2022 QCCA 598, 2022 QCCA 598

Cantore c. Nemaska Lithium inc. 2022 QCCA 598 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-029950-227 (500-11-057716-199) DATE: May 3, 2022 BEFORE THE HONOURABLE BENOÎT MOORE, J.A. VICTOR CANTORE APPLICANT – Plaintiff v. NEMASKA LITHIUM INC. RESPONDENT – Defendant and pricewaterhousecoopers inc., in its capacity as monitor in the matter of the CCAA proceedings of NMX RESIDUAL ASSETS INC. et al.

IMPLEADED PARTY – Monitor and GUY BOURASSA steve nadeau marc dagenais paul-henri couture françois biron vanessa laplante jacques mallette patrick godin luc séguin rené lessard michel baril shigeki (sean) miwa IMPLEADED PARTIES – Voluntary Interveners and the land registrar of the land registry office for the registration division of lac-saint-jean-ouest the registrar of the public register of real and immoveable mining rights IMPLEADED PARTIES – Impleaded Parties JUDGMENT [ 1 ] The applicant seeks leave to appeal from a judgment of the Superior Court, District of Montreal (the Honourable Mr. Justice David R.

Collier), dated February 14, 2022, which granted the motion to partially dismiss of the respondent, Nemaska Lithium Inc., and ordered that various paragraphs of the applicant’s “re-Modified Real Rights Application”, dated April 20, 2021, be struck. [ 2 ] The present application forms part of proceedings under the Companies’ Creditors Arrangement Act [1] (“ CCAA ”) for the restructuring of five debtor companies, the applicant having filed proofs of claims within the scope of those proceedings.

In parallel with those proceedings, the applicant instituted an action seeking the recognition of a sui generis real right, through acquisitive prescription or otherwise, in the mining properties of the debtor companies. [ 3 ] On October 15, 2020, the Superior Court granted an application for a reverse vesting order (“RVO”), which, in essence, consisted in the sale of the debtor companies stripped of certain unwanted assets or liabilities. Given that the RVO provided, in

particular, for the cancellation of existing real rights on the debtor companies’ assets, the applicant objected to the RVO. [ 4 ] In order not to jeopardize the sale, it was agreed to carve out from the RVO the applicant’s action seeking the recognition of a sui generis real right. Consequently, under paragraphs 36 and 37 of the RVO, an amount of $6,000,000 was set aside, which amount will be paid to the respondent if the applicant’s action is successful. If, on the contrary, the applicant’s action is unsuccessful, this amount will be distributed to the creditors of the debtor companies.

Notwithstanding the carve-out, the applicant maintained his objection to the RVO, but the Superior Court dismissed his contestation. [2] My colleague, Marcotte, J.A., subsequently denied leave to appeal from that judgment. [3] [ 5 ] In April and July 2021, the applicant made several amendments to his application seeking the recognition of a sui generis real right. The respondent, being of the opinion that these amendments modified the action instituted in September 2020 by adding a new ground based on oppression, sought to have the amendments struck.

In its view, not only is this ground not included in the carve-out contained in paragraphs 36 and 37 of the RVO, but it is covered by the release set out in paragraph 35(

e) of the RVO and pertains to a claim subsequent to the December 23, 2019 date of crystallization of the rights and claims of creditors. Based essentially on these grounds, the trial judge granted the respondent’s application and ordered a series of allegations struck. [ 6 ] The applicant wishes to appeal this decision. He argues that it causes him irreparable prejudice by deciding part of the dispute and by ruling on an action for oppression without his having had the opportunity to adduce evidence.

In particular, in his view, the judge erred by considering that his action seeking the recognition of a sui generis real right was heard concurrently with the RVO and by limiting himself to considering whether or not the allegations of oppression were covered by paragraph 36 of the RVO, without assessing whether there was any ground barring these new allegations, be it – as the respondent argued – res judicata or the prohibition on a collateral attack against the judgment on the RVO.

He also argues that the issue of whether the release set out in paragraph 35(e), which covers “liabilities”, can include oppression proceedings is of significance to the practice. [ 7 ] The respondent and the various interveners argue that the criteria for leave to appeal have not been met because the judge gave the only possible

interpretation to paragraph 36 of the RVO and the judgment has no impact on the applicant’s claims contemplated in that paragraph. * * * [ 8 ] The applicant submits that leave in the present matter is governed by art. 31 of the Code of Civil Procedure . I disagree. Leave to appeal is governed instead by s. 13 CCAA . [4] The applicable criteria under this

section are well known: [5] [2] There is no issue that the test to be applied in deciding whether to exercise the discretion to grant leave is fourfold as follows:

i) Whether the point on appeal is of significance to the practice; ii) Whether the point is of significance to the action or proceedings; iii) Whether the appeal is prima facie meritorious or frivolous ; iv) Whether the appeal will unduly hinder the progress of the action or proceedings. There is also no dispute that the test is cumulative in that each of the four criteria must be satisfied in order that leave be granted. [Reference omitted] [ 9 ] I am of the opinion that these criteria, which are cumulative, have not been met here.

First, the applicant has not convinced me that there is an issue of significance to the practice. The judgment under appeal is limited to interpreting the judgment authorizing the RVO as well as various case management orders. The issues raised – at best, mixed questions of fact and law – are not of significance beyond the case at bar and, moreover, are owed great deference by this Court. [ 10 ] As for the significance to the proceedings in the case at bar, here too the applicant has not convinced me that this criterion has been met.

The judge merely concluded that the amendments in question constitute a new cause of action. This finding therefore does not modify the action initially instituted, which is maintained by paragraph 36 of the RVO, and does not in any way limit the applicant’s rights under that action. [ 11 ] As the cumulative conditions of s. 13 CCAA have not been satisfied, leave cannot be granted. THEREFORE, THE UNDERSIGNED: [ 12 ] DISMISSES the application for leave to appeal, with legal costs; BENOÎT MOORE, J.A. Mtre Dimitri Maniatis Mtre Alexandre Ducic ACCENT LÉGAL For Victor Cantore

Mtre Louis Martin O’Neil Mtre Lucas Mathieu DAVIES WARD PHILLIPS & VINEBERG For Nemaska Lithium Inc. Mtre Jean Fontaine Mtre Nathalie Nouvet STIKEMAN ELLIOTT For Pricewaterhousecoopers Inc. Mtre Michèle Bédard CASAVANT BÉDARD For Guy Bourassa Mtre Miguel Bourbonnais Mtre Nicolas Deslandres McCARTHY TÉTRAULT For Steve Nadeau, Marc Dagenais, Paul-Henri Couture, François Biron, Vanessa Laplante, Jacques Mallette, Patrick Godin, Luc Séguin, René Lessard, Michel Baril and Shigeki (Sean) Miwa Date of hearing: April 8, 2022