatment vis-à-vis
    other unsecured creditors whose right to convert their claim into an
    interest-bearing judgment is stayed.

[99]

This
    decision does not purport to change or limit the powers of
CCAA
judges.
    Although the decision clearly settles at the outset of a
CCAA
proceeding whether there is a legal entitlement to post-filing interest, it
    does not dictate how the proceeding will progress thereafter until a plan of compromise
    or arrangement is approved, or the
CCAA
proceeding is otherwise
    brought to an end.

[100]

The
    determination of legal entitlement is important as it clearly establishes the
    starting point in a
CCAA
proceeding. It tells creditors, debtors and
    the court what legal claim a particular creditor has. Its significance is not
    only for purposes of setting the voting rights of creditors on any proposed
    plan of compromise or arrangement, it also ensures that, in assessing any such
    proposed plan, the parties will know what they are or are not compromising and
    the court will be equipped to consider the fairness of such a plan.

G.

DISPOSITION

[101]

For these
    reasons, I would dismiss the appeal. Pursuant to the agreement of the parties,
    I would award the respondent Monitor, as successful party, costs as against the
    appellant fixed in the amount of $40,000, inclusive of disbursements and
    applicable taxes. I would make no other order as to costs.

Released: October 13, 2015

(EEG)

Paul
    Rouleau J.A.

I
    agree Janet Simmons J.A.

I
    agree E.E. Gillese J.A.

[1]
There are five Canadian Debtors: Nortel Networks Corporation, Nortel Networks
    Limited, Nortel Networks Technology Corporation, Nortel Networks International
    Corporation and Nortel Networks Global Corporation.

[2]
As explained in Roderick J. Woods text on bankruptcy and insolvency law,
    insolvency law is the wider concept, encompassing bankruptcy law but also
    including non-bankruptcy insolvency systems.: Roderick J. Wood,
Bankruptcy
    & Insolvency Law
(Toronto: Irwin Law Inc., 2009), at p. 1.

[3]
The respondents are the Monitor, the Canadian Debtors, the Canadian Creditors
    Committee and the Wilmington Trust, National Association. While technically The
    Bank of New York Mellon and the Law Debenture Trust Company of New York are
    also respondents, they support the appellants position and so my use of the
    term respondents excludes them.


COURT OF APPEAL FOR ONTARIO

CITATION: Om Sai Physiotherapy Clinic Inc. v. Kucher, 2015
    ONCA 711

DATE: 20151023

DOCKET: C60092

Feldman, Juriansz and Brown JJ.A.

BETWEEN

Om Sai Physiotherapy Clinic Inc.

Plaintiff (Appellant)

and

Robert Kucher

Defendant (Respondent)

AND BETWEEN

Robert Kucher

Plaintiff by Counterclaim

(Respondent)

and

Om Sai Physiotherapy Clinic Inc. and V.P. Raju

Defendants by Counterclaim

(Appellants)

Pathik Baxi and Amrita Mann, for the appellants

Margherita Barbagallo, for the respondent

Heard and released orally: October 2, 2015

On appeal from the order of Justice Jamie K. Trimble of
    the Superior Court of Justice, dated February 4, 2015, with reasons reported at
    2015 ONSC 814.

ENDORSEMENT

[1]

This is an appeal by Om Sai Physiotherapy Clinic Inc. (the Clinic) and
    Mr. V.P. Raju from the order of Trimble J., dated February 4, 2015. Together
    with the appeal, the appellants have brought a motion for leave to file fresh
    evidence which was not before the motion judge.

[2]

The motion judge, by his order of February 4, 2015, dismissed the Clinics
    main action against the respondent, Robert Kucher, for delay and for failure to
    comply with undertakings obligations. The motion judge struck the appellants Reply
    and Defence to Counterclaim for their failure to comply with the interlocutory
    order of Van Melle J., dated November 8, 2013, and he dismissed Mr. Rajus
    motion to dismiss the counterclaim against him personally.

[3]

In reviewing the reasons for judgment of the motion judge, we conclude
    that he applied the correct legal principles and did not misapprehend the
    evidence before him about the non-compensable prejudice to the respondent that the
    absence of certain of the appellants records might cause.

[4]

As a result, we see no error by the motion judge in his exercise of
    discretion, on the record as it existed before him.

[5]

However, we have before us the appellants motion for leave to file
    fresh evidence. The fresh evidence consists of bank statements and other
    financial documents that the appellants undertook to produce on the examination
    for discovery of the Clinics representative on July 15, 2011, but had not
    produced by the time of the motion.

[6]

The fresh evidence does not meet the due diligence requirement under
Palmer
    v. The Queen
, [1980] 1 S.C.R. 759. Obviously, the documents which
    constitute the fresh evidence were available not only at the time of the
    motion, but at the time the undertakings were given back in 2011. In ordinary
    circumstances, this would be sufficient to refuse to admit the fresh evidence. However,
    in this case, the fresh evidence is relevant not only to the Clinics claim,
    but also to the appellants defence to the respondents counterclaim  specifically,
    to their defence to the respondents claim for damages for defamation. The
    counterclaim raises much the same evidentiary issues as does the claim. For
    example, whether a misappropriation of funds occurred remains a live issue in
    the counterclaim as a defence by the appellants to the defamation allegation. The
    respondent intends to pursue his counterclaim, and the fresh evidence therefore
    is relevant to an on-going action.

[7]

With the fresh evidence now showing that the undertakings are complete,
    and with the fresh evidence remaining relevant to the respondents counterclaim,
    we grant the motion for leave to file fresh evidence and we allow the appeal,
    restore the Clinics Statement of Claim and the appellants Reply and Defence
    to Counterclaim, and restore the Clinics action to the Brampton trial list.

[8]

However, we vary the costs award below to $3,000, payable by the
    appellants to the respondent. It was the appellants delay in fulfilling their
    undertakings that caused the problem and that delay was completely within the
    appellants control to cure.

[9]

There will be no costs of this appeal.

K. Feldman
    J.A.

R.G.
    Juriansz J.A.

David
    Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Pirpamer v. Zanette, 2015 ONCA 723

DATE: 20151027

DOCKET: C60548

Blair, Hourigan, Brown JJ.A.

BETWEEN

Frank Pirpamer

Respondent/Applicant

and

Mark Zanette,
    Stephen Zanette and Randy Zanette,

Amelia
    Miragliotta and Francesco Di Nardo

Appellants/Respondents

Patrick Di Monte, for the appellants

Wendy Greenspoon, for the respondent

Heard: October 26, 2015

On appeal from the order of Justice John McIsaac of the Superior
    Court of Justice, dated June 2, 2015.

APPEAL BOOK ENDORSEMENT

[1]

We see no error in the motion judges determination of this dispute.

[2]

The language of the consent order granted by Justice Mulligan
    incorporating the terms of settlement is quite clear and unambiguous in our
    view: the zoning restrictions were to apply to the future development of Block
    7, the Zanette Lots (i.e. the future lots 3.4 & 5 to the north of Block 7)
    and all other lots/blocks, with the Plan. The Plan is implicitly define as
    Mr. Di Nardos proposed plan of subdivision (Sch A). That Plan does not include
    what has now become the contested Lots 1 & 2 of the Zanette lands; and on
    the face and wording of the Consent Order, those lots are not encompassed by
    the language all other lots/blocks within the Plan. Nor are they encompassed
    in the defined term Zanette Lots.

[3]

Even if we were to find some ambiguity in the language of the Consent
    Order, the application of the parole evidence rule would not assist the
    appellants. There is nothing in the correspondence leading up to the settlement
    and the Consent Order that would support the view that the lots referred to
    therein are anything other than the Zanette Lots as defined.

[4]

Finally, we see no basis on the record, including the affidavit
    evidence,that would support a finding of either unilateral or mutual mistake.

[5]

The appeal is therefore dismissed. In accordance with the agreement of
    counsel, costs are fixed in favour of the respondents in the amount of $5,500
    all inclusive.