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insurance company had to maintain in Canada to operate a Canadian branch
comes under the jurisdiction of the Canadian court, regardless of the place of
origin of any claim against these assets.
ii.
The Canadian Stay of Proceedings
Canada Deposit Insurance Corp., v. Canadian Commercial Bank, [1990] A.J. No.
723 (Alberta Queen’s Bench). A winding‐up order creates a stay of all
proceedings against the Canadian company. This includes a proceeding in a
foreign jurisdiction against the Canadian company in liquidation and the
conducting of examinations of the liquidator of the Canadian company for the
purpose of the foreign proceeding. Leave of the Canadian court is first required
to proceed.
Kansa General International Insurance Co. (liquidator of) v. Maska U.S. Inc.,
[1998] O.J. No. 1410 (Quebec Court of Appeal). The Canadian court may
authorize the Canadian liquidator to withdraw from funding the defence of an
alleged insured in a foreign proceeding, and may compel the coverage issues to
be determined by the Canadian court, notwithstanding a determination on
coverage by a foreign court made without leave of the Canadian court.
Canada (Attorney‐General) v. Reliance Insurance Co., [2007] O.J. No. 3820
(Ontario Superior Court – Commercial List); leave to appeal refused [January 25,
2008 – Ontario Court of Appeal No. M35682]. The Canadian stay of proceedings
applies to stay an arbitration involving a claim of the Canadian branch to
reinsurance proceeds, notwithstanding a pre‐insolvency contractual provision
for arbitration. The Canadian court has jurisdiction to hear a dispute involving
reinsurance and set‐off in respect of the Canadian branch business,
notwithstanding a pre‐insolvency contractual arbitration clause.
iii.
Set‐off
Canada (Attorney General) v. Reliance Insurance Co., [2008] O.J. No. 795
(Ontario Superior Court – Commercial List); leave to appeal refused [July 14,
2008 – Ontario Court of Appeal No. M36173]. Where the liquidator of a
Canadian branch of a foreign insurance company seeks to collect an amount
owing in respect of the branch’s business, the counterparty may invoke a
contractual set‐off against the foreign insurance company notwithstanding that
the indebtedness did not arise out of the Canadian branch’s business, provided
the set‐off otherwise meets the requirements of the Canadian insolvency
legislation.
Canada (Attorney General) v. Reliance Insurance Co., [2008] O.J. No. 795
(Ontario Superior Court – Commercial List); leave to appeal refused [July 14,
2008 – Ontario Court of Appeal No. M36173]. The strict timing requirements of
the Winding‐up and Restructuring Act must be met before a counter‐party may
assert a set‐off against the Canadian branch. If the counter‐party’s obligation
was not due or accruing due at the commencement of the Canadian liquidation,
then it cannot be set‐off against the amount owed to the Canadian branch in
liquidation, notwithstanding a contractual set‐off provision.
iv.
Distribution of Assets
The National Benefit Assurance Co., [1928] 3 D.L.R. 289. In the liquidation of a
Canadian branch of a foreign insurance company, a policyholder of a class of
insurance that falls outside the classes authorized by the Canadian license does
not have a claim against the Canadian branch in liquidation.