Case information

Bankruptcy and insolvency – Procedure – Admission and Disallowance of Proofs of Claim and Proofs of Security – Natural justice – Whether discussing the relevant facts with just one party and obtaining the opinion of counsel satisfy the requirements of procedural fairness – Whether the “command center” in this case lies with a bankruptcy court in Quebec or a court located in the jurisdiction stipulated by the contract, namely Ontario – What does it mean for the claims adjudication process under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, to be conducted and applied in a “commercially reasonable manner” and who decides what is “commercially reasonable”?

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant challenged in the Quebec courts the respondent trustee’s disallowance of its 3.7 million dollar claim, following the acceptance of a proposal to creditors made by the respondent debtor under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. The claim arose from an agreement between the applicant and the debtor for the installation of track surfacing for three competition sites for the 2015 Pan Am Games. The Superior Court dismissed the motion, finding among other things that the legal review relied on by the trustee was thorough and substantiated, that the debtor had had sufficient grounds to terminate the agreement with the applicant, and that the trustee had considered the evidence and its supporting documentation with adequate seriousness. In coming to this conclusion the Superior Court relied on the evidence before the trustee. In its view, adjudicating de novo the claim would run contrary to the necessary efficiency of the claims adjudication process set up in the Act and would defeat the underlying principles of the legislation. The Court of Appeal dismissed the appeal.