A lawyer representing a woman seeking millions in damages for a sexual assault she says occurred when she was a Laurentian University student in 1979 is arguing that legislation allows the matter to be lifted out of LU’s current insolvency restructuring process.
Laurentian is still currently under creditor protection under the Companies’ Creditors Arrangement Act (or CCAA).
The woman’s lawyer, Aron Zaltz, is attempting to add Laurentian as a defendant in a lawsuit by his client against the University of Sudbury (one of the formerly federated universities operating on LU’s campus) in relation to this matter.
To do that, the stay of proceedings protecting LU from its creditors must be lifted in this specific case.
The issue was heard by Chief Justice Geoffrey Morawetz, the judge who has heard most matters related to Laurentian’s insolvency, in a three-hour hearing on April 8.
According to documents filed before the courts, the woman, Barbara Robinson, alleges she was sexually abused by University of Sudbury religion professor John Sahadat while a student there in the late 1970s. Sahadat passed away in May 2021.
None of the allegations made by Robinson have been proven in court.
While Sahadat was employed by the University of Sudbury, Zaltz said the alleged abuse happened while Robinson was enrolled in Sahadat’s courses in her capacity as a Laurentian student.
Robinson made a $5-million claim against Laurentian University regarding this matter through its insolvency claims process last summer, but the claim was disallowed, with Laurentian’s CCAA monitor saying Sahadat was an employee of the University of Sudbury, not LU.
She appealed the ruling, but that appeal is on hold while the motion to lift the stay for her matter is before the courts.
A $5-million legal action was also filed by Robinson on March 14 against the University of Sudbury over the same alleged historic sexual abuse.
Zaltz is attempting to have the stay of proceedings against Laurentian lifted so LU can be added as a defendant to the legal action against the University of Sudbury.
To defend his point of view, he cites a certain section of the CCAA (section 19(2)(b)(i)), which he sees as a “carve out” in the legislation.
This could allow an individual to access damages against a "debtor company" under the CCAA. These damages would have to have been awarded by a court in civil proceedings related to "bodily harm intentionally inflicted, or sexual assault."
In this case, an award has not yet been awarded to his client, but Zaltz argues the section of the CCAA still applies. He said the issue has never before been tested before the courts.
“This is a claim, which we respectfully submit, ought to be dealt with outside of that process altogether,” Zaltz said.
Robinson has committed to immediately withdraw from the Laurentian CCAA claims process if the courts grant the lift stay motion.
“Robinson participated in that that claims process as a hedge against the possibility that your honor might not grant any of the relief sought,” Zaltz said.
“And if your honor doesn't, then obviously her only recovery would be through the claims process and any plan of compromise arising there.”
Laurentian University argues that Zaltz’s interpretation of the CCAA is incorrect.
“It would mean that any claim of the types mentioned in Section 19(2) – which is a broad category of claims including fraud, misappropriation, and misrepresentation – would not be capable of being determined in a CCAA claims process and could proceed in ordinary litigation,” said Laurentian, in documents filed before the courts.
“In short, it would create chaos.”
If the courts rule against the use of this section of the CCAA, Zaltz is alternatively asking that Laurentian still be added to the court action against the University of Sudbury.
In that case, he asks that the court provide directions “including, but not limited to” limiting the enforceability of any judgment in the action to such insurance proceeds (if any) as are determined to be available to LU, and not against LU’s current or future assets, as well as the means for determining the extent of insurance.
However, Laurentian has been unable to locate the applicable insurance policy from 1979, despite extensive efforts to do so.
Laurentian also said it has no funds that are traceable to self-insurance (where an organization sets aside a pool of money to be used to remedy an unexpected loss).
“In our submission, that relief is not appropriate in the circumstances, because, as Your Honor acknowledged earlier, Laurentian has conducted an extensive search and has not located an insurance policy that would potentially indemnify this claim,” said Laurentian counsel Andrew Hanrahan.
For its part, the University of Sudbury is also seeking a lift of the stay of proceedings so that Laurentian can be added as a defendant in Robinson’s lawsuit against the U of S.
If the stay of proceedings is lifted, the University of Sudbury says it will cross-claim against Laurentian (a claim brought by one defendant against another in the same proceeding) if the court orders that LU be added to the Robinson lawsuit.
Should the court not order that LU be added as a defendant, the University of Sudbury seeks to add Laurentian as a third party to the lawsuit.
Like Zaltz, the University of Sudbury also argues that Section 19(2) of the CCAA applies in this case.
University of Sudbury lawyer Ronald Caza said “our position is the same basically as the plaintiff’s initial position, which is … the litigation issues that are flowing as a result of the sexual assault that's being alleged by Ms. Robinson, should not be dealt with within the CCAA.”
Morawetz said he would be taking the matter under reserve, and because of other commitments, it might take some time for him to issue his judgment.
“So I will ask for your indulgences,” he said. “It may take me three or four weeks to get at it. I will try to do it sooner as opposed to later.”