U.S. Steel Canada Inc., Re

• Jurisdiction: Ontario
• Judge: Hoy, A.C.J.O., Blair and Lauwers, JJ.A.
• Date: 19 November 2015
• Citation: (2016), 345 O.A.C. 47 (CA),2016 ONCA 68
• Court: Court of Appeal (Ontario)

U.S. Steel Can. Inc., Re (2016), 345 O.A.C. 47 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. JA.026

In The Matter Of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended

And In The Matter Of a Proposed Plan of Compromise or Arrangement with respect to U.S. Steel Canada Inc.

(C61176; 2016 ONCA 68)

Indexed As: U.S. Steel Canada Inc., Re

Ontario Court of Appeal

Hoy, A.C.J.O., Blair and Lauwers, JJ.A.

January 26, 2016.

Summary:

U.S. Steel Canada Inc. (USSC) was subject to protection under the Companies' Creditors Arrangement Act (CCAA). Stakeholders in the CCAA proceedings brought a motion for disclosure of the contents of a Settlement Agreement arrived at in the course of litigation to enforce the Investment Canada Act (ICA). The Settlement Agreement was entered into by USSC, its American parent, United States Steel Corporation (USS), and the Attorney General of Canada (on behalf of Industry Canada). It contained written undertakings provided by USS to the Minister for the purposes of the ICA. The central issue was whether s. 36 of the ICA barred the disclosure sought. The CCAA judge concluded that the Settlement Agreement was privileged in its entirety under s. 36 of the ICA. Because he so concluded, he did not consider whether the Settlement Agreement was protected by common law settlement privilege. He dismissed the stakeholders' motion seeking production of the Settlement Agreement (see 2015 ONSC 2885). The stakeholders appealed.

The Ontario Court of Appeal held that s. 36 of the ICA did not prohibit USSC and USS from disclosing the Settlement Agreement. The court returned the issue of whether disclosure of the Settlement Agreement was barred by common law settlement privilege to the CCAA judge for determination in the exercise of his discretion in the CCAA proceeding.

Company Law - Topic 8226

Foreign investment review - Privileged information - [See Crown - Topic 7213 and Practice - Topic 4584.1 ].

Creditors and Debtors - Topic 8602

Debtors' relief legislation - Companies' creditors arrangement legislation - Practice - [See Practice - Topic 4584.1 ].

Crown - Topic 7213

Examination of public documents - Freedom of information - Bars - Where nondisclosure provided by statute - The Investment Canada Act (ICA) provided for the review of significant investments in Canada by non-Canadians - This appeal concerned the scope of the privilege in s. 36 of the ICA over information obtained by the Minister of Industry or an officer or employee of the Crown in the course of the administration and enforcement of the ICA - The Ontario Court of Appeal stated, inter alia, "The [Access to Information Act] ATIA provides a right of access to information in records under the control of a government institution. However, that right is not absolute and the ATIA contains various exceptions. One exception is s. 24(1), which provides that, where a record 'contains information the disclosure of which is restricted by or pursuant to any provision set out in Schedule II', the head of a government institution shall refuse to disclose it. Section 36 of the ICA is one of the provisions contained in Schedule II. Therefore, if a record contains information the disclosure of which is prohibited by s. 36, the Minister shall not disclose it in response to a request made under the ATIA. The statutory privilege provided for in s. 36 is therefore absolute, subject to the exceptions set out therein, and cannot be circumvented by resort to the ATIA" - See paragraphs 16 to 28.

Practice - Topic 4584.1

Discovery - What documents must be produced - Privileged documents - Statutory privilege - U.S. Steel Canada Inc. (USSC) was subject to protection under the Companies' Creditors Arrangement Act (CCAA) - Stakeholders in the CCAA proceedings brought a motion for disclosure of the contents of a Settlement Agreement arrived at in the course of litigation to enforce the Investment Canada Act (ICA) - The Settlement Agreement was entered into by USSC, its American parent, United States Steel Corporation (USS), and the Attorney General of Canada (on behalf of Industry Canada) - It contained written undertakings provided by USS to the Minister for the purposes of the ICA - The central issue was whether s. 36 of the ICA barred the disclosure sought - The CCAA judge concluded that the Settlement Agreement was privileged in its entirety under s. 36 of the ICA - He therefore did not consider whether the Settlement Agreement was protected by common law settlement privilege - He dismissed the stakeholders' motion seeking production of the Settlement Agreement - They appealed - The Ontario Court of Appeal held that the CCAA judge did not err in concluding that the privilege in s. 36(1) attached to information obtained by the Minister in connection with the enforcement of the ICA and that undertakings contained in the Settlement Agreement were "information" for the purposes of s. 36 - The next issue was whether any of the exceptions to the privilege regime in the ICA applied - The CCAA judge correctly concluded that the exceptions in ss. 36(4)(a) and (d) of the ICA did not apply - However, the court held that the effect of s. 36(4)(b) was that USSC and USS were not prohibited from disclosing the Settlement Agreement - The court returned the issue of whether disclosure of the Settlement Agreement was barred by common law settlement privilege to the CCAA judge for determination in the exercise of his discretion in the CCAA proceeding - See paragraphs 40 to 82.

Cases Noticed:

Kitchenham v. AXA Insurance Canada (2008), 244 O.A.C. 222; 94 O.R.(3d) 276; 2008 ONCA 877, refd to. [para. 41].

Canada (Attorney General) v. Unites States Steel Corp., 2009 CarswellNat 5932 (F.C.), refd to. [para. 43].

Hamilton v. Canada (Attorney General) (1984), 28 B.L.R. 92 (F.C.T.D.), refd to. [para. 45].

Slattery (Bankrupt) v. Slattery, [1993] 3 S.C.R. 430; 158 N.R. 341; 139 N.B.R.(2d) 246; 357 A.P.R. 246, dist. [para. 53].

Camco Inc., Re (1983), 22 B.L.R. 1 (Ont. H.C.), refd to. [para. 70].

Sierra Club of Canada v. Canada (Minister of Finance) et al., [2002] 2 S.C.R. 522; 287 N.R. 203; 2002 SCC 41, refd to. [para. 72].

Hollinger Inc. et al., Re (2011), 283 O.A.C. 264; 107 O.R.(3d) 1; 2011 ONCA 579, leave to appeal denied (2012), 435 N.R. 395 (S.C.C.), refd to. [para. 72].

Sable Offshore Energy Inc. et al. v. Ameron International Corp. et al., [2013] 2 S.C.R. 623; 446 N.R. 35; 332 N.S.R.(2d) 1; 1052 A.P.R. 1; 2013 SCC 37, refd to. [para. 76].

Statutes Noticed:

Access to Information Act, R.S.C. 1985, c. A-1, sect. 24(1) [para. 28].

Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.), sect. 36(1), sect. 36(2) para. 23]; sect. 36(3), sect. 36(4), sect. 36(5) [para. 24].

Counsel:

Andrew Hatnay and Adrian Scotchmer, for the appellants, Non-USW Active Salaried Employees and Non-USW Salaried Retirees;

Kristian Borg-Olivier, for the appellants, USW and USW Local 1005;

Michael Kovacevic, for the appellant, City of Hamilton;

Michael E. Barrack and John Mather, for the respondent, United States Steel Corporation;

Sharon Kour, for the respondent, U.S. Steel Canada Inc.;

John L. Syme, Joseph Cheng and Jacqueline Dais-Visca, for the respondent, Attorney General of Canada;

Jonathan G. Bell, for the respondent, Ernst & Young Inc. (the Monitor);

Peter D. Ruby, for the Superintendent of Financial Services (Ontario).

This appeal was heard on November 19, 2015, before Hoy, A.C.J.O., Blair and Lauwers, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Hoy, A.C.J.O., and was released on January 26, 2016.