2021 QCCA 1923, 2021 QCCA 1923

Canadian Imperial Bank of Commerce c. Chronometriq inc. 2021 QCCA 1923 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-029763-216 , 500-09-029765-211 ( 500-11-060355-217 , ) MINUTES OF THE HEARING DATE : December 20, 2021 THE HONOURABLE CHRISTINE BAUDOUIN, J.A. No: 500-09-029763-216 APPLICANT COUNSEL Canadian Imperial Bank of Commerce Mtre Joshua Bouzaglou ( Woods ) By videoconference APPELLANT COUNSEL ATTORNEY GENERAL OF CANADA Mtre Kim Sheppard ( Department of Justice Canada ) By videoconference RESPONDENTS COUNSEL Chronometriq inc. Health myself innovations inc.

Richter Advisory group inc. Mtre Michel La Roche ( Miller Thomson ) Absent Richter Advisory group inc. Mtre Frédérique Drainville ( McCarthy Tétrault ) By videoconference No: 500-09-029765-211 APPLICANT COUNSEL

Canadian Imperial Bank of Commerce Mtre Joshua Bouzaglou ( Woods ) By videoconference APPELLANT COUNSEL Agence du revenu du québec Mtre Daniel Cantin ( Larivière Meunier ) By videoconference RESPONDENTS COUNSEL Chronometriq inc. Health myself innovations inc. Richter Advisory group inc. Mtre Michel La Roche ( Miller Thomson ) Absent Richter Advisory group inc.

Mtre Frédérique Drainville ( McCarthy Tétrault ) By videoconference DESCRIPTION: 500-09-029763-216 , 500-09-029765-211 Application for leave to intervene of Canadian Imperial Bank of Commerce (Articles 185 and 378 C.c.p. ) Clerk at the hearing : René Gutknecht Courtroom: RC-18 HEARING 10:49 Commencement of the hearing. Identification of counsel. 10:51 Discussion between the Court and the counsel. 10:54 BY THE JUDGE: Judgment – see page 4. 10:56 Conclusion of the hearing. René Gutknecht, Clerk at the hearing

JUDGMENT [ 1 ] I am seized of an application for leave to intervene in two different files involving the Attorney General of Canada (500-09- 029763-218) and the Agence du revenu du Québec (500-09-029765-211) that are, for all intents and purposes, identical and rest on the same grounds. [ 2 ] On October 27, 2021, the Superior Court, Commercial Division (the Honourable Mr.

Justice Martin Castonguay) rendered an order which authorized and approved interim financing by, and an interim lender’s charge, in favour of the Applicant in the maximum amount of $1,600,000, an administration charge, a sale and investment solicitation process, a directors and officers charge, a key employee retention program, procedural consolidation of the estates and other relief. [ 3 ] On November 8, 2021 each of the Appellants, Attorney General of Canada and Agence du revenu du Québec, filed a notice of appeal, both of which are, for all intents and purposes, identical.

The Attorney General of Canada’s Notice of appeal states: [1] 2. More particularly, this appeal concerns the Court’s order ranking the Lender Charge, the Administration Charge and the Directors and Officers Charge (collectively, the “ Charges ” with priority over the Crown’s deemed trust (paragraph 34 of the Order) along with the order declaring a notwithstanding clause to override the provisions of any federal statute (paragraph 37 of the Order). (…) 6. The respondent, ChronoMétriq Inc. has an estimated amount of $ 1,4 MM of unremitted federal payroll deductions for the 2018, 2019 and 2020 tax years.

Those amounts are subject to the deemed trust provisions for unremitted source deductions under the Income Tax Act (“ ITA ”). (…) 16. Had the Crown been given an adequate opportunity to contest the motion presented, it would have demonstrated that:

a) The Crown’s deemed trust for unremitted source deductions has priority over court-ordered priming charges under the Bankruptcy and Insolvency Act (“ BIA ”); and

b) The Court did not have the authority under the BIA to render an order ranking the charges above the Crown’s deemed trust for unremitted source deductions; 17. The Court therefore erred in declaring at paragraph 34 of the Order “that each of the Charges shall constitute a charge on the Property [of the respondents] and that such Charges shall rank in priority to any and […] trusts (statutory or otherwise) ” (our underlining), thereby including the Crown’s deemed trust. 18.

The Court equally erred at paragraph 37 of the Order by declaring a notwithstanding clause to override the provisions of any federal statute, including more particularly, the BIA . [ 4 ] Its conclusions read as follows: 29. (…)

b) SET ASIDE the first instance Order regarding: i. The order and declaration priming the Lender Charge, the Administration Charge and the Directors and Officers Charge with priority over the Crown’s deemed trust (paragraph 34 of the Order); ii.

The order declaring a notwithstanding clause to override the provisions of any federal statute (paragraph 37 of the Order); [ 5 ] The Applicant, Canadian Imperial Bank of Commerce, requests leave to intervene in both appeal proceedings (art. 185 CCP ) and argues that the main question raised by the appeals is whether the Quebec Superior Court exercising its jurisdiction under the Bankruptcy and Insolvency Act has the power to grant charges in favour of interim lenders and others ranking in priority to the Crown’s deemed trust claim for unremitted source deductions. [ 6 ] The Applicant further submits that as the interim lender and beneficiary of the interim financing charge, it is directly affected by the appeals as there are insufficient funds available in the Debtors’ estates to repay both the interim financing provided by the interim lender and beneficiary of the interim financing charge and the Crown’s deemed trust claim.

It therefore argues that it “has a direct, substantial and genuine interest in contesting the appeal on the merits and should be entitled to fully participate therein on the same terms as the Respondents with respect to the length of its factum and oral submissions”. [ 7 ] The Appellants and the Respondents in both matters confirm they do not contest the Applicant’s application for leave to intervene. [ 8 ] Given these circumstances, I am satisfied that leave to intervene should be granted under the same terms and time limits as the Respondents. FOR THESE REASONS, THE UNDERSIGNED :

[ 9 ] GRANTS the Application for Leave to intervene of Canadian Imperial Bank of Commerce ; [ 10 ] ALLOWS the Applicant to intervene in these appeal proceedings on the same terms as the Respondents with respect to the length of its factum and oral submissions and under the same time limits; [ 11 ] COSTS to follow suit. CHRISTINE BAUDOUIN, J.A.