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ZOOMING RULES OF CIVIL PROCEDURE FOR SUPERIOR COURT OF JUSTICE TORONTO BANKRUPTCY COURT

rules of civil procedure superior court of justice toronto bankruptcy courtThe Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to an audio version of this Brandon’s Blog, please scroll to the bottom and click on the podcast.

Rules of civil procedure introduction

Today’s blog is taking a lighter look at new rules of civil procedure for a Zooming video conference world. These are my somewhat tongue in cheek suggestions for the Superior Court of Justice Toronto bankruptcy court.

I did not make these up. I am taking it from an actual Standing Order For The Conduct of Evidentiary Video Conference Hearings. It was issued by the Honourable D. H. Lester, Circuit Judge in the Circuit Court of the Fourth Judicial Circuit, Clay County Florida. It was sent to me by a Florida bankruptcy attorney friend of mine. I have just amended them for the Ontario Superior Court of Justice Toronto bankruptcy court context.

I have not seen any such pronouncements from the Ontario Superior Court of Justice Toronto Bankruptcy Court (and doubt that I will!). Below would be my proposed amendments to the R.R.O. 1990, Reg. 194: RULES OF CIVIL PROCEDURE (Rules of Civil Procedure) under the Courts of Justice Act, R.S.O. 1990, c. C.43. Everything I am suggesting below was actually in the Florida Standing Order.

New rules of civil procedure 46.02

Rules of civil procedure 46 through 51, sets out the rules of civil procedure for pre-trial procedures. I propose a new rule, number 46.02, to read:

46.02 Prior to any video conference hearing, all counsel, parties and witnesses shall familiarize themselves with the operation of Zoom and its capabilities. Instructions on Zoom operation may be found at https://zoom.us/resources. The following procedure will be followed:

(a) Enter your name on your Zoom profile so that you can be identified by the Judge.

(b) Devices must be fully charged prior to the hearing with a charger accessible in the event it becomes necessary.

(c) Devices must remain muted unless the participant is speaking. All participants must be in a location that is free of extraneous noise or visual distraction.

(d) A virtual background is not permitted.

(e) Hearings are court proceedings. Appropriate courtroom attire for counsel, parties and witnesses is expected.

It is too bad that virtual backgrounds would not be allowed in the Toronto bankruptcy court. I personally would want to attend a bankruptcy court hearing with this background:

rules of civil procedure superior court of justice toronto bankruptcy court
Photo courtesy of Zoom.us rules of civil procedure

As far as appropriate courtroom attire, I asked my friend if a judge has made him stand up yet to see what he was wearing below the waist. He said he has not yet been asked to do so, but it could happen.

New Superior Court of Justice rules of civil procedure for witness testimony

Rule 53 of the Rules of Civil Procedure deals with evidence at trial. I propose a new rule 53.01.1 which would go something like:

53.01.1 (a) At least three business days prior to hearing, the parties shall e-mail to the court a list of all witnesses expected to be called, with full names, e-mail addresses and cell phone numbers. Real names must be used. Court reporters are meeting participants. If a court reporter will be present, the reporter’s name and e-mail address shall be provided along with the witness list.

(b) After any opening statements, when a witness is called, the judge will admit the witness from the waiting room. After testifying, the witness will be removed electronically from the hearing.

(c) Witnesses must be alone. Prior to testifying and after testifying, witnesses shall scan the room to confirm they are the only person in the room. However, if an interpreter is necessary, interpreters may be either in the room with a witness or a meeting participant. The parties list of witnesses should indicate whether a witness will be testifying through an interpreter. The interpreter’s name and e-mail address must be provided to the judge in the list of witnesses.

(d) Passing of electronic notes during testimony and recording of the proceedings is forbidden.

(e) All other electronic devices must be turned off.

(f) A lawyer and a party may be in the same room. However, the camera must capture both. No one else may be present in the room.

New rules of civil procedure for documents in writing in Superior Court of Justice proceedings

I propose new rules of civil procedure number 4.01.1:

4.01.1 (a) At least five days prior to hearing, the lawyers shall confer

to disclose exhibits and other documents in writing expected to be used and to stipulate to as many as possible.

(b) All documents in writing must be delivered, e-mailed to the judge or e-filed at least three business days prior to the hearing. They should be pre-marked, identifying the party and exhibit number. Exhibits over ten pages in the number of pages shall be either delivered to the judge or e-filed in searchable PDF format with computer-generated page numbers. The parties must also provide an index that includes the number of pages.

(c) All lawyers, the judge and the court reporter must have a copy of all documents in writing. Witnesses must have a copy of all documents in writing to which they will testify or for which they will lay the predicate for admission.

(d) Documents in writing can be shared during the video hearing using a shared screen on Zoom.

Rules of civil procedure for the Superior Court of Justice

So this is what was in the Florida Standing Order for a Zooming video environment. I hope you enjoyed this somewhat light-hearted Brandon’s Blog.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

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BANKRUPTCY BLOG 2019: OUR MOST FAVOURITE INSOLVENCY TOPICS

bankruptcy blogIntroduction

I first want to wish all of you and your families a healthy, happy and prosperous New Year. As 2019 draws to a close, I thought it would be interesting to do some research in my 2019 Brandon’s bankruptcy blog to see which ones were the most top 10 popular this year.

So, in order counting down from number 10 to number 1, here are my top 10 bankruptcy blog counts for 2019.

#10 – 407 ETR DEBT SETTLEMENT: OUR NEWEST GUILT FREE WAY TO DO IT

This was a blog I wrote in 2015 as a follow up from one in 2014. It was updated for a 2018 Court decision.

In January 2014 in our blog titled 407ETR FAIRNESS-ONTARIO COURT OF APPEAL ENSURES FRESH START I described to you the decision of the Court of Appeal for Ontario in 407 ETR Concession Company Limited v. Superintendent of Bankruptcy (In the Matter of the Bankruptcy of Matthew David Moore) (the Moore Decision).

The highway’s owners appealed that decision to the Supreme Court of Canada (SCC). On Friday, November 13, 2015, the SCC released three decisions all dealing with the same basic issue: does the federal Bankruptcy and Insolvency Act (BIA) take paramountcy over provincial laws purporting to deal with the issue of debt and bankruptcy in Canada. The SCC answer was a resounding YES!

This blog talks about how 407etr deals with the debt owing by an insolvent person filing either a consumer proposal or for bankruptcy.

#9 – SOMETIMES EVEN A SHARK NEEDS BANKRUPTCY AND INSOLVENCY HELP

Not every innovation that is seen on The Shark Tank is bound to be one of the very best. Among the winners, one just entered into bankruptcy and insolvency proceedings. In this blog, I described one such company that got a deal on Shark Tank, but ultimately, went into bankruptcy.

Fizzics is a machine that makes use of sound waves that improves the taste and quality of a beer. Not even a Shark can stop its company from being driven to Chapter 11 bankruptcy protection. This proves that often an ingenious and fantastic invention being marketed with the assistance of a Shark might not truly interest people.

#8 – COURTS OF JUSTICE ACT: COURT OF APPEAL FOR ONTARIO CREATES NEW RULE?

This was a June 2019 blog about a then-recent decision of the Court of Appeal for Ontario that raises certain issues for a Receiver appointed under the Ontario Courts of Justice Act. The question answered in this blog which I focussed on was does the appeal period in the BIA or the Courts of Justice Act, regulates the appeal period from the order of the motion judge in this situation?

#7 – GAMBLING DEBT BANKRUPTCY: CAN GAMBLING DEBT BE DISCHARGED IN BANKRUPTCY?

I am often asked if you can have a gambling debt bankruptcy; can gambling debts be discharged in bankruptcy? In that January 2018 blog, I discussed the issues and provided my views on how best to get a discharge from not only gambling debts but debts related to any addiction.

#6 – CANADIAN REVERSE MORTGAGE: SENIORS MOVING FORWARD WITH INCREASED DEBT

In this August 2019 blog, I discussed the issue of how seniors are flocking to the Canadian reverse mortgage product in record numbers. I described what seniors must know to avoid reverse mortgage problems.

#5 – PRENUPTIAL AGREEMENTS MAKE FAMILIES STRONGER: THEY AREN’T JUST FOR THE RICH & FAMOUS – PRENUPS IN ONTARIO ARE FOR YOU TOO

In this July 2017 blog, I wrote about how prenuptial agreements make families stronger and why anyone can benefit from prenups in Ontario.

#4 – FORM 31 PROOF OF CLAIM: HOW TO COMPLETE THE PROOF OF CLAIM

This blog is from October 2018. I discussed how a form 31 proof of claim form should be completed and discussed why it is important for it, and the related proxy, to be completed properly.

#3 – 40 PARK LANE CIRCLE, 44 PARK LANE CIRCLE TORONTO FOR SALE: ARE FINANCIAL PROBLEMS CONTAGIOUS?

This March 2015 blog asked somewhat tongue in cheek if financial problems could be a result of where you lived. I reviewed some high profile insolvency cases by residents of 40 Park Lane Circle and 44 Park Lane Circle in the toney Bridle Path area of Toronto. I also provided some solutions people could use to solve their own debt issues.

#2 – WHAT HAPPENS TO DEBT WHEN YOU DIE CANADA: ARE YOU FREE OF DEBT

This was a June 2018 blog. In it, I explored what happens to debt when you die in Canada. Does debt survive death or not?

#1 – AVERAGE CANADIAN NET WORTH 2018: MIDLIFE WEALTH SHOCK MAY LEAD TO DEATH

This September 2018 blog looked at household debt at an all-time high, making the average Canadian net worth 2018 is a hot topic. My blog explored a then-recent study showing what could happen if we experience wealth shock.

Bankruptcy blog conclusion

You may have already noticed over the last 10 days or so I have slowed down a bit in the writing of my Brandon’s bankruptcy Blog. The holiday period will do that to me! I will continue in January at a slower pace of blog posting. Come February, I will pick up the pace again.

In the meantime, again, I wish all of my loyal readers and their families a healthy, happy and prosperous 2020.

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Brandon Blog Post

COURTS OF JUSTICE ACT: COURT OF APPEAL FOR ONTARIO CREATES NEW RULE?

Introduction

On June 19, 2019, the Court of Appeal for Ontario, released its decision in the matter of Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508 (the Dianor decision). This case was heard in September 2018. It has to do with a Court-appointed Receiver, appointed under both the Courts of Justice Act, R.S.O. 1990, c. C.43 (CJA) and the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA).

What the decision stands for

Dianor Resources Inc. (Dianor) was a financially troubled exploration company focused on the acquisition and exploitation of mining sites in Canada. The appointment was made under s. 243 of the BIA and s. 101 of the CJA. Dianor’s secured lender Third Eye Capital Corporation (Third Eye) made the application for the appointment of the Receiver.

Dianor’s primary asset was a collection of mining claims located in Ontario and Quebec. The mining claims were also subject to Gross Overriding Royalty agreements (GOR) in favour of two different corporations. All agreements were registered on title.

There were 2 issues that needed to be decided; one relating to the sale of real property by a Court-appointed Receiver by way of vesting order. The second question was procedural.

The questions to be answered were:

  1. Can a 3rd party interest in land in the nature of a GOR be extinguished by a vesting order approved in a receivership case?
  2. Does the appeal period in the BIA or the Courts of Justice Act, regulate the appeal period from the order of the motion judge in this situation?

I am going to tell you how the Court of Appeal for Ontario answered these questions, but I am not going to describe it in detail. Why do you ask? Because that is not the point of this Brandon’s Blog.

Some lawyers have already written summaries on the detailed thinking of the Appeal Court and I am sure there will be more. The decision is very well thought out one and is described in detail in the Court’s Reasons. I provided a link to the decision above, and if you wish to read it but don’t wish to scroll up, here it is again.

Vesting orders

I have written before on the matter of vesting orders. Simply stated, a vesting order is the means by which the transfer of acquired assets can be transferred to a buyer on a free and clear basis. It maintains the priority of competing interests against the debtor with respect to the money generated by the sale transaction and paid to the Receiver.

The Court of Appeal for Ontario decided that depending on the facts of a specific case, vesting orders approved in a receivership case can extinguish a 3rd party interest registered against the title. However, based on the facts of the Dianor case, the Appellate Court ruled that:

  1. The lower Court Judge had jurisdiction under s. 243( 1) of the BIA to provide a sale approval and vesting order.
  1. Based on the nature of the GORs the motion Judge erred in concluding that it was appropriate to extinguish them from the title.

But that is not the end of the matter.

The appeal period

Under r. 31 of the BIA Rules, a notice of appeal must be filed within 10 days after the day of the order or decision appealed from, or within such time as a judge of the court of appeal stipulates.

Under the CJA, r. 61.04(1) provides for a 30 day period from which to appeal a final Order to the Court of Appeal. On top of that, the appellant would have had to have actually applied for a stay of proceedings of the completion of the sale under the vesting order.

After its lengthy analysis, the Court of Appeal decided that the appeal period is governed by the BIA rules and not the CJA Rules of Civil Procedure. As the appellant filed its notice of appeal after the 10 day period, the appeal was unsuccessful. This is notwithstanding that the Court of Appeal agreed with the appellant that in this case, the GORs could not be extinguished. The appellate court also stated that there were not factors involved for the Court to invoke its inherent jurisdiction to provide relief to the appellant to extend the timeline so that its appeal would be valid.

I discussed this appeal period issue previously in my Brandon’s Blog – MOVE FAST TO OBJECT TO AN ONTARIO RECEIVERSHIP COURT ORDER.

But this aspect of the decision is also not my main point of this Brandon’s Blog.

So what is my point you ask?

As a licensed insolvency trustee (formerly called a bankruptcy trustee) (LIT), what really caught my eye in the Court of Appeal’s decision was something that I doubt any lawyer is going to write about when analyzing this case. What I am talking about is two sentences near the end of the decision under the heading “The Receiver’s Conduct”.

I feel these two sentences are so important that in certain cases, it will create a new rule for Receivers. By extension, it will also affect all stakeholders in the receivership and give all legal counsel something serious to think about. The two sentences are so important, I will show them to you here:

“(2) The Receiver’s Conduct

[132] The Receiver argues that it was appropriate for it to close the transaction in the face of a threatened appeal because the appeal period had expired when the appellant advised the Receiver that it was contemplating an appeal (without having filed a notice of appeal or a request for leave) and the Receiver was bound by the provisions of the purchase and sale agreement and the order of the motion judge, which was not stayed, to close the transaction.

[133] Generally speaking, as a matter of professional courtesy, a potentially preclusive step ought not to be taken when a party is advised of a possible pending appeal. However, here the Receiver’s conduct in closing the transaction must be placed in context.”

The Court of Appeal held that the Receiver’s conduct in completing the sale prior to the expiry of the appeal period was proper.

Why is this so important?

Now I am at the point of this Brandon’s Blog. The reason I am writing this. The real heart of the matter. To understand the importance of these two sentences, I must provide you with some additional background information.

In June 2004, the Ontario Court of Appeal released its decision in Regal Constellation Hotel Ltd., Re, 2004 CanLII 206 (ON CA) (the Regal Constellation case). The main points decided in that case were:

  1. There is no automatic stay of a vesting Order under appeal under the Courts of Justice Act or any other provincial statue. There must be an application to stay it while the appeal is outstanding.
  2. Once a vesting order is registered on the title under the Land Titles Act, R.S.O. 1990, c. L.5, its features as a conveyance prevail and its features are spent.
  3. A registered vesting order cannot be attacked except by ways that apply to any type of order transferring outright title and registered under the Land Titles system.
  4. Appeal from a registered vesting order is moot.

The Court of Appeal for Ontario stated in the Regal Constellation case that a vesting order has a double personality. It is, on the one hand, a court order and also a conveyancing tool vesting an interest in real or personal property as stated in the order. As soon as a vesting order has been registered on title, its features and characteristics as an order are spent. Any appeal at that stage is therefore moot.

So why is it so important? As a result of the Regal Constellation case, Receivers and their legal counsel always ask the purchaser’s legal counsel do they wish to close the transaction immediately or wait for the appeal period to expire? I have been involved in many real estate receiverships where the closing is scheduled to begin as soon as the vesting order is issued and entered. Everyone leaves the courthouse and goes straight to the closing. Registering the vesting order against the lands is part of the closing process.

Some buyers will certainly reject the option to complete the transaction before the period to appeal the vesting order has actually run out. Others are prepared to close immediately due to the fact that the chance of overturning the sale approval and setting the transaction aside is incredibly remote. This is especially so if the closing has actually taken place.

Nowhere in the Regal Constellation case is the conduct of the Receiver scrutinized.

The new rule for Court-appointed Receivers

So the new rule for Court-appointed Receivers is that the Receiver and its legal counsel will carefully have to consider in each situation, is the immediate closing of the transaction a reasonable thing to do. I can think of 8 issues to consider because of those two sentences in the Dianor decision:

  1. Has an actual appeal been filed in time?
  2. Has any party threatened an appeal prior to the 10 day appeal period expiring?
  3. Say the situation is that the vendor Receiver and the purchaser has the option of completing the transaction prior to the 10 day appeal period expiring and there is no threatened appeal. Does the Receiver now have a duty, or at least cover off the point, to put all stakeholders on notice that the closing, including the registration of the vesting order, will take place prior to the expiry of the appeal period?
  4. Should a discussion be held with a potential purchaser who has submitted an Agreement of Purchase and Sale that the Receiver believes it can work with regarding whether the Agreement should stipulate whether or not the closing must take place prior to the expiry of the appeal period?
  5. Should the Court-appointed Receiver’s Terms and Conditions of Sale to be approved by the Court now state that any bidder must stipulate that the bidder must declare whether or not it wishes to have the option to complete a Court approved transaction prior to the expiry of the appeal period?
  6. Similarly, must the Court-appointed Receiver’s standard Agreement of Purchase and Sale to be approved by the Court contain a right for the bidder to be able to elect in writing whether it wishes to complete the transaction prior to the expiry of the appeal period, if its bid is recommended by the Receiver and approved by the Court?
  7. Must such an election be made prior to the Court approving the proposed transaction, so that all stakeholders are aware at the time Court approval is sought that such a possibility may exist?
  8. Is the bidder having such an option to elect prior to obtaining Court approval sufficient, or to better protect the vendor Receiver and the purchaser, must the election be made so that such election can also be approved by the Court?

As I said before, this is not the focus of the Dianor decision. I doubt many or any writers analyzing this case will focus on those two sentences. However, as the LIT who will be the Court-appointed Receiver, in my humble opinion, I think those two sentences in the Dianor decision, now give Receivers things to think about that was not the case based on the Regal Constellation decision.

Courts of Justice Act summary

Is your business in financial distress because you cannot collect your billings? Do you not have adequate funds to pay your creditors as their bills to you come due? Are you a secured lender and your borrower is in default and you are considering your enforcement options? Does it appear that applying to the Court for the appointment of a Receiver is your best realization strategy?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting companies looking for financial restructuring, a debt settlement plan and to AVOID bankruptcy. We also have the same experience in assisting secured creditors in realizing on their security and maximizing the proceeds through a receivership process.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your company’s financial problems have caused. End the frustration of dealing with a borrower who can no longer meet the terms of the borrowing agreement with you. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy and balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles. Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

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MOVE FAST TO OBJECT TO AN ONTARIO RECEIVERSHIP COURT ORDER

What is a receiver in insolvency?

A recent case heard in the Court of Appeal for Ontario clarifies what the time limit is to object to an order made in a Court-appointed receivership of a company in Ontario. The bottom line is you better move fast. Before I describe this very interesting decision, I should first remind newer readers on some receiver 101 basics.

What is it?

A receivership is a remedy for secured creditors to enforce their security. In the event, the company defaults on its loan agreement, normally by non-payment, the secured creditor. There are two types of these proceedings in Canada; 1) privately appointed or; 2) court appointed. A receiver might additionally be selected in an investor dispute to complete a task, liquidate assets or market a business.

Typically, the process begins with the secured creditor consulting with a Receiver. If it is decided that there should be a receiver appointed, the secured creditor then makes a choice. They can either appoint the receiver by written appointment letter (privately appointed) or make a motion to the Court for an Order appointing the receiver (court-appointed).

The Bankruptcy and Insolvency Act (Canada) (BIA) states that only a licensed insolvency trustee (formerly called a bankruptcy trustee) can act as a receiver. A privately appointed receiver acts on behalf of the appointing secured creditor. A court-appointed receiver has a duty of care to all creditors.

What are the duties of a receiver?

The receiver’s first duty is to take possession and control of the assets covered by the secured creditor’s security in a private appointment, or all the assets indicated in the court order in a court appointment. The receiver must decide whether it can get a higher value for the assets if it operates the business. Alternatively, the receiver may decide that the risk of operating the business is not worth it in terms of any meaningful increase in the value of the assets.

The receiver then develops a plan to on the running of the business and for the eventual sale of the assets. The type of business and the nature of the assets will dictate what approach the receiver will take. In the meantime, the receiver must inventory all the assets, protect them and make sure there is adequate insurance in place for what the receiver wishes to do in terms of running the business and selling the assets.

In a private appointment, the receiver needs to get the approval of the secured creditor before embarking on the business and asset plan. In a court appointment, the receiver requires the approval of the court.

What happens when a company goes into receivership?

When the company goes into receivership, senior management and the Directors lose most of their authority for decision making. The Directors’ general corporate duty of maintaining corporate records continues, but any decision-making about the running of the business or its assets will not be effective. This is especially true in a court appointment. The subject of Director liability is too broad to start mentioning in this Brandon’s Blog. i am planning to soon write a blog on that topic.

Management’s and employees’ responsibilities about the business in a practical sense will stop upon the appointment of the receiver. Their advice and help are only required if requested by the receiver. They certainly will not be paid for any efforts unless the receiver agrees in writing to make money available for their pay.

Court of Appeal for Ontario says you better move fast

Why the confusion? Isn’t the process for an appeal of a court order straightforward? The confusion comes about because, in the standard model Appointment Order of the Commercial List of the Ontario Superior Court of Justice, the court-appointed receiver is appointed under two statutes:

  1. Section 101 of the provincial Ontario Courts of Justice Act, RSO 1990, c C.43 (CJA).
  2. The federal BIA, section 243(1).

The applicant, in this case, was the purchaser of assets from a court-appointed receiver of a company. One of the standard provisions in the Appointment Order is that anyone wishing to take legal action against the receiver must first get the approval of the court to do so.

They brought an application for authorization to sue the receiver over a disagreement arising from the purchase of the assets from the receiver under the asset purchase agreement. On May 17, 2018, the lower court judge dismissed the application, finding that their allegations were not supported by the evidence. On November 8, 2018, the same judge refused their demand to resume the application based on new evidence.

The applicant filed appeals from both decisions. Its notices of appeal were on time under the provincial CJA, under which there is a 30-day time limit for commencing an appeal. They were late under the federal BIA, which imposes a 10-day time limit.

The lower court judge dismissed the appeals. He held that the BIA was the governing authority for the appeal, not the CJA. He stated that the origin of authority under which the receiver was appointed was section 243( 1) of the BIA and therefore appeals are governed by the BIA, not the CJA. He further went on to say that the appointment also under the CJA did not have the result of ousting the BIA as the source of authority. He further held that it also cannot supersede the federal BIA holds paramountcy over the provincial CJA.

receivership

Business Development Bank of Canada v. Astoria Organic Matters Ltd., 2019 ONCA 269

The Court of Appeal for Ontario decision was released on April 8, 2019. The appeal court found that this was a very narrow issue to decide so that it did not have to get into the merits of the case of the purchaser wanting to sue the receiver over a disagreement arising from the purchase of the assets from the receiver under the asset purchase agreement.

The Court of Appeal rejected the applicant’s appeal and did not find that the chambers judge made any errors. They said that when the order sought to be appealed was made in reliance on jurisdiction under the BIA, the proper appeal path is the BIA.

The lower court, the Ontario Superior Court Justice Commercial List, rejected the purchaser’s demand to sue the receiver, which is the decision the applicant wishes to appeal. The requirement to get leave of the court to sue the receiver comes from the Appointment Order. The court’s authority to include that arrangement order comes from the statutory power to appoint a receiver under s. 243( 1) of the BIA.

The Court of Appeal agreed that the legal power to appoint a receiver is also found in s. 101 of the CJA. But considering that authority for the leave to take legal action against the receiver comes from the BIA in spite of that the receiver was appointed under both laws, the appeal is governed by the BIA as a matter of paramountcy.

Therefore the Court of Appeal for Ontario dismissed the applicant’s appeal and awarded costs against them.

Does your company need to move fast?

Does your company have way too much debt? Is your company’s cash flow not enough to meet all of its financial obligations? Are you afraid that your company’s main secured creditor is about to demand repayment of its loan in full and you just can’t move fast enough to save your company?

If you answered yes, call the Ira Smith Team today so we can end the tension and anxiousness that these financial problems have triggered. We will develop a plan special for your company, to save it from extinction.

Call the Ira Smith Team today. We have years and generations of experience restructuring and saving companies looking for financial restructuring or a debt settlement approach. As a licensed insolvency trustee, we are the only professionals acknowledged, accredited and supervised by the federal government to provide insolvency advice to save companies.

You can have a no-cost analysis to aid you so we can repair your company’s debt problems. Call the Ira Smith Team today. This will certainly allow you to get back to Starting Over Starting Now.

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