Publication
La Cour suprême du Canada tranche : les cadres ne pourront se syndiquer au Québec
Le 19 avril dernier, la Cour suprême du Canada a rendu une décision fort attendue en matière de syndicalisation des cadres.
Canada | Publication | December 9, 2020
Based on basic principles of letters of credit and parties’ intentions (reflected in the specific lease and letter of credit language), the Ontario Court of Appeal confirms that a letter of credit is not rendered unenforceable by a landlord or limited to three months’ rent as a result of a disclaimer of the lease, i.e., rights against third parties relating to a lease survive.
In May 2020, we published a legal update that provided a general overview on tenant insolvency issues for commercial landlords in Alberta. In the context of our general recommendations relating to letters of credit issued by third-party lenders as security for a tenant’s obligations under a lease, we noted an Ontario Superior Court of Justice decision, 7636156 Canada Inc. v OMERS Realty Corporation, which was subsequently appealed. On October 28, 2020, the Ontario Court of Appeal (the Court) released its decision,1 which is the subject of this legal update.
Following the assignment in bankruptcy of 7636156 Canada Inc. (the tenant), OMERS Realty Corporation (the landlord) made a demand to draw on the $2.5 million letter of credit (the LOC) issued by a bank. The lease between the tenant and the landlord stipulated that the LOC would continue to stand as security should a disclaimer of the lease in connection with any bankruptcy of the tenant occur. Under its terms, if the lease is disclaimed in connection with any bankruptcy of the tenant, then the landlord could draw a portion or all of the LOC amount.
The trustee in bankruptcy over the tenant brought a motion to disallow the draws made by the landlord, and the motion judge limited the recovery by the landlord under the LOC to the landlord’s preferred claim for three months’ accelerated rent under federal bankruptcy legislation. The motion judge relied on the Cummer-Yonge Investments Ltd. v Fagot (Cummer-Yonge) decision and reasoned that a disclaimer of a lease by a trustee in bankruptcy extinguishes all obligations of a tenant under a lease (including the third-party obligations and those being secured by a letter of credit).
The Court unanimously overturned the motion judge’s decision, holding that the motion judge erred in its findings. The Court confirmed the landlord was entitled to draw on the full amount of the LOC obtained under the lease with the bankrupt tenant instead of being limited to its preferred claim of three months’ worth of accelerated rent under bankruptcy legislation. The Court’s key conclusions are as follows:
For a general overview on tenant insolvency issues for commercial landlords, please see our legal update.
Publication
Le 19 avril dernier, la Cour suprême du Canada a rendu une décision fort attendue en matière de syndicalisation des cadres.
Publication
Le budget 2024 propose d’élargir la portée de certains pouvoirs permettant à l’ARC de demander des renseignements aux contribuables tout en prévoyant de nouvelles conséquences pour les contribuables contrevenants.
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L'impôt minimum de remplacement (IMR) est un impôt sur le revenu additionnel prévu dans la Loi de l’impôt sur le revenu (Canada) (la « Loi ») auquel sont assujettis les particuliers et certaines fiducies qui pourraient autrement avoir recours à certaines déductions et exemptions et à certains crédits pour réduire leur impôt sur le revenu fédéral canadien régulier.
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