Business Development Bank of Canada v. Pine Tree Resorts Inc. et al., (2013) 307 O.A.C. 1 (CA)

• Judge: Blair, J.A.
• Court: Court of Appeal (Ontario)
• Case Date: April 22, 2013
• Jurisdiction: Ontario
• Citations: (2013), 307 O.A.C. 1 (CA);2013 ONCA 282

BDBC v. Pine Tree Resorts Inc. (2013), 307 O.A.C. 1 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. MY.006

Business Development Bank of Canada (applicant/respondent) v. Pine Tree Resorts Inc. and 1212360 Ontario Limited (respondents/appellants)

(M42401; M42383; M42395; C56856; 2013 ONCA 282)

Indexed As: Business Development Bank of Canada v. Pine Tree Resorts Inc. et al.

Ontario Court of Appeal

Blair, J.A.

April 29, 2013.

Summary:

Mesbur, J., granted the Business Development Bank of Canada's application for the appointment of a receiver over the assets of the respondents, Pine Tree Resorts Inc. and 1212360 Ontario Ltd. (together, Pine Tree). Pine Tree owned and operated an Inn. Pine Tree and the second mortgagee, Romspen Investment Corp., sought to appeal from Mesbur, J.'s order. At the heart of this motion was whether the order should be stayed pending the appeal if there was an appeal. Collateral issues included whether the appeal was as of right under s. 193 of the Bankruptcy and Insolvency Act. If the answer to that question was yes, should the automatic stay be lifted? If leave to appeal was required, should it be granted and, if so, should the order be stayed pending the disposition of the appeal?

The Ontario Court of Appeal, per Blair, J.A., held that the appeal was not as of right, leave to appeal was required and leave ought not to be granted. Therefore, it was unnecessary to deal with the question of whether a stay should be ordered pending appeal.

Bankruptcy - Topic 6882

Practice - Appeals - When available - Mesbur, J., granted the application of the Business Development Bank of Canada (BDC) for the appointment of a receiver over the assets of the respondents, Pine Tree Resorts Inc. and 1212360 Ontario Ltd. (together, Pine Tree) - Pine Tree owned and operated an Inn - Pine Tree and the second mortgagee, Romspen Investment Corp., sought to appeal Mesbur, J.'s order - The Ontario Court of Appeal, per Blair, J.A., held that leave to appeal was required - The appeal was not as of right under s.193(a) ("future rights") of the Bankruptcy and Insolvency Act (BIA) - Blair, J.A., stated that "'Future rights' are future legal rights, not procedural rights or commercial advantages or disadvantages that may accrue from the order challenged on appeal. They do not include rights that presently exist but that may be exercised in the future ... Here, Romspen's legal rights are its right to exercise its power of sale remedy and its right to put the first mortgage in good standing under s. 22 of the Mortgages Act. The first crystallized on the default under the Romspen mortgage, the second on the default under the BDC mortgage. Both rights were therefore triggered before the order of Mesbur J. They were at best rights presently existing but exercisable in the future." - Blair, J.A., also rejected the argument that the property in the appeal exceeded $10,000 in value for the purposes of s. 193(c) of the BIA - Further, "... to allow an appeal as of right in these circumstances would require doing so in almost every case because very few bankruptcy cases would go to appeal where the value of the bankrupt's property did not exceed that amount. More importantly, though, an order appointing a receiver does not bring into play the value of the property; it simply appoints an officer of the court to preserve and monetize those assets, subject to court approval." - See paragraphs 12 to 18.

Bankruptcy - Topic 6888

Practice - Appeals - Leave to appeal - The Ontario Court of Appeal, per Blair, J.A., set out the test for granting leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act - Blair, J.A., stated that "Beginning with the overriding proposition that the exercise of granting leave to appeal under s. 193(e) is discretionary and must be exercised in a flexible and contextual way, the following are the prevailing considerations in my view. The court will look to whether the proposed appeal, a) raises an issue that is of general importance to the practice in bankruptcy/insolvency matters or to the administration of justice as a whole, and is one that this Court should therefore consider and address; b) is prima facie meritorious, and c) would unduly hinder the progress of the bankruptcy/insolvency proceedings." - See paragraph 29.

Bankruptcy - Topic 6888

Practice - Appeals - Leave to appeal - Mesbur, J., granted the Business Development Bank of Canada's application for the appointment of a receiver over the assets of the respondents, Pine Tree Resorts Inc. and 1212360 Ontario Ltd. (together, "Pine Tree") - Pine Tree owned and operated an Inn - Pine Tree and the second mortgagee, Romspen Investment Corp., sought to appeal from Mesbur, J.'s order - The Ontario Court of Appeal, per Blair, J.A., held that the appeal was not as of right under s.193 of the Bankruptcy and Insolvency Act and leave to appeal was required - Blair, J.A., held that leave ought not to be granted - First, Pine Tree and Romspen raised a number of grounds relating to the exercise of the trial judge's discretion - These discretionary considerations were all entitled to great deference and, in any event, were purely factual and case specific, and did not give rise to any matters of general significance to the practice in bankruptcy/insolvency matters or to the administration of justice as a whole - Second, Blair, J.A., was not satisfied that the legal issue raised crossed the prima facie meritorious threshold - Finally, the warm months of the year were fast approaching and a timely sale process was needed for this seasonal business - See paragraphs 34 to 44.

Cases Noticed:

Edo (Canada) Ltd. (Bankrupt), Re (1997), 206 A.R. 295; 156 W.A.C. 295; (C.A.), refd to. [para. 12].

Ravelston Corp., Re, [2005] O.J. No. 5351 (C.A.), refd to. [para. 15].

Ditchburn Boats & Aircraft (1936) Ltd., Re (1938), 19 C.B.R. 240 (Ont. C.A.), refd to. [para. 15].

Dominion Foundry Co., Re (1965), 52 D.L.R.(2d) 79 (Man. C.A.), refd to. [para. 15].

SVCM Capital Ltd. v. Fiber Connections Inc. (2005), 198 O.A.C. 27; 10 C.B.R.(5th) 201 (C.A.), refd to. [para. 15].

Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp. (1988), 19 C.P.C.(3d) 210, refd to. [para. 20].

Nicol (R.J.) Construction Ltd. (Bankrupt) and Nicol (R.J.) Homes Ltd. (Bankrupt) v. Nicol (1995), 77 O.A.C. 395 (C.A.), refd to. [para. 22].

Leard (Bankrupt), Re (1994), 71 O.A.C. 56; 114 D.L.R.(4th) 135 (C.A.), refd to. [para. 23].

GMAC Commercial Credit Corp. of Canada v. TCT Logistics, [2003] O.J. No. 5761, refd to. [para. 24].

Baker (Bankrupt), Re (1995), 83 O.A.C. 351; 22 O.R.(3d) 376 (C.A.), refd to. [para. 24].

Country Style Food Services Inc. et al., Re (2002), 158 O.A.C. 30 (C.A.), refd to. [para. 33].

Blue Range Resource Corp., Re (1999), 244 A.R. 103; 209 W.A.C. 103 (C.A.), refd to. [para. 33].

Daniels (Theodore) Ltd. v. Income Trust Co. (1982), 37 O.R.(2d) 316 (C.A.), refd to. [para. 39].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 193(a), sect. 193(c), sect. 193(e) [para. 13].

Counsel:

Milton A. Davis, for the appellants, Pine Tree Resorts Inc. and 1212360 Ontario Limited;

David Preger, for the appellant, Romspen Investment Corporation;

Harvey Chaiton, for the respondent, Business Development Bank of Canada.

This application for leave to appeal was heard in Chambers on April 22, 2013, by Blair, J.A., of the Ontario Court of Appeal, who delivered the following decision on April 29, 2013.