Reflections from Chief Justice Geoffrey B. Morawetz

As the Canadian insolvency community prepares to gather for the Canadian Insolvency Awards Gala, we are honoured to recognize Chief Justice Geoffrey B. Morawetz as the inaugural recipient of the Outstanding Contribution Award.

The award recognizes a career defined by sustained influence on insolvency and restructuring practice, leadership that strengthened institutions and professional standards, and contributions that continue to guide courts and practitioners. Chief Justice Morawetz was selected for the breadth and longevity of his impact on the development of Canadian insolvency law, both through his jurisprudence and his broader leadership within the justice system.

In advance of the presentation of the Outstanding Contribution Award, we spoke with Chief Justice Morawetz about the evolution of restructuring practice, the pressures facing courts and insolvency professionals today, the role of emerging technologies, and the responsibilities that come with judicial decision-making.

Looking back over your time on the bench or in practice, what changes in the restructuring practice stand out as the most significant to you?

This is a two-part question – with answers separated by a quarter-century. 

I was called to the bar in 1980. Restructuring was not a well-known term. Canada had a liquidation culture – dominated by secured creditors. If the bank made demand on the outstanding indebtedness of its borrower – receivership and liquidation would inevitably follow. The CCAA had been dormant since the 1930s. BIA proposals were limited as secured creditors were not stayed from enforcement. Insolvency professionals and counsel were aligned with secured creditors. Lawyers on the debtor side were referred to as “undertakers”.

Over time, the restructuring practice evolved – not just in Canada but worldwide. The industry recognized that a better path forward was to maximize asset value as opposed to value destruction through liquidation. The CCAA was rediscovered in the mid-1980s. Restructuring through corporate arrangements also became popular and the BIA was amended so as to provide for expanded stay provisions.

The next significant reform was the acceptance of interim financing or debtor-in-possession financing which was ultimately codified into the statutes in the 2009 amendments.

During my time on the bench, if I was to pick the most significant development it would be the 2009 amendments to the BIA and the CCAA which adopted the UNCITRAL Model Law on Cross-border Insolvency. The rules and procedures for restructuring an entity which had operations in different jurisdictions were established. Today, most significant restructuring files involve the use of these cross-border provisions.

If you were able to give yourself one piece of advice as a first-year lawyer what would it be?

Learn from observing. Either in court or in the boardroom. Insolvency requires knowledge in many areas of the law – corporate commercial, secured transactions, labour, environmental, pensions, trust, litigation etc. As well, you have to develop an understanding of the business deal. For the first-year lawyer, be patient. It will take time to develop an expertise in the insolvency area.

What do you view as some of the challenges facing insolvency practitioners or commercial judges today?

Leaving aside large-scale restructurings, there is increasing pressure to keep costs down on a file with the result that clients sometimes feel that the court process is an expense item that should be significantly reduced.

Insolvency practitioners and counsel feel this pressure. The result is to overreach and request expanded relief – or in other words – trying to cover multiple steps in one court hearing as opposed to requesting relief in a logical and appropriate sequence. This in turn puts the court in the position of having to push back against such pressures.

Given the pace with which AI tools are becoming more mainstream, do you foresee an impact on the insolvency and restructuring practice in Canada?

AI is not going away. It is already being used by the profession. AI products will continue to be improved. But for now, there still has to be a human in the loop.

For example, can you totally rely on AI research. Who is preparing the headnote? Is the headnote accurate or is something important in the case being overlooked? We have all seen examples of the misuse of AI. The areas that can definitely benefit are those in which the fact situation and the legal issues are repetitive. A factual summary of facts and applicable law lend themselves to an effective use of AI. Complex matters with unsettled law makes AI less useful.

What have you found to be most challenging or rewarding about being a judge?

First, the most challenging. As a trial judge, you and you alone are responsible for making decisions. Decisions that can impact businesses, employees, retirees, and on occasion, the economy in general. That carries with it a responsibility. You have to be able to discharge that responsibility and to do it on a timely basis.

As for what has been the most rewarding – I have been a judge for nearly 21 years. It has been an honour and a privilege to have served. The reward has been to provide meaningful public service.

Looking back over your career as a judge, what are some of the most memorable or impactful moments on the bench?

The formative years were spent learning how to be a judge. Learning how to be patient. To understand that there are at least two sides to every story. It is important to avoid making a premature jump to a conclusion.

The second phase was acting as the Team Lead of the Commercial List. When you follow the judicial leaders in this area – Justices Ed Saunders, Jim Farley, Jack Ground, Colin Campbell, Bob Blair, Sarah Pepall and others – this has an impact. All of these jurists made significant contributions to the development of insolvency law and being entrusted with that role certainly had an impact on me.

And for the past 11 plus years, I have been involved in court administration – first as the Regional Senior Judge for Toronto and since 2019 as Chief Justice. During this period, I thought it was important to continued to not just be an administrator – but also to continue to be an active judge – i.e. hearing cases. It has been a challenging time, especially during the pandemic, but it has also been memorable. With the support of the bar, my colleagues on the bench, and the Ministry of the Attorney General – much has been accomplished – including most recently the digitalization of the court and proposals to reimagine the Rules of Civil Procedure. These two projects have been exciting to work on and I expect that they will have a meaningful impact on the legal system of Ontario.

We are grateful to Chief Justice Morawetz for taking the time to share these thoughts. His career reflects a deep commitment to fairness, judgment, and public service, together with enduring contributions to the insolvency bar, and it is an honour to celebrate those contributions through the Outstanding Contribution Award.