COURT OF APPEAL FOR ONTARIO

CITATION: Third Eye Capital Corporation v. Ressources Dianor
    Inc./Dianor Resources Inc., 2019 ONCA 508

DATE: 20190619

DOCKET: C62925

Pepall, Lauwers and Huscroft JJ.A.

BETWEEN

Third Eye Capital Corporation

Applicant

(Respondent)

and

Ressources Dianor Inc. /Dianor Resources Inc.

Respondent

(Respondent)

and

2350614 Ontario Inc.

Interested Party

(Appellant)

Peter L. Roy and Sean Grayson, for the appellant 2350614
    Ontario Inc.

Shara Roy and Nilou Nezhat, for the respondent Third Eye
    Capital Corporation

Stuart Brotman and Dylan Chochla, for the receiver of the
    respondent Ressources Dianor Inc./Dianor Resources Inc., Richter Advisory Group
    Inc.

Nicholas Kluge, for the monitor of Essar Steel Algoma
    Inc., Ernst & Young Inc.

Steven J. Weisz, for the intervener Insolvency Institute
    of Canada

Heard: September 17, 2018

On appeal from the order of Justice Frank J.C. Newbould of
    the Superior Court of Justice dated October 5, 2016, with reasons reported at
    2016 ONSC 6086, 41 C.B.R. (6th) 320.

Pepall J.A.:

Introduction

[1]

There are two issues that arise on this appeal. The first issue is
    simply stated: can a third party interest in land in the nature of a Gross
    Overriding Royalty (GOR) be extinguished by a vesting order granted in a
    receivership proceeding? The second issue is procedural. Does the appeal period
    in the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B-3 (BIA) or
    the
Courts of Justice Act
, R.S.O. 1990, c. C. 43 (CJA) govern the
    appeal from the order of the motion judge in this case?

[2]

These reasons relate to the second stage of the appeal from the
    decision of the motion judge. The first stage of the appeal was the subject
    matter of the first reasons released by this court: see
Third Eye Capital
    Corporation v. Ressources Dianor Inc./ Dianor Resources Inc
., 2018 ONCA 253,
    141 O.R. (3d) 192 (First Reasons). As a number of questions remained
    unanswered, further submissions were required. These reasons resolve those
    questions.

Background

[3]

The facts underlying this appeal may be briefly outlined.

[4]

On August 20, 2015, the court appointed Richter Advisory Group Inc. (the
    Receiver) as receiver of the assets, undertakings and properties of Dianor
    Resources Inc. (Dianor), an insolvent exploration company focused on the
    acquisition and exploitation of mining properties in Canada. The appointment
    was made pursuant to s. 243 of the BIA and s. 101 of the CJA, on the application
    of Dianors secured lender, the respondent Third Eye Capital Corporation
    (Third Eye) who was owed approximately $5.5 million.

[5]

Dianors main asset was a group of mining claims located in Ontario and
    Quebec. Its flagship project is located near Wawa, Ontario. Dianor originally entered
    into agreements with 3814793 Ontario Inc. (381 Co.) to acquire certain mining
    claims. 381 Co. was a company controlled by John Leadbetter, the original
    prospector on Dianors properties, and his wife, Paulette A.
    Mousseau-Leadbetter. The agreements provided for the payment of GORs for
    diamonds and other metals and minerals in favour of the appellant 2350614
    Ontario Inc. (235 Co.), another company controlled by John Leadbetter.
[1]
The mining claims were also subject to royalty rights for all minerals in
    favour of Essar Steel Algoma Inc. (Algoma). Notices of the agreements
    granting the GORs and the royalty rights were registered on title to both the
    surface rights and the mining claims. The GORs would not generate any return to
    the GOR holder in the absence of development of a producing mine. Investments
    of at least $32 million to determine feasibility, among other things, are
    required before there is potential for a producing mine.

[6]

Dianor also obtained the surface rights to the property under an
    agreement with 381 Co. and Paulette A. Mousseau-Leadbetter. Payment was in part
    met by a vendor take-back mortgage in favour of 381 Co., Paulette A.
    Mousseau-Leadbetter, and 1584903 Ontario Ltd., another Leadbetter company.
    Subsequently, though not evident from the record that it was the mortgagee, 1778778
    Ontario Inc. (177 Co.), another Leadbetter company, demanded payment under
    the mortgage and commenced power of sale proceedings. The notice of sale
    referred to the vendor take-back mortgage in favour of 381 Co., Paulette A.
    Mousseau-Leadbetter, and 1584903 Ontario Ltd. A transfer of the surface rights
    was then registered from 177 Co. to 235 Co. In the end result, in addition to
    the GORs, 235 Co. purports to also own the surface rights associated with the mining
    claims of Dianor.
[2]

[7]

Dianor ceased operations in December 2012. The Receiver reported that
    Dianors mining claims were not likely to generate any realization under a
    liquidation of the companys assets.

[8]

On October 7, 2015, the motion judge sitting on the Commercial List, and
    who was supervising the receivership, made an order approving a sales process for
    the sale of Dianors mining claims. The process generated two bids, both of
    which contained a condition that the GORs be terminated or impaired. One of the
    bidders was Third Eye. On December 11, 2015, the Receiver accepted Third Eyes
    bid conditional on obtaining court approval.

[9]

The purchase price consisted of a $2 million credit bid, the assumption
    of certain liabilities, and $400,000 payable in cash, $250,000 of which was to
    be distributed to 235 Co. for its GORs and the remaining $150,000 to Algoma for
    its royalty rights. The agreement was conditional on extinguishment of the GORs
    and the royalty rights. It also provided that the closing was to occur within
    two days after the order approving the agreement and transaction and no later
    than August 31, 2016, provided the order was then not the subject of an appeal.
    The agreement also made time of the essence. Thus, the agreement contemplated a
    closing prior to the expiry of any appeal period, be it 10 days under the BIA
    or 30 days under the CJA. Of course, assuming leave to appeal was not required,
    a stay of proceedings could be obtained by simply serving a notice of appeal
    under the BIA (pursuant to s. 195 of the BIA) or by applying for a stay under r.
    63.02 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.

[10]

On August 9, 2016, the Receiver applied to the court for approval of the
    sale to Third Eye and, at the same time, sought a vesting order that purported
    to extinguish the GORs and Algomas royalty rights as required by the agreement
    of purchase and sale. The agreement of purchase and sale, which included the proposed
    terms of the sale, and the draft sale approval and vesting order were included
    in the Receivers motion record and served on all interested parties including
    235 Co.

[11]

The motion judge heard the motion on September 27, 2016. 235 Co. did not
    oppose the sale but asked that the property that was to be vested in Third Eye
    be subject to its GORs. All other interested parties including Algoma supported
    the proposed sale approval and vesting order.

[12]

On October 5, 2016, the motion judge released his reasons. He held that
    the GORs did not amount to interests in land and that he had jurisdiction under
    the BIA and the CJA to order the property sold and on what terms: at para. 37. In
    any event, he saw no reason in logic  why the jurisdiction would not be the
    same whether the royalty rights were or were not an interest in land: at para.
    40. He granted the sale approval and vesting order vesting the property in
    Third Eye and ordering that on payment of $250,000 and $150,000 to 235 Co. and
    Algoma respectively, their interests were extinguished. The figure of $250,000
    was based on an expert valuation report and 235 Co.s acknowledgement that this
    represented fair market value.
[3]

[13]

Although it had in its possession the terms of the agreement of purchase
    and sale including the closing provision, upon receipt of the motion judges
    decision on October 5, 2016, 235 Co. did nothing. It did not file a notice of appeal
    which under s. 195 of the BIA would have entitled it to an automatic stay. Nor
    did it advise the other parties that it was planning to appeal the decision or
    bring a motion for a stay of the sale approval and vesting order in the event that
    it was not relying on the BIA appeal provisions.

[14]

For its part, the Receiver immediately circulated a draft sale approval
    and vesting order for approval as to form and content to interested parties.  A
    revised draft was circulated on October 19, 2016. The drafts contained only
    minor variations from the draft order included in the motion materials. In the
    absence of any response from 235 Co., the Receiver was required to seek an
    appointment to settle the order. However, on October 26, 2016, 235 Co. approved
    the order as to form and content, having made no changes. The sale approval and
    vesting order was issued and entered on that same day and then circulated.

[15]

On October 26, 2016, for the first time, 235 Co. advised counsel for the
    Receiver that an appeal is under consideration and asked the Receiver for a
    deferral of the cancellation of the registered interests. In two email exchanges,
    counsel for the Receiver responded that the transaction was scheduled to close
    that afternoon and 235 Co.s counsel had already had ample time to get
    instructions regarding any appeal. Moreover, the Receiver stated that the
    appeal period is what it is but that the approval order was not stayed during
    the appeal period. Counsel for 235 Co. did not respond and took no further
    steps. The Receiver, on the demand of the purchaser Third Eye, closed the
    transaction later that same day in accordance with the terms of the agreement
    of purchase and sale. The mining claims of Dianor were assigned by Third Eye to
    2540575 Ontario Inc. There is nothing in the record that discloses the
    relationship between Third Eye and the assignee. The Receiver was placed in
    funds by Third Eye, the sale approval and vesting order was registered on title
    and the GORs and the royalty interests were expunged from title. That same day,
    the Receiver advised 235 Co. and Algoma that the transaction had closed and
    requested directions regarding the $250,000 and $150,000 payments.

[16]

On November 3, 2016, 235 Co. served and filed a notice of appeal of the
    sale approval and vesting order. It did not seek any extension of time to
    appeal. 235 Co. filed its notice of appeal 29 days after the motion judges October
    5, 2016 decision and 8 days after the order was signed, issued and entered.

[17]

Algomas Monitor in its
Companies Creditors Arrangement Act
,
    R.S.C. 1985, c. C-36

(CCAA) proceedings received and disbursed the
    funds allocated to Algoma. The $250,000 allocated to 235 Co. are held in escrow
    by its law firm pending the resolution of this appeal.

Proceedings Before This Court

[18]

On appeal, this court disagreed with the motion judges determination
    that the GORs did not amount to interests in land: see First Reasons, at para.
    9. However, due to an inadequate record, a number of questions remained to be
    answered and further submissions and argument were requested on the following
    issues:

(1)

Whether and under what circumstances and limitations a Superior
    Court judge has jurisdiction to extinguish a third partys interest in land,
    using a vesting order, under s. 100 of the CJA and s. 243 of the BIA, where s.
    65.13(7) of the BIA; s. 36(6) of the CCAA; ss. 66(1.1) and 84.1 of the BIA; or
    s. 11.3 of the CCAA do not apply;

(2)

If such jurisdiction does not exist, should this court order that
    the Land Title register be rectified to reflect 235 Co.s ownership of the GORs
    or should some other remedy be granted; and

(3)

What was the applicable time within which 235 Co. was required to
    appeal and/or seek a stay and did 235 Co.s communication that it was
    considering an appeal affect the rights of the parties.

[19]

The Insolvency Institute of Canada was granted intervener status. It
    describes itself as a non-profit, non-partisan and non-political organization
    comprised of Canadas leading insolvency and restructuring professionals.

A. Jurisdiction to Extinguish an Interest in Land Using a Vesting Order

(1)

Positions of Parties

[20]

The appellant 235 Co. initially took the position that no authority
    exists under s. 100 of the CJA, s. 243 of BIA, or the courts inherent
    jurisdiction to extinguish a real property interest that does not belong to the
    company in receivership. However, in oral argument, counsel conceded that the
    court did have jurisdiction under s. 100 of the CJA but the motion judge exercised
    that jurisdiction incorrectly. 235 Co. adopted the approach used by Wilton-Siegel
    J. in
Romspen Investment Corporation v. Woods Property Development Inc.
,
    2011 ONSC 3648, 75 C.B.R. (5th) 109, at para. 190, revd on other grounds, 2011
    ONCA 817, 286 O.A.C. 189. It took the position that if the real property
    interest is worthless, contingent, or incomplete, the court has jurisdiction to
    extinguish the interest. However here, 235 Co. held complete and non-contingent
    title to the GORs and its interest had value.

[21]

In response, the respondent Third Eye states that a broad purposive interpretation
    of s. 243 of the BIA and s. 100 of the CJA allows for extinguishment of the
    GORs. Third Eye also relies on the courts inherent jurisdiction in support of
    its position. It submits that without a broad and purposive approach, the
    statutory insolvency provisions are unworkable. In addition, the
Conveyancing
    and Law of Property Act
, R.S.O. 1990,
    c. C. 34
(CLPA) provides a mechanism for rights associated with an
    encumbrance to be channelled to a payment made into court. Lastly, Third Eye
    submits that if the court accedes to the position of 235 Co., Dianors asset
    and 235 Co.s GORs will waste. In support of this argument, Third Eye notes there
    were only two bids for Dianors mining claims, both of which required the GORs
    to be significantly reduced or eliminated entirely. For its part, Third Eye
    states that there is no deal with the GORs on title as its bid was contingent
    on the GORs being vested off.

[22]

The respondent Receiver supports the position taken by Third Eye that
    the motion judge had jurisdiction to grant the order vesting off the GORs and that
    he appropriately exercised that jurisdiction in granting the order under s. 243
    of the BIA and, in the alternative, the courts inherent jurisdiction.

[23]

The respondent Algoma supports the position advanced by Third Eye and
    the Receiver. Both it and 235 Co. have been paid and the Monitor has disbursed
    the funds paid to Algoma. The transaction cannot now be unwound.

[24]

The intervener, the Insolvency Institute of Canada, submits that a
    principled approach to vesting out property in insolvency proceedings is
    critical for a properly functioning restructuring regime. It submits that the court
    has inherent and equitable jurisdiction to extinguish third party proprietary
    interests, including interests in land, by utilizing a vesting order as a
    gap-filling measure where the applicable statutory instrument is silent or may
    not have dealt with the matter exhaustively. The discretion is a narrow but
    necessary power to prevent undesirable outcomes and to provide added certainty
    in insolvency proceedings.

(2)

Analysis

(a)

Significance of Vesting Orders

[25]

To appreciate the significance of vesting orders, it is useful to
    describe their effect. A vesting order effects the transfer of purchased
    assets to a purchaser on a
free and clear
basis, while preserving the
    relative priority of competing claims against the debtor vendor with respect to
    the proceeds generated by the sale transaction (emphasis in original): David Bish
    & Lee Cassey, Vesting Orders Part 1: The Origins and Development (2015)
    32:4 Natl. Insolv. Rev. 41, at p. 42 (Vesting Orders Part 1). The order acts
    as a conveyance of title and also serves to extinguish encumbrances on title.

[26]

A review of relevant literature on the subject reflects the
    pervasiveness of vesting orders in the insolvency arena. Luc Morin and Nicholas
    Mancini describe the common use of vesting orders in insolvency practice in
    Nothing Personal: the
Bloom Lake
Decision and the Growing Outreach of
    Vesting Orders Against
in personam
Rights in Janis P. Sarra, ed.,
Annual
    Review of Insolvency Law 2017
(Toronto: Thomson Reuters, 2018)

905, at
    p. 938:

Vesting orders are now commonly being used to transfer entire
    businesses. Savvy insolvency practitioners have identified this path as being
    less troublesome and more efficient than having to go through a formal plan of
    arrangement or
BIA
proposal.

[27]

The significance of vesting orders in modern insolvency practice is also
    discussed by Bish and Cassey in Vesting Orders Part 1, at pp. 41-42:

Over the past decade, a paradigm shift has occurred in Canadian
    corporate insolvency practice: there has been a fundamental transition in large
    cases from a dominant model in which a company restructures its business,
    operations, and liabilities through a plan of arrangement approved by each
    creditor class, to one in which a company instead conducts a sale of all or
    substantially all of its assets on a going concern basis outside of a plan of
    arrangement

Unquestionably, this profound transformation would not have
    been possible without the
vesting order
. It is the cornerstone of the
    modern restructuring age of corporate asset sales and secured creditor
    realizations ... The vesting order is the holy grail sought by every purchaser;
    it is the carrot dangled by debtors, court officers, and secured creditors
    alike in pursuing and negotiating sale transactions. If Canadian courts elected
    to stop granting vesting orders, the effect on the insolvency practice would be
    immediate and extraordinary. Simply put, the system could not function in its
    present state without vesting orders. [Emphasis in original.]

[28]

The authors emphasize that a considerable portion of Canadian insolvency
    practice rests firmly on the granting of vesting orders: see David Bish &
    Lee Cassey, Vesting Orders Part 2: The Scope of Vesting Orders (2015) 32:5
    Natl Insolv. Rev. 53, at p. 56 (Vesting Orders Part 2). They write that the
    statement describing the unique nature of vesting orders reproduced from
    Houlden, Morawetz and Sarra (and cited at para. 109 of the reasons in stage one
    of this appeal)
[4]
which relied on 1985 and 2003 decisions from Saskatchewan is remarkable and
    bears little semblance to the current practice. The authors do not challenge or
    criticize the use of vesting orders. They make an observation with which I
    agree, at p. 65, that: a more transparent and conscientious application of the
    formative equitable principles and considerations relating to vesting orders
    will assist in establishing a proper balancing of interests and a framework
    understood by all participants.

(b)

Potential Roots of Jurisdiction

[29]

In analysing the issue of whether there is jurisdiction to extinguish
    235 Co.s GORs, I will first address the possible roots of jurisdiction to
    grant vesting orders and then I will examine how the legal framework applies to
    the factual scenario engaged by this appeal.

[30]

As mentioned, in oral submissions, the appellant conceded that the
    motion judge had jurisdiction; his error was in exercising that jurisdiction by
    extinguishing a property interest that belonged to 235 Co. Of course, a party
    cannot confer jurisdiction on a court on consent or otherwise, and I do not
    draw on that concession. However, as the submissions of the parties suggest, there
    are various potential sources of jurisdiction to vest out the GORs: s. 100 of
    the CJA, s. 243 of the BIA, s. 21 of the CLPA, and the courts inherent
    jurisdiction. I will address the first three potential roots for jurisdiction. As
    I will explain, it is unnecessary to resort to reliance on inherent
    jurisdiction.

(c)

The
    Hierarchical Approach to Jurisdiction in the Insolvency Context

[31]

Before turning to an analysis of the potential roots of jurisdiction, it
    is important to consider the principles which guide a courts determination of
    questions of jurisdiction in the insolvency context. In
Century Services
    Inc. v. Canada (Attorney General)
,
2010 SCC 60, [2010] 3 S.C.R.
    379, at para. 65, Deschamps J. adopted the hierarchical approach to addressing
    the courts jurisdiction in insolvency matters that was espoused by Justice
    Georgina R. Jackson and Professor Janis Sarra in their article Selecting the
    Judicial Tool to Get the Job Done: An Examination of Statutory Interpretation,
    Discretionary Power and Inherent Jurisdiction in Insolvency Matters in Janis
    P. Sarra, ed.,
Annual Review of Insolvency Law 2007
(Toronto: Thomson
    Carswell, 2008) 41. The authors suggest that in addressing under-inclusive or
    skeletal legislation, first one should engage in statutory interpretation to
    determine the limits of authority, adopting a broad, liberal and purposive
    interpretation that may reveal that authority: at p. 42. Only then should one
    turn to inherent jurisdiction to fill a possible gap. By determining first
    whether the legislation can bear a broad and liberal interpretation, judges may
    avoid the difficulties associated with the exercise of inherent jurisdiction:
    at p. 44. The authors conclude at p. 94:

On the authors reading of the commercial jurisprudence, the
    problem most often for the court to resolve is that the legislation in question
    is under-inclusive. It is not ambiguous. It simply does not address the
    application that is before the court, or in some cases, grants the court the
    authority to make any order it thinks fit. While there can be no magic formula
    to address this recurring situation, and indeed no one answer, it appears to
    the authors that practitioners have available a number of tools to accomplish
    the same end. In determining the right tool, it may be best to consider the
    judicial task as if in a hierarchy of judicial tools that may be deployed. The
    first is examination of the statute, commencing with consideration of the
    precise wording, the legislative history, the object and purposes of the Act,
    perhaps a consideration of Driedgers principle of reading the words of the Act
    in their entire context, in their grammatical and ordinary sense harmoniously
    with the scheme of the Act, the object of the Act, and the intention of
    Parliament, and a consideration of the gap-filling power, where applicable. It
    may very well be that this exercise will reveal that a broad interpretation of
    the legislation confers the authority on the court to grant the application
    before it. Only after exhausting this statutory interpretative function should
    the court consider whether it is appropriate to assert an inherent
    jurisdiction. Hence, inherent jurisdiction continues to be a valuable tool, but
    not one that is necessary to utilize in most circumstances.

[32]

Elmer A. Driedgers now famous formulation is that the words of an Act
    are to be read in their entire context, in their grammatical and ordinary sense
    harmoniously with the scheme of the Act, the object of the Act, and the
    intention of Parliament:
The Construction of Statutes
(Toronto:
    Butterworths, 1974), at p. 67. See also
Rizzo & Rizzo Shoes Ltd. (Re)
,
    [1998] 1 S.C.R. 27, at para. 21;
Montréal (City) v. 2952-1366 Québec Inc.
, 2005 SCC 62,
[2005] 3 S.C.R. 141, at para.
    9
. This approach recognizes that statutory interpretation cannot be
    founded on the wording of the legislation alone:
Rizzo
, at para. 21.

(d)

Section 100 of
    the CJA

[33]

This brings me to the CJA. In Ontario, the power to grant a vesting
    order is conferred by s. 100 of the CJA which states that:

A court may by order vest in any person an interest in real or
    personal property that the court has authority to order be disposed of,
    encumbered or conveyed.

[34]

The roots of s. 100 and vesting orders more generally, can be traced to
    the courts of equity. Vesting orders originated as a means to enforce an order
    of the Court of Chancery which was a court of equity. In 1857,
An Act for
    further increasing the efficiency and simplifying the proceedings of the Court
    of Chancery
, c. 1857, c. 56, s. VIII was enacted. It provided that where
    the court had power to order the execution of a deed or conveyance of a
    property, it now also had the power to make a vesting order for such property.
[5]
In other words, it is a power to vest property from one party to another in
    order to implement the order of the court. As explained by this court in
Chippewas
    of Sarnia Band v. Canada (Attorney General)
(2000)
, 51 O.R. (3d) 641 (C.A.), at para. 281, leave to
    appeal refused, [2001] S.C.C.A. No. 63, the courts statutory power to make a
    vesting order supplemented its contempt power by allowing the court to effect a
    change of title in circumstances where the parties had been directed to deal
    with property in a certain manner but had failed to do so. Vesting orders are
    equitable in origin and discretionary in nature:
Chippewas
, at para.
    281.

[35]

Blair J.A. elaborated on the nature of vesting orders in
Re Regal
    Constellation Hotel Ltd.
(2004), 71 O.R. (3d) 355 (C.A.), at para. 33:

A vesting order, then, had a dual character. It is on the one
    hand a court order (allowing the court to effect the change of title
    directly), and on the other hand a conveyance of title (vesting an interest
    in real or personal property in the party entitled thereto under the order).

[36]

Frequently vesting orders would arise in the context of real property,
    family law and wills and estates.
Trick v. Trick
(2006), 81 O.R. (3d)
    241 (C.A.), leave to appeal refused, [2006] S.C.C.A. No. 388, involved a family
    law dispute over the enforcement of support orders made under the
Divorce
    Act
, R.S.C. 1985, c. 3 (2nd Supp.). The motion judge in
Trick
had
    vested 100 per cent of the appellants private pension in the respondent in
    order to enforce a support order. In granting the vesting order, the motion
    judge relied in part on s. 100 of the CJA. On appeal, the appellant argued that
    the vesting order contravened s. 66(4) of the
Pension Benefits Act
, R.S.O.
    1990, c. P. 8 which permitted execution against a pension benefit to enforce a
    support order only up to a maximum of 50 per cent of the benefit.

This
    court allowed the appeal and held that a vesting order under s. 100 of the CJA
    could not be granted where to do so would contravene a specific provision of the
Pension Benefits Act
: at para. 16. Lang J.A. stated at para. 16 that
    even if a vesting order was available in equity, that relief should be refused
    where it would conflict with the specific provisions of the
Pension
    Benefits Act
. In
obiter
, she observed that s. 100 of the CJA does not
    provide a free standing right to property simply because the court considers
    that result equitable: at para. 19.

[37]

The motion judge in the case under appeal rejected the applicability of
Trick
stating, at para. 37:

That case [
Trick
] i[s] not the same as this case. In
    that case, there was no right to order the CPP and OAS benefits to be paid to
    the wife. In this case, the BIA and the
Courts of Justice Act
give the
    Court that jurisdiction to order the property to be sold and on what terms. Under
    the receivership in this case, Third Eye is entitled to be the purchaser of the
    assets pursuant to the bid process authorized by the Court.

[38]

It is unclear whether the motion judge was concluding that either
    statute provided jurisdiction or that together they did so.

[39]

Based on the
obiter
in
Trick
, absent an independent basis
    for jurisdiction, the CJA could not be the sole basis on which to grant a
    vesting order. There had to be some other root for jurisdiction in addition to
    or in place of the CJA.

[40]

In their article Vesting Orders Part 1, Bish and Cassey write at p.
    49:

Section 100 of the CJA is silent as to any transfer being on a
free
    and clear
basis. There appears to be very little written on this subject,
    but, presumably, the power would flow from the court being a court of equity
    and from the very practical notion that it, pursuant to its equitable powers,
    can issue a vesting order transferring assets and should, correspondingly, have
    the power to set the terms of such transfer so long as such terms accord with
    the principles of equity. [Emphasis in original.]

[41]

This would suggest that provided there is a basis on which to grant an
    order vesting property in a purchaser, there is a power to vest out interests on
    a free and clear basis so long as the terms of the order are appropriate and accord
    with the principles of equity.

[42]

This leads me to consider whether jurisdiction exists under s. 243 of
    the BIA both to sell assets and to set the terms of the sale including the
    granting of a vesting order.

(e)

Section
    243 of the BIA

[43]

The BIA is remedial legislation and should be given a liberal
    interpretation to facilitate its objectives:
Ford Motor Company of Canada,
    Limited  v. Welcome Ford Sales Ltd.
, 2011 ABCA 158, 505 A.R. 146, at para.
    43;
Nautical Data International Inc., Re
, 2005 NLTD 104, 249 Nfld. &
    P.E.I.R. 247, at para. 9;
Re Bell
, 2013 ONSC 2682, at para. 125; and
Scenna
    v. Gurizzan
(1999), 11 C.B.R. (4th) 293 (Ont. S.C.), at para. 4. Within
    this context, and in order to understand the scope of s. 243, it is helpful to
    review the wording, purpose, and history of the provision.

The Wording and Purpose of s. 243

[44]

Section 243 was enacted in 2005 and came into force in 2009. It
    authorizes the court to appoint a receiver where it is just or convenient to
    do so. As explained by the Supreme Court in
Saskatchewan (Attorney General)
    v. Lemare Lake Logging Ltd.
, 2015 SCC 53, [2015] 3 S.C.R. 419, prior to
    2009, receivership proceedings involving assets in more than one province were
    complicated by the simultaneous proceedings that were required in different
    jurisdictions. There had been no legislative provision authorizing the
    appointment of a receiver with authority to act nationally. Rather, receivers
    were appointed under provincial statutes, such as the CJA, which resulted in a
    requirement to obtain separate appointments in each province or territory where
    the debtor had assets. Because of the inefficiency resulting from this
    multiplicity of proceedings, the federal government amended its bankruptcy legislation
    to permit their consolidation through the appointment of a national receiver:
Lemare
    Lake Logging
,

at para. 1. Section 243 was the outcome.

[45]

Under s. 243, the court may appoint a receiver to, amongst other things,
    take any other action that the court considers advisable. Specifically, s.
    243(1) states:

243(1). Subject to subsection (1.1), on application
    by a secured creditor, a court may appoint a receiver to do any or all of the
    following if it considers it to be just or convenient to do so:

(a) take possession of all or substantially all of
    the inventory, accounts receivable or other property of an insolvent person or
    bankrupt that was acquired for or used in relation to a business carried on by
    the insolvent person or bankrupt;

(b) exercise any control that the court considers
    advisable over that property and over the insolvent persons or bankrupts
    business; or,

(c) take any other action that the court considers
    advisable.

[46]

Receiver is defined very broadly in s. 243(2), the relevant portion of
    which states:

243(2) [I]n this Part,
receiver
means a
    person who

(a) is appointed under subsection (1); or

(b) is appointed to take or takes possession or
    control  of all or substantially all of the inventory, accounts receivable or
    other property of an insolvent person or bankrupt that was acquired for or used
    in relation to a business carried on by the insolvent person or bankrupt
    under

(i) an agreement under
    which property becomes subject to a security (in this Part referred to as a
    security agreement), or

(ii) a court order made
    under another Act of Parliament, or an Act of a legislature of a province, that
    provides for or authorizes the appointment of a receiver or a receiver
    manager. [Emphasis in original.]

[47]

Lemare Lake Logging
involved a constitutional challenge to
    Saskatchewans farm security legislation. The Supreme Court concluded, at para.
    68, that s. 243 had a simple and narrow purpose: the establishment of a regime
    allowing for the appointment of a national receiver and the avoidance of a
    multiplicity of proceedings and resulting inefficiencies. It was not meant to
    circumvent requirements of provincial laws such as the 150 day notice of
    intention to enforce requirement found in the Saskatchewan legislation in
    issue.

The History of s. 243

[48]

The origins of s. 243 can be traced back to s. 47 of the BIA which was
    enacted in 1992. Before 1992, typically in Ontario, receivers were appointed
    privately or under s. 101 of the CJA and s. 243 was not in existence.

[49]

In 1992, s. 47(1) of the BIA provided for the appointment of an interim
    receiver when the court was satisfied that a secured creditor had or was about
    to send a notice of intention to enforce security pursuant to s. 244(1). Section
    47(2) provided that the court appointing the interim receiver could direct the
    interim receiver to do any or all of the following:

47(2) The court may direct an interim receiver
    appointed under subsection (1) to do any or all of the following:

(a) take possession
    of all or part of the debtor's property mentioned in the appointment;

(b) exercise such
    control over that property, and over the debtor's business, as the court
    considers advisable; and

(c) take such other
    action as the court considers advisable.

[50]

The language of this subsection is similar to that now found in s.
    243(1).

[51]

Following the enactment of s. 47(2), the courts granted interim
    receivers broad powers, and it became common to authorize an interim receiver
    to both operate and manage the debtors business, and market and sell the
    debtors property:
Frank Bennett,
Bennett on Bankruptcy
,
    21st ed. (Toronto: LexisNexis, 2019), at p. 205; Roderick J. Wood,
Bankruptcy
    and Insolvency Law
,

2nd ed. (Toronto: Irwin Law, 2015), at pp. 505-506
.

[52]

Such powers were endorsed by judicial interpretation of s. 47(2).
    Notably, in
Canada (Minister of Indian Affairs and Northern Development) v.
    Curragh
,
Inc.
(1994), 114 D.L.R. (4th) 176 (Ont. Ct. (Gen.
    Div.)), Farley J. considered whether the language in s. 47(2)(c) that provided
    that the court could direct an interim receiver  to  take such other action
    as the court considers advisable, permitted the court to call for claims
    against a mining asset in the Yukon and bar claims not filed by a specific
    date. He determined that it did. He wrote, at p. 185:

It would appear to me that Parliament did not take away any
    inherent jurisdiction from the Court but in fact provided, with these general
    words, that the Court could enlist the services of an interim receiver to do
    not only what "justice dictates" but also what "practicality
    demands." It should be recognized that where one is dealing with an
    insolvency situation one is not dealing with matters which are neatly organized
    and operating under predictable discipline. Rather the condition of insolvency
    usually carries its own internal seeds of chaos, unpredictability and
    instability.

See also
Re Loewen Group
    Inc.
(2001), 22 B.L.R. (3d) 134 (Ont. S.C.)
[6]
.

[53]

Although Farley J. spoke of inherent jurisdiction, given that his focus
    was on providing meaning to the broad language of the provision in the context
    of Parliaments objective to regulate insolvency matters, this might be more
    appropriately characterized as statutory jurisdiction under Jackson and Sarras
    hierarchy. Farley J. concluded that the broad language employed by Parliament in
    s. 47(2)(c) provided the court with the ability to direct an interim receiver
    to do not only what justice dictates but also what practicality demands.

[54]

In the intervening period between the 1992 amendments
    which introduced s. 47, and the 2009 amendments which introduced s. 243, the
    BIA receivership regime was considered by the Standing Senate Committee on
    Banking, Trade and Commerce (Senate Committee). One of the problems
    identified by the Senate Committee, and summarized in
Lemare Lake Logging
,
    at para. 56, was that in many jurisdictions, courts had extended the power of
    interim receivers to such an extent that they closely resembled those of
    court-appointed receivers. This was a deviation from the original intention
    that interim receivers serve as temporary watchdogs meant to protect and
    preserve the debtors estate and the interests of the secured creditor during
    the 10 day period during which the secured creditor was prevented from
    enforcing its security:
Re Big Sky Living Inc.
, 2002 ABQB 659, 318 A.R.
    165, at paras. 7-8; Standing Senate Committee on Banking, Trade and Commerce,
Debtors and Creditors Sharing the Burden: A Review of the
    Bankruptcy and Insolvency Act and the Companies Creditors Arrangement Act
(Ottawa: Senate of Canada, 2003), at pp. 144-145 (Senate Committee
    Report).
[7]

[55]

Parliament amended s. 47(2) through the
Insolvency Reform
    Act
2005 and the
Insolvency Reform Act
2007 which came into force on September 18, 2009.
[8]
The amendment both modified
    the scope and powers of interim receivers, and introduced a receivership regime
    that was national in scope under s. 243.

[56]

Parliament limited the powers conferred on interim receivers by removing
    the jurisdiction under s. 47(2)(c) authorizing an interim receiver to take such
    other action as the court considers advisable. At the same time, Parliament introduced
    s. 243.
Notably Parliament adopted substantially the same broad
    language removed from the old s. 47(2)(c) and placed it into s. 243. To repeat,

243(1). On application by a secured creditor, a court may appoint
    a receiver to do any or all of the following
if it considers it to be just
    or convenient to do so
:

(a) take possession of all or substantially all of the
    inventory, accounts receivable or other property of an insolvent person or
    bankrupt that was acquired for or used in relation to a business carried on by
    the insolvent person or bankrupt;

(b) exercise any control that the court considers advisable
    over that property and over the insolvent persons or bankrupts business; or,

(c) take any other action that the court considers
    advisable.
[Emphasis added.]

[57]

When Parliament enacted s. 243, it was evident that
    courts had interpreted the wording take such other action that the court
    considers advisable in s. 47(2)(c) as permitting the court to do what justice
    dictates and practicality demands. As the Supreme Court observed in
ATCO
    Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board)
, 2006
    SCC 4,
[2006] 1 S.C.R. 140
: It is a well-established principle that the legislature is
    presumed to have a mastery of existing law, both common law and statute law.
    Thus, Parliaments deliberate choice to import the wording from s. 47(2)(c)
    into s. 243(1)(c) must be considered in interpreting the scope of jurisdiction
    under s. 243(1) of the BIA.

[58]

Professor Wood in his text, at p. 510, suggests that in importing
    this language, Parliaments intention was that the wide-ranging orders formerly
    made in relation to interim receivers would be available to s. 243 receivers:

The court may give the receiver the power to take possession of
    the debtors property, exercise control over the debtors business, and take
    any other action that the court thinks advisable.
This gives the court
    the ability to make the same wide-ranging orders that it formerly made in
    respect of interim receivers, including the power to sell the debtors property
    out of the ordinary course of business by way of a going-concern sale or a
    break-up sale of the assets
. [Emphasis added.]

[59]

However, the language in s. 243(1) should also be compared with the
    language used by Parliament in s. 65.13(7) of the BIA and s. 36 of the CCAA.
    Both of these provisions
were enacted as part of the same 2009
    amendments that established s. 243.

[60]

I
n s. 65.13(7), the BIA contemplates the sale
    of assets during a proposal proceeding. This provision expressly provides
    authority to the court to: (i) authorize a sale or disposition (ii) free and
    clear of any security, charge or other restriction, and (iii) if it does, order
    the proceeds of the sale or disposition be subject to a security, charge or
    other restriction in favour of the creditor whose security, charge or other
    restriction is to be affected by the order.

[61]

The language of s. 36(6) of the CCAA which deals with the sale or
    disposition of assets of a company under the protection of the CCAA is
    identical to that of s. 65.13(7) of the BIA.

[62]

Section 243 of the BIA does not contain such express language. Rather,
    as mentioned, s. 243(1)(c) simply uses the language take any other action that
    the court considers advisable.

[63]

This squarely presents the problem identified by Jackson and Sarra: the
    provision is not ambiguous. It simply does not address the issue of whether the
    court can issue a vesting order under s. 243 of the BIA. Rather, s. 243 uses
    broad language that grants the court the authority to authorize any action it
    considers advisable. The question then becomes whether this broad wording, when
    interpreted in light of the legislative history and statutory purpose, confers
    jurisdiction to grant sale and vesting orders in the insolvency context. In
    answering this question, it is important to consider whether
the
    omission from s. 243 of the language found in 65.13(7) of the BIA and s. 36(6)
    of the CCAA impacts the interpretation of s. 243.
To assist in this
    analysis, recourse may be had to principles of statutory interpretation.

[64]

In some circumstances, an intention to exclude certain powers in a
    legislative provision may be implied from the express inclusion of those powers
    in another provision. The doctrine of implied exclusion (
expressio
    unius est exclusio alterius
) is discussed by Ruth
    Sullivan in her leading text
Statutory Interpretation
, 3rd ed. (Toronto:
    Irwin Law, 2016), at p. 154:

An intention to exclude may legitimately be
    implied whenever a thing is not mentioned in a context where, if it were meant
    to be included, one would have expected it to be expressly mentioned. Given an
    expectation of express mention, the silence of the legislature becomes
    meaningful. An expectation of express reference legitimately arises whenever a
    pattern or practice of express reference is discernible. Since such patterns
    and practices are common in legislation, reliance on implied exclusion
    reasoning is also common.

[65]

However, Sullivan notes that the doctrine of implied exclusion
    [l]ike the other presumptions relied on in textual analysis  is merely a
    presumption and can be rebutted. The Supreme Court has acknowledged that when
    considering the doctrine of implied exclusion, the provisions must be read in
    light of their context, legislative histories and objects: see
Marche v.
    Halifax Insurance Co.
, 2005 SCC 6, [2005] 1 S.C.R. 47, at para. 19,
per
McLachlin
    C.J.;
Copthorne Holdings Ltd. v. R
., 2011 SCC 63, [2011] 3 S.C.R. 721,
    at paras. 110-111.

[66]

The Supreme Court noted in
Turgeon v. Dominion Bank
, [1930]
    S.C.R. 67, at pp. 70-71, that the maxim
expressio unius est exclusio
    alterius
no doubt  has its uses when it aids to discover intention; but,
    as has been said, while it is often a valuable servant, it is a dangerous
    master to follow. Much depends upon the context. In this vein, Rothstein J.
    stated in
Copthorne
, at paras. 110-111:

I do not rule out the possibility that in some
    cases the underlying rationale of a provision would be no broader than the text
    itself. Provisions that may be so construed, having regard to their context and
    purpose, may support the argument that the text is conclusive because the text
    is consistent with and fully explains its underlying rationale.

However, the implied exclusion argument is
    misplaced where it relies exclusively on the text of the  provisions without
    regard to their underlying rationale.

[67]

Thus, in determining whether the doctrine of implied exclusion may
    assist, a consideration of the context and purpose of s. 65.13 of the BIA and
    s. 36 of the CCAA is relevant. Section 65.13 of the BIA and s. 36 of the CCAA
    do not relate to receiverships but to restructurings and reorganizations.

[68]

In its review of the two statutes, the Senate Committee concluded
    that, in certain circumstances involving restructuring proceedings,
    stakeholders could benefit from an insolvent company selling all or part of its
    assets, but felt that, in approving such sales, courts should be provided with
    legislative guidance regarding minimum requirements to be met during the sale
    process: Senate Committee Report, pp. 146-148.

[69]

Commentators have noted that the purpose of the amendments was to
    provide the debtor with greater flexibility in dealing with its property while
    limiting the possibility of abuse: Lloyd W. Houlden, Geoffrey B. Morawetz
    & Janis P. Sarra,
The 2018-2019 Annotated Bankruptcy and Insolvency Act
(Toronto: Thomson Reuters, 2018), at

p. 294.

[70]

These amendments and their purpose must be read in the context of
    insolvency practice at the time they were enacted. The nature of restructurings
    under the CCAA has evolved considerably over time. Now liquidating CCAAs, as
    they are described, which involve sales rather than a restructuring, are commonplace.
    The need for greater codification and guidance on the sale of assets outside of
    the ordinary course of business in restructuring proceedings is highlighted by
    Professor Woods discussion of the objective of restructuring law. He notes
    that while at one time, the objective was relatively uncontested, it has become
    more complicated as restructurings are increasingly employed as a mechanism for
    selling the business as a going concern: Wood, at p. 337.

[71]

In contrast, as I will discuss further, typically the nub
    of a receivers responsibility is the liquidation of the assets of the
    insolvent debtor. There is much less debate about the objectives of a
    receivership, and thus less of an impetus for legislative guidance or
    codification. In this respect, the purpose and context of the sales provisions
    in s. 65.13 of the BIA and s. 36 of the CCAA are distinct from those of s. 243
    of the BIA. Due to the evolving use of the restructuring powers of the court, the
    former demanded clarity and codification, whereas the law governing sales in
    the context of receiverships was well established. Accordingly, rather than
    providing a detailed code governing sales, Parliament utilized broad wording to
    describe both a receiver and a receivers powers under s. 243. In light of this
    distinct context and legislative purpose, I do not find that the absence of the
    express language found in s. 65.13 of the BIA and s. 36 of the CCAA from s. 243
    forecloses the possibility that the broad wording in s. 243 confers
    jurisdiction to grant vesting orders.

Section 243  Jurisdiction to Grant a Sales Approval
    and Vesting Order

[72]

This brings me to an analysis of the broad language of s. 243 in light
    of its distinct legislative history, objective and purposes. As I have
    discussed, s. 243 was enacted by Parliament to establish a receivership regime that
    eliminated a patchwork of provincial proceedings. In enacting this provision,
    Parliament imported into s. 243(1)(c) the broad wording from the former s.
    47(2)(c) which courts had interpreted as conferring jurisdiction to direct an
    interim receiver to do not only what justice dictates but also what practicality
    demands. Thus, in interpreting s. 243, it is important to elaborate on the
    purpose of receiverships generally.

[73]

The purpose of a receivership is to enhance and facilitate the
    preservation and realization of the assets for the benefit of creditors:
Hamilton
    Wentworth Credit Union Ltd. v. Courtcliffe Parks Ltd.
(1995)
,
23 O.R. (3d) 781 (Gen.
    Div.), at p. 787. Such a purpose is generally achieved through a liquidation of
    the debtors assets: Wood, at p. 515. As the Appeal Division of the Nova Scotia
    Supreme Court noted in
Bayhold Financial Corp. v. Clarkson
    Co. Ltd. and Scouler
(1991),
108 N.S.R. (2d)
    198 (N.S.C.A.), at para. 34, the essence of a receivers powers is to
    liquidate the assets. The receivers primary task is to ensure that the highest
    value is received for the assets so as to maximise the return to the
    creditors:
1117387 Ontario Inc. v. National Trust Company
, 2010 ONCA
    340, 262 O.A.C. 118, at para. 77.

[74]

This purpose is reflected in commercial practice. Typically, the order
    appointing a receiver includes a power to sell: see for example the Commercial
    List Model Receivership Order, at para. 3(k). There is no express power in the
    BIA authorizing a receiver to liquidate or sell property. However, such sales
    are inherent in court-appointed receiverships and the jurisprudence is replete
    with examples: see e.g.
bcIMC Construction Fund Corp. v. Chandler Homer
    Street Ventures Ltd.
, 2008 BCSC 897, 44 C.B.R. (5th) 171 (in Chambers),
Royal
    Bank v. Fracmaster Ltd.
, 1999 ABCA 178, 11 C.B.R. (4th) 230,
Skyepharma
    PLC v. Hyal Pharmaceutical Corp.
(1999), 12 C.B.R. (4th) 87 (Ont. S.C.),
    affd (2000), 47 O.R. (3d) 234 (C.A.).

[75]

Moreover, the mandatory statutory receivers reports required by s. 246
    of the BIA direct a receiver to file a statement of all property of which the
    receiver has taken possession or control that
has not yet
    been sold or realized
 during the receivership (emphasis added):
Bankruptcy
    and Insolvency General Rules
, C.R.C. c. 368, r. 126 (BIA Rules).

[76]

It is thus evident from a broad, liberal, and purposive interpretation
    of the BIA receivership provisions, including s. 243(1)(c), that implicitly the
    court has the jurisdiction to approve a sale proposed by a receiver and courts
    have historically acted on that basis. There is no need to have recourse to
    provincial legislation such as s.100 of the CJA to sustain that jurisdiction.

[77]

Having reached that conclusion, the question then becomes whether this
    jurisdiction under s. 243 extends to the implementation of the sale through the
    use of a vesting order as being incidental and ancillary to the power to sell. In
    my view it does. I reach this conclusion for two reasons. First, vesting orders
    are necessary in the receivership context to give effect to the courts
    jurisdiction to approve a sale as conferred by s. 243. Second, this
    interpretation is consistent with, and furthers the purpose of, s. 243. I will
    explain.

[78]

I should first indicate that the case law on vesting orders in the
    insolvency context is limited. In
Re New Skeena Forest Products Inc
.,
    2005 BCCA 154, 9 C.B.R. (5th) 267, the British Columbia Court of Appeal held,
    at para. 20, that a court-appointed receiver was entitled to sell the assets of
    New Skeena Forest Products Inc. free and clear of the interests of all
    creditors and contractors. The court pointed to the receivership order itself
    as the basis for the receiver to request a vesting order, but did not discuss
    the basis of the courts jurisdiction to grant the order. In 2001, in
Re
    Loewen Group Inc.,
Farley J. concluded, at para. 6, that in the CCAA
    context, the court's inherent jurisdiction formed the basis of the court's
    power and authority to grant a vesting order. The case was decided before
    amendments to the CCAA which now specifically permit the court to authorize a
    sale of assets free and clear of any charge or other restriction. The Nova
    Scotia Supreme Court in
Enterprise Cape Breton Corp. v. Crown Jewel Resort
    Ranch Inc.,
2014 NSSC 420, 353 N.S.R. (2d) 194 stated that neither
    provincial legislation nor the BIA provided authority to grant a vesting order.

[79]

In
Anglo Pacific Group PLC v. Ernst & Young Inc.
, 2013 QCCA
    1323, the Quebec Court of Appeal concluded that pursuant to s. 243(1)(c) of the
    BIA, a receiver can ask the court to sell the property of the bankrupt debtor,
    free of any charge. In that case, the judge had discharged a debenture, a
    royalty agreement and universal hypothecs. After reciting s. 243, Thibault
    J.A., writing for the court stated, at para 98: It is pursuant to paragraph
    243(1) of the BIA that the receiver can ask the court to sell the property of a
    bankrupt debtor, free of any charge. Although in that case, unlike this
    appeal, the Quebec Court of Appeal concluded that the instruments in issue did
    not represent interests in land or real rights, it nonetheless determined
    that s. 243(1)(c) provided authority for the receiver to seek to sell property
    free of any charge(s) on the property.

[80]

The necessity for a vesting order in the receivership context is
    apparent. A receiver selling assets does not hold title to the assets and a
    receivership does not effect a transfer or vesting of title in the receiver. As
    Bish and Cassey state in Vesting Orders Part 2, at p. 58, [a] vesting order
    is a vital legal bridge that facilitates the receivers giving good and
    undisputed title to a purchaser. It is a document to show to third parties as
    evidence that the purported conveyance of title by the receiver  which did not
    hold the title  is legally valid and effective. As previously noted, vesting
    orders in the insolvency context serve a dual purpose. They provide for the
    conveyance of title and also serve to extinguish encumbrances on title in order
    to facilitate the sale of assets.

[81]

The Commercial Lists Model Receivership Order authorizes a receiver to
    apply for a vesting order or other orders necessary to convey property free
    and clear of any liens or encumbrances: see para. 3(l). This is of course not
    conclusive but is a reflection of commercial practice. This language is placed
    in receivership orders often on consent and without the courts advertence to
    the authority for such a term. As Bish and Cassey note in Vesting Orders Part
    1, at p. 42, the vesting order is the holy grail sought by purchasers and
    has become critical to the ability of debtors and receivers to negotiate sale
    transactions in the insolvency context. Indeed, the motion judge observed that
    the granting of vesting orders in receivership sales is a near daily
    occurrence on the Commercial List: at para. 31. As such, this aspect of the
    vesting order assists in advancing the purpose of s. 243 and of receiverships
    generally, being the realization of the debtors assets. It is self-evident
    that purchasers of assets do not wish to acquire encumbered property. The use
    of vesting orders is in essence incidental and ancillary to the power to sell.

[82]

As I will discuss further, while jurisdiction for this aspect of vesting
    orders stems from s. 243, the exercise of that jurisdiction is not unbounded.

[83]

The jurisdiction to vest assets in a purchaser in the context of a
    national receivership is reflective of the objective underlying s. 243. With a
    national receivership, separate sales approval and vesting orders should not be
    required in each province in which assets are being sold. This is in the
    interests of efficiency and if it were otherwise, the avoidance of a multiplicity
    of proceedings objective behind s. 243 would be undermined, as would the remedial
    purpose of the BIA.

[84]

If the power to vest does not arise under s. 243 with the appointment of
    a national receiver, the sale of assets in different provinces would require a
    patchwork of vesting orders. This would be so even if the order under s. 243
    were on consent of a third party or unopposed, as jurisdiction that does not
    exist cannot be conferred.

[85]

In my view, s. 243 provides jurisdiction to the court to authorize the
    receiver to enter into an agreement to sell property and in furtherance of that
    power, to grant an order vesting the purchased property in the purchaser. Thus,
    here the Receiver had the power under s. 243 of the BIA to enter into an
    agreement to sell Dianors property, to seek approval of that sale, and to
    request a vesting order from the court to give effect to the sale that was
    approved.

[86]

Lastly, I would also observe that this conclusion supports the
    flexibility that is a hallmark of the Canadian system of insolvency  it facilitates
    the maximization of proceeds and realization of the debtors assets, but as I
    will explain, at the same time operates to ensure that third party interests
    are not inappropriately violated. This conclusion is also consonant with
    contemporary commercial realities; realities that are reflected in the
    literature on the subject, the submissions of counsel for the intervener, the
    Insolvency Institute of Canada, and the model Commercial List Sales Approval
    and Vesting Order. Parliament knew that by importing the broad language of s.
    47(2)(c) into s. 243(1)(c), the interpretation accorded s. 243(1) would be
    consistent, thus reflecting a desire for the receivership regime to be flexible
    and responsive to evolving commercial practice.

[87]

In summary, I conclude that jurisdiction exists under s. 243(1) of the BIA
    to grant a vesting order vesting property in a purchaser. This jurisdiction
    extends to receivers who are appointed under the provisions of the BIA.

[88]

This analysis does not preclude the possibility that s. 21 of the CLPA
    also provides authority for vesting property in the purchaser free and clear of
    encumbrances. The language of this provision originated in the British
Conveyancing
    and Law of Property Act, 1881
, 44 & 45 Vict. ch. 41 and has been the
    subject matter of minimal judicial consideration. In a nutshell, s. 21 states
    that where land subject to an encumbrance is sold, the court may direct payment
    into court of an amount sufficient to meet the encumbrance and declare the land
    to be free from the encumbrance. The word encumbrance is not defined in the
    CLPA.

[89]

G. Thomas Johnson in Anne Warner La
    Forest, ed.,
Anger & Honsberger Law of Real Property
, 3rd
    ed., loose-leaf (Toronto: Thomson Reuters, 2017), at §34:10 states:

The word encumbrance is not a technical term. Rather, it is a
    general expression and must be interpreted in the context in which it is found.
    It has a broad meaning and may include many disparate claims, charges, liens or
    burdens on land. It has been defined as every right to or interest in land
    granted to the diminution of the value of the land but consistent with the
    passing of the fee.

[90]

The author goes on to acknowledge however, that even this definition,
    broad as it is, is not comprehensive enough to cover all possible encumbrances.

[91]

That said, given that s. 21 of the CLPA was not a basis advanced before
    the motion judge, for the purposes of this appeal, it is unnecessary to
    conclusively determine this issue.

B. Was it Appropriate to Vest out 235 Cos GORs?

[92]

This takes me to the next issue  the scope of the sales approval and
    vesting order and whether 235 Co.s GORs should have been extinguished.

[93]

Accepting that the motion judge had the jurisdiction to issue a sales
    approval and vesting order, the issue then becomes not one of jurisdiction
    but rather one of appropriateness as Blair J.A. stated in
Re Canadian Red
    Cross Society/Société canadienne de la Croix-Rouge

(1998), 5 C.B.R.
    (4th) 299 (Ont. Ct. (Gen. Div.)), at para. 42, leave to appeal refused, (1998),
    32 C.B.R. (4th) 21 (Ont. C.A.). Put differently, should the motion judge have
    exercised his jurisdiction to extinguish the appellants GORs from title?

[94]

In the first stage of this appeal, this court concluded that the GORs
    constituted interests in land. In the second stage, I have determined that the
    motion judge did have jurisdiction to grant a sales approval and vesting order.
    I must then address the issue of scope and determine whether the motion judge
    erred in ordering that the GORs be extinguished from title.

(1)

Review of the Case
    Law

[95]

As illustrated in the first stage of this appeal and as I will touch
    upon, a review of the applicable jurisprudence reflects very inconsistent
    treatment of vesting orders.

[96]

In some cases, courts have denied a vesting order on the basis that the
    debtors interest in the property circumscribes a receivers sale rights. For
    example, in
1565397 Ontario Inc., Re
(2009), 54 C.B.R. (5th) 262 (Ont. S.C.), the
receiver sought an order authorizing it to sell the
    debtors property free of an undertaking the debtor gave to the respondents to hold
    two lots in trust if a plan of subdivision was not registered by the closing
    date. Wilton-Siegel J. found that the undertaking created an interest in land. He
    stated, at para. 68, that the receiver had taken possession of the property of
    the debtor only and could not have any interest in the respondents interest in
    the property and as such, he was not prepared to authorize the sale free of the
    undertaking. Wilton-Siegel J. then went on to discuss five equitable
    considerations that justified the refusal to grant the vesting order.

[97]

Some cases have weighed equitable considerations to determine whether
    a vesting order is appropriate. This is evident in certain decisions involving
    the extinguishment of leasehold interests. In
Meridian Credit Union v. 984
    Bay Street Inc
., [2005] O.J. No. 3707 (S.C.), the court-appointed receiver
    had sought a declaration that the debtors land could be sold free and clear of
    three non-arms length leases. Each of the lease agreements provided that it
    was subordinate to the creditors security interest, and the lease agreements
    were not registered on title. This court remitted the matter back to the motion
    judge and directed him to consider the equities to determine whether it was
    appropriate to sell the property free and clear of the leases: see
Meridian
    Credit Union Ltd. v. 984 Bay Street Inc
., [2006] O.J. No. 1726 (C.A.). The
    motion judge subsequently concluded that the equities supported an order
    terminating the leases and vesting title in the purchaser free and clear of any
    leasehold interests:
Meridian Credit Union v. 984 Bay Street Inc
., [2006]
    O.J. No. 3169 (S.C.).

[98]

An equitable framework was also applied by Wilton-Siegel J. in
Romspen
.
    In
Romspen
, Home Depot entered into an agreement of purchase and sale
    with the debtor to acquire a portion of the debtors property on which a new
    Home Depot store was to be constructed. The acquisition of the portion of
    property was contingent on compliance with certain provisions of the
Planning
    Act
, R.S.O. 1990, c. P.13.

The debtor defaulted on its mortgage over
    its entire property and a receiver was appointed.

[99]

The receiver entered into a purchase and sale agreement with a third
    party and sought an order vesting the property in the purchaser free and clear
    of Home Depots interest. Home Depot took the position that the receiver did
    not have the power to convey the property free of Home Depot's interest. Wilton-Siegel
    J. concluded that a vesting order could be granted in the circumstances. He
    rejected Home Depots argument that the receiver took its interest subject to
    Home Depots equitable property interest under the agreement of purchase and
    sale and the ground lease, as the agreement was only effective to create an
    interest in land if the provisions of the
Planning Act
had been complied
    with.

[100]

He then considered the equities between
    the parties. The
mortgage had priority over Home Depots interest and
    Home Depot had failed to establish that the mortgagee had consented to the
    subordination of its mortgage to the leasehold interest. In addition, the purchase
    and sale agreement contemplated a price substantially below the amount secured
    by the mortgage, thus there would be no equity available for Home Depots subordinate
    interest in any event. Wilton-Siegel J. concluded that the equities favoured a vesting
    of the property in the purchaser free and clear of Home Depots interests.
[9]

[101]

As this review of the case law suggests, and as indicated in the First
    Reasons, there does not appear to be a consistently applied framework of
    analysis to determine whether a vesting order extinguishing interests ought to
    be granted. Generally speaking, outcomes have turned on the particular
    circumstances of a case accounting for factors such as the nature of the
    property interest, the dealings between the parties, and the relative priority
    of the competing interests. It is also clear from this review that many cases
    have considered the equities to determine whether a third party interest should
    be extinguished.

(2)

Framework for
    Analysis to Determine if a Third Party Interest Should be Extinguished

[102]

In my view, in considering whether to grant a vesting order that serves
    to extinguish rights, a court should adopt a rigorous cascade analysis.

[103]

First, the court should assess the nature and strength of the interest
    that is proposed to be extinguished. The answer to this question may be
    determinative thus obviating the need to consider other factors.

[104]

For instance, I agree with the Receivers submission that it is
    difficult to think of circumstances in which a court would vest out a fee
    simple interest in land. Not all interests in land share the same
    characteristics as a fee simple, but there are lesser interests in land that
    would also defy extinguishment due to the nature of the interest. Consider, for
    example, an easement in active use. It would be impractical to establish an
    exhaustive list of interests or to prescribe a rigid test to make this
    determination given the broad spectrum of interests in land recognized by the
    law.

[105]

Rather, in my view, a key inquiry is whether the interest in land is
    more akin to a fixed monetary interest that is attached to real or personal
    property subject to the sale (such as a mortgage or a lien for municipal taxes),
    or whether the interest is more akin to a fee simple that is in substance an
    ownership interest in some ascertainable feature of the property itself. This
    latter type of interest is tied to the inherent characteristics of the property
    itself; it is not a fixed sum of money that is extinguished when the monetary
    obligation is fulfilled. Put differently, the reasonable expectation of the
    owner of such an interest is that its interest is of a continuing nature and,
    absent consent, cannot be involuntarily extinguished in the ordinary course
    through a payment in lieu.

[106]

Another factor to consider is whether the parties have consented to the
    vesting of the interest either at the time of the sale before the court, or
    through prior agreement. As Bish and Cassey note, vesting orders have become a
    routine aspect of insolvency practice, and are typically granted on consent: Vesting
    Orders Part 2, at pp. 60, 65.

[107]

The more complex question arises when consent is given through a prior
    agreement such as where a third party has subordinated its interest
    contractually.
Meridian
,
Romspen
, and
Firm Capital Mortgage
    Funds Inc.

v. 2012241 Ontario Ltd.
, 2012 ONSC 4816, 99 C.B.R. (5th) 120
are cases in which the
    court considered the appropriateness of a vesting order in circumstances where
    the third party had subordinated its interests. In each of these cases,
    although the court did not frame the subordination of the interests as the
    overriding question to consider before weighing the equities, the decisions all
    acknowledged that the third parties had agreed to subordinate their interest to
    that of the secured creditor. Conversely, in
Winick
v.
    1305067 Ontario Ltd.

(2008), 41 C.B.R. (5th) 81 (Ont. S.C.)
, the court refused to
    vest out a leasehold interest on the basis that the purchaser had notice of the
    lease and the purchaser acknowledged that it would purchase the property
    subject to the terms and conditions of the leases.

[108]

The priority of the interests reflected in freely negotiated agreements
    between parties is an important factor to consider in the analysis of whether
    an interest in land is capable of being vested out. Such an approach ensures
    that the express intention of the parties is given sufficient weight and allows
    parties to contractually negotiate and prioritize their interests in the event
    of an insolvency.

[109]

Thus, in considering whether an interest in land should be extinguished,
    a court should consider: (1) the nature of the interest in land; and (2)
    whether the interest holder has consented to the vesting out of their interest
    either in the insolvency process itself or in agreements reached prior to the
    insolvency.

[110]

If these factors prove to be ambiguous or inconclusive, the court may
    then engage in a consideration of the equities to determine if a vesting order
    is appropriate in the particular circumstances of the case. This would include:
    consideration of the prejudice, if any, to the third party interest holder;
    whether the third party may be adequately compensated for its interest from the
    proceeds of the disposition or sale; whether, based on evidence of value, there
    is any equity in the property; and whether the parties are acting in good faith.
    This is not an exhaustive list and there may be other factors that are relevant
    to the analysis.

(3)

The Nature of the Interest
    in Land of 235 Co.s GORs

[111]

Turning then to the facts of this appeal, in the circumstances of this
    case, the issue can be resolved by considering the nature of the interest in
    land held by 235 Co. Here the GORs cannot be said to be a fee simple interest
    but they certainly were more than a fixed monetary interest that attached to
    the property. They did not exist simply to secure a fixed finite monetary
    obligation; rather they were in substance an interest in a continuing and an inherent
    feature of the property itself.

[112]

While it is true, as the
    Receiver and Third Eye emphasize, that the GORs are linked to the interest of
    the holder of the mining claims and depend on the development of those claims, that
    does not make the interest purely monetary. As explained in stage one of this
    appeal, the nature of the royalty interest as described by the Supreme Court in
Bank of Montreal v. Dynex Petroleum Ltd.
, 2002 SCC 7, [2002] 1 S.C.R.
    146, at para. 2 is instructive:

[R]oyalty arrangements are common forms of
    arranging exploration and production in the oil and gas industry in Alberta. Typically,
    the owner of minerals
in situ
will lease to a potential producer
    the right to extract such minerals. This right is known as a working interest.
A
    royalty is an unencumbered share or fractional interest in the gross production
    of such working interest
.
A lessors royalty
    is a royalty granted to (or reserved by) the initial lessor. An overriding
    royalty or a gross overriding royalty is a royalty granted normally by the
    owner of a working interest to a third party in exchange for consideration
    which could include, but is not limited to, money or services (e.g., drilling or
    geological surveying) (G. J. Davies, The Legal Characterization of Overriding
    Royalty Interests in Oil and Gas (1972), 10
Alta. L. Rev.
232,
    at p. 233). The rights and obligations of the two types of royalties are
    identical. The only difference is to whom the royalty was initially granted. [Italics
    in original; underlining added.]

[113]

Thus, a GOR is an interest in the gross product extracted from the land,
    not a fixed monetary sum. While the GOR, like a fee simple interest, may be
    capable of being valued at a point in time, this does not transform the
    substance of the interest into one that is concerned with a fixed monetary sum
    rather than an element of the property itself. The interest represented by the
    GOR is an ownership in the product of the mining claim, either payable by a
    share of the physical product or a share of revenues. In other words, the GOR
    carves out an overriding entitlement to an amount of the property interest held
    by the owner of the mining claims.

[114]

The Receiver submits that the realities of commerce and business
    efficacy in this case are that the mining claims were unsaleable without
    impairment of the GORs. That may be, but the imperatives of the mining claim
    owner should not necessarily trump the interest of the owner of the GORs.

[115]

Given the nature of 235 Co.s interest and the absence of any agreement
    that allows for any competing priority, there is no need to resort to a
    consideration of the equities. The motion judge erred in granting an order
    extinguishing 235 Co.s GORs.

[116]

Having concluded that the court had the jurisdiction to grant a vesting
    order but the motion judge erred in granting a vesting order extinguishing an
    interest in land in the nature of the GORs, I must then consider whether the
    appellant failed to preserve its rights such that it is precluded from
    persuading this court that the order granted by the motion judge ought to be
    set aside.

C. 235 Co.s
    Appeal of the Motion Judges Order

[117]

235 Co. served its notice of appeal on November 3, 2016, more than a
    week after the transaction had closed on October 26, 2016.

[118]

Third Eye had originally argued that 235 Co.s appeal was moot because
    the vesting order was spent when it was registered on title and the conveyance
    was effected. It relied on this courts decision in
Regal Constellation
in
    that regard.

[119]

Justice Lauwers wrote that additional submissions were required in the
    face of the conclusion that 235 Co.s GORs were interests in land: First
    Reasons, at para. 21. He queried whether it was appropriate for the court-appointed
    receiver to close the transaction when the parties were aware that 235 Co. was
    considering an appeal prior to the closing of the transaction: at para. 22.

[120]

There are three questions to consider in addressing what, if any, remedy
    is available to 235 Co. in these circumstances:

(1)  What appeal period
    applies to 235 Co.s appeal of the sale approval and vesting order;

(2)  Was it permissible
    for the Receiver to close the transaction in the face of 235 Co.s October 26,
    2016 communication to the Receiver that an appeal is under consideration; and

(3)  Does 235 Co.
    nonetheless have a remedy available under the
Land Titles Act
, R.S.O.
    1990, c. L.5?

(1)

The Applicable Appeal
    Period

[121]

The Receiver was appointed under s. 101 of the
CJA
and s. 243 of the BIA. The motion judges
    decision approving the sale and vesting the property in Third Eye was released through
    reasons dated October 5, 2016.

[122]

Under the CJA, the appeal would be governed by the
Rules of Civil
    Procedure
, r. 61.04(1)
which provides for a 30 day period from which to appeal a final order to the
    Court of Appeal. In addition, the appellant would have had to have applied for
    a stay of proceedings.

[123]

In contrast, under the BIA, s. 183(2) provides that courts of appeal are
    invested with power and jurisdiction at law and in equity, according to their
    ordinary procedures except as varied by the BIA or the BIA Rules, to hear and
    determine appeals. An appeal lies to the Court of Appeal if the point at issue
    involves future rights; if the order or decision is likely to affect other
    cases of a similar nature in the bankruptcy proceedings; if the property
    involved in the appeal exceeds in value $10,000; from the grant of or refusal
    to grant a discharge if the aggregate unpaid claims of creditors exceed $5,000;
    and in any other case by leave of a judge of the Court of Appeal: BIA, s. 193. Given
    the nature of the dispute and the value in issue, no leave was required and
    indeed, none of the parties took the position that it was. There is therefore
    no need to address that issue.

[124]

Under r. 31 of the BIA Rules, a notice of appeal must be filed within
    10 days after the day of the order or decision appealed from, or within such
    further time as a judge of the court of appeal stipulates.

[125]

The 10 days runs from the day the order or
decision
was rendered:
Moss (Bankrupt), Re
(1999), 138 Man. R. (2d) 318 (C.A., in Chambers), at
    para. 2;
Re
Koska
, 2002 ABCA 138, 303 A.R. 230, at para. 16;
CWB
    Maxium Financial Inc. v. 6934235 Manitoba Ltd. (c.o.b. White Cross Pharmacy
    Wolseley)
, 2019 MBCA 28 (in Chambers), at para. 49. This is clear from the
    fact that both r. 31 and s. 193 speak of order
or
decision (emphasis
    added). If an entered and issued order were required, there would be no need
    for this distinction.
[10]
Accordingly, the [t]ime starts to run on an appeal under the
BIA
from
    the date of pronouncement of the decision, not from the date the order is
    signed and entered:
Re Koska
, at para. 16.

[126]

Although there are cases where parties have conceded that the BIA appeal
    provisions apply in the face of competing provincial statutory provisions (see e.g.
Ontario Wealth Management Corp. v. SICA Masonry and General Contracting
    Ltd.
, 2014 ONCA 500, 323 O.A.C. 101 (in Chambers), at para. 36 and
Impact
    Tool & Mould Inc. v. Impact Tool & Mould Inc. Estate
, 2013 ONCA
    697, at para. 1), until recently, no Ontario case had directly addressed this
    point.

[127]

Relying on first principles, as noted by Donald J.M. Brown in
Civil Appeals
(Toronto: Carswell, 2019), at 2:1120, where federal legislation occupies the
    field by providing a procedure for an appeal, those provisions prevail over
    provincial legislation providing for an appeal. Parliament has jurisdiction
    over procedural law in bankruptcy and hence can provide for appeals:
Re
    Solloway Mills & Co. Ltd., In Liquidation, Ex Parte I.W.C. Solloway
(1934), [1935] O.R. 37 (C.A.). Where there is an operational or purposive inconsistency
    between the federal bankruptcy rules and provincial rules on the timing of an
    appeal, the doctrine of federal paramountcy applies and the federal bankruptcy rules
    govern: see
Canada (Superintendent of Bankruptcy) v. 407 ETR Concession Company
    Limited.
, 2013 ONCA 769, 118 O.R. (3d) 161, at para. 59, affd 2015 SCC
    52, [2015] 3 S.C.R. 397;
Alberta (Attorney General) v.
Moloney
, 2015 SCC 51, [2015] 3 S.C.R. 327, at para. 16
.

[128]

In
Business Development Bank of Canada v. Astoria Organic Matters Ltd
.,
    2019 ONCA 269, Zarnett J.A. wrote that the appeal route is dependent on the
    jurisdiction pursuant to which the order was granted. In that case, the
    appellant was appealing from the refusal of a judge to grant leave to sue the
    receiver who was stated to have been appointed pursuant to s. 101 of the CJA
    and s. 243 of the BIA. There was no appeal from the receivership order itself.
    Thus, to determine the applicable appeal route for the refusal to grant leave,
    the court was required to determine the source of the power to impose a leave
    to sue requirement in a receivership order. Zarnett J.A. determined that by
    necessary implication, Parliament must be taken to have clothed the court with
    the power to require leave to sue a receiver appointed under s. 243(1) of the
    BIA and federal paramountcy dictated that the BIA appeal provisions apply.

[129]

Here, 235 Co.s appeal is from the sale approval order, of which the
    vesting order is a component. Absent a sale, there could be no vesting order.
    The jurisdiction of the court to approve the sale, and thus issue the sale
    approval and vesting order, is squarely within s. 243 of the BIA.

[130]

Furthermore, as 235 Co. had known for a considerable time, there could
    be no sale to Third Eye in the absence of extinguishment of the GORs and
    Algomas royalty rights; this was a condition of the sale that was approved by
    the motion judge. The appellant was stated to be unopposed to the sale but in
    essence opposed the sale condition requiring the extinguishment. Clearly the
    jurisdiction to grant the approval of the sale emanated from the BIA, and as I
    have discussed, so did the vesting component; it was incidental and ancillary
    to the approval of the sale. It would make little sense to split the two
    elements of the order in these circumstances. The essence of the order was
    anchored in the BIA.

[131]

Accordingly, I conclude that the appeal period was 10 days as prescribed
    by r. 31 of the BIA Rules and ran from the date of the motion judges decision
    of October 5, 2016. Thus, on a strict application of the BIA Rules, 235 Co.s
    appeal was out of time. However, in the circumstances of this case it is
    relevant to consider first whether it was appropriate for the Receiver to close
    the transaction in the face of 235 Co.s assertion that an appeal was under consideration
    and, second, although only sought in oral submissions in reply at the hearing
    of the second stage of this appeal, whether 235 Co. should be granted an
    extension of time to appeal.

(2)

The Receivers
    Conduct

[132]

The Receiver argues that it was appropriate for it to close the
    transaction in the face of a threatened appeal because the appeal period had
    expired when the appellant advised the Receiver that it was contemplating an
    appeal (without having filed a notice of appeal or a request for leave) and the
    Receiver was bound by the provisions of the purchase and sale agreement and the
    order of the motion judge, which was not stayed, to close the transaction.

[133]

Generally speaking, as a matter of professional courtesy, a potentially
    preclusive step ought not to be taken when a party is advised of a possible
    pending appeal. However, here the Receivers conduct in closing the transaction
    must be placed in context.

[134]

235 Co. had known of the terms of the agreement of purchase and sale and
    the request for an order extinguishing its GORs for over a month, and of the
    motion judges decision for just under a month before it served its notice of
    appeal. Before October 26, 2016, it had never expressed an intention to appeal
    either informally or by serving a notice of appeal, nor did it ever bring a
    motion for a stay of the motion judges decision or seek an extension of time
    to appeal.

[135]

Having had the agreement of purchase and sale at least since it was
    served with the Receivers motion record seeking approval of the transaction, 235
    Co. knew that time was of the essence. Moreover, it also knew that the Receiver
    was directed by the court to take such steps as were necessary for the completion
    of the transaction contemplated in the purchase and sale agreement approved by
    the motion judge pursuant to para. 2 of the draft court order included in the
    motion record.

[136]

The principal of 235 Co. had been the original prospector of Dianor. 235
    Co. never took issue with the proposed sale to Third Eye. The Receiver obtained
    a valuation of Dianors mining claims and the valuator concluded that they had
    a total value of $1 million to $2 million, with 235 Co.s GORs having a value
    of between $150,000 and $300,000, and Algomas royalties having a value of
    $70,000 to $140,000. No evidence of any competing valuation was adduced by 235
    Co.

[137]

Algoma agreed to a payment of $150,000 but 235 Co. wanted more than the
    $250,000 offered. The motion judge, who had been supervising the receivership, stated
    that 235 Co. acknowledged that the sum of $250,000 represented the fair market
    value: at para. 15. He made a finding at para. 38 of his reasons that the
    principal of 235 Co. was not entitled to exercise tactical positions to
    tyrannize the majority by refusing to agree to a reasonable amount for the royalty
    rights.  In
obiter
, the motion judge observed that he saw no reason in
    logic  why the jurisdiction would not be the same whether the royalty rights
    were or were not an interest in land: at para. 40. Furthermore, the appellant
    knew of the motion judges reasons for decision since October 5, 2016 and did
    nothing that suggested any intention to appeal until about three weeks later.

[138]

As noted by the Receiver, it is in the interests of the efficient
    administration of receivership proceedings that aggrieved stakeholders act
    promptly and definitively to challenge a decision they dispute. This principle
    is in keeping with the more abbreviated time period found in the BIA Rules.
    Blair J.A. in
Regal Constellation
,
at para. 49, stated that [t]hese matters ought not to be determined on the
    basis that the race is to the swiftest. However, that should not be taken to
    mean that the race is adjusted to the pace of the slowest.

[139]

For whatever reasons, 235 Co. made a tactical decision to take no steps
    to challenge the motion judges decision and took no steps to preserve any
    rights it had. It now must absorb the consequences associated with that
    decision. This is not to say that the Receivers conduct would always be
    advisable. Absent some emergency that has been highlighted in its Receivers
    report to the court that supports its request for a vesting order, a Receiver
    should await the expiry of the 10 day appeal period before closing the sale
    transaction to which the vesting order relates.

[140]

Given the context and history of dealings coupled with the actual expiry
    of the appeal period, I conclude that it was permissible for the Receiver to close
    the transaction. In my view, the appeal by 235 Co. was out of time.

(3)

Remedy is not Merited

[141]

As mentioned, in oral submissions in reply, 235 Co. sought an extension
    of time to appeal
nunc pro tunc
. It further requested that this court
    exercise its discretion and grant an order pursuant to ss. 159 and 160 of the
Land
    Titles Act
rectifying the title and granting an order directing the Minings
    Claim Recorder to rectify the provincial register so that 235 Co.s GORs are
    reinstated. The Receiver resists this relief. Third Eye does not oppose the
    relief requested by 235 Co. provided that the compensation paid to 235 Co. and
    Algoma is repaid. However, counsel for the Monitor for Algoma states that the
    $150,000 it received for Algomas royalty rights has already been disbursed by the
    Monitor to Algoma.

[142]

The rules and jurisprudence surrounding extensions of time in bankruptcy
    proceedings is discussed in Lloyd W. Houlden, Geoffrey B. Morawetz & Janis
    P. Sarra,
Bankruptcy and Insolvency Law of Canada
, 4th ed., loose-leaf
    (Toronto: Thomson Reuters, 2009). Rule 31(1) of the BIA Rules provides that a
    judge of the Court of Appeal may extend the time to appeal. The authors write,
    at pp. 8-20-8-21:

The court ought not lightly to interfere with the time limit
    fixed for bringing appeals, and special circumstances are required before the
    court will enlarge the time

In deciding whether the time for appealing should be extended,
    the following matters have been held to be relevant:

(1)

The appellant formed an intention
    to appeal before the expiration of the 10 day period;

(2)

The appellant informed the
    respondent, either expressly or impliedly, of the intention to appeal;

(3)

There was a continuous intention
    to appeal during the period when the appeal should have been commenced;

(4)

There is a sufficient reason why,
    within the 10 day period, a notice of appeal was not filed;

(5)

The respondent will not be
    prejudiced by extending the time;

(6)

There is an arguable ground or
    grounds of appeal;

(7)

It is in the interest of justice,
    i.e., the interest of the parties, that an extension be granted. [Citations
    omitted.]

[143]

These factors are somewhat similar to those considered by this court
    when an extension of time is sought under r. 3.02 of the
Rules of Civil
    Procedure
: did the appellant form a
bona fide
intention to appeal
    within the relevant time period; the length of and explanation for the delay;
    prejudice to the respondents; and the merits of the appeal. The justice of the
    case is the overarching principle: see
Enbridge Gas Distributions Inc. v.
    Froese
, 2013 ONCA 131, 114 O.R. (3d) 636 (in Chambers), at para. 15.

[144]

There is no evidence that 235 Co. formed an intention to appeal within
    the applicable appeal period, and there is no explanation for that failure. The
    appellant did not inform the respondents either expressly or impliedly that it
    was intending to appeal. At best, it advised the Receiver that an appeal was
    under consideration 21 days after the motion judge released his decision. The
    fact that it, and others, might have thought that a longer appeal period was
    available is not compelling seeing that 235 Co. had known of the position of
    the respondents and the terms of the proposed sale since at least August 2016
    and did nothing to suggest any intention to appeal if 235 Co. proved to be
    unsuccessful on the motion. Although the merits of the appeal as they relate to
    its interest in the GORs favour 235 Co.s case, the justice of the case does
    not. I so conclude for the following reasons.

1. 235 Co. sat on its rights
    and did nothing for too long knowing that others would be relying on the motion
    judges decision.

2. 235 Co. never opposed the
    sale approval despite knowing that the only offers that ever resulted from the
    court approved bidding process required that the GORs and Algomas royalties be
    significantly reduced or extinguished.

3. Even if I were to accept
    that the
Rules of Civil Procedure
governed the appeal, which I do not,
    235 Co. never sought a stay of the motion judges order under the
Rules of
    Civil Procedure
. Taken together, this supports the inference that 235 Co.
    did not form an intention to appeal at the relevant time and ultimately only
    served a notice of appeal as a tactical manoeuvre to engineer a bigger payment
    from Third Eye. As found by the motion judge, 235 Co. ought not to be permitted
    to take tyrannical tactical positions.

4. The Receiver obtained a
    valuation of the mining claims that concluded that the value of 235 Co.s GORs was
    between $150,000 and $300,000. Before the motion judge, 235 Co. acknowledged
    that the payment of $250,000 represented the fair market value of its GORs. Furthermore,
    it filed no valuation evidence to the contrary. Any prejudice to 235 Co. is
    therefore attenuated. It has been paid the value of its interest.

5. Although there are no subsequent
    registrations on title other than Third Eyes assignee, Algomas Monitor has
    been paid for its royalty interest and the funds have been distributed to
    Algoma. Third Eye states that if the GORs are reinstated, so too should the
    payments it made to 235 Co. and Algoma. Algoma has been under CCAA protection
    itself and, not surprisingly, does not support an unwinding of the transaction.

[145]

I conclude that the justice of the case does not warrant an extension of
    time. I therefore would not grant 235 Co. an extension of time to appeal
nunc
    pro tunc
.

[146]

While 235 Co. could have separately sought a discretionary remedy under
    the
Land Titles Act
for rectification of title in the manner
    contemplated in
Regal Constellation
, at paras. 39, 45,

for the
    same reasons I also would not exercise my discretion or refer the matter back
    to the motion judge to grant an order pursuant to ss. 159 and 160 of the
Land
    Titles Act
rectifying the title and an order directing the Mining Claims
    Recorder to rectify the provincial register so that 235 Co.s GORs are
    reinstated.

Disposition

[147]

In conclusion, the motion judge had jurisdiction pursuant to s. 243(1)
    of the BIA to grant a sale approval and vesting order. Given the nature of the
    GORs the motion judge erred in concluding that it was appropriate to extinguish
    them from title. However, 235 Co. failed to appeal on a timely basis within the
    time period prescribed by the BIA Rules and the justice of the case does not
    warrant an extension of time. I also would not exercise my discretion to grant
    any remedy to 235 Co. under any other statutory provision. Accordingly, it is
    entitled to the $250,000 payment it has already received and that its counsel
    is holding in escrow.

[148]

For these reasons, the appeal is dismissed. As agreed by the parties, I
    would order Third Eye to pay costs of $30,000 to 235 Co. in respect of the first
    stage of the appeal and that all parties with the exception of the Receiver
    bear their own costs of the second stage of the appeal. I would permit the
    Receiver to make brief written submissions on its costs within 10 days of the
    release of these reasons and the other parties to reply if necessary within 10
    days thereafter.

Released: SEP JUN 19, 2019

S.E. Pepall J.A.

I agree. P. Lauwers J.A.

I agree. Grant Huscroft J.A.

[1]

The original agreement provided for the payment of the GORs to
    381 Co. and Paulette A. Mousseau-Leadbetter. The motion judge noted that the
    record was silent on how 235 Co. came to be the holder of these royalty rights
    but given his conclusion, he determined that there was no need to resolve this
    issue: at para. 6.

[2]

The ownership of the surface rights is not in issue in this
    appeal.

[3]

Although in its materials filed on this appeal, 235 Co. stated
    that the motion judge erred in making this finding, in oral submissions before
    this court, Third Eyes counsel confirmed that this was the position taken by
    235 Co.s counsel before the motion judge, and 235 Co.s appellate counsel, who
    was not counsel below, stated that this must have been the submission made by
    counsel for 235 Co. before the motion judge.

[4]
To repeat, the statement quoted from Lloyd W. Houlden, Geoffrey B. Morawetz
    & Janis P. Sarra,
Bankruptcy and Insolvency Law of Canada
, 4th
    ed., loose-leaf (Toronto: Carswell, 2009), at Part XI, L§21,  said:

A vesting order
    should only be granted if the facts are not in dispute and there is no other
    available or reasonably convenient remedy; or in exceptional circumstances
    where compliance with the regular and recognized procedure for sale of real
    estate would result in an injustice. In a receivership, the sale of the real
    estate should first be approved by the court. The application for approval
    should be served upon the registered owner and all interested parties. If the
    sale is approved, the receiver may subsequently apply for a vesting order, but
    a vesting order should not be made until the rights of all interested parties
    have either been relinquished or been extinguished by due process. [Citations
    omitted.]

[5]

Such orders were subsequently described as vesting orders in
An
    Act respecting the Court of Chancery
, C.S.U.C. 1859, c. 12,
    s. 63. The authority to grant vesting orders was inserted into the
The
Judicature Act
, R.S.O.
    1897, c. 51, s. 36 in 1897 when the Courts of Chancery were abolished. Section
    100 of the CJA appeared in 1984 with the demise of
The Judicature Act
:
    see
An Act to revise and consolidate the Law respecting the Organization,
    Operation and Proceedings of Courts of Justice in Ontario
,

S.O.
    1984, c. 11, s. 113.

[6]
This case was decided before s. 36 of the
Companies Creditors Arrangements
    Act
, R.S.C. 1985, c. C-36 (CCAA) was enacted but the same principles are
    applicable.

[7]

This 10 day notice period was introduced following the Supreme
    Courts decision in
R.E. Lister Ltd. v. Dunlop Canada Ltd.
, [1982] 1
    S.C.R. 726 (S.C.C.) which required a secured creditor to give reasonable notice
    prior to the enforcement of its security.

[8]

An Act to establish the
Wage Earner Protection Program Act
, to
    amend the
Bankruptcy and Insolvency Act
and the
Companies
    Creditors Arrangement Act
and to make consequential amendments to other
    Acts
, S.C. 2005, c. 47 (
Insolvency Reform Act
2005);
An Act to
    amend the Bankruptcy and Insolvency Act, the
Companies Creditors
    Arrangement Act
,
the
Wage Earner Protection Program Act

and chapter 47 of the
Statutes of Canada
, 2005
, S.C. 2007, c.
    36 (
Insolvency Reform Act
2007)
.

[9]

This court allowed an appeal of the motion judges order in
Romspen
and remitted the matter back to the motion judge for a new hearing on the
    basis that the motion judge applied an incorrect standard of proof in making
    findings of fact by failing to draw reasonable inferences from the evidence,
    and in particular, on the issue of whether Romspen had expressly or implicitly
    consented to the construction of the Home Depot stores: see
Romspen
    Investment Corporation v. Woods Property Development Inc
.,
2011 ONCA
    817, 286 O.A.C. 189.

[10]

Ontario Wealth Managements Corporation v. Sica Masonry and General
    Contracting Ltd.
, 2014 ONCA 500, 323 O.A.C. 101 (in Chambers) a decision of
    a single judge of this court, states, at para. 5, that a signed, issued, and
    entered order is required. This is generally the case in civil proceedings
    unless displaced, as here by a statutory provision.
Re Smoke
(1989), 77
    C.B.R. (N.S.) 263 (Ont. C.A.), that is relied upon and cited in
Ontario
    Wealth Managements Corporation
, does not address this issue.