Case information

Commercial law — Plan of arrangement — Motion for garnishment — Constructive taking — Company proposing to make certain payments as part of plan of arrangement — Creditor of another party claiming payments would de facto be made to its debtor and seeking garnishment of payments — Courts below finding payments would not be made to creditor’s debtor — Application of the test for constructive taking set out in Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227, and confirmed in Annapolis Group Inc. v. Halifax Regional Municipality, 2022 SCC 36 — What type of gain is required under the beneficial interest prong of the test? — What is required under the prong of the test that refers to all reasonable uses of the property? — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 60.08.

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, Entes Industrial Plants Construction & Erection Contracting Co. Inc. (“Entes”) brought a motion for garnishment, which was heard at the same time as an application brought by the respondent, Centerra Gold Inc. (“Centerra”), for approval of a plan of arrangement. Entes is a substantial creditor of the Kyrgyz Republic. It sought to garnish a payment that Centerra would make under the plan of arrangement it applied to have approved. Centerra, through a subsidiary, owned a gold mine in the Kyrgyz Republic. After the Kyrgyz Republic attempted to gain control of the gold mine, Centerra engaged in negotiations within an international arbitration proceeding and arrived at an agreement that would allow it to sever all ties with the gold mine and the Kyrgyz Republic. The application judge approved the plan of arrangement and dismissed Entes’ motion for garnishment. She rejected Entes’ claims that the Kyrgyz Republic had conducted a de facto expropriation of Centerra’s subsidiary from Centerra such that the subsidiary no longer existed as a corporate entity. Entes appealed the dismissal of its motion for garnishment. The Ontario Court of Appeal dismissed the appeal.