500-09-027077 -171 Court of Appeal of Quebec Montreal On appeal from a Judgment of the Superior Court, District of Montreal, rendered on September 11,2017 by the Honourable Stephen W. Hamilton, J.S.C. No. 500-11-048114-157 S.C.M. In the matter of the Plan of Compromise or Arrangement of Bloom Lake General Partner Limited et al: MICHAEL KEEPER, TERENCE WATT, DAMIEN LEBEL and NEIL JOHNSON as Representatives of the Salaried I Non-Union Employees and Retirees APPELLANTS I INCIDENTAL RESPONDENTS (Mis en cause) v. FTI CONSULTING CANADA INC. RESPONDENT I INCIDENTAL APPELLANT (Monitor-Petitioner) -and- VILLE DE SEPT-iLES MISE EN CAUSE I INCIDENTAL APPELLANT (Mise en cause) -and- APPELLANTS' BRIEF THEMIS MULTIFACTUM INC. ~-,~ 4, rue Notre-Dame Est, bur. 100, Montreal (Quebec) H2Y 1B8 • Telephone: 514866-3565 Telecopieur: 514866-4861 ..,-= . [email protected] www.multifactum.com I:J~ • 500-09-027077 -171 Court of Appeal of Quebec Montreal BLOOM LAKE GENERAL PARTNER LIMITED, QUINTO MINING CORPORATION, 8568391 CANADA LIMITED, CLIFFS QUEBEC IRON MINING ULC, WABUSH IRON CO. LIMITED, WABUSH RESOURCES INC., MISES EN CAUSE - (Debtors) -and- THE BLOOM LAKE IRON ORE MINE LIMITED PARTNERSHIP, BLOOM LAKE RAILWAY COMPANY LIMITED, WABUSH MINES, ARNAUD RAILWAY COMPANY, WABUSH LAKE RAILWAY COMPANY, LIMITED, SYNDICAT DES METALLOS, SECTION LOCALE 6254, SYNDICAT DES METALLOS, SECTION LOCALE 6285, ATTORNEY GENERAL OF CANADA, HER MAJESTY IN RIGHT OF NEWFOUNDLAND AND LABRADOR, MORNEAU SHEPELL LTD., RETRAITE QUEBEC MISES EN CAUSE - (Mises en cause) APPELLANTS' BRIEF THEMIS MULTIF ACTUM INC. ~-.~ 4, rue Notre-Dame Est, bur. 100, Montreal (Quebec) H2Y 1B8 Telephone: 514866-3565 Telecopieur: 514 866-4861 fiI":.. 1.:.1. • [email protected] www.multifactum.com 500-09-027077 -171 Court of Appeal of Quebec Montreal Me Andrew J. Hatnay Me Mark E. Meland Me Amy Tang Me Nicolas Brochu KOSKIE MINSKY LLP FISHMAN FLANZ MELAND PAQUIN LLP 20 Queen Street West, Suite 900 1250 Rene-Levesque Blvd. West Toronto, Ontario M5H 3R3 Suite 4100 Tel. : 416977-8353 Montreal, Quebec H3B 4W8 Fax: 416977-3316 Tel. : 514932-4100 [email protected] Fax: 514932-4170 [email protected] [email protected] [email protected] [email protected] Attorneys for the Appellants Me Sylvain Rigaud Me Bernard Boucher Me Chrystal Ashby Me Emily Hazlett NORTON ROSE FULBRIGHT CANADA LLP BLAKE, CASSELS & GRAYDON LLP 1 Place Ville Marie, Suite 2500 1 Place Ville Marie, Suite 3000 Montreal, Quebec H3B 1 R1 Montreal, Quebec H3B 4N8 Tel.: 514847-4747 Tel. : 514 982-4006 Fax: 514286-5474 Fax: 514 982-4099 [email protected] [email protected] [email protected] [email protected] [email protected] Attorneys for the Mises en cause Attorneys for the Respondents Bloom Lake General Partner Limited, FTI Consulting Canada Inc., in its Quinto Mining Corporation, 8568391 capacity as Court-appointed Monitor Canada Limited, Cliffs Quebec Iron to Bloom Lake General Partner Mining ULC, Wabush Iron Co. Limited, Wabush Resources Inc., Limited et al The Bloom Lake Iron Ore Mine Limited Partnership, Bloom Lake Railway Company Limited, Wabush Mines, Arnaud Railway Company and Wabush Lake Railway Company, Limited THEMIS MULTIFACTUM INC. 4, rue Notre-Dame Est, bur. 100, Montreal (Quebec) H2Y 1B8 Telephone: 514866-3565 Telecopieur: 514866-4861 [email protected] www.multifactum.com 500-09-027077 -171 Court of Appeal of Quebec Montreal Me Martin Roy Me Daniel Boudreault STEIN MONAST LLP PHILION LEBLANC BEAUDRY, AVOCATS 70 Dalhousie Street, Suite 300 565 Cremazie Blvd. East, Suite 5400 Quebec, Quebec G1 K 4B2 Montreal, Quebec H2M 2V6 Tel.: 418 640-4426 Tel.: 514387-3538 Fax: 418 523-5391 Fax: 514387-7386 martin. [email protected] [email protected] [email protected] Attorney for the Mise en cause Attorney for the Mis en cause Ville de Sept-iles Syndicat des Metallos, Sections locales 6254 & 6285 Me Pierre Lecavalier Me Doug C. Mitchell Me Michelle Kellam Me Edward Bechard-Torres DEPARTMENT OF JUSTICE - CANADA IMK LLP Guy-Favreau Complex 3500 De Maisonneuve Blvd. West East Tower, 9th Floor Suite 1400 200 Rene-Levesque Blvd. West Montreal, Quebec H3Z 3C1 Montreal, Quebec H2Z 1X4 Tel.: 514 935-4460 Tel.: 514496-4073 Fax: 514935-2999 Fax: 514283-3856 [email protected] [email protected] [email protected] [email protected] [email protected] Attorneys for the Mis en cause Attorneys for the Mise en cause The Attorney General of Canada, Her Majesty in Right of acting behalf of the Office of the Newfoundland and Labrador, as Superintendent of Financial represented by the Superintendent Institutions of Pensions THEMIS MULTIF ACTUM INC. 4, rue Notre-Dame Est, bur. 100, Montreal (Quebec) H2Y 1B8 Telephone: 514866-3565 Telecopieur: 514 866-4861 [email protected] www.multifactum.com TABLE OF CONTENTS (1 ) APPELLANTS' ARGUMENT PART I THE FACTS ............................................................................................... 1 PART II ISSUES IN DISPUTE ................................................................................. 3 PART III SUBMISSIONS .......................................................................................... 3 Introduction .............................................................................................. 3 Issue #1: Did the CCAA Judge err in holding that the deemed trusts in the NLPBA and the SPPA are inoperative in the Wabush Mines CCAA proceedings based on the doctrine of paramountcy? .......................................................................................... 7 Issue #2: Did the CCAA Judge err in holding that sections 49 and 264 of the SPPA are not sufficient to create deemed trusts in respect of the unpaid going concern payments and special payments owing by the employer to a pension plan in the context of the Wabush Mines CCAA proceedings? ................................. 9 Issue #3: Did the CCAA Judge err in holding that the deemed trusts in the PBSA are inoperative in the Wabush Mines CCAA proceedings because they conflict with Parliament's intent? ................. 13 Issue #4: Did the CCAA Judge err in holding that: a) The PBSA applies exclusively to those Wabush Mines Salaried Members (and USW Plan Members) who as employees worked on the Wabush Mines railway? ............................... 16 b) The SPPA applies exclusively to those Wabush Mines Salaried Members (and USW Plan Members) who as employees were non-railway employees and who reported for work in Quebec? ................................................................................... 16 c) The NLPBA applies exclusively to those Wabush Mines Salaried Members (and USW Plan Members) who as employees were non-railway employees and reported for work in Newfoundland? ................................................................................. 16 Issue #5: Did the CCAA Judge err in holding that the deemed trusts in section 32 of the NLPBA do not apply to Wabush Mines' assets located in Quebec and the sales proceeds therefrom? ............................................................................. 24 TABLE OF CONTENTS (2) Issue #6: Did the CCAA Judge err in holding that the scheme of distribution to creditors in section 136 of the Bankruptcy and Insolvency Act applies in the Wabush Mines CCAA proceedings? ......................................................................................... 28 Issue #7: Did the CCAA Judge err in holding that the priority of the NLPBA, SPPA, and/or PBSA deemed trusts as against a secured claim is dependent on the deemed trusts coming into effect before the secured claim? ........................................................... 29 PART IV CONCLUSIONS ....................................................................................... 31 PART V AUTHORITIES ......................................................................................... 33 ATTESTATION .............................................................................................................. 36 A Appellants' Argument CANADA PROVINCE OF QUEBEC COURT OF APPEAL DISTRICT OF MONTREAL No. 500-09-027077-171 C.A. No. 500-11-048114-157 S.C. In the matter of the Plan of Compromise or Arrangement of Bloom Lake General Partner Limited et al: MICHAEL KEEPER, TERENCE WATT, DAMIEN LEBEL and NEIL JOHNSON as Representatives of the Salaried ! Non-Union Employees and Retirees APPELLANTS !INCIDENTAL RESPONDENTS (Mis en cause) v. FTI CONSULTING CANADA INC. RESPONDENT !INCIDENTAL APPELLANT (Mon itor-Petitioner) -and- VILLE DE SEPT -iLES MISE EN CAUSE !INCIDENTAL APPELLANT (Mise en cause) -and- BLOOM LAKE GENERAL PARTNER LIMITED, QUINTO MINING CORPORATION, 8568391 CANADA LIMITED, CLIFFS QUEBEC IRON MINING ULC, WABUSH IRON CO. LIMITED, WABUSH RESOURCES INC., MISES EN CAUSE - (Debtors) -and- B Appellants' Argument THE BLOOM LAKE IRON ORE MINE LIMITED PARTNERSHIP, BLOOM LAKE RAILWAY COMPANY LIMITED, WABUSH MINES, ARNAUD RAILWAY COMPANY, WABUSH LAKE RAILWAY COMPANY, LIMITED, SYNDICAT DES METALLOS, SECTION LOCALE 6254, SYNDICAT DES METALLOS, SECTION LOCALE 6285, ATTORNEY GENERAL OF CANADA, HER MAJESTY IN RIGHT OF NEWFOUNDLAND AND LABRADOR, MORNEAU SHEPELL LTD., RETRAITE QUEBEC MISES EN CAUSE - (Mises en cause) APPELLANTS'ARGUMENT 1 Appellants' Argument The Facts PART 1- THE FACTS 1. The Appellants and all non-union employees and retirees whom they represent (collectively, the "Salaried Members") are members of one single pension plan established, administered,