• Post category:Court Cases

Carillion Canada Holdings Inc. et al. (Re), 2022 ONSC 66

What are the rules applicable to the interpretation of a tolling order?

Carillion provided year-round routine and preventative maintenance services for approximately 40,000 kilometers of highway across Ontario and Alberta. Carillion had leased premises in Alberta from Weinrich since June 2009. In 2018, the Court issued an initial order under the CCAA, which appointed a Monitor and stayed all proceedings against Carillion. Around the same time, Weinrich became aware of damage to the leased premises caused during Carillion’s tenancy. In July 2018, the CCAA Court approved the sale of Carillion’s roads business to a company called Emcon.

Weinrich paid $408,835.08 for an engineering opinion and to replace a damaged building on the leased premises. Under the Alberta rules of court, and taking into account the temporary suspension of Alberta’s limitation period due to the COVID-19 pandemic, Weinrich had until August 2020 to commence its claim. Weinrich issued its Statement of Claim on May 29, 2020 without seeking the applicants’ and the Monitor’s consent or leave to do so from the CCAA Court.

On October 27, 2020, after its limitation period expired, Weinrich sought the Monitor’s consent to lift the stay. The Monitor declined. On this motion, Weinrich argued that any limitation period applicable to its Alberta action against Carillion was suspended (tolled) by the January 13, 2020 order of the CCAA Court. Paragraph 3 of that order deemed certain time periods to be extended from the date the tolling order was granted to the date of the expiry of the stay period granted under the initial order. In particular, Weinrich relied on the provisions of the order which toll limitations relating to “current and future assets, undertakings and properties”, and “the business” of Carillion.

Weinrich argued that, by its plain wording, the tolling order captures the Weinrich action because it makes claims in relation to both the “assets, undertakings and properties” of Carillion and its “business”. Consequently, under the tolling order, the limitation period with respect to the Weinrich action was tolled and continues to be tolled because the original stay is still in place.

The interpretation of a court order is much like the interpretation of a statute. The Court must consider the plain language of the tolling order as well as its context and purpose. Here, the most obvious indication of the purpose of the tolling order is set out in its preamble. The relief sought was “an order tolling the period of time for any of the Applicants to commence an action against a third party”.

The provisions relied on by Weinrich were intended to mean as yet unknown claims by the applicants related to their assets and business. There was no reference to claims of third parties against Carillion whatsoever. If the provisions were intended to extend all limitations applicable to all possible third-party claims against Carillion in general, the language used would have been explicit.

In any event, the tolling order was effective only with respect to a prescription, time or limitation period which “may hereafter expire during the pendency of these CCAA proceedings”. The roads business was sold in July 2018. Thus, in January 2020 when the tolling order was issued, the Weinrich claim did not relate to any “current or future” property or to the then-existing “business” of Carillion.

Weinrich also failed to articulate any principled basis, context or purpose for why a general suspension of all limitation periods of all third-party claims against Carillion would have been in the interests of the applicants or other stakeholders in general. Given the claims process and claims bar dates established in the claims procedure order which had already been made in July 2018, there is no discernible benefit to the applicants, the Monitor, or the stakeholders of the applicants generally to toll claims of third parties against the applicants. In fact, doing so would only serve to create additional uncertainty as claims that were previously time-barred could then be potentially resurrected.

Weinrich’s interpretation of the tolling order is inconsistent with one of the fundamental purposes of the CCAA, that all claims against the debtor should be determined in a single proceeding, according to a single process that does not favour one creditor over another. Weinrich’s interpretation undermines the intent of the claims process order that all claims against the applicants be dealt with in the claims process and leads to differential treatment between creditors.

The Court dismissed Weinrich’s motion.

Judge: Penny J.

Counsel: Alexander Soutter of TGF for Monitor and Receiver, Ernst & Young Inc.; and Gregory Azeff of Miller Thomson for Weinrich Holdings Inc.

Fullcase: https://canlii.ca/t/jlrvq

By Matilda Lici