Confectionately Yours Inc., Re, (2002) 164 O.A.C. 84 (CA)

• Judge: Catzman, Doherty and Borins, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: April 08, 2002
• Jurisdiction: Ontario
• Citations: (2002), 164 O.A.C. 84 (CA)

Confectionately Yours Inc., Re (2002), 164 O.A.C. 84 (CA)

MLB headnote and full text

Temp. Cite: [2002] O.A.C. TBEd. SE.047

In The Matter Of The Proposals of Confectionately Yours, Inc., Bakemates International Inc., Marmac Holdings Inc., Confectionately Yours Bakeries Inc. and Sweet-Ease Inc.

(C36486)

Indexed As: Confectionately Yours Inc. et al., Re

Ontario Court of Appeal

Catzman, Doherty and Borins, JJ.A.

September 19, 2002.

Summary:

A receiver and manger was appointed respecting the present and future assets of five companies. The companies' assets were sold. The receiver presented a report seeking, inter alia, approval of the fees and disbursements of itself and its solicitors. The owners of the companies objected to the fees and disbursements. The motions judge approved the fees and disbursements of the receiver and its solicitors without any reduction. The owners appealed.

The Ontario Court of Appeal allowed the appeal in part.

Courts - Topic 691

Judges - Disqualification - Bias - Reasonable apprehension of bias - The appellants appealed from the assessment of a court-appointed receiver's fees and disbursements - They argued that they were denied a fair hearing because the motion judge exhibited a demonstrable bias against them and their counsel (Pape) - The Ontario Court of Appeal rejected the argument - The motion judge's reaction to the presence of a court reporter (requested by Pape), his interjections during Pape's questioning of the receiver and his reference to Pape's lawyering in his reasons for judgment, evinced an impatience or annoyance with Pape - That impatience or annoyance did not equate with judicial support for the receiver - The circumstances relied on by the appellants did not come close to the type of judicial conduct that would result in an unfair hearing - See paragraphs 22 to 29.

Receivers - Topic 4005

Compensation - General - Court appointed receiver - The Ontario Court of Appeal reviewed the procedure to be followed on the passing of the accounts of a court-appointed receiver - The court stated, inter alia, that, as a matter of form, there was nothing wrong with a receiver including its claim for compensation in its final report - However, the receiver's accounts and those of its solicitors should be verified by affidavit - See paragraphs 30 to 41.

Receivers - Topic 4006

Compensation - General - Questioning or cross-examination of receiver - A court-appointed receiver submitted its report which included its fees and disbursements - The motion judge refused to permit the appellant's counsel (Pape) to cross-examine the receiver's representative respecting fees on the basis that the receiver, as an officer of the court, was not subject to cross-examination on its report - However, the motion judge allowed Pape to ask questions of the unsworn representative as the judge's "proxy" - The Ontario Court of Appeal agreed that neither the practice of interviewing the receiver, nor the opportunity given to Pape to question the representative as the motion judge's proxy, was an adequate and effective substitute for the cross-examination of the receiver under oath - However, in the circumstances of this case, Pape's questioning was an adequate substitute - See paragraphs 63 and 67.

Receivers - Topic 4006

Compensation - General - Questioning or cross-examination of receiver - The appellants appealed from the assessment of a court-appointed receiver's fees and disbursements - They denied the opportunity to cross-examine the receiver's representative respecting the account - The Ontario Court of Appeal stated that an interested party should not have to show "special" or "unusual" circumstances in order to cross-examine a receiver or its representative, on its remuneration - It would be rare to preclude cross-examination where the accounts had been challenged - Similarly, where the accounts had not been verified by affidavit, the motion judge had discretion to permit an opposing party to cross-examine the receiver, or its representative - The threshold for permitting questioning should be quite low - If the judge was satisfied that the questioning could assist in determining whether the remuneration was fair and reasonable, cross-examination should be permitted - See paragraphs 64 and 65.

Receivers - Topic 4006

Compensation - General - Questioning or cross-examination of receiver - The appellants appealed from the assessment of a court-appointed receiver's fees and disbursements - The Ontario Court of Appeal stated that "the opposing party must have a fair opportunity to challenge the remuneration claimed. That fair opportunity requires that the party have access to the relevant documentation, access to and the co-operation of the receiver in the review of that material prior to the passing of the accounts, an opportunity to present any evidence relevant to the appropriateness of the accounts and, where appropriate, the opportunity to cross-examine the receiver before the motion judge, or on the trial of an issue or an assessment, should either be directed by the motion judge." - See paragraph 66.

Receivers - Topic 4064

Compensation - Measure of - Reasonable and proper charges - The Ontario Court of Appeal stated that the factors suggested by Stratton J.A. in Federal Business Development Bank v. Belyea and Fowler were a useful guideline in assessing the compensation of a receiver on a quantum meruit basis - However, they should not be considered as exhaustive of the factors to be taken into account as other factors may be material depending on the circumstances of the receivership - See paragraph 51.

Cases Noticed:

Anvil Range Mining Corp., Re, [2001] O.T.C. Uned. 279; 21 C.B.R.(4th) 194 (Sup. Ct.), refd to. [para. 11].

Mortgage Insurance Co. of Canada v. Innisfill Landfill Corp. (1995), 3 O.T.C. 23; 30 C.B.R.(3d) 100 (Gen. Div.), refd to. [para. 11].

Avery v. Avery, [1954] O.W.N. 364 (H.C.), refd to. [para. 13].

Mr. Greenjeans Corp., Re (1985), 52 C.B.R.(N.S.) 320 (Ont. H.C.), refd to. [para. 13].

BT-PR Realty Holdings Inc. v. Coopers & Lybrand Ltd. (1997), 29 O.T.C. 354 (Gen. Div.), refd to. [para. 20].

Committee for Justice and Liberty Foundation Foundation et al. v. National Energy Board et al., [1978] 1 S.C.R. 369; 9 N.R. 115; 68 D.L.R.(3d) 716, refd to. [para. 25].

R. v. R.D.S., [1997] 3 S.C.R. 484; 218 N.R. 1; 161 N.S.R.(2d) 241; 477 A.P.R. 241; 118 C.C.C.(3d) 353; 151 D.L.R.(4th) 193, refd to. [para. 26].

Hermanns v. Ingle (1988), 68 C.B.R.(N.S.) 15 (Ont. Assess. Off.), refd to. [para. 37].

Toronto-Dominion Bank v. Park Foods Ltd. (1986), 77 N.S.R.(2d) 202; 191 A.P.R. 202 (T.D.), refd to. [para. 37].

Halifax Developments Ltd. v. Fabulous Lobster Trap Cabaret Ltd. (1983), 46 C.B.R.(N.S.) 117 (N.S.S.C.), refd to. [para. 38].

In-Med Laboratories Ltd. v. Director of Laboratories Services (Ont.), [1991] O.J. No. 210 (Div. Ct.), refd to. [para. 38].

Murano et al. v. Bank of Montreal et al. (1998), 111 O.A.C. 241; 163 D.L.R.(4th) 21 (C.A.), refd to. [para. 38].

Canadian Imperial Bank of Commerce v. Barley Mow Inn Inc. (1996), 76 B.C.A.C. 190; 125 W.A.C. 190; 41 C.B.R.(3d) 251 (C.A.), refd to. [para. 41].

Belyea v. Federal Business Development Bank (1983), 44 N.B.R.(2d) 248; 116 A.P.R. 248; 46 C.B.R.(N.S.) 244 (C.A.), refd to. [para. 41].

Heller (Walter E.) Canada Ltd. v. Sea Queen of Canada Ltd. (1974), 19 C.B.R.(N.S.) 252 (Ont. S.C. Master), refd to. [para. 41].

Olympic Foods (Thunder Bay) Ltd. v. 539618 Ontario Inc. (1989), 40 C.P.C.(2d) 280 (Ont. S.C.), refd to. [para. 41].

Cohen v. Kealey (1985), 10 O.A.C. 344; 26 C.P.C.(2d) 211 (C.A.), refd to. [para. 41].

Atkinson, Re, [1952] O.R. 685 (C.A.), affd., [1953] 2 S.C.R. 41, refd to. [para. 42].

Ibar Developments Ltd. v. Mount Citadel Ltd. et al. (1978), 26 C.B.R.(N.S.) 17 (Ont. S.C. Master), refd to. [para. 42].

West Toronto Stereo Center Ltd., Re (1975), 19 C.B.R.(N.S.) 306 (Ont. S.C.), refd to. [para. 46].

Hoskinson, Re (1976), 22 C.B.R.(N.S.) 127 (Ont. S.C.), refd to. [para. 46].

Bank of Montreal v. Nican Trading Co. (1990), 78 C.B.R.(N.S.) 85 (B.C.C.A.), refd to. [para. 47].

MacPherson v. Ritz Management Inc., [1992] O.J. No. 506 (Gen. Div.), refd to. [para. 47].

Ferguson v. Imax Systems Corp. et al. (1984), 4 O.A.C. 188; 47 O.R.(2d) 225 (Div. Ct.), refd to. [para. 65].

Authors and Works Noticed:

Bennett, Receiverships (2nd Ed. 1999), pp. 443 et seq. [para. 34]; 460 [para. 37]; 462, 463 [para. 38]; 471 [para. 43]; 755, 756 [para. 38, footnote 1].

Holmested and Gale, The Judicature Act of Ontario and Rules of Practice (1983) (Looseleaf Ed.), vol. 3, p. 2093 [para. 38].

Kerr, Receivers (15th Ed. 1978), p. 246 [para. 38, footnote 2].

Kerr, Receivers & Administrators (17th Ed. 1989), p. 239 [para. 38, footnote 2].

Sopinka, John, Lederman, Sydney N., and Bryant, Allan W., The Law of Evidence in Canada (2nd Ed. 1999), paras. 16.6, 16.99 [para. 63].

Counsel:

Martin Teplitsky, for the appellants, Barbara and Mario Parravano;

Benjamin Zarnett and David Lederman, for the respondent, KPMG Inc.;

Katherine McEachern, for the respondent, Laurentian Bank of Canada.

This appeal was heard on April 8, 2002, before Catzman, Doherty and Borins, JJ.A., of the Ontario Court of Appeal. Borins, J.A., delivered the following decision for the Court of Appeal on September 19, 2002.