Cross Canada Case Law Update

The Annual Cross Canada Update was the third session of the Canadian Bar Association National Insolvency Law Conference held on September 12, 2025. The session provided a comprehensive update on recent insolvency law cases and developments across Canada.

The session was presented by a team of lawyers from across Canada who highlighted the key decisions in their jurisdiction for the national audience in attendance:

Meaghan Kells, Associate, Cox & Palmer (Halifax, NS)
Jake Harris, Associate, Blake, Cassels & Graydon LLP (Toronto, ON)
Kira Lagadin, Associate, Miller Thomson LLP (Calgary, AB)
Khaoula Bansaccal, Associate, Osler, Hoskin, & Harcourt LLP (Montreal, QC)
Eamonn Watson, Associate, Dentons Canada LLP (Vancouver, BC)

Atlantic Canada

Atlantic Sea Cucumber Ltd. (Re), 2025 NSSC 234: This court addressed the validity of debt and security interests held by non-arm’s length parties, emphasizing the importance of proper documentation and nature of the transaction.

Roman Catholic Episcopal Corporation of St. John's (Re), 2025 NLSC 77: The court dealt with the ownership and sale of church property, highlighting the competing interests of the insolvency regime, historical community involvement, and the court's broad discretion in issuing injunctions.

Re Blue Lobster Capital Limited et al., 2025 NSSC 243: The court highlighted the importance of maintaining the integrity of the court-approved sale process and the balancing of interests when considering late-stage redemption bids.

Edward Collins Contracting Limited (Re), 2024 NLSC 145: in this costs decision, the court addressed the importance of procedural discipline and efficiency in CCAA claims processes.

British Columbia

GEC (Richmond) GP Inc. v. Romspen Investment Corporation, 2025 BCCA 9: The Court of Appeal addressed whether an order was “made under” the CCAA for the purpose of s. 13 and clarified the circumstances under which leave to appeal is not required under if an order is made in the context of a CCAA proceeding.

J.R. v. 23andMe Holdings Co., 2025 BCCA 199: The Court of Appeal provided further guidance on when an order is “made under” the CCAA and leave is required pursuant to s. 13 of the CCAA.

Piekut v Canada (National Revenue), 2025 SCC 13: The Supreme Court clarified the interpretation of s. 178(1)(g) of the BIA in relation to student loan debt, confirming the single date approach is the correct interpretation of the BIA.

QRD (Willoughby) Holdings Inc. v. MCAP Financial Corporation, 2024 BCCA 318: The court reaffirmed the importance of a fair and transparent sales process, especially when there is a wide disparity between competing offers.

My Mortgage Auction Corp. (Re), 2025 BCSC 1520: The court granted a clawback order to recover false profits and preferential payments from early investors in a Ponzi scheme to permit distribution to later investors that lost money, emphasizing the importance of equitable redistribution of funds and the single proceeding model.

Quebec

Arrangement relatif à Valeo Pharma Inc., 2025 QCCS 580: The court approved a reverse vesting order (RVO) for the sale of Valeo's shares to Xediton Pharmaceuticals Inc., despite objections from the Attorney General of Canada regarding the treatment of non-retained employees. It held that ResidualCo qualified as their former employer under the WEPPA and found the RVO necessary to preserve critical regulatory assets. The Québec Court of Appeal later granted leave to appeal.

Arrangement relatif à 9387-8080 Québec inc., 2024 QCCS 4111: The court refused to grant an initial order under the CCAA for the debtors, who were involved in a residential real estate development with no active operations, finding the proposed restructuring did not meet the CCAA's remedial objectives and was primarily driven by a shareholder dispute rather than a viable restructuring purpose. The stay would have mainly benefited the applicant, and the CCAA is not the appropriate forum to resolve such conflicts.

Arrangement relatif à ELNA Medical Group Inc./Groupe médical ELNA inc., 2024 QCCS 4541: The court granted a limited third-party stay of proceedings in favor of Mr. Amram personally, founder and director of ELNA Medical Group. The stay was deemed necessary to avoid hindering the restructuring process given Mr. Amram’s deep financial entanglement with the debtors, including substantial personal loans and guarantees.

Surintendante des pensions du Nouveau-Brunswick c. PF Résolu Canada inc., 2024 QCCA 1486: The court held that pension-related claims arising from partial termination orders constitute provable claims under the CCAA and can be extinguished if not properly filed in the claims process. The court dismissed the appeal, emphasizing the importance of active participation in the claims process during restructuring.

Syndic de Bopack inc., 2025 QCCS 1531: The court affirmed the broad scope of subsection 34(1) of the BIA, allowing trustees to seek judicial directions on substantive matters affecting the administration of a bankrupt's estate, including questions of asset ownership. The court concluded that certain deposits held in trust were part of the bankrupt's estate, while the other belonged to a third party. The court denied lifting the stay of proceedings, emphasizing that the trustee’s motion was appropriate to protect the estate’s interests.

Avis d’intention de Galarneau Entrepreneur général inc., 2025 QCCS 558: The court held that criminal fines cannot be transferred through a reverse vesting order (RVO) in a way that effectively releases the debtor's liability. The court emphasized that such fines must survive bankruptcy to fulfill certain policy objectives.

Séquestre de Cinémas Guzzo inc., 2025 QCCS 235: The court expanded the receiver's powers and refused to authorize parallel CCAA proceedings. Despite the debtor’s optimistic projections and conditional offers for financing and stalking horse bids, the court found these unrealistic and insufficient. The debtor’s lack of transparency and unauthorized fund use further justified granting the receiver full control to protect stakeholders.

Syndic de L’Écuyer, 2024 QCCA 1475: The court affirmed that a decision dismissing an application for a bankruptcy order may be appealable as of right under subsection 193(c) of the BIA if it involves assets exceeding $10,000. The court highlighted the ongoing divergence among Canadian appellate courts regarding the interpretation of subsection 193(c) of the BIA but found the case involved sufficient property value to justify an appeal without leave.

Alberta

Mayfield Investments Ltd (Re), 2025 ABKB 326: The court revisited the test for determining whether issues in a receivership proceeding with an existing arbitration agreement should be resolved through arbitration or within the receivership proceedings. The decision confirmed that a party seeking to proceed by way of arbitration must bring a Notice of Arbitration early, and must not attorn to the jurisdiction of the court by participating in court proceedings.

Delta 9 Cannabis Inc (Re), 2025 ABKB 52: The court reaffirmed that creditors opposing a release in a restructuring transaction must provide evidence to support their position and raise concerns early to avoid prejudice to other stakeholders.

Easy Legal Finance Inc v Law Society of Alberta, 2025 ABCA 112: The Court of Appeal of Alberta overturned a Chambers decision, confirming that the “interest stops rule” does not apply to secured claims in a receivership proceeding.

ATB Financial v Mayfield Investments Ltd, 2025 ABKB 61: The court applied the anti-deprivation rule to void a contractual provision, clarifying that a clause is not immune from the rule merely because it includes non-insolvency triggering events.

Ontario

Xplore Inc. (Re), 2024 ONSC 5250: Xplore Inc., an internet service provider, successfully restructured its debt through a CBCA plan of arrangement, which included a reverse vesting order (RVO) to address its obligations to satellite providers.

Marshallzehr Group Inc. v. La Pue International Inc., 2025 ONCA 124: The Court of Appeal ruled that the debtor did not have an automatic right to appeal under section 193 of the BIA, as the rights in question were not future rights but existing ones and because the approval and vesting order did not directly involve property valued at over $10,000.

Unity Health Toronto v. 2442931 Ontario Inc., 2025 ONCA 93: Similar to the Marshallzehr case, the Court of Appeal found that the appellant did not have an automatic right to appeal under section 193 of the BIA, as the order in question was procedural and did not directly put into play property valued at over $10,000.

RPG Receivables Purchase Group Inc. v. American Pacific Corporation, 2025 ONCA 371: The Court of Appeal overturned a bankruptcy judge's decision, finding that Specialty Chemical Industries Inc. did not have a reasonable belief that preferential payments would enable the corporation to stay in business for the benefit all creditors, thus failing to rebut the presumption of fraudulent intent.

Imperial Tobacco Canada Limited, 2025 ONSC 1358: The Court approved the CCAA plans for three tobacco companies despite opposition from social stakeholders, emphasizing that the Court's role is to sanction or reject the plans, not to amend them to reflect the concerns of stakeholders that do not have rights pursuant to the CCAA.