Brief of the Alberta Energy Regulator for

Transcription

Clerk’s Stamp
COURT FILE NUMBER
1501-04793
COURT
COURT OF QUEEN’S BENCH
JUDICIAL CENTRE
CALGARY
PLAINTIFF
ALBERTA TREASURY BRANCHES
DEFENDANT
REDWATER ENERGY CORP.
DOCUMENT
BRIEF OF THE ALBERTA ENERGY
REGULATOR FOR DECLARATION
FOR RECEIVER TO COMPLY
ADDRESS FOR SERVICE
AND CONTACT
INFORMATION OF
PARTY FILING THIS
DOCUMENT
Miles Davison LLP
Bow Valley Square II
900. 517l0hI1 Avenue S.W.
Calgary, Alberta T2R 0A8
Telephone: (403) 298-0326
Facsimile: (403) 263-6840
Attention: Terry L. Czechowskyj
COURT FILE NUMBER
BKOI-094570
COURT
COURT OF QUEEN’S BENCH OF
ALBERTA IN BANKRUPTCY
CALGARY
JUDICIAL CENTRE
IN THE MATTER OF THE
BANKRUPTCY AND INSOLVENCY ACT
R.S.C. 1985, c. B-3, AS AMENDED
APPLICANT
DEFENDANT
DOCUMENT
BRIEF OF THE ALBERTA ENERGY
REGULATOR FOR DECLARATION
FOR TRUSTEE TO COMPLY
CLERK OF ThE
NOV 20 2015
JUDICIAL CENTRE
OF CALGARY
BANKRbIFèt 59SOLVEIVI
FAILLrrE Er INSOLVABILITE
FILED
NOV 202015
JUDICIAL CENTRE
OF CALGARY
TABLE OF CONTENTS
I.
Introduction .......................................................................................................................... 1
II.
Facts ..................................................................................................................................... 1
III.
Issue ..................................................................................................................................... 6
IV.
Law and Argument .............................................................................................................. 6
V.
Relief Sought ..................................................................................................................... 20
List of Authorities .......................................................................................................................... 21
1
I.
Introduction
1.
This Application by the Alberta Energy Regulator (AER) is in response to the improper
disclaimers by Grant Thornton Limited (GTL/Receiver or Trustee as the case may require)
of most of the AER licensed assets of Redwater Energy Corp. (Redwater) first in its
capacity of Receiver and then in its capacity as Trustee and GTL's failure to comply with
closure and abandonment orders issued by the AER relating to the assets disclaimed by
the Receiver. The AER is concerned that GTL disclaimed assets for the sole purpose of
avoiding statutory obligations that are crucial for health, safety, and the environment.
2.
The matter before the Court is of great significance to the safe and efficient regulation of
the oil and gas industry in Alberta. If a receiver or trustee is permitted to disclaim assets
to avoid its regulatory obligations, it will create a situation where there is no responsible
party for the purposes of care and custody obligations (including emergency, incident and
complaint response), abandonment, reclamation and remediation of the debtor's licensed
assets. This in tum, poses a threat to the health, safety, and environmental security of
Albertans. A receiver or trustee should not be in a better position than the licensee itself
in relation to its statutory duties and obligations as a licensee. This is especially so given
the legislature clearly intended receivers and trustees to assume licensee responsibilities
by explicitly including those parties in the definition of licensee in AER administered
legislation.
3.
The facts relevant to this Application are set out in the Affidavits of Patricia Johnston
Q.C., General Counsel for the AER, sworn August 13, 2015 and September 8, 2015; and
the Affidavit of David Wolfe, Director of the Alberta Oil & Gas Orphan Abandonment
and Reclamation Association (OWA) sworn September 22, 2015.
II.
Facts
Background Facts
4.
Registered in Alberta in 2008, Redwater was a publicly listed oil and gas corporation that
holds a number of AER licensed properties in central Alberta (Receiver's First Report,
pa.6).
5.
In 2013, Alberta Treasury Branches (ATB) advanced funds to Redwater pursuant to
commitment letters dated January 31, 2013 and August 19, 2013. Exhibit B to the Affidavit
ofJacqueline Gauthier sworn May 8, 2015.
2
6.
It is ATB's standard practice in accordance with its Industry Knowledge Guide to
specifically consider the debtor's statutory abandonment and reclamation obligations
when assessing its risk exposure and to expect its customers to comply with same. This
exposure is managed by ATB through ensuring the debtor budgets for and sets money
aside for abandonment. Exhibit 1 p. 2 "Managing Risks" bullet 7 to the Questioning of
Jacqueline Gauthier sworn May 8, 2015.
7.
In consideration of Redwater's abandonment and reclamation obligations, ATB required
Redwater to complete an environmental questionnaire that included questions regarding
Redwater's policies to ensure timely abandonment, reclamation and decommissioning of
uneconomic sites. ATB also required submission of a third party report outlining
abandonment costs in relation to calculations under the AER licensee liability rating
(LLR) program, and engineering reports that included information regarding Redwater's
abandonment and reclamation liabilities. The December 31, 2014 engineering report
indicated that certain Redwater properties would need to be abandoned in 2015 and others
in 2020: Responses to Undertakings of Jacqueline Gauthier from Question on September
30, 2015, Tab 9 p. 1, Responses to Undertakings 13 and 20, and Tab 5 December 21,
2014 Report at p. 26.
8.
As of January 29, 2015, and prior to appointment of the Receiver by ATB, ATB records
indicate it anticipated full recovery on its debt notwithstanding low commodity prices. As
a result of a sales process conducted prior to appointment of the Receiver, a substantial
offer was received for a portion of Redwater's assets. ATB was not in favour of the offer
and considered receivership as an option for affording it better control of all sales
proceeds and timing. In a letter dated May 1, 2015, a consultant retained to market
Redwater's assets prior to the receivership advised ATB that it was unlikely to obtain
greater results through another marketing effort: Responses to Undertakings of Jacqueline
Gauthier from Question on September 30, 2015, Tab 25 p. 145, 155.
9.
Pursuant to the Order of Justice Jones granted May 12, 2015 (Receivership Order), GTL
was appointed Receiver of all of Redwater's "current and future assets, undertakings, and
properties of every nature and kind whatsoever, and wherever situate, including all
proceeds thereof'. A copy of the Receivership Order is attached as Exhibit "A" to the
Affidavit of Patricia Johnston sworn August 13, 2015 and is reproduced for convenience.
Receivership Order filed May 12, 2015 TAB 1
10.
The AER was not given notice of the application,for the Receivership Order.
3
AER Mandate and Practices
11.
The AER was established by the Responsible Energy Development Act (REDA) and acts
as the single regulator of all upstream oil and gas activities in the Province of Alberta
(Affidavit of Patricia Johnston, pa.2). The AER's mandate includes providing "efficient,
safe, orderly and environmentally responsible development of energy resources in
Alberta."
Section 2, Responsible Energy Development Act (REDA), SA 2012, c R-17.3 TAB 2
12.
In carrying out its mandate, the AER establishes rules and issues licences, approvals,
permits, orders, decisions and directions in furtherance of the purposes of AER
administered legislation, including the Oil and Gas Consen1ation Act (OGCA). The
purposes of the OGCA are set out in section 4. The AER also enforces the requirements
of its administered legislation.
Oil and Gas Conservation Act ( OGCA), RSA 2000, c 0-6 TAB 3
13.
The definitions of "licensee" in the OGCA and Pipeline Act and "operator" in the
Environmental Protection and Enhancement Act (EPEA) explicitly include receivers,
receiver-managers and trustees. On appointment, GTL assumed the obligations of
Redwater under AER administered legislation.
14.
As noted in paragraph 8 of Ms. Johnston's Affidavit dated August 13, 2015, the AER has
been consistent in its position that it will support the appointment of a receiver or trustee
provided the receiver or trustee confirms either that it is assuming care, custody, and
control of the licensee's AER licensed assets or that the licensee will continue to be
responsible for those statutory obligations.
15.
The rationale for the AER's position is based on concerns related to public safety,
environmental protection, and the need to have a responsible party for the purposes of
incident, emergency, and landowner complaint response. It is crucial and in the public
interest that the AER ensures there is always a responsible party that will respond in an
emergency situation, such as a pipeline leak or spill, well blow-out, release of hydrogen
sulfide, or incidents requiring initiation of a licensee's emergency response plan. It is also
crucial to the sustainability of the industry that there are always parties responsible to
fulfil these statutory responsibilities: Affidavit of Patricia Johnston filed August 18, 2015
atpara.9.
4
16.
In the normal course, when a licensee is in default of AER LLR program requirements, the
AER initiates its normal enforcement process, eventually resulting in one or more closure
and abandonment orders. Throughout this process, the licensee has the opportunity to
bring itself into compliance such that abandonment is not required. Where a receiver has
been appointed, as a result of the stay provisions in the appointment order, the AER does
not commence its enforcement process until following the discharge of a receiver. As part
of the enforcement process, the AER will issue orders against both the licensee and any
working interest participants (WIPs) in the properties. If the orders are not fully complied
with and the AER's enforcement process has been exhausted, the AER typically
designates remaining AER licensed properties as "orphans" pursuant to section 70 of
OGCA: Affidavit of Patricia Johnston filed August 18, 2015 at para 24.
17.
Once designated as an orphan, the AER will refer a property to the OWA for
abandonment, remediation and reclamation. The OWA is a separate entity operating
under delegated authority under the OGCA and is overseen by a board of directors
comprised of members from industry associations, the Government of Alberta, and the
AER. Affidavit ofDavid Wolf Filed September 23, 2015 at para. 3, 5.
18.
There is no guarantee an orphaned property will be abandoned, reclaimed or remediated
by the OWA. Decisions by the OWA regarding which orphan properties will be
abandoned and when depends on a number of factors, including available budget and
safety/environmental risk factors. This is especially so given the large inventory of
orphans currently before the OWA (695 wells to be abandoned and 503 sites to be
reclaimed). Where the OWA does conduct abandonment, remediation and/or reclamation
work, there is the possibility that it can off-set its costs by selling equipment or materials
found on site. When the OWA conducts work on an orphaned property, it does not seek
reimbursement from the applicable licensee of the property. Affidavit of David Wolfe
filed September 23, 2015 at para.15.
19.
This uncertainty regarding if and when an orphaned property will be abandoned makes it
all the more important for the AER to take steps to ensure that licensees comply with their
obligations.
Developments Subsequent to Appointment
20.
After becoming aware of the Receiver's appointment, AER wrote to the Receiver seeking
confirmation in accordance with the standard policy described above: Affidavit ofPatricia
Johnston, pa.JO and Exhibit "C" thereto.
5
21.
On July 3, 2015, the Receiver advised through its counsel that it was only taking
possession and control of 20 of Redwater's 127 AER licensed properties: Affidavit of
Patricia Johnston filed August 18, 2015, para.12 and Exhibit "E" thereto.
22.
More specifically, the Receiver took possession of Redwater's most valuable assets and
did not take possession of (i.e., disclaimed) the less desirable ones: Affidavit of Patricia
Johnston filed August 18, 2015, para.19.
23.
As a result of the Receiver's refusal to acknowledge responsibility for care and custody
and related statutory obligations of the disclaimed properties, the AER issued closure and
abandonment orders in relation to the properties disclaimed by the Receiver): Affidavit of
Patricia Johnston filed August 18, 2015, para.13 and Exhibits "F" and "G" thereto.
24.
On October 16, 2015 the AER was served with a copy of an application on behalf of ATB
seeking an order adjudging Redwater bankrupt and appointing GTL as Trustee of the
Redwater estate. The AER contested the application arguing that it was being brought for
an improper purpose and, would result in unnecessary expense, duplication and resources,
which would further diminish the funds available to the estate for the purposes of
compliance with AER requirements. On October 28, 2015, Justice Romaine granted the
bankruptcy order.
25.
On November 2, 2015, GTL disclaimed the Redwater assets for a second time, this time in
its capacity as Trustee.
26.
To date GTL has not complied with the closure and abandonment orders issued by the
AER and GTL has indicated it has no intention of doing so. The failure by GTL to
comply with the orders has resulted in uncertainty for both the AER and WIPs in the
disclaimed properties. Where Redwater does not hold a 100% interest in a disclaimed
property, the AER has turned to the WIPs of the property to complete the abandonment
work in accordance with its requirements. Certain WIPs have sought extensions to comply
with their obligations to await the outcome of this proceeding. This is because if the AER
is successful in this application, it will the Receiver and/or Trustee (not the WIPs) that
bear primary responsibility to comply with the orders. The longer this matter goes
unresolved, the longer the disclaimed properties go without a responsible party for care,
custody, and emergency and incident response.
6
III.
27.
IV.
Issue
The primary issue for the court to determine is whether the disclaimers of certain
Redwater licensed properties by GTL is contrary to law, the Receivership Order and/or the
public interest.
Law and Argument
The Disclaimers Are Opportunistic and Improper
28.
The basis of the Receiver's disclaimer of assets (and corresponding application to require
the AER to waive its LLR program requirements) is motivated by a desire to avoid AER
LLR program requirements and end of life obligations, complete a quick sale of the
undisclaimed assets, and maximize the sales proceeds for ATB. It appears that the
Receiver's decision was also motivated by the precedent this would set for other
receivership files if the AER did not appeal and/or amend its legislation: Responses to
Undertakings of Jacqueline Gauthier from Question on September 30, 2015, Tab 25, p.
46.
29.
The second disclaimer of the assets by GTL in its capacity as Trustee appears to be based
on a belief that it would somehow elevate its position in relation to this litigation.
30.
The AER submits that neither the Receiver or Trustee (being GTL in both cases) is not
permitted to disclaim assets as a means of avoiding a licensee's statutory obligations. The
AER's legislation makes it clear that accompanying, the issuance of a licence is the
obligation to abandon, reclaim and remediate. The obligations are inchoate from the date
the wells were drilled and are included in the obligations and expenses inherent in the
nature of the properties assumed by the Receiver and Trustee.
Panamericana de Bienesy Servicios SA v. Northern Badger Oil & Gas Ltd.,
1991ABCA181 at para. 29, 32 TAB 4
31.
The AER submits that a disclaimer of assets does not permit the disclaiming party to avoid
these inherent obligations nor can it otherwise be contracted out of. Section 9 of the
OGCA provides that the OGCA, its regulations, rules, and declarations, orders or
directions of the AER override the terms and conditions of any contract or other
arrangement conflicting with the provisions of the OGCA or the regulations, the rules or a
declaration, order or direction.
Section 9, OGCA, supra TAB 5
7
32.
Both GTL and ATB clearly understand both the AER LLR program requirements and the
statutory obligations of AER licensees and formulated their actions for sole and improper
the purposes of avoiding those requirements.
33.
The decision to disclaim certain Redwater assets hasmade it much more difficult for the
Receiver to comply with AER licence transfer requirements and has left the Receiver to
pursue a sales process the does not include otherwise viable and valuable assets that could
have been marketed and sold. Sale of these disclaimed assets could result in additional
funds for the estate and assist in satisfying the AER's LLR program requirements:
Responses to Undertakings of Jacqueline Gauthier from Question on September 30,
2015,Tab 25 p. 46 and Tab 34, p. 10.
34.
The AER is not expecting or requiring either the Trustee or the Receiver to abandon and
reclaim all of Redwater' s properties. Rather, as per its normal practice, the AER requires
GTL to take steps necessary to ensure that its sales process is conducted in a manner that
does not worsen Redwater's LLR. GTL has several options to accomplish this, all of
which are outlined at paragraph 6 of Ms. Johnston's affidavit filed September 8, 2015. In
a receivership context, this typically means packaging of assets in a manner that ensures
no worsening of the seller's' s LLR as a result of the sale. In fact the AER has facilitated
several such transactions by receivers and/or trustees in the past several years. GTL
clearly recognized this as an option and as being part of a "normal liquidation sales
process" by which it can market positive value assets with negative value assets, which in
tum can increase the purchase price, while simultaneously reducing any negative impact
on the licensee's LLR: Responses to Undertaldngs of Jacqueline Gauthier from Question
on September 30, 2015, Tab 25, p. 104.
35.
In the event packaging of assets does not prevent a negative impact on the licensee's LLR,
it is still open to GTL to either abandon properties or post LLR security as a means of
ensuring the sales process does not worsen the licensee's LLR. In the case at hand, GTL's
consultant advised GTL that abandonment of five of Redwater' s inactive wells with high
LLR liabilities could be abandoned at an estimated cost substantially less than the LLR
assessed amount. Choosing this option would have significantly reduced Redwater's
LLR. This option has necessitated the Receiver's application seeking to require the AER
to waive its LLR program requirements in respect of the undisclaimed assets. Instead, the
Receiver chose disclaimer of assets over this option: Responses to Undertakings of
Jacqueline Gauthier from Question on September 30, 2015, Tab 34, p. 10.
36.
The AER submits that GTL in its capacity as both Receiver and Trustee is obligated to
comply with AER administered legislation, including the AER LLR program
8
requirements. It should not be permitted to avoid those responsibilities because doing so
may delay or hamper its proposed sales process and/or result in decreased return to
creditors.
The Disclaimers are Contrary to Legislation
37.
The disclaimers of Redwater assets are contrary to AER administered legislation, which
provides that receivers, receiver-managers and trustees assume the licensee's obligations
on appointment. As licensee, the receiver, receiver-manager or trustee is obligated to
provide care and custody, comply with AER requirements and provide for emergency and
incident response in respect of, all of Redwater's AER licensed properties.
38.
Receivers, receiver-managers and trustees are also included in the definition of "person
responsible" and "operator" under EPEA and in the definition of "licensee" under the
OGCA and Pipeline Act.
Sections l(tt)(iii) and 134, Environmental Protection and Enhancement Act, RSA 2000, c E-12
Section l(l)(cc), OGCA, supra
Section l(l)(n), Pipeline Act, RSA 2000, c P-15
TAB6
39.
In 1994, the definition of "licensee" was amended to include "a trustee or rece1vermanager" in response to the 1991 decision of the Alberta Court of Appeal's decision in
Panamericana de Bienesy Servicios SA v. Northern Badger Oil & Gas Ltd (Northern
Badger).
40.
As illustrated in the attached record of the Legislative debate, the 1994 amendments to the
OGCA (as contained in the Oil and Gas Conservation Amendment Act, 1994 (Bill 5)) were
specifically targeted at problems associated with addressing unfunded abandonment
obligations as illustrated by the following excerpt from Alberta Hansard on March 14,
1994 at p.570.
MRS. BLACK: Mr. Speaker, I request leave to introduce Bill 5, the Oil and
Gas Conservation Amendment Act, 1994.
The first aspect of this amendment is to provide the Energy Resources
Conservation Board with clear jurisdiction to order abandonment of wells and a
method of ensuring that the order is complied with. The purpose is to prevent
orphan wells - that is, wells that have no responsible owner from being a
drain on the public purse.
The second aspect of this legislation is to provide a fund which will be paid for
by industry through an annual levy to cover the cost of abandoning orphan
wells or, where there are insolvent partners, to pay for the insolvent partner's
share. The amendment will also provide a method of collecting any money which
may be owing to the fund.
9
41.
In Northern Badger, as in the present case, the central issue was whether a courtappointed receiver was obligated to comply with an abandonment order issued by the
Energy Resources Conservation Board (ERCB), the predecessor to the AER. In that case
the receiver was seeking to disclaim assets which it had been unable to sell and which the
ERCB had ordered be abandoned. The receiver argued the ERCB was merely a creditor,
and that it should not be permitted to force compliance by the receiver with the
abandonment orders, which would necessarily come at the expense of secured creditors.
Northern Badger, supra at para. 29
42.
The Court of Appeal first looked at the purpose of abandonment obligations, stating "the
process of abandonment of oil and gas wells is part of the general law of Alberta enacted
to protect the environment and for the health and safety of all citizens."
43.
The Court of Appeal then went on to further consider the actions of the ERCB and its
object in issuing the orders. The Court confirmed that recovery of money was not the
object or motive behind the ERCB's enforcement processes and that the duty owed is a
"public duty". The Court determined that a public officer given the duty to enforce a
public law does not become a "creditor".
Northern Badger, supra at paras. 33, 35 and 36
44.
In addressing the role of the receiver, the Court of Appeal noted that the receiver could not
enjoy the benefits of a licensee in producing wells and profit from those revenues while at
the same time refusing to accept, and comply with, the corresponding regulatory
obligations. After finding that the receiver was effectively in the position of a licensee,
the Court of Appeal concluded at paragraph 55 as follows:
In that position, it cannot pick and choose as to whether an operation is
profitable or not in deciding whether to carry it out. If one of the wells of which
a receiver has chosen to take control should blow out of control or catch fire, it
would be a remarkable rule of law which would permit him to walk away from
the disaster saying simply that remedial action would diminish distribution to
unsecured creditors. [emphasis added]
Northern Badger, supra at paras. 55-56
10
45.
As noted above, subsequent to the Court of Appeal decision in Northern Badger, the
definitions of "licensee" in both the OGCA and the Pipeline Act were amended to include
trustee, and receiver-manager. While not explicitly tied to the amendment of the
definition of "licensee", comments in Hansard at the time of introduction of the
amendments expressly reference the Northern Badger decision:
Debate Continued
MR. DALLA LONGA: Anyway as I was saying, Mr. Chairman, I do have a bit
of knowledge and a bit of experience with this particular section. I believe that
one of the impetuses for having this Bill brought about was a court case called I don't remember the specific name, but it had to do with an oil company called
Northern Badger that had gone into receivership. The government had to step
in and clean up properly some of the abandoned wells. In that particular case,
they found that the receiver as well as the oil company and I believe some of
the creditors were responsible for some of the cleanup costs, and in that
particular case, the firm I was with at the time was the receiver. So this brought
up a whole bunch of legal issues that I think this Bill with good intention - and
I reiterate "with good intention" - is trying to solve.
Alberta Hansard, April 12, 1994
46.
The AER submits these amendments signaled an intent by the Legislature to ensure there
is no separation of the benefits and burdens of the AER licensing regime.
47.
It should be noted that, while the AER takes the position that GTL as receiver and trustee
has stepped into the shoes of the licensee on appointment, receivers and trustees actually
enjoy benefits that solvent licensees do not. For example, in the normal course a
defaulting licensee would not be permitted to continue to produce and receive production
revenue and would be required to shut in production on all of its wells and facilities until it
brought itself into compliance. As a result of stay provisions in receivership orders, in a
receivership and bankruptcy context, the AER is not able to enforce its requirements
against defaulting licensees. Hence, receivers and trustees (and ultimately the creditor that
appointed them) continue to receive and enjoy production revenue through the duration of
the appointment even while in default of AER requirements. This would not be permitted
outside a receivership or bankruptcy situation.
48.
That the Receiver is continuing operation of and receiving production from some of
Redwater's AER licensed properties further supports that it is the licensee. Section 11 of
the OGCA does not permit production operations to commence or continue unless the
person undertaking the activity is the licensee. Furthermore, once a party becomes a
licensee, it cannot choose to be licensee for the purposes of some AER licensed assets
11
while disregarding others. The benefits and obligations of each AER license flows to the
licensee of those assets.
49.
It is contrary to the public interest to permit GTL to pick and choose which properties it is
the licensee of in order to maximize the return to creditors at the expense of compliance
with regulatory and statutory obligations.
50.
As a result of the definitions of "licensee", "person responsible" and "operator" in the
absence of any clear conflict with the Bankruptcy and Insolvency Act (BIA), GTL is
obligated to comply with the licensee's statutory obligations associated with all of
Redwater's AER licensed properties. To permit otherwise results in an abuse of the
provincial energy regulatory system, prejudices solvent licensees, and increases risks to
the environment and the public, as properties disclaimed by the receiver and trustee are
left without any entity or person responsible for care and custody, and incident, emergency
and complaint response. It also operates to incent creditors to petition licensees into
receivership and/or bankruptcy as a means of avoiding the licensee's statutory obligations.
51.
GTL may argue that the disclaimed properties are not without care and custody because
the AER's legislation permits the AER to perform incident and emergency response where
the Licensee and/or Receiver is unable or unwilling to do so. In response, the AER
submits it is a regulator of upstream oil and gas activities and is not a licensee or in the
business of operating, abandoning or reclaiming properties licensed by it. The presence of
discretionary provisions in AER administered legislation that permit the AER to respond
to incidents and emergencies and abandon and reclaim properties does not obligate the
AER to perform those activities. Further, the provisions are not intended to operate as a
mechanism by which licensees, receivers or trustees can abdicate their statutory
responsibilities. As is clear from section 2 of REDA, the purpose of the AER is not to
carry out the obligations of a licensee but provide for efficient, safe, orderly and
environmentally responsible development of energy resources. This is achieved through
oversight and regulation of all stages in the lifecycle of energy resource development,
including abandonment and closure, remediation, reclamation, monitoring site conditions
and effects of energy resource activities on the environment, and enforcing compliance.
The AER's mandate does not include carrying out the statutory responsibilities of the
entities regulated by it.
12
The Disclaimers are Contrary to the Receivership Order and Not Permitted
under the BIA
52.
The AER submits that the Receiver is not permitted to rely on either the Receivership
Order or the BIA as its authority to refuse to take possession of and/or disclaim any of
Redwater's AER licensed properties. To do so would be to permit a licensee in
receivership to ignore its statutory obligations and would be in direct conflict with the
AER's legislation. Also, disclaimer of properties in reliance on paragraph 3(a) of the
Receivership Order pennits the Receiver to disclaim properties in a circumstance that
would not otherwise be permitted under either section 15 of the Receivership Order or
section 14.06 of the BIA. Specifically, those provisions only permit receivers and trustees
to disclaim properties in situations where they are concerned about personal liability for
environmental impacts or damage.
53.
The AER submits that neither the template receivership order nor section 14.06 of the BIA
were intended to permit a receiver to avoid its statutory obligations and public duties
regarding end of life obligations of the licensee and any attempts by the Receiver to do so
should not be permitted.
54.
Paragraphs 2, 8 and 9 of the Receivership Order are premised on the Receiver providing
care and control over all property and complying with statutory and regulatory
requirements relating to health, safety or the environment to the extent the receivership
estate permits.
55.
Paragraph 2 of the Receivership Order provides that the Receiver was appointed in respect
of all of Redwater's "current and future assets, undertakings, and properties of every
nature and kind whatsoever, and wherever situate, including all proceeds thereof'.
56.
While the Receivership Order contains no definition of property, section 2 of the BIA
defines "property" to mean "any type of property, whether situated in Canada or
elsewhere, and includes money, goods, things in action, land and every description of
property, whether real or personal, legal or equitable, as well as obligations, easements
and every description of estate, interest and profit, present or future, vested or contingent,
in, arising out of or incident to property". It is clear, from the expansive definition of
property that the 107 properties disclaimed by the Receiver would fall within this
definition.
Section 2, Bankruptcy and Insolvency Act, RSC 1985, c. B-3 TAB 7
13
57.
The Receiver's disclaimer is an attempt to avoid its statutory obligations having stepped
into the shoes of Redwater as licensee. This is an improper purpose and is contrary to
paragraphs 8 and 9 of the Receivership Order. Paragraph 8 expressly exempts from the
general stay an "action, suit or proceeding that is taken in respect of the debtor by or
before a Regulatory Body, other than the enforcement of a payment order by the
Regulatory Body or the Court." Paragraph 9 provides that the Receiver is not exempt from
compliance with statutory and regulatory provisions relating to health, safety or the
environment.
58.
Further, the explanatory notes for the Alberta template receivership order explicitly reject
the inclusion of the equivalent of paragraph 15 of the Ontario template receivership order
that states "nothing shall require the Receiver to occupy or take control, care, charge or
possession of any property of the debtor".
Also, the explanatory notes point out the
definition of "person responsible" in EPEA includes a receiver and that provision would
clearly override paragraph 15 of the Ontario order because the receiver is a "person
responsible" under EPEA regardless of the receiver's actual possession of the property.
The AER submits the same rationale applies to the discrepancy between paragraphs 2 and
3(a) of the Receivership Order.
Alberta Template Receivership Order Explanatory Notes,
(Revised December 2012), p. 11 - 13 TAB 8
59.
Further support for this position is found in the following comments of the Court in the
decision of Standard Trust Company, in Liquidation v. Lindsay Holdings Ltd. et al as
follows:
Rather than suggest that the legislation must specifically include entities not
intended to be made liable, the more logical approach would be to expect
legislation to exclude those not liable. This is precisely the approach taken by
Parliament with respect to trustees in bankruptcy. Under a recent amendment
to the Bankruptcy and Insolvency Act, R.S.C. 1992, c. 26, s. 14.06, the
potential environmental liability of a trustee has been expressly limited. No
similar limitation is given to receivers in any legislation and accordingly I
conclude that the legislators intended them to fall within the ambit of
environmental legislation.
To make the order requested the court would have to find jurisdiction within its
own Rules, the Law and Equity Act or its inherent jurisdiction. Rule 47
provides that the court may appoint a receiver "either unconditionally or on
terms ... " The Law and Equity Act empowers the court to appoint a receiver
and the order may be made "on terms and conditions that the court thinks just."
Neither of these, in my opinion, empowers the court to impose conditions that
conflict with statutory duties, rights or liabilities.
14
Standard Trust Co. (Liquidator of) v. Lindsay Holdings Ltd. (Standard Trust),
[1995) 3 WWR 181, 1994 CanLii 465 (BCSC) at p. 9-10 TAB 9
60.
The AER submits that its administered legislation clearly and unambiguously anticipates
and requires receivers and trustees to fulfill all statutory obligations of the licensee and
operator on appointment. By disclaiming assets GTL has attempted to avoid those
responsibilities and is relying on the Receivership Order and/or the BIA to do so. The
AER submits the Court is not authorized to permit a disclaimer of assets that is not
otherwise permitted by legislation.
I am of the opinion that receivers do have environmental obligations and that
the court does not have the jurisdiction to either tamper with or emasculate
legislation creating such obligations.
Standard Trust, supra at p. 13
61.
Section 14.06 of the BIA only permits a receiver or trustee to disclaim assets where it is
fearful of personal liability for failing to comply with an order requiring it to remedy an
environmental condition or damage affecting property in the estate. There is no suggestion
here that GTL is facing personal liability as contemplated in that provision or that the
AER expects more of GTL than that it will fulfill Redwater' s obligations as licensee using
the assets of the estate. Hence, GTL cannot rely on section 14.06 to disclaim AER
licensed assets. Further, even though GTL in its capacity as receiver and trustee is an
officer of the Court, it is obviously different from the Court itself. As noted by the Court
in Standard Trust, "a receiver is a commercial entity which -takes on business
responsibilities for financial gain" and is therefore not shielded from liability as Courts
are.
62.
The Court in Standard Trust went on to state:
The petitioner asserts that it, "is merely attempting to limit the liability of Price
Waterhouse so as to maximize the value of the collateral." That being so, the
risk of being required to provide compensation for environmental problems
should fall on the persons who stand to gain - namely the creditors or indeed
the receiver - and not the general public. I reject a course that will protect
creditors and their agents at the risk of the public losing the protection of
environmental legislation.
Protection of the receiver as sought represents a potential encouragement to
creditors to have a receiver appointed to improve the creditor's position. It was
suggested by the Attorney General for Canada that there may be answers to the
liability potential without court involvement. It may be that receivers should
15
require suitable indemnity from creditors applying for the appointment of a
receiver.
63.
The orders issued by the AER are not orders requiring or demanding payment of funds.
Rather, they require the licensee to abandon, remediate and reclaim the properties named
in the orders. Should GTL fail to comply, it is very unlikely that the AER would conduct
the abandonment work itself and in fact the AER has no intention of doing so. Rather,
once GTL has been discharged and the AER has exhausted all of its statutory enforcement
mechanisms, the AER may designate the properties subject to the orders as orphans under
section 70 of the OGCA. However, orphaning should be viewed as a last resort. In
accordance with paragraphs 28 and 29 of the Receivership Order, the Receiver should be
required to work with the AER to take steps to ensure that statutory obligations are met
and steps are taken to prevent costs associated with these properties from being borne by
the public of Alberta and to minimize the risk to the OWA.
64.
It should be stressed that should GTL acknowledge its obligations to take possession of
and provide care and custody of the 107 disclaimed properties, it has a number of options
to choose from and will not necessarily be required to abandon all of properties. GTL can
abandon a sufficient number of properties to retain a liability management ratio in
compliance with AER requirements, include them in asset sale packages as part of its sales
process, or operate them depending on its liability management ratio: Affidavit of Patricia
JohnstonfiledAugust 18, 2015,para.6
65.
Indeed it is clear that GTL was aware of, and rejected, each of these options when it
decided to disclaim: Responses to Undertakings of Jacqueline Gauthier from Question on
September 30, 2015, Tab 25, p. 46-47.
The Disclaimers are Not in the Public Interest
66.
GTL is not entitled to shirk its statutory responsibilities by disclaiming AER licensed
assets in the estate. As stated in Northern Badger, the Receiver "cannot pick and choose
as to whether an operation is profitable or not in deciding whether to carry it out." To
permit otherwise is to let a receiver or trustee reap the benefits of acting as a licensee
without accepting any of the burdens. More importantly, it would permit the receiver or
trustee to leave properties without any care and custody and without a party responsible
for emergency, incident and complaint response.
16
67.
It is unreasonable for secured creditors to be in a better position within a receivership than
they would be outside it. ATB knew of the risk associated with advancing the funds to
Redwater and that there were abandonment obligations associated with Redwater's assets.
In fact, its commitment letter and Industry Knowledge Guide demonstrate an expectation
that Redwater would comply with all of its statutory obligations. There was no caveat or
qualification that such compliance should only occur to the extent it did not impact ATB's
ability to collect: Affidavit ofJaqueline Gauthier, filed May 11, 2015 at Tab B.
68.
Even if ATB intended that caveat or qualification should apply such that compliance with
AER requirements would only occur to the extent it did not impact ATB's credit
arrangement with Redwater, this would be void pursuant to section 9 of the OGCA.
Section 9, OGCA, supra
69.
Prior to receivership and bankruptcy, Redwater would not have had the luxury of simply
disclaiming assets in order to avoid its public duty; it would have to comply, even if that
meant utilizing its other assets to do so. It is an abuse of the insolvency system to permit
GTL to use the insolvency process to avoid Redwater's statutory obligations and its public
duty.
70.
In 2012, the Supreme Court of Canada released its split decision in Re AbitibiBowater Inc.
(Abitibi), 2012 SCC 67. In that decision, the Court stated:
As a matter of principle, reorganization does not amount to a license to
no
disregard the rules ... "Debtors in bankruptcy have - and should have
greater license to pollute in violation of a statute than they have to sell cocaine
in violation of a statute" (D.G. Baird and T.H. Jackson, "Comment: Kovacs and
Toxic Wastes in Bankruptcy" (1984), 36 Stan. L. Rev. 1199, at p. 1200).
Re AbitibiBowater Inc. (Abitibi), 2012 SCC 67 at para. 2, 41 TAB 10
71.
The extent to which secured creditors may realize less in the insolvency process as a result
of compliance with AER requirements is an unavoidable consequence of the obligation of
the receiver and trustee to comply with the licensee's statutory duties and its public duty.
72.
When a secured creditor chooses to lend money to an AER licensee, it does so with full
knowledge of its customer's statutory and regulatory obligations and ultimate
abandonment obligations. It cannot later complain that compliance with those obligations
may negatively impact its debt recovery.
17
AER Orders relate to Health, Public Safetv and/or the Environment
73.
To the extent GTL may be required to suspend, abandon, reclaim or remediate any of
Redwater' AER licensed properties, the AER submits that its duty to comply exists and
continues despite section 14.06(4) of the BIA, paragraph 15 of the Receivership Order and
the Abitibi decision.
74.
GTL may argue that section 14.06(4) contemplates and permits a receiver or trustee to
renounce property, and that in doing so it is relieved from its obligations as licensee.
However, GTL does not appear to be disclaiming or renouncing assets; rather, it has
purported to have never took possession of them in the first place (see correspondence
from the Receiver's counsel at Exhibit "E" to the Affidavit of Patricia Johnston). In these
circumstances, section 14.06(4) is neither applicable nor available to GTL as authority for
its actions.
75.
Even if section 14.06(4) is available to GTL, at least in relation to the bankruptcy
proceedings, the AER submits that the section does not relieve a receiver or trustee from
its duty to comply. Rather, it limits the personal liability of a receiver or trustee for failure
to comply with orders relating to environmental conditions or damages affecting property
in the estate.
76.
The AER submits that section 14.06 is intended to shield receivers and trustees from
personal liability for remedying environmental impacts or conditions where there are
insufficient assets in the estate to fully comply with an environmental order. It was not
intended to, and does not, relieve a receiver or trustee from complying with a public duty
to the extent the estate assets permit.
77.
This interpretation is supported by the decision in the Strathcona case, in which Justice
Burrows considered the various amendments to the BIA and concluded they did not
derogate from the principle in Northern Badger that a receiver must comply with its
public duty. The Strathcona decision was tacitly endorsed by Chief Justice McLachlin in
her dissent in Abitibi, where she expressly approves of Justice Burrows' interpretation that
section 14.06(8) of the BIA "does not convert a statutorily imposed obligation owed to the
public at large into a liability owed to the public body charged with enforcing it."
Strathcona v. Fantasy Construction Ltd. Estate (Trustee of), 2005 ABQB 559
at para. 42, 46 TAB 11
Abitibi, supra at para.76
18
78.
It is a trite rule of statutory interpretation that any intent to overrule the common law must
be clearly expressed. There is no language in section 14.06 of the BIA or the Receivership
Order that relieves GTL from complying with its public duty. Rather, it only serves to
limit the GTL's personal liability where GTL is unable to comply due to lack of funds in
the debtor's estate.
79.
GTL may also submit that it has no duty to comply with the AER's orders as a result of
the Abitibi decision.
80.
It is submitted that Abitibi rested on particular and unique set of facts. The Supreme Court
repeatedly states in the decision that not all regulatory orders should be assumed to be
monetary in nature, and that each case must rely on its particular facts. In considering
whether the orders should be characterized as a monetary claim rather than a regulatory
order aimed at enforcing a statutory obligation, the court considered whether there was
sufficient certainty that the regulatory authority would carry out the work itself and
subsequently claim reimbursement for same, thereby create a debt owing to the regulatory
authority.
Abitibi, supra at paras. 36, 48 and 50
81.
In relation to Abitibi, the question becomes whether it is sufficiently certain that the AER
would carry out the work required to abandon and reclaim any of Redwater's AER
licensed assets and seek reimbursement from the estate of the costs of doing so.
82.
In two subsequent decisions that have applied the Abitibi decision, the courts have focused
on whether there was sufficient certainty that the Minister of the Environment would carry
out the work.
Re Nortel Networks Corp., 2013 ONCA 599, TAB 12
Re Northstar Aerospace Inc. (Northstar), 2013 ONCA 600, TAB 13
83.
In Northstar, it was found "sufficiently certain" that the Ontario Minister of the
Environment would complete certain remediation work, primarily on the basis that the
work was already underway. By contrast, the Court in Nortel concluded that for the
majority of the orders in question, there was not sufficient certainty that the MOE would
carry out the work. The main factor for the Court appeared to be that there were other
parties (in that case, the subsequent owners) whom the Minister could compel to carry out
the orders. The exception was one property where there was no other party who might be
compelled to carry out the work (unlike a Receiver, a Monitor appointed under the
Companies' Creditors Arrangement Act is not a "licensee'', either expressly or de facto).
19
84.
On the facts before this Court, GTL does have access to and the ability to provide care and
custody of the properties in question. Should the disclaimers be found to be invalid, there
are options available to GTL such that abandonment in all instances may not be required.
Further, there are assets available to GTL to fund the abandonment and reclamation work.
The AER has not commenced any of the work, nor does it intend to. While the AER does
infrequently abandon properties of solvent licensees, it virtually never abandons properties
of insolvent licensees. This is because, following discharge of the receiver, the AER, after
completion of its enforcement processes, typically designates remaining properties as
orphans and refers them to the OWA for abandonment and reclamation: Transcripts from
the Questioning ofPatricia Johnston on September 29, 2015, p. 25 L 7 - p.26 Ll.
85.
At most, it appears the AER may eventually designate the properties disclaimed by the
Receiver as orphans. Once designated as orphans, there is still no guarantee that any work
will be carried out in relation to the properties as any work would depend on the OWA's
capacity to carry out same. Further, even where the OWA conducts abandonment and
reclamation of orphaned properties, it does not claim reimbursement from the insolvent
licensee. For these reasons, there is absolutely no certainty that either the AER or the
OWA will carry out the necessary abandonment and reclamation work. Further, there is
virtually no possibility that, even if they did so, either entity would claim as a creditor of
Redwater's estate. For these reasons, Abitibi does not apply in the circumstances.
86.
The decision by the AER to designate a property as an orphan is not taken lightly. The
OWA does not have infinite resources to provide care and custody or conduct
abandonment and reclamation work. Given the large inventory of wells and unreclaimed
sites in its current inventory, there is no certainty as to the timing of OWA abandonment
and reclamation of Redwater's licensed properties should they be orphaned. Nor is there a
guarantee that the cost associated with any work that is completed will not ultimately be
home by the Alberta public.
87.
The above clearly illustrates there is virtually no possibility that the orders issued by the
AER will tum into monetary claims against the estate by either the AER or the OWA.
88.
The evidence before the Court in this proceeding is that, in issuing the orders, the AER is
concerned not with establishing monetary claims, but rather with ensuring there is a party
responsible to provide care and custody and perform the same level of incident and
emergency response that is required of a licensee (if no such party exists, the properties
need to be abandoned to prevent the possibility of such incidents). The evidence is that
the AER has been consistent with its position in all insolvencies, and is not treating the
Redwater situation any differently.
20
89.
The concept that the AER's ultimate objective is to have a licensee take responsibility for
and perform the required work is reflected in the Northern Badger case, in which the
Court found similar abandonment orders issued by the AER's predecessor were concerned
not with the recovery of money, but enforcing a public duty. It is also reflected in the
AER's mandate and the stated purposes of the OGCA.
90.
From the above it is clear that the AER's insistence that GTL comply with the AER's
orders is rooted in its position that licensees are not entitled to enjoy the benefits of
licensing while avoiding the burdens of licensing. It is always understood that at some
point AER licensed properties must be abandoned and reclaimed. This was known by
Redwater at the time that the licenses were obtained, by ATB at the time it advanced its
funding to Redwater, and by GTL when it accepted its appointments. It is unfathomable
that these parties, having enjoyed the benefits of AER licences, can avoid the
corresponding burdens of those licences. To permit such a blatant disregard of the
licensing regime would be to set a dangerous precedent and undermine the entire
regulatory regime.
91.
In the alternative, should this Honourable Court disagree with the AER's submissions and
find that the abandonment orders are "provable claims" under the BIA, which the AER
vehemently disputes, the AER submits that pursuant to section 103 of the OGCA, the AER
has a first charge over all of Redwater's interests in any wells, facilities and pipelines, land
or petroleum substances.
Section 103, OGCA, supra TAB 14
V.
Relief Sought
92.
Based upon all of the foregoing, the AER respectfully requests:
a. A declaration that the disclaimer by the Receiver of a portion of the licensed
assets of Redwater is void and unenforceable;
b. An Order compelling the Receiver to comply with the closure and
abandonment orders issued by the AER using the funds in the estate;
c. An Order compelling the Receiver to fulfill its statutory obligations as
licensee in relation to abandonment, reclamation, and remediation of all
Redwater licensed properties;
d. An award of costs of this Application; and
21
e. Such further relief as this Honourable Court may find just and appropriate in
the circumstances.
Respectfully submitted this 20 1h day of
N~
-W- Terry Czechowskyj, Counsel for the
Applicant, Alberta Energy Regulator
22
List of Authorities
Tab
Description
1.
Receivership Order filed May 12, 2015
2.
Responsible Energy Development Act, SA 2012, c R-17.3, section 2
3.
Oil and Gas Conservation Act, RSA 2000, c 0-6, section 4
4.
Panamericana de Bienesy Servicios SA v. Northern Badger Oil & Gas Ltd., 1991
ABCA 181
5.
6.
Environmental Protection and Enhancement Act, RSA 2000, c E-12, sections l(tt)(iii)
and 134; Oil and Gas Conservation Act, RSA 2000, c 0-6, section l(l)(cc); and
Pipeline Act, RSA 2000, c P-15, section l(l)(n)
7.
Bankruptcy and Insolvency Act, RSC 1985, c. B-3, section 2
8.
Alberta Template Receivership Order Explanatory Notes, Revised December 2012
9.
Standard Trust Co. (Liquidator of) v. Lindsay Holdings Ltd., [1995] 3 WWR 181, 1994
CanLii 465 (BCSC)
10.
Re AbitibiBowater Inc., 2012 SCC 67
11.
Strathcona v. Fantasy Construction Ltd. Estate (Trustee of), 2005 ABQB 559
12.
Re Nortel Networks Corp., 2013 ONCA 599
13.
Re Northstar Aerospace Inc., 2013 ONCA 600
14.
T
A
B
1
Clerk's stamp:
COURT FILE NO.
COURT
JUDICIAL CENTRE
IN THE MATTER OF AN APPLICATI61'r UNDER
SUBSECTION 243(1) OF THE BANKRUPTCY AND
INSOLVENCY ACT, RSC 1985, C B~3, AS AMENDED
APPLICANT
RESPONDENT
DOCUMENT
RECEIVERSHIP ORDER
ADDRESS FQR SERVICE AND
CONTACT INFORMATION OF
PARTYFILINQ.'.I1IIS DOCfUMENT
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' tlerebY ce
Attn:
the or\g\na\4/< Jd.,d~
Oated th\$ /v.~
Facsimile:
Email:
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_
BLAKE, CASSELS & GRAYOON LLP
3500, 855 -2nd Street S.W.
Calgary, AB T2P 4J8
----=-Te~lephone:
File Ref.:
Kelly Bourassa/Ryan Zahara
403-260-9697/9628
403:.260-9700
[email protected]
[email protected]
81518/98
DATE ON WHICH ORDER WAS PRONOUNCED: May 12, 2015
LOCATION WHERE ORDER WAS PRONOUNCED: CALGARY COURTS CENTRE
NAME OF THE JUDGE WHO MADE THIS ORDER: The Honotirable Justic~ C.M. Jones
UPON the application of Alberta Treasury Branches ("ATB") in respect of Redwater
Energy Corp. ("Redwater" or the "Debtor"); AND UPON having read the Application, the
Affidavit of Jacqueline Gauthier .sworn on May 8, 2015, the Supplemental Affidavit of
Jacqueline Gauthier sworn May 11, 2015, filed and the Affidavit of Service of Carol Benish
sworn May 12, 2015, untiled; AND UPON reading the consent of Grant Thornton Limited to act
31198935.3
-2-
as receiver ("Receiver") of the Debtor; AND UPON hearing counsel for ATB; IT IS HEREBY
ORDERED AND DECLARED THAT:
SERVICE
1.
The time for service of the notice of application is hereby abridged and service thereof is
deemed good and sufficient.
APPOINTMENT
2.
Pursuant to section 243(1) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3
("BIA"), Grant Thornton Limited is hereby appointed Receiver, without security, of all of
the Debtor's current and future assets, undertakings and properties of every nature and
kind whatsoever, and wherever situate, including all proceeds thereof (the "Property").
RECEIVER'S POWERS
3.
The Receiver is hereby empowered and authorized, but not obligated, to act at once in
respect of the Property and, without in any way limiting the generality of the foregoing,
the Receiver is hereby expressly empowered and authorized to do any of the following
where the Receiver considers it necessary or desirable:
(a)
to take possession of and exercise control over the Property and any and all
proceeds, receipts and disbursements arising out of or from the Property;
(b)
to receive, preserve and protect the Property, or any part or parts thereof,
including, but not limited to, the changing of locks and security codes, the
relocating of Property to safeguard it, the engaging of independent security
personnel, the taking of physical inventories and the placement of such insurance
coverage as may be necessary or desirable;
(c)
to manage, operate and carry on the business of the Debtor, including the powers
to enter into any agreements, incur any obligations in the ordinary course of
business, cease to carry on all or any part other business, or cease to perform any
contracts of the Debtor;
31198935.3
-3-
(d)
to engage consultants, appraisers, agents, experts, auditors, accountants,
managers, counsel and such other persons from time to time and on whatever
basis, including on a temporary basis, to assist with. the exercise of the Receiver's
powers and duties, including without limitation those conferred by this Order;
(e)
to purchase or lease machinery, equipment, inventories, supplies, premises or
other assets to continue the business of the Debtor or any part or parts thereof;
(t)
to receive and collect all monies and accounts now owed or hereafter owing to the
Debtor and to exercise all remedies of the Debtor in collecting such monies,
including, without limitation, to enforce any security held by the Debtor;
(g)
to settle, extend or compromise any indebtedness owing to or by the Debtor;
(h)
to execute, assign, issue and endorse documents of whatever nature in respect of
any of the Property, whether in the Receiver's name or in the name and on behalf
of the Debtor, for any purpose pursuant to this Order;
(i)
to undertake environmental or workers' health and safety assessments of the
Property and operations of the Debtor;
G)
to initiate, prosecute and continue the prosecution of any and all proceedings and
to defend all proceedings now pending or hereafter instituted with respect to the
Debtor, the Property or the Receiver, and to settle or compromise any such
proceedings.
The authority hereby conveyed shall extend to such appeals or
applications for judicial review in respect of any order or judgment pronounced in
any such proceeding, and provided further that nothing in this Order shall
authorize the Receiver to defend or settle the action in which this Order is made
unless otherwise directed by this Court.
(k)
to market any or all the Property, including advertising and soliciting offers in
respect of the Property or any part or parts thereof and negotiating such terms and
conditions of sale as the Receiver in its discretion may deem appropriate.
(I)
to sell, convey, transfer, lease or assign the Property or any part or parts thereof
out of the ordinary course of business,
31198935.3
-4-
(i)
without the approval of this Court in respect of any transaction not
exceeding $50,000, provided that the aggregate consideration for all such
transactions does not exceed $250,000; and
(ii)
with the approval of this Court in respect of any transaction in which the
purchase price or the aggregate purchase price exceeds the applicable
amount set out in the preceding clause,
and in each such case notice under subsection 60(8) of the Personal Property
Security Act, RSA 2000, c P-7 shall not be required.
(m)
to apply for any vesting order or other orders necessary to convey the Property or
any part or parts thereof to a purchaser or purchasers thereof, free and clear of any
liens or encumbrances affecting such Property;
(n)
to report to, meet with and discuss with such affected Persons (as defined below)
as the Receiver deems appropriate all matters relating to the Property and the
receivership, and to share information, subject to such terms as to confidentiality
as the Receiver deems advisable;
(o)
to register a copy of this Order and any other Orders in respect of the Property
against title to any of the Property;
(p)
to apply for any permits, licences, approvals or permissions as may be required by
any governmental authority and any renewals thereof for and on behalf of and, if
thought desirable by the Receiver, in the name of the Debtor;
(q)
to enter into agreements with any trustee in bankruptcy appointed in respect of the
Debtor, including, without limiting the generality of the foregoing, the ability to
enter into occupation agreements for any property owned or leased by the Debtor;
(r)
to exercise any shareholder, partnership, joint venture or other rights which the
Debtor may have; and
(s)
to take any steps reasonably incidental to the exercise of these powers or the
performance of any statutory obligations;
31198935.3
-5-
and in each case where the Receiver takes any such actions or steps, it shall be
exclusively authorized and empowered to do so, to the exclusion of all other Persons (as
defined below), including the Debtor, and without interference from any other Person.
DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER
4.
(i) The Debtor, (ii) all of its current and former directors, officers, employees, agents,
· accountants, legal counsel and shareholders, and all other persons acting on its
instructions or behalf, and (iii) all other individuals, firms, corporations, governmental
bodies or agencies, or other entities having notice of this Order (all of the foregoing,
collectively, being "Persons" and each being a "Person") shall forthwith advise the
Receiver of the existence of any Property in such Person's possession or control, shall
grant immediate and continued access to the Property to the Receiver, and shall.deliver
all such Property (excluding Property subject to liens the validity of which is dependant
on maintaining possession) to the Receiver upon the Receiver's request.
5.
All Persons shall forthwith advise the Receiver of the existence of any books, documents,
securities, contracts, orders, corporate and accounting records, and any other papers,
records and information of any kind related to the business or affairs of the Debtor, and
any computer programs, computer tapes, computer disks, or other data storage media
containing any such information (the foregoing, collectively, the "Records") in that
Person's possession or control, and shall provide to the Receiver or permit the Receiver to
make, retain and take away copies thereof and grant to the Receiver unfettered access to
and use of accounting, computer, software and physical facilities relating thereto,
provided however that nothing in this paragraph 5 or in paragraph 6 of this Order shall
require the delivery of Records, or the granting of access to Records, which may not be
disclosed or provided to the Receiver due to the privilege attaching to solicitor-client
communication or documents prepared in contemplation of litigation or due to statutory
provisions prohibiting such disclosure.
6.
If any Records are stored or otherwise contained on a computer or other electronic system
of information storage, whether by independent service provider or otherwise, all Persons
31198935.3
-6-
in possession or control of such Records shall forthwith give unfettered access to the
Receiver for the purpose of allowing the Receiver to recover and fully copy all of the
information contained therein whether by way of printing the information onto paper or
making copies of computer disks or such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or
destroy any Records without the prior written consent of the Receiver. Further, for the
purposes of this paragraph, all Persons shall provide the Receiver with all such assistance
in gaining immediate access to the information in the Records as the Receiver may in its
discretion require including providing the Receiver with instructions on the use of any
computer or other system and providing the Receiver with any and all access codes,
account names and account numbers that may be required to gain access to the
information.
NO PROCEEDINGS AGAINST THE RECEIVER
7.
No proceeding or enforcement process in any court or tribunal (each, a "Proceeding"),
shall be commenced or continued against the Receiver except with the written consent of
the Receiver or with leave of this Court.
NO PROCEEDINGS AGAINST THE DEBTOR OR THE PROPERTY
8.
No Proceeding against or in respect of the Debtor or the Property shall be commenced or
continued except with the written consent of the Receiver or with leave of this Court and
any and all Proceedings currently under way against or in respect of the Debtor or the
Property are hereby stayed and suspended pending further Order of this Court, provided,
however, that nothing in this Order shall: (i) prevent any Person from commencing a
proceeding regarding a claim that might otherwise become barred by statute or an
existing agreement if such proceeding is not commenced before the expiration of the stay
provided by this paragraph 8; and (ii) affect a Regulatory Body's investigation in respect
of the debtor or an action, suit or proceeding that is taken in respect of the debtor by or
before the Regulatory Body, other than the enforcement of a payment order by the
Regulatory Body or the Court. "Regulatory Body" means a person or body that has
31198935.3
-7-
powers, duties or functions relating to the enforcement or administration of an Act of
Parliament or of the legislature of a province.
NO EXERCISE OF RIGHTS OF REMEDIES
9.
All rights and remedies (including, without limitation, set-off rights) against the Debtor,
the Receiver, or affecting the Property, are hereby stayed and suspended except with the
written consent of the Receiver or leave of this Court, provided however that nothing in
this paragraph shall (i) empower the Receiver or the Debtor to carry on any business
which the Debtor is not lawfully entitled to carry on, (ii) exempt the Receiver or the
Debtor from compliance with statutory or regulatory provisions relating to health, safety
or the environment, (iii) prevent the filing of any registration to preserve or perfect a
security interest, or (iv) prevent the registration of a claim for lien.
NO I_NTERFERENCE WITH THE RECEIVER
10.
No Person shall discontinue, fail to honour, alter, interfere with, repudiate, terminate or
cease to perform any right, renewal right, contract, agreement, licence or permit in favour
of or held by the Debtor, without written consent of the Receiver or leave of this Court.
CONTINUATION OF SERVICES
11.
All Persons having oral or written agreements with the Debtor or statutory or regulatory
mandates for the supply of goods and/or services, including without limitation, all
computer software, communication and other data services, centralized banking services,
payroll services, insurance, transportation services, utility or other services to the Debtor
are hereby restrained until further Order of this Court from discontinuing, altering,
interfering with or terminating the supply of such goods or services as may be required
by the Receiver, and this Court directs that the Receiver shall be entitled to the continued
use of the Debtor's current telephone numbers, facsimile numbers, internet addresses and
domain names, provided in each case that the normal prices or·charges for all such goods
or services received after the. date of this Order are paid by the Receiver in accordance
with normal payment practices of the Debtor or such other practices as may be agreed
31198935.3
-8-
upon by the supplier or service provider and the Receiver, or as may be ordered by this
Court.
RECEIVER TO HOLD FUNDS
12.
All funds, monies, cheques, instruments, and other forms of payments received or
collected by the Receiver from and after the making of this Order from any source
whatsoever, including without limitation the sale of all or any of the Property and the
collection of any accounts receivable in whole or in part, whether in existence on the date
of this Order or hereafter coming into existence, shall be deposited into one or more new
accounts to be opened by the Receiver (the "Post Receivership Accounts") and the
monies standing to the credit of such Post Receivership Accounts from time to time, net
of any disbursements provided for herein, shall be held by the Receiver to be paid in
accordance with the terms of this Order or any further order of this Court.
EMPLOYEES
13.
Subject to employees' rights to terminate their employment, all employees of the Debtor
shall remain the employees of the Debtor until such time as the Receiver, on the Debtor's
behalf, may terminate the employment of such employees. The Receiver shall not be
liable for any employee-related liabilities, including any successor employer liabilities as
provided for in section 14.06(1.2) of the BIA, other than such amounts as the Receiver
may specifically agree in writing to pay, or in respect of its obligations under sections
81.4(5) or 81.6(3) of the BIA or under the Wage Earner Protection Program Act, SC
2005, c 47 ("WEPPA").
14.
Pursuant to clause 7(3)(c) of the Personal Information Protection and Electronic
Documents Act, SC 2000, c 5, the Receiver shall disclose personal information of
identifiable individuals to prospective purchasers or bidders for the Property and to their
advisors, but only to the extent desirable or required to negotiate and attempt to complete
one or more sales of the Property (each, a "Sale"). Each prospective purchaser or bidder
to whom such personal information is disclosed shall maintain and protect the privacy of
such information and limit the use of such information to its evaluation of the Sale, and if
31198935.3
-9-
it does not complete a Sale, shall return all such information to the Receiver, or in the
alternative destroy all such information. The purchaser of any Property shall be entitled to
continue to use the personal information provided to it, and related to the Property
purchased, in a manner which is in all material respects identical to the prior use of such
information by the Debtor, and shall return all other personal information to the Receiver,
or ensure that all other personal information is destroyed.
LIMITATION ON ENVIRONMENTAL LIABILITIES
15.
(a)
Notwithstanding anything in any federal or provincial law, the Receiver is not
personally liable in that position for any environmental condition that arose or
environmental damage that occurred:
(i)
before the Receiver's appointment; or
(ii)
after the Receiver's appointment unless it is established that the condition
arose or the damage occurred as a result of the Receiver's gross negligence
or wilful misconduct.
(b)
Nothing in sub-paragraph (a) exempts a Receiver from any duty to report or make
disclosure imposed by a law referred to in that sub-paragraph.
(c)
Notwithstanding anything in any federal or provincial law, but subject to subparagraph (a) hereof, where an order is made which has the effect of requiring the
Receiver to remedy any environmental condition or environmental damage
affecting the Property, the Receiver is not personally liable for failure to comply
with the order, and is not personally liable for any costs that are or would be
incurred by any person in carrying out the terms of the order,
(i)
if, within such time as is specified in the order, within 10 days after the
order is made if no time is so specified, within 10 days after the
appointment of the Receiver, if the order is in effect when the Receiver is
appointed, or during the period of the stay referred to in clause (ii) below,
the Receiver:
A.
31198935.3
complies with the order, or
- 10 -
B.
on notice to the person who issued the order, abandons, disposes of
or otherwise releases any interest in any real property affected by
the condition or damage;
(ii)
during the period of a stay of the order granted, on application made
within the time specified in the order referred to in clause (i) above, within
10 days after the order is made or within 10 days after the appointment of
the Receiver, ifthe order is in effect when the Receiver is appointed, by,
A.
the court or body having jurisdiction under the law pursuant to
which the order was made to enable the Receiver to contest the
order; or
B.
the court having jurisdiction in bankruptcy for the purposes of
assessing the economic viability of complying with the order; or
(iii)
if the Receiver had, before the order was made, abandoned or renounced
or been divested of any interest in any real property affected by the
condition or damage.
LIMITATION ON THE RECEIVER'S LIABILITY
16.
Except for gross negligence or wilful misconduct, as a result of its appointment or
carrying out the provisions of this Order the Receiver shall incur no liability or obligation
that exceeds an amount for which it may obtain full indemnity from the Property.
Nothing in this Order shall derogate from any limitation on liability or other protection
afforded to the Receiver under any applicable law, including, without limitation, Section
14.06, 81.4(5) or 81.6(3) of the BIA.
RECEIVER'S ACCOUNTS
17.
The Receiver and counsel to the Receiver shall be paid their reasonable fees and
disbursements, in each case, incurred at their standard rates and charges. The Receiver
and counsel to the Receiver shall be entitled to and are hereby granted a charge (the
"Receiver's Charge") on the Property, as security for such fees and disbursements,
31198935.3
- 11 -
incurred both before and after the making of this Order in respect of these proceedings,
and the Receiver's Charge shall form a first charge on the Property in priority to all
security interests, trusts, liens, charges and encumbrances, statutory or otherwise, m
favour of any Person but subject to section 14.06(7), 81.4(4) and 81.6(2) of the BIA.
18.
The Receiver and its legal counsel shall pass their accounts from time to time.
19.
Prior to the passing of its accounts, the Receiver shall be at liberty from time to time to
apply reasonable amounts, out of the monies in its hands, against its fees and
disbursements, including the legal fees and disbursements, incurred at the normal rates
and charges of the Receiver or its counsel, and such amounts shall constitute advances
against its remuneration and disbursements when and as approved by this Court.
FUNDING OF THE RECEIVERSHIP
20.
The Receiver be at liberty and it is hereby empowered to borrow by way of a revolving
credit or otherwise, such monies from time to time as it may consider necessary or
desirable, provided that the outstanding principal amount does not exceed $200,000 (or
such greater amount as this Court may by further Order authorize) at any time, at such
rate or rates of interest as it deems advisable for such period or periods of time as it may
arrange, for the purpose of funding the exercise of the powers and duties conferred upon
the Receiver by this Order, including interim expenditures. Any such borrowing is
subject to the Receiver providing ATB with satisfactory evidence that the amount sought
to be drawn is required in the circumstances and not otherwise available from funds in
the receivership estate. The whole of the Property shall be and is hereby charged by way
of a fixed and specific charge (the "Receiver's Borrowings Charge") as security for the
payment of the monies borrowed, together with interest and charges thereon, in priority
to all security interests, trusts, liens, charges and encumbrances, statutory or otherwise, in
favour of any Person, but subordinate in priority to the Receiver's Charge and the charges
set out in sections 14.06(7), 81.4(4) and 81.6(2) and 88 of the BIA.
31198935.3
- 12 -
21.
Neither the Receiver's Borrowings Charge nor any other security granted by the Receiver
in connection with its borrowings under this Order shall be enforced without leave of this
Court.
22.
The Receiver is at liberty and authorized to issue certificates substantially in the form
annexed as Schedule "A" hereto (the "Receiver's Certificates") for any amount
borrowed by it pursuant to this Order.
23.
The monies from time to time borrowed by the Receiver pursuant to this Order or any
further order of this Court and any and all Receiver's Certificates evidencing the same or
any part thereof shall rank on a pari passu basis, unless otherwise agreed to by the
holders of any prior issued Receiver's Certificates.
ALLOCATION
24.
Any interested party may apply to this Court on notice to any other party likely to be
affected, for an order allocating the Receiver's Charge and Receiver's Borrowings Charge
amongst the various assets comprising the Property.
GENERAL
25.
The Receiver may from time to time apply to this Court for advice and directions in the
discharge of its powers and duties hereunder.
26.
Notwithstanding Rule 6.11 of the Alberta Rules of Court, unless otherwise ordered by
this Court, the Receiver will report to the Court from time to time, which reporting is not
required to be in affidavit form and shall be considered by this Court as evidence.
27.
Nothing in this Order shall prevent the Receiver from acting as a trustee in bankruptcy of
the Debtor.
28.
This Court hereby requests the aid and recognition of any court, tribunal, regulatory or
administrative body having jurisdiction in Canada or in the United States to give effect to
this Order and to assist the Receiver and its agents in carrying out the terms of this Order.
All courts, tribunals, regulatory and administrative bodies are hereby respectfully
31198935.3
- 13 -
requested to make such orders and to provide such assistance to the Receiver, as an
officer of this Court, as may be necessary or desirable to give effect to this Order or to
assist the Receiver and its agents in carrying out the terms of this Order.
29.
The Receiver be at liberty and is hereby authorized and empowered to apply to any court,
tribunal, regulatory or administrative body, wherever located, for the recognition of this
Order and for assistance in carrying out the terms of this Order and that the Receiver is
authorized and empowered to act as a representative in respect of the within proceedings
for the purpose of having these proceedings recognized in a jurisdiction outside Canada.
30.
The Plaintiff shall have its costs of this motion, up to and including entry and service of
this Order, provided for by the terms of the Plaintiffs security or, if not so provided by
the Plaintiffs security, then on a substantial indemnity basis to be paid by the Receiver
from the Debtor's estate with such priority and at such time as this Court may determine.
31.
Any interested party may apply to this Court to vary or amend this Order on not less than
7 days' notice to the Receiver and to any other party likely to be affected by the order
sought or upon such other notice, if any, as this Court may order.
FILING
32.
The Receiver shall establish and maintain a website in respect of these proceedings at
http://www.grantthornton.ca/services/reorg/creditor updates and shall post there as soon
as practicable:
(a)
all materials prescribed by statue or regulation to be made publically available;
and
31198935.3
- 14 -
(b)
all applications, reports, affidavits, orders and other materials filed in these
proceedings by or on behalf of the Receiver, or served upon it, except such
materials as are confidential and the subject of a sealing order or pending
application for a sealing order.
J.C.Q.B.A
31198935.3
SCHEDULE "A"
RECEIVER CERTIFICATE
CERTIFICATE NO.
AMOUNT
$
1.
THIS IS TO CERTIFY that GRANT THORNTON LIMITED, the receiver (the
"Receiver") of all of the assets, undertakings and properties of REDWATER ENERGY
CORP. appointed by Order of the Court of Queen's Bench of Alberta in Bankruptcy and
,
(the
Insolvency (the "Court") dated the _ _ day of
"Order") made in action number
, has received as such Receiver from
, being part
the holder of this certificate (the "Lender") the principal sum of$
of the total principal sum of $
which the Receiver is authorized to
borrow under and pursuant to the Order.
2.
The principal sum evidenced by this certificate is payable on demand by the Lender with
interest thereon calculated and compounded [daily] [monthly not in advance on the
_ _ day of each month] after the date hereof at a notional rate per annum equal to the
per cent above the prime commercial lending rate of Alberta Treasury
rate of
Branches from time to time.
3.
Such principal sum with interest thereon is, by the terms of the Order, together with the
principal sums and interest thereon of all other certificates issued by the Receiver
pursuant to the Order or to any further order of the Court, a charge upon the whole of the
Property, in priority to the security interests of any other person, but subject to the
priority of the charges set out in the Order and the Bankruptcy and Insolvency Act, and
the right of the Receiver to indemnify itself out of such Property in respect of its
remuneration and expenses.
4.
All sums payable in respect of principal and interest under this certificate are payable at.
the main office of the Lender at [•].
5.
Until all liability in respect of this certificate has been terminated, no certificates creating
charges ranking or purporting to rank in priority to this certificate shall be issued by the
Receiver to any person other than the holder of this certificate without the prior written
consent of the holder of this certificate.
6.
The charge securing this certificate shall operate so as to permit the Receiver to deal with
the Property) as authorized by the Order and as authorized by any further or other order
of the Court.
31198935.3
7.
The Receiver does not undertake, and it is not under any personal liability, to pay any
sum in respect of which it may issue certificates under the terms of the Order.
DATED the _ _ _ day of _ _ _ _ _ _, 20_.
GRANT THORNTON LIMITED, solely in its
capacity as Receiver of the Property (as
defined in the Order), and not in its personal
capacity
Per:
Name:
Title:
31198935.3
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Section 2
RESPONSIBLE ENERGY DEVELOPMENT ACT
2012
Chapter R-17.3
(iii) the Water Act,
(iv) Part 8 of the Mines and Minerals Act,
(v) a regulation under an enactment referred to in subclauses
(i) to (iv), or
(vi) any enactment prescribed by the regulations.
(2) A reference in this Act to “any other enactment” means a
reference to an energy resource enactment or a specified enactment
where the context so requires.
Mandate of Regulator
2(1) The mandate of the Regulator is
(a) to provide for the efficient, safe, orderly and
environmentally responsible development of energy
resources in Alberta through the Regulator’s regulatory
activities, and
(b) in respect of energy resource activities, to regulate
(i) the disposition and management of public lands,
(ii) the protection of the environment, and
(iii) the conservation and management of water, including
the wise allocation and use of water,
in accordance with energy resource enactments and, pursuant to
this Act and the regulations, in accordance with specified
enactments.
(2) The mandate of the Regulator is to be carried out through the
exercise of its powers, duties and functions under energy resource
enactments and, pursuant to this Act and the regulations, under
specified enactments, including, without limitation, the following
powers, duties and functions:
(a) to consider and decide applications and other matters under
energy resource enactments in respect of pipelines, wells,
processing plants, mines and other facilities and operations
for the recovery and processing of energy resources;
(b) to consider and decide applications and other matters under
the Public Lands Act for the use of land in respect of energy
resource activities, including approving energy resource
activities on public land;
7
Section 3
RESPONSIBLE ENERGY DEVELOPMENT ACT
2012
Chapter R-17.3
(c) to consider and decide applications and other matters under
the Environmental Protection and Enhancement Act in
respect of energy resource activities;
(d) to consider and decide applications and other matters under
the Water Act in respect of energy resource activities;
(e) to consider and decide applications and other matters under
Part 8 of the Mines and Minerals Act in respect of the
exploration for energy resources;
(f) to monitor and enforce safe and efficient practices in the
exploration for and the recovery, storing, processing and
transporting of energy resources;
(g) to oversee the abandonment and closure of pipelines, wells,
processing plants, mines and other facilities and operations
in respect of energy resource activities at the end of their life
cycle in accordance with energy resource enactments;
(h) to regulate the remediation and reclamation of pipelines,
wells, processing plants, mines and other facilities and
operations in respect of energy resource activities in
accordance with the Environmental Protection and
Enhancement Act;
(i) to monitor energy resource activity site conditions and the
effects of energy resource activities on the environment;
(j) to monitor and enforce compliance with energy resource
enactments and specified enactments in respect of energy
resource activities.
Part 1
Alberta Energy Regulator
Division 1
Establishment and Governance
of Regulator
Alberta Energy Regulator
3(1) The Alberta Energy Regulator is established as a corporation.
(2) The Regulator has the capacity and, subject to this Act and any
other enactment, the rights, powers and privileges of a natural
person.
(3) The Regulator’s fiscal year is April 1 to the following March
31.
8
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Section 4
OIL AND GAS CONSERVATION ACT
RSA 2000
Chapter O-6
Part 1
Object and Application of Act
Purposes of Act
4 The purposes of this Act are
(a) to effect the conservation of, and to prevent the waste of, the
oil and gas resources of Alberta;
(b) to secure the observance of safe and efficient practices in the
locating, spacing, drilling, equipping, constructing,
completing, reworking, testing, operating, maintenance,
repair, suspension and abandonment of wells and facilities
and in operations for the production of oil and gas or the
storage or disposal of substances;
(c) to provide for the economic, orderly and efficient
development in the public interest of the oil and gas
resources of Alberta;
(d) to afford each owner the opportunity of obtaining the
owner’s share of the production of oil or gas from any pool;
(e) to provide for the recording and the timely and useful
dissemination of information regarding the oil and gas
resources of Alberta;
(f) to control pollution above, at or below the surface in the
drilling of wells and in operations for the production of oil
and gas and in other operations over which the Regulator
has jurisdiction.
RSA 2000 cO-6 s4;2010 c14 s3;2012 cR-17.3 s97(31)
Part 2 Repealed 2012 cR-17.3 s97(3).
Part 3
General Powers
General powers
7 The Regulator, with the approval of the Lieutenant Governor in
Council, may make any just and reasonable orders and directions
the Regulator considers necessary to effect the purposes of this Act
and that are not otherwise specifically authorized by this Act.
RSA 2000 cO-6 s7;2012 cR-17.3 s97(31)
Conditions of approval
8(1) Any order of the Lieutenant Governor in Council under this
Act may be made subject to any terms or conditions that the
Lieutenant Governor in Council prescribes.
15
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In the Court of Appeal of Alberta
Date: 19910612
Docket: 11698 & 11713
Registry: Calgary
Between:
PanAmericana de Bienes y Servicios, S.A.
Respondent
(Plaintiff)
- and Northern Badger Oil & Gas Limited
Respondent
(Defendant)
And Between:
The Energy Resources Conservation Board
Appellant
(Applicant)
- and Vennard Johannesen Insolvency Inc., Receiver and Manager
of Northern Badger Oil & Gas Limited
Respondent
- and Attorney General of Alberta
Appellant
(Intervenor)
1991 ABCA 181 (CanLII)
Citation: PanAmericana de Bienes y Servicios v. Northern Badger Oil & Gas Limited,
1991 ABCA 181
The Honourable Chief Justice Laycraft
The Honourable Mr. Justice Foisy
The Honourable Mr. Justice Irving
Reasons for Judgment of The Honourable Chief Justice Laycraft
Concurred in by The Honourable Mr. Justice Foisy
And Concurred in by The Honourable Mr. Justice Irving
APPEAL FROM THE ORDER OF THE HONOURABLE MR. JUSTICE MACPHERSON OF
THE COURT OF QUEEN'S BENCH OF ALBERTA DATED THE 20TH DAY OF
DECEMBER, 1989
COUNSEL:
Stanley H. Rutwind, Esq., for the Appellant (Intervenor) The Attorney General of Alberta
W. J. Major, Q.C. and M. J. Major, Esq., Messrs. Major Caron & Company for the Appellant
The Energy Resources Conservation Board
R. C. Wigham, Esq., Messrs. Fenerty Robertson Fraser & Hatch for the Respondent,
Panamerlcana de Bienes Y Servlclos, S.A.
T. L. Czechowskyj, Esq. Messrs. McManus Anderson Miles for the Respondent, Vennard
Johannesen Insolvency Inc.
J. D. McDonald, Esq., Messrs. Bennett Jones Verchere for Collins Barrow Limited, Trustee
in Bankruptcy
REASONS FOR JUDGMENT OF
THE HONOURABLE CHIEF JUSTICE LAYCRAFT
[1]
The issue on this appeal is whether the Bankruptcy Act (R.S.C. 1980, c. B-3)
prevents the court appointed Receiver/Manager of an insolvent and bankrupt oil company
from complying with an order of the Energy Resources Conservation Board of the Province of
Alberta. The order required the Receiver/Manager, in the interests of environmental safety, to
carry out proper abandonment procedures on seven suspended oil wells. In Court of Queen's
Bench, Mr. Justice MacPherson held that the order requiring "the abandonment and securing
of potentially dangerous well sites is at the expense of the secured creditor's entitlement"
The Court:
under the Bankruptcy Act and is "beyond the province's constitutional powers". He directed
the Receiver/Manager not to comply with the order. For the reasons which follow, I
respectfully disagree with that conclusion and would allow the appeal by the Board.
"Abandonment" and "abandon" are terms with different meanings in the oil industry
than when used in their usual legal sense. In the oil industry they refer to the process of
sealing a hole which has been drilled for oil or gas, at the end of its useful life, to render it
environmentally safe. In general terms, the process requires that the well bore be sealed at
various points along its length to prevent cross-flows of liquids or gases between formations,
or into aquifers or from the surface. The cost may vary from a few hundred dollars to tens of
thousands of dollars depending on the circumstances.
I FACTS
[3]
Prior to May, 1987 Northern Badger Oil and Gas Limited carried on business in the
exploration for, and the production of, oil and gas in Alberta and Saskatchewan. It was
licensed to operate 31 oil and gas wells in Alberta of which 11 were producing wells. The
remainder were suspended or standing in a non-producing condition. Northern Badger owned
varying interests approximating 10 per cent in each well and was the operator of them on
behalf of itself and other working interest owners.
[4]
On November 1, 1985, Northern Badger granted floating charge debenture security
over certain oil and gas assets, including its interest in the 31 Alberta wells, to the respondent
Panamericana. It defaulted under the debenture and in May, 1987, Panamericana applied for
and obtained a court order appointing Vennard Johannesen Insolvency Inc. ("the Receiver")
"…Receiver and Manager of all of the undertaking, property, and assets of the
Defendant, Northern Badger Oil and Gas Limited with authority to manage, operate, and
carry on the business and undertaking of the Defendant…"
[5]
On August 7, 1987, a Receiving Order, effective retroactively to July 7, 1987,
placed Northern Badger in Bankruptcy. Collins Barrow Limited was appointed Trustee in
Bankruptcy.
[6]
On July 20, 1987, the Energy Resources Conservation Board wrote to Northern
Badger referring to the insolvency and
"requiring an undertaking that the wells will continue to be operated in adherence with
the regulations and conditions of the well licenses. Also it is essential that the licensee
[2]
be capable of responding to any problems which may occur and properly abandoning
the well once production is complete."
[7]
The Board further suggested that "the solution to the problem" would be to transfer
the wells to a party "who is prepared to take on the responsibilities of the licensee". The
been transferred to other parties, but that 12 wells had not. It then said:
"The Receivership Manager is presently involved in negotiations to sell all of the assets
and liabilities to a number of interested parties. Vennard Johannesen is therefore
striving to pass on the obligations to the prospective purchaser." (emphasis added)
[8]
The Board wrote again to the Receiver on December 11, 1987, pointing out that
their records still showed Northern Badger to be the licensee of the wells. The letter asked the
Receiver to confirm that no permits, licenses or approvals would be remaining before they
applied for discharge "or alternatively that you give the Board notice of any application to be
discharged".
[9]
During the interval between these two letters, the Receiver had attempted to sell
the Northern Badger properties to various prospective purchasers including Senex
Corporation. On November 13, Senex made an offer to purchase the remaining Northern
Badger assets held by the Receiver for $1,850,000.00 plus a carried interest of 17.5% on
certain undeveloped properties held by Northern Badger. Under this offer Senex would
become the licensee of the remaining wells. However, the agreement had a clause which
provided:
"The purchaser may elect to exclude any interest of the Vendor in any lands which has a
value less than the costs of abandonment as agreed by the parties, or, failing agreement
by Sproule Associates Limited, on or before the closing date."
[10]
The Receiver applied to the Court for approval of the sale; the affidavit material
filed in support of the application made no express reference to the "back out" clause. The
Receiver did not give notice to the Board of the application. The Court approved the
transaction on December 18, 1987 and the closing date of the sale was set for January 15,
1988.
[11]
Prior to the closing, by an agreement dated on the same day, Senex exercised its
rights under the "back out" clause and passed seven wells back to the Receiver. This
amending agreement did not vary the purchase price of the remaining assets. All the wells
Receiver responded to this letter on August 14, 1987. It reported that 21 of the wells had
passed back must now be abandoned; two of them require minor expenditures, but the other
five will require expenditures in the range of $40,000.00 each.
[12]
The court order of December 18, 1987, set aside five different funds to meet the
claimants had rights of set-off, or to meet lien claims against the properties themselves. None
of these funds made allowance for the abandonment of the wells. The remainder of the
moneys were held by the Receiver awaiting the outcome of litigation to determine whether
Panamericana was entitled to priority over other creditors.
[13]
On January 27, 1988, the Receiver advised the Board that
"effective January 15, 1988 Vennard Johannesen Insolvency Inc. in its capacity as
Receiver and Manager of Northern Badger Oil and Gas Limited has sold all of the
assets of the company to Senex corporation.
"Please cancel our account with you effective January 15, 1988. We will not be
responsible for any charges or fees incurred after January 15, 1988.…" (emphasis
added)
[14]
After a six day trial in May, 1988, Panamericana obtained judgment against
Northern Badger for $1,304,112.00, and also obtained a declaration that it had priority over all
other creditors of Northern Badger for the payment of sums due under the debenture.
Thereupon, on May 29, 1988, the Receiver applied to Court of Queen's Bench for an order
approving its administration of the Receiving order and for a discharge from its
responsibilities. The affidavit filed in support detailed the payment or settlement of all claims
for which provision had been made by the five funds established in December 1987. It
disclosed that, after all assets were distributed to Panamericana, there would still be a
substantial deficiency in the payment of the debenture debt.
[15]
At the time of this application, the Receiver had approximately $226,000. on hand
which it sought to pay to Panamericana after deducting its fees and disbursements. It wished
to deliver to Collins Barrow, as Trustee in Bankruptcy, what were termed "minor, unrealized
receivables" including the interest of Northern Badger in the seven wells and the well licenses
relating to them. The affidavit did not refer specifically to the liability arising from the obligation
to abandon the seven wells. An apparent indirect reference to these seven wells is contained
in paragraph 18 of the supporting affidavit:
"The Receiver has determined that certain assets of Northern Badger were not
marketable and were excluded by Senex Corporation in its purchase of the assets of
claims of named claimants against Northern Badger for sums held in trust for them, or where
Northern Badger, which assets shall remain with the estate of Northern Badger, subject
to any further direction of this Honourable Court."
[16]
The record before this court makes only brief reference to events during the next
year. However, the application by the Receiver to be discharged remained in abeyance. In
licensed to Northern Badger. The Receiver did not respond until May 3, 1989. It advised the
Board that five of the seven wells which now require to be abandoned, had been deleted from
the Senex sale.
[17]
The Board's reaction to this information was, apparently, immediate. On June 1,
1989, an Order in Council of the Lieutenant Governor in Council purporting to be issued
under Section 7 of the Oil and Gas Conservation Act approved the issuance by the Board of
an order respecting the abandonment of those five wells and the two others.
[18]
The Board order authorized by the Order in Council was issued on June 6, 1989. It
required the Receiver to submit abandonment programs for the seven wells by June 15, 1989
and to abandon them in accordance with an approved program on or before February 28,
1990. On June 13, 1989 the Board moved in Court of Queen's Bench for an order requiring
the Receiver to comply with the Board's order and this litigation resulted.
[19]
While the Board's motion was pending, an effort was made to obtain contribution
toward the cost of abandonment from other working interest owners. Upon the application of
the Board, on November 23, 1989, Mr. Justice MacPherson directed the Receiver to take
steps to collect from other working interest owners of the seven wells their proportionate
share of abandonment costs totalling $202,500.00. The proportion of these costs attributable
to the percentage interest of Northern Badger in the wells was estimated at $17,330.00.
Nothing in the record before the Court discloses whether, or the extent to which, this effort
succeeded.
[20]
On this appeal, the respondents objected that a portion of the evidence presented
on behalf of the Board was inadmissible. They strongly urged that there was, in the result, no
evidence that failure to abandon the wells presented any danger. The evidence in question
was the affidavit of Mr. G.J. DeSorcy, Chairman of the Energy Resources Conservation
Board. In that affidavit Mr. DeSorcy stated that he is a Professional Engineer and Chairman of
the Board. He testified, on information and belief, as to a considerable amount of technical
information about the five wells, the formations encountered, and the present condition of
December 1988, the Board wrote to the Receiver pointing out that a number of wells were still
them. He expressed opinions as to the danger of cross flows of liquids and gases, and as to
hazards to the environment and to "public health and safety". The information was,
apparently, derived from the records of the wells filed with the Board; the expressions of
[21]
In my opinion, it is not necessary to determine whether this information was
admissible in this form or to consider the need for a new trial if it was not. Even if the
information and expressions of opinion in this affidavit are ignored, there is ample evidence
on the record in other affidavits, including those filed on behalf of the Receiver, to establish
the probable cost of abandonment of the wells and the need for that process. As will be
discussed later in these reasons, the process of abandonment of oil and gas wells is part of
the general law of Alberta enacted to protect the environment and for the health and safety of
all citizens.
II THE REASONS FOR JUDGMENT
[22]
The learned Chambers Judge delivered extensive reasons for Judgment. He held
that the Board order sanctioned by the Order in Council was within the Board's jurisdiction
under its the general powers contained in sections 4(b), 4(f) and 7 of the Oil and Gas
Conservation Act. He held, however, that the Board "is a creditor seeking to have its claim to
have the seven wells abandoned, preferred to the claim of the secured creditor and to the
scheme of distribution set forth in section 107 of the Bankruptcy Act." He cited Re Rainville
[1980] 1 S.C.R. 45 (S.C.C.) and R. v. Henfrey, Samson and Belair Limited [1989] 2 S.C.R. 24
(S.C.C.) and said:
"The E.R.C.B. Orders-in-council in form relate to a constitutionally valid objective, that is,
abandonment of gas wells. The genuine purpose is to do something beyond the
province's constitutional powers. It is to take money directed, by the Bankruptcy Act, to
be paid to a secured creditor, and apply it to another purpose.
……..
"Subject to the rights of secured creditors, everything in the nature of property of the
bankrupt vests in the Trustee in bankruptcy. The E.R.C.B. has the powers under the Oil
and Gas Conservation Act to abandon the wells and collect the costs from the
appropriate parties.
This claim, whether done directly or ordered to be done, is a claim provable in
bankruptcy.
Section 121 of the Bankruptcy Act:
opinion were his own.
'All debts and liabilities, present or future, to which the bankrupt is subject'
The proper approach to solving problems such as are raised in the case at bar is
prescribed by the Supreme Court of Canada in the Federal Business Development Bank
v. Commission de la Sante et de la Securlte du Travail et al. 68 C.B.R. 209 at page 217
and following. A similar case of contest between preserving the secured creditors' rights
as opposed to saving the public purse.
The Bankruptcy Act has not been amended to deal with modern social problems of
abandonment of contaminated property. Here the abandonment and the securing of
potentially dangerous well sites is at the expense of the secured creditors' entitlement if
the E.R.C.B. were to succeed.
While I am aware that the Supreme Court of the United States of American split five to
four in deciding a similar issue in the matter of Quanta Resources, 474 U.S. 494 (1986),
I am of the view that the law of Canada accords with the dissenting view of the Chief
Justice of the United States when he said that it was for the legislature to change the
law, not the courts, when it came to impairing otherwise valid security for societal
purposes. One should see also Lloyd's Bank of Canada v. International Warranty
Company Limited et al., an unreported decision of the Alberta Court of Appeal (1989) as
to the need for clear legislative statements before destroying property rights.
Accordingly, I must instruct the Receiver/manager that he must not proceed to abandon
the several wells directed to be abandoned by the order of the E.R.C.B. out of the
monies held for the secured creditors."
III THE REGULATORY REGIME FOR ALBERTA
OIL AND GAS WELLS
[23]
The regulatory scheme for oil and gas operations in Alberta is contained in the Oil
and Gas Conservation Act (R.S.A. 1980 c. 0-5, in the Energy Resources Act (R.S.A. 1980 c.
E-11) and in the regulations under those acts. Each statute contains a statement of its
purposes. Section 4 of the Oil and Gas Conservation Act provides:
"4. The purposes of this Act are:
(b) to secure the observance of safe and efficient practices in the locating,
spacing, drilling, equipping, completing, reworking, operating and abandonment of
wells and in operations for oil and gas.
.….……
(f) to control pollution above, at or below the surface in the drilling of wells and in
operations for the production of oil and gas and in other operations over which the
Board has jurisdiction.
is surely wide enough to cover this liability.
[24]
The Board is given wide specific powers under the act in the regulation of
operations in the exploration for, and production of, oil and gas. Where a specific power is not
given to the Board to be exercised on its own volition, it has a wide general power to be
7. The Board, with the approval of the Lieutenant Governor in Council, may make any
just and reasonable orders and directions the Board considers necessary to effect the
purposes of this Act and that are not otherwise specifically authorized by this Act.
[25]
Section 9 provides that a Board order shall override the terms of any contract.
Sections 11 to 20 provide for the licensing of oil and gas drilling and producing operations.
Section 11 provides that no person shall continue any producing operations unless
"(b) he is the licensee or is acting under the instructions of the licensee."
[26]
Section 13 provides that if it is established that a licensee does not have the right to
produce oil or gas from land, the license becomes "void for all purposes except as to the
liability of the holder of the license to complete or abandon the well…". Section 3.030 (3) of
the regulations also provides, in some circumstances, for the Board to direct a licensee to
abandon a well. Section 18 provides that a well license shall not be transferred without the
consent of the Board. Section 19 outlines circumstances in which the Board may cancel a
license.
[27]
By sections 92(1) and (2) the Board is empowered to enter a well site and to
perform, itself, work needed for "control, completion, suspension or abandonment of the well".
The cost of this work then becomes a "debt payable by the licensee of a well to the Board".
Section 95 empowers the Board to enforce any order by taking over the production,
management and control of the well.
[28]
The Energy Resources Conservation Act (R.S.A. 1980 c. fill), which establishes the
Board, has a similar statement of its purposes in Section 2. Among these purposes are:
"2 (c) to effect the conservation of, and to prevent the waste of, the energy resources
of Alberta;
(d) to control pollution and ensure environment conservation in the exploration for,
processing, development and transportation of energy resources and energy;
(e) to secure the observance of safe and efficient practices in the exploration for,
processing, development and transportation of the energy resources of Alberta;"
exercised with the authorization of the Lieutenant Governor in Council. Section 7 provides:
[29]
It is evident that the regulatory regime contained in these statutes and regulations
contemplates that all wells drilled for oil or gas will one day be abandoned. That is so whether
the well is unsuccessful or whether it produces large quantities of oil or gas. At some point,
exceeds the revenue which could be obtained from it, the process of abandonment is
required of the well licensee. In those situations where there is no solvent entity able to carry
out the abandonment duties the wells become, in the descriptive vernacular of the oil
industry, "orphan wells". Thus the direct issue in this litigation, in my opinion, is whether the
Bankruptcy Act requires that the assets in the estate of a insolvent well licensee should be
distributed to creditors leaving behind the duties respecting environmental safety, which are
liabilities, as a charge to the public.
IV DID THE BOARD HAVE A PROVABLE CLAIM IN THE BANKRUPTCY?
[30]
A basic premise of the respondents' position in Court of Queen's Bench, and in this
court, is that the Board has a provable claim as a creditor in the bankruptcy of Northern
Badger. From this it is contended that, in enforcing the requirement for the proper
abandonment of oil and gas wells, the Board simply ranks as a creditor. Then, it is said, the
scheme of distribution of the Bankruptcy Act gives priority to the secured creditors so that the
trustee is unable to obey the law requiring abandonment of oil and gas wells. That is so, it is
urged, because the requirement of the provincial legislation cannot subvert the scheme of
distribution specified by the Bankruptcy Act. The respondents point to the definition of
"creditor" in Section 2 of the Bankruptcy Act and to the elements of a "provable claim" set
forth in section 121.
[31]
Mr. Justice MacPherson agreed with these contentions saying that the words in
sections 2 and 121 of the Bankruptcy Act were "surely wide enough to cover" Northern
Badger's liability to abandon the wells. These sections provide:
"2. In this Act,
"Creditor" means a person having a claim preferred, secured or unsecured,
provable as a claim under this Act;"
"121(1) All debts and liabilities, present or future, to which the bankrupt is subject at
the date of the bankruptcy or to which he may become subject before his discharge by
reason of any obligation incurred before the date of the bankruptcy shall be deemed to
be claims provable in proceedings under this Act."
when further production is not possible or the cost of production of remaining quantities
[32]
There are two aspects to the question whether the Board had a "provable claim" in
the bankruptcy. The first is whether Northern Badger had a liability; the second is whether
that liability is to the Board so that it is the Board which is the creditor. I respectfully agree that
abandonment. It was one of the expenses, inherent in the nature of the properties
themselves, taken over for management by the Receiver. With respect, I do not agree,
however, that the public officer or public authority given the duty of enforcing a public law
thereby becomes a "creditor" of the person bound to obey it.
[33]
The statutory provisions requiring the abandonment of oil and gas wells are part of
the general law of Alberta, binding every citizen of the Province. All who become licensees of
oil and gas wells are bound by them. Similar statutory obligations bind citizens in many other
areas of modern life. Rules relating to health, or the prevention of fires, or the clearing of ice
and snow, or the demolition of unsafe structures are examples which come to mind. But the
obligation of the citizen is not to the peace officer, or public authority which enforces the law.
The duty is owed as a public duty by all the citizens of the community to their fellow citizens.
When the citizen subject to the order complies, the result is not the recovery of money by the
peace officer or public authority, or of a judgment for money, nor is that the object of the
whole process. Rather, it is simply the enforcement of the general law. The enforcing
authority does not become a "creditor" of the citizen on whom the duty is imposed.
[34]
It is true that this Board has the power by statute to create in its own favour a
statutory debt if it chooses to do so. It may, under Sections 91(1) and (2) of the Oil and Gas
Conservation Act (discussed above) do the work of abandonment itself and become a
creditor for the sums expended. But the Board has not done so in this case. Rather it is
simply in the course of enforcing observance of a part of the general law of Alberta.
[35]
Counsel for Panamericana cited three authorities in support of its argument that the
Board is a creditor of Northern Badger: Re Rainville [1980] 1 S.C.R. 45; Deloitte, Haskins &
Sells Ltd. v. WCB (1985), 19 D.L.R. (4th) 577 (S.C.C.); and R. in Right of British Columbia v.
Henfrey Samson Belair Ltd. [1989] 5 W.W.R. 577 (S.C.C.). But in all these cases some actual
impost had been levied against the citizen and a sum of money was due and owing to the
specific public authority involved. In Rainville, Quebec had registered a "privilege" for
$5,474.08 for sales tax which the company had failed to remit; in Deloitte, Haskins & Sells,
the sum in dispute was a levy of $3,646.68 made under the Workers' Compensation Act; in
Northern Badger had a liability, inchoate from the day the wells were drilled, for their ultimate
Henry, Samson, Belair Ltd. the company had collected, and failed to remit sales tax of
$58,763.23. Thus in each case a specific sum was due to the Crown, or a Crown agency, as
a debt. None of the cases is authority for the proposition that a public officer ordering a citizen
be required to spend in complying.
[36]
In my view, the Board is not, at this point, a "creditor" of Northern Badger with a
claim provable in its bankruptcy. The problem presented by this case is not to be solved,
therefore, by determining whether the Board ranks as a creditor of Northern Badger before or
after the secured creditors. Rather it must be determined whether the Receiver, which was
the operator of the oil wells in question, had a duty to abandon them in accordance with the
law.
V THE DUTIES OF THE RECEIVER
[37]
Vennard Johannesen Insolvency Inc. assumed its duties as Receiver in this case
as an officer of the court. The nature of its duties has been determined by a long line of
cases, now reinforced by the provisions of the Business Corporations Act (R.S.A. 1980 c. B15). Sections 92 and 93 require the Receiver to act in accordance with the directions of the
Court and of the instrument under which the appointment was made. Sections 94 and 95
provide:
"94 A receiver or receiver-manager of a corporation appointed under an instrument shall
(a) act honestly and in good faith and,
(b) deal with any property of the corporation in his possession or control in a
commercially reasonable manner.
95 On an application by a receiver or receiver-manager, whether appointed by the
Court or under an instrument, or on an application by any interested person, the Court
may make any order it thinks fit including, without limiting the generality of the foregoing,
any or all of the following:
(a) an order appointing, replacing or discharging a receiver or receiver-manager
and approving his accounts;
(b) an order determining the notice to be given to any person or dispensing with
notice to any person;
(c) an order fixing the remuneration of the receiver or receiver-manager;
(d) an order
to obey the general law thereby becomes a creditor for any amount the citizen may ultimately
(i) requiring the receiver or receiver-manager, or a person by or on behalf of
whom he is appointed, to make good any default in connection with the
receiver's or receiver-manager's custody or management of the property and
business of the corporation;
(iii) confirming any act of the receiver or receiver-manager;
(d.1)
an order that the receiver or receiver-manager make available to the
applicant any information from the accounts of his administration that the Court
specifies;
(e)
an order giving directions on any mater relating to the duties of the
receiver or receiver-manager."
[38]
A receiver appointed by the court must act fairly and honestly as a fiduciary on
behalf of all parties with an interest in the debtor's property and undertaking. The receiver is
not the agent of the debtor or the creditor or of any other party, but has the duty of care,
supervision and control which a reasonable person would exercise in the circumstances. The
receiver may be liable for failure to exercise an appropriate standard of care. These points
have been made in many cases starting in 1905 with Plisson v. Duncan (1905) 36 S.C.R.
647. The decision of Viscount Haldane in Parsons et al v. Sovereign Bank of Canada
[1913] A.C.160, which has been frequently quoted, emphasizes the independence of the
receiver from those who procured the appointment.
[39]
It is also clear that the receiver takes full responsibility for the management,
operation and care of the debtor's assets, but does not take legal title to them. That point has
been made in a number of decisions including that of Lamer J. (as he then was) speaking for
the court in F.B.D.B. v. Commission de Sante et al. (1988) 84 N.R. 308. At page 315 he said:
"… the immoveable in the case at bar is property of the bankrupt within the meaning of
the Bankrupt Act. Even if the trustee takes possession of the immoveable before the
bankruptcy, the bankrupt remains owner of his property. The trustee who has seized an
encumbered right of ownership over that property: he has only the rights of a creditor
under a pledge or hypothec. This Court has ruled this way twice in Laliberte v. Larue,
[1931] S.C.R. 7 and Trust general du Canada v. Roland Chalifoux Ltee, [1962] S.C.R.
456."
[40]
A further factor affecting the obligation of a court appointed receiver is the
receiver's status as an officer of the court; the standard required because of that status is one
of meticulous correctness. In Alta Treasury Branches v. Invictus Financial Corporation Ltd.
(1986) 42 Alta L.R. (2d) 181, Stratton J. (as he then was) said that the receiver's obligations
(ii) relieving any of those persons from any default on any terms the Court
thinks fit;
"reach further than merely acting honestly". He quoted with approval the statement of Wilson
"… the receiver is an officer of the court and in his discharge of that office he may not, in
the name of the court, lend his power to defeat the proper claims of those on whose
behalf those powers are exercised. Clothed as he is with the mantle of this court, his
duties are to be approached not as the mere agent of the debenture holder, but as
trustee for all parties interested in the fund of which he stands possessed."
[41]
The same concern for proper conduct by the court's appointed officer may be seen
in the judgment of the Saskatchewan Court of Appeal in Canadian Commercial Bank v.
Simmons Drilling Ltd. (1989) 76 C.B.R. 241. In that case the Receiver undertook a lengthy
review of the debtor's records, and discovered that some subcontractors, who had not
registered liens in time, were unpaid. In some cases, the time for filing liens had expired after
the Receiver had been appointed. The Court affirmed the duty of a Receiver to ascertain his
obligations within a reasonable time and noted that the Receiver's actions in the discharge of
those obligations are the actions of the court which appointed him. It held that, whether by
intention or by default, an officer of the court, cannot be permitted to change the relative rights
of those for whom he is acting. Sherstobitoff J.A. said at page 249:
"The receiver, and through it the bank, must bear responsibility for the consequences of
the failure to act with sufficient diligence to discover the claims within a reasonable time,
thereby permitting lapse of the limitation period.
What is clear is that, when the receiver was appointed, the subcontractors were
entitled to payment from the trust fund. The failure to make payment to the
subcontractors within a reasonable time thereafter, an obligation imposed by s. 89 of the
Business Corporations Act and s. 7 of the Builders' Lien Act taken together, was in
default of those statutory obligations. If the receiver had applied to the court for
directions for payment out of the moneys on that date or within a reasonable time
thereafter, the money would have been ordered paid to the subcontractors. The result is
that the default of the receiver in failing to act with sufficient promptness and diligence to
discover and pay the claims against the trust before expiration of the limitation period
has deprived the subcontractors of the right to realize their claims from the trust fund.
The bank now seeks to benefit from that default and the receiver supports its
position. That position is untenable. While it may not be improper for a private debtor to
withhold payment of a debt due and owing, whether deliberately or by neglect or
oversight, and thereby benefit from an intervening limitation period, the same is not true
of a receiver, for he is an officer of the court. The receiver's action is the action of the
court and the court will not permit or approve any action on the part of its officer which
has the effect of changing the rights of competing creditors, whether deliberately or by
default."
(emphasis added)
J. in Fotti v. 777 Mgmt. Inc. [1981]5 W.W.R. 48 at 54:
[42]
In the present case it is clear that almost from the commencement of the
receivership, the Receiver was aware of the obligation, in law, of Northern Badger to see the
oil and gas wells properly abandoned. The correspondence from the Board detailed the
[43]
As one reviews the sequence of events leading to the sale of the assets to Senex,
it is difficult to escape the conclusion that the "back out" clause was deliberately negotiated to
achieve the very result for which the respondents now contend. The "back out" clause
contemplates the situation that the costs of abandonment of some wells may exceed the
revenue to be gained from them. Of course, no matter what wealth a well has produced in the
past, there comes a time, in the last days of its life, when little oil remains and the well must
be abandoned. At that point it is a liability with the cost of abandonment exceeding the
revenue that could be obtained. In this case, the parties even provided for an arbitrator to
determine, if need be, whether that moment had arrived. All wells with some value were to be
sold; the remainder were to be left in the bankrupt estate when the Receiver obtained a
discharge from its duties.
[44]
Moreover, whether by accident or design, the Board was not made aware of the
developing situation. Despite the correspondence, the Board was not aware that Senex was
able to exercise a "back out" clause in the sale agreement. The Board was first told of the
effort "to sell all the assets and liabilities". It was then told that "all the assets have been sold".
Only the most alert reader would detect the subtle difference in the two quoted portions of the
Receiver's letters. On the material filed, it is also difficult to escape the conclusion that the
court approved the sale to Senex without being aware of the prospect that some wells were to
be left as "orphans".
VI CONCLUSION
[45]
In my opinion the Board had the power, when authorized by the Lieutenant
Governor in Council, to order the abandonment of the wells by some person. The order was
clearly within the general regulatory scheme, and within the expressed purposes, of both of
the statutes regulating the oil and gas industry. Indeed, the contrary was not argued. What
was contended is that the Board should have directed its order to Northern Badger or to the
trustee in bankruptcy rather than to the Receiver. What was further contended is that the
receiver or trustee in bankruptcy is unable to obey the general law enacted by the provincial
obligation for the proper operation of the wells and the ultimate abandonment of them.
legislature to govern oil wells because to do so would subvert the scheme Parliament has
devised for distribution of assets in a bankruptcy.
[46]
The parties referred the court to some cases in the United States and to one in
distribution of the estate on insolvency. In each case, however, the response of the court was
to some degree determined by statutory provisions. The cases are not easy to reconcile.
[47]
In Kovacs v. B & W Enterprises (1984) 469 U.S. 649 a state obtained an injunction
ordering an individual to clean up a hazardous site, and later a receiver was appointed to
seize property of the debtor and perform the duty. The individual filed for bankruptcy and the
issue was whether his subsequent discharge from bankruptcy cleared the obligation. It was
held in the Sixth Circuit Court of Appeals that the claim was essentially a monetary "liability on
a claim" under the bankruptcy statute, and that the debtor was discharged. The United States
Supreme Court affirmed.
[48]
In Penn Terra Ltd. V. Dept. of Environmental Resources (1984) 733 F. 2d 267 the
Third Circuit Court of Appeals was required to decide whether an exemption clause in the
bankruptcy legislation should be construed to exempt from discharge an order requiring the
debtor to complete restoration of the sites after coal operations. The court observed that the
judgment obtained was not in the form of a traditional money judgment as for a tort or other
claim. It then held that the debtor was not discharged and was required to perform the
restoration.
[49]
In Midlantic National Bank v. New Jersey Department of Environmental Protection
(1985) 474 U.S. 494, a corporation filed for bankruptcy after it was discovered to have stored
oil contaminated with a carcinogen at a site in New Jersey and another in New York. The
trustee proposed to abandon the sites on the ground that they were of "inconsequential value"
to the estate. In New Jersey, State environmental officials ordered the site cleaned up. A
majority of the United States Supreme Court held that a bankruptcy trustee may not abandon
property in contravention of state law. The minority would have held that the abandonment
might be barred in emergency conditions, which did not yet exist in the case.
[50]
A similar problem arose again after both the above cases had been decided in
United States v. Whizco Inc. (1988) 841 F. (2d) 147. The United States sought an injunction
to force obedience to a statutory obligation to abandon a worked out coal mine. The Sixth
Canada where a debtor's legal duties on environmental matters conflicted with the potential
Circuit Court of Appeals held, following the Kovacs case, that the operator's discharge under
the Bankruptcy Act discharged the operator's liability to the extent that it would require the
expenditure of money.
One similar case has arisen in Canada. In Canada Trust Company v. Bulora
Corporation (1980) 34 C.B.R. 145, the Receiver, as in the present case, had been appointed
to receive and manage the company. The Fire Marshall ordered the Receiver to demolish
certain housing units which were in a "serious and hazardous" condition. It was urged that,
despite the appointment of the Receiver, the company continued to exist and to hold title to its
assets. Thus, it was said, the proper recipient of the demolition order was the company, itself,
and not the Receiver. Cory J., then a judge of the High Court of Ontario, summarized the
argument in these terms at page 151:
"It was contended that the nature of the position of the receiver, although it might
paralyze the power of the company for which it was appointed, did not extinguish the
legal existence of that company. Thus Bulora continued to exist and continued as the
entity responsible for the required demolition. It was said that, as the Fire Marshal had
every right to recover the municipality, the receiver should not and could not be required
to undertake the demolition, which would have the effect of reducing the amount
recovered by Canada Trust, the secured creditor."
[52]
Cory J. then summarized the powers of the Receiver under the order appointing it,
which gave it very wide powers of management and control similar to those given the
Receiver in this case. He then said at page 152:
"There remains the major problem of determining who should bear the costs of the
demolition. The order of the Fire Marshal is of vital concern for the safety of residents of
the units adjacent to and close by the abandoned units. The safety of those persons
occupying such units should be of paramount importance. If the receiver is given wide
and sweeping powers in the management of the company, surely in the course of such
management it has a duty to comply with a demolition order where the safety of
individuals is so vitally concerned. It is indeed unfortunate that a creditor must suffer the
loss resulting from the demolition. Nevertheless, the asset to be managed by the
receiver must, in my opinion, be managed with a view to the safety of those residing in
and beside that asset. Receivership cannot and should not be guided solely by the
recovery of assets. In my view, there is a social duty to comply with an order such as
this which deals with the safety of individuals affected by an asset the receiver is
managing.
The direction then will be that the receiver is to comply with the order of the Fire
Marshal and proceed with the demolition of the specified units."
[53]
The Court of Appeal affirmed the judgment of Cory J. [(1981) 39 C.B.R. 153]. The
endorsement on the record was as follows:
[51]
[54]
As in Bulora Corporation, it is urged in this case that Northern Badger is the
licensee of the wells; the Receiver has never had legal title to them and is not the licensee.
Therefore, it is said, the abandonment order should be directed to Northern Badger and not to
the Receiver. In my opinion, that contention is not valid.
[55]
The Receiver has had complete control of the wells and has operated them since
May, 1987, when it was appointed Receiver and Manager of them. It has carried out for more
than three years activities with respect to the wells which only a licensee is authorized to do
under the provisions of the Oil and Gas Conservation Act. In that position, it cannot pick and
choose as to whether an operation is profitable or not in deciding whether to carry it out. If
one of the wells of which a receiver has chosen to take control should blow out of control or
catch fire, for example, it would be a remarkable rule of law which would permit him to walk
away from the disaster saying simply that remedial action would diminish distribution to
secured creditors.
[56]
While the Receiver was in control of the wells, there was no other entity with whom
the Board could deal. An order addressed to Northern Badger would have been fruitless. That
is so because, by order of the court, upon the application of the debenture holder, neither
Northern Badger nor its trustee in bankruptcy had any right even to enter the well sites or to
undertake any operation with respect to them. Moreover, under the regulatory scheme for
Alberta oil wells, only a licensee is entitled to produce oil and gas. The Receiver cannot be
heard to say that, while functioning as a licensee to produce the wells and to profit from them,
it assumed none of a licensee's obligations.
[57]
I must also consider the contention, which found favour in the Court of Queen's
Bench, that the receiver or bankruptcy trustee managing and operating oil and gas wells need
not, and, indeed, is forbidden, to obey the general provincial law governing property of that
description. Put another way, this argument states that the general provincial law regulating
"There was an order made by the fire marshall the legality and appropriateness of which
is not challenged by the appellant. We are of the view that under the circumstances it
was not only within the jurisdiction of the learned judge to direct that the court-appointed
receiver-manager carry out that order but those circumstances necessitated that the
receiver-manager be so directed. Although Cory J. referred to a 'social duty' to comply
with the order that language, with deference, was inappropriate. The duty involved was
a statutory one and it was unnecessary for him to consider the social implications of the
order. The appeal is dismissed with costs."
the operation of oil and gas wells in Alberta is invalid to the extent that it purports to govern a
receiver or bankruptcy trustee in possession of such wells.
[58]
Conflict between federal and provincial legislation is, of course, a classic Canadian
law, validly enacted within the constitutional power reserved to the enacting body, also
touches upon or affects a heading of power reserved to the other level of government. These
cases have been extensively reviewed and commented upon in the recent decision of the
Supreme Court of Canada in Bank of Montreal v. Hall [1990] 1 S.C.R. 121.
[59]
Provincial legislation has often been upheld despite incidental effects on a subject
under the federal power. Where there is direct confrontation (as where one statute says "yes"
and the other says "no" -- as Dickson J. (as he then was) expressed it in Multiple Access Ltd.
v McCutcheon [1982] 2 S.C.R. 16) the doctrine of paramountcy may force a conclusion of
invalidity of the provincial legislation.
[60]
That the two statutes affect the same subject matter does not necessarily mean
that one or the other of them is invalid. An early case of this type was Canadian Pacific
Railway Company v. Notre Dame de Bonsecours [1899] A.C. 367. In that case the Privy
Council held that since Parliament has the exclusive right to prescribe regulations for the
construction/ repair and alteration of a railway, a provincial legislature could not regulate the
structure of a ditch forming part of the works. But it held intra vires a municipal code which
prescribed the cleaning of the ditch and the removal of obstructions to prevent flooding.
[61]
Similarly in Royal Bank of Canada v. Workmen's Compensation Board of Nova
Scotia [1936] S.C.R. 560, the Supreme Court of Canada held valid a levy for worker's
compensation which adversely affected security granted under the Bank Act. La Forest J.,
giving the judgment of the court in Bank of Montreal v. Hall (supra), quoted the judgment of
Davis J. in the Nova Scotia case (at 568-569) as follows (at 148):
"…I have reached the conclusion that the goods in question, though owned by the bank
subject to all the statutory rights and duties attached to the security were property in the
province of Nova Scotia
'used in or in connection with or produced by the industry with respect to which the
employer (was) assessed though not owned by an employer'
and became subject to the lien of the provincial statute the same as the goods of other
owners…It is a provincial measure of general application for the benefit of workmen
problem. A number of cases have considered the situation where either a federal or provincial
employed in industry in the province and is not aimed at the impairment of bank
securities though its operations may incidentally in certain cases have that effect."
(emphasis added by La Forest J.)
In Bank of Montreal v. Hall (supra) the provincial legislation in conflict with valid
federal legislation was forced to give way. The bank sought to enforce security granted to it
under the Bank Act and the issue was whether it was required to follow the procedures and
experience delays prescribed by the Saskatchewan Limitation of Civil Rights Act. After a
review of the case law and of the two enactments La Forest J. was "led inescapably to the
conclusion" that there was an "actual conflict in operation" between them. The provincial
legislation was held inoperative in respect of security taken by the bank.
[63]
In my view, there is no such direct conflict in this case. The Alberta legislation
regulating oil and gas wells in this province is a statute of general application within a valid
provincial power. It is general law regulating the operation of oil and gas wells, and safe
practices relating to them, for the protection of the public. It is not aimed at subversion of the
scheme of distribution under the Bankruptcy Act though it may incidentally affect that
distribution in some cases. It does so, not by a direct conflict in operation, but because
compliance by the Receiver with the general law means that less money will be available for
distribution.
[64]
I respectfully agree with the decision in Bulora Corporation (supra). In my opinion,
the Receiver, the manager of the wells with operating control of them, was bound to obey the
provincial law which governed them.
[65]
I would not attempt to define the limits of provincial regulatory authority in relation to
the federal powers respecting insolvency and bankruptcy. The various levels of government
regulate business in a myriad of ways. The extent to which these levels of government may,
in the exercise of their powers, affect in an incidental way, the distribution of insolvent estates
must depend, to a considerable extent, on the facts of the particular case.
[66]
I would allow the appeal and direct the Receiver to comply with the Board Order.
The parties may speak to costs.
DATED AT CALGARY, ALBERTA
THIS 12th DAY OF JUNE
A.D. 1991.
[62]
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Section 9
RSA 2000
Chapter O-6
(2) An order of the Lieutenant Governor in Council granting any
approval or authorization under this Act and made before June 2,
1972 is not invalid by reason only of the fact that the order was
made subject to any terms or conditions.
(3) If the holder of an approval contravenes or fails to comply with
any term or condition contained in an order of the Lieutenant
Governor in Council approving or authorizing the Regulator’s
approval,
(a) the Regulator may cancel an approval granted by it under
this Act or may take any other remedial measures that it
considers suitable in the circumstances, or
(b) the Lieutenant Governor in Council may amend, vary, add
to or replace any terms or conditions contained in the order.
RSA 2000 cO-6 s8;2012 cR-17.3 s97(31),(32)
Part 4
Overriding Provisions
Overriding provisions
9(1) A provision of
(a) this Act,
(b) the regulations,
(b.1) the rules,
(c) a declaration, order or direction of the Regulator pursuant to
this Act or in any matter over which the Regulator has
jurisdiction,
(d) an order of the Alberta Utilities Commission in a matter in
which its jurisdiction arises from an order under this Act,
(e) an order of the Gas Utilities Board on any application or
matter referred to it by the Alberta Energy Regulator, or
(f) an order of the Lieutenant Governor in Council under this
Act,
overrides the terms and conditions of any contract or other
arrangement conflicting with the provisions of this Act or the
regulations, the rules or a declaration, order or direction.
(2) No terms or conditions of a contract or other arrangement that
conflict with a provision referred to in subsection (1) are
16
Section 10
RSA 2000
Chapter O-6
enforceable or give rise to any cause of action by any party against
any other party to the contract or arrangement.
(3) This section does not apply to a franchise conferred by statute,
or to a contract or arrangement entered into pursuant to a statute
and between a municipal corporation or Metis settlement and a
person supplying gas to the ultimate consumer, insofar as the
franchise, contract or arrangement relates to the supply or
distribution of gas within the municipality or settlement area.
RSA 2000 cO-6 s9;2007 cA-37.2 s82(20);2012 cR-17.3 s97(4)
Part 5
Rules
Rules
10(1) The Regulator may make rules
(a) prescribing the information that is to be included in or is to
accompany any application under this Act or the rules;
(b) requiring licensees and approval holders to provide to the
Regulator deposits or other forms of security to guarantee
the proper and safe suspension, abandonment and
reclamation of wells and facilities and the carrying out of
any other activities necessary to ensure the protection of the
public and the environment, including rules respecting the
amount and form of those deposits and security and how
they may be used, retained, forfeited and returned;
(c) respecting the service of and the making of payments under
a notice of garnishment under section 103;
(d) as to the licensing, approval, transfer, location, equipping
and operation of facilities;
(e) prohibiting the drilling of a well at any point within a
prescribed distance of any boundary, roadway, road
allowance, right of way, building of any specified type, or
any specified works either public or private;
(f) requiring notice to the Regulator of intention and approval
of the Regulator before
(i) the suspension of normal drilling or normal producing or
injecting operations,
(ii) the abandonment of a well,
(iii) the reconditioning or recompletion of a well,
17
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Section 1
ENVIRONMENTAL PROTECTION
AND ENHANCEMENT ACT
RSA 2000
Chapter E-12
(iii) any other mineral substances, other than natural gas,
in association with that crude bitumen or those sands
and other rock materials referred to in subclauses (i)
and (ii);
(rr) “oil sands site” means a location at which a facility exists
or is to be developed for recovering oil sands by drilling
or other in situ recovery operations, and includes
(i) any injection or pumping facility, storage facility or
tailings storage or disposal site that exists or is to be
developed, and
(ii) any permanent access or haul road, railway,
telecommunication line or pipeline on the location
for the transmission of synthetic crude oil;
(ss) “owner”, with regard to land, means
(i) the registered owner of the land,
(ii) a purchaser of the land whose interest as a purchaser
is shown on the certificate of title to that land, or
(iii) a tenant or other person who is in lawful possession
or occupation of the land;
(tt) “person responsible”, when used with reference to a
substance or a thing containing a substance, means
(i) the owner and a previous owner of the substance or
thing,
(ii) every person who has or has had charge,
management or control of the substance or thing,
including, without limitation, the manufacture,
treatment, sale, handling, use, storage, disposal,
transportation, display or method of application of
the substance or thing,
(iii) any successor, assignee, executor, administrator,
receiver, receiver-manager or trustee of a person
referred to in subclause (i) or (ii), and
(iv) a person who acts as the principal or agent of a
person referred to in subclause (i), (ii) or (iii),
but does not include
(v) a municipality in respect of
14
AND ENHANCEMENT ACT
Section 134
RSA 2000
Chapter E-12
(ii) the manner in which a claim for compensation is
assessed and made and the determination of the
amount payable;
(b) respecting the manner in which notice is to be provided
under sections 126(b) and 130(b).
1992 cE-13.3 s118
Part 6
Conservation and Reclamation
Definitions
134 In this Part,
(a) “expropriation board” means the board, person or other
body having the power to order termination of a right of
entry order as to the whole or part of the land affected by
the order;
(b) “operator” means
(i) an approval or registration holder who carries on or
has carried on an activity on or in respect of specified
land pursuant to an approval or registration,
(ii) any person who carries on or has carried on an
activity on or in respect of specified land other than
pursuant to an approval or registration,
(iii) the holder of a licence, approval or permit issued by
the Alberta Energy Regulator or the Alberta Utilities
Commission for purposes related to the carrying on
of an activity on or in respect of specified land,
(iv) a working interest participant in
(A) a well,
(B) a mine,
(C) a coal processing plant,
(D) an oil sands processing plant, or
(E) a plant or facility that is subject to the Large
Facility Liability Management Program
administered by the Alberta Energy Regulator
on, in or under specified land,
90
Section 134
AND ENHANCEMENT ACT
RSA 2000
Chapter E-12
(v) the holder of a surface lease for purposes related to
the carrying on of an activity on or in respect of
specified land,
(vi) a successor, assignee, executor, administrator,
receiver, receiver-manager or trustee of a person
referred to in any of subclauses (i) to (v), and
(vii) a person who acts as principal or agent of a person
referred to in any of subclauses (i) to (vi);
(c) “reclamation certificate” means a reclamation certificate
issued under this Part;
(d) “reclamation inquiry” means a reclamation inquiry
conducted under this Part;
(e) “right of entry order” means
(i) an order granting right of entry that is made
(A) by the Surface Rights Board under the Surface
Rights Act,
(B) under a former Act within the meaning of that
term in the Surface Rights Act, or
(C) by a body that is empowered to grant a right of
entry under the Metis Settlements Act in respect
of land that is located in a settlement area;
(ii) an order for the expropriation of land or an interest in
land required for the purposes of a pipeline or
transmission line that is made by the Surface Rights
Board or the Alberta Utilities Commission or a
predecessor of either of them or by a body that is
empowered to make such an order under the Metis
Settlements Act in respect of land that is located in a
settlement area;
(f) “specified land” means specified land within the meaning
of the regulations on or in respect of which an activity is
or has been carried on, but does not include
(i) land used solely for the purposes of an agricultural
operation,
(ii) subdivided land that is used or intended to be used
solely for residential purposes,
91
Section 1
RSA 2000
Chapter O-6
(z) “helium” means, in addition to its normal scientific
meaning, a mixture mainly of helium that ordinarily may
contain some nitrogen and methane;
(aa) “holding” means an area established as a holding pursuant
to the regulations or rules;
(aa.01) “in situ coal scheme” means an in situ coal scheme as
defined in the Coal Conservation Act;
(aa.1) “large facility” means a facility that is
(i) a central processing facility as defined in the rules made
under the Oil Sands Conservation Act with a Regulator
approved design capacity of 5000 cubic metres or more
per day,
(ii) an oil sands upgrader integrated into a central processing
facility as defined in the rules made under the Oil Sands
Conservation Act with a Regulator approved design
capacity of 5000 cubic metres or more per day,
(iii) a processing plant designated by the Regulator as a stand
alone straddle plant, or
(iv) a gas processing plant that has or has had sulphur
recovery, with a sulphur inlet of one tonne or more per
day;
(bb) “licence” means a licence granted pursuant to this Act or
any predecessor of this Act or a regulation under any of
them or rules under this Act;
(cc) “licensee” means the holder of a licence according to the
records of the Regulator and includes a trustee or
receiver-manager of property of a licensee;
(dd) “market demand” means the amount of oil or gas reasonably
needed for current consumption, use, storage and working
stocks within and outside Alberta;
(ee) “marketable gas” means a mixture mainly of methane
originating from raw gas, if necessary through the
processing of the raw gas for the removal or partial removal
of some constituents, and that meets specifications for use
as a domestic, commercial or industrial fuel or as an
industrial raw material;
9
Section 1
PIPELINE ACT
RSA 2000
Chapter P-15
(ii) any building or structure that houses or protects anything
referred to in subclause (i),
but does not include a refinery, processing plant, marketing
plant or manufacturing plant;
(m) “licence” means a licence to construct and operate a pipeline
under this Act or a gas utility pipeline;
(n) “licensee” means the holder of a licence for a pipeline
according to the records of the Regulator or the holder of a
licence for purposes of a gas utility pipeline according to the
records of the Alberta Utilities Commission and includes a
trustee or receiver-manager of the property of a licensee;
(o) “local authority” means a member of the Executive Council
or a municipal corporation or a Metis settlement having the
administration or the direction, management and control of a
road by or under any Act of the Legislature;
(p) “manufacturing plant” means a plant that utilizes a mineral
or a substance recovered from a mineral as a component of a
product manufactured by the plant;
(q) “marketing plant” means a plant used for the marketing or
distribution of a product obtained from the refining,
processing or purifying of oil and gas;
(r) “oil” means
(i) crude oil both before and after it has been subjected to
any refining or processing,
(ii) any hydrocarbon recovered from crude oil, oil sands,
natural gas or coal for transmission in a liquid state,
(iii) liquefied natural gas, and
(iv) synthetic coal liquid as defined in the Coal Conservation
Act,
and any other substance in association with that crude oil,
hydrocarbon, liquefied natural gas or synthetic coal liquid;
(s) “oil sands” means
(i) sands and other rock materials containing crude bitumen,
(ii) the crude bitumen contained in those sands and other
rock materials, and
5
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CANADA
CONSOLIDATION
CODIFICATION
Bankruptcy and
Insolvency Act
Loi sur la faillite et
l’insolvabilité
R.S.C., 1985, c. B-3
L.R.C. (1985), ch. B-3
Current to September 27, 2015
À jour au 27 septembre 2015
Last amended on February 26, 2015
Dernière modification le 26 février 2015
Published by the Minister of Justice at the following address:
http://laws-lois.justice.gc.ca
Publié par le ministre de la Justice à l’adresse suivante :
http://lois-laws.justice.gc.ca
Bankruptcy and Insolvency — September 27, 2015
ties to an eligible financial contract in accordance with its provisions;
“official
receiver”
« séquestre
officiel »
“official receiver” means an officer appointed
under subsection 12(2);
“person”
« personne »
“person” includes a partnership, an unincorporated association, a corporation, a cooperative
society or a cooperative organization, the successors of a partnership, of an association, of a
corporation, of a society or of an organization
and the heirs, executors, liquidators of the succession, administrators or other legal representatives of a person;
“prescribed”
« prescrit »
« personne »
a) Sont assimilés aux personnes les sociétés
de personnes, associations non constituées en
personne morale, personnes morales, sociétés et organisations coopératives, ainsi que
leurs successeurs;
b) sont par ailleurs assimilés aux personnes
leurs héritiers, liquidateurs de succession,
exécuteurs testamentaires, administrateurs et
autres représentants légaux.
« personne insolvable » Personne qui n’est pas
en faillite et qui réside au Canada ou y exerce
ses activités ou qui a des biens au Canada, dont
les obligations, constituant à l’égard de ses
créanciers des réclamations prouvables aux
termes de la présente loi, s’élèvent à mille dollars et, selon le cas :
“prescribed”
(a) in the case of the form of a document
that is by this Act to be prescribed and the
information to be given therein, means prescribed by directive issued by the Superintendent under paragraph 5(4)(e), and
“proposal”
« proposition
concordataire »
ou « proposition »
b) qui a cessé d’acquitter ses obligations
courantes dans le cours ordinaire des affaires
au fur et à mesure de leur échéance;
“property” means any type of property, whether
situated in Canada or elsewhere, and includes
money, goods, things in action, land and every
description of property, whether real or personal, legal or equitable, as well as obligations,
easements and every description of estate, interest and profit, present or future, vested or
contingent, in, arising out of or incident to
property;
c) dont la totalité des biens n’est pas suffisante, d’après une juste estimation, ou ne
suffirait pas, s’il en était disposé lors d’une
vente bien conduite par autorité de justice,
pour permettre l’acquittement de toutes ses
obligations échues ou à échoir.
“proposal” means
(a) in any provision of Division I of Part III,
a proposal made under that Division, and
(b) in any other provision, a proposal made
under Division I of Part III or a consumer
proposal made under Division II of Part III
and includes a proposal or consumer proposal,
as the case may be, for a composition, for an
extension of time or for a scheme or arrangement;
“public utility”
« entreprise de
service public »
« personne
insolvable »
“insolvent
person”
a) qui, pour une raison quelconque, est incapable de faire honneur à ses obligations au
fur et à mesure de leur échéance;
(b) in any other case, means prescribed by
the General Rules;
“property”
« bien »
« personne »
“person”
« personne morale » Personne morale qui est
autorisée à exercer des activités au Canada ou
qui y a un établissement ou y possède des
biens, ainsi que toute fiducie de revenu. Sont
toutefois exclues les banques, banques étrangères autorisées au sens de l’article 2 de la Loi
sur les banques, compagnies d’assurance, sociétés de fiducie, sociétés de prêt ou compagnies de chemin de fer constituées en personnes
morales.
« personne
morale »
“corporation”
« prescrit »
« prescrit »
“prescribed”
a) Dans le cas de la forme de documents à
prescrire au titre de la présente loi et des renseignements qui doivent y figurer, prescrit
par le surintendant en application de l’alinéa
5(4) e);
“public utility” includes a person or body who
supplies fuel, water or electricity, or supplies
telecommunications, garbage collection, pollution control or postal services;
b) dans les autres cas, prescrit par les Règles
générales.
6
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Last Revised: December 2012
ALBERTA TEMPLATE RECEIVERSHIP ORDER
EXPLANATORY NOTES
Alberta Template Order Committee,
Calgary/Edmonton, Alberta
INTRODUCTION
In February of 2006, the Alberta Template Orders Committee (the “Alberta Committee”)
finalized a template receivership order for Alberta and explanatory notes to be read in
conjunction therewith.
The Alberta Template Receivership Order used the model receivership order (the “Ontario
Order”) and explanatory notes (“Ontario Explanatory Notes”) developed by the Commercial List
Users’ Committee of the Ontario Superior Court of Justice (the “Ontario Committee”) as a
starting point for developing the Alberta Template Receivership Order (“Receivership Order”),
focusing on those areas where the Alberta practice or legislation diverged from that in Ontario.
In this fashion, the Alberta Committee hoped that the form of template Order would be as similar
as practicable to the Ontario Order, while appropriately addressing Alberta-specific concerns.
The Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”) has undergone a substantial
amendment process which concluded on September 18, 2009 when the proposed amendments
were proclaimed in force. Although some of the amendments represent a significant departure
from current practices in bankruptcy and insolvency proceedings, others represent a codification
of powers that courts have previously invoked inherent jurisdiction to assume. In light of these
amendments, the Receivership Order required certain amendments to comply with the new
provisions of the BIA.
The Receivership Order presented by the Alberta Committee is not meant to be the last word in
either draftsmanship or applicability to each situation. Rather, consistent with the philosophy
adopted by the Ontario Committee, the Receivership Order is meant to serve as a starting point
from which any additions, amendments or deletions can be highlighted and brought to the
attention of the Justice from whom the Order is sought.
The assistance of members of the judiciary to the Alberta Committee, notably the Honourable
Justice K. M. Horner and the Honourable Justice J. Topliniski, does not mean that there is any
“arrangement” with the Court that a Receivership Order will be granted in all instances where
the proposed Order approximates the Receivership Order, or at all. The input of the judiciary is
appreciated, but in each application the discretion of the presiding Justice will be completely
unfettered by the use or non use of the Receivership Order.
RECEIVER
The Receivership Order appoints the court officer as a Receiver under s. 243(1) of the BIA and
as Receiver and Manager pursuant to s. 13(2) of the Judicature Act, R.S.A. 2000, c. J-2 (the
“JA”) and s. 99(a) of the Business Corporations Act, R.S.A. 2000, c. B-9 (the “ABCA”). In
those cases, where the applying creditor holds a security agreement charging the debtor
-2company’s personal property, the Order could also reference an appointment under s. 65(7) of
the Personal Property Security Act, R.S.A. 2000, c. P-7 (the “PPSA”).
The Receivership Order assumes the applying creditor maintains security over all of the debtor
company’s property, business and undertaking, and it is not the recommended form to be used in
land foreclosure actions, where appointments are made pursuant to s. 49 of the Law of Property
Act, R.S.A. 2000, c. L-7.
The dual appointment of a Receiver pursuant to s. 243(1) of the BIA and a Receiver and
Manager pursuant to one or more of s. 13(2) of the JA and s. 99(a) of the ABCA has both
benefits and burdens that the applying party should consider in determining what to include and
what, if anything, to exclude. In this regard, it should be noted that dual appointments raise
distinct procedural and other issues with varying consequences which counsel must be
cognizant of, including, for example, differing appeal periods between Queen’s Bench civil
and bankruptcy actions.
Since the Receivership Order meets the definition of “Receiver” as set out in s. 243(2) of the
BIA, and also constitutes an appointment under s. 13(2) of JA and s. 99(a) of the ABCA, the
Alberta Committee is of the view that:
1.
The applying creditor must serve the mandatory ss. 244(1) BIA Notice prior to the
appointment;
2.
The Receiver is subject to the statutory rights of suppliers under s. 81.1 of the
BIA in respect of 30 day goods; and
3.
The required reporting to the office of the Superintendent in Bankruptcy must be
maintained.
Similar to the views of the Ontario Committee regarding the Ontario Order, the Alberta
Committee considers the Receivership Order to be neutral and inclusive in respect of the
interests of all stakeholders.
CLAUSE BY CLAUSE REVIEW
PARTIES, RECITALS AND SERVICE
The Receivership Order is to be sought on motion in an action to be commenced either by
Statement of Claim, by Originating Notice (in the event s. 70 of the PPSA applies), or as may be
directed by the Court in Part 3, Division 2, Subdivision 1 of the Alberta Rules of Court (since no
statutory procedure is set out in s. 243(1) of the BIA, s. 13(2) of the JA, or s. 99(a) of the
ABCA).1
1
The Receivership Order is drafted with a dual style of cause, reflecting a Court of Queen’s Bench of Alberta civil
action and an associated bankruptcy action to reflect the commonly sought dual appointment under the BIA and
the JA. In that scenario, materials would be filed in both actions. Paragraph 32 of the Order references the
issuing and filing of the Order in both actions, indicating they are not consolidated but will be heard together
unless otherwise ordered.
-3-
The parties consist of the applying creditor and the debtor company, respectively named as either
the Plaintiff and the Defendant (in the event the action is commenced by way of Statement of
Claim), or as Applicant and Respondent (in the event the action is commenced by Originating
Application or by Order granted under Part 3, Division 2, Subdivision 1of the Alberta Rules of
Court).
In urgent situations (imminent risk of asset dissipation, or immediate need to appoint the
Receiver to preserve and maintain the value, including the going concern value of the debtor
company’s assets in the best interest of all stakeholders) the application could be made ex-parte
supported by affidavit evidence of the urgency. The Receivership Order contemplates, however,
that it would be granted either with the consent of or on notice to the debtor company, and on
notice to other potential interested persons that may be affected by the granting of the Order (for
example, other secured creditors, statutory or otherwise). Since Rule 6.4 permits ex parte
applications in circumstances where no notice is necessary or where the delay caused by
proceeding by notice of motion might entail serious mischief, if an ex parte order is granted, the
preamble should be amended to delete reference to service and to establish why it is appropriate
to proceed ex parte. Also, in the event of an ex parte order paragraph 1 should be deleted.
If the appointing creditor proceeds by application under Part 3, Division 2, Subdivision 1 of the
Alberta Rules of Court, the appointing creditor must follow the service directed by the Court. To
address concerns of asset dissipation or preservation and maintenance of the going concern value
of the debtor’s assets, the applying creditor may apply to the Court on short notice and seek an
abridgement of time for the debtor’s response to the originating document as authorized pursuant
to Rule 13.5 of the Alberta Rules of Court.
In those cases where there are facts in dispute between the appointing creditor and the debtor
company, but the Court finds it just and convenient to appoint a Receiver to preserve and
maintain the status quo while outstanding issues are determined, a number of the powers and
authorities of the Receiver granted under the Receivership Order may not be appropriate and
may have to be modified, depending upon the applicable facts and the interests of the parties and
other affected creditors.
It is more likely that the debtor company or other interested persons would have greater success
in a future application to vary or amend the Receivership Order under the “comeback” clause in
paragraph 31, if the debtor company or any such interested person was not served with notice of
the application to obtain the Order. The debtor company and other potentially affected persons
should therefore be served with notice of the application where circumstances permit. Further,
the preamble should identify all of those served, and note the appearance or non-appearance of
the parties and persons served.
As stated in the Ontario Explanatory Notes:
Many rights are affected by service and appearance at a motion. Appeal rights, effective
vesting and even the effectiveness of the receivership order itself may depend upon proof
of service and appearance. Recitation of these jurisdictional facts in the order itself
should not be ignored.
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Unless the Order is being consented to by the debtor company, it is recommended that the
application be made before a Justice in Chambers, rather that before a Master in Chambers. It is
unlikely, unless the Order is consented to by the debtor company, that a Master has the
jurisdiction to grant the injunctive relief contained within the Receivership Order.
PARAGRAPH 3—THE RECEIVER’S POWERS
The Alberta Committee considers the recitation of powers to be given to a Receiver in the
Ontario Order to be appropriate for the Receivership Order, and adopts the Ontario Committee’s
rationale expressed in the Ontario Explanatory Notes, paraphrased as follows:
1.
While it is tempting to give the Receiver a broadly worded simple power to take
all reasonable steps to conduct the Receivership, it is very helpful and often
essential for the Receiver to be able to point to a specifically enumerated power in
the Order to enforce compliance or support the Receiver’s entitlement to act.
Therefore, the most essential and least controversial powers regarding
presentation and realization have been identified and included. It is open to
counsel to seek to reduce or enlarge upon the listed powers by highlighting the
change and bringing it to the Court’s attention;
2.
Among the powers specifically enumerated are the standard powers to take
possession of and protect and preserve the debtor’s property, particularly liquid
assets;
3.
It is assumed the Receiver will manage the business, hire consultants as required,
enter into transactions and compromise claims owing to the debtor;
4.
Normal powers to litigate are included;
5.
It is assumed the Receiver will market and sell assets with no specific approval of
the marketing process required. However, a Receiver is well advised in a
significant case to seek prior approval to avoid subsequent questioning of the
efficacy of the process itself. There is a materiality level established for assets
sold beyond which prior approval of the Court should be sought;
6.
Paragraph 3(n) empowers the Receiver to report to, meet and discuss with
affected persons. It is expected that as an officer of the Court, the Receiver will
engage in meaningful communications with stakeholders. This process can cause
extra costs and therefore requires the Receiver to exercise reasonable discretion.
The case law is clear that use of the Court-appointed Receiver is not the private
preserve of the senior creditors and must have some degree of transparency and
accountability to stakeholders. Expensive appearances and last minute challenges
may be avoided by timely communications among the appropriate parties;
7.
The concluding words of paragraph 3 are designed to clarify that the Receiver is
exclusively in control of the debtor’s activities. Absent specific authority, the
-5debtor’s board of directors may not engage in litigation or take any other steps on
behalf of the debtor following the Receiver’s appointment; and
8.
There is no specific provision allowing the Receiver to make an assignment in
bankruptcy or to consent to the making of a Bankruptcy Order under the BIA.
While some case law permits Receivers to take such steps, typically Receivers
seek prior Court approval even where the specific power to do so is included in
the Order. Bankrupting the debtor may reverse priorities and prejudice or favour
certain creditors over others. Bankruptcy is a sufficiently material, substantive
and final act that, if a Receiver is empowered to bankrupt the debtor, it should be
expressly brought to the Court’s attention.
The Alberta Committee has added a phrase to paragraph 3(j) of the Receivership Order that
makes it clear that, despite the Receiver being empowered to defend all actions involving the
debtor, the Receiver does not have that authority with respect to the very action in which the
Receiver is appointed. This follows Toronto-Dominion Bank v. Fortin et al (1978), 26 C.B.R.
(N.S.) 168 (B.C.S.C.).
PARAGRAPHS 4 TO 6 – INJUNCTIONS, POSSESSION AND ACCESS TO PROPERTY
Paragraph 4 of the Receivership Order requires the debtor (including the debtor’s management,
advisors, and shareholders), those affiliated with the debtor and everyone with notice of the
Order, to advise the Receiver of the existence of any of the debtor’s property in their possession
or control and to deliver to the Receiver such of the debtor’s property as the Receiver requires.
The limitation of delivery of property to that which the Receiver requires is designed to save
costs for third parties and protect the estate from being forced to incur costs to move or store
property that might be more efficiently left in the possession of third parties temporarily or
permanently.
Paragraph 4 also qualifies the obligation to protect the interests of third parties who may require
continuing possession of the debtor’s property in order to maintain certain lien rights.
Paragraph 5 mandates the Receiver’s entitlement to records in the possession or control of any
person that relate to the business or affairs of the debtor. The Receiver’s entitlement to review
such records is subject to exceptions for statutory provisions prohibiting such disclosure or
privilege attaching to records which are the subject of a solicitor and client communication or are
prepared in contemplation of litigation.
PARAGRAPHS 7 TO 11 – THE STAY
The combined effect of these paragraphs is to restrain the commencement, continuation or
exercise of any rights or remedies against the Receiver, the debtor, or the property of the debtor
under the Receiver’s administration.
There has been minimal, if any controversy over the Court’s ability to protect its officer, the
Court-appointed Receiver, from suit without leave, and it has always been a logical extension of
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that protection to include the assets of the debtor. The underlying philosophy that has routinely
been accepted by the Courts is the need to protect its officer in the performance of the duties it
has been authorized to perform, to permit it the opportunity to gather in all assets of the debtor
free from interference by creditors attacking individual assets, and to facilitate administration of
the entire estate for the benefit of all stakeholders with less expense. Some Alberta authority has
cast doubt, however, on the Court’s ability to issue what is essentially an injunction restraining
suits against debtors in Receivership (see, for example, Toronto-Dominion Bank v. W-32
Corporation Limited (1983), 50 C.B.R. (N.S) 78 (Alta. Q.B)).
The jurisdiction to issue a stay of proceedings is contained in ss. 17 and 18 of the JA. Frank
Bennett, Bennett on Receiverships, 2nd ed (Scarborough: Carswell, 1999) argues persuasively for
the existence of an inherent jurisdiction to grant relief to give effect to a Receivership Order,
including staying actions against the debtor (at pages 200 — 222):
If creditors are able to take proceedings against the debtor without Court approval, the
debtor is in most cases without funds to defend. If priority is claimed, the Courtappointed Receiver will be involved in as many actions as are commenced by creditors
against the debtor. If no priority is claimed, the effect of a Judgment is unenforceable
until the Receiver is discharged. The Court must be able to control its own judicial
process and allow the Receiver sufficient opportunity to perform the powers and duties.
Such a condition is not contained in any legislation, but rather it is a condition rooted in
the inherent jurisdiction of the Court to control its own process and protect its officers.
Of particular concern to the Alberta Committee was the possibility that a party having a claim
against a debtor in Receivership might face the possibility of a limitation period expiring before
that party could apply to set aside the stay of proceedings to permit its claim to be advanced.
The Alberta Committee is therefore recommending that the general stay be subject to a proviso
that any party facing the expiry of a limitation period would be entitled to commence whatever
proceedings are necessary to preserve that party’s rights, without further Order.
The Alberta Committee has now included a provision in paragraph 8 which allows regulatory
bodies to continue investigations or proceedings against a debtor so long as the investigation or
proceeding is not for the enforcement of a payment order. This provision is consistent with s.
69.6(2) of the BIA which provides regulatory bodies an exemption from the automatic stay of
procedings that arises where a Notice of Intention to File a Proposal has been filed.
Section 65.1(1) of the BIA provides that where a Proposal or Notice of Intention to File a
Proposal is filed, an automatic general stay applies to prevent termination of agreements based
on the debtor’s insolvency. Similarly, where an initial Order is made under s. 11.02 of the
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”), the Order may contain
a general stay enjoining termination of contracts with the debtor. Section 65.1(7) of the BIA
excepts from the statutory stay, any right a counterparty has to terminate an eligible financial
contract (“EFC”). Sections 34 of the CCAA and 22.1 of the Winding Up and Restructuring Act,
R.S.C. 1985, c. W-11 contain analogous provisions excluding the stay from applying to prevent
termination of EFCs. However, in many receiverships there are no applicable statutory provision
to except an EFC from the application of a general stay Order.
-7-
In Re Enron Canada Corp. (2001), 31 C.B.R. (4th) 15, Hart J. considered an application by
Enron Canada Corp. for a general stay in arrangement proceedings it brought under the Canada
Business Corporations Act., R.S.C. 1985, c. C-44. Although that Act contained no express
statutory exception for EFCs, Hart J. found that just as there is good reason for statutory
exceptions for EFCs in insolvency legislation, there is equally good reason to honour the
underlying public policy considerations in cases involving solvent applications. Accordingly,
Hart J. declined to grant the general stay applied for against termination of EFCs.
Although there do not appear to be any cases dealing with the propriety of an exception for EFCs
from the general stay provisions of a Receivership Order, the Courts may generally support an
exception for EFCs from the general stay. Although an exception for EFCs has been added to
the stays contained in paragraphs 9 and 10 of the Receivership Order, the Alberta Committee
notes that the court will decide whether or not to make EFCs an exception to the general stay.
As stated in the Ontario Explanatory Notes:
There have also been many attempts to deal with circumstances where the suppliers to the
debtor seek to secure or obtain preferential payment of pre-insolvency claims by using
post-proceeding pricing practices. Suppliers have been known to seek security deposits
or to enforce price increases to seek to disguise their efforts to re-coup pre-proceeding
claims.
At law, a Court-appointed Receiver is a separate person from that of the debtor company, and as
such is entitled to enter into new supply contracts with any supplier. In particular, a Courtappointed Receiver is entitled to obtain the supply of water, gas and electricity without the
payment of any outstanding arrears, pursuant to ss. 22, 23 and 25 of the Water, Gas and Electric
Companies Act, R.S.A. 2000 c.W-4 (“WGECA”) and Canadian Commercial Bank v. Universal
Tank Ltd and Universal Industries Ltd. (1983), 49 C.B.R. (N.S.) 226 (Alta. Q.B.).
The Alberta Committee is also mindful of the competing decisions of Alberta Treasury Branches
v. Invictus Financial Corp. (1985), 55 C.B.R. (N.S.) 176 (Alta. Q.B.) and BC Credit Union v.
Metro Co-Operative (1982), 43 C.B.R. (N.S.) 97 (B.C.C.A.). These decisions reached opposite
conclusions to a certain extent on whether a supplier of a telephone service can compel payment
of arrears before a Court-appointed Receiver is entitled to utilize a debtor’s telephone number, or
at the very least, before a Court-appointed Receiver is entitled to transfer the right to use the
telephone number to a purchaser of the debtor company’s business.
The Receiver has the right under the WGECA to acquire the supply of water, gas and electricity
without the necessity of paying the outstanding arrears payable in respect to such utilities by the
debtor. The Receiver, under its power as a separate entity to enter into new contracts for the
supply of services, is otherwise left to negotiate new arrangements with suppliers of essential
services to the debtor, and hopefully to do so in a manner which does not give any preference for
the recovery of unsecured claims against the debtor that arose prior to the Receivership.
The “continuation of services” paragraph included in the Ontario Order is also included in
paragraph 11 of the Receivership Order. The Alberta Committee concluded that in order to
preserve the business and undertaking of the debtor in the best interests of all stakeholders, it
would be preferable at the outset to enjoin the discontinuance, alteration, interference or
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termination of the supply of goods and services to the debtor company (including computer
software, communication and other data services, centralized banking services, payroll services,
insurance, transportation services, utility or other services). In return, the Receiver is obliged to
pay the “normal prices or charges for all such goods and services received as and from the date
of the Order ... in accordance with normal payment practice of the debtor, or such other practices
as may be agreed upon by the supplier or the service provider and the Receiver, or as may be
ordered by the Court”.
In each case, if the Receiver and any particular key supplier cannot agree on the reasonable
prices or charges for the supply of any particular goods or services, the matter of the Receiver’s
obligation to pay a fair price for these can be determined by the Court on application by the
Receiver or the supplier.
Furthermore, if any supplier believes that it has been unduly affected by paragraph 11 of the
Receivership Order, the supplier can also re-apply pursuant to the “comeback clause” in
paragraph 31 to vary this provision of the Order.
PARAGRAPH 13 – EMPLOYMENT
Among the most controversial aspects of receivership orders in Ontario has been the paragraph
dealing with employment of employees by the Receiver.
Some insolvency professionals are of the view that in order to protect the Receiver from personal
liability for termination and severance pay obligations, the Order ought to terminate the
employment of all of the debtor’ s employees and thereby crystallize termination obligations as
claims against the estate. The Receiver is then free to re-hire employees as it wishes, free of preexisting obligations, as provided under s. 14.06(1.2) of the BIA. They rely on the limited
mandate of the Receiver and the fact that there has been no “sale” of the debtor’s assets to argue
that the Receiver will not be a successor employer in these circumstances.
Other counsel believe that if the Receiver actually hires employees in its own name, the Receiver
stands a greater risk of being bound by pre-existing obligations. These counsel prefer to adopt
the historical characterization of the Receiver as a third party simply monitoring the affairs of the
debtor’s business and therefore not interfering at all in the debtor’s employment of its own
employees. These counsel are of the view that the Receiver will have less risk of being held to
be a successor employer because, notionally at least, the debtor’s corporate personality survives
during the Receivership with its employment contracts intact. This characterization is at odds
with the reality of the Receiver’s role in most cases.
This remains a live topic in Ontario with several cases having been brought on issues of
relevance. While reasonable counsel can differ on the degree of protection available under
differing receivership structures, the Ontario Order was drafted by the Ontario Committee to
minimize the disruption to the existing legal relationship, while providing as much protection as
they were able to give, having regard to the TCT decision described below, and leaving it open
to counsel to seek a wider order in a particular case.
-9-
The decision of the Ontario Court of Appeal in TCT has effectively prohibited, at least in
Ontario, the previous practice of routinely deeming a Receiver not to be a successor employer in
Receivership Orders. The background is that Receivers who continue to operate businesses in
Receivership can be held to be successor employers under labour legislation, and become
responsible for termination, wage, pension and other obligations.
Section 46(1) of the Alberta Labour Relations Code, R.S.A. 2000, c. L-1 (the “ALRC”) provides
that:
…when a business or undertaking or part of it is sold, leased, transferred or merged with
another business or undertaking or part of it, or otherwise disposed of so that the control,
management or supervision of it passes to the purchaser, lessee, transferee or person
acquiring it…, and:
(a)
if a trade union is certified, the certification remains in effect and
applies to the purchaser, lessee, transferee or person acquiring the business or
undertaking or part of it, and
(b)
if a collective agreement is in force, the collective agreement binds the
purchaser, lessee, transferee or person acquiring the business or undertaking or
part of it as if the collective agreement had been signed by that person.
Similarly, s. 5 of the Employment Standards Code, R.S.A. 2000, c. E-9 provides that for the
purposes of that Act, “. . .the employment of an employee is deemed to be continuous and
uninterrupted when a business, undertaking or other activity or part of it is sold, leased,
transferred or merged or if it continues to operate under a Receiver or Receiver-Manager.”
The Ontario Labour Relations Act, 1995, SO. 1995, c. 1, Sch. A (the “OLRA”) contains a
provision (s. 69) very similar to s. 46(1) of the ALRC, and provides that a decision as to whether
a purchaser or other party is bound by the certification and collective agreement must be made
by the Ontario Labour Relations Board (the “OLRB”). Section 114 of the OLRA also provides
that the determination of the OLRB is final and conclusive for the purposes of that Act, and that
the OLRB “. . .has exclusive jurisdiction ... to determine all questions of fact or law that arise in
any matter before it, and the action or decision of the Board thereon is final and conclusive for
all purposes The OLRB’s decisions and rulings cannot be questioned or reviewed in any Court.
In TCT the Receiver, acting under the normal receivership order of the time, purported to effect a
sale of the assets of one of TCT’s businesses, and to allow the purchaser to hire only certain of
the employees of that business, contrary to the terms of a collective agreement. That was
challenged by the union representing the employees. Farley J. decided the Receiver could not be
deemed a successor as long as it was acting “qua realizer” of the assets. On appeal, the Ontario
Court of Appeal concluded that Farley J. erred by applying the “realizer versus employer” test to
effectively determine whether the Receiver was a successor employer, and that the Court had no
jurisdiction to make that determination. It concluded that a bankruptcy Justice did not have
jurisdiction to exempt a Receiver from the successor employer provisions of the OLRA, but
could restrain labour proceedings on a temporary basis by refusing to give leave under s. 215 of
the BIA to a party wishing to proceed with a “successor employer” application under the OLRA.
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The Alberta situation would appear to be different from the Ontario situation in one key respect:
the ALRC does not seem to remove from the Alberta Courts the ability to decide whether a
Receiver would be bound by s. 46(1) of the ALRC. This would appear to allow the Court the
ability to decide, on the appropriate facts, that a Receiver was in fact proceeding, as Farley J.
held in TCT, qua realizer rather than qua operator of the business. Accordingly, on proper
factual and legal support it appears the Alberta Courts might consider, in appropriate
circumstances, taking into account the differences between the ALRC and the OLRA to issue an
Order of limited duration during which the Receiver would be deemed to be operating qua
realizer rather than as a successor in the business for purposes of the ALRC. Clearly, such a
provision could not affect the liability of a Receiver under s. 5 of the Employment Standards
Code, and would not be effective in jurisdictions such as Ontario where the Court does not have
the authority to make that determination. The provision could, however, greatly reduce the loss
of value in particular cases in Alberta where employees are unionized and continued operations
are key to preserving value and jobs.
Since one of the key benefits to appointing a Receiver under s. 243(1) of the BIA is the national
reach of the Order, there are obvious benefits to using language familiar to an Ontario audience
where a Receivership Order may have effect in Ontario. The Receivership Order therefore uses
the same language as the Ontario Order. Counsel in Alberta should, however, be aware that the
possibility of “deeming” a Receiver not to be a successor employer in Alberta exists. This
should probably be done in specific cases on appropriate supporting evidence, with specific
reference to Alberta and for a limited time, rather than as a general matter in each Receivership
Order.
The Alberta Committee has revised paragraph 13 of the Receivership Order to address the
amendments to the BIA dealing with employee and pension plan laibilities and the
implementation of the Wage Earner Program Protection Act, S.C. 2005, c. 47 (the “WEPPA”).
Paragraph 13 now provides that the Receiver is not liable for any employee-related liabilities
including successor employer liabilities as provided for in s. 14.06(1.2) of the BIA. That section
provides that a trustee is not liable for any employee liabilities or in respect of any pension plan
for the benefit of those employees that exist before the trustee is appointed or are calculated in
reference to a period before the appointment.
Paragraph 13 of the Receivership Order has also been amended to reference the Receiver’s
obligations under ss. 81.4(5) and 81.6(3) of the BIA and under the WEPPA. Section 81.4(1) of
the BIA provides that the claim of a clerk, servant, travelling salesperson, labourer or worker
who is owed wages by a debtor for services rendered in the six months preceding the
receivership is secured to the extent of $2,000 on the current assets in the possession or under
control of the Receiver. Section 81.4(2) also provides security to the extent of $1,000 for the
disbursements of a travelling salesperson incurred in the six months preceding the receivership
on the current assets in the possession or under control of the Receiver. Section 81.4(5) of the
BIA provides that if the Receiver takes possession or in any way disposes of current assets
covered by the security, the Receiver is liable for the claim of the clerk, servant, travelling
salesperson, labourer or worker to the extent of the amount realized on the disposition of the
current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson,
labourer or worker in respect of the amounts paid to that person by the Receiver.
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Section 81.6(1) of the BIA provides that if a debtor is an employer who participated or
participates in a prescribed pension plan for the benefit of employees, certain enumerated
amounts that are unpaid as of the date of the receivership order are secured by security on all of
the debtor’s assets. Section 81.6(3) provides that if the Receiver disposes of assets covered by
the security, the Receiver is liable for the unpaid pension amounts to the extent of the amount
realized on the disposition of the assets and is subrogated in and to all rights of the fund
established for the purpose of the pension plan in respect of those amounts.
The WEPPA provides that an employee is entitled to apply to the Ministry of Labour for
payment of wages owing for the six months prior to the date of a bankruptcy or receivership.
The maximum amount that the employee will receive is $3,000 or the equivalent of four times
the maximum weekly insurable earnings under the Employment Insurance Act, less any
applicable deductions under federal or provincial law. Section 36 of the WEPPA and s. 81.4 of
the BIA together provide that the Minister will have a subrogated priority claim for a maximum
of $2,000 per employee over the current assets of the debtor employer under receivership.
PARAGRAPH 14 – PIPEDA
The following commentary of the Ontario Committee, paraphrased slightly, explains paragraph
14 of the Receivership Order.
The Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5
(“PIPEDA”) seems to impact the ability of creditors to realize upon a business. Personal
information concerning employees, customers and possibly suppliers could well be very
important components of either a Receiver’s ability to run the business or to sell it.
PIPEDA contains a reasonableness standard that is one of the overriding principles guiding the
use and dissemination of personal information. A Receiver has little time and ability to seek the
consent of every employee or every customer before disclosing information needed to keep a
plant open or to allow an expeditious realization. The reasonableness of limiting the need to
obtain express consent in urgent circumstances in order to keep a business from failing is selfevident. It maintains the jobs and the business to which individuals have provided their
information presumably because they either want their jobs or they want to do business with the
debtor. PIPEDA also allows for Court Orders limiting the need to obtain express consent in
appropriate circumstances.
The Ontario Order and in turn the Receivership Order contain such a limitation drawn from Re
PSINet Limited (2002), 33 C.B.R. (4th) 284 (Ont. S.C.J.) CCAA proceeding. In effect, the
Receiver will be entitled to disclose personal information to prospective purchasers under the
terms of appropriate confidentiality orders and provided that the purchaser, by agreement and
Court Order, can make no further use of the debtor’s data than was available to the debtor itself.
PARAGRAPH 15 - RECEIVER’S LIABILITY FOR ENVIRONMENTAL MATTERS
The Receiver, as an officer of the Court, should be protected from liability arising out of
environmental matters, unless the environmental condition arose or the damage occurred as a
result of the Receiver’s gross negligence or wilful misconduct. Some receivership orders have
- 12 -
gone further and have limited damage awards against a Receiver to the value of the assets of the
estate or the amount of the Receiver’s fees, even in the event of the gross negligence or wilful
misconduct by the Receiver. The Alberta Committee is not aware of any jurisprudence or
statutory provision which would support the inclusion of such a provision.
In Big Sky, Slatter J. reviewed the proper scope of the terms of an Order appointing a Receiver
and concluded (at paragraph 46):
There is no basis for holding that a receiver in Alberta has any immunity for
environmental damage beyond what is found in Section 14.06, or the E.P.E. Act itself.
As was held in Lindsay the court has no general jurisdiction to grant exemptions from
statutes.
Slatter J. went on to permit the inclusion of a clause which essentially paralleled the provisions
of s. 14.06(2) of the BIA. He acknowledged that such a provision might be redundant in legal
terms, but believed it would be helpful to note these provisions in the Order.
Paragraph 15 of the Ontario Order contains a provision that nothing shall require the Receiver to
occupy or take control, care, charge or possession of any property of the debtor subject to the
Receivership Order. Further, the Receiver shall not, as a result of the Receivership Order, or
anything done in pursuance of the Receivership Order, be deemed to be in possession of any of
the property, unless the Receiver is in actual possession of the property. Slatter J. in Big Sky
commented on a similar provision in the proposed Order before him (at paragraph 48):
The initial problem with the proposed environmental provisions in the Order is that they
contradict other provisions of the Order. Paragraph 2 of the Order places all of the assets
of the debtor under the power of the Interim Receiver. Paragraph 28 then provides that
the Order does not vest in the Interim Receiver care or control of any properly which
“may be” environmentally polluted. This latter clause is unacceptable, because at best it
creates great uncertainly as to which properties are under the control of the Interim
Receiver, and at worst it gives the Interim Receiver some sort of ex post facto right to
elect whether it has been in control of the properly or not. Sections 14.06(4)(c) and
14.06(6) contemplate the abandonment of contaminated properly by the Receiver, which
is the process that should be followed if this latter becomes necessary.
Section 240(3) of the Alberta Environmental Protection and Enhancement Act, R. S.A. 2000, c.
E-12 (“EPEA”) provides:
Where an environmental protection order is directed to a person who is acting in the
capacity of executor, administrator, Receiver, Receiver/Manager or trustee, that person’s
liability is limited to the value of the assets that person is administering unless the
situation identified in the order resulted from or was aggravated by the gross negligence
or wilful misconduct of the executor, administrator, Receiver, Receiver/Manager or
trustee.
In addition, EPEA defines a “person responsible” for a substance or thing containing a substance,
as someone who has or has had ownership, charge, management or control over a substance, or
that person’s Receiver. This would clearly override the provisions in paragraph 15 of the
Ontario Order, as under the EPEA, a Receiver is a “person responsible” regardless of the
Receiver’s actual possession of property.
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As a result, in the Alberta Committee’s view the wording in paragraph 15 of the Receivership
Order is consistent with the existing statutory provisions and jurisprudence in the Province of
Alberta, and is therefore supportable. If some additional protection is required, then an applicant
would be expected to satisfy the Court that it is warranted by the facts and is supported by some
judicial authority.
A Receiver should apply for an extension of time in which to comply with environmental orders
before the later of (a) the time specified in the environmental order, (b) 10 days after the
environmental order (if no time is specified), and (c) within 10 days after the appointment of the
Receiver, to avoid risking loss of the protection afforded under s. 14.06(2) of the BIA.
It is not always clear on the date a Receiver is appointed whether any environmental orders exist
in respect of the debtor’s property. Accordingly, there may be circumstances (where, for
example, the debtor’s records are unreliable or the debtor has significant or complex holdings of
property that could be the subject of an environmental order), where it is appropriate to include a
stay pursuant to s. 14.06(5) of the BIA in the initial Order that gives the Receiver a more
reasonable period of time to review the circumstances surrounding the debtor’s property without
fear of losing this protection.
PARAGRAPH 16 – LIMITATION ON THE RECEIVER’S LIABILITY
The Receivership Order provides that except for gross negligence or wilful misconduct, as a
result of its appointment or carrying out the provisions of the Order, the Receiver shall incur no
liability or obligation exceeding the amount for which it may obtain full indemnity from the
Property. Paragraph 16 also expressly reserves protections and limitations on liability afforded
to the Receiver under any applicable law, including, without limitations, ss. 14.06, 81.4(5) and
81.6(3) of the BIA.
PARAGRAPHS 17 TO 23 – THE FUNDING OF THE RECEIVERSHIP
Pursuant to paragraph 17 of the Receivership Order, the Receiver is granted a Receiver’s Charge
as a first charge on the Property, as security for the fees and disbursements incurred by the
Receiver and its counsel both before and after making the Order in respect of the receivership
proceedings. Pursuant to paragraph 20, the Receiver’s Borrowing Charge ranks just behind the
Receiver’s Charge and in priority to all security interests. The priority of the Receiver’s Charge
and the Receiver’s Borrowing Charge is subject to ss. 14.06(7), 81.4(4) and 81.6(2) and
potentially, s. 88 of the BIA.
Section 14.06(7) of the BIA provides that any claim of Her Majesty in right of Canada or a
province against a debtor in receivership for the costs of remedying any environmental condition
or damage affecting real property or an immovable of the debtor is secured by security on the
real property or immovable affected by the environmental condition or damage and on any other
real property or immovable that is contiguous thereto or related to the activity that caused the
environmental condition or damage. Such security ranks above any other claim, right, charge or
security against the property, despite any other provision in the BIA or anything in any other
federal or provincial law.
- 14 -
Sections 81.4(1) and (3) and 81.6(1) of the BIA set out the security for unpaid wages and unpaid
pension plan contributions, respectively. Sections 81.4(4) and 81.6(2) provide that the security
for such amounts rank above every other claim, right, charge or security against the debtor’s
current assets – regardless of when that other claim, right, charge or security arose – except
rights under ss. 81.1 (rights of unpaid suppliers to repossess goods) and 81.2 (special rights of
farmers, fisherman and aquaculturists).
Section 88 of the BIA provides that in relation to a bankruptcy or proposal, no order may be
made that would have the effect of subordinating financial collateral. Financial collateral means
(i) cash or cash equivalents including negotiable instruments and demand deposits; (ii) securities,
a securities account, a securities entitlement or a right to acquire securities or (iii) a futures
agreement or a futures account that are subject to an interest. Although there is no similar
provision in the BIA in respect of receiverships, the Courts may support the inclusion of s. 88 in
list of interests to which the Receiver’s Charge and Receiver’s Borrowing Charge are
subordinate. The Alberta Committee has include s. 88 in paragraphs 17 and 20 of the
Receivership Order but notes that the court will decide whether or not to avoid subordination to
financial collateral.
The priority afforded to the Receiver’s Charge and the Receiver’s Borrowing Charge is
appropriate where the Receiver has been appointed at the request, or with the consent or approval
of the holders of all security interests in the Property (see Robert F. Kowal Investments Ltd. et al.
v. Deeder Electric Ltd (1976), 9 OR. (2d), 84, 88 (CA.)) (“Kowal“). The priority is also
appropriate where the Receiver has been appointed to preserve and realize assets for the benefit
of all interested parties, including secured creditors, or where the Receiver has expended money
for the necessary preservation or improvement of the Property (Kowal at pages 89 and 91,
respectively).
The Court may not, however, make an Order granting the Receiver’s Charge and the Receiver’s
Borrowing Charge priority unless it is satisfied that the secured creditors who would be
materially affected by the Order were given reasonable notice and an opportunity to make
representations. As such, if a Receiver has not been appointed at the request or with the consent
or approval of the holder of a security interest, and if that security interest holder does not fall
within one of the other exceptions (referred to above) in Kowal, then paragraphs 17 and 20
should be modified so that they do not provide for priority over such a security interest holder.
There may be cases with multiple secured creditors with differing priorities over the various
assets that comprise the Property. The fees and expenses of the Receiver may benefit some
assets, but not others. If the Receiver carries on the business of the Debtor, doing so may benefit
or potentially benefit some of the assets, but not others. In such circumstances, receivership
costs should be appropriately allocated among the various assets comprising the Property.
Paragraph 24 contemplates that any interested party may apply for allocation of both the
Receiver’s Charge (for its fees and expenses) and the Receiver’s Borrowing Charge among the
various assets comprising the Property.
The Receivership Order does not specify how the Receiver’s Charge and Receiver’s Borrowing
Charge should be allocated amongst the various assets. Pursuant to an application under
paragraph 24, Receivership costs and borrowings should be allocated among the assets equitably
- 15 -
(not necessarily equally) having regard, inter alia, to the relative benefit or potential benefit to
the various assets involved. See, for example, Re Hunters Trailer & Marine Ltd. (2001), 30
C.B.R. (4th) 206 (Alta. Q.B.) which involved allocation of DIP financing and the Monitor’s
charge amongst secured creditors with priority over differing assets in a CCAA proceeding. See
also R. Western Express Airlines Inc. (2005), 7 P.P.S.A.C. (3d) 229 (B.C.S.C.), where aircraft
lessors who received no benefit from a CCAA restructuring were not required to bear any of the
costs of the restructuring.
In New Skeena Forests Products Inc. (Re) (2005), 9 C.B.R. (5th) 278, the British Columbia
Court of Appeal reversed an order of the British Columbia Supreme Court allocating DIP
financing and restructuring costs in a CCAA proceeding. The chambers judge had allocated
those costs based on relative value of the assets as previously appraised. The Court of Appeal
allocated costs on the basis of the actual value at the time the assets were realized but with the
proviso that the secured creditor could not be required to pay costs in an amount exceeding the
value of the property subject to its security.
PARAGRAPH 26 – REPORTING TO THE COURT
On November 1, 2010, the new Alberta Rules of Court were enacted. Rule 6.11 of the Alberta
Rules of Court set out the evidence that a Court would consider on an application and the
enumerated list did not make a provision for the filing of a report by a Receiver. This resulted in
some confusion as to whether a Receiver would now be required to file evidence in affidavit
form. In light of the practice that has developed of Receiver’s filing evidence in report form, the
Alberta Committee suggests that the Receivership Order provide that unless otherwise ordered
by the Court, Receiver’s reports to the Court are not required to be in affidavit form and such
reports shall be considered as evidence.
PARAGRAPH 31 – THE COMEBACK CLAUSE
The Alberta Committee, after much discussion about whether the paragraph 31 “comeback
clause” should include a deadline for applying to vary the Receivership Order (namely a set
number of days (perhaps 20) after the service of the Order), concluded that it was best to leave
the comeback clause the same as in the Ontario Order, since:
1.
circumstances could change after the expiry of the deadline otherwise detailed in
a comeback clause, that could affect an applicable interested party; and
2.
the insertion of a deadline in the comeback clause may result in various interested
parties filing pro forma applications to vary and then adjourning sine die such
applications, simply to avoid having their rights affected.
PARAGRAPH 33 - MAINTENANCE OF RECEIVER’S WEBSITE
Over the past several years, Receivers have maintained websites for their various receivership
files. This has been a very helpful and easily accessible resource to anyone interested in a
receivership proceeding. The principal shortcoming arising from this practice is that the
websites do not always include substantially all of the materials filed in the receivership
- 16 -
proceedings. After discussion and consultation with members of the judiciary, the Alberta
Committee has included paragraph 33 in the Receivership Order. This paragraph provides that
the Receiver will post as soon as practicable materials filed in the receivership proceedings by
the Receiver or served upon it, excluding confidential materials that are the subject of a sealing
order or pending application for a sealing order. (This is in addition to whatever the Receiver
may be required by statute or regulation to make publically available.)
CONCLUDING NOTES
The Alberta Committee hopes that the Receivership Order will be a useful tool to both the Bar
and Bench by providing a familiar and well-understood starting point. As counsel and the Court
consider an appropriate order for a given case, blacklining to the Receivership Order should
enable them to expeditiously address changes needed to appropriately tailor the Order to the
circumstances.
The Receivership Order is not intended to apply universally to every Receivership, nor is it
intended to raise any sort of onus that will require counsel to meet some legal or evidentiary
burden in order to depart from the template. Rather, it is intended as a practical help to the
Bench and Bar to ensure both are acquainted with typical terms of an initial Receivership Order,
so that departures from such terms can be speedily highlighted for consideration by simply
blacklining any changes made to the Receivership Order.
The Alberta Template Orders Committee
Robert Anderson, Q.C.
Jeremy Hockin
Carole Hunter
Josef Kruger, Q.C.
David Mann
Patrick McCarthy, Q.C.
Rick Reeson, Q.C.
Douglas Shell, Q.C.
T
A
B
9
November 22, 1994
No. H890626
Vancouver Registry
IN THE SUPREME COURT OF BRITISH
COLUMBIA
BETWEEN:
STANDARD TRUST COMPANY,
IN LIQUIDATION
PETITIONER
AND:
LINDSAY HOLDINGS LTD., JOHN
RICHARD OSTAF, ACC AUTO CARE
CENTRE, INC., COAST HUDSON LTD.
and ROYAL BANK OF CANADA
RESPONDENTS
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
REASONS FOR JUDGMENT
OF THE HONOURABLE
MR. JUSTICE THACKRAY
Counsel for the Petitioner:
Counsel for Lindsay Holdings Ltd.
and John Richard Ostaf:
(IN CHAMBERS)
F.L. Lamer
G. Burnyeat
Counsel for the Attorney General
of Canada:
G. Donegan Q.C.
Counsel for the Attorney General
of British Columbia:
D. Doyle
Heard at Vancouver, B.C.:
October 26, l994
The petitioner applied for the appointment, without security,
of Price Waterhouse Limited as receiver and manager of certain
lands, buildings, leases, rents and business.
The property is an
automotive-oriented shopping mall in Richmond, British Columbia.
The contentious issue is the desire of the proposed receiver to
1994 CanLII 465 (BC SC)
Date of Release:
2
have protection from legislation that creates liability for the
Richmond is bounded north and south by the Fraser River which
is a spawning ground and migration route of numerous specie of
salmon.
Seepage of petroleum products or spillage that enters the
storm drainage system could find its way into the river.
Opposition to the liability provisions was thought by the
Attorneys General to be hypothetical.
the case.
However, such might not be
Counsel for the petitioner indicated that there is some
pollution, although the extent was not disclosed.
The controversial sections of the proposed order read as
follows:
AND THIS COURT FURTHER ORDERS that the Receiver and
Manager (which term shall herein include its officers,
directors, employees, agents, consultants, principals and
solicitors, as well as any party substituted for Price
Waterhouse Limited and in the limited case of the
liability contemplated by subparagraph (b) below, extends
to any individual including any agents, employees, former
employees and officers of the Respondent Lindsay Holdings
Ltd. that the Receiver and Manager may hereafter employ
or retain from time to time) shall not be personally
liable either directly or vicariously under any
Environmental Regulations in respect of any environmental
condition which arose, or any environmental damage which
occurred either:
(a)
before the
hereunder;
Receiver
and
Manager's
appointment
(b)
after the Receiver and Manager's appointment and
prior to its discharge hereunder; or
costs of environmental protection and for environmental damage.
3
after the discharge of the Receiver and Manager,
unless it can be demonstrated by the regulatory authority
responsible for the administration of the applicable
Environmental Regulations ("Environmental Regulator")
that the condition arose or the damage occurred after the
appointment of the Receiver and Manager and prior to its
discharge and as a result of the Receiver and Manager's
failure to comply with any written order or instruction
issued by the Environmental Regulator and that the
Receiver and Manager has been provided sufficient funding
or assurance of funding specifically designated for
compliance with such order or instruction.
AND THIS COURT FURTHER ORDERS that the Receiver and
Manager shall undertake such environmental preservation
and environmental maintenance and monitoring of the
Property as the Environmental Regulator reasonably
advises the Receiver and Manager should be undertaken by
way of written order or instruction by the Environmental
Regulator and for which the Receiver and Manager has or
receives funding or is provided with assurances of
funding which are acceptable to the Receiver and Manager
and which funds are specifically designated for
compliance with such order or instruction.
AND THIS COURT FURTHER ORDERS that nothing in this
order shall compel the Petitioner or make the Petitioner
liable to provide the funding required for compliance
with any written order made by the Environmental
Regulator.
AND THIS COURT FURTHER ORDERS that the term of this
order sets out the only requirement of:
(a)
the Receiver and Manager, and
(b)
any individuals including agents, employees, former
employees and officers of Lindsay Holdings Ltd.
that the Receiver and Manager shall employ or
retain from time to time ("Employees") for such
period as such person or persons is employed by the
Receiver and Manager
with respect to compliance with and liabilities arising
under the Environmental Regulations such that, except as
expressly provided to the contrary herein, nothing herein
contained shall vest in the Receiver and Manager or
Employees
the
ownership,
control,
possession
or
management nor require the Receiver and Manager or
Employees to take possession, control or manage the
Property or a part thereof which may be a pollutant or
(c)
4
AND THIS COURT FURTHER ORDERS that excepting
liability for acts of willful misconduct or gross
negligence on the part of the officers, directors and
direct employees of Price Waterhouse Limited in its
personal capacity and not in its capacity as Receiver and
Manager, any liability of the Receiver and Manager
whatsoever, including without limitation arising under
Environmental Regulations resulting out of or from its
appointment in the exercise of its powers hereunder shall
be limited in the aggregate to the amount received by the
Receiver and Manager from the disposition of the Property
or any part thereof after deductions for payment of both
the fees, disbursements and expenditures of every nature
and kind incurred by the Receiver and Manager and its
counsel and any monies borrowed by the Receiver and
Manager pursuant to this Order.
The Attorneys General oppose these limitations.
They submit
that the court does not have jurisdiction to limit a receiver
manager's liability as proposed.
The petitioner framed the issue
as follows:
The issue in this case is whether a court can, under Rule
47 and Section 36 of the Law and Equity Act, R.S.B.C.
l979, c. 224, limit the civil and penal liability of a
court appointed received under the Fisheries Act, R.S.C.
l985, c. F-l4, the Canadian Environmental Protection Act,
R.S.C. l985, c. C-l6, the Transportation of Dangerous
Goods Act, R.S.C. l985, c. T-l9, the Navigable Waters
Protection Act, R.S.C. l985, c. C-l9, the Canada Water
Act, R.S.C. l970, c. N-22, the Waste Management Act,
S.B.C. l982, c. 4l the Environment Management Act, S.B.C.
l98l, c. l4, the Municipal Act, R.S.B.C. l979, c. 290,
the Transportation of Dangerous Goods Act, S.B.C. l985,
c. l7, as amended, or the regulations thereunder or any
other existing legislation, federal, provincial or
otherwise relating in whole or in part to the protection
or the enhancement of the environment, transportation of
goods, occupational safety, product liability, public
health and public safety (collectively, "Environmental
contaminant or cause or contribute to a discharge,
release or deposit or a substance contrary to any
Environmental Regulations which may have application in
any jurisdiction in which any of the Property is situate.
5
Laws"), which may have application to the property which
is the subject matter of the order being requested from
the court.
[...]
... the issues raised by the Attorney General of British
Columbia and the Attorney General of Canada in relation
to the request for court ordered limitation on
environmental liability are as follows:
(a)
Is a court appointed receiver, in its capacity as
an officer of the court acting in compliance with
the terms and conditions of its appointment, a
"person" to which environmental laws apply?
(b)
Even if the environmental laws are capable of
encompassing court appointed receivers in the
absence of court ordered limitation on liability,
does the wording of any environmental law restrict,
either specifically or by necessary implication,
the power of a court to appoint a receiver "on
terms and conditions the court thinks just"?
SUBMISSIONS OF THE PETITIONER
The petitioner submitted that a court appointed receiver is an
officer of the court and not a person to which environmental laws
apply.
Accordingly, the court can "clarify" a receiver's duties
and powers. The petitioner noted that the word "person" as defined
in
the
Interpretation Act ,
R.S.C.
1985
c.I-23,
and
in
the
Interpretation Act, R.S.B.C. 1979, c.206, does not mention an
officer of the court.
Counsel for the petitioner contended that who or what is
encompassed by "person" is dependent on the purpose and meaning of
any specific legislative enactment.
He said that the starting
6
point in any analysis of the issue is to determine the legal status
He cited Parsons v. The Sovereign
Bank of Canada, [l9l3] A.C. l60 (P.C.) at page l67:
A receiver and manager appointed, as were those in the
present case, is the agent neither of the debentureholders, whose credit he cannot pledge, nor of the
company, which cannot control him. He is an officer of
the Court put in to discharge certain duties prescribed
by the order appointing him; duties which in the present
case extended to the continuation and management of the
business. The company remains in existence, but it has
lost its title to control its assets and affairs, with
the result that some of its contracts, such as those in
which it stands to an employee in the relation of master
to servant, being of a personal nature, may, in certain
cases, be determined by the mere change in possession,
and the company may be liable for a breach.
The petitioner further submitted that as an officer of the
court the receiver holds the property which is the subject matter
of the receivership on behalf of the court and not on behalf of any
secured creditor.
He concluded that a receiver's, "obligations
should be limited to the resources available to it". He continued:
... the use of the word "person" in an Environmental
Law (or indeed any other statute) cannot be interpreted
to cover a court appointed receiver if it purports to
impose unlimited liability on such a "person". This is
essentially the reasoning used by Chief Justice Hickman
in Bank of Montreal v. Lundrigans Ltd. (l992), l2 C.B.R.
(3d) l70 (Nfld. S.C.(T.D.)) to rule that such an
unlimited liability cannot be imposed on a court
appointed receiver.
Chief Justice Hickman found that
none of the environmental legislation referred to him
(including federal legislation) "provides that a receiver
and manager shall be personally liable for any
environmental contaminant found upon the property that
comes into its or his hands", at pages l79-80:
of a court appointed receiver.
7
In my view, the appointment of a receiver and
manager
by
the
court,
and
his
subsequent
assumption of control of all or some of a debtor's
assets, does not, under existing legislation,
render him liable to pay money or perform work
ordered by environmental authorities in excess of
the value of or moneys received from the sale of
the
individual
asset
which
caused
the
environmental damage.
Legislation intended to
impose unlimited liability on a receiver and
manager would have to say so in clear and
unmistakable language, which is not the case with
existing environmental legislation.
The
Petitioner
submits
that
this
rule
of
construction is valid with respect to any legislation
which could potentially cover court appointed receivers.
This rule of construction applies even more forcefully
to the Environmental Laws in view of the basis upon
which liability is imposed, i.e. mere possession and
control.
It would be irrational to impose such unlimited
liability on a "person" who does not have the same
rights, powers and obligations as either a natural
person, a corporation or even a "corporation sole" (i.e.
a government). In fact, a court appointed receiver is
merely the corporate conduit of a court ordered mandate
because, in its capacity as a court officer, it is the
person through which the court has elected to act. None
of the Environmental Laws can be interpreted as imposing
liability on the courts and, as a result, no liability
can be imposed under these statutes to the court's duly
appointed officers. It is for this reason that a court
appointed receiver cannot be considered to be a "person"
within the meaning of the Environmental Laws. It is the
Petitioner's respectful submission that, as a result,
none of the Environmental Laws specifically imposed
environmental obligations on court appointed receivers.
Counsel for the petitioner canvassed whether environmental
legislation is intended to restrict the powers of the court under
Supreme Court Rule 47 and section 36 of the Law and Equity Act.
He said that Chief Justice Hickman in Lundrigans (also reported at
[. . .]
8
(1992) 92 D.L.R. (4th) 554 (N.S.S.C.)) held that the court has the
Finally, counsel for the petitioner said that the appointment
of a receiver cannot be achieved if Price Waterhouse may incur
unlimited liability.
He concluded as follows:
For these reasons, the petitioner submits that the
order sought with respect to environmental liability is
merely declarative in nature and that, even if it isn't,
the court has jurisdiction to provide the requested
limitation on liability in order to ensure that it is
capable of finding a receiver who will be able and
willing to perform its court ordered mandate.
JUDGMENT
I
do
not
specifically
receivers.
accept
state
the
that
proposition
there
is
that
unlimited
legislation
must
liability
upon
It follows that I do not agree with Hickman C.J. in
Lundrigans when he said that, "Legislation intended to impose
unlimited liability on a receiver and manager would have to say so
in clear and unmistakable language...".
Similarly, I reject the
submission of the petitioner that the word "person" in statutes
"cannot be interpreted to cover a court appointed receiver if it
purports to impose unlimited liability on such a 'person'".
The British Columbia Interpretation Act defines "person" as
including, "a corporation, partnership or party, and the personal
or other legal representatives of a person to whom the context can
inherent jurisdiction to make an order such as the one proposed.
9
The federal
person as including a corporation.
Interpretation Act defines
It must therefore be concluded
that legislators, in using the word "person" in various statutes
to describe those upon whom liability for environmental damage
attaches, intended to provide an expansive definition, one that
should not be limited by the courts.
Federal
and
provincial
environmental damage.
legislation
create
liability
for
No federal legislation authorizes the court
to limit liability in the manner sought by the petitioner.
For
example, the Fisheries Act, R.S.C. 1985, c. F-14, s.42(4) which
provides that, "The liability of any person described in paragraph
(1)(a) is absolute and does not depend on proof of fault or
negligence ...".
Paragraph (1)(a) defines "any person" as anyone
who at any material time owned the deleterious substance or had
charge, management or control thereof.
Rather than suggest that the legislation must specifically
include entities not intended to be made liable, the more logical
approach would be to expect legislation to
liable.
exclude those not
This is precisely the approach taken by Parliament with
respect to trustees in bankruptcy.
Under a recent amendment to
the Bankruptcy and Insolvency Act, R.S.C. 1992, c.26, s.14.06, the
potential environmental liability of a trustee has been expressly
limited.
No similar limitation is given to receivers in any
legislation
and
accordingly
I
conclude
that
the
legislators
apply according to law."
10
intended
them
to
fall
within
the
ambit
of
environmental
To make the order requested the court would have to find
jurisdiction within its own Rules, the Law and Equity Act or its
inherent
jurisdiction.
Rule
47
provides
that
the
court
may
appoint a receiver "either unconditionally or on terms ...".
The
Law and Equity Act empowers the court to appoint a receiver and
the order may be made "on terms and conditions that the court
thinks just."
Neither of these, in my opinion, empowers the court
to impose conditions that conflict with statutory duties, rights
or liabilities.
Counsel
for
the
petitioner
submitted
jurisdiction of the court will suffice.
that
the
inherent
He contended that Chief
Justice Hickman in Lundrigans was correct in relying upon the
inherent jurisdiction of the court in limiting the liability of a
receiver under environmental laws.
However, I must point out that
Hickman
the
C.J.
stated
that
while
court
had
the
inherent
jurisdiction to act, he also acknowledged that any order must be
made "in accordance with existing laws ... ".
The
petitioner
referred
to
I.H.
Jacobs,
The
Inherent
Jurisdiction of the Court (1970), 23 Current Legal Problems 23 at
pp. 27-28:
legislation.
The jurisdiction which is inherent in a superior
court of law is that which enables it to fulfill itself
as a court of law.
The juridical basis of this
jurisdiction is therefore the authority of the judiciary
to uphold, to protect and to fulfill the judicial
function of administering justice according to law in a
regular, orderly and effective manner.
The petitioner contended that, "the inherent jurisdiction of the
court is the jurisdiction to grant such orders as may be necessary
in order to prevent ... the law from being stultified and in order
to
ensure
necessary
that
to
superior
accomplish
courts
their
have
mandate
the
to
procedural
uphold
powers
the
law."
However, regardless of the jurisdictional foundation, a court may
only interpret legislation, not amend it.
If the legislation
clearly attaches liability upon a receiver then, for the court to
acknowledge such, is not a "stultification" of the law.
I am of the opinion that the various statutes defining the
liable entity as a "person"
are clear and unambiguous.
I agree
with counsel for the petitioner who said:
The environmental laws impose liability on the
basis of the notion of "possession and control", as
opposed to the notion of any wrongdoing on the part of a
"person".
Under the environmental laws, there is no
middle ground in liability: if an entity is a "person"
in "possession or control" under the environmental laws,
it is fully and immediately liable to comply with the
obligation set out in the environmental laws ...".
11
12
In
R.
v.
British
Columbia
(1992),
66
B.C.L.R.
(2d)
84
is fundamental to the framework of the [Fisheries] Act."
Shaw J.
said that the scheme of the Fisheries Act is meant to give farreaching protection to fisheries.
He quoted Nemetz C.J.B.C. in R.
v. Richmond, [1984] 4 W.W.R. 191, 4 D.L.R. (4th) 189 (B.C.C.A.) at
192:
In the first place, I look to the entire scheme of the
Act. I think it is only common sense that Parliament in
providing for the protection of waters from pollution
intended that that should apply to all persons in Canada
and could not, unless there was some specific language,
exclude a municipal corporation.
The petitioner said that the courts have indicated that
environmental laws should be "observed to the extent possible
under
the
circumstances."
Consequently,
under
its
inherent
jurisdiction, the courts have been imposing some environmental
obligations on receivers "which they would not otherwise have."
Therefore, according to the petitioner, "courts may grant complete
immunity to a court officer such as a receiver or a trustee in
bankruptcy."
There are two assumptions in this argument.
that
receivers
legislation.
impose
have
no
obligations
under
The first is
environmental
The second is that if the court has the power to
environmental responsibilities upon receivers then it has
(B.C.S.C.) the court specifically noted, "that the word 'person'
13
the power to render immunity from all environmental obligations.
am
of
the
opinion
that
receivers
do
have
environmental
obligations and that the court does not have the jurisdiction to
either
tamper
with
or
emasculate
legislation
creating
such
obligations.
The petitioner submitted that, "None of the environmental
laws can be interpreted as imposing liability on the courts and,
as a result, no liability can be imposed under these statutes to
the court's duly appointed officers."
Implicit
in
this
submission is the assumption that an officer of the court enjoys
the same immunity from liability as the court itself.
agree with that proposition.
I do not
Taken to the extreme, such reasoning
inexorably leads to the conclusion that, regardless of negligence,
a court appointed officer may avoid liability simply because of
the source of the appointment.
In my opinion the purpose of designating individuals as
officers of the court is not to shield them from liability but to
impose upon them obligations for which they will be accountable.
As
early
as
the
Middle
Ages
the
court
held
a
disciplinary
jurisdiction over lawyers because they were officers of the court:
see
W.S.
Holdsworth,
A
History
(London: Methuen, 1923) at 392.
of
English
Law,
3d,
vol.III
I
14
There are many categories of people who are "officers of the
and
Administrators
(London:
Sweet
&
Maxwell,
1989)
at
131.
However, a receiver is obviously different from the court itself.
A
receiver
is
a
responsibilities
commercial
for
entity
financial
which
gain.
As
takes
such
liability is different from that of the court.
on
business
its
potential
As F. Bennett
notes in Receiverships (Toronto: Carswell, 1985) at 118:
Notwithstanding that the receiver and manager is an
officer of the court, [its] fiduciary duty to all
extends to a standard of care in the running of the
business comparable to the "reasonable care, supervision
and control as an ordinary [person] would give to the
business were it his own" ... Where [it] fails to
provide such a standard of care, [it] may be liable for
[its] negligence.
Although Bennett's comments are in relation to a common law
duty they are equally applicable, if not more so, to liability for
a breach of a statutory duty.
Re
Lamford
(B.C.S.C.)
is
Products
relied
Ltd.
upon
by
(1991),
the
63
B.C.L.R.
petitioner.
abatement order was issued on October 18, 1990.
A
(2d)l
388
pollution
Lamford Forest
Products Ltd. had made a voluntary assignment into bankruptcy on
October 11, 1990.
In all likelihood this was not known by the
Regional Waste Manager when the abatement order was made.
In any
court", of which a receiver manager is one: see Kerr on Receivers
15
event,
the
order
was
made
against
Lamford,
not
against
the
Taking those circumstances into account,
Mr. Justice Harvey
made the following observation regarding the potential liability
of a trustee in bankruptcy (at 392):
... I do not think that s.71(2) imposes personal
liability on the trustee in bankruptcy for the
remediation of the Sooke site. In the same way that a
trustee does not become personally responsible for any
other debts of the bankrupt, the trustee cannot be held
personally liable for the costs of cleanup beyond the
funds realizable from the estate."
Contrary to the petitioner's submissions, these comments do not,
in my opinion, assist in the resolution of the case at bar.
They
relate to the scope of s.71(2) of the Bankruptcy Act, and not to
the potential liability of trustees under other legislation.
This
was acknowledged by Harvey J. in the next paragraph where he
stated (at 392):
However, with regard to the disposal of the P.C.B.s
stored on the site, the trustee could fall within the
scope of other legislation, such as s. 36 of the
Canadian Environmental Protection Act, S.C. 1988, c.22;
ss.4 and 5 of the Transportation of Dangerous Goods Act,
R.S.C. 1985, c. T-19; s. 9 of the Canada Water Act,
R.S.C. 1985, c. C-11; s. 35 of the Fisheries Act, R.S.C.
1985, c F-14; and s. 3.1 of the Waste Management Act.
Since there has not yet been any question of the
violation of these statutes, I will refrain from
commenting on a trustee's potential liability under
them.
official receiver.
16
Nevertheless, I am not overlooking the comments in Lamford at
The balancing of values in this case falls in
favour of protecting the health and safety of society
over the rights of creditors, as it did in the Bulora
and the Panamericana case, but there is also a need in
modern society for trustees to take on the duty of
winding up insolvent estates.
The evidence before me
indicates that no trustee can be found who will take on
the bankruptcy of Lamford without a guarantee that he or
she will be entitled to trustee's fees to be deducted
from the amount paid out under the order, and will have
no personal liability for the costs of cleanup of the
contaminated site ...
I understand these concerns.
petitioner herein.
the legislation.
They were echoed by counsel for the
However, they cannot override the intention of
If receivers are to be protected to the extent
of trustees in bankruptcy, or to a greater or lesser extent, that
obligation falls upon the legislators.
The proposed indemnity sections of the order not only provide
indemnity
to
legislation.
the
receiver,
but
"rewrite"
environmental
So as not to expand these reasons immeasurably, I
will detail only one example.
Section 38(4) of the Fisheries Act
provides that where there is a deposit of a deleterious substance
in water frequented by fish, or an imminent danger thereof, any
person who owns or has charge, management or control of the
substance shall report such an occurrence.
page 396:
17
Section 38(6) states that where an inspector is satisfied
control
of
measures.
jointly
and
the
substance
may
be
directed
to
take
remedial
Section 42(1) makes the person described in 38(4)
severally
liable
for
any
costs
incurred
by
the
authorities in either preventing, remedying or mitigating the
problem.
In contrast, the proposed order provides that a receiver
shall not be liable either directly or vicariously under any
environmental regulation either prior to or after its discharge,
or during its tenure, "unless it can be demonstrated" by the
authorities that the condition arose during the tenure "and as a
result of the receiver and manager's failure to comply with any
written order or instruction issued by the Environmental Regulator
and that the receiver and manager has been provided sufficient
funding
or
assurance
of
funding
specifically
designated
for
compliance with such order or instruction."
Such indirect legislative alterations are outside of the
jurisdiction of this court.
Furthermore, the proposed indemnity
sections are in direct contradiction to the unambiguous language
of the legislation. In Baxter Student Housing Ltd. v. College
Housing Co-operative Ltd. (1975), 57 D.L.R. (3d) 1, [1976] 1
W.W.R. 1, [1976] 2 S.C.R. 475, Dickson J. in delivering the
judgment of the Court said at page 480:
that there is such an occurrence, the person who has management or
In my opinion the inherent jurisdiction of the
Court of Queen's Bench is not such as to empower a judge
of that Court to make an order negating the unambiguous
expression of the legislative will.
This
binding
principle
rejecting the proposed order.
provides
a
solid
foundation
for
In Lamford, Harvey J. specifically
noted that the order which he was making was, "not in conflict
with the federal statute [the Bankruptcy Act]."
The petitioner relies heavily upon Lundrigans.
However, the
primary concern in that case was environmental damage caused prior
to the receiver and manager being appointed. At page 175 Chief
Justice Hickman said:
... the appointment by the court of a receiver and
manager does not impose upon such receiver and manager
liability for environmental misbehaviour or damages
caused by or attributable to an asset or assets owned by
a debtor prior to the appointment of such receiver and
manager.
Furthermore, the Chief Justice concluded at page 178 as follows:
... should the receiver and manager appointed to
take over the assets of Lundrigans breach any
environmental laws during the discharge of its functions
and responsibilities, that such receiver and manager
will be answerable for same and subject to any direction
given by the appropriate regulatory regime.
18
19
proposed
order
in
envisioned in Lundrigans.
this
case
goes
beyond
what
was
It even goes beyond the provisions of
the Bankruptcy and Insolvency Act wherein the protection to the
trustee is given only for the period outside the trustee's tenure.
The petitioner asserts that it, "is merely attempting to
limit the liability of Price Waterhouse so as to ensure that it is
willing to act in a manner that will maximize the value of the
collateral."
This being so, the risk of being required to provide
compensation for environmental problems should fall on the persons
who stand to gain - namely, the creditors or indeed the receiver and not the general public.
I reject a course that will protect
creditors and their agents at the risk of the public losing the
protection of environmental legislation.
Protection of the receiver as sought represents a potential
encouragement to creditors to have a receiver appointed to improve
the creditors' position.
It was suggested by the Attorney General
for Canada that there may be answers to the liability potential
without
court
involvement.
require
suitable
indemnity
It
from
may
be
that
creditors
receivers
applying
should
for
the
appointment of a receiver.
Those portions of the proposed order set forth earlier in
these reasons are denied.
The
20
"A. D. Thackray J."
A. D. Thackray J.
Vancouver, B.C.
November 22, l994
T
A
B
10
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater
443
Her Majesty The Queen in Right of
the Province of Newfoundland and
Labrador Appellant
Sa Majesté la Reine du chef de la
province de Terre-Neuve-etLabrador Appelante
v.
c.
AbitibiBowater Inc., Abitibi-Consolidated
Inc., Bowater Canadian Holdings Inc.,
Ad Hoc Committee of Bondholders,
Ad Hoc Committee of Senior Secured
Noteholders and U.S. Bank National
Association (Indenture Trustee for the Senior
Secured Noteholders) Respondents
AbitibiBowater Inc., Abitibi-Consolidated
Inc., Bowater Canadian Holdings Inc.,
comité ad hoc des créanciers obligataires,
comité ad hoc des porteurs de billets garantis
de premier rang et U.S. Bank National
Association (fiduciaire désigné par l’acte
constitutif pour les porteurs de billets
garantis de premier rang) Intimés
and
et
Attorney General of Canada, Attorney
General of Ontario, Attorney General of
British Columbia, Attorney General of
Alberta, Her Majesty The Queen in Right
of British Columbia, Ernst & Young Inc.,
as Monitor, and Friends of the Earth
Canada Interveners
Procureur général du Canada, procureur
général de l’Ontario, procureur général de la
Colombie-Britannique, procureur général de
l’Alberta, Sa Majesté la Reine du chef de la
Colombie-Britannique, Ernst & Young Inc.,
en sa qualité de contrôleur, et Les Ami(e)s de
la Terre Canada Intervenants
Indexed as: Newfoundland and Labrador v.
AbitibiBowater Inc.
Répertorié : Terre-Neuve-et-Labrador c.
AbitibiBowater Inc.
2012 SCC 67
2012 CSC 67
File No.: 33797.
No du greffe : 33797.
2011: November 16; 2012: December 7.
2011 : 16 novembre; 2012 : 7 décembre.
Present: McLachlin C.J. and LeBel, Deschamps,
Fish, Abella, Rothstein, Cromwell, Moldaver and
Karakatsanis JJ.
Présents : La juge en chef McLachlin et les juges
LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell,
Moldaver et Karakatsanis.
on appeal from the court of appeal for
quebec
en appel de la cour d’appel du québec
Bankruptcy and Insolvency — Provable claims —
Contingent claims — Corporation filing for insolvency
protection — Province issuing environmental protection orders against corporation and seeking declaration
that orders not “claims” under Companies’ Creditors
Arrangement Act, R.S.C. 1985, c. C‑36 (“CCAA”), and
not subject to claims procedure order — Whether environmental protection orders are monetary claims that
Faillite et insolvabilité — Réclamations prouvables — Réclamations éventuelles — Demande de protection contre l’insolvabilité par une société — Ordonnances environnementales émises par la province contre
la société et demande, par la province, d’un jugement
déclarant que les ordonnances ne constituent pas des
« réclamations » aux termes de la Loi sur les arrangements avec les créanciers des compagnies, L.R.C. 1985,
444
nfld. and labrador
v. abitibibowater
[2012] 3 S.C.R.
can be compromised in corporate restructuring under
CCAA — Whether CCAA is ultra vires or constitutionally inapplicable by permitting court to determine whether
environmental order is a monetary claim.
ch. C‑36 (« LACC »), et qu’elles ne sont pas assujetties à
l’ordonnance relative à la procédure de réclamations —
Les ordonnances environnementales constituent-elles
des réclamations pécuniaires pouvant faire l’objet d’une
transaction dans le cadre d’une restructuration sous le
régime de la LACC? — La LACC est-elle ultra vires ou
constitutionnellement inapplicable en permettant au tribunal de déterminer si une ordonnance environnementale constitue une réclamation pécuniaire?
A was involved in industrial activity in Newfoundland
and Labrador (the “Province”). In a period of general financial distress, it ended its last operation there, filed for
insolvency protection in the United States and obtained
a stay of proceedings under the Companies’ Creditors
Arrangement Act, R.S.C. 1985, c. C‑36 (“CCAA”). The
Province subsequently issued five orders under the
Environmental Protection Act, S.N.L. 2002, c. E‑14.2,
requiring A to submit remediation action plans for five
industrial sites it had occupied, three of which had been
expropriated by the Province, and to complete the remediation actions. The Province also brought a motion
for a declaration that a claims procedure order issued
under the CCAA in relation to A’s proposed reorganization did not bar the Province from enforcing the environmental protection orders. The Province argued that
the environmental protection orders were not “claims”
under the CCAA and therefore could not be stayed and
subject to a claims procedure order. It further argued
that Parliament lacked the constitutional competence
under its power to make laws in relation to bankruptcy
and insolvency to stay orders that were validly made
in the exercise of a provincial power. A contested the
motion, arguing that the orders were monetary in nature and hence fell within the definition of the word
“claim” in the claims procedure order. The CCAA court
dismissed the Province’s motion. The Court of Appeal
denied the Province leave to appeal.
A a poursuivi des activités industrielles à TerreNeuve-et-Labrador (la « province »). Dans une période
de grandes difficultés financières, elle a mis un terme
à ses activités dans la province, elle a présenté une demande de protection contre l’insolvabilité aux ÉtatsUnis et elle a obtenu une suspension des procédures en
vertu de la Loi sur les arrangements avec les créanciers
des compagnies, L.R.C. 1985, ch. C‑36 (« LACC »). La
province a par la suite prononcé cinq ordonnances environnementales en vertu de l’Environmental Protection
Act, S.N.L. 2002, ch. E‑14.2, contraignant A à présenter des plans de restauration pour cinq sites industriels
qu’elle avait occupés, dont trois avaient été expropriés
par la province, et à réaliser les plans de restauration
approuvés. La province a également demandé par requête un jugement déclarant qu’une ordonnance relative
à la procédure de réclamations rendue aux termes de la
LACC dans le cadre de la réorganisation proposée de A
n’empêchait pas la province d’exécuter les ordonnances
environnementales. La province a plaidé que les ordonnances environnementales ne constituent pas des « réclamations » au sens de la LACC et que leur exécution
ne peut donc être suspendue ni être assujettie à une ordonnance relative à la procédure de réclamations. Elle
a de plus fait valoir que le pouvoir du Parlement de
légiférer en matière de faillite et d’insolvabilité ne lui
confère pas la compétence constitutionnelle pour suspendre l’application des ordonnances prononcées dans
l’exercice valide de pouvoirs provinciaux. A a contesté
la requête et a soutenu que les ordonnances étaient de
nature pécuniaire et qu’elles étaient donc visées par la
définition du terme « réclamation » utilisé dans l’ordonnance relative à la procédure de réclamations. Le juge
chargé d’appliquer la LACC a rejeté la requête de la province et la Cour d’appel a rejeté la demande d’autorisation d’appel de la province.
Held (McLachlin C.J. and LeBel J. dissenting): The
appeal should be dismissed.
Arrêt (la juge en chef McLachlin et le juge LeBel
sont dissidents) : Le pourvoi est rejeté.
Per Deschamps, Fish, Abella, Rothstein, Cromwell,
Moldaver and Karakatsanis JJ.: Not all orders issued
by regulatory bodies are monetary in nature and thus
provable claims in an insolvency proceeding, but some
may be, even if the amounts involved are not quantified
Les juges Deschamps, Fish, Abella, Rothstein,
Cromwell, Moldaver et Karakatsanis : Les ordonnances des organismes administratifs ne sont pas toutes
de nature pécuniaire, et donc des réclamations prouvables dans le cadre de procédures d’insolvabilité, mais
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater
445
at the outset of the proceedings. In the environmental
context, the CCAA court must determine whether there
are sufficient facts indicating the existence of an environmental duty that will ripen into a financial liability
owed to the regulatory body that issued the order. In
such a case, the relevant question is not simply whether
the body has formally exercised its power to claim a
debt. A CCAA court does not assess claims or orders
on the basis of form alone. If the order is not framed
in monetary terms, the CCAA court must determine, in
light of the factual matrix and the applicable statutory
framework, whether it is a claim that will be subject to
the claims process.
certaines peuvent l’être en dépit du fait qu’elles ne sont
pas quantifiées dès le début des procédures. En matière
environnementale, le tribunal chargé de l’application de
la LACC doit déterminer s’il y a suffisamment de faits
indiquant qu’il existe une obligation environnementale
de laquelle résultera une dette envers l’organisme administratif qui a prononcé l’ordonnance. En pareil cas, la
question pertinente ne se résume pas à déterminer si
l’organisme a formellement exercé son pouvoir de réclamer une dette. Le tribunal qui évalue une réclamation ou une ordonnance ne se limite pas à un examen de
sa forme. Si l’ordonnance n’est pas formulée en termes
pécuniaires, le tribunal doit déterminer, en fonction des
faits en cause et du cadre législatif applicable, si elle
constitue une réclamation qui sera assujettie au processus de réclamation.
There are three requirements orders must meet in
order to be considered claims that may be subject to
the insolvency process in a case such as the one at bar.
First, there must be a debt, a liability or an obligation
to a creditor. In this case, the first criterion was met
because the Province had identified itself as a creditor
by resorting to environmental protection enforcement
mechanisms. Second, the debt, liability or obligation
must be incurred as of a specific time. This requirement was also met since the environmental damage
had occurred before the time of the CCAA proceedings. Third, it must be possible to attach a monetary
value to the debt, liability or obligation. The present
case turns on this third requirement, and the question
is whether orders that are not expressed in monetary
terms can be translated into such terms.
Pour qu’elles constituent des réclamations pouvant être assujetties au processus applicable en matière d’insolvabilité dans une affaire telle celle en
l’espèce, les ordonnances doivent satisfaire à trois
conditions. Premièrement, il doit s’agir d’une dette,
d’un engagement ou d’une obligation envers un créancier. En l’espèce, il a été satisfait à la première condition
puisque la province s’est présentée comme créancière
en ayant recours aux mécanismes d’application en matière de protection de l’environnement. Deuxièmement,
la dette, l’engagement ou l’obligation doit avoir pris
naissance à un moment précis. Il a également été satisfait à cette condition puisque les dommages environnementaux sont survenus avant que les procédures en
vertu de la LACC ne soient entamées. Troisièmement,
il doit être possible d’attribuer une valeur pécuniaire à
cette dette, cet engagement ou cette obligation. La présente affaire est centrée sur cette troisième condition,
et la question est de savoir si des ordonnances qui ne
sont pas formulées en termes pécuniaires peuvent être
formulées en de tels termes.
A claim may be asserted in insolvency proceedings even if it is contingent on an event that has not
yet occurred. The criterion used by courts to determine
whether a contingent claim will be included in the insolvency process is whether the event that has not yet
occurred is too remote or speculative. In the context
of an environmental protection order, this means that
there must be sufficient indications that the regulatory
body that triggered the enforcement mechanism will ultimately perform remediation work and assert a monetary claim. If there is sufficient certainty in this regard,
the court will conclude that the order can be subject to
the insolvency process.
Il est possible de faire valoir une réclamation dans
le cadre de procédures d’insolvabilité même si elle dépend d’un événement non encore survenu. Le critère retenu par les tribunaux pour décider si une réclamation
éventuelle sera incluse dans le processus d’insolvabilité
est celui qui consiste à déterminer si l’événement non
encore survenu est trop éloigné ou conjectural. Dans
le contexte d’une ordonnance environnementale, cela
signifie qu’il doit y avoir des indications suffisantes
permettant de conclure que l’organisme administratif
qui a eu recours aux mécanismes d’application de la
loi effectuera en fin de compte des travaux de décontamination et présentera une réclamation pécuniaire.
Si cela est suffisamment certain, le tribunal conclura que l’ordonnance peut être assujettie au processus
d’insolvabilité.
446
nfld. and labrador
v. abitibibowater
[2012] 3 S.C.R.
Certain indicators can guide the CCAA court in this
assessment, including whether the activities are ongoing, whether the debtor is in control of the property, and
whether the debtor has the means to comply with the
order. The court may also consider the effect that requiring the debtor to comply with the order would have
on the insolvency process. The analysis is grounded in
the facts of each case. In this case, the CCAA court’s
assessment of the facts, particularly its finding that the
orders were the first step towards performance of the
remediation work by the Province, leads to no conclusion other than that it was sufficiently certain that the
Province would perform remediation work and therefore fall within the definition of a creditor with a monetary claim.
Certains indicateurs permettent de guider le tribunal
dans cette analyse, notamment si les activités se poursuivent, si le débiteur exerce un contrôle sur le bien et
s’il dispose des moyens de se conformer à l’ordonnance.
Il est également possible pour le tribunal de prendre en
compte les conséquences qu’entraînerait sur le processus d’insolvabilité le fait d’exiger du débiteur qu’il
se conforme à l’ordonnance. L’analyse est fondée sur
les faits propres à chaque cas. En l’espèce, l’appréciation des faits par le tribunal, plus particulièrement sa
constatation que les ordonnances constituaient la première étape en vue de la décontamination des sites par
la province, ne permet de tirer aucune conclusion autre
que celle suivant laquelle il était suffisamment certain
que la province exécuterait des travaux de décontamination et qu’elle était par conséquent visée par la définition d’un créancier ayant une réclamation pécuniaire.
Subjecting such orders to the claims process does
not extinguish the debtor’s environmental obligations
any more than subjecting any creditor’s claim to that
process extinguishes the debtor’s obligation to pay a
debt. It merely ensures that the Province’s claim will
be paid in accordance with insolvency legislation. Full
compliance with orders that are found to be monetary
in nature would shift the costs of remediation to third
party creditors and replace the polluter-pay principle with a “third-party-pay” principle. Moreover, to
subject environmental protection orders to the claims
process is not to invite corporations to restructure in
order to rid themselves of their environmental liabilities. Reorganization made necessary by insolvency
is hardly ever a deliberate choice, and when the risks
corporations engage in materialize, the dire costs are
borne by almost all stakeholders.
Le fait d’assujettir ces ordonnances au processus de
réclamations n’éteint pas les obligations environnementales qui incombent au débiteur, pas plus que le fait de
soumettre à ce processus les réclamations des créanciers
n’éteint l’obligation du débiteur de payer ses dettes. Le
fait d’assujettir une ordonnance au processus de réclamation vise simplement à faire en sorte que le paiement
au créancier sera fait conformément aux dispositions
législatives applicables en matière d’insolvabilité. Le
respect intégral des ordonnances dont la nature pécuniaire est reconnue transférerait le coût de la décontamination aux tiers créanciers et substituerait au principe
du pollueur-payeur celui du « tiers-payeur ». En outre,
l’assujettissement des ordonnances environnementales à
la procédure de réclamations n’équivaut pas à convier
les sociétés à se réorganiser dans le but d’échapper à
leurs obligations environnementales. Une réorganisation rendue nécessaire par l’insolvabilité de la société
peut difficilement être assimilée à un choix délibéré, et
lorsque les risques auxquels s’exposent les sociétés se
concrétisent, la quasi-totalité des personnes ayant des
intérêts dans la société en supportent les terribles coûts.
Because the provisions on the assessment of claims
in insolvency matters relate directly to Parliament’s jurisdiction, the ancillary powers doctrine is not relevant
to this case. The interjurisdictional immunity doctrine
is also inapplicable, because a finding that a claim of
an environmental creditor is monetary in nature does
not interfere in any way with the creditor’s activities; its
claim is simply subject to the insolvency process.
L’application de la doctrine des pouvoirs accessoires n’est pas pertinente en l’espèce car les dispositions
régissant l’évaluation des réclamations en matière d’insolvabilité sont directement reliées à la compétence
du législateur fédéral. La doctrine de la protection des
compétences exclusives ne s’applique pas non plus parce
qu’une conclusion selon laquelle un créancier œuvrant
dans le domaine de l’environnement détient une réclamation pécuniaire ne modifie en rien les activités de ce
créancier; sa réclamation est simplement assujettie au
processus d’insolvabilité.
Per McLachlin C.J. (dissenting): Remediation orders made under a province’s environmental protection
La juge en chef McLachlin (dissidente) : Les ordonnances exigeant la décontamination émises aux termes
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater
447
legislation impose ongoing regulatory obligations on
the corporation required to clean up the pollution. They
may only be reduced to monetary claims which can
be compromised under CCAA proceedings in narrow
circumstances where a province has done the remediation work, or where it is “sufficiently certain” that
it will do the work. This last situation is regulated by
the provisions of the CCAA for contingent or future
claims. The test is whether there is a likelihood approaching certainty that the province will do the work.
“Likelihood approaching certainty” recognizes that the
government’s decision is discretionary and may be influenced by competing political and social considerations, which are not normally subject to judicial consideration. Insofar as this determination touches on the
division of powers, I am in substantial agreement with
Deschamps J.
d’une loi provinciale sur la protection de l’environnement imposent des exigences réglementaires continues
à la personne morale requise de remédier à la pollution.
Ces ordonnances ne peuvent être converties en réclamations pécuniaires pouvant faire l’objet de transactions
dans le cadre de procédures engagées aux termes de la
LACC que dans certaines circonstances particulières,
lorsqu’une province a exécuté les travaux ou lorsqu’il
est « suffisamment certain » qu’elle exécutera les travaux. Cette deuxième situation est prévue par les dispositions de la LACC relatives aux réclamations éventuelles ou futures. Le critère consiste à déterminer s’il
existe une probabilité proche de la certitude que la province exécutera les travaux. Une « probabilité proche
de la certitude » reconnaît que la décision du gouvernement est discrétionnaire et peut être influencée par
des considérations politiques et sociales concurrentes
qui sont normalement soustraites à l’examen judiciaire.
Dans la mesure où cette décision touche le partage des
pouvoirs, je souscris pour l’essentiel à l’opinion exprimée par la juge Deschamps.
Apart from the orders related to the work done or
tendered for on the Buchans property, the orders for
remediation in this case are not claims that can be
compromised. The CCAA maintains the fundamental
distinction between regulatory obligations under the
general law aimed at the protection of the public and
monetary claims that can be compromised in CCAA restructuring or bankruptcy. The CCAA judge never asked
himself the critical question of whether it was “sufficiently certain” that the Province would do the work
itself. His failure to consider that question requires this
Court to answer it in his stead. There is nothing on the
record to support the view that the Province will move
to remediate the properties. It has not been shown that
the contamination poses immediate health risks which
must be addressed without delay. It has not been shown
that the Province has taken any steps to do any work.
And it has not been shown that the Province has set
aside or even contemplated setting aside money for this
work. The Province retained a number of options, including leaving the sites contaminated, or calling on
Abitibi to remediate following its emergence from restructuring. There is nothing in the record that makes
it more probable, much less establishes “sufficient certainty”, that the Province will opt to do the work itself.
À l’exception des ordonnances relatives aux travaux
sur le site de Buchans déjà exécutés ou à l’égard desquels
des appels d’offres ont été lancés, les ordonnances exigeant la décontamination en l’espèce ne constituent pas
des réclamations pouvant faire l’objet de transactions
dans le cadre d’une restructuration. La LACC établit une
distinction fondamentale entre les exigences réglementaires découlant d’une loi d’application générale visant
la protection du public, d’une part, et les réclamations
pécuniaires pouvant faire l’objet d’une transaction dans
le cadre d’une restructuration engagée sous le régime de
la LACC ou en matière de faillite, d’autre part. Le juge
de première instance ne s’est jamais posé la question
cruciale de savoir s’il était « suffisamment certain » que
la province exécuterait elle-même les travaux. Le fait
qu’il n’ait pas examiné cette question oblige notre Cour
à y répondre à sa place. Aucune preuve au dossier ne
laisse croire que la province entreprendra la décontamination des sites. Il n’a pas été démontré que la contamination pose pour la santé des risques immédiats exigeant la prise de mesures dans les plus brefs délais. Il n’a
pas été démontré que la province a pris quelque mesure
que ce soit pour réaliser des travaux. Et il n’a pas été
démontré que la province a prévu des sommes d’argent
pour ces travaux ou qu’elle a même songé à en prévoir.
La province a conservé un certain nombre de choix,
notamment laisser les sites contaminés, ou demander à
Abitibi d’exécuter les travaux lorsqu’elle aura complété
sa restructuration. Rien au dossier n’indique qu’il est
plus probable, et encore moins qu’il est « suffisamment
certain », que la province choisira d’exécuter elle-même
la décontamination.
448
nfld. and labrador
v. abitibibowater
[2012] 3 S.C.R.
Per LeBel J. (dissenting): The test proposed by the
Chief Justice according to which the evidence must
show that there is a “likelihood approaching certainty”
that the Province would remediate the contamination
itself is not the established test for determining where
and how a contingent claim can be liquidated in bankruptcy and insolvency law. The test of “sufficient certainty” described by Deschamps J. best reflects how
both the common law and the civil law view and deal
with contingent claims. Applying that test, the appeal
should be allowed on the basis that there is no evidence
that the Province intends to perform the remedial work
itself.
Le juge LeBel (dissident) : Le critère que propose la
Juge en chef, selon lequel la preuve doit démontrer une
« probabilité proche de la certitude » que la province
se chargerait de la décontamination, ne constitue pas
le critère établi pour déterminer si, et de quelle façon,
une réclamation éventuelle peut être liquidée en droit
de la faillite et de l’insolvabilité. Le critère de ce qui est
« suffisamment certain » qu’énonce la juge Deschamps
reflète mieux la façon dont la common law et le droit
civil envisagent et traitent les réclamations éventuelles. En appliquant ce critère, il y aurait lieu d’accueillir
le pourvoi puisqu’aucune preuve ne confirme l’intention de la province d’exécuter elle-même les travaux de
décontamination.
Cases Cited
Jurisprudence
By Deschamps J.
Citée par la juge Deschamps
Distinguished: Panamericana de Bienes y Servicios
S.A. v. Northern Badger Oil & Gas Ltd. (1991), 81 Alta.
L.R. (2d) 45; referred to: Husky Oil Operations Ltd.
v. Minister of National Revenue, [1995] 3 S.C.R. 453;
Canada v. McLarty, 2008 SCC 26, [2008] 2 S.C.R.
79; Confederation Treasury Services Ltd. (Bankrupt),
Re (1997), 96 O.A.C. 75; Imperial Oil Ltd. v.
Quebec (Minister of the Environment), 2003 SCC 58,
[2003] 2 S.C.R. 624.
Distinction d’avec l’arrêt : Panamericana de
Bienes y Servicios S.A. c. Northern Badger Oil & Gas
Ltd. (1991), 81 Alta. L.R. (2d) 45; arrêts mentionnés :
Husky Oil Operations Ltd. c. Ministre du Revenu national, [1995] 3 R.C.S. 453; Canada c. McLarty, 2008
CSC 26, [2008] 2 R.C.S. 79; Confederation Treasury
Services Ltd. (Bankrupt), Re (1997), 96 O.A.C. 75; Cie
pétrolière Impériale ltée c. Québec (Ministre de l’Environnement), 2003 CSC 58, [2003] 2 R.C.S. 624.
By McLachlin C.J. (dissenting)
Citée par la juge en chef McLachlin (dissidente)
Panamericana de Bienes y Servicios S.A. v. Northern
Badger Oil & Gas Ltd. (1991), 81 Alta. L.R. (2d) 45;
Lamford Forest Products Ltd. (Re) (1991), 86 D.L.R. (4th)
534; Shirley (Re) (1995), 129 D.L.R. (4th) 105; Husky
Oil Operations Ltd. v. Minister of National Revenue,
[1995] 3 S.C.R. 453; Air Canada, Re [Regulators’ motions] (2003), 28 C.B.R. (5th) 52; General Chemical
Canada Ltd., Re, 2007 ONCA 600, 228 O.A.C. 385;
Strathcona (County) v. PriceWaterhouseCoopers Inc.,
2005 ABQB 559, 47 Alta. L.R. (4th) 138; Confederation
Treasury Services Ltd. (Bankrupt), Re (1997), 96
O.A.C. 75; Anvil Range Mining Corp., Re (2001), 25
C.B.R. (4th) 1; R. v. Imperial Tobacco Canada Ltd.,
2011 SCC 42, [2011] 3 S.C.R. 45; Housen v. Nikolaisen,
2002 SCC 33, [2002] 2 S.C.R. 235.
Panamericana de Bienes y Servicios S.A. c. Northern
Badger Oil & Gas Ltd. (1991), 81 Alta. L.R. (2d) 45;
Lamford Forest Products Ltd. (Re) (1991), 86 D.L.R. (4th)
534; Shirley (Re) (1995), 129 D.L.R. (4th) 105; Husky
Oil Operations Ltd. c. Ministre du Revenu national,
[1995] 3 R.C.S. 453; Air Canada, Re [Regulators’ motions] (2003), 28 C.B.R. (5th) 52; General Chemical
Canada Ltd., Re, 2007 ONCA 600, 228 O.A.C. 385;
Strathcona (County) c. PriceWaterhouseCoopers Inc.,
2005 ABQB 559, 47 Alta. L.R. (4th) 138; Confederation
Treasury Services Ltd. (Bankrupt), Re (1997), 96
O.A.C. 75; Anvil Range Mining Corp., Re (2001), 25
C.B.R. (4th) 1; R. c. Imperial Tobacco Canada Ltée,
2011 CSC 42, [2011] 3 R.C.S. 45; Housen c. Nikolaisen,
2002 CSC 33, [2002] 2 R.C.S. 235.
Statutes and Regulations Cited
Lois et règlements cités
Abitibi-Consolidated Rights and Assets Act, S.N.L.
2008, c. A‑1.01.
Act to amend the Bankruptcy Act and to amend the Income Tax Act in consequence thereof, S.C. 1992, c.
27, s. 9.
Act to amend the Bankruptcy and Insolvency Act, the
Companies’ Creditors Arrangement Act and the Income Tax Act, S.C. 1997, c. 12.
Abitibi-Consolidated Rights and Assets Act, S.N.L.
2008, ch. A‑1.01.
Code civil du Québec, L.Q. 1991, ch. 64, art. 1497, 1508,
1513.
Environmental Protection Act, S.N.L. 2002, ch. E‑14.2,
art. 99, 102(3).
Loi modifiant la Loi sur la faillite et l’insolvabilité, la
Loi sur les arrangements avec les créanciers des
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater
449
Act to amend the Bankruptcy and Insolvency Act, the
Companies’ Creditors Arrangement Act, the Wage
Earner Protection Program Act and chapter 47 of the
Statutes of Canada, 2005, S.C. 2007, c. 36, s. 65.
Bankruptcy and Insolvency Act, R.S.C. 1985, c. B‑3, ss. 2
“claim provable in bankruptcy”, “creditor”, 14.06(8),
121(1), (2), 135(1.1).
Civil Code of Québec, S.Q. 1991, c. 64, arts. 1497, 1508,
1513.
Companies’ Creditors Arrangement Act, R.S.C. 1985, c.
C‑36, ss. 2(1) “claim”, 11, 11.1, 11.8(5), (7), (8), (9),
12(1), (2).
Environmental Protection Act, S.N.L. 2002, c. E‑14.2,
ss. 99, 102(3).
compagnies et la Loi de l’impôt sur le revenu, L.C.
1997, ch. 12.
Loi modifiant la Loi sur la faillite et l’insolvabilité, la
Loi sur les arrangements avec les créanciers des compagnies, la Loi sur le Programme de protection des
salariés et le chapitre 47 des Lois du Canada (2005),
L.C. 2007, ch. 36, art. 65.
Loi modifiant la Loi sur la faillite et la Loi de l’impôt sur
le revenu en conséquence, L.C. 1992, ch. 27, art. 9.
Loi sur la faillite et l’insolvabilité, L.R.C. 1985, ch.
B-3, art. 2 « créancier », « réclamation prouvable en
matière de faillite », 14.06(8), 121(1), (2), 135(1.1).
Loi sur les arrangements avec les créanciers des compagnies, L.R.C. 1985, ch. C-36, art. 2(1) « réclamation »,
11, 11.1, 11.8(5), (7), (8), (9), 12(1), (2).
Treaties and Other International Instruments
Traités et autres instruments internationaux
North American Free Trade Agreement Between the
Government of Canada, the Government of the United Mexican States and the Government of the United
States of America, Can. T.S. 1994 No. 2.
Accord de libre‑échange nord‑américain entre le gouvernement du Canada, le gouvernement des États‑Unis
d’Amérique et le gouvernement des États-Unis du
Mexique, R.T. Can. 1994 no 2.
Authors Cited
Doctrine et autres documents cités
Baird, Douglas G., and Thomas H. Jackson. “Comment:
Kovacs and Toxic Wastes in Bankruptcy” (1984), 36
Stan. L. Rev. 1199.
Canada. House of Commons. Evidence of the Standing
Committee on Industry, No. 16, 2nd Sess., 35th Parl.,
June 11, 1996.
Hohfeld, Wesley Newcomb. Fundamental Legal Conceptions as Applied in Judicial Reasoning, new ed. by
David Campbell and Philip Thomas, eds. Burlington,
Vt.: Ashgate, 2001.
MacCormick, D. N. “Rights in Legislation”, in
P. M. S. Hacker and J. Raz, eds., Law, Morality, and
Society: Essays in Honour of H. L. A. Hart. Oxford:
Clarendon Press, 1977, 189.
Saxe, Dianne. “Trustees’ and Receivers’ Environmental
Liability Update” (1998), 49 C.B.R. (3d) 138.
Baird, Douglas G., and Thomas H. Jackson. « Comment :
Kovacs and Toxic Wastes in Bankruptcy » (1984), 36
Stan. L. Rev. 1199.
Canada. Chambre des communes. Témoignages du Comité permanent de l’industrie, no 16, 2e sess., 35e lég.,
11 juin 1996.
Hohfeld, Wesley Newcomb. Fundamental Legal Conceptions as Applied in Judicial Reasoning, new ed. by
David Campbell and Philip Thomas, eds. Burlington,
Vt. : Ashgate, 2001.
MacCormick, D. N. « Rights in Legislation », in
Society : Essays in Honour of H. L. A. Hart. Oxford :
Clarendon Press, 1977, 189.
Saxe, Dianne. « Trustees’ and Receivers’ Environmental
Liability Update » (1998), 49 C.B.R. (3d) 138.
APPEAL from a judgment of the Quebec Court
of Appeal (Chamberland J.A.), 2010 QCCA 965, 68
C.B.R. (5th) 57, 52 C.E.L.R. (3d) 1, [2010] Q.J. No.
4579 (QL), 2010 CarswellQue 4782, dismissing the
appellant’s motion for leave to appeal a decision of
Gascon J., 2010 QCCS 1261, 68 C.B.R. (5th) 1, 52
C.E.L.R. (3d) 17, [2010] Q.J. No. 4006 (QL), 2010
CarswellQue 2812. Appeal dismissed, McLachlin
C.J. and LeBel J. dissenting.
POURVOI contre une décision de la Cour d’appel du Québec (le juge Chamberland), 2010 QCCA
965, 68 C.B.R. (5th) 57, 52 C.E.L.R. (3d) 1, [2010]
Q.J. No. 4579 (QL), 2010 CarswellQue 4782, qui
a rejeté la requête de l’appelante pour permission
d’en appeler d’un jugement du juge Gascon, 2010
QCCS 1261, 68 C.B.R. (5th) 1, 52 C.E.L.R. (3d)
17, [2010] Q.J. No. 4006 (QL), 2010 CarswellQue
2812. Pourvoi rejeté, la juge en chef McLachlin et
le juge LeBel sont dissidents.
David R. Wingfield, Paul D. Guy and Philip
Osborne, for the appellant.
David R. Wingfield, Paul D. Guy et Philip
Osborne, pour l’appelante.
450
nfld. and labrador
v. abitibibowater Deschamps J.
[2012] 3 S.C.R.
Sean F. Dunphy, Nicholas McHaffie, Joseph
Reynaud and Marc B. Barbeau, for the respondents.
Sean F. Dunphy, Nicholas McHaffie, Joseph
Reynaud et Marc B. Barbeau, pour les intimés.
Christopher Rupar and Marianne Zoric, for the
intervener the Attorney General of Canada.
Christopher Rupar et Marianne Zoric, pour l’intervenant le procureur général du Canada.
Josh Hunter, Robin K. Basu, Leonard Marsello
and Mario Faieta, for the intervener the Attorney
General of Ontario.
Josh Hunter, Robin K. Basu, Leonard Marsello
et Mario Faieta, pour l’intervenant le procureur général de l’Ontario.
R. Richard M. Butler, for the intervener the
Attorney General of British Columbia.
R. Richard M. Butler, pour l’intervenant le procureur général de la Colombie-Britannique.
Roderick Wiltshire, for the intervener the
Attorney General of Alberta.
Roderick Wiltshire, pour l’intervenant le procureur général de l’Alberta.
Elizabeth J. Rowbotham, for the intervener Her
Majesty The Queen in Right of British Columbia.
Elizabeth J. Rowbotham, pour l’intervenante Sa Majesté la Reine du chef de la ColombieBritannique.
Robert I. Thornton, John T. Porter and Rachelle
F. Moncur, for the intervener Ernst & Young Inc.,
as Monitor.
Robert I. Thornton, John T. Porter et Rachelle
F. Moncur, pour l’intervenante Ernst & Young Inc.,
en sa qualité de contrôleur.
William A. Amos, Anastasia M. Lintner, Hugh
S. Wilkins and R. Graham Phoenix, for the intervener the Friends of the Earth Canada.
William A. Amos, Anastasia M. Lintner, Hugh
S. Wilkins et R. Graham Phoenix, pour l’intervenant Les Ami(e)s de la Terre Canada.
The judgment of Deschamps, Fish, Abella,
Rothstein, Cromwell, Moldaver and Karakatsanis
JJ. was delivered by
Version française du jugement des juges
Deschamps, Fish, Abella, Rothstein, Cromwell,
Moldaver et Karakatsanis rendu par
[1] Deschamps J. — The question in this appeal
is whether orders issued by a regulatory body with
respect to environmental remediation work can be
treated as monetary claims under the Companies’
Creditors Arrangement Act, R.S.C. 1985, c.
C‑36 (“CCAA”).
[1] La juge Deschamps — La question soulevée dans le présent pourvoi est de savoir si des
ordonnances d’un organisme administratif relatives à des travaux de décontamination peuvent
être traitées comme des réclamations pécuniaires
aux termes de la Loi sur les arrangements avec les
créanciers des compagnies, L.R.C. 1985, ch. C‑36
(« LACC »).
[2] Regulatory bodies may become involved in
reorganization proceedings when they order the
debtor to comply with statutory rules. As a matter of principle, reorganization does not amount
to a licence to disregard rules. Yet there are circumstances in which valid and enforceable orders
will be subject to an arrangement under the CCAA.
One such circumstance is where a regulatory body
[2] Un organisme administratif peut être appelé à
intervenir dans le cadre de procédures de réorganisation lorsqu’il prononce une ordonnance intimant
au débiteur de se conformer à une règle prescrite
par la loi. En principe, une réorganisation ne permet pas à une personne d’ignorer ses obligations légales. Par ailleurs, en certaines circonstances, une
ordonnance valable et exécutoire sera assujettie
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater La juge Deschamps
451
makes an environmental order that explicitly asserts a monetary claim.
à un arrangement conclu en vertu de la LACC.
C’est le cas notamment lorsqu’un organisme administratif prononce une ordonnance environnementale qui est explicitement formulée en termes
pécuniaires.
[3] In other circumstances, it is less clear whether
an order can be treated as a monetary claim. The
appellant and a number of interveners posit that
an order issued by an environmental body is not a
claim under the CCAA if the order does not require
the debtor to make a payment. I agree that not all
orders issued by regulatory bodies are monetary in
nature and thus provable claims in an insolvency
proceeding, but some may be, even if the amounts
involved are not quantified at the outset of the proceeding. In the environmental context, the CCAA
court must determine whether there are sufficient
facts indicating the existence of an environmental
duty that will ripen into a financial liability owed
to the regulatory body that issued the order. In such
a case, the relevant question is not simply whether
the body has formally exercised its power to claim
a debt. A CCAA court does not assess claims — or
orders — on the basis of form alone. If the order
is not framed in monetary terms, the court must
determine, in light of the factual matrix and the applicable statutory framework, whether it is a claim
that will be subject to the claims process.
[3] En d’autres circonstances, il est plus difficile
de savoir si une ordonnance peut être traitée comme
une réclamation pécuniaire. L’appelante et certains des intervenants affirment qu’une ordonnance
émise par un organisme de protection de l’environnement ne constitue pas une réclamation au sens de
la LACC si elle n’exige pas du débiteur qu’il lui paye
un montant d’argent. Je conviens que les ordonnances des organismes administratifs ne constituent
pas toutes des réclamations pécuniaires, et donc des
réclamations prouvables dans le cadre de procédures d’insolvabilité, mais certaines peuvent l’être en
dépit du fait qu’elles ne sont pas quantifiées dès le
début des procédures. En matière environnementale, le tribunal chargé de l’application de la LACC
doit déterminer s’il y a suffisamment de faits indiquant qu’il existe une obligation environnementale
de laquelle résultera une dette envers l’organisme
administratif qui a prononcé l’ordonnance. En
pareil cas, la question pertinente ne se résume pas
à déterminer si l’organisme a formellement exercé
son pouvoir de réclamer une dette. Lorsque le tribunal évalue une réclamation (ou une ordonnance)
il ne se limite pas à un examen de sa forme. Si l’ordonnance n’est pas formulée en termes pécuniaires,
le tribunal doit déterminer, en fonction des faits en
cause et du cadre législatif applicable, si elle constitue une réclamation qui sera assujettie au processus
de réclamation.
[4] The case at bar concerns contamination that
occurred, prior to the CCAA proceedings, on property that is largely no longer under the debtor’s
possession and control. The CCAA court found
on the facts of this case that the orders issued by
Her Majesty the Queen in right of the Province of
Newfoundland and Labrador (“Province”) were
simply a first step towards remediating the contaminated property and asserting a claim for the resulting costs. In the words of the CCAA court, “the
intended, practical and realistic effect of the EPA
Orders was to establish a basis for the Province to
[4] Le présent pourvoi a trait à des dommages environnementaux survenus avant que les procédures
sous le régime de la LACC ne soient engagées, des
dommages causés à des terrains qui, en majeure
partie, ne sont plus en la possession du débiteur ni
sous son contrôle. Le tribunal de première instance
a conclu, selon les faits en l’espèce, que les ordonnances émises par Sa Majesté la Reine du chef de
la province de Terre-Neuve-et-Labrador (« province ») ne constituaient que la première étape en
vue de restaurer les sites contaminés et de réclamer
les coûts engagés. Comme l’a exprimé le juge de
452
nfld. and labrador
[2012] 3 S.C.R.
recover amounts of money to be eventually used for
the remediation of the properties in question” (2010
QCCS 1261, 68 C.B.R. (5th) 1, at para. 211). As a
result, the CCAA court found that the orders were
clearly monetary in nature. I see no error of law
and no reason to interfere with this finding of fact.
I would dismiss the appeal with costs.
première instance, [TRADUCTION] « les ordonnances avaient pour effet attendu, pratique et réaliste
d’établir le fondement d’une réclamation permettant à la province de récupérer des sommes d’argent qui seraient utilisées pour procéder aux travaux de décontamination » (2010 QCCS 1261, 68
C.B.R. (5th) 1, par. 211). Par conséquent, pour le
tribunal, les ordonnances étaient clairement de nature pécuniaire. Je ne vois aucune erreur de droit ni
aucune raison de modifier ces conclusions de fait.
Je suis d’avis de rejeter le pourvoi avec dépens.
I. Facts and Procedural History
I. Faits et historique judiciaire
[5] For over 100 years, AbitibiBowater Inc. and
its affiliated or predecessor companies (together,
“Abitibi”) were involved in industrial activity in
Newfoundland and Labrador. In 2008, Abitibi announced the closure of a mill that was its last operation in that province.
[5] Pendant plus d’une centaine d’années,
AbitibiBowater Inc., et ses auteurs ou sociétés filiales (ensemble, « Abitibi ») ont poursuivi des activités industrielles à Terre-Neuve-et-Labrador. En
2008, Abitibi a annoncé la fermeture de la dernière
des scieries qu’elle exploitait dans cette province.
[6] Within two weeks of the announcement, the
Province passed the Abitibi-Consolidated Rights
and Assets Act, S.N.L. 2008, c. A-1.01 (“Abitibi
Act”), which immediately transferred most of
Abitibi’s property in Newfoundland and Labrador
to the Province and denied Abitibi any legal remedy for this expropriation.
[6] Dans les deux semaines qui ont suivi
cette annonce, la province a adopté l’AbitibiConsolidated Rights and Assets Act, S.N.L. 2008,
ch. A‑1.01 (« Abitibi Act »), qui transférait immédiatement à la province la plus grande partie des
biens d’Abitibi situés à Terre-Neuve-et-Labrador et
privait la société de tous recours judiciaires en relation avec cette expropriation.
[7] The closure of its mill in Newfoundland and
Labrador was one of many decisions Abitibi made
in a period of general financial distress affecting its
activities both in the United States and in Canada.
It filed for insolvency protection in the United
States on April 16, 2009. It also sought a stay of
proceedings under the CCAA in the Superior Court
of Quebec, as its Canadian head office was located
in Montréal. The CCAA stay was ordered on April
17, 2009.
[7] La fermeture de sa scierie à Terre-Neuve-etLabrador est l’une des nombreuses décisions prises par Abitibi dans une période où de grandes
difficultés financières touchaient ses activités au
Canada et aux États-Unis. Le 16 avril 2009, elle a
présenté une demande de protection contre l’insolvabilité aux États-Unis. Elle a également demandé
à la Cour supérieure du Québec, à Montréal, où elle
a son siège social au Canada, une suspension des
procédures en vertu de la LACC. La suspension a
été ordonnée le 17 avril 2009.
[8] In the same month, Abitibi also filed a notice of intent to submit a claim to arbitration under NAFTA (the North American Free Trade
Agreement Between the Government of Canada,
the Government of the United Mexican States and
the Government of the United States of America,
[8] Au cours du même mois, Abitibi a aussi déposé un avis d’intention de soumettre une plainte à
l’arbitrage en vertu de l’ALENA (Accord de libreéchange nord-américain entre le gouvernement du
Canada, le gouvernement des États-Unis d’Amérique et le gouvernement des États-Unis du Mexique,
[2012] 3 R.C.S.
t.-n.-et-labrador
453
Can. T.S. 1994 No. 2) for losses resulting from the
Abitibi Act, which, according to Abitibi, exceeded
$300 million.
R.T. Can. 1994 no 2) relativement à des pertes découlant de l’application de l’Abitibi Act, lesquelles
totalisaient, selon Abitibi, une somme supérieure à
300 millions de dollars.
[9] On November 12, 2009, the Province’s Minister of Environment and Conservation (“Minister”) issued five orders (the “EPA Orders”) under
s. 99 of the Environmental Protection Act, S.N.L.
2002, c. E‑14.2 (“EPA”). The EPA Orders required
Abitibi to submit remediation action plans to the
Minister for five industrial sites, three of which had
been expropriated, and to complete the approved
remediation actions. The CCAA judge estimated
the cost of implementing these plans to be from
“the mid-to-high eight figures” to “several times
higher” (para. 81).
[9] Le 12 novembre 2009, le ministre provincial
de l’Environnement et de la Conservation (« ministre ») a prononcé, en vertu de l’art. 99 de l’Environmental Protection Act, S.N.L. 2002, ch.
E‑14.2 (« EPA »), cinq ordonnances (les « ordonnances EPA ») contraignant Abitibi à présenter au
ministre des plans de restauration pour cinq sites
industriels, dont trois avaient été expropriés, et à
réaliser les plans de restauration approuvés. Le
juge chargé de l’instance instituée sous le régime
de la LACC a évalué les coûts de la mise en œuvre
de ces plans à une somme se situant [TRADUCTION]
« entre cinquante et cent millions de dollars », ou
« plusieurs fois plus élevée » (par. 81).
[10] On the day it issued the EPA Orders, the
Province brought a motion for a declaration that
a claims procedure order issued under the CCAA
in relation to Abitibi’s proposed reorganization
did not bar the Province from enforcing the EPA
Orders. The Province argued — and still argues —
that non-monetary statutory obligations are not
“claims” under the CCAA and hence cannot be
stayed and be subject to a claims procedure order.
It further submits that Parliament lacks the constitutional competence under its power to make laws
in relation to bankruptcy and insolvency to stay orders that are validly made in the exercise of a provincial power.
[10] Le jour même où elle émettait les ordonnances EPA, la province a demandé par requête
un jugement déclarant qu’une ordonnance relative
à la procédure de réclamations rendue aux termes
de la LACC dans le cadre de la réorganisation proposée d’Abitibi n’empêchait pas la province d’exécuter les ordonnances EPA. La province a soutenu — et soutient toujours — que des obligations
légales de nature non pécuniaire ne constituent pas
des « réclamations » au sens de la LACC et que
leur exécution ne peut donc être suspendue ni être
assujettie à une ordonnance relative à la procédure
de réclamations. Elle fait de plus valoir que le pouvoir du Parlement de légiférer en matière de faillite
et d’insolvabilité ne lui confère pas la compétence
constitutionnelle pour suspendre l’application des
ordonnances prononcées dans l’exercice valide de
pouvoirs provinciaux.
[11] Abitibi contested the motion and sought a
declaration that the EPA Orders were stayed and
that they were subject to the claims procedure order. It argued that the EPA Orders were monetary
in nature and hence fell within the definition of the
word “claim” in the claims procedure order.
[11] Abitibi a contesté la requête et a demandé
un jugement déclarant que les ordonnances EPA
avaient été suspendues et qu’elles étaient assujetties
à l’ordonnance relative à la procédure de réclamations. Abitibi a soutenu que les ordonnances EPA
étaient de nature pécuniaire et qu’elles étaient donc
visées par la définition du terme « réclamation »
utilisé dans l’ordonnance relative à la procédure de
réclamations.
454
nfld. and labrador
[2012] 3 S.C.R.
[12] Gascon J. of the Quebec Superior Court, sitting as a CCAA court, dismissed the Province’s
motion. He found that he had the authority to
characterize the orders as “claims” if the underlying regulatory obligations “remain[ed], in a particular fact pattern, truly financial and monetary
in nature” (para. 148). He declared that the EPA
Orders were stayed by the initial stay order and
were not subject to the exception found in that order. He also declared that the filing by the Province
of any claim based on the EPA Orders was subject
to the claims procedure order, and reserved to the
Province the right to request an extension of time to
assert a claim under the claims procedure order and
to Abitibi the right to contest such a request.
[12] Le juge Gascon de la Cour supérieure du
Québec, siégeant aux termes de la LACC, a rejeté
la requête de la province. Il a statué qu’il avait le
pouvoir de qualifier les ordonnances de « réclamations » si les obligations légales sous-jacentes
[TRADUCTION] « demeur[aient], dans une situation factuelle particulière, de nature véritablement
financière et pécuniaire » (par. 148). Il a déclaré
que les ordonnances EPA avaient été suspendues
en vertu de l’ordonnance de suspension initiale et
qu’elles n’étaient pas visées par l’exception énoncée
dans cette ordonnance. Il a également déclaré que
la présentation, par la province, de toute réclamation fondée sur les ordonnances EPA était assujettie
à l’ordonnance relative à la procédure de réclamations; il a réservé à la province le droit de demander
par requête une prorogation du délai pour présenter
une réclamation en vertu de la procédure de réclamations et a confirmé le droit d’Abitibi de contester
une telle requête.
[13] In the Court of Appeal, Chamberland J.A.
denied the Province leave to appeal (2010 QCCA
965, 68 C.B.R. (5th) 57). In his view, the appeal had
no reasonable chance of success, because Gascon
J. had found as a fact that the EPA Orders were
financial or monetary in nature. Chamberland J.A.
also found that no constitutional issue arose, given
that the Superior Court judge had merely characterized the orders in the context of the restructuring
process; the judgment did not ‘“immunise’ Abitibi
from compliance with the EPA Orders” (para. 33).
Finally, he noted that Gascon J. had reserved the
Province’s right to request an extension of time to
file a claim in the CCAA process.
[13] En Cour d’appel, le juge Chamberland a rejeté la demande d’autorisation d’appel présentée par
la province (2010 QCCA 965, 68 C.B.R. (5th) 57).
À son avis, l’appel n’avait aucune chance raisonnable de succès parce que le juge Gascon avait conclu,
comme question de faits, que les ordonnances EPA
étaient de nature financière ou pécuniaire. Le
juge Chamberland a également estimé qu’aucune
question constitutionnelle ne se posait, car le
juge de la Cour supérieure n’avait fait que qualifier les ordonnances dans le contexte du processus
de restructuration; le jugement ne [TRADUCTION]
« “soustrayait” pas Abitibi à son obligation de se
conformer aux ordonnances EPA » (par. 33). Enfin,
il a fait remarquer que le juge Gascon avait réservé
à la province le droit de demander la prorogation
de délai pour produire une réclamation en vertu de
la LACC.
II. Positions of the Parties
II. Thèses des parties
[14] The Province argues that the CCAA court
erred in interpreting the relevant CCAA provisions
in a way that nullified the EPA, and that the interpretation is inconsistent with both the ancillary
powers doctrine and the doctrine of interjurisdictional immunity. The Province further submits
[14] La province soutient que le tribunal de première instance a commis l’erreur d’interpréter les
dispositions applicables de la LACC de façon à invalider l’EPA et que cette interprétation est incompatible tant avec la doctrine des pouvoirs accessoires qu’avec celle de la protection des compétences
[2012] 3 R.C.S.
t.-n.-et-labrador
455
that, in any event, the EPA Orders are not “claims”
within the meaning of the CCAA. It takes the position that “any plan of compromise and arrangement that Abitibi might submit for court approval
must make provision for compliance with the EPA
Orders” (A.F., at para. 32).
exclusives. La province fait de plus valoir que, de
toute façon, les ordonnances EPA ne constituent
pas des « réclamations » au sens de la LACC. Elle
soutient que [TRADUCTION] « tout plan de transaction et d’arrangement qu’Abitibi pourrait soumettre
à l’approbation du tribunal doit prévoir qu’[Abitibi]
doit se conformer aux ordonnances EPA » (m.a.,
par. 32).
[15] Abitibi contends that the factual record does
not provide a basis for applying the constitutional
doctrines. It relies on the CCAA court’s findings
of fact, particularly the finding that the Province’s
intent was to establish the basis for a monetary
claim. Abitibi submits that the true issue is whether a province that has a monetary claim against an
insolvent company can obtain a preference against
other unsecured creditors by exercising its regulatory power.
[15] Abitibi soutient que l’application des doctrines constitutionnelles ne trouve aucun fondement dans les faits du dossier. Elle appuie sa position sur les conclusions de fait tirées par le tribunal
de première instance, plus particulièrement celles
où le tribunal conclut que l’intention de la province
était d’établir le fondement d’une réclamation pécuniaire. Abitibi plaide que la véritable question
est de savoir si, par l’exercice de son pouvoir de
réglementation, une province ayant une réclamation pécuniaire à faire valoir contre une entreprise
insolvable peut obtenir une préférence à l’encontre
d’autres créanciers non garantis.
III. Constitutional Questions
III. Questions constitutionnelles
[16] At the Province’s request, the Chief Justice
stated the following constitutional questions:
[16] À la demande de la province, la Juge en
chef a formulé les questions constitutionnelles suivantes :
1.Is the definition of “claim” in s. 2(1) of the
Companies’ Creditors Arrangement Act, R.S.C. 1985,
c. C‑36, ultra vires the Parliament of Canada or constitutionally inapplicable to the extent this definition
includes statutory duties to which the debtor is subject
pursuant to s. 99 of the Environmental Protection Act,
S.N.L. 2002, c. E‑14.2?
1. La définition d’une « réclamation » énoncée au par.
2(1) de la Loi sur les arrangements avec les créanciers
des compagnies, L.R.C. 1985, ch. C-36, outrepasse-t-elle
les pouvoirs du Parlement du Canada ou est-elle constitutionnellement inapplicable dans la mesure où elle englobe les obligations légales auxquelles le débiteur est
assujetti en application de l’art. 99 de l’Environmental
Protection Act, S.N.L. 2002, ch. E‑14.2?
2.Is s. 11 of the Companies’ Creditors Arrangement
Act, R.S.C. 1985, c. C-36, ultra vires the Parliament
of Canada or constitutionally inapplicable to the extent this section gives courts jurisdiction to bar or extinguish statutory duties to which the debtor is subject
pursuant to s. 99 of the Environmental Protection Act,
S.N.L. 2002, c. E‑14.2?
2. L’article 11 de la Loi sur les arrangements avec les
créanciers des compagnies, L.R.C. 1985, ch. C-36,
outrepasse‑t‑il les pouvoirs du Parlement du Canada
ou est-il constitutionnellement inapplicable dans la mesure où il confère aux tribunaux la compétence pour
libérer le débiteur des obligations légales auxquelles
il est ou pourrait être assujetti en application de l’art.
99 de l’Environmental Protection Act, S.N.L. 2002,
ch. E‑14.2?
3.Is s. 11 of the Companies’ Creditors Arrangement
Act, R.S.C. 1985, c. C-36, ultra vires the Parliament
of Canada or constitutionally inapplicable to the
extent this section gives courts jurisdiction to
3. L’article 11 de la Loi sur les arrangements avec les
créanciers des compagnies, L.R.C. 1985, ch. C‑36,
outrepasse‑t‑il les pouvoirs du Parlement du Canada ou
est-il constitutionnellement inapplicable dans la mesure
456
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[2012] 3 S.C.R.
review the exercise of ministerial discretion under
s. 99 of the Environmental Protection Act, S.N.L. 2002,
c. E‑14.2?
où il confère aux tribunaux la compétence pour réviser l’exercice du pouvoir discrétionnaire conféré au ministre par l’art. 99 de l’Environmental Protection Act,
S.N.L. 2002, ch. E‑14.2?
[17] I note that the question whether a CCAA
court has constitutional jurisdiction to stay a provincial order that is not a monetary claim does not
arise here, because the stay order in this case did
not affect non-monetary orders. However, the question may arise in other cases. In 2007, Parliament
expressly gave CCAA courts the power to stay
regulatory orders that are not monetary claims by
amending the CCAA to include the current version of s. 11.1(3) (An Act to amend the Bankruptcy
and Insolvency Act, the Companies’ Creditors
Arrangement Act, the Wage Earner Protection
Program Act and chapter 47 of the Statutes of
Canada, 2005, S.C. 2007, c. 36, s. 65) (the “2007
amendments”). Thus, future cases may give courts
the opportunity to consider the question raised by
the Province in an appropriate factual context. The
only constitutional question that needs to be answered in this case concerns the jurisdiction of a
CCAA court to determine whether an environmental order that is not framed in monetary terms is in
fact a monetary claim.
[17] Je souligne que la question de savoir si,
aux termes de la LACC, un tribunal a compétence
constitutionnelle pour suspendre l’application
d’une ordonnance provinciale qui ne constitue
pas une réclamation pécuniaire ne se pose pas en
l’espèce parce que l’ordonnance de suspension en
cause ne visait pas ces ordonnances. La question
pourrait toutefois se poser dans d’autres affaires. En 2007, par l’ajout du par. 11.1(3) de la LACC,
le législateur fédéral a explicitement conféré aux
tribunaux compétents aux termes de la LACC le
pouvoir de suspendre l’application des ordonnances d’un organisme administratif qui ne constituent
pas des réclamations pécuniaires (Loi modifiant la
Loi sur la faillite et l’insolvabilité, la Loi sur les
arrangements avec les créanciers des compagnies,
la Loi sur le Programme de protection des salariés et le chapitre 47 des Lois du Canada (2005),
L.C. 2007, ch. 36, art. 65) (les « modifications
de 2007 »). Ainsi, les tribunaux auront l’occasion
d’analyser la question soulevée par la province lorsque le contexte factuel s’y prêtera. La seule question constitutionnelle qui requiert une réponse en
l’espèce a trait à la compétence d’un tribunal, aux
termes de la LACC, de déterminer si une ordonnance environnementale qui n’est pas formulée en
termes pécuniaires constitue, en fait, une réclamation pécuniaire.
[18] Processing creditors’ claims against an
insolvent debtor in an equitable and orderly manner
is at the heart of insolvency legislation, which falls
under a head of power attributed to Parliament.
Rules concerning the assessment of creditors’
claims, such as the determination of whether a
creditor has a monetary claim, relate directly to the
equitable and orderly treatment of creditors in an
insolvency process. There is no need to perform a
detailed analysis of the pith and substance of the
provisions on the assessment of claims in insolvency matters to conclude that the federal legislation governing the characterization of an order
as a monetary claim is valid. Because the provisions relate directly to Parliament’s jurisdiction,
[18] Le traitement équitable et ordonné des réclamations présentées par des créanciers contre un
débiteur insolvable se situe au cœur même de la
législation en matière d’insolvabilité, un domaine
de compétence attribué au législateur fédéral.
L’établissement de règles relatives à l’évaluation des
réclamations des créanciers, comme celle permettant de déterminer si un créancier fait valoir une
réclamation pécuniaire, concerne directement le
traitement équitable et ordonné des créanciers dans
le cadre d’un processus établi en matière d’insolvabilité. Il n’est pas nécessaire d’analyser en détail le
caractère véritable des dispositions régissant l’évaluation des réclamations en matière d’insolvabilité
pour conclure à la validité du texte législatif fédéral
[2012] 3 R.C.S.
t.-n.-et-labrador
457
the ancillary powers doctrine is not relevant to this
case. I also find that the interjurisdictional immunity doctrine is not applicable. A finding that a
claim of an environmental creditor is monetary in
nature does not interfere in any way with the creditor’s activities. Its claim is simply subjected to the
insolvency process.
permettant d’établir qu’une ordonnance constitue
une réclamation pécuniaire. L’application de la
doctrine des pouvoirs accessoires n’est pas pertinente en l’espèce car les dispositions en cause sont
directement reliées à la compétence du législateur
fédéral. J’estime également que la doctrine de la
protection des compétences exclusives ne s’applique pas en l’espèce. Une conclusion selon laquelle
un créancier œuvrant dans le domaine de l’environnement détient une réclamation pécuniaire ne
modifie en rien les activités de ce créancier. La
réclamation de ce dernier est simplement assujettie
au processus d’insolvabilité.
[19] What the Province is actually arguing is
that courts should consider the form of an order
rather than its substance. I see no reason why the
Province’s choice of order should not be scrutinized
to determine whether the form chosen is consistent with the order’s true purpose as revealed by the
Province’s own actions. If the Province’s actions
indicate that, in substance, it is asserting a provable claim within the meaning of federal legislation, then that claim can be subjected to the insolvency process. Environmental claims do not have
a higher priority than is provided for in the CCAA.
Considering substance over form prevents a regulatory body from artificially creating a priority higher
than the one conferred on the claim by federal legislation. This Court recognized long ago that a province cannot disturb the priority scheme established
by the federal insolvency legislation (Husky Oil
Operations Ltd. v. Minister of National Revenue,
[1995] 3 S.C.R. 453). Environmental claims are
given a specific, and limited, priority under the
CCAA. To exempt orders which are in fact monetary claims from the CCAA proceedings would
amount to conferring upon provinces a priority
higher than the one provided for in the CCAA.
[19] Ce que soutient en fait la province, c’est
que les tribunaux devraient examiner la forme des
ordonnances plutôt que leur substance. Je ne vois
aucune raison empêchant l’examen du choix par la
province d’un type d’ordonnance donnée afin de
déterminer si la forme choisie concorde avec l’objectif véritable qui se dégage des gestes qu’elle a
posés. Si ces gestes indiquent qu’elle fait effectivement valoir une réclamation prouvable au sens de la
législation fédérale, alors cette réclamation peut être
assujettie au processus d’insolvabilité. Les réclamations en matière d’environnement ne bénéficient pas
d’un rang supérieur à celui prévu par les dispositions
de la LACC. Privilégier l’examen de la substance
d’une ordonnance plutôt que de sa forme permet
d’éviter qu’un organisme administratif obtienne de
façon artificielle une priorité de rang supérieure à
celle que la législation fédérale attribue à la réclamation. Notre Cour a depuis longtemps reconnu
qu’une province ne pouvait perturber les priorités
établies par le régime fédéral d’insolvabilité (Husky
Oil Operations Ltd. c. Ministre du Revenu national,
[1995] 3 R.C.S. 453). La LACC établit une priorité
précise et limitée à l’égard des réclamations en
matière environnementale. Le fait de soustraire aux
procédures d’insolvabilité les ordonnances qui sont
en fait des réclamations pécuniaires équivaudrait à
accorder aux provinces une priorité d’un rang supérieur à celui prévu par la LACC.
IV. Claims Under the CCAA
IV. Réclamations sous le régime de la LACC
[20] Several provisions of the CCAA have
been amended since Abitibi filed for insolvency
[20] Plusieurs dispositions de la LACC ont été
modifiées depuis qu’Abitibi a présenté une demande
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[2012] 3 S.C.R.
protection. Except where otherwise indicated, the
provisions I refer to are those that were in force
when the stay was ordered.
de protection contre l’insolvabilité. À moins d’indication contraire de ma part, les dispositions que
je cite sont celles qui étaient en vigueur lorsque la
suspension des procédures a été ordonnée.
[21] One of the central features of the CCAA
scheme is the single proceeding model, which ensures that most claims against a debtor are entertained in a single forum. Under this model, the
court can stay the enforcement of most claims
against the debtor’s assets in order to maintain
the status quo during negotiations with the creditors. When such negotiations are successful, the
creditors typically accept less than the full amounts
of their claims. Claims have not necessarily accrued or been liquidated at the outset of the insolvency proceeding, and they sometimes have to be
assessed in order to determine the monetary value
that will be subject to compromise.
[21] Une des caractéristiques principales du régime créé par la LACC est de traiter la presque totalité des réclamations contre un débiteur suivant
une procédure unique devant un même tribunal.
En vertu de ce modèle, le tribunal peut ordonner
la suspension de la plupart des mesures d’exécution
engagées contre les actifs du débiteur de façon à
maintenir le statu quo durant la négociation avec
les créanciers. Lorsque la négociation réussit, les
créanciers consentent habituellement à recevoir
moins que le plein montant de leurs réclamations,
lesquelles ne sont pas nécessairement exigibles ou
liquidées dès le début des procédures d’insolvabilité. Ces réclamations doivent parfois être évaluées
afin d’établir la valeur pécuniaire qui fera l’objet du
compromis.
[22] Section 12 of the CCAA establishes the basic
rules for ascertaining whether an order is a claim
that may be subjected to the insolvency process:
[22] L’article 12 de la LACC énonce les règles de
base pour déterminer si une ordonnance constitue
une réclamation pouvant être assujettie au processus applicable en matière d’insolvabilité :
12. (1) [Definition of “claim”] For the purposes of
this Act, “claim” means any indebtedness, liability or
obligation of any kind that, if unsecured, would be a
debt provable in bankruptcy within the meaning of the
Bankruptcy and Insolvency Act.
12. (1) [Définition de « réclamation »] Pour l’application de la présente loi, « réclamation » s’entend de
toute dette, tout engagement ou toute obligation d’un
genre quelconque qui, s’il n’était pas garanti, constituerait une dette prouvable en matière de faillite au sens de
la Loi sur la faillite et l’insolvabilité.
(2) [Determination of amount of claim] For the purposes of this Act, the amount represented by a claim of
any secured or unsecured creditor shall be determined
as follows:
(2) [Détermination du montant de la réclamation]
Pour l’application de la présente loi, le montant représenté par une réclamation d’un créancier garanti ou
chirographaire est déterminé de la façon suivante :
(a) the amount of an unsecured claim shall be the
amount
a) le montant d’une réclamation non garantie est le
montant :
. . .
(iii)in the case of any other company, proof of
which might be made under the Bankruptcy and
Insolvency Act, but if the amount so provable is
not admitted by the company, the amount shall
be determined by the court on summary application by the company or by the creditor; . . .
. . .
(iii)dans le cas de toute autre compagnie, dont
la preuve pourrait être établie en vertu de la Loi
sur la faillite et l’insolvabilité, mais si le montant ainsi prouvable n’est pas admis par la compagnie, ce montant est déterminé par le tribunal
sur demande sommaire par la compagnie ou le
créancier;
[2012] 3 R.C.S.
t.-n.-et-labrador
459
[23] Section 12 of the CCAA refers to the rules of
the Bankruptcy and Insolvency Act, R.S.C. 1985, c.
B‑3 (“BIA”). Section 2 of the BIA defines a claim
provable in bankruptcy:
[23] L’article 12 de la LACC renvoie aux règles
de la Loi sur la faillite et l’insolvabilité, L.R.C.
1985, ch. B‑3 (« LFI »). L’article 2 de la LFI définit ainsi une réclamation prouvable en matière de
faillite :
“claim provable in bankruptcy”, “provable claim” or
“claim provable” includes any claim or liability
provable in proceedings under this Act by a creditor;
« réclamation prouvable en matière de faillite » ou
« réclamation prouvable » Toute réclamation ou
créance pouvant être prouvée dans des procédures
intentées sous l’autorité de la présente loi par un
créancier.
[24] This definition is completed by s. 121(1) of
the BIA:
[24] Cette définition est complétée par le par.
121(1) de la LFI :
121. (1) All debts and liabilities, present or future, to
which the bankrupt is subject on the day on which the
bankrupt becomes bankrupt or to which the bankrupt
may become subject before the bankrupt’s discharge
by reason of any obligation incurred before the day on
which the bankrupt becomes bankrupt shall be deemed
to be claims provable in proceedings under this Act.
121. (1) Toutes créances et tous engagements, présents ou futurs, auxquels le failli est assujetti à la date
à laquelle il devient failli, ou auxquels il peut devenir
assujetti avant sa libération, en raison d’une obligation
contractée antérieurement à cette date, sont réputés des
réclamations prouvables dans des procédures entamées
en vertu de la présente loi.
[25] Sections 121(2) and 135(1.1) of the BIA offer additional guidance for the determination of
whether an order is a provable claim:
[25] Les paragraphes 121(2) et 135(1.1) de la LFI
donnent des indications additionnelles lorsqu’il
s’agit de déterminer si une ordonnance constitue
une réclamation prouvable :
121. . . .
121. . . .
(2)The determination whether a contingent or unliquidated claim is a provable claim and the valuation of
such a claim shall be made in accordance with section
135.
(2)La question de savoir si une réclamation éventuelle ou non liquidée constitue une réclamation prouvable et, le cas échéant, son évaluation sont décidées en
application de l’article 135.
135. . . .
135. . . .
(1.1) The trustee shall determine whether any contingent claim or unliquidated claim is a provable claim,
and, if a provable claim, the trustee shall value it, and
the claim is thereafter, subject to this section, deemed a
proved claim to the amount of its valuation.
(1.1) Le syndic décide si une réclamation éventuelle
ou non liquidée est une réclamation prouvable et, le cas
échéant, il l’évalue; sous réserve des autres dispositions
du présent article, la réclamation est dès lors réputée
prouvée pour le montant de l’évaluation.
[26] These provisions highlight three requirements that are relevant to the case at bar. First,
there must be a debt, a liability or an obligation to
a creditor. Second, the debt, liability or obligation
must be incurred before the debtor becomes bankrupt. Third, it must be possible to attach a monetary value to the debt, liability or obligation. I will
examine each of these requirements in turn.
[26] Ces dispositions font ressortir trois conditions pertinentes à la présente affaire. Premièrement, on doit être en présence d’une dette, d’un
engagement ou d’une obligation envers un créancier.
Deuxièmement, la dette, l’engagement ou l’obligation doit avoir pris naissance avant que le débiteur
ne devienne failli. Troisièmement, il doit être possible d’attribuer une valeur pécuniaire à cette dette,
cet engagement ou cette obligation. Je vais examiner
chacune de ces conditions à tour de rôle.
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[2012] 3 S.C.R.
[27] The BIA’s definition of a provable claim,
which is incorporated by reference into the
CCAA, requires the identification of a creditor.
Environmental statutes generally provide for the
creation of regulatory bodies that are empowered
to enforce the obligations the statutes impose. Most
environmental regulatory bodies can be creditors
in respect of monetary or non-monetary obligations imposed by the relevant statutes. At this first
stage of determining whether the regulatory body
is a creditor, the question whether the obligation
can be translated into monetary terms is not yet relevant. This issue will be broached later. The only
determination that has to be made at this point is
whether the regulatory body has exercised its enforcement power against a debtor. When it does so,
it identifies itself as a creditor, and the requirement
of this stage of the analysis is satisfied.
[27] La définition de réclamation prouvable établie par la LFI et incorporée par renvoi à la LACC
exige qu’une personne ait qualité de créancier. Les
lois régissant l’environnement pourvoient généralement à la création d’un organisme chargé de voir
au respect des obligations qui y sont prévues. La
plupart des organismes administratifs peuvent agir
à titre de créanciers en relation avec les obligations pécuniaires ou non pécuniaires imposées
par ces lois. À cette première étape qui consiste
à déterminer si un organisme administratif est un
créancier, il n’est pas encore pertinent de décider
si l’obligation peut être formulée en termes pécuniaires. Cette question sera abordée à un stade ultérieur. À cette étape, la seule question à trancher est
de savoir si l’organisme administratif a exercé, à
l’encontre d’un débiteur, son pouvoir de faire appliquer la loi. Lorsqu’il le fait, il s’identifie alors
comme créancier et la condition de cette étape est
espectée.
[28] The enquiry into the second requirement
is based on s. 121(1) of the BIA, which imposes a
time limit on claims. A claim must be founded on
an obligation that was “incurred before the day on
which the bankrupt becomes bankrupt”. Because
the date when environmental damage occurs is often difficult to ascertain, s. 11.8(9) of the CCAA
provides more temporal flexibility for environmental claims:
[28] L’examen de la seconde condition repose sur le par. 121(1) de la LFI qui impose que la
réclamation ait pris naissance dans un délai donné. Celle-ci doit se fonder sur une obligation
« contractée antérieurement à cette date [la date
à laquelle le failli devient failli] ». Comme il est
souvent difficile d’établir la date à laquelle un
dommage lié à l’environnement est survenu, le
par. 11.8(9) de la LACC prévoit une certaine flexibilité pour ce qui est des réclamations en matière
d’environnement :
11.8 . . .
11.8 . . .
(9)A claim against a debtor company for costs of
remedying any environmental condition or environmental damage affecting real property of the company
shall be a claim under this Act, whether the condition
arose or the damage occurred before or after the date on
which proceedings under this Act were commenced.
(9)La réclamation pour les frais de réparation du
fait ou dommage lié à l’environnement et touchant un
bien immeuble de la compagnie débitrice constitue une
réclamation, que la date du fait ou dommage soit antérieure ou postérieure à celle où des procédures sont
intentées au titre de la présente loi.
[29] The creditor’s claim will be exempt from the
single proceeding requirement if the debtor’s corresponding obligation has not arisen as of the time
limit for inclusion in the insolvency process. This
could apply, for example, to a debtor’s statutory obligations relating to polluting activities that continue after the reorganization, because in such cases,
[29] La réclamation du créancier sera exemptée
de l’exigence découlant de la procédure unique si
l’obligation correspondante du débiteur n’a pas pris
naissance dans le délai fixé pour que la réclamation soit incluse dans le processus d’insolvabilité. À
titre d’exemple, cela pourrait s’appliquer aux obligations que la loi impose à un débiteur concernant
[2012] 3 R.C.S.
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461
the damage continues to be sustained after the reorganization has been completed.
ses activités polluantes qui se poursuivent après la
réorganisation, parce qu’en pareilles circonstances, des dommages sont encore causés après que la
réorganisation ait été complétée.
[30] With respect to the third requirement, that
it be possible to attach a monetary value to the obligation, the question is whether orders that are
not expressed in monetary terms can be translated
into such terms. I note that when a regulatory body
claims an amount that is owed at the relevant date,
that is, when it frames its order in monetary terms,
the court does not need to make this determination,
because what is being claimed is an “indebtedness”
and therefore clearly falls within the meaning of
“claim” as defined in s. 12(1) of the CCAA.
[30] En ce qui concerne la troisième condition,
soit qu’il doit être possible d’attribuer à l’obligation
une valeur pécuniaire, la question est de savoir si
des ordonnances qui ne sont pas formulées en termes pécuniaires peuvent être formulées en de tels
termes. Je souligne que lorsqu’un organisme administratif réclame une somme qui est due à la date
pertinente, il formule ainsi son ordonnance en termes pécuniaires. Le tribunal n’a alors aucune détermination à faire à cette étape car ce qui est réclamé
est une « dette » et est, par conséquent, clairement
visé par la définition d’une « réclamation » prévue
au par. 12(1) de la LACC.
[31] However, orders, which are used to address various types of environmental challenges,
may come in many forms, including stop, control, preventative, and clean-up orders (D. Saxe,
“Trustees’ and Receivers’ Environmental Liability
Update” (1998), 49 C.B.R. (3d) 138, at p. 141).
When considering an order that is not framed in
monetary terms, courts must look at its substance
and apply the rules for the assessment of claims.
[31] Toutefois, parce qu’elles sont utilisées pour
traiter divers enjeux environnementaux, les ordonnances peuvent se présenter sous plusieurs formes et peuvent viser notamment la cessation ou le
contrôle d’une activité, la prévention et la décontamination (D. Saxe, « Trustees’ and Receivers’
Environnmental Liability Update » (1998), 49
C.B.R. (3d) 138, p. 141). Lorsqu’ils analysent une
ordonnance qui n’est pas formulée en des termes
pécuniaires, les tribunaux doivent en examiner la
substance et appliquer les règles régissant l’évaluation des réclamations.
[32] Parliament recognized that regulatory bodies
sometimes have to perform remediation work (see
House of Commons, Evidence of the Standing
Committee on Industry, No. 16, 2nd Sess., 35th
Parl., June 11, 1996). When one does so, its claim
with respect to remediation costs is subject to the
insolvency process, but the claim is secured by a
charge on the contaminated real property and certain other related property and benefits from a priority (s. 11.8(8) CCAA). Thus, Parliament struck a
balance between the public’s interest in enforcing
environmental regulations and the interest of thirdparty creditors in being treated equitably.
[32] Le législateur fédéral reconnaît que les organismes administratifs doivent à l’occasion exécuter des travaux de décontamination (voir Chambre
des communes, Témoignages du Comité permanent de l’industrie, no 16, 2e sess., 35e lég., 11 juin
1996). En pareil cas, la réclamation relative aux
frais de décontamination est assujettie à la procédure de réclamations en matière d’insolvabilité
mais elle est garantie par une charge réelle grevant
l’immeuble contaminé et certains immeubles connexes et bénéficie d’un rang prioritaire (par. 11.8(8)
LACC). Ainsi, le législateur a établi un équilibre
entre l’intérêt du public à l’égard de l’application de
la réglementation environnementale et les intérêts
des tiers créanciers qui doivent être traités de façon
équitable.
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[2012] 3 S.C.R.
[33] If Parliament had intended that the debtor
always satisfy all remediation costs, it would have
granted the Crown a priority with respect to the
totality of the debtor’s assets. In light of the legislative history and the purpose of the reorganization
process, the fact that the Crown’s priority under
s. 11.8(8) of the CCAA is limited to the contaminated property and certain related property leads
me to conclude that to exempt environmental orders
would be inconsistent with the insolvency legislation. As deferential as courts may be to regulatory
bodies’ actions, they must apply the general rules.
[33] Si le législateur fédéral avait eu l’intention
d’obliger le débiteur à supporter dans tous les cas
tous les coûts des travaux de décontamination, il
aurait accordé à l’État une priorité applicable à la
totalité des actifs du débiteur. Compte tenu de l’historique des dispositions législatives et des objectifs
du processus de réorganisation, le fait que la priorité de l’État aux termes du par. 11.8(8) de la LACC
soit limitée au bien contaminé et à certains biens
liés m’amène à conclure qu’une exemption à l’égard
des ordonnances environnementales serait incompatible avec la législation en matière d’insolvabilité. Aussi respectueux soient-ils des mesures prises par les organismes administratifs, les tribunaux
sont tenus d’appliquer les règles générales.
[34] Unlike in proceedings governed by the common law or the civil law, a claim may be asserted
in insolvency proceedings even if it is contingent
on an event that has not yet occurred (for the common law, see Canada v. McLarty, 2008 SCC 26,
[2008] 2 S.C.R. 79, at paras. 17-18; for the civil law,
see arts. 1497, 1508 and 1513 of the Civil Code of
Québec, S.Q. 1991, c. 64). Thus, the broad definition of “claim” in the BIA includes contingent and
future claims that would be unenforceable at common law or in the civil law. As for unliquidated
claims, a CCAA court has the same power to assess
their amounts as would a court hearing a case in a
common law or civil law context.
[34] Contrairement à l’approche qui prévaut
dans le contexte des procédures régies par la common law ou le droit civil, il est possible de faire
valoir une réclamation dans le cadre de procédures
d’insolvabilité même si elle dépend d’un événement
non encore survenu (en common law, voir Canada
c. McLarty, 2008 CSC 26, [2008] 2 R.C.S. 79,
par. 17-18; en droit civil, voir les art. 1497, 1508 et
1513 du Code civil du Québec, L.Q. 1991, ch. 64).
Ainsi, la définition générale de « réclamation » de
la LFI englobe des réclamations éventuelles et futures qui seraient inexécutoires en common law ou
en droit civil. En ce qui concerne les réclamations
non liquidées, le tribunal chargé de l’application de
la LACC a le même pouvoir d’évaluer leur montant
qu’un tribunal saisi d’une affaire sous le régime de
la common law ou du droit civil.
[35] The reason the BIA and the CCAA include a
broad range of claims is to ensure fairness between
creditors and finality in the insolvency proceeding
for the debtor. In a corporate liquidation process, it
is more equitable to allow as many creditors as possible to participate in the process and share in the
liquidation proceeds. This makes it possible to include creditors whose claims have not yet matured
when the corporate debtor files for bankruptcy, and
thus avert a situation in which they would be faced
with an inactive debtor that cannot satisfy a judgment. The rationale is slightly different in the context of a corporate proposal or reorganization. In
such cases, the broad approach serves not only to
[35] C’est pour assurer l’équité entre les créanciers ainsi que, pour le débiteur, le caractère définitif de la procédure d’insolvabilité que la LFI et
la LACC englobent un large éventail de réclamations. Dans le cadre de la liquidation d’une société, il est plus équitable de permettre au plus grand
nombre possible de créanciers de participer au processus et de se partager le produit de la liquidation. Cela permet d’inclure les créanciers dont les
réclamations ne sont pas venues à échéance lorsque le débiteur corporatif devient failli, et ainsi
éviter que, ayant cessé ses activités, le débiteur ne
puisse pas satisfaire à un jugement rendu en leur
faveur. L’approche est quelque peu différente dans
[2012] 3 R.C.S.
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463
ensure fairness between creditors, but also to allow
the debtor to make as fresh a start as possible after
a proposal or an arrangement is approved.
le contexte d’une proposition concordataire présentée par une société ou d’une réorganisation. Dans
ces cas, l’objectif que sous-tend une interprétation
large est non seulement de garantir l’équité entre
créanciers, mais aussi de permettre au débiteur
de prendre un nouveau départ dans les meilleures conditions possibles à la suite de l’approbation
d’une proposition ou d’un arrangement.
[36] The criterion used by courts to determine whether a contingent claim will be included in the insolvency process is whether the
event that has not yet occurred is too remote or
speculative (Confederation Treasury Services
Ltd. (Bankrupt), Re (1997), 96 O.A.C. 75). In the
context of an environmental order, this means that
there must be sufficient indications that the regulatory body that triggered the enforcement mechanism will ultimately perform remediation work
and assert a monetary claim to have its costs reimbursed. If there is sufficient certainty in this regard, the court will conclude that the order can be
subjected to the insolvency process.
[36] Le critère retenu par les tribunaux pour décider si une réclamation éventuelle sera incluse dans
le processus d’insolvabilité est celui qui consiste
à déterminer si l’événement non encore survenu
est trop éloigné ou conjectural (Confederation
Treasury Service Ltd. (Bankrupt), Re (1997), 96
O.A.C. 75). Dans le contexte d’une ordonnance
environnementale, cela signifie qu’il doit y avoir
des indications suffisantes permettant de conclure
que l’organisme administratif qui a eu recours aux
mécanismes d’application de la loi effectuera en fin
de compte des travaux de décontamination et présentera une réclamation pécuniaire afin d’obtenir
le remboursement de ses débours. Si cela est suffisamment certain, le tribunal conclura que l’ordonnance peut être assujettie au processus d’insolvabilité.
[37] The exercise by the CCAA court of its jurisdiction to determine whether an order is a provable
claim entails a certain scrutiny of the regulatory
body’s actions. This scrutiny is in some ways similar to judicial review. There is a distinction, however, and it lies in the object of the assessment that
the CCAA court must make. The CCAA court does
not review the regulatory body’s exercise of discretion. Rather, it inquires into whether the facts indicate that the conditions for inclusion in the claims
process are met. For example, if activities at issue
are ongoing, the CCAA court may well conclude
that the order cannot be included in the insolvency
process because the activities and resulting damages will continue after the reorganization is completed and hence exceed the time limit for a claim.
If, on the other hand, the regulatory body, having
no realistic alternative but to perform the remediation work itself, simply delays framing the order as
a claim in order to improve its position in relation
to other creditors, the CCAA court may conclude
[37] Lorsqu’il détermine si une ordonnance
constitue une réclamation prouvable, le tribunal
chargé de l’application de la LACC doit, dans une
certaine mesure, examiner les actes posés par l’organisme administratif. Cet examen se rapproche à
certains égards de celui d’un contrôle judiciaire. La
différence se situe, toutefois, au niveau de l’objet
de l’évaluation que doit faire le tribunal. Son examen ne porte pas sur l’exercice du pouvoir discrétionnaire par l’organisme administratif. Il doit plutôt déterminer si le contexte factuel indique que
les conditions requises pour que l’ordonnance soit
incluse dans le processus de réclamations sont respectées. Par exemple, si le débiteur continue d’exercer les activités faisant l’objet de l’intervention de
l’organisme administratif, il est fort possible que
le tribunal conclue que l’ordonnance ne peut être
incorporée au processus d’insolvabilité parce que
ces activités et les dommages en découlant se poursuivront après la réorganisation et qu’elles excéderont donc le délai prescrit pour la production d’une
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[2012] 3 S.C.R.
that this course of action is inconsistent with the insolvency scheme and decide that the order has to be
subject to the claims process. Similarly, if the property is not under the debtor’s control and the debtor
does not, and realistically will not, have the means
to perform the remediation work, the CCAA court
may conclude that it is sufficiently certain that the
regulatory body will have to perform the work.
réclamation. Par contre, si l’organisme administratif, n’ayant aucune solution réaliste autre que
celle d’effectuer lui-même les travaux de décontamination, ne fait que retarder la production d’une
réclamation pécuniaire dans le but d’améliorer sa
position par rapport à celle des autres créanciers,
le tribunal pourrait conclure que cette démarche
n’est pas compatible avec le régime d’insolvabilité
et décider que l’ordonnance doit être traitée dans le
cadre du processus de réclamations. De même, si
le débiteur n’exerce aucun contrôle sur le bien et ne
dispose pas, ni ne disposera, de façon réaliste, des
moyens pour effectuer les travaux de décontamination, le tribunal pourrait conclure de façon suffisamment certaine que l’organisme administratif
devra exécuter les travaux.
[38] Certain indicators can thus be identified
from the text and the context of the provisions to
guide the CCAA court in determining whether an
order is a provable claim, including whether the
activities are ongoing, whether the debtor is in control of the property, and whether the debtor has the
means to comply with the order. The CCAA court
may also consider the effect that requiring the
debtor to comply with the order would have on the
insolvency process. Since the appropriate analysis
is grounded in the facts of each case, these indicators need not all apply, and others may also be
relevant.
[38] Il est ainsi possible de discerner, grâce au
libellé des dispositions et à leur contexte, certains
indicateurs qui permettent de guider le tribunal
au moment de déterminer si l’ordonnance constitue une réclamation prouvable, notamment si les
activités se poursuivent, si le débiteur exerce un
contrôle sur le bien et s’il dispose des moyens de se
conformer à l’ordonnance. Il est également possible
pour le tribunal de prendre en compte les conséquences qu’entraînerait sur le processus d’insolvabilité le fait d’exiger du débiteur qu’il se conforme
à l’ordonnance. Puisque l’analyse qu’il convient de
réaliser est fondée sur les faits propres à chaque
cas, il n’est pas nécessaire que tous ces indicateurs
soient présents, et d’autres peuvent également devenir pertinents.
[39] Having highlighted three requirements for
finding a claim to be provable in a CCAA process
that need to be considered in the case at bar, I must
now discuss certain policy arguments raised by the
Province and some of the interveners.
[39] Après avoir souligné les trois conditions qui
permettent en l’espèce de conclure qu’une ordonnance constitue une réclamation prouvable dans le
cadre d’un processus régi par la LACC, il me faut
examiner certains arguments de principe que la
province et certains intervenants ont fait valoir.
[40] These parties argue that treating a regulatory order as a claim in an insolvency proceeding
extinguishes the debtor’s environmental obligations, thereby undermining the polluter-pay principle discussed by this Court in Imperial Oil Ltd. v.
Quebec (Minister of the Environment), 2003 SCC
58, [2003] 2 S.C.R. 624, at para. 24. This objection
[40] Ils ont plaidé que le fait d’assimiler une
ordonnance d’un organisme administratif à une
réclamation dans le cadre de procédure en insolvabilité éteint les obligations environnementales
auxquelles le débiteur est tenu, minant par le fait
même le principe du pollueur-payeur examiné par
notre Cour dans l’arrêt Cie pétrolière Impériale
[2012] 3 R.C.S.
t.-n.-et-labrador
465
demonstrates a misunderstanding of the nature of
insolvency proceedings. Subjecting an order to the
claims process does not extinguish the debtor’s environmental obligations any more than subjecting
any creditor’s claim to that process extinguishes
the debtor’s obligation to pay its debts. It merely
ensures that the creditor’s claim will be paid in accordance with insolvency legislation. Moreover,
full compliance with orders that are found to be
monetary in nature would shift the costs of remediation to third-party creditors, including involuntary
creditors, such as those whose claims lie in tort or
in the law of extra-contractual liability. In the insolvency context, the Province’s position would result not only in a super-priority, but in the acceptance of a “third-party-pay” principle in place of the
polluter-pay principle.
ltée c. Québec (Ministre de l’Environnement), 2003
CSC 58, [2003] 2 R.C.S. 624, par. 24. Cet argument démontre une mauvaise compréhension de la
nature des procédures en matière d’insolvabilité.
Le fait d’assujettir une ordonnance au processus de
réclamations n’éteint pas les obligations environnementales qui incombent au débiteur, pas plus que
le fait de soumettre à ce processus les réclamations
des créanciers n’éteint l’obligation du débiteur de
payer ses dettes. Le fait d’assujettir une ordonnance
au processus de réclamation vise simplement à
faire en sorte que le paiement au créancier sera fait
conformément aux dispositions législatives applicables en matière d’insolvabilité. De plus, le respect
intégral des ordonnances dont la nature pécuniaire
est reconnue transférerait le coût de la décontamination aux tiers créanciers, y compris aux créanciers involontaires, par exemple les créanciers en
responsabilité délictuelle ou extra-contractuelle.
Dans un contexte d’insolvabilité, la position de
la province aurait comme résultat de lui accorder
non seulement une super-priorité, mais aussi de
reconnaître l’application d’un principe du « tierspayeur » plutôt que celui du pollueur-payeur.
[41] Nor does subjecting the orders to the insolvency process amount to issuing a licence to pollute, since insolvency proceedings do not concern the debtor’s future conduct. A debtor that is
reorganized must comply with all environmental
regulations going forward in the same way as any
other person. To quote the colourful analogy of
two American scholars, “Debtors in bankruptcy
have — and should have — no greater license to
pollute in violation of a statute than they have to
sell cocaine in violation of a statute” (D. G. Baird
and T. H. Jackson, “Comment: Kovacs and Toxic
Wastes in Bankruptcy” (1984), 36 Stan. L. Rev.
1199, at p. 1200).
[41] Par ailleurs, l’assujettissement des ordonnances au processus d’insolvabilité n’autorise pas une
personne à polluer, car la procédure en insolvabilité
ne touche pas les actes que le débiteur posera dans
le futur. Le débiteur réorganisé doit se conformer
pour l’avenir à la réglementation environnementale, comme le ferait toute autre personne. Pour citer
une analogie haute en couleurs de deux universitaires américains, [TRADUCTION] « [l]es débiteurs
en faillite n’ont pas — et ne devraient pas avoir —
une autorisation plus étendue de polluer en violation d’une loi qu’ils n’en ont de vendre de la cocaïne » (D. G. Baird et T. H. Jackson, « Comment :
Kovacs and Toxic Wastes in Bankruptcy » (1984),
36 Stan. L. Rev. 1199, p. 1200).
[42] Furthermore, corporations may engage in
activities that carry risks. No matter what risks are
at issue, reorganization made necessary by insolvency is hardly ever a deliberate choice. When the
risks materialize, the dire costs are borne by almost
all stakeholders. To subject orders to the claims
process is not to invite corporations to restructure
[42] En outre, il arrive que des sociétés exercent
des activités comportant des risques. Peu importe
les risques en cause, une réorganisation rendue
nécessaire par l’insolvabilité de la société peut
difficilement être assimilée à un choix délibéré.
Lorsque les risques se concrétisent, la quasi-totalité
des personnes ayant des intérêts dans la société en
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[2012] 3 S.C.R.
in order to rid themselves of their environmental
liabilities.
supportent les terribles coûts. L’assujettissement
des ordonnances à la procédure de réclamations
n’équivaut pas à convier les sociétés à se réorganiser dans le but d’échapper à leurs obligations environnementales.
[43] And the power to determine whether an order is a provable claim does not mean that the court
will necessarily conclude that the order before it
will be subject to the CCAA process. In fact, the
CCAA court in the case at bar recognized that orders relating to the environment may or may not
be considered provable claims. It stayed only those
orders that were monetary in nature.
[43] Et le pouvoir de déterminer si une ordonnance constitue une réclamation prouvable ne signifie pas que le tribunal jugera nécessairement que
l’ordonnance sera soumise au processus de réorganisation. En fait, le tribunal en l’espèce a reconnu
que les ordonnances environnementales pouvaient
être ou ne pas être considérées comme des réclamations prouvables. Il n’a rendu une ordonnance de
suspension qu’à l’égard des ordonnances de nature
pécuniaire.
[44] The Province also argues that courts have
in the past held that environmental orders cannot
be interpreted as claims when the regulatory body
has not yet exercised its power to assert a claim
framed in monetary terms. The Province relies in
particular on Panamericana de Bienes y Servicios
S.A. v. Northern Badger Oil & Gas Ltd. (1991),
81 Alta. L.R. (2d) 45 (C.A.), and its progeny. In
Panamericana, the Alberta Court of Appeal held
that a receiver was personally liable for work under
a remediation order and that the order was not a
claim in insolvency proceedings. The court found
that the duty to undertake remediation work is
owed to the public at large until the regulator exercises its power to assert a monetary claim.
[44] La province plaide aussi que selon la jurisprudence, les ordonnances environnementales ne
peuvent pas être assimilées à des réclamations
lorsque l’organisme administratif n’a pas encore
exercé son pouvoir de faire valoir une réclamation formulée en termes pécuniaires. La province
s’appuie particulièrement sur l’arrêt Panamericana
de Bienes y Servicios S.A. c. Northern Badger Oil
& Gas Ltd. (1991), 81 Alta. L.R. (2d) 45 (C.A.), et
les jugements rendus dans sa foulée. Dans l’arrêt
Panamericana, la Cour d’appel de l’Alberta a tenu
le séquestre personnellement responsable de l’exécution des travaux ordonnés et a statué que l’ordonnance ne constituait pas une réclamation visée par
les procédures en insolvabilité. La cour a conclu
que l’obligation d’entreprendre les travaux de décontamination est due au public en général jusqu’à
ce que l’organisme administratif exerce son pouvoir de faire valoir une réclamation pécuniaire.
[45] The first answer to the Province’s argument
is that courts have never shied away from putting
substance ahead of form. They can determine
whether the order is in substance monetary.
[45] La première réponse à cet argument de la
province est que les tribunaux n’ont jamais hésité
à privilégier le fond à la forme. Les tribunaux peuvent déterminer si, en substance, l’ordonnance est
de nature pécuniaire.
[46] The second answer is that the provisions
relating to the assessment of claims, particularly
those governing contingent claims, contemplate
instances in which the quantum is not yet established when the claims are filed. Whether, in the
[46] La seconde réponse est que les dispositions concernant l’évaluation des réclamations, en
particulier celles régissant les réclamations éventuelles, n’exigent pas que la valeur pécuniaire soit
établie au moment où elles sont produites. Un
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467
regulatory context, an obligation always entails
the existence of a correlative right has been discussed by a number of scholars. Various theories of rights have been put forward (see W. N.
Hohfeld, Fundamental Legal Conceptions as
Applied in Judicial Reasoning (new ed. 2001);
D. N. MacCormick, “Rights in Legislation”, in
Society: Essays in Honour of H. L. A. Hart (1977),
189). However, because the Province issued the orders in this case, it would be recognized as a creditor in respect of a right no matter which of these
theories was applied. As interesting as the discussion may be, therefore, I do not need to consider
which theory should prevail. The real question is
not to whom the obligation is owed, as this question is answered by the statute, which determines
who can require that it be discharged. Rather, the
question is whether it is sufficiently certain that the
regulatory body will perform the remediation work
and, as a result, have a monetary claim.
certain nombre d’auteurs ont examiné la question
de savoir si, dans un contexte réglementaire, l’existence d’une obligation implique toujours en corrélation celle d’un droit. Diverses théories relatives
aux droits ont été avancées (voir W. N. Hohfeld,
Fundamental Legal Conceptions as Applied in
Judicial Reasoning (nouvelle éd. 2001); D. N.
MacCormick, « Rights in Legislation », dans
P. M. S. Hacker et J. Raz, dir., Law, Morality, and
Society : Essays in Honour of H. L. A. Hart (1977),
189). Toutefois, comme en l’espèce la province a
prononcé les ordonnances, elle serait reconnue
comme créancière d’un droit en vertu de l’une ou
l’autre de ces théories. Par conséquent, malgré
l’intérêt que peut susciter ce débat, il n’est pas nécessaire de déterminer la théorie qui prévaut. La
véritable question n’est pas de savoir à qui est due
l’obligation, puisque la loi y répond en indiquant qui
peut en exiger l’exécution. La question est plutôt de
savoir s’il est suffisamment certain que l’organisme
administratif effectuera les travaux de décontamination et pourra ainsi faire valoir une réclamation
pécuniaire.
[47] The third answer to the Province’s argument
is that insolvency legislation has evolved considerably over the two decades since Panamericana.
At the time of Panamericana, none of the provisions relating to environmental liabilities were in
force. Indeed, some of those provisions were enacted very soon after, and seemingly in response
to, that case. In 1992, Parliament shielded trustees
from the very liability imposed on the receiver in
Panamericana (An Act to amend the Bankruptcy
Act and to amend the Income Tax Act in consequence thereof, S.C. 1992, c. 27, s. 9, amending
s. 14 of the BIA). The 1997 amendments provided
additional protection to trustees and monitors (An
Act to amend the Bankruptcy and Insolvency Act,
the Companies’ Creditors Arrangement Act and
the Income Tax Act, S.C. 1997, c. 12). The 2007
amendments made it clear that a CCAA court has
the power to determine that a regulatory order may
be a claim and also provided criteria for staying
regulatory orders (s. 65, amending the CCAA to include the current version of s. 11.1). The purpose
of these amendments was to balance the creditor’s
[47] La troisième réponse à l’argument soulevé par la province est que la législation en matière d’insolvabilité a considérablement évolué
au cours des deux décennies écoulées depuis
l’arrêt Panamericana. À l’époque où l’arrêt
Panamericana a été prononcé, aucune des dispositions concernant les obligations liées à l’environnement n’était en vigueur. Certaines des dispositions
ont été adoptées très peu de temps après cette décision et, semble‑t‑il, en réponse à celle-ci. En 1992,
le législateur a permis aux syndics d’échapper à
la responsabilité même que l’arrêt Panamericana
avait retenue contre le séquestre (Loi modifiant la
Loi sur la faillite et la Loi de l’impôt sur le revenu
en conséquence, L.C. 1992, ch. 27, art. 9, modifiant l’art. 14 de la LFI). Une protection additionnelle a été accordée au syndic et au contrôleur avec
les modifications adoptées en 1997 (Loi modifiant
la Loi sur la faillite et l’insolvabilité, la Loi sur les
arrangements avec les créanciers des compagnies
et la Loi de l’impôt sur le revenu, L.C. 1997, ch.
12). Les modifications apportées en 2007 ont précisé que le tribunal chargé d’appliquer la LACC a
468
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[2012] 3 S.C.R.
need for fairness against the debtor’s need to make
a fresh start.
le pouvoir de décider qu’une ordonnance d’un organisme administratif peut constituer une réclamation; ces modifications ont de plus établi des
critères applicables à la suspension de ces ordonnances (art. 65, modifiant la LACC par l’ajout de
l’art. 11.1). Ces modifications visaient à établir un
équilibre entre le besoin de traiter les créanciers de
façon équitable et celui de permettre au débiteur de
prendre un nouveau départ.
[48] Whether the regulatory body has a contingent claim is a determination that must be grounded
in the facts of each case. Generally, a regulatory
body has discretion under environmental legislation to decide how best to ensure that regulatory
obligations are met. Although the court should take
care to avoid interfering with that discretion, the
action of a regulatory body is nevertheless subject
to scrutiny in insolvency proceedings.
[48] La détermination qu’une ordonnance d’un
organisme administratif constitue une réclamation
éventuelle doit être fondée sur les faits de chaque
affaire. La législation en matière d’environnement
accorde généralement à un organisme administratif un pouvoir discrétionnaire de décider de la
meilleure façon d’assurer le respect des obligations
découlant de la réglementation. Quoique le tribunal
doive se garder de s’ingérer dans l’exercice du pouvoir discrétionnaire de ces organismes, les mesures qu’ils prennent peuvent néanmoins faire l’objet
d’un examen dans le cadre de procédures engagées
sous le régime fédéral de l’insolvabilité.
V. Application
V. Application
[49] I now turn to the application of the principles
discussed above to the case at bar. This case does
not turn on whether the Province is the creditor of
an obligation or whether damage had occurred as
of the relevant date. Those requirements are easily satisfied, since the Province had identified itself as a creditor by resorting to EPA enforcement
mechanisms and since the damage had occurred
before the time of the CCAA proceedings. Rather,
the issue centres on the third requirement: that the
orders meet the criterion for admission as a pecuniary claim. The claim was contingent to the extent
that the Province had not yet formally exercised its
power to ask for the payment of money. The question is whether it was sufficiently certain that the
orders would eventually result in a monetary claim.
To the CCAA judge, there was no doubt that the
answer was yes.
[49] J’aborde maintenant l’application des principes énoncés ci-dessus à l’affaire dont notre Cour
est saisie. En l’espèce, le débat n’est pas centré sur
la question de savoir si la province est créancière
d’une obligation ou si des dommages étaient survenus à la date pertinente. Il est facile de répondre
à ces questions étant donné que la province s’est
elle-même présentée comme créancière en ayant
recours aux mécanismes d’application de l’EPA
et que les dommages sont survenus avant que les
procédures en vertu de la LACC ne soient entamées. Le débat porte plutôt sur la troisième condition, celle qui consiste à savoir si les ordonnances
satisfont au critère d’admissibilité à titre de réclamation pécuniaire. La réclamation était éventuelle
dans la mesure où la province n’avait pas formellement exercé son pouvoir de demander paiement
d’une somme d’argent. La question est de savoir s’il
était suffisamment certain que l’ordonnance mènerait éventuellement à la production d’une réclamation pécuniaire. Pour le juge de première instance,
une réponse affirmative ne faisait pas de doute.
[2012] 3 R.C.S.
t.-n.-et-labrador
469
[50] The Province’s exercise of its legislative
powers in enacting the Abitibi Act created a unique
set of facts that led to the orders being issued. The
seizure of Abitibi’s assets by the Province, the cancellation of all outstanding water and hydroelectric contracts between Abitibi and the Province,
the cancellation of pending legal proceedings by
Abitibi in which it sought the reimbursement of
several hundreds of thousands of dollars, and the
denial of any compensation for the seized assets
and of legal redress are inescapable background
facts in the judge’s review of the EPA Orders.
[50] En adoptant l’Abitibi Act, ayant ainsi recours à son pouvoir législatif, la province mettait
en place un contexte factuel unique qui menait à
l’émission des ordonnances. La saisie par la province des actifs d’Abitibi, l’annulation de tous les
contrats d’approvisionnement en eau et d’hydroélectricité conclus entre Abitibi et la province,
l’annulation des recours intentés par Abitibi pour
obtenir le remboursement de plusieurs centaines de
milliers de dollars et le refus de toute indemnité et
de tous recours en justice à l’égard des actifs saisis tissent un contexte factuel dont le juge ne peut
faire abstraction dans son examen des ordonnances
EPA.
[51] The CCAA judge did not elaborate on whether it was sufficiently certain that the Minister would
perform the remediation work and therefore make
a monetary claim. However, most of his findings
clearly rest on a positive answer to this question.
For example, his finding that “[i]n all likelihood,
the pith and substance of the EPA Orders is an attempt by the Province to lay the groundwork for
monetary claims against Abitibi, to be used most
probably as an offset in connection with Abitibi’s
own NAFTA claims for compensation” (para.
178), is necessarily based on the premise that the
Province would most likely perform the remediation work. Indeed, since monetary claims must,
both at common law and in civil law, be mutual
for set-off or compensation to operate, the Province
had to have incurred costs in doing the work in order to have a claim that could be set off against
Abitibi’s claims.
[51] Le juge de première instance n’a pas fait une
analyse distincte du critère suivant lequel le tribunal doit être suffisamment certain que le ministre
exécuterait les travaux de décontamination et ferait,
par conséquent, valoir une réclamation pécuniaire.
Cependant, la plupart de ses conclusions reposent manifestement sur un constat positif à cet
égard. Par exemple, le constat que [TRADUCTION]
« [s]elon toute vraisemblance, le caractère véritable
des ordonnances EPA [consiste] pour la province
à tenter de jeter les bases de réclamations pécuniaires contre Abitibi, dans le but de les utiliser
tout probablement à titre compensatoire au regard
des demandes d’indemnisation d’Abitibi fondées
sur l’ALÉNA » (par. 178) repose nécessairement
sur la prémisse que la province allait fort probablement exécuter les travaux de décontamination.
En effet, puisque les réclamations pécuniaires, en
common law comme en droit civil, doivent être
réciproques pour opérer compensation, la province
devait avoir engagé des dépenses en exécutant
des travaux, ce qui établissait la base de la réclamation qu’elle ferait valoir pour compenser celle
d’Abitibi.
[52] That the judge relied on an implicit finding that the Province would most likely perform
the work and make a claim to offset its costs is
also shown by the confirmation he found in the
declaration by the Premier that the Province was
attempting to assess the cost of doing remediation work Abitibi had allegedly left undone and
that in the Province’s assessment, “at this point in
[52] Un autre fait illustre que le juge de première
instance a implicitement conclu que la province
allait fort probablement exécuter les travaux et produire une réclamation pour compenser ses coûts est
qu’il en a trouvé une confirmation dans la déclaration du premier ministre selon laquelle la province
tentait d’évaluer ce qu’il en coûterait pour réaliser
les travaux de décontamination qu’Abitibi n’aurait
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[2012] 3 S.C.R.
time, there would not be a net payment to Abitibi”
(para. 181).
pas exécutés, et que selon l’estimation de la province, [TRADUCTION] « à l’heure actuelle, aucun
paiement net ne serait versé à Abitibi » (par. 181).
[53] The CCAA judge’s reasons not only rest on
an implicit finding that the Province would most
likely perform the work, but refer explicitly to facts
that support this finding. To reach his conclusion
that the EPA Orders were monetary in nature, the
CCAA judge relied on the fact that Abitibi’s operations were funded through debtor-in-possession
financing and its access to funds was limited to
ongoing operations. Given that the EPA Orders targeted sites that were, for the most part, no longer in
Abitibi’s possession, this meant that Abitibi had no
means to perform the remediation work during the
reorganization process.
[53] Les motifs du juge de première instance reposent non seulement sur une constatation implicite que la province exécuterait fort probablement
les travaux, mais ils renvoient expressément aux
faits qui appuient cette constatation. Pour conclure
que les ordonnances EPA étaient de nature pécuniaire, le juge s’est fondé sur le fait qu’Abitibi pouvait mener ses opérations grâce à un financement
de débiteur-exploitant et qu’elle n’avait accès à ces
fonds que pour ses activités courantes. Étant donné
que les ordonnances visaient des sites que, pour la
plupart, Abitibi ne possédait plus, cela signifiait
qu’Abitibi ne disposait d’aucune ressource pour
exécuter les travaux pendant la réorganisation.
[54] In addition, because Abitibi lacked funds and
no longer controlled the properties, the timetable
set by the Province in the EPA Orders suggested
that the Province never truly intended that Abitibi
was to perform the remediation work required by
the orders. The timetable was also unrealistic. For
example, the orders were issued on November 12,
2009 and set a deadline of January 15, 2010 to perform a particular act, but the evidence revealed that
compliance with this requirement would have taken close to a year.
[54] De plus, parce qu’Abitibi ne disposait pas
des fonds et n’exerçait plus aucun contrôle sur les
biens, l’échéancier fixé par la province dans les ordonnances EPA était non seulement irréaliste, mais
suggérait que la province n’avait jamais vraiment eu
l’intention qu’Abitibi exécute les travaux qu’elle lui
ordonnait de faire. Par exemple, les ordonnances en
date du 12 novembre 2009 exigeaient que certains
travaux particuliers soient terminés le 15 janvier
2010 alors que la preuve démontre qu’il aurait fallu
presque un an pour exécuter ces travaux.
[55] Furthermore, the judge relied on the fact
that Abitibi was not simply designated a “person
responsible” under the EPA, but was intentionally targeted by the Province. The finding that the
Province had targeted Abitibi was drawn not only
from the timing of the EPA Orders, but also from
the fact that Abitibi was the only person designated
in them, whereas others also appeared to be responsible — in some cases, primarily responsible — for
the contamination. For example, Abitibi was ordered to do remediation work on a site it had surrendered more than 50 years before the orders were
issued; the expert report upon which the orders
were based made no distinction between Abitibi’s
activities on the property, on which its source of
power had been horse power, and subsequent activities by others who had used fuel-powered vehicles
[55] En outre, le juge s’est appuyé sur le fait
qu’Abitibi n’était pas simplement désignée comme
[TRADUCTION] « personne responsable » aux termes de l’EPA, mais qu’elle était intentionnellement
visée par la province. Il a fait cette constatation
non seulement en raison du choix du moment où
les ordonnances ont été prononcées, mais aussi
parce qu’Abitibi y était la seule personne désignée
alors que d’autres semblaient également responsables — et en certains cas, principalement responsables — de la contamination. Par exemple, la province a ordonné à Abitibi d’effectuer des travaux de
décontamination d’un site qu’elle avait abandonné
plus de 50 ans avant le prononcé des ordonnances
alors que le rapport d’expert sur lequel les ordonnances étaient fondées ne distinguait aucunement
les activités d’Abitibi, qui avait utilisé des chevaux,
[2012] 3 R.C.S.
t.-n.-et-labrador
471
there. In the judge’s opinion, this finding of fact
went to the Province’s intent to establish a basis for
performing the work itself and asserting a claim
against Abitibi.
et les activités subséquentes d’autres personnes qui
y avaient utilisé des véhicules alimentés au mazout. Ce fait, pour le juge, illustrait l’intention de
la province d’établir un fondement pour exécuter
elle-même les travaux et présenter une réclamation
contre Abitibi.
[56] These reasons — and others — led the
CCAA judge to conclude that the Province had not
expected Abitibi to perform the remediation work
and that the “intended, practical and realistic effect
of the EPA Orders was to establish a basis for the
Province to recover amounts of money to be eventually used for the remediation of the properties in
question” (para. 211). He found that the Province
appeared to have in fact taken some steps to liquidate the claims arising out of the EPA Orders.
[56] Ces motifs — et d’autres — ont amené le
juge de première instance à conclure que la province
ne s’attendait pas à ce qu’Abitibi exécute les travaux
de décontamination et que [TRADUCTION] « les ordonnances EPA avaient pour effet voulu, pratique
et réaliste de jeter les bases qui permettraient à la
province de recouvrer les sommes d’argent devant
éventuellement être employées pour la décontamination des terrains en question » (par. 211). Il a
conclu que la province semblait avoir en fait pris
des mesures en vue de liquider les réclamations découlant des ordonnances EPA.
[57] In the end, the judge found that there was
definitely a claim that “might” be filed, and that it
was not left to “the subjective choice of the creditor to hold the claim in its pocket for tactical reasons” (para. 227). In his words, the situation did
not involve a “detached regulator or public enforcer
issuing [an] order for the public good” (para. 175),
and it was “the hat of a creditor that best fi[t]
the Province, not that of a disinterested regulator” (para. 176).
[57] En fin de compte, le juge a conclu qu’il existait véritablement une réclamation qui « pourrait »
être présentée, et qu’on ne pouvait laisser au bon
vouloir du créancier [TRADUCTION] « le choix subjectif de la garder en réserve pour des raisons tactiques » (par. 227). Pour reprendre ses propres mots,
il ne s’agissait pas d’un cas où « un organisme de
réglementation ou d’application de la loi a émis de
manière objective une ordonnance dans l’intérêt
public » (par. 175), mais que « la province a agi
plus comme un créancier que comme un organisme
administratif désintéressé » (par. 176).
[58] In sum, although the analytical framework
used by Gascon J. was driven by the facts of the
case, he reviewed all the legal principles and facts
that needed to be considered in order to make the
determination in the case at bar. He did at times
rely on indicators that are unique and that do not appear in the analytical framework I propose above,
but he did so because of the exceptional facts of
this case. Yet, had he formulated the question in
the same way as I have, his conclusion, based on
his objective findings of fact, would have been the
same. Earmarking money may be a strong indicator that a province will perform remediation work,
and actually commencing the work is the first step
towards the creation of a debt, but these are not the
[58] En somme, bien que le cadre analytique utilisé par le juge Gascon a été dicté par les faits de
l’affaire, il a examiné tous les principes juridiques
et les faits qu’il était tenu de prendre en compte pour
statuer sur la question qui se posait. À l’occasion,
il s’est appuyé sur des indicateurs singuliers qui ne
figurent pas dans le cadre analytique que j’ai déjà
proposé, mais cela s’explique par les faits exceptionnels en l’espèce. Or, s’il avait formulé la question comme je l’ai posée, sa conclusion, appuyée
sur ses constatations de fait objectives, aurait été la
même. Le fait de prévoir un budget peut constituer
un indicateur clair qu’une province exécutera des
travaux de décontamination, et le fait que ces travaux soient entrepris constitue la première étape de
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[2012] 3 S.C.R.
only considerations that can lead to a finding that a
creditor has a monetary claim. The CCAA judge’s
assessment of the facts, particularly his finding that
the EPA Orders were the first step towards performance of the remediation work by the Province,
leads to no conclusion other than that it was sufficiently certain that the Province would perform
remediation work and therefore fall within the definition of a creditor with a monetary claim.
la constitution d’une dette, mais ces considérations
ne sont pas les seules qui permettent de conclure
qu’un créancier fait valoir une réclamation pécuniaire. L’appréciation des faits par le juge de première instance, plus particulièrement sa constatation que les ordonnances constituaient la première
étape en vue de la décontamination des sites, ne
permet de tirer aucune conclusion autre que celle
suivant laquelle il était suffisamment certain que
la province exécuterait des travaux de décontamination et qu’elle était par conséquent visée par la
définition d’un créancier ayant une réclamation
pécuniaire.
VI. Conclusion
VI. Conclusion
[59] In sum, I agree with the Chief Justice that,
as a general proposition, an environmental order
issued by a regulatory body can be treated as a
contingent claim, and that such a claim can be included in the claims process if it is sufficiently certain that the regulatory body will make a monetary
claim against the debtor. Our difference of views
lies mainly in the applicable threshold for including
contingent claims and in our understanding of the
CCAA judge’s findings of fact.
[59] En somme, je suis d’accord avec la Juge en
chef pour dire qu’en règle générale, une ordonnance
environnementale d’un organisme administratif
peut être traitée comme une réclamation éventuelle
et qu’une telle réclamation peut être incluse au processus de réclamation s’il est suffisamment certain
que l’organisme administratif fera valoir une réclamation pécuniaire contre le débiteur. Nos divergences de vues portent principalement sur le critère
applicable pour que les réclamations éventuelles
soient incluses et sur la façon dont nous interprétons les constatations de fait tirées par le juge de
première instance.
[60] With respect to the law, the Chief Justice
would craft a standard specific to the context of environmental orders by requiring a “likelihood approaching certainty” that the regulatory body will
perform the remediation work. She finds that this
threshold is justified because “remediation may
cost a great deal of money” (para. 86). I acknowledge that remediating pollution is often costly, but I
am of the view that Parliament has borne this consideration in mind in enacting provisions specific
to environmental claims. Moreover, I recall that in
this case, the Premier announced that the remediation work would be performed at no net cost to
the Province. It was clear to him that the Abitibi
Act would make it possible to offset all the related
costs.
[60] En ce qui concerne le droit, la Juge en chef
établirait une norme propre au contexte des ordonnances environnementales qui exigerait une « probabilité proche de la certitude » que l’organisme
administratif réalisera les travaux de restauration. Elle estime que ce critère s’impose parce que
« les travaux de restauration peuvent être très coûteux » (par. 86). Je reconnais que les travaux de décontamination sont souvent coûteux, mais je crois
que cette considération a été prise en compte par
le législateur fédéral lors de l’adoption des dispositions particulières visant les réclamations en matière environnementale. De plus, je rappelle qu’en
l’instance, le premier ministre a annoncé que les
travaux de décontamination seraient réalisés sans
coût net pour la province. Il était évident pour lui
que l’adoption de l’Abitibi Act permettrait de compenser tous les coûts afférents.
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater La Juge en chef
473
[61] Thus, I prefer to take the approach generally taken for all contingent claims. In my view,
the CCAA court is entitled to take all relevant facts
into consideration in making the relevant determination. Under this approach, the contingency to be
assessed in a case such as this is whether it is sufficiently certain that the regulatory body will perform remediation work and be in a position to assert a monetary claim.
[61] Par conséquent, je préfère retenir la méthode généralement suivie en matière de réclamations éventuelles. À mon avis, le tribunal chargé de
l’application de la LACC peut prendre en compte
l’ensemble des faits pertinents en vue de rendre la
décision appropriée. Suivant cette approche, l’éventualité qu’il faut évaluer dans une affaire comme
celle-ci est de savoir s’il est suffisamment certain
que l’organisme administratif exécutera les travaux
de décontamination et sera en mesure de faire valoir une réclamation pécuniaire.
[62] Finally, the Chief Justice would review the
CCAA court’s findings of fact. I would instead defer to them. On those findings, applying any legal standard, be it the one proposed by the Chief
Justice or the one I propose, the Province’s claim is
monetary in nature and its motion for a declaration
exempting the EPA Orders from the claims procedure order was properly dismissed.
[62] Enfin, la Juge en chef réviserait les conclusions de fait du juge de première instance. Pour ma
part, je m’en remets à ces conclusions. Quelle que
soit la norme juridique appliquée, soit celle proposée par la Juge en chef ou celle que je propose, au
vu de ces conclusions, la réclamation de la province
est de nature pécuniaire et sa requête demandant
de déclarer que les ordonnances EPA n’étaient pas
assujetties à l’ordonnance relative à la procédure de
réclamations a été à juste titre rejetée.
[63] For these reasons, I would dismiss the appeal with costs.
[63] Pour ces motifs, je suis d’avis de rejeter le
pourvoi avec dépens
The following are the reasons delivered by
Version française des motifs rendus par
The Chief Justice (dissenting) —
La Juge en chef (dissidente) —
1. Overview
1. Aperçu
[64] The issue in this case is whether orders made
under the Environmental Protection Act, S.N.L.
2002, c. E‑14.2 (“EPA”), by the Newfoundland
and Labrador Minister of Environment and
Conservation (“Minister”) requiring a polluter
to clean up sites (the “EPA Orders”) are monetary claims that can be compromised in corporate restructuring under the Companies’ Creditors
Arrangement Act, R.S.C. 1985, c. C‑36 (“CCAA”).
If they are not claims that can be compromised in
restructuring, the Abitibi respondents (“Abitibi”)
will still have a legal obligation to clean up the
sites following their emergence from restructuring.
If they are such claims, Abitibi will have emerged
from restructuring free of the obligation, able to
recommence business without remediating the
[64] Il s’agit en l’espèce de savoir si des ordonnances du ministre de l’Environnement et de la
Conservation (le « ministre ») de Terre-Neuveet-Labrador, émises en vertu de l’Environmental
Protection Act, S.N.L. 2002, ch. E‑14.2 (« EPA »),
obligeant un pollueur à décontaminer des sites (les
« ordonnances EPA ») constituent des réclamations pécuniaires qui peuvent faire l’objet d’une
transaction dans le cadre d’une restructuration
d’entreprise engagée sous le régime de la Loi sur
les arrangements avec les créanciers des compagnies, L.R.C. 1985, ch. C‑36 (« LACC »). Si elles ne
constituent pas des réclamations pécuniaires pouvant faire l’objet d’une transaction, les intimées du
groupe Abitibi (« Abitibi ») auront encore l’obligation légale de décontaminer les sites lorsque leur
474
nfld. and labrador
v. abitibibowater The Chief Justice
[2012] 3 S.C.R.
properties it polluted, the cost of which will fall on
the Newfoundland and Labrador public.
restructuration sera terminée. Dans le cas contraire,
Abitibi sera dégagée de cette obligation; elle pourra
reprendre ses activités à l’issue de la restructuration
sans avoir à décontaminer les sites qu’elle a pollués
et la population de Terre-Neuve-et-Labrador devra
supporter le coût de la décontamination.
[65] Remediation orders made under a province’s
environmental protection legislation impose ongoing regulatory obligations on the corporation required to clean up the pollution. They are not monetary claims. In narrow circumstances, specified
by the CCAA, these ongoing regulatory obligations
may be reduced to monetary claims, which can be
compromised under CCAA proceedings. This occurs where a province has done the work, or where
it is “sufficiently certain” that it will do the work.
In these circumstances, the regulatory obligation
would be extinguished and the province would
have a monetary claim for the cost of remediation
in the CCAA proceedings. Otherwise, the regulatory obligation survives the restructuring.
[65] Les ordonnances exigeant la décontamination émises aux termes d’une loi provinciale sur la
protection de l’environnement imposent des exigences réglementaires continues à la personne morale
requise de remédier à la pollution. Ces ordonnances
ne constituent pas des réclamations pécuniaires. En
certaines circonstances particulières prévues par
la LACC, ces exigences réglementaires continues
peuvent être converties en réclamations pécuniaires, lesquelles peuvent faire l’objet de transactions
dans le cadre de procédures engagées aux termes de
la LACC. Cette situation se produit lorsqu’une province a exécuté les travaux, ou lorsqu’il est « suffisamment certain » qu’elle exécutera les travaux.
Dans ces circonstances, l’exigence réglementaire
serait éteinte et la province pourrait produire, dans
le cadre de procédures engagées sous le régime de
la LACC, une réclamation pécuniaire couvrant le
coût des travaux de décontamination. Autrement,
l’exigence réglementaire subsiste après la restructuration.
[66] In my view, the orders for remediation in
this case, with a minor exception, are not claims
that can be compromised in restructuring. On one
of the properties, the Minister did emergency remedial work and put other work out to tender.
These costs can be claimed in the CCAA proceedings. However, with respect to the other properties,
on the evidence before us, the Minister has neither done the clean-up work, nor is it sufficiently
certain that he or she will do so. The Province of
Newfoundland and Labrador (“Province”) retained
a number of options, including requiring Abitibi to
perform the remediation if it successfully emerged
from the CCAA restructuring.
[66] À mon avis, les ordonnances exigeant la
décontamination en l’espèce, à une exception près,
ne constituent pas des réclamations pouvant faire
l’objet de transactions dans le cadre d’une restructuration. Dans un des sites, la ministre de l’époque a effectué d’urgence la décontamination et a
lancé un appel d’offres pour d’autres travaux. Le
coût de ces travaux peut faire l’objet d’une réclamation dans les procédures engagées sous le régime de la LACC. Toutefois, en ce qui concerne
les autres sites, selon les éléments de preuve dont
nous disposons, le ministre en poste n’a pas effectué les travaux de décontamination et il n’est pas
suffisamment certain qu’il le fera. La province de
Terre-Neuve-et-Labrador (« province ») a conservé
un certain nombre de solutions, dont celle d’obliger Abitibi à décontaminer les sites si elle réussit
sa restructuration engagée sous le régime de la
LACC.
[2012] 3 R.C.S.
t.-n.-et-labrador
475
[67] I would therefore allow the appeal and grant
the Province the declaration it seeks that Abitibi is
still subject to its obligations under the EPA following its emergence from restructuring, except for
work done or tendered for on the Buchans site.
[67] Je suis par conséquent d’avis d’accueillir le
pourvoi et d’accorder à la province le jugement déclaratoire sollicité portant qu’Abitibi reste assujettie à ses obligations en vertu de l’EPA au terme de
cette période de restructuration, à l’exception des
travaux sur le site de Buchans déjà exécutés ou à
l’égard desquels des appels d’offres ont été lancés.
2. The Proceedings Below
2. Les décisions des juridictions inférieures
[68] The CCAA judge took the view that the
Province issued the EPA Orders, not in order to
make Abitibi remediate, but as part of a money grab.
He therefore concluded that the orders were monetary and financial in nature and should be considered claims that could be compromised under the
CCAA (2010 QCCS 1261, 68 C.B.R. (5th) 1). The
Quebec Court of Appeal denied leave to appeal on
the ground that this “factual” conclusion could not
be disturbed (2010 QCCA 965, 68 C.B.R. (5th) 57).
[68] Le juge de première instance a adopté le
point de vue selon lequel la province avait émis les
ordonnances EPA, non pas pour obliger Abitibi à
réparer les dommages causés, mais pour lui soutirer de l’argent. Il a donc conclu que les ordonnances étaient de nature pécuniaire et financière,
et qu’elles devraient être considérées comme des
réclamations pouvant faire l’objet de transactions
sous le régime de la LACC (2010 QCCS 1261, 68
C.B.R. (5th) 1). La Cour d’appel du Québec a refusé l’autorisation d’interjeter appel de cette décision au motif que rien ne permettait de modifier
cette conclusion « de fait » (2010 QCCA 965, 68
C.B.R. (5th) 57).
[69] The CCAA judge’s stark view that an EPA
obligation can be considered a monetary claim capable of being compromised simply because (as
he saw it) the Province’s motive was money, is no
longer pressed. Whether an EPA order is a claim
under the CCAA depends on whether it meets the
requirements for a claim under that statute. That
is the only issue to be resolved. Insofar as this
determination touches on the division of powers,
I am in substantial agreement with my colleague
Deschamps J., at paras. 18-19.
[69] Le point de vue peu nuancé du juge de première instance, selon lequel une obligation découlant de l’EPA peut être considérée comme une
réclamation pécuniaire susceptible de faire l’objet
d’une transaction du simple fait (à son avis) que
la province n’était motivée que par l’argent, n’est
plus en cause. Pour répondre à la question de savoir
si une ordonnance émise sous le régime de l’EPA
constitue une réclamation au sens de la LACC,
il faut déterminer si elle satisfait aux conditions
d’existence d’une réclamation établies par cette loi.
Il s’agit de la seule question à trancher. Dans la mesure où la décision sur ce point touche le partage
des pouvoirs, je souscris pour l’essentiel à l’opinion
exprimée par ma collègue la juge Deschamps aux
par. 18-19.
3. The Distinction Between Regulatory Obligations and Claims Under the CCAA
3. La distinction entre une exigence réglementaire et une réclamation au titre de la LACC
[70] Orders to clean up polluted property under
provincial environmental protection legislation are
regulatory orders. They remain in effect until the
[70] Les ordonnances exigeant la décontamination des sites pollués émises en vertu des lois provinciales sur l’environnement sont des ordonnances
476
nfld. and labrador
[2012] 3 S.C.R.
property has been cleaned up or the matter otherwise resolved.
de nature réglementaire. Elles demeurent en vigueur jusqu’à ce que le site ait été décontaminé ou
que l’affaire soit réglée d’une autre façon.
[71] It is not unusual for corporations seeking to
restructure under the CCAA to be subject to a variety of ongoing regulatory orders arising from statutory schemes governing matters like employment,
energy conservation and the environment. The corporation remains subject to these obligations as it
continues to carry on business during the restructuring period, and remains subject to them when it
emerges from restructuring unless they have been
compromised or liquidated.
[71] Il n’est pas inhabituel pour les sociétés qui
cherchent à se restructurer sous le régime de la
LACC d’être assujetties à diverses ordonnances
réglementaires continues découlant de régimes législatifs régissant des domaines tels que l’emploi,
la conservation de l’énergie et l’environnement. La
société demeure assujettie à ces exigences alors
qu’elle continue d’exercer ses activités pendant la
période de restructuration, et elle y demeure assujettie au terme de cette période de restructuration,
à moins que ces exigences n’aient fait l’objet d’une
transaction ou qu’elles n’aient été liquidées.
[72] The CCAA, like the Bankruptcy and
Insolvency Act, R.S.C. 1985, c. B‑3 (“BIA”), draws
a fundamental distinction between ongoing regulatory obligations owed to the public, which generally survive the restructuring, and monetary claims
that can be compromised.
[72] La LACC, à l’instar de la Loi sur la faillite et
l’insolvabilité, L.R.C. 1985, ch. B‑3 (« LFI »), établit une distinction fondamentale entre les exigences réglementaires continues établies en faveur du
public, lesquelles continuent de s’appliquer après la
restructuration, et les réclamations pécuniaires qui
peuvent faire l’objet d’une transaction.
[73] This distinction is also recognized in the
jurisprudence, which has held that regulatory
duties owed to the public are not “claims” under the BIA, nor, by extension, under the CCAA.
In Panamericana de Bienes y Servicios S.A. v.
Northern Badger Oil & Gas Ltd. (1991), 81 Alta.
L.R. (2d) 45, the Alberta Court of Appeal held
that a receiver in bankruptcy must comply with
an order from the Energy Resources Conservation
Board to comply with well abandonment requirements. Writing for the court, Laycraft C.J.A. said
the question was whether the Bankruptcy Act “requires that the assets in the estate of an insolvent
well licensee should be distributed to creditors
leaving behind the duties respecting environmental
safety . . . as a charge to the public” (para. 29). He
answered the question in the negative:
[73] Cette distinction est aussi reconnue dans
la jurisprudence, selon laquelle les obligations réglementaires établies en faveur du public ne sont
pas des « réclamations » aux termes de la LFI ni,
par extension, aux termes de la LACC. Dans l’arrêt Panamericana de Bienes y Servicios S.A. c.
Northern Badger Oil & Gas Ltd. (1991), 81 Alta.
L.R. (2d) 45, la Cour d’appel de l’Alberta a statué
qu’un séquestre doit se conformer à une ordonnance
de l’Energy Resources Conservation Board lui
enjoignant de respecter des exigences en matière
d’abandon de puits. Le juge en chef Laycraft, au
nom de la cour, a affirmé que la question à trancher
était de savoir si la Loi sur la faillite [TRADUCTION]
« exige que les actifs se trouvant dans le patrimoine d’un titulaire de permis de puits soient
distribués aux créanciers en laissant à la charge
du public les obligations en matière de sécurité
environnementale » (par. 29). Il a répondu par la
négative :
The duty is owed as a public duty by all the citizens
of the community to their fellow citizens. When the
[TRADUCTION] L’obligation est établie comme une
obligation à caractère public qui doit être respectée par
[2012] 3 R.C.S.
t.-n.-et-labrador
477
citizen subject to the order complies, the result is not
the recovery of money by the peace officer or public
authority, or of a judgment for money, nor is that the
object of the whole process. Rather, it is simply the enforcement of the general law. The enforcing authority
does not become a “creditor” of the citizen on whom
the duty is imposed. [Emphasis added; para. 33.]
l’ensemble des citoyens de la collectivité à l’égard de
leurs concitoyens. Lorsque le citoyen visé par l’ordonnance s’y conforme, le résultat n’est pas perçu comme le
recouvrement d’une somme d’argent par un agent de la
paix ou l’autorité publique, ni comme l’exécution d’un
jugement ordonnant le paiement d’une somme d’argent;
d’ailleurs, cela ne constitue pas non plus l’objectif de
l’ensemble du processus. Il faut plutôt y voir l’application d’une loi générale. L’organisme d’application de la
loi ne devient pas un « créancier » du citoyen à qui incombe l’obligation. [Je souligne; par. 33.]
[74] The distinction between regulatory obligations under the general law aimed at the protection of the public and monetary claims that can
be compromised in CCAA restructuring or bankruptcy is a fundamental plank of Canadian corporate law. It has been repeatedly acknowledged:
Lamford Forest Products Ltd. (Re) (1991), 86
D.L.R. (4th) 534 (B.C.S.C.); Shirley (Re) (1995),
129 D.L.R. (4th) 105 (Ont. Ct. (Gen. Div.)), at
p. 109; Husky Oil Operations Ltd. v. Minister of
National Revenue, [1995] 3 S.C.R. 453, at para.
146, per Iacobucci J. (dissenting). As Farley J. succinctly put it in Air Canada, Re [Regulators’ motions] (2003), 28 C.B.R. (5th) 52 (Ont. S.C.J.), at
para. 18: “Once [the company] emerges from these
CCAA proceedings (successfully one would hope),
then it will have to deal with each and every then
unresolved [regulatory] matter.”
[74] La distinction entre les exigences réglementaires découlant d’une loi d’application générale visant la protection du public, d’une part, et
les réclamations pécuniaires pouvant faire l’objet
d’une transaction dans le cadre d’une restructuration engagée sous le régime de la LACC ou
en matière de faillite, d’autre part, constitue un
élément important du droit canadien des sociétés. Cette distinction a maintes fois été reconnue : Lamford Forest Products Ltd. (Re) (1991), 86
D.L.R. (4th) 534 (C.S.C.‑B.); Shirley (Re) (1995),
129 D.L.R. (4th) 105 (C. Ont. (Div. gén.)), p. 109;
Husky Oil Operations Ltd. c. Ministre du Revenu
national, [1995] 3 R.C.S. 453, par. 146, le juge
Iacobucci (dissident). Comme l’a dit succinctement
le juge Farley dans Air Canada, Re [Regulators’
motions] (2003), 28 C.B.R. (5th) 52 (C.S.J. Ont.),
par. 18 : [TRADUCTION] « À l’issue des procédures engagées en vertu de la LACC — souhaitons
qu’elles soient couronnées de succès — [la société]
aura alors à régler chacun des dossiers non résolus
[en matière réglementaire]. »
[75] Recent amendments to the CCAA confirm
this distinction. Section 11.1(2) now explicitly provides that, except to the extent a regulator is enforcing a payment obligation, a general stay does
not affect a regulatory body’s authority in relation
to a corporation going through restructuring. The
CCAA court may only stay specific actions or suits
brought by a regulatory body, and only if such action is necessary for a viable compromise to be
reached and it would not be contrary to the public
interest to make such an order (s. 11.1(3)).
[75] Des modifications apportées récemment à la
LACC confirment cette distinction. Le paragraphe
11.1(2) prévoit maintenant expressément que, sauf
dans la mesure où un organisme de réglementation fait respecter une obligation de paiement, une
suspension générale ne porte aucunement atteinte
aux pouvoirs de celui-ci à l’égard d’une société en
restructuration. Le tribunal chargé d’appliquer la
LACC ne peut ordonner une suspension qu’à l’égard
de certaines actions ou poursuites intentées par un
organisme administratif, et seulement si cette mesure est nécessaire à la conclusion d’une transaction viable et si une telle ordonnance ne serait pas
contraire à l’intérêt public (par. 11.1(3)).
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[2012] 3 S.C.R.
[76] Abitibi argues that another amendment to
the CCAA, s. 11.8(9), treats ongoing regulatory duties owed to the public as claims, and erases the
distinction between the two types of obligation:
see General Chemical Canada Ltd., Re, 2007
ONCA 600, 228 O.A.C. 385, per Goudge J.A., relying on s. 14.06(8) of the BIA (the equivalent of
s. 11.8(9) of the CCAA). With respect, this reads
too much into the provision. Section 11.8(9) of the
CCAA refers only to the situation where a government has performed remediation, and provides
that the costs of the remediation become a claim
in the restructuring process even where the environmental damage arose after CCAA proceedings
have begun. As stated in Strathcona (County) v.
PriceWaterhouseCoopers Inc., 2005 ABQB 559,
47 Alta. L.R. (4th) 138, per Burrows J., the section “does not convert a statutorily imposed obligation owed to the public at large into a liability
owed to the public body charged with enforcing
it” (para. 42).
[76] Abitibi plaide qu’en vertu d’une autre modification apportée à la LACC, le par. 11.8(9), les
exigences réglementaires continues établies en faveur du public sont considérées comme des réclamations, et que cette modification élimine la distinction entre les deux types d’obligations : voir
General Chemical Canada Ltd., Re, 2007 ONCA
600, 228 O.A.C. 385, le juge Goudge, citant le
par. 14.06(8) de la LFI (la disposition équivalente au par. 11.8(9) de la LACC). Avec égards, cette
interprétation de la disposition est trop large. Le
paragraphe 11.8(9) de la LACC vise uniquement la
situation où un gouvernement a exécuté des travaux
de réparation du dommage, et prévoit que les frais
de réparation constituent une réclamation dans
le cadre du processus de restructuration, même si
les dommages ont été causés à l’environnement
après l’introduction des procédures au titre de la
LACC. Comme l’a déclaré le juge Burrows dans
Strathcona (County) c. PriceWaterhouseCoopers
Inc., 2005 ABQB 559, 47 Alta. L.R. (4th) 138,
la disposition [TRADUCTION] « ne convertit pas
une exigence imposée par la loi et établie en faveur du public en général en une dette envers
l’organisme public chargé d’appliquer la loi »
(par. 42).
4. When Does a Regulatory Obligation Become a
Claim Under the CCAA?
4. Quand une exigence réglementaire devient-elle
une réclamation au titre de la LACC?
[77] This brings us to the heart of the question
before us: When does a regulatory obligation imposed on a corporation under environmental protection legislation become a “claim” provable and
compromisable under the CCAA?
[77] Ceci nous amène au cœur de la question
dont nous sommes saisis : quand une exigence réglementaire imposée à une société en vertu d’une
loi sur la protection de l’environnement devient-elle
une « réclamation » prouvable et pouvant faire l’objet d’une transaction aux termes de la LACC?
[78] Regulatory obligations are, as a general
proposition, not compromisable claims. Only financial or monetary claims provable by a “creditor” fall within the definition of “claim” under the
CCAA. A “creditor” is defined as “a person having a claim”: s. 2, BIA. Thus, the identification of
a “creditor” hangs on the existence of a “claim”.
Section 12(1) of the CCAA defines “claim” as “any
indebtedness, liability or obligation . . . that . . .
would be a debt provable in bankruptcy”, which is
[78] En règle générale, les exigences réglementaires ne sont pas des réclamations pouvant faire l’objet
d’une transaction. Seules les réclamations financières ou pécuniaires prouvables par un « créancier »
correspondent à la définition de « réclamation » au
sens de la LACC. Un « créancier » est défini comme
étant une « [p]ersonne ayant une réclamation » : art.
2, LFI. Ainsi, l’identification d’un « créancier » repose sur l’existence d’une « réclamation ». Le paragraphe 12(1) de la LACC définit une « réclamation »
[2012] 3 R.C.S.
t.-n.-et-labrador
479
accepted as confined to obligations of a financial
or monetary nature.
comme étant « toute dette, tout engagement ou toute
obligation [. . .] qui [. . .] constituerait une dette prouvable en matière de faillite », une définition dont la
portée reconnue se limite aux obligations de nature
financière ou pécuniaire.
[79] The CCAA does not depart from the proposition that a claim must be financial or monetary.
However, it contains a scheme to deal with disputes
over whether an obligation is a monetary obligation
as opposed to some other kind of obligation.
[79] La LACC ne s’écarte pas du principe selon
lequel une réclamation doit être financière ou pécuniaire. Elle prévoit cependant un régime permettant de régler les différends portant sur la question
de savoir si une obligation est de nature pécuniaire,
par opposition à une obligation d’une autre nature.
[80] Such a dispute may arise with respect to environmental obligations of the corporation. The
CCAA recognizes three situations that may arise
when a corporation enters restructuring.
[80] Les obligations environnementales qui incombent à une personne morale peuvent engendrer
un tel différend. La LACC reconnaît trois situations
susceptibles de se présenter lorsqu’une personne
morale s’engage dans un processus de restructuration.
[81] The first situation is where the remedial
work has not been done (and there is no “sufficient
certainty” that the work will be done, unlike the
third situation described below). In this situation,
the government cannot claim the cost of remediation: see s. 102(3) of the EPA. The obligation of
compliance falls in principle on the monitor who
takes over the corporation’s assets and operations. If the monitor remediates the property, he
can claim the costs as costs of administration. If he
does not wish to do so, he may obtain a court order staying the remediation obligation or abandon
the property: s. 11.8(5) CCAA (in which case costs
of remediation shall not rank as costs of administration: s. 11.8(7)). In this situation, the obligation
cannot be compromised.
[81] La première situation est celle où les travaux
de restauration du site n’ont pas été exécutés (et
il n’est pas « suffisamment certain » que les travaux seront exécutés, contrairement à la troisième
situation exposée ci-après). En pareil cas, le gouvernement ne peut réclamer le coût de la restauration : voir le par. 102(3) de l’EPA. En principe,
l’obligation de se conformer à la loi incombe au
contrôleur qui prend en charge l’actif et les activités de la société. Si le contrôleur exécute les travaux de restauration du site, il peut réclamer les
frais en tant que frais d’administration. S’il ne désire pas le faire, il peut obtenir de la cour une ordonnance suspendant l’exigence de restauration ou
il peut abandonner l’immeuble : par. 11.8(5) de la
LACC (dans ce cas, les frais de restauration ne font
pas partie des frais d’administration : par. 11.8(7)).
En pareil cas, l’obligation ne peut faire l’objet d’une
transaction.
[82] The second situation is where the government that has issued the environmental protection
order moves to clean up the pollution, as the legislation entitles it to do. In this situation, the government has a claim for the cost of remediation that is
compromisable in the CCAA proceedings. This is
because the government, by moving to clean up the
pollution, has changed the outstanding regulatory
[82] La deuxième situation est celle où le gouvernement qui a émis l’ordonnance environnementale
prend des mesures de décontamination, ce que la
législation l’autorise à faire. En pareil cas, le gouvernement peut produire, pour le coût de la décontamination, une réclamation qui pourra faire l’objet d’une transaction dans le cadre des procédures
engagées sous le régime de la LACC. Il en est ainsi
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[2012] 3 S.C.R.
obligation owed to the public into a financial or
monetary obligation owed by the corporation to
the government. Section 11.8(9), already discussed,
makes it clear that this applies to damage after the
CCAA proceedings commenced, which might otherwise not be claimable as a matter of timing.
parce que le gouvernement, en prenant des mesures
pour décontaminer le site, a transformé l’exigence
réglementaire non exécutée établie en faveur du public en une obligation financière ou pécuniaire à laquelle la société est tenue envers le gouvernement.
Le paragraphe 11.8(9), examiné précédemment,
prévoit clairement que cette situation s’applique
aux dommages survenus après que les procédures
ont été engagées au titre de la LACC; en l’absence
d’une telle précision, ces dommages ne pourraient
faire l’objet d’une réclamation compte tenu du moment choisi pour agir.
[83] A third situation may arise: the government
has not yet performed the remediation at the time
of restructuring, but there is “sufficient certainty”
that it will do so. This situation is regulated by the
provisions of the CCAA for contingent or future
claims. Under the CCAA, a debt or liability that is
contingent on a future event may be compromised.
[83] Une troisième situation peut se présenter :
le gouvernement n’a pas encore exécuté des travaux
de restauration au moment de la restructuration,
mais il est « suffisamment certain » qu’il le fera.
Cette situation est prévue par les dispositions de
la LACC relatives aux réclamations éventuelles ou
futures. Aux termes de la LACC, une dette ou un
engagement qui dépend d’un événement futur peut
faire l’objet d’une transaction.
[84] It is clear that a mere possibility that work
will be done does not suffice to make a regulatory obligation a contingent claim under the CCAA.
Rather, there must be “sufficient certainty” that
the obligation will be converted into a financial or
monetary claim to permit this. The impact of the
obligation on the insolvency process is irrelevant
to the analysis of contingency. The future liabilities
must not be “so remote and speculative in nature
that they could not properly be considered contingent claims”: Confederation Treasury Services
Ltd. (Bankrupt), Re (1997), 96 O.A.C. 75, at para. 4.
[84] Il est évident qu’une simple possibilité que
les travaux soient exécutés ne suffit pas pour transformer une exigence réglementaire en une réclamation éventuelle au titre de la LACC. Pour en arriver
à ce résultat, il faut plutôt qu’il soit « suffisamment
certain » que l’exigence sera convertie en une réclamation financière ou pécuniaire. L’incidence
de l’exigence sur le processus d’insolvabilité n’est
pas pertinente pour l’analyse du caractère éventuel de la réclamation. Les engagements futurs ne
doivent pas être [TRADUCTION] « si lointains et
hypothétiques qu’ils ne puissent être considérés à
bon droit comme des réclamations éventuelles » :
Confederation Treasury Services Ltd. (Bankrupt),
Re (1997), 96 O.A.C. 75, par. 4.
[85] Where environmental obligations are concerned, courts to date have relied on a high degree
of probability verging on certainty that the government will in fact step in and remediate the property. In Anvil Range Mining Corp., Re (2001), 25
C.B.R. (4th) 1 (Ont. S.C.J.), Farley J. concluded
that a contingent claim was established where the
money had already been earmarked in the budget
for the remediation project. He observed that
[85] Lorsque des exigences environnementales sont en cause, les tribunaux se sont jusqu’à ce
jour fondés sur un haut degré de probabilité, proche de la certitude, que le gouvernement prendra
réellement des mesures et exécutera les travaux
de restauration. Dans Anvil Range Mining Corp.,
Re (2001), 25 C.B.R. (4th) 1 (C.S.J. Ont.), le juge
Farley a conclu que la preuve d’une réclamation
éventuelle était établie parce que les fonds avaient
[2012] 3 R.C.S.
t.-n.-et-labrador
481
“there appears to be every likelihood to a certainty
that every dollar in the budget for the year ending
March 31, 2002 earmarked for reclamation will be
spent” (para. 15 (emphasis added)). Similarly, in
Shirley (Re), Kennedy J. relied on the fact that the
Ontario Minister of the Environment had already
entered the property at issue and commenced
remediation activities to conclude that “[a]ny doubt
about the resolve of the [Ministry’s] intent to realize upon its authority ended when it began to incur
expense from operations” (p. 110).
déjà été dédiés au projet de restauration dans le
budget. Il a fait remarquer qu’[TRADUCTION] « il
semble fortement probable et presque certain que
chaque dollar dédié aux réclamations figurant au
budget établi pour l’année se terminant le 31 mars
2002 sera dépensé » (par. 15 (je souligne)). De
même, dans Shirley (Re), le juge Kennedy s’est
fondé sur le fait que les employés du ministère de
l’Environnement de l’Ontario se trouvaient déjà sur
le terrain en cause et avaient commencé les travaux
de restauration pour conclure que [TRADUCTION]
« [t]ous doutes quant à la détermination du [ministère] d’exercer son droit se sont estompés lorsque
l’opération a commencé à lui occasionner des dépenses » (p. 110).
[86] There is good reason why “sufficient certainty” should be interpreted as requiring “likelihood approaching certainty” when the issue is
whether ongoing environmental obligations owed
to the public should be converted to contingent
claims that can be expunged or compromised in the
restructuring process. Courts should not overlook
the obstacles governments may encounter in deciding to remediate environmental damage a corporation has caused. To begin with, the government’s
decision is discretionary and may be influenced by
any number of competing political and social considerations. Furthermore, remediation may cost a
great deal of money. For example, in this case, the
CCAA court found that at a minimum the remediation would cost in the “mid-to-high eight figures”,
and could indeed cost several times that (para. 81).
In concrete terms, the remediation at issue in this
case may be expected to meet or exceed the entire budget of the Minister ($65 million) for 2009.
Not only would this be a massive expenditure, but
it would also likely require the specific approval
of the legislature and thereby be subject to political uncertainties. To assess these factors and determine whether all this will occur would embroil
the CCAA judge in social, economic and political
considerations — matters which are not normally
subject to judicial consideration: R. v. Imperial
Tobacco Canada Ltd., 2011 SCC 42, [2011] 3
S.C.R. 45, at para. 74. It is small wonder, then, that
courts assessing whether it is “sufficiently certain”
that a government will clean up pollution created
[86] Une bonne raison explique pourquoi il
convient d’interpréter l’expression « suffisamment
certain » comme exigeant une « probabilité proche de la certitude » lorsqu’il s’agit de déterminer
si des exigences environnementales continues établies en faveur du public devraient être converties
en réclamations éventuelles qui peuvent être rayées
ou faire l’objet d’une transaction dans le cadre du
processus de restructuration. Les tribunaux ne devraient pas oublier les obstacles auxquels les gouvernements peuvent se heurter lorsqu’ils décident
de réparer les dommages environnementaux causés par une société. D’abord, la décision du gouvernement est discrétionnaire, et elle peut être influencée par nombre de considérations politiques
et sociales concurrentes. En outre, les travaux de
restauration peuvent être très coûteux. En l’espèce,
par exemple, le juge de première instance a conclu
que ces travaux pourraient coûter au minimum
[TRADUCTION] « entre cinquante et cent millions de dollars », et même plusieurs fois cette
somme (par. 81). En termes concrets, le coût des
travaux en cause en l’espèce pourrait atteindre ou
dépasser le budget total du ministre (65 millions
de dollars) pour l’exercice 2009. Il s’agirait non
seulement d’une dépense énorme, mais il faudrait
probablement aussi l’approbation explicite de l’assemblée législative, avec les incertitudes politiques
que cela comporte. L’évaluation de ces facteurs et
l’appréciation de la possibilité que tout ce qui précède se produise entraîneraient le juge chargé d’appliquer la LACC dans des considérations d’ordre
482
nfld. and labrador
[2012] 3 S.C.R.
by a corporation have insisted on proof of likelihood approaching certainty.
social, économique et politique — des questions
normalement soustraites à l’examen judiciaire : R.
c. Imperial Tobacco Canada Ltée, 2011 CSC 42,
[2011] 3 R.C.S. 45, par. 74. Il n’est donc pas étonnant que les tribunaux, lorsqu’il s’agit d’apprécier
s’il est « suffisamment certain » qu’un gouvernement procédera à la décontamination causée par
une société, s’en soient tenus à la preuve d’une probabilité proche de la certitude.
[87] In this case, as will be seen, apart from the
Buchans property, the record is devoid of any evidence capable of establishing that it is “sufficiently
certain” that the Province will itself remediate the
properties. Even on a more relaxed standard than
the one adopted in similar cases to date, the evidence in this case would fail to establish that remediation is “sufficiently certain”.
[87] En l’espèce, comme nous le verrons, à l’exclusion du site de Buchans, le dossier est dénué
d’éléments de preuve susceptibles d’établir qu’il
est « suffisamment certain » que la province exécutera elle-même les travaux de décontamination.
Même si l’on applique une norme plus souple que
celle retenue jusqu’à ce jour dans des affaires semblables, la preuve en l’espèce n’établirait pas qu’il
est « suffisamment certain » que les sites seront
décontaminés.
5. The Result in This Case
5. L’issue du présent pourvoi
[88] Five different sites are at issue in this case.
The question in each case is whether the Minister
has already remediated the property (making it to
that extent an actual claim), or if not, whether it is
“sufficiently certain” that he or she will remediate
the property, permitting it to be considered a contingent claim.
[88] En l’espèce, cinq sites différents sont en cause. La question dans chaque cas est de savoir si le
ministre a déjà décontaminé les sites — il aurait
alors une réclamation — ou, si tel n’est pas le cas,
s’il est « suffisamment certain » qu’il exécutera les
travaux de restauration, ce qui permettrait de considérer le coût de la décontamination comme une réclamation éventuelle.
[89] The Buchans site posed immediate risks to
human health as a consequence of high levels of
lead and other contaminants in the soil, groundwater, surface water and sediment. There was a risk
that the wind would disperse the contamination,
posing a threat to the surrounding population. Lead
has been found in residential areas of Buchans and
adults tested in the town had elevated levels of lead
in their blood. In addition, a structurally unsound
dam at the Buchans site raised the risk of contaminating silt entering the Exploits and Buchans rivers.
[89] Le site de Buchans posait un risque immédiat à la santé pour les humains en raison de la forte
concentration de plomb et d’autres contaminants
présente dans le sol, l’eau souterraine et de surface
ainsi que dans des sédiments. Il y avait un risque
que le vent disperse la contamination, ce qui aurait
représenté une menace pour la population environnante. On a trouvé du plomb dans des zones résidentielles de Buchans et les tests de sang ont révélé
chez des adultes résidant dans la ville des concentrations élevées de plomb. De plus, un barrage en
mauvais état situé sur le site de Buchans augmentait le risque de contamination du limon se déversant dans les rivières Exploits et Buchans.
[90] The Minister quickly moved to address the
immediate concern of the unsound dam and put
[90] La ministre de l’époque a rapidement pris
des mesures pour régler le problème immédiat du
[2012] 3 R.C.S.
t.-n.-et-labrador
483
out a request for tenders for other measures that required immediate action at the Buchans site. Money
expended is clearly a claim under the CCAA. I am
also of the view that the work for which the request
for tenders was put out meets the “sufficiently certain” standard and constitutes a contingent claim.
barrage en mauvais état et a lancé un appel d’offres
relatif aux autres mesures nécessitant une intervention immédiate sur le site de Buchans. Il est clair
que les sommes d’argent dépensées constituent une
réclamation au sens de la LACC. J’estime également que les travaux à l’égard desquels des appels
d’offres ont été lancés satisfont à la norme de ce qui
est « suffisamment certain » et qu’ils constituent
une réclamation éventuelle.
[91] Beyond this, it has not been shown that it is
“sufficiently certain” that the Province will do the
remediation work to permit Abitibi’s ongoing regulatory obligations under the EPA Orders to be considered contingent debts. The same applies to the
other properties, on which no work has been done
and no requests for tender to do the work initiated.
[91] Quant au reste, on n’a pas établi qu’il soit
« suffisamment certain » que la province exécutera
les travaux de décontamination de façon à pouvoir
considérer comme des dettes éventuelles les exigences réglementaires continues que les ordonnances EPA ont imposées à Abitibi. La même conclusion s’applique à l’égard des autres sites, où aucun
travail n’a été réalisé et pour lesquels aucun appel
d’offres n’a été lancé pour l’exécution des travaux.
[92] Far from being “sufficiently certain”, there
is simply nothing on the record to support the view
that the Province will move to remediate the remaining properties. It has not been shown that the
contamination poses immediate health risks, which
must be addressed without delay. It has not been
shown that the Province has taken any steps to
do any work. And it has not been shown that the
Province has set aside or even contemplated setting aside money for this work. Abitibi relies on
a statement by the then-Premier in discussing the
possibility that the Province would be obliged to
compensate Abitibi for expropriation of some of
the properties, to the effect that “there would not be
a net payment to Abitibi”: R.F., at para. 12. Apart
from the fact that the Premier was not purporting to
state government policy, the statement simply does
not say that the Province would do the remediation. The Premier may have simply been suggesting
that outstanding environmental liabilities made the
properties worth little or nothing, obviating any net
payment to Abitibi.
[92] Il n’est pas « suffisamment certain » que
la province entreprenne la décontamination des
autres sites : aucune preuve au dossier ne laisse entrevoir cette possibilité. Il n’a pas été démontré que
la contamination pose pour la santé des risques immédiats exigeant la prise de mesures dans les plus
brefs délais. Il n’a pas été démontré que la province
a pris quelque mesure que ce soit pour réaliser des
travaux. Et il n’a pas été démontré que la province
a prévu des sommes d’argent pour ces travaux ou
qu’elle a même songé à en prévoir. Abitibi se fonde
sur une déclaration du premier ministre de l’époque, qui examinait la possibilité que la province
soit tenue de verser à Abitibi une indemnité pour
l’expropriation de certains terrains, selon laquelle
[TRADUCTION] « aucun montant net ne serait versé
à Abitibi » : m.i., par. 12. Mis à part le fait que le
premier ministre ne prétendait pas établir une politique gouvernementale, sa déclaration n’indique
aucunement que la province exécuterait la décontamination. Le premier ministre indiquait peut-être
simplement qu’en raison des exigences environnementales non respectées, les terrains ne valaient
plus rien ou presque et qu’il serait inutile de verser
quoi que ce soit à Abitibi.
[93] My colleague Deschamps J. concludes that
the findings of the CCAA court establish that it was
[93] Ma collègue la juge Deschamps conclut
que les constatations du juge de première instance
484
nfld. and labrador
[2012] 3 S.C.R.
“sufficiently certain” that the Province would remediate the land, converting Abitibi’s regulatory
obligations under the EPA Orders to contingent
claims that can be compromised under the CCAA.
With respect, I find myself unable to agree.
établissent qu’il est « suffisamment certain » que
la province décontaminerait les terrains, transformant ainsi les exigences réglementaires que les ordonnances EPA imposent à Abitibi en réclamations
éventuelles pouvant faire l’objet d’une transaction
sous le régime de la LACC. Avec égards, je ne puis
souscrire à cette conclusion.
[94] The CCAA judge never asked himself the
critical question of whether it was “sufficiently certain” that the Province would do the work itself.
Essentially, he proceeded on the basis that the EPA
Orders had not been put forward in a sincere effort
to obtain remediation, but were simply a money
grab. The CCAA judge buttressed his view that the
Province’s regulatory orders were not sincere by
opining that the orders were unenforceable (which
if true would not prevent new EPA orders) and by
suggesting that the Province did not want to assert a contingent claim, since this might attract a
counterclaim by Abitibi for the expropriation of
the properties (something that may be impossible
due to Abitibi’s decision to take the expropriation
issue to NAFTA (the North American Free Trade
Agreement Between the Government of Canada,
the Government of the United Mexican States and
the Government of the United States of America,
Can. T.S. 1994 No. 2), excluding Canadian courts).
In any event, it is clear that the CCAA judge, on the
reasoning he adopted, never considered the question of whether it was “sufficiently certain” that the
Province would remediate the properties. It follows
that the CCAA judge’s conclusions cannot support
the view that the outstanding obligations are contingent claims under the CCAA.
[94] Le juge de première instance ne s’est jamais
posé la question cruciale de savoir s’il était « suffisamment certain » que la province exécuterait ellemême les travaux. Essentiellement, il a tenu pour
acquis que les ordonnances EPA n’avaient pas été
émises avec l’intention sincère d’obtenir la décontamination des sites, mais qu’il s’agissait simplement
d’une manœuvre pour soutirer de l’argent. Le juge a
renforcé son point de vue selon lequel les ordonnances réglementaires émises par la province étaient
dépourvues de sincérité en exprimant l’avis qu’elles
n’étaient pas susceptibles d’exécution (ce qui, si cela
s’avérait exact, n’empêcherait pas que de nouvelles
ordonnances soient émises). Le juge a également
laissé entendre que la province ne voulait pas produire une réclamation éventuelle, ce qui aurait pu
provoquer le dépôt d’une demande reconventionnelle d’Abitibi pour l’expropriation des propriétés (un résultat qui peut s’avérer impossible étant
donné la décision d’Abitibi de soumettre la question de l’expropriation à l’ALÉNA (Accord de libreéchange nord-américain entre le gouvernement du
Canada, le gouvernement des États-Unis d’Amérique et le gouvernement des États-Unis du Mexique,
R.T. Can. 1994 no 2), en écartant la juridiction des
tribunaux canadiens). Quoi qu’il en soit, il est évident que dans son raisonnement, le juge de première
instance n’a jamais examiné la question de savoir
s’il était « suffisamment certain » que la province
décontaminerait les sites. Il s’ensuit que les conclusions du juge ne peuvent soutenir le point de vue
selon lequel les obligations non exécutées constituent des réclamations éventuelles au sens de la
LACC.
[95] My colleague concludes:
[95] Ma collègue conclut comme suit :
[The CCAA judge] did at times rely on indicators that
are unique and that do not appear in the analytical
framework I propose above, but he did so because of the
exceptional facts of this case. Yet, had he formulated the
À l’occasion, [le juge] s’est appuyé sur des indicateurs
singuliers qui ne figurent pas dans le cadre analytique
que j’ai déjà proposé, mais cela s’explique par les faits exceptionnels en l’espèce. Or, s’il avait formulé la question
[2012] 3 R.C.S.
t.-n.-et-labrador
485
question in the same way as I have, his conclusion, based
on his objective findings of fact, would have been the
same. . . . The CCAA judge’s assessment of the facts . . .
leads to no conclusion other than that it was sufficiently
certain that the Province would perform remediation
work and therefore fall within the definition of a creditor with a monetary claim. [Emphasis added; para. 58.]
comme je l’ai posée, sa conclusion, appuyée sur ses
constatations de fait objectives, aurait été la même. [. . .]
L’appréciation des faits par le juge [. . .] ne permet de tirer
aucune conclusion autre que celle suivant laquelle il était
suffisamment certain que la province exécuterait des travaux de décontamination et qu’elle était par conséquent
visée par la définition d’un créancier ayant une réclamation pécuniaire. [Je souligne; par. 58.]
[96] I must respectfully confess to a less sanguine view. First, I find myself unable to decide the
case on what I think the CCAA judge would have
done had he gotten the law right and considered the
central question. In my view, his failure to consider
that question requires this Court to answer it in his
stead on the record before us: Housen v. Nikolaisen,
2002 SCC 33, [2002] 2 S.C.R. 235, at para. 35. But
more to the point, I see no objective facts that support, much less compel, the conclusion that it is
“sufficiently certain” that the Province will move
to itself remediate any or all of the pollution Abitibi
caused. The mood of the regulator in issuing remediation orders, be it disinterested or otherwise,
has no bearing on the likelihood that the Province
will undertake such a massive project itself. The
Province has options. It could, to be sure, opt to do
the work. Or it could await the result of Abitibi’s
restructuring and call on it to remediate once it resumed operations. It could even choose to leave the
sites contaminated. There is nothing in the record
that makes the first option more probable than the
others, much less establishes “sufficient certainty”
that the Province will itself clean up the pollution,
converting it to a debt.
[96] Avec égards, je dois avouer que je ne partage pas la certitude de ma collègue à ce titre.
Premièrement, j’estime ne pas pouvoir trancher le
pourvoi en me fondant sur ce que je crois qu’aurait
fait le juge de première instance s’il avait alors saisi
correctement le droit et examiné la question réellement en jeu. À mon avis, le fait qu’il n’ait pas examiné cette question oblige notre Cour à y répondre
à sa place au vu du dossier : Housen c. Nikolaisen,
2002 CSC 33, [2002] 2 R.C.S. 235, par. 35. Mais,
plus précisément, je ne vois pas de faits objectifs
qui appuient, et encore moins qui imposent, la
conclusion selon laquelle il est « suffisamment certain » que la province entreprendra elle-même de
décontaminer un site ou tous les sites pollués par
Abitibi. L’humeur de l’organisme de réglementation qui ordonne la décontamination, qu’il soit ou
non désintéressé, n’a aucune incidence sur la probabilité que la province entreprenne elle-même un
projet d’une telle ampleur. Des choix s’offrent à la
province. Elle pourrait certes choisir d’exécuter les
travaux. Ou elle pourrait attendre le résultat de la
restructuration d’Abitibi et lui demander d’exécuter
les travaux d’assainissement une fois qu’elle aura
repris ses activités. Elle pourrait même choisir de
laisser les sites contaminés. Rien au dossier n’indique que le premier choix est plus susceptible d’être
retenu que les autres, et encore moins qui établisse
qu’il est « suffisamment certain » que la province
exécutera elle-même la décontamination, convertissant ainsi l’opération en une créance.
[97] I would allow the appeal and issue a declaration that Abitibi’s remediation obligations under
the EPA Orders do not constitute claims compromisable under the CCAA, except for work done or
tendered for on the Buchans site.
[97] Je suis d’avis d’accueillir le pourvoi et de déclarer que les obligations de décontaminer les sites
qui incombent à Abitibi aux termes des ordonnances EPA ne constituent pas des réclamations pouvant faire l’objet d’une transaction aux termes de
la LACC, à l’exception des travaux exécutés sur le
site de Buchans ou à l’égard desquels des appels
d’offres ont été lancés.
486
nfld. and labrador
v. abitibibowater LeBel J.
[2012] 3 S.C.R.
The following are the reasons delivered by
Version française des motifs rendus par
[98] LeBel J. (dissenting) — I have read the reasons of the Chief Justice and Deschamps J. They
agree that a court overseeing a proposed arrangement under the Companies’ Creditors Arrangement
Act, R.S.C. 1985, c. C‑36 (“CCAA”), cannot relieve
debtors of their regulatory obligations. The only
regulatory orders that can be subject to compromise are those which are monetary in nature. My
colleagues also accept that contingent environmental claims can be liquidated and compromised if it
is established that the regulatory body would remediate the environmental contamination itself, and
hence turn the regulatory order into a monetary
claim.
[98] Le juge LeBel (dissident) — J’ai pris
connaissance des motifs de la Juge en chef et de
la juge Deschamps. Elles s’entendent pour affirmer qu’un tribunal qui supervise un arrangement
proposé aux termes de la Loi sur les arrangements
avec les créanciers des compagnies, L.R.C. 1985,
ch. C‑36 (« LACC »), ne peut soustraire les débiteurs aux exigences réglementaires qui leurs sont
imposées. Seules peuvent faire l’objet d’une transaction les ordonnances réglementaires de nature
pécuniaire. Mes collègues reconnaissent également
que les réclamations environnementales éventuelles peuvent être liquidées ou faire l’objet d’une
transaction s’il est établi que l’organisme administratif se chargerait de la décontamination, transformant ainsi l’ordonnance réglementaire en une
réclamation pécuniaire.
[99] At this point, my colleagues disagree on the
proper evidentiary test with respect to whether the
government would remediate the contamination. In
the Chief Justice’s opinion, the evidence must show
that there is a “likelihood approaching certainty”
that the province would remediate the contamination itself (para. 86). In my respectful opinion, this
is not the established test for determining where
and how a contingent claim can be liquidated in
bankruptcy and insolvency law. The test of “sufficient certainty” described by Deschamps J., which
does not look very different from the general civil
standard of probability, better reflects how both
the common law and the civil law view and deal
with contingent claims. On the basis of the test
Deschamps J. proposes, I must agree with the Chief
Justice and would allow the appeal.
[99] Sur ce, mes collègues diffèrent d’opinion
quant au critère de preuve applicable pour déterminer si le gouvernement entend effectuer la
décontamination. De l’avis de la Juge en chef, la
preuve doit démontrer une « probabilité proche de
la certitude » que la province se chargerait de la
décontamination (par. 86). À mon humble avis,
il ne s’agit pas du critère établi pour déterminer
si, et de quelle façon, une réclamation éventuelle
peut être liquidée en droit de la faillite et de l’insolvabilité. Le critère de ce qui est « suffisamment certain » qu’énonce la juge Deschamps ne
semble pas différer beaucoup de la norme générale de probabilité en matière civile et reflète
mieux la façon dont la common law et le droit civil
envisagent et traitent les réclamations éventuelles. Cependant, en appliquant le critère que propose
la juge Deschamps, je dois souscrire aux motifs
de la Juge en chef et je suis d’avis d’accueillir le
pourvoi.
[100] First, no matter how I read the CCAA court’s
judgment (2010 QCCS 1261, 68 C.B.R. (5th) 1), I
find no support for a conclusion that it is consistent
with the principle that the CCAA does not apply to
purely regulatory obligations, or that the court had
evidence that would satisfy the test of “sufficient
certainty” that the province of Newfoundland and
[100] Tout d’abord, sans égard à la façon d’envisager le jugement du tribunal chargé d’appliquer la
LACC (2010 QCCS 1261, 68 C.B.R. (5th) 1), rien à
mon sens ne permet de conclure qu’il soit conforme
au principe selon lequel la LACC ne s’applique pas
aux exigences purement réglementaires, ou que la
preuve faite devant le tribunal respecterait le critère
[2012] 3 R.C.S.
t.-n.-et-labrador
c. abitibibowater Le juge LeBel
487
Labrador (“Province”) would perform the remedial
work itself.
voulant qu’il soit « suffisamment certain » que la
province de Terre-Neuve-et-Labrador (« province ») exécuterait elle-même les travaux de décontamination.
[101] In my view, the CCAA court was concerned
that the arrangement would fail if the Abitibi
respondents (“Abitibi”) were not released from
their regulatory obligations in respect of pollution.
The CCAA court wanted to eliminate the uncertainty that would have clouded the reorganized corporations’ future. Moreover, its decision appears to
have been driven by an opinion that the Province
had acted in bad faith in its dealings with Abitibi
both during and after the termination of its operations in the Province. I agree with the Chief Justice
that there is no evidence that the Province intends
to perform the remedial work itself. In the absence
of any other evidence, an offhand comment made
in the legislature by a member of the government
hardly satisfies the “sufficient certainty” test. Even
if the evidentiary test proposed by my colleague
Deschamps J. is applied, this Court can legitimately disregard the CCAA court’s finding as the
Chief Justice proposes, since it did not rest on a sufficient factual foundation.
[101] À mon avis, le tribunal de première instance craignait un échec de l’arrangement si les
sociétés du groupe Abitibi intimées (« Abitibi »)
ne pouvaient se libérer des exigences réglementaires relatives à la pollution. Le tribunal voulait
écarter l’incertitude qui aurait assombri l’avenir de
ces sociétés après leur réorganisation. De plus, sa
décision semble motivée par l’opinion suivant laquelle la province avait traité de mauvaise foi avec
Abitibi dès que cette dernière eût cessé ses activités
dans cette province. Je suis d’accord avec la Juge en
chef pour conclure qu’aucune preuve ne confirme
l’intention de la province d’exécuter elle-même les
travaux de décontamination. En l’absence de tout
autre élément de preuve, une remarque faite en passant par un ministre devant l’assemblée législative
peut difficilement satisfaire au critère de ce qui est
« suffisamment certain ». Même si l’on applique le
critère de preuve que propose ma collègue la juge
Deschamps, notre Cour peut légitimement écarter
les conclusions du tribunal de première instance
comme le propose la Juge en chef car elles ne reposent sur aucun fondement factuel suffisant.
[102] For these reasons, I would concur with the
disposition proposed by the Chief Justice.
[102] Pour ces motifs, je suis d’avis de souscrire
au dispositif que propose la Juge en chef.
Appeal dismissed with costs, McLachlin C.J.
and LeBel J. dissenting.
Pourvoi rejeté avec dépens, la juge en chef
McLachlin et le juge LeBel sont dissidents.
Solicitors for the appellant: WeirFoulds,
Toronto; Attorney General of Newfoundland and
Labrador, St. John’s.
Procureurs de l’appelante : WeirFoulds,
Toronto; procureur général de Terre-Neuve-etLabrador, St. John’s.
Solicitors for the respondents AbitibiBowater
Inc., Abitibi-Consolidated Inc. and Bowater
Canadian Holdings Inc.: Stikeman Elliott, Toronto.
Procureurs des intimées AbitibiBowater Inc.,
Abitibi-Consolidated Inc. et Bowater Canadian
Holdings Inc. : Stikeman Elliott, Toronto.
Solicitors for the respondent the Ad Hoc
Committee of Bondholders: Goodmans, Toronto.
Procureurs de l’intimé le comité ad hoc des
créanciers obligataires : Goodmans, Toronto.
Solicitors for the respondents the Ad Hoc
Committee of Senior Secured Noteholders and the
U.S. Bank National Association (Indenture Trustee
Procureurs des intimés le comité ad hoc des
porteurs de billets garantis de premier rang
et U.S. Bank National Association (fiduciaire
488
nfld. and labrador
v. abitibibowater
[2012] 3 S.C.R.
for the Senior Secured Noteholders): Borden
Ladner Gervais, Toronto.
désigné par l’acte constitutif pour les porteurs de
billets garantis de premier rang) : Borden Ladner
Gervais, Toronto.
Solicitor for the intervener the Attorney General
of Canada: Attorney General of Canada, Ottawa.
Procureur de l’intervenant le procureur général du Canada : Procureur général du Canada,
Ottawa.
of Ontario: Attorney General of Ontario, Toronto.
Procureur de l’intervenant le procureur général de l’Ontario : Procureur général de l’Ontario,
Toronto.
Solicitor for the interveners the Attorney
General of British Columbia and Her Majesty
The Queen in Right of British Columbia: Attorney
General of British Columbia, Victoria.
Procureur des intervenants le procureur général
de la Colombie-Britannique et Sa Majesté la Reine
du chef de la Colombie-Britannique : Procureur
général de la Colombie-Britannique, Victoria.
of Alberta: Attorney General of Alberta, Edmonton.
Procureur de l’intervenant le procureur général de l’Alberta : Procureur général de l’Alberta,
Edmonton.
Solicitors for the intervener Ernst & Young Inc.,
as Monitor: Thornton Grout Finnigan, Toronto.
Procureurs de l’intervenante Ernst & Young
Inc., en sa qualité de contrôleur : Thornton Grout
Finnigan, Toronto.
Solicitors for the intervener the Friends of the
Earth Canada: Ecojustice, University of Ottawa,
Ottawa; Fasken Martineau DuMoulin, Toronto.
Procureurs de l’intervenante Les Ami(e)s de la
Terre Canada : Ecojustice, Université d’Ottawa,
Ottawa; Fasken Martineau DuMoulin, Toronto.
T
A
B
11
Court of Queen’s Bench of Alberta
Date: 20050721
Dockets: BK03 109703, BK03 109704, BK03 109685, BK03 109686
Registry: Edmonton
Between:
Strathcona County
Applicant
- and -
PriceWaterhouseCoopers Inc.,
Trustee of the Estates of Fantasy Construction Ltd.,
Madison Development Corporation 1984 Ltd.,
John Van Leenen, and Irene Jean Van Leenen, Bankrupts
Respondents
_______________________________________________________
Reasons for Judgment
of the
Honourable Mr. Justice Brian R. Burrows
_______________________________________________________
[1]
Strathcona County seeks a declaration that PriceWaterhouseCoopers, as Trustee in
Bankruptcy of the bankrupts, is bound by the terms of Development Permits issued by the
County in respect of a condominium project in the County. In particular the County seeks
declarations which would have the effect of requiring the Trustee to use the assets of the
bankrupt estates to pay the cost of drainage work the Development Permits required be done, but
which was not done. The Trustee takes the position that it cannot be required to use estate assets
to do the work and that, at best, the Trustee may have a provable claim as a creditor in the
bankruptcy.
2005 ABQB 559 (CanLII)
Citation: Strathcona County v. PriceWaterhouseCoopers Inc., 2005 ABQB 559
Page: 2
[2]
In 1999 and 2000 the County issued three Development Permits to Fantasy Construction
Ltd., all relating to a proposed multi-family residential development in the County known as
Sunrise Park. The first permit, dated May 31, 1999, was for Phase I of the project which covered
12 dwelling units. The second, dated October 4, 1999, was for Phase II covering 14 units. The
third was issued on August 30, 2000 for Phases III and IV and covered 25 units.
[3]
Each of the permits was issued subject to express conditions requiring the installation of
appropriate stormwater management. The permits required Fantasy to submit grading plans to
County officials for review and approval and then to do site grading in accordance with those
plans.
[4]
At least as of February 2004 titles to various units of the condominium project were in
the names of Madison Development Corporation 1984 Ltd. and the individual bankrupts. The
bankrupt John Van Leenen is the sole shareholder and director of both corporate bankrupts.
[5]
On November 13, 2003 the County issued Stop Orders to Fantasy in respect of all three
Development Permits. Grading on the project lands did not comply with the design grades that
had been submitted. There had been unauthorized alterations to a berm structure on the
property. The Stop Orders required Fantasy to submit a new surface drainage plan for approval
by November 30, 2003 and to complete the drainage work by May 31, 2004. Fantasy submitted
a new drainage plan in response to the Stop Orders but there were a number of deficiencies and it
was not approved.
The Drainage Action
[6]
On February 6, 2004 the County commenced an action by Originating Notice against
Fantasy, Madison and the Van Leenens (the “developers”) seeking declarations that they were in
breach of the Municipal Government Act, the Strathcona County Land Use Bylaw, the
Development Permits, and the Stop Orders. The County also sought a mandatory injunction
pursuant to the Municipal Government Act, s. 554 requiring the developers to complete the
necessary grading and drainage work to the satisfaction of the County. This proceeding is
referred to as “the drainage action”.
[7]
The developers did not contest the drainage action. They acknowledged that the County
was entitled to the relief claimed. However, they asked for more time to comply with the Stop
Orders.
[8]
On February 18, 2004 Sanderman J. issued an Order, founded on the developers’
concessions, declaring the developers in breach of the Act, Bylaw, Development Permits, and
Stop Orders, and granting the mandatory injunction which the County had sought. The
The Development Permits and Stop Orders
Page: 3
[9]
The plans were not submitted as required by the injunction. The developers sought and
were granted time extensions. They submitted plans to the County but they were unacceptable.
[10] On June 15, 2004 County personnel inspected the construction site and discovered a
contractor doing drainage work though no plan had been approved. When informed that there
was no approved plan, the contractor stopped work.
July 22, 2004 Order
[11] On July 22, 2004 the County applied before Sanderman J. for further relief in the
drainage action. Efforts to get Fantasy to provide an acceptable drainage plan had been in vain.
Unapproved drainage work had been done. Counsel who had appeared for Mr. Van Leenen in
February had ceased to act. Mr. Van Leenen had fired the successor counsel just before the July
22 application. Purchasers of condominium units had advised the County that they had lost all
confidence in Fantasy and would not allow Fantasy on their property to do drainage work. The
transcript of the proceedings on July 22 demonstrates that Sanderman J. concluded that Mr. Van
Leenen was solely at fault for the drainage issue not having been resolved by that date.
[12] The main thrust of the July 22 application was to put in place a procedure by which the
drainage work would get done without further involvement of the developers, but at their
expense.
[13] The County had sought a temporary injunction preventing the developers from engaging
in unapproved drainage work. However, it was plain that approved work would not get done if
any reliance was placed on the developers. So Sanderman J. issued a permanent injunction
requiring them “to cease drainage related work including trenching, excavation and pouring of
concrete”. The Order also declared that the County would be at liberty to engage an engineer to
complete a satisfactory drainage plan and to complete the required work at the expense of the
developers. The Order further required:
-
Fantasy and Madison to pay $240,000 into Court by July 30, 2004 as security for
the completion of the work,
-
Fantasy, Madison and the Van Leenens not to sell any of the lands, and
-
any funds received on existing sales to be paid into Court pending further
directions.
[14] On August 12, 2004 the developers, having retained new counsel, applied to Sanderman
J. for a variation of the July 22 Order on the ground that they had not had notice of the
developers were required to submit drainage plans prepared by an engineer to the satisfaction of
the County by March 31, 2004.
application and because the obligations imposed by the Order were “unnecessarily onerous and
difficult to comply with”. In an affidavit filed in support of this application Mr. Van Leenen
swore that Fantasy, Madison and he, himself, did not have the funds required to be paid into
Court and attempts to borrow them had been unsuccessful.
[15] On that application Sanderman J. suspended the requirement that Fantasy and Madison
pay $240,000 into Court as security until August 26, 2004.
Safety Code Proceedings
[16] At the same time as the drainage action was proceeding, the County was also taking steps
against Fantasy and Madison in relation to violations of the Safety Code. Those proceedings
were also under Sanderman J.’s case management. Mr. Van Leenen’s actions in that context
were similarly uncooperative and frustrating to the County, purchasers of condominium units
and the Court.
August 26, 2004 Order
[17] On August 26, 2004 Mr. Van Leenen, who had again changed counsel, submitted, based
on his construction experience, that the required drainage work would not cost more than
$45,000 so that security of $240,000 was excessive. He made various proposals for dealing with
the safety code and drainage concerns and other issues. Both the County and the Court found the
proposals unacceptable. Sanderman J. ordered Fantasy and Madison to pay $625,000 and the
Van Leenens to pay $125,000 into Court by October 1, 2004 as security in respect of the safety
code deficiencies, and ordered that all assets owned by the developers be frozen. The obligation
created by the July 22 Order to pay $240,000 into Court as security in respect of the drainage
work continued to be outstanding.
The Bankruptcies
[18] The developers assigned themselves into bankruptcy on September 9 and 10, 2004.
PriceWaterhouseCoopers Inc. was appointed Trustee of all four bankrupt estates.
Drainage Work Not Done
[19] Though, at the time of the July 22 Order, the intention clearly was that the County would
do the drainage work that the developers had not done, that did not occur by the time of the
bankruptcies. The intention had been that the County would do the work at the expense of the
developers who would pay $240,000 into Court to secure payment. The funds were not paid into
Court. The County did not therefore do the work.
Page: 4
[20] After the assignments into bankruptcy, the County took the position that the Trustee was
obliged to carry out the drainage work. In October 2004 the Trustee attempted to find a practical
solution and applied for an order appointing the Trustee as a receiver and authorizing it to charge
the bankrupt estate in priority to other secured creditors in order to obtain funds to do the
required work. Creditors who would have realized no benefit from the proposed work and who
feared deterioration of their security position opposed that application. I declined to grant the
receivership order because, in my view, the question of whether the proposed course of action
was in the interests of the bankrupt estates, and should therefore be undertaken, was for the
Inspectors and Trustee, not the Court, to determine. (BIA s. 30(1)(g))
[21] It was essential that some of the required work not be further delayed. It was done. At
least some of it was done pursuant to an order preserving the County’s right to claim that the
Trustee ought to have done it and without prejudice to the County’s claim to have the cost paid
out of the bankrupt estates. (Order of November 25, 2004)
[22] In January 2005 the Sunrise Park Condominium Corporation, supported by the County,
applied in early 2005 to have the bankruptcies of Fantasy and Madison annulled. I dismissed the
application. ((2005) 8 C.B.R. (5th) 216)
County’s Position
[23] The County, supported by the Sunrise Park Condominium Corporation, now takes the
position that the obligation to do drainage work according to a County approved plan, survived
the bankruptcy and is now an obligation of the Trustee. They seek a declaration to that effect
and an order requiring that the drainage work, for which an engineering firm retained by the
County has prepared a plan, be completed at the expense of the bankrupt estates.
Panamericana Case
[24] The County cites Panamericana De Bienes Y Servicio (Receiver of) v. Northern Badger
Oil & Gas Ltd. (1991) 81 D.L.R. (4th) 280 (Alta. C.A.) (leave to appeal to the Supreme Court of
Canada refused, 86 D.L.R. (4th) viii) in support of its application. Northern Badger was the
operator of several oil wells. The Energy Resources Conservation Board regulated oil well
operations. The Board had ordered Northern Badger to properly abandon several non-producing
wells to make them environmentally safe. The process was expected to cost in excess of
$200,000. Northern Badger defaulted on security held by Panamericana and a Court- appointed
receiver was put in place. Shortly thereafter a bankruptcy receiving order was issued. Northern
Badger’s assets were insufficient to cover both Panamericana’s secured claim and the
abandonment costs. The Alberta Court of Appeal held that the receiver was obliged to use the
bankrupt’s funds to pay for the well abandonment – to comply with the ERCB’s order – even
though doing so would prejudice the secured creditor, Panamericana.
Page: 5
Page: 6
Laycraft J.A., writing for the Court, articulated the issue as follows: (page 289)
Thus the direct issue in this litigation, in my opinion, is whether the Bankruptcy
Act requires that the assets in the estate of an insolvent well licensee should be
distributed to creditors leaving behind the duties respecting environmental safety,
which are liabilities, as a charge to the public.
[26] The main argument in support of the secured creditor’s position was that the obligation to
the Board was a “provable claim” under the Bankruptcy Act. It was therefore subject to the
scheme of distribution under that Act which gave priority to secured creditors. The Trustee
would therefore not be able to obey the Board’s abandonment order. The requirements of
provincial legislation could not subvert the scheme of distribution specified by the Bankruptcy
Act.
[27] Laycraft J.A. observed that a “provable claim” in bankruptcy has two features. First the
bankrupt must have been subject to a liability. This feature was present. From the day the wells
were drilled, Northern Badger was liable for their ultimate abandonment.
[28] The second feature was that the liability must be owed to the party said to have the
provable claim, the creditor. Laycraft J.A. held that this feature was not present. Northern
Badger’s abandonment obligation was not owed to the ERCB. It was owed to the public at large.
Laycraft J.A. said: (page 290)
With respect, I do not agree, however, that the public officer or public authority
given the duty of enforcing a public law thereby becomes a “creditor” of the
person bound to obey it.
The statutory provisions requiring the abandonment of oil and gas wells are part
of the general law of Alberta, binding every citizen of the province. All who
become licensees of oil and gas wells are bound by them. Similar statutory
obligations bind citizens in many other areas of modern life. Rules relating to
health, or the prevention of fires, or the clearing of ice and snow, or the
demolition of unsafe structures are examples which come to mind. But the
obligation of the citizen is not to the peace officer, or public authority which
enforces the law. The duty is owed as a public duty by all the citizens of the
community to their fellow citizens. When the citizen subject to the order
complies, the result is not the recovery of money by the peace officer or public
authority, or of a judgment for money, nor is that the object of the whole process.
Rather, it is simply the enforcement of the general law. The enforcing authority
does not become a “creditor” of the citizen on whom the duty is imposed.
[29] Laycraft J.A. held that the Board was not a creditor even though the statute which
empowered it gave it the authority to do the required abandonment work itself and to create a
[25]
statutory debt in its own favour. He observed that though such powers existed, the Board had
not chosen to use them. It had not taken the steps which the statute permitted it to take to make
itself a creditor. It was seeking to enforce the bankrupt’s obligation by steps which did not
involve making itself a creditor.
[30] Having concluded that the Board was not a creditor, Laycraft J.A. went on to consider
whether a receiver appointed under a security instrument had a duty to comply with the
provincial law which the Board was charged to enforce. After considering several points
relevant to that issue, including the constitutionally validity of provincial legislation which has
an incidental effect on a subject within federal jurisdiction, Laycraft J.A. concluded that the
Receiver was bound to obey the Board’s order and to use estate assets to pay for the
abandonment despite the resulting prejudice to the secured creditor.
[31] Strathcona County submits that the situation in this case is governed by Panamericana.
The obligation imposed on Fantasy in the Development Permits relating to drainage grading was
an obligation owed to the public in general – not to the County. The County’s position is
analagous to that of the ERCB in Panamericana. It is the public agency charged by the
Legislature to ensure that standards required for the safety of citizens and their property are
imposed on those who undertake land development. On the day it began to develop the Sunrise
Park Condominium project pursuant to the first Development Permit, Fantasy acquired an
obligation to ensure that the required drainage work was done. That obligation did not cease to
exist when Fantasy assigned itself into bankruptcy and the Trustee became responsible for the
administration of its assets. Just as the receiver in Panamericana was obliged to use the assets
of Northern Badger to cover the cost of abandonment of the oil wells even though the secured
creditor would not, as a result, realize as much of its secured debt, so here, the Trustee is obliged
to use the bankrupts’ assets to cover the cost of the drainage work, even though secured creditors
may not, as a result, recover as much on their claims.
BIA Amendments
[32] The Trustee submits that amendments to the BIA made after Panamericana and in
response to that case have “overruled the state of the common law created by Panamericana”.
[33] It appears accurate that implications of the decision in Panamericana and other similar
decisions that preceded it (Canada Trust Co. v. Bulora Corp. (1981), 39 C.B.R. (N.S.) 152 (Ont.
C.A.) and Quanta Resources Corp. v. New York (City) (1986) 474 U.S. 494 (U.S.S.C.)) resulted
in both judicial and legislative response. Developments are traced by Dr. Dianne Saxe in her
article Trustee’s and Receivers’ Environmental Liability Update (1997) 49 C.B.R. (3d) 138.
[34] Dr. Saxe observes that these cases created uncertainty which produced a reluctance on
the part of Trustees and receivers to accept assignments in cases involving environmental issues.
Some of this reluctance was overcome judicially. In Re Lamford Forest Products Ltd. (1991),
10 C.B.R. (3d) 137 (B.C.S.C.) Harvey J. held that though the cost of compliance with an
Page: 7
Page: 8
[35] In November 1992, the BIA was amended to confirm the protection of Trustees from
personal liability. A Trustee could not be personally liable for any environmental damage that
occurred before the Trustee’s appointment. If there was environmental damage after the
Trustee’s appointment, the Trustee could only be liable if the damage resulted from the Trustee’s
negligence. (S.C. 1992, c. 27, s. 9(1) enacting BIA s. 14.06(2))
[36] In April 1997 the BIA was further amended to extend to receivers the protection from
personal liability that had been granted to Trustees in 1992. The standard of care required of
Trustees and receivers in respect of after appointment environmental damage was reduced from
negligence to “gross negligence or willful misconduct”. In limited circumstances, a Trustee
could avoid personal liability for failure to comply with an order requiring the Trustee to remedy
an environmental condition by abandoning any interest in the property affected by the condition.
The Crown was given a charge, prior to any other claim, against real property on which an
environmental cleanup was required for the cost of the cleanup. Though normally a liability must
exist at the time of the bankruptcy in order to be a provable claim, claims against a bankrupt
estate for environmental cleanup costs would be provable claims regardless of when the claim
arose.
[37] The principle established in Panamericana is that an obligation of a bankrupt to comply
with public safety or environmental standards, imposed pursuant to statutory authority, must be
honoured by the Trustee using estate assets notwithstanding resulting prejudice to creditors of
the bankrupt. The BIA amendments deal with Trustee’s personal liability, Trustee’s standard of
care in relation to environmental issues, Trustee’s abandonment of property to avoid liability for
environmental conditions, crown priority, and timing of provable claims. It may be that
Panamericana inspired the concerns that lead to the amendments. Parliament responded to
those concerns as it considered necessary. But in doing so it did not overrule Panamericana. In
my view the principle articulated and applied in Panamericana is still part of the law.
[38] The Trustee referred to an extensive collection of materials generated by the
parliamentary committee which reviewed both BIA amendments. Those materials do not support
the conclusion that Parliament’s intention in enacting the amendments was to overrule
Panamericana.
[39] I note that the vitality of the Panamericana principle was not doubted by either Slatter J.
in Re Big Sky Living Inc. (2002) 318 A.R. 165 (para. 46) or Master Wacowich in KPMG v.
Kovacs (2003) 2 C.B.R. (5th) 320.
BIA s. 14.06(8)
environmental protection order would have priority to the claim of a secured creditor, it would
not have priority to the fees of the Trustee. He also held that the Trustee would not be personally
liable for the compliance cost.
Page: 9
(8) Notwithstanding subjection 121(l), a claim against a debtor in a bankruptcy or
proposal for the costs of remedying any environmental condition or
environmental damage affecting real property of the debtor shall be a provable
claim, whether the condition arose or the damage occurred before or after the date
of the filing of the proposal or the date of the bankruptcy.
[41] In Panamericana Laycraft J.A. held that the obligation to pay the abandonment costs
was not a provable claim. It was a liability of the bankrupt. But it was a liability owed to the
public at large which the ERCB was charged to enforce. So it was not a liability owed to a
creditor. It therefore lacked the features of a provable claim. It might be argued that s.14.06(8)
provides, despite that reasoning, that an environmental costs claim is a provable claim.
[42] That, in my view, would be a misinterpretation of s. 14.06(8). I interpret the section as
intending only to overcome what would otherwise be the effect of s. 121(1). That section
provides that liabilities to which the bankrupt is subject on the day on which he becomes
bankrupt, or to which he may become subject before discharge by reason of an obligation
existing at the time of bankruptcy, are provable claims. If that section applied, an environmental
claim arising after the date of bankruptcy but before discharge might not be a provable claim.
Section 14.06(8) deals only with that timing issue. It does not convert a statutorily imposed
obligation owed to the public at large into a liability owed to the public body charged with
enforcing it.
Application of Panamericana
[43] The Panamericana principle continues to be part of the law. I am obliged to apply it
where a bankrupt has an obligation of the type contemplated by the principle at the time of
bankruptcy. In my view that is the situation in the case before me.
[44] The obligation to provide an approved drainage system for the land on which the
condominium development was built was imposed pursuant to statutory authority. The
Municipal Government Act, RSA 2000, c. M-26, requires the County to enact a land use bylaw
(s. 639), and to have a designated development authority to exercise development powers on its
behalf (s. 624(1)). The Act requires that the land use bylaw prescribe the conditions that are to
be attached to a Development Permit (s.640(2)(c)(iv)). The County’s land use bylaw requires
applicants for Development Permits to address site drainage issues. It requires the development
authority to ensure that site drainage issues are properly addressed in a development plan:
Strathcona County Land Use Bylaw, Bylaw 8-2001, s. 6.13. As previously noted, the
Development Permits issued in this case required drainage grading plans to be approved and
followed in construction.
[40] I wish to comment more specifically on BIA s. 14.06(8) because it could appear to be
directed to the reasoning in Panamericana. The subsection reads:
Page: 10
. . . part of the general law of Alberta, binding every citizen of the province. All
who became licensees or oil and gas wells are bound by them. Similar statutory
obligations bind citizens in many other areas of modern life. Rules relating to
health, or the prevention of fires, or the clearing or ice and snow, or the
demolition of unsafe structures are examples which come to mind.”
[46] Is the Panamericana principle limited to a certain subclass of statutory obligations? Is
the obligation to provide appropriate stormwater drainage grading in a land development in that
class? In my view whether the type of statutory obligation to which Panamericana applies is
limited to obligations imposed to protect the safety of citizens or their property or is as broad as
any obligation imposed pursuant to the general law of Alberta, the obligation here in question is
included. The obligation imposed on the land developer in this case was for the benefit of
citizens who would eventually buy units in the project. It was also for the benefit of the
taxpayers of the County upon whom fall some part of the expense of responding to floods which
damage property with inadequate drainage. It is an obligation to which the Panamericana
principle applies.
Effect of July 22, 2004 Order
[47] Was the obligation affected by the July 22, 2004 Order of Sanderman J.? As previously
noted, that Order provided, in part, as follows:
1.
A permanent injunction is hereby granted requiring the Respondents to
cease drainage related work, including trenching, excavation and pouring
of concrete.
2.
It is hereby declared that the County is at liberty to engage the services of
an engineer or engineering firm of the County’s choice to have a Drainage
Plan completed to the County’s satisfaction at the expense of the
Respondents.
3.
It is hereby declared that the County, its designated officers or employees,
agents or contractors, without further notice or further leave of this Court,
are at liberty to enter the Lands and proceed with completion of the work
contemplated under an approved Drainage Plan, at the Respondents’
expense.
[45] In Panamericana Laycraft J.A. held that the obligation to abandon the oil wells was an
obligation owed by Northern Badger to the citizens of Alberta. He said that the obligation was:
Page: 11
The Respondents Fantasy and Madison are hereby ordered to pay
$240,000 into Court by July 30, 2004 as security for completion of the
aforementioned orders.
...
[48] This Order was in force at the time of the bankruptcy. The Trustee observes that
paragraph 1 of the Order enjoined the developers from doing any further drainage work. How
then can it be that the Trustee acquired an obligation to do drainage work?
[49] As noted above, at the time of this Order the County had been attempting for many
months to secure the developer’s compliance with the drainage obligations of the Development
Permits. The developers had never disputed their obligation. They had repeatedly
acknowledged it and sought time extensions to permit them to comply with it. In the weeks
immediately preceding the July 22 Order it had become plain that efforts to secure compliance
were unlikely to succeed. In that context, it appeared that the only way the work would get done
was if the County stepped in to do it. Given that the County had recently discovered the
developer doing drainage grading without an approved plan, it was necessary to have that
activity stopped. The July 22 Order stopped it and contemplated the County doing the required
work at the developer’s expense.
[50] The injunction therefore was part of a plan to secure compliance with the developers’
obligation. Its purpose was similar to the purpose of the Stop Orders which had, it appeared,
been ignored. The other parts of the plan were that the County would retain an engineer to do
the drainage design, would get the work done, and that the developers would pay funds sufficient
to pay for drainage work into Court. The plan failed because the developer did not pay the funds
into Court. Without that security, the County did not do the work.
[51] It is clear that the Order, read as a whole, did not intend to relieve the developers of their
obligation. Quite the contrary. The intention clearly was to ensure the obligation was met at the
expense of the developers. In my view, the Order had no effect on the obligation the County
now seeks to enforce against the Trustee. That obligation was extant at the time of the
bankruptcy. The Panamericana principle applies in this case.
Are all bankrupt estates liable?
[52] The County seeks a declaration that all four of the bankrupt estates, those of Fantasy,
Madison and both Mr. and Mrs. Van Leenen, are subject to the obligation to complete the
drainage work. However, the Development Permits were issued only to Fantasy. Likewise, the
Stop Orders were issued only to Fantasy, albeit to the attention of Mr. Van Leenen.
[53] The Originating Notice of Motion by which the drainage action was commenced on
February 9, 2004 named Madison and the Van Leenens as Respondents in addition to Fantasy
4.
and sought declarations that all four respondents were in breach of the Municipal Government
Act, the Development Permits and the Stop Orders. The pleading alleged that Fantasy was the
developer of the land, that Madison was the owner of 16 units and that the Van Leenens were the
owners of two units.
[54] The Affidavit filed in support of the application contained evidence supporting those
allegations and also indicating that Mr. Van Leenen was the sole director and shareholder of both
Fantasy and Madison. It also recited that the Stop Orders were provided to the registered owners
of the lands including Madison and the Van Leenens.
[55] The Order granted on February 18, 2004 in the drainage action granted the declarations
the County sought. It was declared that all four Respondents were in breach of the Municipal
Government Act, the Development Permits and the Stop Orders. As previously noted this Order
was founded on concessions by the Respondents which are recited in the Order as follows:
. . . AND UPON hearing that the Respondents do not contest the validity of the
Stop Orders, nor do they intend to cross examine Mr. Lanuk on his evidence, nor
do they intend to submit evidence, but they do wish additional time to comply
with the requirements of the Stop Orders . . .
[56] I have reviewed an excerpt from the transcript of the proceedings before Sanderman J. on
February 18, 2004 and there appears to have been no discussion of the basis for concluding that
Madison and the Van Leenens owed, and should be declared to be in breach of, the obligations
imposed by the Development Permits. It does not appear that that specific point was either
raised or conceded in the hearing. It is not specifically mentioned in the recital quoted above. A
concession that the Stop Orders were valid does not equate to an admission that parties not
named in them have an obligation under them.
[57] The materials before me do not address the basis upon which Madison and the Van
Leenens were held in breach. The point was not addressed on this application. I am not certain
as to the effect of the February 18, 2004 Order. Is it now, by reason of the Order, beyond dispute
that Madison and the Van Leenens are in breach of the drainage work obligation imposed by the
Development Permits? In considering whether to make the declaration sought in this application
am I obliged to accept the conclusion recorded in the February 18, 2004 Order?
[58] It may be that these questions do not have practical significance. It may be that the assets
of Fantasy are sufficient to cover the cost of the required work. Or it may be that creditors with
claims only against Fantasy would wish to submit that the cost of the drainage work must be
shared by all four bankrupt estates.
[59] Since this aspect of the matter was not addressed in the application I will at this point
only grant the declaration sought by the County in respect of Fantasy. If counsel wish to address
the issue of whether the same declaration should also be made in respect of Madison and the Van
Leenens, they may arrange to make submissions in that regard.
Page: 12
[60] I therefore grant the declarations sought in paragraphs 1 and 2 of the Notice of Motion in
respect only of the estate of Fantasy Construction Ltd. It may be that the formal order will
require other provisions to give practical effect to these declarations. If counsel are unable to
agree in that regard they may make arrangements for an application to address the matter.
[61] Finally, I wish to observe that during the hearing of this application there was some
discussion of BIA s. 14.06(4) which gives the Trustee the right in certain circumstances to avoid
personal liability for failure to comply with an order requiring a Trustee to remedy an
environmental condition by abandoning the property. It appears from their submissions that
counsel differ on the applicability of this section to this case. If it becomes necessary to
determine whether the section could be invoked in this situation, counsel may wish to make
application in that regard. Though there was argument addressed to the point, I do not consider
it necessary to make any ruling on it now.
Heard on the 10th day of June 2005.
Dated at the City of Edmonton, Alberta this 21st day of July 2005.
Brian R. Burrows
J.C.Q.B.A.
Appearances:
Jeneane S. Grundberg and Daniel R. Peskett
Brownlee
for the Applicant
Michael J. McCabe, Q.C. and Rebecca Ratti
Reynolds, Mirth, Richards & Farmer
for the Respondent
Jeremy H. Hockin
Parlee McLaws
for Sunrise Park Condominium Corporation
Page: 13
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12
CITATION: Nortel Networks Corporation (Re), 2013 ONCA 599
DATE: 20131003
DOCKET: C55682
Goudge, MacPherson and Juriansz 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
Leonard F. Marsello and William R. MacLarkey, for the appellant Her Majesty the
Queen in right of Ontario as represented by the Ministry of the Environment
David W. DeMille, for the City of Belleville and the Algonquin and Lakeshore
Catholic District School Board
Alan B. Merskey and Vasuda Sinha, for the respondents Nortel Networks Corp.,
Nortel Networks Ltd., Nortel Networks Global Corp., Nortel Networks
International Corp. and Nortel Networks Technology Corp.
Joseph Pasquariello, for the Monitor Ernst & Young Inc.
Adam Hirsh, for Former Directors and Officers of Nortel Networks Corp. and
Nortel Networks Ltd.
Jane Dietrich, for Unsecured Creditors’ Committee of Nortel Networks Inc.
Adam Slavens, for Nortel Networks Inc.
Gavin H. Finlayson, for Informal Committee of Noteholders
Heard: June 19, 2013
On appeal from the order of Justice Geoffrey B. Morawetz of the Superior Court
of Justice, dated March 9, 2012, with reasons reported at 2012 ONSC 1213.
Juriansz J.A.:
2013 ONCA 599 (CanLII)
COURT OF APPEAL FOR ONTARIO
A.
OVERVIEW
[1]
The CCAA judge, whose decision is the subject of this appeal, aptly
described the issues as arising “from the untidy intersection” of the Companies'
Creditors Arrangement Act, R.S.C. 1985, c. C-36, (“CCAA”) and the powers of
the provincial Minister of the Environment (“MOE”) “to make orders with respect
to the remediation of real property in Ontario.”
[2]
After the usual order staying proceedings (the “Initial Order”) was granted
to the insolvent respondents, Nortel Networks Corporation, Nortel Networks
Limited,
Nortel
Networks
Global
Corporation,
Nortel
Networks
International
Corporation and Nortel Networks Technology Corporation (collectively, “Nortel or
the “respondents”), the MOE issued orders pursuant to the Environmental
Protection Act, R.S.O. 1990, c. E-19, (“EPA”) requiring Nortel Networks Limited
to remediate environmental contamination remaining on properties it once or
currently owned.
[3]
In his order dated March 9, 2012, the CCAA judge declared that the MOE’s
remediation orders were subject to the stay granted by the Initial Order. Ancillary
to that declaration, he granted certain other relief. He declared that all
proceedings against the respondents or the Former Directors and Officers before
the Ontario Environmental Review Tribunal in relation to the EPA orders were
subject to the stay of proceedings; he authorized the respondents to cease
Page: 2
Page: 3
performing remediation of property; he declared that any claims in relation to
against the respondents or the Former Directors and Officers were subject to the
insolvency claims process; and he authorized the respondents to repudiate all
contractual obligations to carry out remediation at the properties.
[4]
The MOE appeals.
[5]
For the reasons that follow, I would allow the appeal.
B.
FACTS
[6]
Nortel is engaged in a liquidating insolvency and has no operations. The
sites
where
Nortel
and
its
predecessors
once
conducted
manufacturing
operations were largely disposed of in the late 1990s. At that time Nortel
identified environmental impacts that arose from its past operations at Brampton,
Brockville, Kingston, Belleville, and London (the “Impacted Sites”) and was
conducting remediation at those sites on a voluntary or contractual basis.
[7]
On January 14, 2009, Nortel filed for protection under the CCAA. At that
time, Nortel maintained only a partial interest in the London site. It had disposed
of its interests in the other Impacted Sites. As well, the MOE had not issued any
remediation orders against Nortel. Nortel says that it spent some $28.5 million on
remediation of the sites before filing under the CCAA. After Nortel’s CCAA filing,
current or future remediation requirements imposed by orders under the EPA
Page: 4
the MOE issued remediation orders (the “MOE Orders”) that Nortel estimates
[8]
Nortel brought a motion before the CCAA judge seeking an order declaring
that the relief the MOE Orders sought was financial and monetary in nature; that
the Initial Order stayed the MOE Orders; and an order staying all related
proceedings before the Ontario Environmental Review Tribunal. Nortel also
sought authorization and direction that it cease performing remediation at the
Impacted Sites and a declaration that any claims in relation to current or future
remediation by the MOE or any other person against Nortel were stayed and had
to be dealt with according to the CCAA claims procedure. In addition, Nortel
sought an order repudiating or disclaiming any contractual obligations to carry
out remediation at the Impacted Sites; and finally, advice and direction with
respect to the London site where Nortel maintained a partial interest in the
property.
[9]
On March 9, 2012, the CCAA judge determined that, where operations had
ceased on a particular property and a company could only comply with the EPA
or MOE Orders by expending funds, the environmental liabilities involved amount
to financial obligations to pay. Therefore, they were subject to the Initial Order
and had to be addressed as claims in the CCAA process.
would require further expenditures of approximately $18 million.
Page: 5
[10]
On June 22, 2012, the MOE was granted leave to appeal the CCAA
[11]
While the MOE’s appeal was pending, the Supreme Court released its
decision in Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67,
[2012] 3 S.C.R. 443, on December 7, 2012. On March 28, 2013, the parties were
given leave to file “fresh” factums and fresh evidence.
[12]
The parties dispute the interpretation of the Supreme Court’s decision, and
how it should be applied to the case under appeal.
C.
SUPREME COURT’S DECISION IN ABITIBIBOW ATER
[13]
AbitibiBowater Inc. (“Abitibi”) had carried on industrial activities in the
Province of Newfoundland and Labrador for over 100 years. In 2009, Abitibi
sought protection under the CCAA.
[14]
Subsequently,
the
Minister
of
Environment
and
Conservation
of
Newfoundland and Labrador issued five ministerial orders against Abitibi under
the
province’s
environmental
legislation.
These
orders
required Abitibi
to
remediate several sites, most of which had been expropriated by the province.
The province also brought a motion for a declaration that the CCAA claims
process did not bar the province from enforcing the orders. The province argued,
among other things, that the remediation orders were regulatory orders, not
judge’s order.
Page: 6
"claims" under the CCAA, and therefore they could not be stayed or subjected to
[15]
The Supreme Court decided that a CCAA court could determine whether
an environmental order that is not framed in monetary terms is in fact a “provable
claim”. Justice Deschamps, writing for the majority, held that “[a] finding that a
claim of an environmental creditor is monetary in nature does not interfere in any
way with the creditor's activities. Its claim is simply subjected to the insolvency
process” (at para. 18). The CCAA court should consider the substance of an
order rather than its form: “[i]f the Province's actions indicate that, in substance, it
is asserting a provable claim within the meaning of federal legislation, then that
claim can be subjected to the insolvency process” (at para. 19).
[16]
The CCAA, informed by the Bankruptcy and Insolvency Act, R.S.C. 1985,
c. B-3 (“BIA”), establishes three requirements for establishing a provable claim.
First, there must be a debt, liability or obligation to a creditor. This requirement is
satisfied simply by the regulatory body exercising its enforcement power against
a debtor: at paras. 26-27.
[17]
Second, a claim must be founded on an obligation that falls within the time
limit for claims. Section 11.8(9) of the CCAA provides temporal flexibility for
environmental claims by providing that
[a] claim against a debtor company for costs of remedying any
environmental condition or environmental damage affecting real
compromise in the CCAA restructuring process.
Page: 7
However, statutory environmental obligations relating to polluting activities that
continue after the reorganization will not satisfy the time limits: at paras. 28-29.
[18]
Both the first and second requirements were easily satisfied in the Abitibi
case.
[19]
The third requirement is “that it be possible to attach a monetary value to
the obligation”; that is, “the question is whether orders that are not expressed in
monetary terms can be translated into such terms” (at para. 30). A court must
look at the substance of the order not its form and apply its usual approach in
dealing with future or contingent claims.
[20]
The usual test courts use to decide if a contingent claim will be included in
insolvency proceedings is whether it is “too remote or speculative”: at para. 36,
citing Confederation Treasury Services Ltd. (Re) (1997), 96 O.A.C. 75, leave to
appeal to S.C.C. refused, [1997] S.C.C.A. No. 229. This means that there must
be “sufficient indications” that the regulatory body that made the remediation
order “will ultimately perform remediation work” itself, thus entitling it to seek
reimbursement by means of a monetary claim: AbitibiBowater, at para 36.
property of the company shall be a claim under this Act, whether the
condition arose or the damage occurred before or after the date on
which proceedings under this Act were commenced.
Page: 8
[21]
Accordingly, Deschamps J. concluded that the CCAA court must assess
remediation work and, as a result, have a monetary claim” (at para. 46).
[22]
The CCAA judge’s discretion will govern the assessment, but several
considerations may be relevant, depending on the circumstances of the case.
Justice Deschamps identified four potential factors: “whether the [polluting]
activities are ongoing, whether the debtor is in control of the property …, whether
the debtor has the means to comply with the order,” and “the effect that requiring
the debtor to comply with the order would have on the insolvency process” (at
para. 38).
[23]
In the circumstances of AbitibiBowater, Deschamps J. acknowledged that
the CCAA judge had not addressed whether it was “sufficiently certain” that the
Province would remediate the property and seek reimbursement, but she
concluded that his reasons rested on the implicit finding that the Province would
do so (at para. 51). The CCAA judge explicitly referred to the facts that supported
this finding, at paras. 53-55:

Abitibi was not in a position to carry out the
remediation because it was no longer in
possession of most of the sites;

Abitibi’s operations were funded through debtorin-possession financing and its access to funds
would limited to ongoing operations;
whether “it is sufficiently certain that the regulatory body will perform the
[24]

the timetable set by the Province in the
remediation orders suggested that the Province
never truly expected Abitibi to perform the
remediation work;

and the surrounding facts suggested that the
Province had intentionally targeted Abitibi.
On this reasoning, Deschamps J., writing for the majority, deferred to the
CCAA judge’s implicit conclusion it was sufficiently certain that the Province
would perform the remediation work. Therefore, the Province fell within the
definition of a creditor with a monetary claim.
[25]
McLachlin C.J. and LeBel J. dissented.
D.
THE RESPONDENTS’ EFFORT TO DISTINGUISH ABITIBIBOW ATER
[26]
The
respondents
submit
that
it
is
an
oversimplification
of
the
AbitibiBowater decision to read it as requiring all future courts to examine
environmental remediation orders “through the exclusive and binary test” of
determining whether it is sufficiently certain that the province would perform the
remediation
and
claim
reimbursement.
The
respondents
suggest
that
in
AbitibiBowater the court used this language because it was particularly apt for
the circumstances in the case. They claim that a careful reading of the reasons
makes evident that the test the court established is less specific.
[27]
The respondents point to the more general language in Deschamps J.’s
reasons. They highlight the various factors that Deschamps J. indicated could be
Page: 9
Page: 10
relevant depending on the circumstances of each case to determine whether
as long as the order requires an expenditure of funds its nature is monetary. In
setting out the three basic requirements to determine whether an environmental
order is a “claim”, Deschamps J. said with respect to the third requirement, “that
it be possible to attach a monetary value to the obligation, the question is
whether orders that are not expressed in monetary terms can be translated into
such terms” (at para. 30).
[28]
Instead, the respondents posit that in AbitibiBowater, the Supreme Court
set out the policy approach to be followed in determining whether nonmonetary
orders can be translated into monetary terms. This approach, as Deschamps J.
emphasized, concerns: the importance of the single proceeding model of
insolvency in Canada; the necessity of examining the substance, not only the
form, of an environmental remediation order; the balance struck by Parliament
between enforcement of environmental regulation and the interests of insolvency
stakeholders; and the need to have regard to the interests of third-party creditors.
[29]
Turning to this case, the respondents submit that it was sufficiently certain
that compliance with the orders would require the expenditure of a minimum of
$18 million. Whether the money is paid to the MOE as reimbursement for the
costs of performing the remediation, or paid to third parties retained to perform
the remediation should make no difference. The environmental problems at the
remediation orders will be subject to a CCAA stay: at para. 38. They argue that
Page: 11
impacted sites were long-standing; the soil had been contaminated decades
it.
Historical
environmental
problems,
the
respondents
argue,
should
be
distinguished from current ones, where the debtor is polluting at the time.
[30]
Finally, the respondents stress that the CCAA court should be mindful of
the impact on the debtor and the stakeholders and avoid giving the MOE a
super-priority it would not have under the BIA. Under the BIA there is no debtorin-possession, only a trustee, and the trustee could abandon the contaminated
property. In a liquidating reorganization there was no good reason why the MOE
should do better under the CCAA than under the BIA.
E.
ANALYSIS
[31]
I cannot accept the respondents’ proposed interpretation of AbitibiBowater.
In determining whether a regulatory order is a provable claim, a CCAA court
must apply the general rules that apply to future or contingent claims. As I read it,
the Supreme Court’s decision is clear: ongoing environmental remediation
obligations may be reduced to monetary claims that can be compromised in
CCAA proceedings only where the province has performed the remediation work
and advances a claim for reimbursement, or where the obligation may be
considered a contingent or future claim because it is “sufficiently certain” that the
province will do the work and then seek reimbursement.
earlier. In fact, the Brockville site was already contaminated when Nortel bought
Page: 12
[32]
The respondents’ approach is not only inconsistent with AbitibiBowater, it
found to be provable claims. As Deschamps J. observed, a company may
engage in activities that carry risks. When those risks materialize, the costs are
borne by those who hold a stake in the company. A risk that results in an
environmental obligation becomes subject to the insolvency process only when it
is in substance monetary and is in substance a provable claim.
[33]
Parliament has struck a balance between the interests of the stakeholders
and that of the public in designing the CCAA process. Parliament, in s. 11.8(8) of
the CCAA, granted the MOE's claims with respect to remediation costs the
security of a charge on the contaminated property. And Parliament, in s. 11.1(3),
made it clear that a CCAA court has the discretion to stay regulatory orders on
specified criteria.
F.
IS IT IMPLICIT THAT THE CCAA JUDGE APPLIED THE CORRECT
TEST?
[34]
The CCAA judge in this case, without the benefit of the AbitibiBowater
decision, did not explicitly consider the question whether it was sufficiently certain
that
the
MOE
would
perform
the
remediation
work
ordered.
In
these
circumstances there are two legal approaches available to this court. This court
could attempt to glean from the CCAA judge’s reasons how he would have
is too broad. It would result in virtually all regulatory environmental orders being
Page: 13
answered the question had the law been available to him; and it can consider the
judges did in AbitibiBowater.
[35]
I am unable to read the CCAA judge’s reasons as implicitly addressing the
question whether it was sufficiently certain that the MOE would perform the
remediation work. The CCAA judge’s analysis focused on whether Nortel would
be required to incur a financial obligation to comply with the remediation orders,
without regard to whom the financial obligations would be owed. He rejected the
MOE’s contention “that financial obligations incurred by Nortel for the purpose of
complying with the MOE Orders are different from obligations incurred directly to
the Crown.” He focused instead on the fact that undertaking remedial work would
result in Nortel expending money that would be “directed away from creditors
participating in the insolvency proceedings”. He held that “the same insolvency
considerations ought to apply regardless of who receives the money” (at para.
107).
[36]
This analysis stands in contrast to that of Deschamps J. She made it clear,
at para. 3, that the question was “whether there are sufficient facts indicating the
existence of an environmental duty that will ripen into a financial liability owed to
the regulatory body that issued the order” (emphasis added).
evidence in the record and answer the question in his stead, as the dissenting
Page: 14
[37]
The CCAA judge was well aware that in this case, unlike AbitibiBowater, it
perform the remediation work itself. Nortel no longer owns most of the properties,
and the MOE Orders are directed to Nortel and the subsequent owners. In fact,
the CCAA judge specifically discussed Nortel’s contractual arrangements with
some of the subsequent purchasers and in his order permitted Nortel to
repudiate some of those arrangements.
[38]
In my view, this court lacks the basis to conclude, as did the majority in
AbitibiBowater, that the CCAA judge’s decision rests on an implicit finding that
the MOE will most likely perform the work.
G.
IS IT SUFFICIENTLY CERTAIN THE MOE WILL UNDERTAKE THE
REMEDIATION?
[39]
Considering the matter afresh, I would conclude that it is not sufficiently
certain that the MOE will perform the remediations ordered. The MOE orders
respecting in the Belleville, Brockville and Kingston sites are directed to Nortel
together with other current and former owners of the properties. In fact with
respect to the Kingston site, the other current and former owners named in the
orders are jointly and severally liable with Nortel to carry out the activities
required by the orders. Under s. 18 of the EPA, the MOE clearly has the power to
could not be said that the regulatory body had no realistic alternative but to
Page: 15
make orders against subsequent (or past) owners for anything it ordered Nortel
[40]
In AbitibiBowater, the province had expropriated most of the properties and
remained the owner. It would seem reasonable to expect that the MOE would
enforce the orders against other parties instead of undertaking the remediation
itself. Indeed, the CCAA judge observed that subsequent purchasers of the
properties may have unsecured contractual claims against Nortel.
[41]
Matters at the London site are not so clear. Evidently, in 1997 and 1998
Nortel subdivided and sold three parts of the London site to others, but retained
the fourth part. The MOE order respecting the London site is directed to Nortel
and the three entities who own the other parts and imposes joint responsibilities
as well as some individual responsibilities on them. After the insolvency there will
be no going-forward entity. Evidently Nortel’s retained portion of the land is worth
less than the cost of remediating it and it seems probable that the retained
portion will eventually be abandoned. There is no one to carry out Nortel’s
responsibilities under the MOE Order. As a result, I consider it “sufficiently
certain” that MOE will ultimately undertake Nortel’s obligations under the order,
and may seek to claim the security provided by s. 11.8(8).
to do.
H.
CONCLUSION
[42]
I would conclude that the MOE Orders in relation to the Impacted Sites
other than the retained portion of the London property have not been established
to be provable claims that must be included in the insolvency process.
[43]
In paragraph 2 of his order, the CCAA judge declared that the MOE’s
remediation orders “are subject to the stay of proceedings granted in the initial
order… and stayed thereunder”. This declaration cannot stand. Paragraph 15 of
the initial order contains the caveat that “nothing in this Order shall…(ii) exempt
the [respondents] from compliance with statutory or regulatory provisions relating
to health, safety or the environment”. The conclusion that the remediation orders
are regulatory rather than provable claims brings them within the ambit of this
caveat.
[44]
The CCAA judge himself acknowledged, at para. 104 that “if the Minister is
solely acting in its regulatory capacity, it can do so unimpeded by the Stay. This
is the effect of s. 11.1(2) of the CCAA.” Section 11.1(2) provides:
(2) Subject to subsection (3), no order made under section 11.02
affects a regulatory body’s investigation in respect of the debtor
company or an action, suit or proceeding that is taken in respect of
the company by or before the regulatory body, other than the
enforcement of a payment ordered by the regulatory body or the
court.
[45]
I
would therefore allow the appeal and modify the CCAA judge’s
declaration that the MOE Orders are stayed by the Initial Order so that it applies
Page: 16
Page: 17
only to the retained London lands. I would also modify paragraphs 3, 4, 5, and 6
are not regulatory, so that they apply only to the retained London lands.
[46]
If the MOE is seeking costs, it may make written submissions through the
court’s senior legal counsel, John Kromkamp.
“R.G. Juriansz J.A.”
“I agree S.T. Goudge J.A.”
“I agree J.C. MacPherson J.A.”
Released: October 03, 2013
of his order, which are premised on the finding that MOE Orders are claims and
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CITATION: Northstar Aerospace Inc. (Re), 2013 ONCA 600
DATE: 20131003
DOCKET: C56518
Goudge, MacPherson and Juriansz JJ.A.
In the Matter of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C36, as amended
And in the Matter of a Plan of Compromise or Arrangement of Northstar
Aerospace Inc., Northstar Aerospace (Canada) Inc., 2007775 Ontario Inc. and
3024308 Nova Scotia Company
Leonard F. Marsello, William R. MacLarkey and Jacqueline L. Wall, for the
appellant Her Majesty the Queen in right of Ontario as represented by the
Ministry of the Environment
Steven J. Weisz and Jenna Willis, for the respondent Fifth Third Bank
Paul D. Guy and Scott McGrath, for the Former Directors and Officers Group
Craig J. Hill, for the Monitor Ernst & Young Inc.
Heard: June 19, 2013
On appeal from the order of Justice Geoffrey B. Morawetz of the Superior Court
of Justice, dated July 24, 2012, with reasons reported at 2012 ONSC 4423.
Juriansz J.A.:
[1]
The appellant, Her Majesty the Queen in right of Ontario as represented by
the Ministry of the Environment (the “MOE”), appeals from the order of the CCAA
judge dated July 24, 2012, with written reasons released on July 30, 2012.
COURT OF APPEAL FOR ONTARIO
Page: 2
[2]
In his decision, the CCAA judge granted the motion of the insolvent
(“Northstar Canada”), 2007775 Ontario Inc. and 3024308 Nova Scotia Company
(collectively, “Northstar”), for approval of an agreement for the sale of Northstar’s
assets, and dismissed the MOE’s motion for a declaration that a remediation
order issued by the MOE under the Environmental Protection Act, R.S.O. 1990,
c. E-19 (“EPA”), was not subject to the stay of proceedings previously ordered,
or, in the alternative, an order lifting the stay in respect of that remediation order.
[3]
Leave to appeal the CCAA judge’s order was granted only from the
dismissal of the MOE’s motion.
[4]
For the reasons that follow, I would dismiss the appeal.
A.
FACTS
[5]
Northstar Canada operated a manufacturing and processing facility in
Cambridge, Ontario from around 1981 to 2009. The chemical trichloroethylene, a
carcinogen, was used in these operations, and the operations produced waste
containing heavy metals. Since 2004, Northstar Canada has been actively
involved in monitoring the contamination at the site and in the surrounding
community, a part of which is residential, and subsequently began remediation
activities. In 2012, the MOE, due to a concern that Northstar would be unable to
continue its voluntary remediation because of financial problems, issued two
respondents, Northstar Aerospace Inc., Northstar Aerospace (Canada) Inc.
Page: 3
remediation orders against it, dated March 15, 2012 and May 31, 2012 (the
[6]
On June 14, 2012, Northstar sought and obtained protection under the
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”). The
usual initial order staying all rights and remedies against the insolvent company
was issued that same date (the “Initial Order”). The Initial Order does not affect
regulatory proceedings as contemplated by s.11.1(2) of the CCAA.
[7]
On July 24, 2012, the CCAA judge approved the agreement for the sale of
substantially all of Northstar’s assets. The contaminated site at Cambridge was
not included in the sale. The debtor-in-possession lenders advised Northstar that
they would not continue to fund its remediation efforts after the agreement for
sale of assets closed on August 3, 2012. Northstar advised the MOE that if the
sale of assets were approved, its intention was to abandon the site and terminate
the remediation work. Also on July 24, 2012, the CCAA judge dismissed the
MOE’s motion. He found that the remediation orders were subject to the stay of
proceedings granted in the Initial Order. Northstar has made no provision to
continue its remediation activities after the close of the sale of assets transaction.
B.
THE DECISION UNDER APPEAL
[8]
In his reasons, the CCAA judge noted that the Initial Order excepted
regulatory proceedings as permitted by s. 11.1 of the CCAA. He referred to his
“MOE Orders”).
Page: 4
earlier decision in Re Nortel Networks Corp., 2012 ONSC 1213, 88 C.B.R. (5th)
operations at the property, “it is necessary to consider the substance of the
MOE’s actions” (at para. 105). If the MOE orders require the debtor to act in a
certain way, it is inevitable that the debtor would incur financial obligations to
comply. Where there is no going-forward business, the debtor has no option but
to pay money to comply. The clear result would be that “[t]he MOE would be, in
reality, enforcing a payment obligation,” which the Initial Order prohibited (at
para. 105).
[9]
The CCAA judge noted that the Cambridge facility had been shut down in
2010 and only remediation activities have been carried on there since that time.
In the court-supervised sales process, no bidder was willing to purchase (or
expressed any interest in purchasing) the Cambridge facility, either alone or
together with the other assets of Northstar.
[10]
The CCAA judge therefore adopted his reasoning in Nortel and concluded
that, in the circumstances of this case, any financial activity the debtor is required
to undertake to comply with environmental orders is stayed by the Initial Order.
He went on to remark that in this case it was “quite clear that the March 15
[MOE] Order seeks to enforce a payment obligation” (Northstar, at para. 61). He
concluded that while the MOE was entitled to file a claim for any costs of
remedying the environmental conditions at the Cambridge facility, it was not
111, quoting his remarks that if the insolvent company was not carrying on
Page: 5
entitled to use the remediation order “to create a priority that it otherwise does
[11]
On this reasoning, the CCAA judge dismissed the MOE’s motion.
C.
ANALYSIS
[12]
On August 1, 2012, the MOE brought a motion for a partial stay of the
CCAA judge’s order permitting distribution of the sale’s proceeds. The motion
was dismissed and leave to appeal that denial was refused. Thus, this appeal
may
have
some
jurisprudential
significance
but
will be of
no practical
consequence.
[13]
While the motion for leave to appeal was pending, the Supreme Court of
Canada released its decision in Newfoundland and Labrador v. AbitibiBowater,
2012 SCC 67, [2012] 3 S.C.R. 443. That the CCAA judge did not have the
benefit of the Supreme Court’s decision must be kept in mind in reviewing his
reasons. The same situation arose in Nortel Networks Corp. (Re), 2013 ONCA
599, and the two appeals were heard together.
[14]
I adopt my review of the AbitibiBowater decision as set out in Nortel. Briefly
stated, the Supreme Court decided that ongoing environmental remediation
obligations may be reduced to monetary claims that can be compromised in
CCAA proceedings in two circumstances: (1) where the province has performed
the remediation work and advances a claim for reimbursement, or (2) where the
not have access to under the legislation” (at para. 66).
Page: 6
obligation may be considered a contingent or future claim because it is
certain”
that the province will do the work and then seek
reimbursement.
[15]
This court, in reviewing a decision of a CCAA judge rendered before the
Supreme Court’s decision in AbitibiBowater, may attempt to glean from the
reasons how he or she would have answered the question had the law been
available; and it may consider the evidence in the record and answer the
question in his or her stead.
[16]
It seems to me, the CCAA judge’s reasons show that he was of the view
the MOE had no realistic alternative but to remediate the property. The property
had been contaminated during Northstar’s operations while Northstar owned it,
and there was no subsequent purchaser whom the MOE could order to
undertake the remediation. The CCAA judge said that it seemed quite clear to
him that the remediation order sought to enforce a payment obligation.
[17]
In my view, the CCAA judge implicitly found it was “sufficiently certain” the
MOE would remediate the lands.
[18]
A review of the fresh evidence supports his conclusion.
[19]
Northstar
went bankrupt and the trustee abandoned the Cambridge
property. The MOE therefore commenced remediation activities at the site. The
Minister’s Direction permitting the MOE to perform work at the site provides:
“sufficiently
Page: 7
“[u]ntil such time as any other person assumes responsibility for the work
the work required by the [MOE] Order to be done by the [MOE]”.
[20]
The affidavit supporting the MOE’s fresh evidence motion states that “[t]he
MOE has undertaken the Preventive Work without prejudice to its position in this
appeal.” The MOE also filed a claim with the Monitor for the costs incurred, again
on the basis that doing so was “without prejudice to the MOE’s position that the
two Director’s Orders are not pre-filing claims…” The MOE is currently seeking to
compel a group of former directors and officers of Northstar to continue
remediating the property. The directors and officers appeared on the appeal to
submit that they will be able to successfully resist the MOE’s efforts.
[21]
The issues between the MOE and the directors will be decided elsewhere.
As far as this proceeding is concerned, in my view, the fact that the MOE has
undertaken remediation activities makes it “sufficiently certain” that it will do so. I
am unsure what the MOE hoped to achieve by its unilateral assertion of having
undertaken the work on a without prejudice basis.
[22]
It is certainly conceivable that the MOE, after commencing remediation
work, is able to compel other responsible parties to take over the work and
complete it. If the MOE is successful in doing so, the work will be done without
the MOE expending funds. As far as the other responsible parties are concerned,
required by the [MOE] Order…, it is in the public interest to cause some or all of
Page: 8
the MOE will be acting in a purely regulatory capacity. However, as far as the
the circumstances of this case establishes that the MOE Orders are in substance
a claim provable in the insolvency.
D.
CONCLUSION
[23]
For these reasons, I would dismiss the appeal.
[24]
Given the distribution order, the Fifth Third Bank had no stake in the
outcome of this appeal and appeared to assist the court by addressing the
creditors’ perspective. The issues between the directors and officers and the
MOE are being dealt with elsewhere. This is not a case for costs.
“R.G. Juriansz J.A.”
“I agree S.T. Goudge J.A.”
“I agree J.C. MacPherson J.A.”
Released: October 03, 2013
MOE Orders against Northstar are concerned, its commencement of the work in
T
A
B
14
Section 103
RSA 2000
Chapter O-6
taken from the well or facility, but the Regulator shall not sell any
equipment, installation or material that it knows is owned by
someone other than the licensee, approval holder or working
interest participant.
(2) A person to whom any equipment, installation or material is
sold pursuant to subsection (1) receives good title to the equipment,
installation or material, free of any claim whatsoever.
(3) When the Regulator receives money on the sale or disposal of
any equipment, installation or material under subsection (1), the
Regulator shall
(a) apply the money
(i) first, to the payment of any unpaid costs and penalty
determined by it under section 30 or 100, and
(ii) 2nd, if any money remains after complying with
subclause (i), to the payment of any other outstanding
debt owing to the Regulator by the licensee, approval
holder or working interest participant,
and
(b) if any money remains after complying with clause (a),
forward the remainder to the Minister for payment out to
persons who file a claim with the Minister within 6 months
after the date of the sale and establish their entitlement to
the money.
RSA 2000 cO-6 s102;2006 c23 s60;2012 cR-17.3 s97(25)
Enforcement of lien
103(1) In this section,
(a) “debtor” means a person who is indebted to the Regulator
for any costs, levy, fee, penalty or other amount;
(b) “payor” means
(i) a purchaser, operator or other person who owes money
to or holds or receives money on behalf of a debtor as a
result of a sale of the debtor’s proportionate share of any
gas, oil or other hydrocarbon produced from a well or
facility, and
(ii) a person who holds or receives revenue owing to the
debtor resulting
68
Section 104
RSA 2000
Chapter O-6
(A) from the use of a well or facility by another person,
or
(B) from the provision of services by the debtor.
(2) The Regulator has a lien in respect of a debtor’s debt on the
debtor’s interest in any wells, facilities and pipelines, land or
interests in land, including mines and minerals, equipment and
petroleum substances, and when it arises, the lien has priority over
all other liens, charges, rights of set-off, mortgages and other
security interests.
(3) The Regulator’s lien arises when the debtor fails to satisfy the
debt when due, and expires on full satisfaction of the debt.
(4) The Regulator may enforce its lien by serving on the debtor
and the payor a notice of garnishment in the form prescribed by the
regulations or rules.
(5) On receipt of a notice of garnishment, the payor shall forward
to the Regulator for payment on account of the debt owing to the
Regulator all money and revenue referred to in subsection (1)(b)
that is then owing or later becomes owing to the debtor.
(6) The obligation to make payments under subsection (5)
continues until the Regulator advises the payor that the debt has
been paid in full.
(7) Any payment to the Regulator on the account of the debtor
under this section is deemed to be a payment to the debtor and
releases the payor from liability in debt to the debtor to the extent
of the payment.
(8) A payor who fails to comply with a notice of garnishment is
guilty of an offence.
(9) A payor who fails to comply with a notice of garnishment or
makes payment to a debtor in contravention of the notice of
garnishment is indebted to the Regulator for an amount equal to the
amount the payor is required to pay pursuant to the notice of
garnishment or the amount of the payment made to the debtor,
whichever is less.
RSA 2000 cO-6 s103;2012 cR-17.3 s97(31),(32),(33)
Escaped substance
104(1) If oil, crude bitumen, water or any other substance, in this
section referred to as the “escaped substance”, has escaped or
appears to have escaped from a well, facility or pipeline or from an
unidentified source and it appears to the Regulator that the escaped
69

Brief of the Alberta Energy Regulator for

Transcription

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