Menzies Lawyers Professional Corp. et al. v. Morton (Bankrupt) et al., (2015) 337 O.A.C. 1 (CA)

• Judge: Lauwers, J.A.
• Court: Court of Appeal (Ontario)
• Case Date: November 18, 2014
• Jurisdiction: Ontario
• Citations: (2015), 337 O.A.C. 1 (CA);2015 ONCA 553

Menzies Lawyers Prof. Corp. v. Morton (2015), 337 O.A.C. 1 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. JL.026

In the Matter of the Proposal of Edwin Harold Morton: Ottawa Bankrupty

Menzies Lawyers Professional Corporation, Menziesbank Corp. and Douglas G. Menzies, personally (applicants) v. Doyle Salewski, Trustees in Bankruptcy for Edwin Morton and the Attorney General of Canada (respondents)

(M44416; 2015 ONCA 553)

Indexed As: Menzies Lawyers Professional Corp. et al. v. Morton (Bankrupt) et al.

Ontario Court of Appeal

Lauwers, J.A.

July 27, 2015.

Summary:

The applicants (Menzies) represented Morton in settling matrimonial property litigation. In doing so, Menzies postponed claims for fees and paid $30,000 to clear the execution creditors' interests to permit the closing of the sale of the matrimonial home. Menzies postponed claims for fees. Morton became bankrupt. Menzies claimed a solicitor's lien and a charging order for its fees in preserving Morton's property in the litigation (wife to pay Morton a $250,000 settlement) and a salvage lien for the $30,000 paid to clear the execution creditor's claim. The applications judge refused to grant a charging order or salvage lien. Menzies mistakenly believed that the limitation period to appeal was 30 days under the Rules of Civil Procedure, when in fact it was 10 days under the Bankruptcy and Insolvency General Rules. Menzies sought an extension of time to file the notice of appeal and, if granted, argued that it had an appeal under s. 193(c) of the Bankruptcy and Insolvency Act and did not require leave under s. 193(e).

The Ontario Court of Appeal, per Lauwers, J.A., granted an extension of time to file the notice of appeal and held that s. 193(c) applied, making leave to appeal under s. 193(e) unnecessary. Alternatively, the court would have granted leave to appeal.

Bankruptcy - Topic 6882

Practice - Appeals - When available - [See Bankruptcy - Topic 6888 ].

Bankruptcy - Topic 6888

Practice - Appeals - Leave to appeal - Section 193(c) of the Bankruptcy and Insolvency Act provided that an appeal to the Court of Appeal was available from any order or decision of a judge "if the property involved in the appeal exceeds the value of ten thousand dollars" - Section 193(e) required leave to appeal in all other cases - Menzies represented Morton in settling matrimonial property litigation - Menzies postponed claims for fees and paid $30,000 to clear the execution creditors' interests to permit the closing of the sale of the matrimonial home - Morton became bankrupt - Menzies claimed a solicitor's lien and a charging order for its fees in preserving Morton's property in the litigation (wife to pay Morton a $250,000 settlement) and a salvage lien for the $30,000 paid to clear the execution creditor's claim - The applications judge refused to grant a charging order or salvage lien - Menzies mistakenly believed that the limitation period to appeal was 30 days under the Rules of Civil Procedure, when in fact it was 10 days under the Bankruptcy and Insolvency General Rules - Menzies sought an extension of time to file the notice of appeal and, if granted, argued that it had an appeal under s. 193(c) and did not require leave under s. 193(e) - The Ontario Court of Appeal, per Lauwers, J.A., granted an extension of time as Menzies had a bona fide intention to appeal, the delay was explained, Morton was not prejudiced, and there was sufficient merit to the appeal - Section 193(c) applied, as it was "more arguable" that a solicitor's lien and charging order constituted a form of "property" for the purposes of s. 193(c) - Alternatively, if leave was required, it would have been granted, as the appeal raised issues of general importance to bankruptcy practice and the action itself, the appeal was prima facie meritorious, and an appeal would not unduly hinder the progress of the bankruptcy proceedings.

Bankruptcy - Topic 6889

Practice - Appeals - Time for (incl. extension of) - [See Bankruptcy - Topic 6888 ].

Cases Noticed:

Tots and Teens Sault Ste. Marie et al., Re (1975), 11 O.R.(2d) 103 (H.C.J.), refd to. [para. 17].

Thomas Gold Pettingill LLP v. Ani- Wall Concrete Forming Inc. et al., [2012] O.T.C. Uned. 2182; 2012 ONSC 2182, refd to. [para. 19].

Ontario Wealth Management Corp. v. Sica Masonry and General Contracting Ltd. (2014), 323 O.A.C. 101; 2014 ONCA 500, dist. [para. 20].

Moore (Bankrupt), Re (2013), 314 O.A.C. 153; 2013 ONCA 769, refd to. [para. 24].

Superintendent of Bankruptcy v. 407 ETR Concession Co. - see Moore (Bankrupt), Re.

Business Development Bank of Canada v. Pine Tree Resorts Inc. et al. (2013), 307 O.A.C. 1; 2013 ONCA 282, refd to. [para. 24].

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. 30].

Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C.(3d) 396 (B.C.C.A.), refd to. [para. 31].

Baker (Bankrupt), Re (1995), 83 O.A.C. 351; 22 O.R.(3d) 376 (C.A.), refd to. [para. 31].

SVCM Capital Ltd. v. Fiber Connections Inc. (2005), 198 O.A.C. 27; 10 B.C.R.(5th) 201 (C.A.), refd to. [para. 31].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 193(c), sect. 193(e) [para. 9].

Counsel:

Douglas G. Menzies, acting in person;

Stephanie Lauriault, for the Attorney General of Canada.

This application was heard in Chambers, on November 18, 2014, before Lauwers, J.A., of the Ontario Court of Appeal, who released the following judgment on July 27, 2015.