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Insolvency (BIA) - Appeals (7). Royal Bank of Canada v. 1434399 Ontario Inc. [leave to appeal]
In Royal Bank of Canada v. 1434399 Ontario Inc. (Ont CA, 2025) the Ontario Court of Appeal granted a motion "seeking an order declaring that the responding party, 1434399 Ontario Inc. (“143”), has no right of appeal under ss. 193(a) or (c) of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (the “BIA”) from three orders of Sheard J., dated May 27, 2025: an approval and vesting order, an ancillary order, and a discharge order".
Here the court considers leave to appeal under the BIA:[21] The receiver opposes the grant of leave on the basis that 143 did not request leave in its notice of appeal, as required by r. 31(2) of the Bankruptcy and Insolvency General Rules, C.R.C., c. 368 1 (the “BIA Rules”). This court has stated that leave should generally be refused where it is not sought in the notice of appeal: North House Foods, at para. 43. However, in rare circumstances, based on the combined operation of r. 3 of the BIA Rules and r. 61.08(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, an order may be granted to amend a notice of appeal to seek leave nunc pro tunc: North House Foods, at paras. 44-46.
[22] I do not think this is the rare case in which such an order should be made. But I add that I would not have granted leave even if it had properly been sought. Applying the test from Business Development Bank of Canada v. Pine Tree Resorts Inc., 2013 ONCA 282, 115 O.R. (3d) 617, at para. 29, this appeal concerns a fact-based matter rather than a matter of general importance to the law. 143 was unsuccessful in its attempt to redeem the mortgage for less than the amount owing. It had ample time to make an offer if it wished to do so – some 20 months – and it failed to do so. Finally, this matter has been subject to considerable delay – it proved difficult to sell the property and for a variety of reasons the court’s processes did not work efficiently. There is no basis to delay things further by granting leave to appeal. . Royal Bank of Canada v. 1434399 Ontario Inc.
In Royal Bank of Canada v. 1434399 Ontario Inc. (Ont CA, 2025) the Ontario Court of Appeal granted a motion "seeking an order declaring that the responding party, 1434399 Ontario Inc. (“143”), has no right of appeal under ss. 193(a) or (c) of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (the “BIA”) from three orders of Sheard J., dated May 27, 2025: an approval and vesting order, an ancillary order, and a discharge order".
Here the court considers the BIA s.193(c) ['under $10,000'] appeal route:There is no right of appeal under s. 193(c)
[15] Section 193(c) provides a right of appeal “if the property involved in the appeal exceeds in value ten thousand dollars”.
[16] 143 focuses on the $10,000 threshold, arguing that it is clearly surpassed by the value of the property in this case and the loss it says it will incur if the sale is completed.
[17] However, it is well established that the right of appeal under s. 193(c) must be construed narrowly to avoid undermining the stay imposed by s. 195: see e.g., Cosa Nova Fashions Ltd. v. The Midas Investment Corporation, 2021 ONCA 581, 95 C.B.R. (6th) 240, at para. 22, citing First National Financial GP Corporation v. Golden Dragon HO 10 Inc., 2019 ONCA 873, 74 C.B.R. (6th) 1, at para. 15; Bending Lake, at para. 53. In Bending Lake, Brown J.A. held that s. 193(c) does not provide for an appeal as of right from: “(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.”
[18] At the hearing of the motion, 143 argued that “loss” was established because two people were willing to lend 143 $1.4 million and were seeking mortgages as security for their loans. From this, 143 argued that it could be inferred that the value of the property was $1.4 million. Although the price obtained by the receiver is subject to a sealing order, for the purposes of this motion, the receiver agreed that the price could be assumed to be $1 million. Thus, 143 argued that it had suffered a “loss” of $400,000 – the difference between the value of the property and the approved sale price.
[19] I do not accept this argument. The inference I am invited to draw as to the value of the property is simply not available. Affidavit evidence as to what a friend and a family member were willing to lend says nothing about the objective value of the property. Moreover, the affidavits are an unenforceable statement of intention. They state that someone is willing to make a loan, but no such loan was made at the relevant time. 143 characterized its attempt to redeem the mortgage as “essentially” an offer but acknowledged that it was not articulated as an offer to purchase the property for $1.4 million, and that there was a difference between affidavits promising money and money held in a trust account, available to complete a purchase. All that was available on May 27 was the affidavits.
[20] Essentially, 143 attempted to redeem its debt to RBC, albeit for significantly less than the amount of the debt. This was no offer to purchase, and even if it could be so characterized, it was contingent on raising monies that it did not have. 143 had only non-binding promises of money. The receiver was under no obligation to act on these promises, and its decision not to do so occasioned no loss, let alone the loss of $400,000 that 143 contends. . Royal Bank of Canada v. 1434399 Ontario Inc.
In Royal Bank of Canada v. 1434399 Ontario Inc. (Ont CA, 2025) the Ontario Court of Appeal granted a motion "seeking an order declaring that the responding party, 1434399 Ontario Inc. (“143”), has no right of appeal under ss. 193(a) or (c) of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (the “BIA”) from three orders of Sheard J., dated May 27, 2025: an approval and vesting order, an ancillary order, and a discharge order".
Here the court considers the BIA s.193(a) ['future rights'] appeal route:There is no right of appeal under s. 193(a)
[10] Section 193(a) of the BIA establishes a right of appeal “if the point at issue involves future rights”.
[11] 143 argues that its appeal involves future rights because Mr. Fulton, as guarantor of the mortgage, will be subject to greater liability when RBC seeks to enforce its claim against him personally.
[12] I do not accept this argument. It is well established that “future rights” mean future legal rights. As explained in North House Foods Ltd. (Re), 2025 ONCA 563, 20 C.B.R. (7th) 1, at para. 25:Future rights under s. 193(a) mean future legal rights. The phrase has been interpreted to mean “rights which could not at the present time be asserted but which will come into existence at a future time”. The question is whether the rights engaged in an appeal are future rights or presently existing rights that are exercisable in the future. Future rights do not include procedural rights or commercial advantages or disadvantages that may accrue from the order challenged on appeal. [citations omitted.] [13] There is no question that, as guarantor of 143’s debt, Mr. Fulton’s commercial interests are affected by the approval and vesting order. That order determines the extent of his liability on the guarantee, but that is his present liability, not a future right: see 2403177 Ontario Inc. v. Bending Lake Iron Group Ltd., 2016 ONCA 225, 396 D.L.R. (4th) 635, at paras. 27-28.
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