On April 17, 2014, the Supreme Court of Canada denied leave to appeal to Nortel from the decision rendered by the Ontario Court of Appeal last October. For additional details and commentary on the decision of the Ontario Court of Appeal, please see our November 2013 Blakes Bulletin: Ontario Court of Appeal Applies AbitibiBowater Test in Concurrent Decisions.
For the time being, therefore, the framework developed by the Supreme Court of Canada in Newfoundland and Labrador v. AbitibiBowater Inc. will continue to be the binding precedent on Canadian courts applying the Companies' Creditors Arrangement Act (CCAA). As such, when assessing whether a claim by the Ministry of the Environment is a regulatory order or a monetary claim, the determining factor will likely be whether it is possible to attach a monetary value to the claim or obligation and, more specifically, whether it is "sufficiently certain" that the ministry will perform the work itself. If a regulatory agency has no realistic alternative to performing the remediation work required by its order itself, the order will almost certainly constitute a provable claim that is subject to the CCAA stay of proceedings and can be compromised in the debtor's claims process – without disrupting the priority scheme set out in the CCAA. Whether or not a regulatory agency has "no realistic alternative" will be a factual inquiry in each case, and may or may not be easily identified. The "untidy intersection" remains, pending further court consideration.
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