Roman Catholic Episcopal Corp. of St. George's (Bankrupt), Re,

• Jurisdiction: Newfoundland and Labrador
• Judge: Wells
• Neutral Citation: 2007 NLCA 17
• Citation: (2007), 265 Nfld. & P.E.I.R. 49 (NLCA),2007 NLCA 17,265 Nfld & PEIR 49,(2007), 265 Nfld & PEIR 49 (NLCA),265 Nfld. & P.E.I.R. 49
• Date: 06 March 2007
• Court: Court of Appeal (Newfoundland)

R.C. Episcopal (Bankrupt), Re (2007), 265 Nfld. & P.E.I.R. 49 (NLCA);

    805 A.P.R. 49

MLB headnote and full text

Temp. Cite: [2007] Nfld. & P.E.I.R. TBEd. MR.013

In The Matter Of the Amended Proposal of the Roman Catholic Episcopal Corporation of St. George's, An Insolvent

Ernst & Young Inc., as Trustee pursuant to the Amended Proposal of the Roman Catholic Episcopal Corporation of St. George's (intended appellant) v. John Doe - 49 - GBS (intended first respondent) and John Doe - 51 - GBS (intended second respondent) and John Doe - 48 - GBS (intended third respondent) and John Doe - 50 - GBS (intended fourth respondent)

(07/07; 2007 NLCA 17)

Indexed As: Roman Catholic Episcopal Corp. of St. George's (Bankrupt), Re

Newfoundland and Labrador Supreme Court

Court of Appeal

Wells, C.J.N.L.

March 6, 2007.

Summary:

The Roman Catholic Episcopal Corp. of St. Georges (the Corporation) made a proposal to its creditors which was approved by the court in July 2005. Most of the creditors were victims of sexual abuse for which the Corporation was vicariously liable. The proposal provided, inter alia, that creditors unknown to the Corporation at the time of the proposal could make claims as long as they were presented prior to the claims bar date. The applicants filed their claims after the date. The trustee in bankruptcy disallowed the claims. The applicants applied to have the trustee's decision reversed.

The Newfoundland and Labrador Supreme Court, Trial Division, in a decision reported at (2007), 264 Nfld. & P.E.I.R. 309; 801 A.P.R. 309, allowed the application. Pursuant to s. 193 of the Bankruptcy Act, the trustee appealed and, if necessary, applied for leave to appeal.

The Newfoundland and Labrador Court of Appeal, per Wells, C.J.N.L., ordered that (1) the trustee was entitled to appeal as of right under s. 193(c) of the Bankruptcy Act and (2) in the event that the court hearing the appeal concluded otherwise, leave to appeal was granted under s. 193(e).

Bankruptcy - Topic 6881

Practice - Appeals - General - The Roman Catholic Episcopal Corp. of St. Georges (the Corporation) made a proposal to its creditors which was approved by the court in July 2005 - Most of the creditors were victims of sexual abuse for which the Corporation was vicariously liable - The proposal provided, inter alia, that creditors unknown to the Corporation at the time of the proposal could make claims as long as they were presented prior to the claims bar date - The applicants filed their claims after the date - The trustee in bankruptcy disallowed the claims - The applicants successfully applied to have the trustee's decision reversed - Pursuant to s. 193 of the Bankruptcy Act, the trustee appealed and, if necessary, applied for leave to appeal - The Newfoundland and Labrador Court of Appeal, per Wells, C.J.N.L., held that a judge, hearing an application for leave combined with a notice of appeal, as Bankruptcy and Insolvency General Rule 31(2) required, could conclude that an appeal existed as a matter of right under one or more of paragraphs (a) to (d) of s. 193, while also making a decision, in the alternative, as to whether or not leave ought to be granted under s. 193(e) - See paragraphs 14 to 21.

Bankruptcy - Topic 6882

Practice - Appeals - When available - The Roman Catholic Episcopal Corp. of St. Georges (the Corporation) made a proposal to its creditors which was approved by the court in July 2005 - Most of the creditors were victims of sexual abuse for which the Corporation was vicariously liable - The proposal provided, inter alia, that creditors unknown to the Corporation at the time of the proposal could make claims as long as they were presented prior to the claims bar date - The applicants filed their claims after the date - The trustee in bankruptcy disallowed the claims - The applicants successfully applied to have the trustee's decision reversed - Pursuant to s. 193 of the Bankruptcy Act, the trustee appealed and, if necessary, applied for leave to appeal - The Newfoundland and Labrador Court of Appeal, per Wells, C.J.N.L., held that s. 193(a) (future rights) did not apply - A current allegation of existing facts, although for some reason procedurally blocked, was an existing claim - It did not involve future rights - See paragraph 22.

Bankruptcy - Topic 6882

Practice - Appeals - When available - The Roman Catholic Episcopal Corp. of St. Georges (the Corporation) made a proposal to its creditors which was approved by the court in July 2005 - Most of the creditors were victims of sexual abuse for which the Corporation was vicariously liable - The proposal provided, inter alia, that creditors unknown to the Corporation at the time of the proposal could make claims as long as they were presented prior to the claims bar date - The applicants filed their claims after the date - The trustee in bankruptcy disallowed the claims - The applicants successfully applied to have the trustee's decision reversed - Pursuant to s. 193 of the Bankruptcy Act, the trustee appealed and, if necessary, applied for leave to appeal - The Newfoundland and Labrador Court of Appeal, per Wells, C.J.N.L., held that the trustee was entitled to appeal as a matter of right under s. 193(c) (property involved exceeded $10,000) - The refusal of a right to appeal would entail a loss of more than $10,000 - The loss was potentially $2,000,000 - The trustee was obligated to protect the interests of the parties to the proposal in the assets realized - See paragraphs 24 to 27.

Bankruptcy - Topic 6888

Practice - Appeals - Leave to appeal - The Roman Catholic Episcopal Corp. of St. Georges (the Corporation) made a proposal to its creditors which was approved by the court in July 2005 - Most of the creditors were victims of sexual abuse for which the Corporation was vicariously liable - The proposal provided, inter alia, that creditors unknown to the Corporation at the time of the proposal could make claims as long as they were presented prior to the claims bar date - The applicants filed their claims after the date - The trustee in bankruptcy disallowed the claims - The applicants successfully applied to have the trustee's decision reversed - Pursuant to s. 193 of the Bankruptcy Act, the trustee appealed and, if necessary, applied for leave to appeal - The Newfoundland and Labrador Court of Appeal, per Wells, C.J.N.L., granted leave to appeal - The bankruptcy judge recognized the possibility of two different approaches to his review of the trustee's decision - He chose not to consider whether the trustee had made an error in law - In fact, he acknowledged that the trustee had no alternative but to decide as he did - Instead, the bankruptcy judge chose to decide, himself, the substantive issue that was before the trustee - He also recognized that there were two lines of authority with respect to the approach to be taken in deciding the substantive issue of whether to permit or reject the late claims - Clearly, there was an arguable case on appeal - See paragraphs 28 to 30.

Cases Noticed:

Enron Canada Corp. v. National OilWell Canada Ltd. - see Blue Range Resources Corp., Re.

Blue Range Resources Corp., Re (2000), 271 A.R. 138; 234 W.A.C. 138; 193 D.L.R.(4th) 314; 2000 ABCA 285, refd to. [para. 10].

Noma Co., Re, [2004] O.T.C. 1068 (Sup. Ct.), refd to. [para. 11].

Kenco Developments Ltd. v. Miller Contracting Ltd. (1984), 53 C.B.R.(N.S.) 297 (B.C.C.A.), refd to. [para. 16].

Bank of British Columbia v. First Nation Investments Ltd. (1980), 34 C.B.R.(N.S.) 282 (B.C.C.A.), refd to. [para. 16].

McNeill v. Roe, Hoops & Wong - see McNeill (Bankrupt), Re.

McNeill (Bankrupt), Re (1996), 71 B.C.A.C. 213; 117 W.A.C. 213; 20 B.C.L.R.(3d) 274; 39 C.B.R.(3d) 147 (C.A.), refd to. [para. 17].

Nautical Data International Inc., Re (2005), 250 Nfld. & P.E.I.R. 201; 746 A.P.R. 201; 2005 NLCA 62, refd to. [para. 18].

518494 Ontario Ltd. (Bankrupt), Re (1985), 12 O.A.C. 392; 57 C.B.R.(N.S.) 272 (C.A.), refd to. [para. 20].

Kostiuk (Bankrupt), Re (2006), 229 B.C.A.C. 292; 379 W.A.C. 292; 24 C.B.R.(5th) 160; 2006 BCCA 371, refd to. [para. 22].

Cameron (Bankrupt), Re (2002), 312 A.R. 198; 281 W.A.C. 198; 2002 ABCA 183, refd to. [para. 22].

Catalina Exploration & Development Ltd., Re; Elias and Catalina Exploration and Development Ltd. v. Hutchinson (1981), 27 A.R. 1; 37 C.B.R.(N.S.) 149; 121 D.L.R.(3d) 95 (C.A.), refd to. [para. 22].

Fallis et al. v. United Fuel Investments Ltd., [1962] S.C.R. 771; 4 C.B.R.(N.S.) 209, refd to. [para. 25].

Orpen v. Roberts, [1925] S.C.R. 364, refd to. [para. 25].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 193 [para. 2].

Counsel:

John Stringer, Q.C., and Stacey O'Dea, for the intended appellant;

Harry Mugford, for the intended first, second, third and fourth respondents.

This application was heard on March 6, 2007, by Wells, C.J.N.L., of the Newfoundland and Labrador Court of Appeal, who delivered his decision orally on the same date and filed the following written reasons on March 14, 2007.