SCC Case Information
Conrad Black, et al. v. Daniel Colson, et al.
(Ontario) (Civil) (By Leave)
Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch) for information purposes only.
Commercial law – Sealing order – Companies’ Creditor Arrangement Act proceedings – Settlement agreements – Whether and when the open court principle should give way to the policy objective of fostering the settlement of litigation – How does the open court principle apply in the context of settlements that require court approval – What importance should the courts give the open court principle in proceedings under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36.
Hollinger Inc. and two related corporations were granted Companies’ Creditor Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”), protection. A Litigation Trustee was appointed to deal with the assets available to Hollinger's creditors which consist almost entirely of Hollinger's claims against former officers, directors and advisors, including Conrad Black and Conrad Black Capital Corporation (“Black”), Torys LLP and KPMG LLP. Black asserted a claim against Hollinger in the CCAA proceedings, as well as claims for contribution and indemnity against Torys and KPMG in relation to several claims asserted against him by Hollinger. Settlement discussions and mediations between Hollinger, the Litigation Trustee, Torys and KPMG, led to two settlement agreements that require court approval. The draft settlement agreements were circulated to all parties with the amounts to be paid by way of settlement redacted. Hollinger, Torys and KPMG moved before the judge dealing with the CCAA proceedings for a sealing order redacting those amounts. In its affidavit in support of the motion, Hollinger stated that “disclosure of the commercially sensitive terms contained in the Settlements and the strategy of the Litigation Trustee and other confidential details relating to Litigation Assets set out in the Litigation Trustee's Report would undermine the Litigation Trustee's initiatives with respect to the remaining Litigation Assets including, without limitation, any possible settlements the Litigation Trustee may reach in respect of any of the remaining Litigation Assets and litigation with KPMG or Torys, in the event that the settlements are not approved”.
The Ontario Superior Court of Justice granted the sealing order redacting the amounts to be paid by Torys LLP and KPMG LLP to Hollinger Inc. pursuant to the proposed settlement agreements. The Ontario Court of Appeal dismissed Conrad Black’s and Black Capital Corporation’s appeal.