



COURT OF APPEAL FOR ONTARIO

CITATION: Crystallex International
    Corporation (Re),
2021 ONCA 87

DATE: 20210209

DOCKET: M51677

Rouleau, Benotto and Thorburn
    JJ.A.

In the Matter of the
Companies
    Creditors Arrangement Act
, R.S.C. 1985,
c. C-36, as amended

And In the Matter of a Plan of
    Compromise or Arrangement of Crystallex International Corporation

Robin Schwill, Natalie Renner and
    Maureen Littlejohn, for the moving party Crystallex International Corporation

Timothy Pinos, Shayne Kukulowicz, and
    Ryan Jacobs, for the moving party Tenor Special Situation I, LP

Alan H. Mark, Robert J. Chadwick, Peter
    Ruby, and Chris Armstrong, for the responding parties Computershare Trust
    Company of Canada in its Capacity as Trustee for the Holders of 9.375% Senior
    Notes of Crystallex International Corporation and the Ad Hoc Committee of
    Noteholders

Heard: in writing

Motion for leave to appeal from the order
    of Justice Glenn A. Hainey of the Superior Court of Justice, dated June 8, 2020
    and August 31, 2020.

REASONS
    FOR DECISION

[1]

Crystallex
    International Corporation (Crystallex) and DIP lender Tenor Special Situation
    I, LP (Tenor) seek leave to appeal the motion judges order
dismi
ssing, in
part, Crystallexs motion to seal
    certain information contained in the Monitor
s
Thirty-Third Report.
For the reasons that
    follow, we refuse leave.

Background

[2]

Crystallex
    has been under the protection of the Companies Creditors Arrangement Act
, R
.S.C. 1985, c. C-36 (CCAA)
,
since December 2011.
Since that time, Crystallexs sole business activity has
    been pursuing its claim agai
nst the Republic of
    Venezuela for having

expropriated its rights
to
the Las Cristinas
    gold mine. In 2016, the World Bank
s International
    Centre for the Settlement of Investment Disputes awarded Crystallex $1.202
    billion, and the company has been seeking to enforce th
e
award ever since.

[3]

In
    May 2020, Crystallex sought an extension of its initial order and requested
that certa
in information
in
the Monitors
    Thirty-Third Report, including certain financial information
, be sealed.

[4]

Computershare
    Trust Company of
Canada in its capacity as Trustee
    for the Holders of 9.375% Senior Notes of Crystallex and the Ad Hoc Committee
    of Noteh
olders

opposed the sealing order sought by Crystallex insofar as
    it related to the sealing of Crystallexs (i) cash balance
,
(ii) cash-flow
    statement
,
and (iii) cash-flow forecast.

[5]

In
    his endorsement dated June 8, 2020, Hainey J. refused to seal the contested
    financial information
. He noted that it was significant that the Monitor did not
    fully support Crystallexs request for a sealing o
rder.
He held that the
Sierra Club
test was no
t satisfied
:
Sierra Club of Canada v. Canada (Ministry of Finance)
, 2002 SCC 41, [2002] 2 S.CR. 522.
The affidavit evidence did

not provide detailed
    or compelling reasons about how this information, if disclosed, could be used
    to the detriment of Crystall
ex or any details
    whatsoever as to the feared consequences of its disclosure to the public. The
    evidence was

highly speculative and
    [did] not specify any incremental risk that Crystallex may suffer from the
    disclosure of this information over and above t
he
    risk it is already exposed to.

[6]

Following the hearing, the Monitor identified certain
    redactions that should be made to its report if the full sealing order
    requested by Cry
s
tallex w
ere
not granted.
Indicating that he thought the
    proposed redactions ma
de sense,
t
he

motion judge
permitted the parties
    to make further submissions with respect to the proposed redactions.
In addition,
Crystallex filed a
    supplementary affidavit
detailing
why
it was of the view that
disclosure of
key
financial information,
    including its cash balance, could harm its efforts
to
enforc
e
its award against
    Venezuela.

[7]

In his endorsement dated
    August 31, 2020,
Hainey
    J. agreed to the Monitors proposed redactions
. He continued to be of the view that the prop
osed redactions
made sense and
represented a fair and reasonable balance between the
    protection of Crystallexs important commercial interest and public disclosure
    in keeping with the open

court principle.

[8]

The result was that the
Companys
motion
was dism
issed in part. The motion
    judge
ordered that the Thirty-Third Report be redacted as proposed by the Company
,
except for references to Crystallexs cash balance and related information.

[9]

In
    seeking leave,
Crystallex and Tenor
submit that the motion judge mad
e a number of errors, including
erring
in interpreting and
    applying the
Sierra Club
test,
in
failing to apply s.
    10(3) of the CCAA, and
in
relying on the Monitors submissions as to whether the test
    for a
sealing
order had been met.
In their submission,
the motion judges
    order is inconsistent with prior sealing orders in this proceeding, as well as
    established practice in Ontario.
They strenuously
contend
that disclosure of
    Crystallexs cash balance could undermine
the companys
enf
orcement efforts.

The Test for Leave
    is Not Met

[10]

Leave
    to appeal is granted sparingly in
CCAA
proceedings and
    only where there are serious and arguable grounds that are of real and
    significant interest to the parties. In addressing whether leave should be g
ranted, the court will consider
:
(1)
whether
the proposed appeal
    is
prima facie
meritorious or frivolous;
    (2)
whether
the points on the proposed appeal are of significance to
    the practice; (3)
whether
the points on the proposed appeal are of significance t
o the action; and
(4)
whether the proposed
    appeal will unduly hinder the progress of the action
:

see, for e.g.,
Stelco Inc.

(Re)
(2005), 75 O.R.
    (3d) 5 (C.A.), at para. 24;
Timminco Ltd.
(Re)
, 2012 ONCA
    552, 2 C.B.R. (6th) 332, at para. 2;

Nortel Networks
Corp. (Re)
, 2016 ONCA 332,
36 C.B.R. (6th) 1,
at para. 34.

[11]

Having
    reviewed the extensive materials filed on this leave motion, we are not
    satisfied that the proposed appeal is
prima facie
meritorious
or that the case is
    of significance to the practice.
Crystallex and Tenor seek
to
challenge a
    discretionary order of the motion judge, who as the supervising judge is
    intimately familiar with this CCAA proceeding.
The motion judge applied the
    well-established
Sierra Club
test
in light of the
    evidence before
him.
In our view, he did
    not give improper
consideration
or
weight
to the Monitors
    views
. Nor do we see any other basis
on which to
interfere with the
    motion judges
order
.


[12]

In
    light of our view that the first
two prongs of the leave test are
    not satisfi
ed, we r
efuse
    leave.
Costs, to be shared equally by Crystallex and Tenor, are
    fixed at $1,000.

Paul
    Rouleau J.A.

M.L.
    Benotto J.A.

J.A.
    Thorburn J.A.


