Priority claims were filed in respect of the Plans and their members.
The Monitor sought directions from the Court as to what priority to give unpaid special payments and the deficits in the Plans.
 White Birch Paper Holding Company (Arrangement relatif à) 2014 QCCS 4709 (Can LII) (White Birch).
 Timminco ltée (Arrangement relatif à), 2014 QCCS 174 (Timminco). 264 of the SPPA, which renders certain amounts payable to a pension fund to be “unseizable” as effectively providing for the necessary second ingredient. In addition to our regular guest bloggers, Inside Internal Controls blog published by First Reference, provides occasional guest post opportunities from various subject matter experts on the topics of risk management and best practices in finance and accounting, information technology, environmental issues, corporate governance, sales/marketing and operations, not-for-profits and business related issues in Canada.
The case, like the many cases before it involving the intersection of pensions and insolvency law, highlights the need for Parliament to provide clear statutory guidance on the priority afforded to pension obligations.
The author would like to thank Peter Hamilton, Joseph Reynaud and Chris Lofft for their helpful comments.
By Andrea Boctor, Partner, Stikeman Elliott  Justice Hamilton is a former partner of Stikeman Elliott LLP.
 Justice Mongeau is currently a justice of the Quebec Court of Appeal.
In the context of the NL Reference, dueling deemed trusts, dueling pension priority regimes, and divergent arguments from the Regulators and Plan Members, the decision, written by Justice Stephen Hamilton, masterfully cuts to the chase.
After agreeing with the Regulators that the deemed trust provisions under each of the NL PBA, Quebec SPPA and federal PBSA applies with respect to each Plans’ members subject to that jurisdiction, the Court turned to whether each deemed trust is valid, what amounts are subject to each deemed trust, and whether each is effective in the context of the Wabush CCAA. The Court, citing Sparrow Electric, established that two elements are necessary in order to create a statutory deemed trust with an effective priority: When examined against these two criteria, the Court determined that the NL PBA and federal PBSA deemed trusts do create an effective priority, but that the Quebec SPPA deemed trust contained in s. Specifically, the court determined that the second critical ingredient necessary to make an effective deemed trust is missing from the SPPA, thus rendering the deemed trust ineffective to create a priority.
The decision appears to be the tie-breaking vote between two previous Quebec Superior Court decisions, both written by Justice Mongeau that had, on the one hand, determined the SPPA deemed trust to be ineffective for the same reasons as did Justice Hamilton, and on the other, determined it to create an effective priority. Having established against the two-part test noted above that the NL PBA and PBSA deemed trusts create an effective priority, the Court then turned to the matter of what amounts owing to the Plans were covered by the various deemed trusts, and whether each of the NL PBA and federal PBSA deemed trusts were effective in the context of the Company’s “liquidating CCAA”.
In any event, Wabushis a welcome decision for third-party lenders to companies with defined benefit pension plans, and employers who sponsor defined benefit pension plans who may have had issues in accessing capital as a result of the SCC decision in Indalex.
For obvious reasons, it will also be met with fierce opposition by pensioner groups and pension regulators.