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Insolvency (BIA) - Appeals (5). Marshallzehr Group Inc. v. La Pue International Inc.
In Marshallzehr Group Inc. v. La Pue International Inc. (Ont CA, 2025) the Ontario Court of Appeal dismissed an insolvency motion, here seeking declarations regarding appeal rights and leave to appeal under BIA s.193.
Here the court considers BIA s.193(c) ['over $10k']:[5] Appeals under the BIA are dealt with in s. 193:Unless otherwise expressly provided, an appeal lies to the Court of Appeal from any order or decision of a judge of the court in the following cases:
(a) if the point at issue involves future rights;
(b) if the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings;
(c) if the property involved in the appeal exceeds in value ten thousand dollars;
(d) from the grant of or refusal to grant a discharge if the aggregate unpaid claims of creditors exceed five hundred dollars; and
(e) in any other case by leave of a judge of the Court of Appeal. ....
[9] The debtor’s second submission is that it has a right of appeal under s. 193(c) of the BIA. It says that if the transaction contemplated by the AVO is completed, it is certain that there will be a loss exceeding $10,000 suffered by the company, its principal and the lien claimants. The debtor points out that in its factum the receiver acknowledges that the debtor’s indebtedness to the applicant continues to accrue interest at $14,181.37 per day and the underlying debt already exceeds $20,000,000.
[10] I am not persuaded by this submission. In Bending Lake Iron Group, supra, Brown J.A. said, at para. 53:[C]ontextual factors militate against employing an expansive application of the automatic right of appeal contained in s. 193(c) and, instead, point to the need for an approach which is alive to and satisfies the needs of modern, “real-time” insolvency litigation. I shall employ such an approach in applying the following three principles that have emerged from the jurisprudence: s. 193(c) does not apply to (i) orders that are procedural in nature, (ii) orders that do not bring into play the value of the debtor’s property, or (iii) orders that do not result in a loss. [11] In my view, the AVO in this case fits precisely into the three parameters set out by Brown J.A. in this passage, and the appeal does not meet the threshold in s. 193(c) of the BIA. I agree with the receiver that the AVO is procedural in nature, does not bring into play the value of the debtor’s property, and does not result in a direct loss to any interested party. . Marshallzehr Group Inc. v. La Pue International Inc.
In Marshallzehr Group Inc. v. La Pue International Inc. (Ont CA, 2025) the Ontario Court of Appeal dismissed an insolvency motion, here seeking declarations regarding appeal rights and leave to appeal under BIA s.193.
Here the court considers BIA s.193(a) ['future rights']:[5] Appeals under the BIA are dealt with in s. 193:Unless otherwise expressly provided, an appeal lies to the Court of Appeal from any order or decision of a judge of the court in the following cases:
(a) if the point at issue involves future rights;
(b) if the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings;
(c) if the property involved in the appeal exceeds in value ten thousand dollars;
(d) from the grant of or refusal to grant a discharge if the aggregate unpaid claims of creditors exceed five hundred dollars; and
(e) in any other case by leave of a judge of the Court of Appeal. [6] The debtor asserts that it has a right to appeal under s. 193(a) of the BIA.[1] It says that the AVO affects its future rights as well as those of 359 pre-sale purchasers that entered into pre-sale construction agreements with the debtor and the lien claimants with more than $12,000,000 in security registered against title to the property.
[7] I do not accept this submission. In 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225, Brown J.A. said, at paras. 21-23:Although the category of “future rights” increasingly seems an anachronistic and confusing basis upon which to ground appeal rights, courts have attempted to cloak the term “future rights” with some practical meaning. In Re Ravelston Corp., Doherty J.A. stated, at para. 18:The meaning of the phrase "future rights" is not obvious. Caselaw holds that it refers to future legal rights and not to procedural rights or commercial advantages or disadvantages that may accrue from the order challenged on appeal … Rights that presently exist, but may be exercised in the future or altered by the order under appeal are present rights and not future rights ... [Citations omitted.] Doherty J.A. went on to adopt, at para. 19, the view expressed in Elias v. Hutchison, at paras. 100-101, that s. 193(a) of the BIA “must refer to rights which could not at the present time be asserted but which will come into existence at a future time.”
More recently, Blair J.A., in Business Development Bank of Canada v. Pine Tree Resorts Inc., stated, at para. 15:“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. [8] In my view, the debtor cannot bring itself within the definitions set out in these authorities. Its rights that may be in issue in the bankruptcy proceedings may be in issue now, not in the future. . Marshallzehr Group Inc. v. La Pue International Inc.
In Marshallzehr Group Inc. v. La Pue International Inc. (Ont CA, 2025) the Ontario Court of Appeal dismissed an insolvency motion, here seeking declarations regarding appeal rights and leave to appeal under BIA s.193.
Here the court considers BIA s.193(e) ['any other case with leave']:[5] Appeals under the BIA are dealt with in s. 193:Unless otherwise expressly provided, an appeal lies to the Court of Appeal from any order or decision of a judge of the court in the following cases:
(a) if the point at issue involves future rights;
(b) if the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings;
(c) if the property involved in the appeal exceeds in value ten thousand dollars;
(d) from the grant of or refusal to grant a discharge if the aggregate unpaid claims of creditors exceed five hundred dollars; and
(e) in any other case by leave of a judge of the Court of Appeal. ....
[12] The debtor’s third submission is that, if it does not have an automatic right of appeal under either or both s. 193(a) and s. 193(c) of the BIA, it should nevertheless be granted leave under the discretionary s. 193(e) of the BIA.
[13] The test for leave to appeal under s. 193(e) of the BIA is well established. In Business Development Bank of Canada v. Pine Tree Resorts Inc., 2013 ONCA 282, Blair J.A. said, at para 29: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. [14] The debtor cannot establish any of these factors.
[15] The proposed appeal does not raise an issue of general importance to insolvency practice or to the administration of justice as a whole. I agree with the receiver that the proposed appeal is rooted in the specifics of the dealings among the receiver, the debtor and the potential purchaser. . Unity Health Toronto v. 2442931 Ontario Inc.
In Unity Health Toronto v. 2442931 Ontario Inc. (Ont CA, 2025) the Ontario Court of Appeal dismissed an insolvency (BIA) motion, here seeking to resolve "whether the appellant, Bank of Montreal, has an automatic right of appeal of an order ... pursuant to s. 193(c) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”) or if it requires leave to appeal the order pursuant to s. 193(e), and whether leave should be granted".
Here the court decides that leave to appeal under BIA 193(e) is denied:(2) Leave to appeal under s. 193(e) is denied
[43] The appellant seeks leave to appeal under s. 193(e) of the BIA. Under s. 193(e), the court must 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 Pine Tree, at para. 29. [44] The exercise of granting leave to appeal is discretionary and the test must be exercised in a flexible and contextual way: Pine Tree, at para. 29.
....
[48] Here, the jurisdiction to grant leave is carefully proscribed by the BIA. While the test must be approached flexibly and contextually, the court in Pine Tree noted that the three considerations noted above are the “prevailing considerations”: at para. 29. The appellant’s argument, if accepted, would necessarily expand the test for leave. As the respondent points out, to do so would be inconsistent with the jurisprudence of the court that holds that these sections must be narrowly construed. . Unity Health Toronto v. 2442931 Ontario Inc.
In Unity Health Toronto v. 2442931 Ontario Inc. (Ont CA, 2025) the Ontario Court of Appeal dismissed an insolvency (BIA) motion, here seeking to resolve "whether the appellant, Bank of Montreal, has an automatic right of appeal of an order ... pursuant to s. 193(c) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”) or if it requires leave to appeal the order pursuant to s. 193(e), and whether leave should be granted".
Here the court decides that BIA 193(c) does not apply to this appeal attempt:(1) The appellant does not have an appeal as of right under s. 193(c)
[22] Section 193(c) of the BIA states:Unless otherwise expressly provided, an appeal lies to the Court of Appeal from any order or decision of a judge of the court in the following cases:
....
(c) if the property involved in the appeal exceeds in value ten thousand dollars [23] The right of appeal under s. 193(c) has been narrowly construed by this court to promote efficient and expeditious resolution of bankruptcy proceedings: 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225, 369 D.L.R. (4th) 635 (“Bending Lake”), at paras. 46-53. Accordingly, the court in Bending Lake held that s. 193(c) does not apply to orders that: (i) are procedural in nature, (ii) do not bring into play the value of the debtor’s property, or (iii) do not result in a loss.
....
(a) The motion judge’s order is procedural
....
[27] Plainly, the order is procedural in nature because it simply “lift[s]” the stay for the purpose of permitting the respondent to exercise its rights under the Project Agreement. Although paragraph 3 declares that the Project Agreement is terminated as of the date of service of the order and notice of termination, this declaration simply outlines when and how the agreement may be terminated, not that the agreement is in fact terminated by the order.[2]
[28] The order does not terminate the Project Agreement; it only lifts the stay of the receivership order to enable the respondent to exercise its contractual right to terminate.
(b) The order does not directly “bring into play” the value of the debtor’s property
[29] The appellant relies on this court’s decision in Hillmount Capital Inc. v. Pizale, 2021 ONCA 364, 462 D.L.R. (4th) 228, to argue that even if the order is procedural, it does not necessarily follow that there is not property value involved that meets the requirement of s. 193(c). The appellant asks me to, as instructed in Hillmount, look beyond the procedural nature of the order and analyze the “economic effect” of the order: Hillmount, at para. 41. The appellant argues that while the Lift Stay Order appears procedural, it is the effect of that order that brings into play property that exceeds $10,000.
[30] In my view, to accept the appellant’s argument would be to expand this court’s interpretation of s. 193(c). And I do not read Hillmount as having expanded the application of automatic rights of appeal under the BIA; on the contrary, Hillmount reaffirmed that there is no right of appeal under s. 193(c) from a question involving procedure alone: see paras. 29-40.
[31] The facts at hand bear analogy to the facts in Romspen Investment Corporation v. Courtice Auto Wreckers Limited, 2017 ONCA 301, 138 O.R. (3d) 373, a case cited in Hillmount for the proposition that this court has construed the right to appeal under s. 193(c) to cases which directly deal with property valued over $10,000: at paras. 29-30. In Romspen, the majority of the court held that the appellant did not have an automatic right of appeal under s. 193(c) because the proposed appeal involved a procedural matter that did not directly involve any quantum of money: at para. 22. The appellant was a union seeking to certify a bargaining unit at a corporation that was placed in receivership. The union also sought to file an unfair labour practice complaint against the corporation for firing four employees in retaliation for the certification application. However, because the corporation was in receivership, no proceedings could be commenced against the corporation and so the union’s certification application and complaint were stayed. When the union’s motion to lift the stay was denied, they sought to appeal the decision under s. 193(c) of the BIA, arguing that the stay prevented them from seeking reinstatement of the four terminated employees (and that the value of these employees plus damages and back pay was in excess of $10,000).
[32] The majority of the court rejected the union’s argument, holding, at para. 22, that the proposed appeal involved a procedural matter: “can the union proceed at this time with its certification application and [complaint]”? The majority held that based on this question, the appeal did not involve a quantum of money and did not fall under s. 193(c).
[33] Similarly, the question at issue in this appeal is a procedural one: can the respondent proceed with its contractual right to terminate the Project Agreement? The motion judge’s order is thus procedural and does not directly involve the economic interests of the appellant. Even if the appellant was successful on appeal of the Lift Stay Order, its success would not guarantee its recovery of the TIC payment. At best, the appellant would have the opportunity to sue the respondent for the TIC payment. The order’s effect, then, is to deny the appellant the chance to try to obtain the TIC payment, not to deny the appellant the actual TIC payment due.
[34] The appellant also relies on Tulloch J.A.’s (as he then was) decision in C & K Mortgage Services Inc. v. Camilla Court Homes Inc., 2020 CanLII 100559 (Ont. C.A.). In that case, the appellant entered into an agreement to purchase a property subject to a receivership. The receiver then obtained an order authorizing it to disclaim the agreement. Tulloch J.A. agreed with the appellant that he had a right to appeal the order under s. 193(c) because the order “purported to finally determine [the appellant’s] lack of entitlement to the property”: at para. 37.
[35] C & K Mortgage is distinguishable from the facts at hand. In C & K Mortgage, Tulloch J.A. was deciding the very issue that put into play property valued at more than $10,000, namely, whether the receiver could disclaim the agreement. In contrast, the motion judge in this case was only deciding whether to the lift the stay – she was not deciding whether the respondent could terminate the Project Agreement. Lifting the stay does not directly put into jeopardy the appellant’s property; the respondent’s act of terminating the Project Agreement does. In other words, this case is one step removed from C & K Mortgage, where the act at issue in the motion (i.e., disclaiming the agreement of purchase and sale) brought into play more than $10,000.
[36] In conclusion, while the appellant’s argument has some superficial appeal, the weight of the jurisprudence of this court runs against the appellant’s position. This court has consistently held that the appeal must directly involve property exceeding $10,000 in value: Enroute Imports Inc. (Re), 2016 ONCA 247 at para. 5; Crate Marine Sales Limited (Re), 2016 ONCA 140, 33 C.B.R. (6th) 169, at paras. 6-7; Robson Estate v. Robson (2002), 2002 CanLII 53241 (ON CA), 33 C.B.R. (4th) 86 (Ont. C.A.), at para. 5; Pine Tree, at para. 17; and Ontario Wealth Management Corporation v. Sica Masonry and General Contracting Ltd., 2014 ONCA 500, 17 C.B.R. (6th) 91, at para. 41. The Lift Stay Order is procedural and does not directly bring into play the value of the debtor’s property.
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