COURT OF APPEAL FOR ONTARIO

CITATION: The Guarantee Company of North America v. Ciro
    Excavating & Grading Ltd., 2016 ONCA 125

DATE: 20160212

DOCKET: C60882

Hoy A.C.J.O., Pardu and Roberts JJ.A.

BETWEEN

The Guarantee Company of North America

Plaintiff (Respondent)

and

Ciro Excavating & Grading Ltd., V.B. Trucking
    and Contracting Inc., Soil Logistics Environmental Inc.,
Stella
    Barillari
and The Estate of Ciro Barillari

Defendants (
Appellant
)

Daniel Chitiz and Alastair McNish, for the appellant

Richard Yehia, for the respondent

Heard: February 4, 2016

On appeal from the order of Justice Kenneth G. Hood of
    the Superior Court of Justice, dated July 10, 2015.

ENDORSEMENT

[1]

The appellant, Stella Barillari, appeals the motion judges order
    granting summary judgment to the respondent in the amount of $1,170,312.47 payable
    under an indemnity agreement and dismissing the appellants cross-motion for
    summary judgement dismissing the respondents action against her. Her appeal is
    founded largely on the refusal of Cosimo Leopizzi, who swore an affidavit
    attesting to the appellants execution of the indemnity agreement, to answer numerous
    questions when cross-examined. Mr. Leopizzi asserted that the questions
    exceeded the permissible limits of that examination.

[2]

For the reasons that follow, we dismiss her appeal.

A.

The motion judges decision

[3]

The motion judge noted that the parties agreed that the motion judge was
    entitled, on the evidence filed, to grant summary judgment, that he did not
    need to use any of the fact-finding tools available under r. 20 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194, and that the evidence at trial
    would be no different or better than what was before him.

[4]

The motion judge concluded that the appellant had signed the indemnity agreement.
    While the appellant had asked him to draw an adverse inference about Mr.
    Leopizzis credibility from Mr. Leopizzis refusal to answer certain questions,
    the motion judge declined to do so. He stated that if the refusals were so
    important, the appellant should have brought a refusals motion, but that she
    did not do so. He also stated that she had not brought any evidence to support
    her claim that Mr. Leopizzi was a crook and generally untrustworthy, or that
    he had doctored documents and forged her signature. The motion judge drew an
    adverse inference from the appellants failure to provide evidence  such as
    from a handwriting expert  to support her forgery allegation. He also found
    that the appellant had signed documents that her late husband asked her to sign
    without knowing what they were, and that she had done the same with Mr.
    Leopizzi.

[5]

The motion judge concluded that the appellant could not rely on the
    defence of
non est factum
, which is available to someone who, as a
    result of misrepresentation, has signed a document mistaken as to its nature
    and who has not been careless in doing so. He found that she had not shown that
    Mr. Leopizzi had misrepresented the indemnity agreement, nor had she ever taken
    steps to inform herself about what she was signing. He concluded that she was
    careless to the point of indifference and could not avoid being bound by the
    indemnity agreement.

[6]

He therefore granted the respondent summary judgment in the amount of
    $1,170,312.47 payable under the indemnity agreement (the appellant did not
    dispute that the respondent had paid this amount) and dismissed the appellants
    cross-motion for summary judgment.

B.

Arguments on appeal

[7]

The appellant submits that the motion judge erred:

1.

in finding that the appellant did not attempt to bring a refusals motion;

2.

in refusing to draw an adverse inference as to Mr. Leopizzis credibility
    as a result of these refusals;

3.

in failing to direct a hearing with oral evidence if he were not
    prepared to draw an adverse inference as to Mr. Leopizzis credibility from the
    refusals; and

4.

in concluding that the appellants defence of
non est factum
could not succeed.

C.

Analysis

(1)

The refusals motion that was not brought

[8]

These motions for summary judgment were scheduled in April 2015. The
    examination of Mr. Leopizzi took place on June 2, 2015. The appellant appeared
    before a motion scheduling judge on June 9, 2015 to ask for an adjournment of
    the summary judgment motions so that she could bring a refusals motion. The
    scheduling judge refused the adjournment, indicating that an urgent refusals
    motion could be brought if the appellant considered it important. In the course
    of a motion-management attendance, counsel for the appellant reserved the right
    to call oral evidence on the motions, but made no attempt to do so on the
    hearing of the motions. Nor did the appellant renew her request for an
    adjournment at the hearing of the motions.

[9]

The motions were heard on June 19, 2015. Before this court, the
    appellant alleges that her ability to pursue a refusals motion was stymied by
    the respondent, who said it was not available to attend on such a motion. The
    respondent has a different view of the facts. It submits that while it was
    unavailable for an urgent motion on the Monday before the summary judgment
    motions, it offered to attend on either the Tuesday or the Wednesday, and that
    the appellant abandoned pursuit of such a motion.

[10]

We
    are not persuaded that the motion judges statement that, if the refusals were
    so important, the appellant should have brought a refusals motion, but did not
    do so, amounts to a palpable and overriding error. There was no evidence before
    the motion judge as to these competing versions of the non-pursuit of the
    refusals motion and no fresh evidence before this court. And, in any event, in
    the circumstances the refusals were of no consequence. Even if a few of the numerous
    questions refused should have been answered by Mr. Leopizzi, there was no
    evidence to support the appellants allegation that she did not sign the indemnity
    agreement.

[11]

The
    appellants evidence changed on the issue of whether her signature to the
    indemnity agreement was forged. At first she said it was possible Mr. Leopizzi
    forged her signature. Then she said she signed whatever he put in front of her.
    Next, she said she could not say she did not sign the indemnity agreement, she
    just could not remember. And, finally, she said that Mr. Leopizzi had no reason
    to forge her signature because she always signed what he presented to her. Notably,
    the appellant refused to submit samples of her signature so that a forensic
    comparison could be made with the disputed indemnity agreement. In the face of
    this evidence, and in the absence of any evidence of forgery, the motion judge
    did not err in concluding that the appellant had signed the indemnity
    agreement.

(2)

Failure to draw an adverse inference from refusals

[12]

The
    motion judge analyzed Mr. Leopizzis refusals and noted that there were no
    refusals when he was asked specific questions about [the appellant] signing the
    [indemnity] agreement and his presence as a witness. The motion judge did not
    find that the refusals were material. In light of all of the evidence before
    him, this was not an unreasonable conclusion.

(3)

Failure to order oral evidence

[13]

The
    appellants position that oral evidence was required if the motion judge did
    not draw an adverse inference as to Mr. Leopizzis credibility from his refusals,
    but was not required if the motion judge drew the inference sought by the
    appellant is untenable. A party to a motion for summary judgment cannot say
    oral evidence is not necessary if it is successful, but is required if the
    judge is leaning against it. Here, there is no indication that the appellant
    stated unequivocally that oral evidence was required on the hearing of the
    motion. She made no efforts to have Mr. Leopizzi present on the motion.

(4)

Non est factum

[14]

The
    motion judge accurately set out the test for
non est factum
from
Marvco
    Color Research Ltd. v. Harris
, [1982], 2 S.C.R. 774, and
Bulut v.
    Carter
, 2014 ONCA 424: the defence of
non est factum
is
    available to someone who, as a result of misrepresentation, has signed a
    document mistaken as to its nature and character and who has not been careless
    in doing so. There was no evidence of any misrepresentation. As the motion
    judge observed:

Stellas own evidence established that she never read any
    documents presented to her; she never asked for a translation of any document;
    she took no steps to inform herself of what she was signing; she did not ask
    questions about the document; she never asked to speak to a lawyer or friend
    about the document; and she never took time to think about what she was
    signing.

[15]

The
    absence of a misrepresentation and the appellants carelessness are fatal to
    her
non est factum
defence.

D.

Disposition

[16]

This
    appeal is dismissed. The respondent shall be entitled to its costs of the
    appeal, fixed in the amount of $16,000, inclusive of HST and disbursements.

Alexandra
    Hoy A.C.J.O.

G.
    Pardu J.A.

L.B.
    Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Wainfleet
    (Township) v. Vrbicek, 2016 ONCA 123

DATE: 20160211

DOCKET: C60535

Doherty, Epstein and Miller JJ.A.

BETWEEN

The Corporation of the Township of Wainfleet

Plaintiff/Defendant by Counterclaim (
Respondent
)

and

Ivan Vrbicek

Defendant/Plaintiff by Counterclaim (
Appellant
)

Ivan Vrbicek, appearing in person

Sarah J. Draper, for the respondent

Heard and released orally:  February 1, 2016

On appeal from the judgment of Justice W.L. MacPherson,
    of the Superior Court of Justice, dated December 31, 2014.

ENDORSEMENT

[1]

The appellant has essentially reargued the two issues identified by the
    trial judge in her helpful reasons (paras. 15-16).

The
Line Fences Act
Issue

[2]

The trial judge found that any claim the appellant had with respect to
    damages flowing from the respondents failure to maintain the fence was
    restricted by the
Limitations Act
to the period beginning in November
    2009.

[3]

The appellant accepts this conclusion on appeal.

[4]

The trial judge further found that, even assuming the respondent had
    failed to maintain the fence during the relevant period, the appellant had
    failed to prove any damages (paras. 86-88).  On our review of the record, that
    finding was available to the trial judge and we see no basis upon which we can
    interfere with it.  The
Line Fences Act
claim, therefore, was properly
    dismissed.

The Dispute over the Sale of Parts 7, 10 and 12 of Lot 17 of
    the Corridor

[5]

At trial, the appellant claimed that the parcel of land that the
    respondent had agreed to sell to the appellant included Parts 7, 10 and 12 of
    Lot 17.  The respondents position was that those lots were not included in the
    parcel or part of the corridor to be sold to the appellant.  It is fair to say
    that this was the most contentious issue at trial.  It is essentially a factual
    issue.

[6]

Ultimately, the trial judge accepted the respondents contention that
    the appellant had agreed to purchase the parts of the corridor excluding Parts
    7, 10 and 12 of the Lot 17.  She thoroughly reviewed the evidence before coming
    to that finding, including the evidence that a representative of the respondent
    had altered a document relevant to that sale.  Ultimately, the trial judge
    accepted the evidence put forward by the respondent.  She gave extensive
    reasons for doing so and once again we see no basis upon which we can interfere
    with that factual finding (paras. 89-102).

[7]

We note that the appellant ultimately purchased the part of the corridor
    that did not include Parts 7, 10 and 12.  Any claim, therefore, had to rest in
    damages for the failure to convey those parts.  The trial judge found that the
    appellant had failed to prove any damages flowing from the failure to convey
    what the appellant contended was worthless land (para. 107).  Once again, we
    see no basis upon which we can interfere with that finding.

[8]

The appellant appeals costs.  Although he has not formally asked for
    leave, we treat this as a request for leave to appeal the costs order made by
    the trial judge.

[9]

Costs are in the discretion of the trial judge.  She outlined the
    factors relevant to her assessment of the costs.  All of those factors were
    properly considered by her in the exercise of her discretion.  The total amount
    awarded was well within the reasonableness range having regard to the length of
    the proceeding.  We see no basis upon which leave to appeal the costs order
    should be granted and we would not grant leave.

Conclusion

[10]

The
    appeal from the dismissal of the claims is dismissed and leave to appeal the costs
    order at trial is refused.

[11]

In
    our view, the respondent is entitled to its costs of the appeal on a partial
    indemnity basis.  We fix that amount at $8,000, inclusive of relevant taxes and
    disbursements.

Doherty J.A.

Gloria Epstein J.A.

Bradley Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Warburg-Stuart Management Corporation v. DBG
    Holdings Inc., 2016 ONCA 157

DATE: 20160226

DOCKET: C60304

Simmons, LaForme and Huscroft JJ.A.

BETWEEN

Warburg-Stuart Management Corporation

Plaintiff (Respondent)

and

DBG Holdings Inc., OHara Technologies Inc.,
    1346041 Ontario Inc.
, The Gil OHara Family Trust By Their Trustees Brian
    W. OHara and David P. OHara, Brian W. OHara and David P. OHara

Defendants (Appellants)

Douglas D. Langley, for the appellants

Peter I. Waldmann, for the respondent

Heard: December 11, 2015

On appeal from the judgment of Justice Frederick L. Myers
    of the Superior Court of Justice, dated March 10, 2015 reported at 2015 ONSC
    1594 and from the costs award dated April 7, 2015 reported at 2015 ONSC 2178.

By the
    Court:

[1]

The motion judge granted summary judgment to the
    respondent, Warburg-Stuart Management Corporation (Warburg), against the
    appellants, DBG Holdings Inc. (DBG), OHara Technologies Inc. (OTI) and
    1346041 Ontario Inc. (134), on a joint and several basis for commissions
    owing on two engagement agreements, both dated August 23, 2012. The motion
    judge also dismissed Warburgs action against the personal defendants.

[2]

In calculating the amounts owing under the
    engagement agreements, the motion judge credited the appellants with a sum paid
    as an initial retainer under one of the engagement agreements.

[3]

The appellants appeal from the finding that
    commissions were owing under the engagement agreements, and, in the
    alternative, from the quantum awarded. They also appeal from the finding of
    joint and several liability.

[4]

Warburg cross-appeals from the dismissal of the
    action against the personal defendants and from the decision to credit the
    respondents with the amount of the initial retainer.

Background

[5]

OTI is a manufacturer; 134 owns the land on
    which OTIs products are manufactured; and DBG is a guarantor of various credit
    facilities extended to OTI and 134.

[6]

In 2009, 134 and OTI obtained various loans and
    credit facilities from the Royal Bank of Canada (RBC), consisting of:

·

a $2.7 million building loan secured by a
    collateral mortgage against 134s land;

and five operating loans:

·

a $3 million revolving line of credit (Facility
    1);

·

a $1 million revolving demand facility (Facility
    2);

·

a $1.5 million revolving facility by way of term
    loans (Facility 3);

·

a $150,000 revolving lease line of credit (Facility
    4);

·

a $250,000 business VISA (Facility 5).

[7]

In 2010, Facility 4 was cancelled by mutual agreement.
    In June 2012, RBC notified OTI and 134 that they were in default under their
    financial covenants and cancelled Facility 3. Although Facility 2 remained in
    existence, all parties understood it was no longer available because Export Development
    Canada withdrew its guarantee. Around the same time, RBC recommended that the
    appellants obtain restructuring advice.

[8]

Acting on RBCs recommendation to obtain
    restructuring advice, the appellants engaged Warburg to assist them with
    restructuring their financial affairs and with finding alternate financing. Two
    engagement agreements were signed, first, the building engagement agreement,
    aimed at procuring mortgage financing for 134s building (signed by Warburg,
    OTI, 134 and DBG); and second, the operating engagement agreement, aimed at
    procuring revolving operating financing (signed by Warburg, OTI and DBG).
The
    engagement agreements would automatically terminate 90 days after the appellants
    provide specified information and documentation to Warburg.

[9]

The operating engagement agreement also provided
    that any Advisory Services to be provided by Warburg would be separately
    agreed on in writing and that Warburg would receive remuneration for these
    services as provided for in Schedule A to the operating engagement agreement.
    Schedule A stipulated an hourly rate for Advisory Services of $380 and stated
    that a $12,500 retainer is required to commence Advisory Services.

[10]

In accordance with the terms of the engagement agreements,
    Warburg approached various financial institutions with a view to obtaining
    financing proposals and ultimately, in March 2013, approached RBC. On April 15,
    2013, RBC responded with a proposal for refinancing, essentially in the same
    terms as Warburg had proposed to RBC.

[11]

Subsequently, and unbeknownst to Warburg, on
    July 2, 2013, RBC delivered a discussion paper (term sheet) to the appellants.
    The appellants eventually signed the discussion paper on August 16, 2013. RBC
    provided a formal commitment letter on October 8, 2013. After obtaining legal
    advice, the appellants signed the commitment letter on October 31, 2013,
    exactly 91 days after they purported to terminate their arrangement with
    Warburg.

The motion judges decision

[12]

The motion judge found the appellants liable to
    Warburg for commissions under para. 9 of the engagement agreements.

[13]

Paragraph 9 of each engagement agreement required
    the appellants who were parties to the particular agreement (defined as the
    Client in each engagement agreement) to pay Warburg a commission if within
    one (1) year of the termination of this Agreement, the Client executes an
    agreement to obtain financing from an investor/lender disclosed to the Client
    by [Warburg] during the term of this Agreement.

[14]

The appellants liability under para. 9 of each
    engagement agreement thus turned on the interpretation of the phrase a lender
    disclosed to the Client by [Warburg]. The appellants argued that RBC was not
    disclosed to them by Warburg because RBC was well known to the appellants and
    had been their longtime lender.

[15]

The motion judge rejected the appellants
    argument and found that they were reading the term disclosed too narrowly. He
    noted that the other banks approached by Warburg were known to the appellants
    as well and that, considered in this context, disclosed referred to the
    willingness of a financial institution to make a financing proposal to the
    appellants.

[16]

In relation to RBC, the motion judge determined
    that the appellants had not wanted to continue borrowing from RBC and that they
    were unaware that RBCs commercial lending department would be willing to make
    them a financing proposal that would induce them to change their minds. Having
    regard to these circumstances, he concluded that Warburg disclosed RBC to the
    appellants by obtaining RBCs April 2013 financing offer, which the appellants
    eventually accepted. In the particular circumstances of this case, RBC fell
    within the definition of the phrase, a lender disclosed by [Warburg].

[17]

The motion judge awarded Warburg the commissions
    it claimed, subject to a credit for the initial retainer paid to Warburg for
    Advisory Services. He held that the appellants were jointly and severally
    liable for the total amount owing and dismissed Warburgs action against the
    personal defendants.

The appeal

[18]

The appellants raise four main issues on appeal.

[19]

First, the appellants argue that the motion
    judge erred in holding that the term lender disclosed by [Warburg] in para. 9
    of the engagement agreements could include the appellants longtime lender,
    RBC. They say that the motion judges reasoning in this respect is tainted by
    palpable and overriding error in that he wrongly concluded that RBC had called
    the appellants loans and therefore began the interpretive exercise from the
    incorrect premise that RBC had excluded itself from the universe of available
    lenders. Further, they say that the motion judges determination results in a
    strained interpretation of the phrase lender disclosed by [Warburg] that does
    not fit with other provisions of the engagement agreements. Moreover, the
    motion judge improperly considered the events of March-April 2013 as part of
    the factual matrix to be considered in interpreting the engagement agreements.

[20]

We do not accept these arguments. The motion
    judge stated at para. 7 of his reasons that RBC declared defaults on the
    appellants loan facilities in June 2012. Read as a whole, his reasons indicate
    he was well aware that RBC did not call the appellants loans in June 2012, but
    merely declared them in default. The isolated reference identified by the
    appellants is a harmless misstatement.

[21]

We are not persuaded that the motion judges
    interpretation of the phrase lender disclosed by [Warburg] is either strained
    or inconsistent with the balance of the contract. As noted by the motion judge,
    many potential lenders were well known to the appellants. Warburgs role was to
    procure financing proposals and it was by revealing the willingness of a lender
    to make a financing proposal that it disclosed the lender to the appellants. In
    our view, the motion judge reasonably interpreted the restriction on
    communicating with a lender disclosed by Warburg without Warburgs consent in
    para. 9 of the engagement agreements as referring, in RBCs case, to the
    commercial lending department.

[22]

As we read his reasons, the motion judge did not
    use subsequent events to interpret the meaning of para. 9 of the engagement
    agreements. Rather, he examined those events to determine whether Warburg met
    the requirements of para. 9. He found that RBC fell within the definition of
    lender disclosed by [Warburg] because prior to Warburgs involvement, the
    appellants were unaware that RBCs commercial lending department was willing to
    make a financing proposal to them. Moreover, until Warburg obtained a proposal
    from RBC, the appellants did not want to continue borrowing from RBC.

[23]

The motion judge found as a fact that it was as
    a result of Warburgs efforts that RBC offered financing to the appellants. We
    see no error in that conclusion or in his finding that Warburg was entitled to
    the benefit of para. 9 of the engagement agreements in all the circumstances.
    RBC was not excluded as a lender under the engagement agreements. In our
    view, the motion judges interpretation of para. 9 is not inconsistent with the
    other terms of the engagement agreements.

[24]

We would not give effect to this ground of
    appeal.

[25]

Second, and in the alternative, the appellants
    argue that the motion judge erred in calculating the amount owing to Warburg.
    The first way the motion judge erred is by finding that commission was owed to
    Warburg on loans that had been fully advanced by RBC years earlier rather than
    simply on the new facilities obtained under the 2013 RBC financing commitment.

[26]

We do not accept this argument. Under the terms
    of paras. 9 and 4 of the engagement agreements, Warburg was entitled to be paid
    a commission in relation to the financing commitments into which the appellants
    entered. As noted by the motion judge, RBC made a fresh financing decision for
    all the loan facilities it provided. We see no basis on which to interfere with
    the motion judges interpretation of what was owing.

[27]

The second way in which the appellants say the
    motion judge erred in determining the quantum owing is calculating commissions
    on what Warburg described as Free Cash in its claim. According to the
    appellants, Free Cash refers to the increase from $270,000 to $500,000 of the
    portion of the $3 million operating loan (Facility 1) that was not subject to
    margins. Since the amount was part of the $3 million on which commission had
    already been calculated, the additional commission of $20,000 awarded by the
    motion judge amounted to double-counting.

[28]

We accept the appellants submission in this
    regard. The motion judge did not address this specific calculation in his
    reasons. Although Warburg claimed in oral argument on the appeal that the
    $500,000 is a separate facility unrelated to the $3 million operating loan,
    based on our review of the record, we are not persuaded that that is the case.
    We therefore reduce the amount of the commissions awarded in relation to the
    operation engagement agreement by $20,000.

[29]

The appellants third argument on the appeal is
    that the motion judge erred in ordering that the appellants are jointly and
    severally liable for all amounts owing to Warburg. We agree with this
    submission. The motion judge provided no reasons for rendering the appellants
    jointly and severally liable and we can see none. Warburgs claims against the
    appellants arise under the written engagement agreements. Liability under each
    engagement agreement should be restricted to the contracting parties under each
    agreement.

[30]

The appellants final argument is that the
    motion judge erred in awarding higher costs than Warburg sought on a partial
    indemnity basis. Warburg sought substantial indemnity costs of $73,168.88 based
    on allegations of reprehensible conduct; or, in the alternative, partial
    indemnity costs to October 31, 2014 and substantial indemnity costs thereafter,
    totaling $70,538.79 taking account of offers to settle; or, in the further
    alternative, partial indemnity costs of $59,376.26. Taking account of a number
    of factors, including the fact that Warburg recovered nearly 100% of the amount
    truly in issue, the motion judge awarded Warburg partial indemnity costs of
    $65,000, inclusive of disbursements and applicable taxes. Assuming it was open
    to the motion judge to award an amount for partial indemnity costs greater than
    the amount claimed by Warburg, taking account of the reduction we have made to
    the amount Warburg recovered, we reduce the costs awarded to Warburg to the
    amount claimed by Warburg for partial indemnity costs.

The Cross-appeal

[31]

Warburg raises two issues by way of
    cross-appeal.

[32]

First, Warburg argues that the motion judge
    erred in giving the appellants credit for $12,500 on account of the initial
    retainer for Advisory Services in relation to the operating engagement
    agreement. Warburg points to para. 3 of the engagement agreement, which it
    claims entitled it to terminate the agreement and treat as forfeit all sums
    paid under the agreement in the event the appellants failed to disclose relevant
    facts. We see no merit in this argument. Although we agree that the appellants
    breached their disclosure obligations by failing to advise Warburg about RBCs
    financing offer, Warburg did not terminate the engagement agreement. Therefore,
    it cannot rely on para. 3.

[33]

Second, Warburg argues that the motion judge
    erred in dismissing its action against the personal defendants as the claims
    against them did not form part of the summary judgment motion. The appellants
    concede that the summary judgment motion did not address the personal
    defendants. In the circumstances, the order dismissing the action against the
    personal defendants should be set aside.

Disposition

[34]

Based on the foregoing reasons:

i)

the appeal is allowed in part, the order
    imposing joint and several liability on 134 for commissions owing under the
    operating engagement agreement is set aside, the amount owing for commissions
    under the operating engagement agreement is reduced by $20,000 and the amount
    awarded for partial indemnity costs is reduced to $59,376.26, the amount
    Warburg claimed for partial indemnity costs;

ii)

the appeal is in all other respects dismissed;

iii)

the cross-appeal is allowed in part, and the
    order dismissing the action against the personal defendants is set aside; and

iv)

the cross-appeal is in all other respects
    dismissed.

[35]

Costs of the appeal and cross-appeal are to
    Warburg on a partial indemnity scale fixed in the amount of $12,000, inclusive
    of disbursements and applicable taxes.

Released: H.S.L. February 26, 2016

Janet
    Simmons J.A.

H.S.
    LaForme J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Yasmin v. Alexander, 2016 ONCA 165

DATE: 20160229

DOCKET: C60796

MacPherson, van Rensburg and Miller JJ.A.

BETWEEN

Rukhsana Yasmin

Plaintiff (Appellant)

and

Lenard Alexander

Defendant (Respondent)

William G. Scott, for the appellant

Michael Chadwick, for the respondent

Heard: February 24, 2016

On appeal from the order of Justice Frederick L. Myers of
    the Superior Court of Justice, dated June 22, 2015.

ENDORSEMENT

[1]

This is an appeal of the dismissal of an action as statute-barred. At
    issue is when the appellant Rukhsana Yasmin ought reasonably to have known that
    the impairment from her injuries was serious and permanent, such that her claim
    for personal injury damages as a result of a motor vehicle accident was
    discoverable under s. 5 of the
Limitations Act, 2002
, S.O. 2002, c.
    24, Sched. B.

[2]

Yasmin claims that on August 16, 2008, while walking on Silvercreek Road
    in Mississauga, she was struck by a car owned and operated by the respondent
    Lenard Alexander, and that as a result she has sustained serious, lasting and
    permanent personal injuries.

[3]

Yasmin retained a lawyer, K., who pursued her claim for statutory
    accident benefits. K. did not, however, commence a tort action. In 2011 Yasmin
    sued K., alleging negligence in his failure to commence the tort action within
    the prescribed limitation period. K. defended the action, asserting that his
    retainer was limited to claiming accident benefits.

[4]

At the request of K.s lawyers, Yasmins new counsel issued a statement
    of claim on February 17, 2012 against Alexander. Alexander moved for summary
    judgment claiming that the action was statute-barred.

[5]

K.s lawyers obtained an intervener order and responded on behalf of
    Yasmin to Alexanders motion. The intervener submitted that, to the extent that
    Yasmin sustained an injury that met the threshold under s. 267.5(5) of the
Insurance
    Act
, R.S.O. 1990, c. I.8 (permanent serious impairment of an important
    physical, mental or psychological function), her injury was not discoverable
    prior to February 17, 2010 (two years prior to the date on which the statement
    of claim was issued).

[6]

The motion judge granted the respondents motion and dismissed the
    action. He noted that the appellants claim may not meet the threshold under s. 267.5(5)
    of the
Insurance Act
, in which case she would have no right to sue. If
    the claim meets the threshold, then the question is when a person exercising
    reasonable diligence would have known this was the case. The motion judge
    concluded that, according to the available medical reports, from the date of
    the accident to February 10, 2010 (two years before the statement of claim was
    issued) little, if anything, had changed. Even if admissible, the appellants
    statement in her discovery that she believed she would get better did not
    address the objective test for discoverability set out in s. 5(1)(b) of the
Limitations
    Act, 2002.
The appellant, or her former lawyer, did not exercise
    reasonable diligence to determine the possibility that her injuries were
    serious and permanent. The appellant failed to persuade the court that the
    seriousness and permanence relied upon and asserted were not discoverable
    within the limitation period.

[7]

The appellant makes three arguments on appeal.

[8]

First, the appellant says the motion judge erred in finding that she had
    no right to sue at all if her claim did not meet the threshold under the
Insurance
    Act.
The appellant says that this finding was not relevant to the issue on
    the motion because it amounted to a pre-trial determination that her injuries
    did not meet the threshold.

[9]

We disagree. The motion judge, in stating that the appellant would have
    no right to sue if she did not meet the threshold was simply stating the obvious
     that the appellant would have to meet the threshold to be successful in her
    action. There was no pre-trial determination by the motion judge that the
    appellants injuries failed to meet the threshold, and this was not, on any
    reasonable interpretation of his reasons, the basis for his dismissal of her
    claim.

[10]

Second,
    the appellant says that the motion judge erred in finding that she did not
    exercise reasonable diligence to determine the possibility that her injuries
    were serious and permanent. The appellant contends that she acted with
    reasonable diligence by attending for treatment and assessments by the health
    care providers and doctors provided by her accident benefits insurer, that she
    underwent x-rays on three occasions, consulted her family doctor and was
    assessed by nine different doctors and health practitioners each of whom
    delivered a report. None of the reports indicated that she had a permanent
    injury.

[11]

We
    do not give effect to this argument.

[12]

Although
    prior to February 17, 2010 none of the medical reports indicated that the
    appellant had a permanent impairment, the reason this is not mentioned in the
    reports is because neither the appellant nor her counsel sought an opinion with
    respect to this issue. According to the appellant, she had retained K. to
    pursue her claim. K., who denied such a retainer, had not taken any steps to
    investigate whether the appellants injuries met the threshold. The evidence
    suggested no real change in the appellants condition since 2008; indeed the
    appellants new counsel based his opinion that she met the threshold on her
    description of her injuries together with an x-ray report from 2009. The motion
    judge concluded that it was unreasonable for the appellant to have failed to
    make the inquiry having regard to her injuries and condition. In these
    circumstances, there was no error in the motion judges finding that the
    appellant failed to act with diligence to determine whether her injuries were
    serious and permanent, and that her claim ought reasonably to have been
    discovered before February 17, 2010.

[13]

Finally,
    the appellant contends that the motion judge erred in failing to consider the
    fact that the defendant obtained an orthopaedic report dated September 6, 2013
    that states that the appellant had not sustained a serious impairment of an
    important bodily function. The effect of this report, according to the
    appellant, is to toll the limitation period.

[14]

Again,
    we disagree.

[15]

The
    defence orthopaedic report does not assist the appellant. It is simply an
    opinion obtained in the course of the litigation that no serious impairment had
    occurred, and expresses the opinion that the appellants condition had almost
    entirely resolved. This is not evidence, as the appellant asserts, that she had
    not yet met the threshold, nor can it be determinative of whether the
    appellant, who had commenced an action seeking damages for her injuries, ought
    reasonably to have discovered that her impairment was serious and permanent.

[16]

For
    these reasons, the appeal is dismissed. Costs to the respondent in the sum of
    $7,500, inclusive of applicable taxes and disbursements.

J.C. MacPherson J.A.

K. van Rensburg J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: 1860035 Ontario Ltd. v. Velika Realty Inc., 2016
    ONCA 195

DATE: 20160307

DOCKET: C61183

Laskin, MacFarland and Roberts JJ.A.

BETWEEN

1860035 Ontario Ltd.

Plaintiff (Respondent)

and

Velika Realty Inc. and Ahmed Abou-Gabal

Defendants (Appellants)

Charles L. Merovitz, for the appellants

Craig O'Brien, for the respondent

Heard: March 4, 2016

On appeal from the judgment of Justice Paul B. Kane of the
    Superior Court of Justice, September 15, 2015.

APPEAL BOOK ENDORSEMENT

[1]

The appellants appeal the order of Kane J. striking their statement of
    defence. In support of their appeal they seek to file fresh evidence. Their
    main submission is that their failure to file defending material is the fault
    of their lawyer. We do not see the record that way. As both Robertson J. and
    Kane J. recognized, the position the appellants now find themselves in due to
    their own intransigence. They have failed to comply with a litany of court
    orders and even in their fresh evidence material have not put forward any
    evidence showing a defence to any of these orders.

[2]

Kane J. properly recognized that a court should only reluctantly strike
    a defendants statement of defence. In his opinion this was one of those rare
    cases in which it was appropriate to do so. We agree. The appeal is dismissed
    as is the motion to admit fresh evidence. The respondent is entitled to its
    costs of the appeal and the fresh evidence motion in the amount of $15,000
    inclusive of disbursements and applicable taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: 2249740 Ontario Inc. v. Morguard Elgin Ltd., 2016
    ONCA 233

DATE: 20160331

DOCKET: C59998

Feldman, Simmons and Miller JJ.A.

BETWEEN

2249740 Ontario Inc.

Plaintiff (Respondent)

and

Morguard Elgin Ltd. and Morguard Corporation

Defendants (Appellants)

J. Scott Maidment and Stephen Brown-Okruhlik, for the
    appellants

Ronald F. Caza and Anne M. Tardif, for the respondent

Heard: August 24, 2015

On appeal from the order of Justice Marc R. Labrosse of
    the Superior Court of Justice, dated January 14, 2015, with reasons reported at
    2015 ONSC 299.

ADDENDUM

[1]

This court released reasons on September 10, 2015 setting aside the
    motion judges decision granting summary judgment. In those reasons, the court
    requested further written submissions from the parties in order to avoid
    sending the matter back for a new summary judgment motion. Following the
    receipt of the submissions, on February 3, 2016, the court awarded judgment in
    favour of the respondent and remitted the matter back to the motion judge for
    quantification of damages, if any (at para. 9).

[2]

Counsel now advise that both parties agree that, in the circumstances of
    this case, the quantification of damages, if any, should be remitted to a judge
    other than the original motion judge. The parties therefore ask the court to
    modify paragraph 9 of the February 3, 2016 endorsement to state that the matter
    is remitted to a different judge of the Superior Court of Justice for
    quantification of damages, if any.

[3]

In accordance with that request, paragraph 9 of the endorsement dated
    February 3, 2016 should now read:

[9]      Having previously set aside
    the decision of the motion judge, judgment shall go in favour of the respondent
    for breach of contract by the appellants. The matter is remitted to a different
    judge of the Superior Court of Justice for quantification of damages, if any.

K. Feldman J.A.

J.M. Simmons J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: 2403177 Ontario Inc. v. Bending Lake Iron Group
    Limited,

2016 ONCA 225

DATE: 20160322

DOCKET: M46061 (C61637)

Brown J.A. (In Chambers)

BETWEEN

2403177 Ontario Inc.

Applicant
    (Respondent/

Responding Party)

and

Bending Lake Iron Group Limited

Respondent (Appellant/

Responding
    Party)

Kenneth Kraft, for the moving party, A. Farber &
    Partners Inc.

Robert MacRae, for the responding party, Bending Lake Iron
    Group Limited

Heard: March 8, 2016

ENDORSEMENT

I.

OVERVIEW

[1]

This motion considers the somewhat awkward and
    anachronistic appeal provisions contained in s. 193 of the
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c. B-3 (the
BIA
). A.
    Farber & Partners Inc. was appointed receiver of the property of Bending
    Lake Iron Group Limited (the Debtor) pursuant to s. 243(1) of the
BIA
. The Receiver moves for directions whether the Debtor requires
    leave to appeal under s. 193(e) of the
BIA

from
    the approval and vesting order made by the motion judge on January 8, 2016,
    2016 ONSC 199, transferring all the Debtors property to an unrelated
    purchaser, Legacy Hill Resources Ltd. (Legacy Hill). At the conclusion of the
    hearing, I held that the Debtor did require leave to appeal and set a timetable
    for its leave motion.  These are my reasons for so ordering.

II.

HISTORY OF THE RECEIVERSHIP

[2]

The Debtor went into receivership on September
    11, 2014 on the application of its secured creditor, 2403177 Ontario Inc. (the
    Receivership Order). The Debtors major asset is an undeveloped iron ore mine
    site located northwest of Thunder Bay, Ontario.

[3]

By order dated November 27, 2014, the court
    approved a Sales and Investor Solicitation Process for the Debtors property (the
    SISP Order). Significantly, the Debtor consented to the SISP Order.

[4]

In November 2015, the Receiver moved for court
    approval of an asset purchase agreement it had entered into with Legacy Hill
    for substantially all of the Debtors property (the Sale Agreement).  The
    Debtor opposed the motion and, in turn, brought its own motion seeking a
    variety of relief, including the postponement of the sale of its property.

[5]

The motion judge approved the Sale Agreement
    and ordered the vesting of the Debtors property in Legacy Hill upon the filing
    of a receivers certificate (the Approval and Vesting Order). As well, the
    motion judge dismissed the Debtors motion to postpone the sale and for other
    relief.

[6]

The Debtor filed a notice of appeal dated
    January 13, 2016 seeking to set aside the Approval and Vesting Order. Section
    195 of the
BIA
provides that all proceedings
    under an order appealed from are stayed until the appeal is disposed of.
    However, the Debtor did not perfect its appeal within the time required by the
Rules
    of Civil Procedure
, and this court has issued a notice of
    intention to dismiss the appeal for delay unless it is perfected by March 22,
    2016.

[7]

Legacy Hill is not prepared to close the Sale
    Agreement until the Debtor has exhausted its appeal rights in this court.

[8]

The Receiver moves for a declaration that the
    Debtor requires leave to appeal. Granting such relief would quash the Debtors
    existing notice of appeal.

III.

ISSUE ON THE MOTION

[9]

The central issue on this motion is whether the
    Approval and Vesting Order falls into any of the categories of cases identified
    in s. 193 of the
BIA
in which an appeal lies as of right to this court, or whether the
    Debtor must obtain leave to appeal under s. 193(e). Section 193 of the
BIA
provides:

Unless otherwise expressly provided, an
    appeal lies to the Court of Appeal from any order or decision of a judge of the
    court in the following cases:

(a)
if the
    point at issue involves future rights;

(b)
if the
    order or decision is likely to affect other cases of a similar nature in the
    bankruptcy proceedings;

(c)
if the
    property involved in the appeal exceeds in value ten thousand dollars;

(d)
from
    the grant of or refusal to grant a discharge if the aggregate unpaid claims of
    creditors exceed five hundred dollars; and

(e)
in any
    other case by leave of a judge of the Court of Appeal.

[10]

The Debtor submits that the Approval and Vesting
    Order falls within ss. 193(a), (b), and (c), and therefore an appeal lies as of
    right.  I shall consider the Debtors submissions on each sub-section in turn.

IV.

SECTION 193(a): DOES THE APPROVAL AND VESTING ORDER INVOLVE FUTURE
    RIGHTS?

A.

Positions of the parties

[11]

The Debtor submits the point in issue in its
    appeal involves future rights. The Debtor makes the following submissions in
    its factum:

[T]here remains outstanding a Notice of Motion
    seeking a finding that the Receiver has violated the Crowns fiduciary duty to
    Aboriginal Peoples, as well as the Honour of the Crown, such duties being owed
    by the Receiver as an Officer of the Court.  This motion has not been heard as
    of yet.

The future rights of the affected Aboriginal
    communities will very much be affected by the confirmation of the Vesting
    Order as granted by [the motion judge].

[12]

In order to assess this submission, some review
    is required of the evidence the Debtor placed before the motion judge on the
    sale approval motion about affected Aboriginal communities and of the relief the
    Debtor plans to seek in a further motion before the motion judge.

B.

Debtors evidence concerning affected
    Aboriginal communities

[13]

Mr. Henry Wetelainen, the President and CEO of
    the Debtor, swore an affidavit which was filed in opposition to the Receivers
    motion to approve the Sale Agreement. In it, he deposed that, in early 2015,
    after the Receivership Order had been made, he held discussions with Legacy
    Hill about a possible partnership/co-operative development in rescuing [the
    Debtor] from receivership. He described his discussions with Legacy Hill as
    attempts to attract a financial partner to assist in the refinancing of the
    Debtor in order to terminate the Receivership.

[14]

At various points in his affidavit, Mr.
    Wetelainen stated he had pursued those discussions as part of his continued
    efforts on behalf of [the Debtor] and its creditors, shareholders, stakeholders
    and affected Aboriginal communities. He deposed that the termination of the
    receivership would have a concurrent benefit to [the Debtor], its creditors,
    shareholders, stakeholders and affected Aboriginal communities.

[15]

Despite having pursued discussions with Legacy
    Hill in early 2015, Mr. Wetelainen opposed the Sale Agreement. He took the
    position that Legacy Hill had breached a fiduciary duty owed to the Debtor by
    dealing with the Receiver. Frankly, it is difficult to understand that position
    given that under the Receivership Order and the SISP Order, Mr. Wetelainen, as
    an officer of the Debtor, was not permitted to pursue the discussions he did with
    Legacy Hill without the knowledge and concurrence of the Receiver.

[16]

In any event, Mr. Wetelainens evidence
    disclosed that the main reason he opposed the Sale Agreement was that he wanted
    more time for the Debtor to find financing to take out its secured creditors
    and terminate the receivership. In his affidavit, he explained why the Debtor
    was seeking orders to postpone approval of the Sale Agreement:

The Orders being sought from the Court will
    ensure that all of the creditors, shareholders, stakeholders and affected
    Aboriginal communities be given an appropriate period of time pursuant to Court
    Order to permit [the Debtor] to complete the Corporate requirement for the
    purpose of providing the creditors, shareholders, stakeholders and affected
    Aboriginal communities to invest in Special Shares in [the Debtor] in order to
    retire the debt that [the applicant] has agreed to reduce to the amount as
    reflected in the Assets Purchase Agreement.

The net result of the successful refinancing
    of [the Debtor] will be that all the shareholders will have their share value
    protected and [the Debtor] will be required to deal with unsecured creditors in
    a fair fashion.  At all times during the financing proceedings with [Legacy
    Hill], I anticipated that there would be a compromise with respect to the
    amount of debt owed to the Applicant.

[17]

In Mr. Wetelainens view, the Sale Agreement is
    a disasterous agreement that will wipe out millions of dollars of shareholder
    value, creditor obligations to stakeholders and various Aboriginal
    communities.

[18]

A further reason given by Mr. Wetelainen for his
    opposition to the Receivers sale was that an asset purchase by Legacy Hill ran
    a very substantial risk of [Legacy Hill] alienating all of the affected
    Aboriginal communities as well as the members of the communities where a
    workforce would have been drawn from and whose cooperation would have been
    received. The Aboriginal Employment Preferences Policy identifies these clearly
    articulated goals.

C.

The Debtors pending motion

[19]

The Debtor intends to bring a motion before the
    motion judge at the end of May seeking an order that it be granted leave to
    commence an action against the Receiver for damages as a result of the failure
    of the Receiver to uphold the honour of the Crown and the Crowns fiduciary
    duties to Aboriginal peoples including the Aboriginal communities affected by
    the actions of the Receiver. In its notice of motion, the Debtor asserts it
    had provided continual notice to the Receiver that Aboriginal communities
    were directly affected by the receivership, yet the Receiver failed to maintain
    the honour of the Crown by not notifying affected Aboriginal communities of its
    intention to seek a sale of the Debtors assets.

D.

Analysis

[20]

The concept of future rights as a category of
    cases appealable to this court as of right traces its origins to the late nineteenth
    century federal
Winding-Up Act
.
[1]
The passage of time has not
    improved the clarity of the concept. In
Elias v. Hutchinson
,
[2]
McGillivray C.J.A. commented, at para. 20, that the authorities leave me in a
    state of uncertainty as to what a future right is at all, let alone what there
    is about a future right that would require a treatment of cases involving
    future rights different from cases that do not involve future rights.

[21]

Although the category of future rights increasingly
    seems an anachronistic and confusing basis upon which to ground appeal rights, courts
    have attempted to cloak the term future rights with some practical meaning.
In
Re Ravelston Corp.,
[3]
Doherty J.A. stated, at para. 18:

The meaning of the phrase "future rights" is not
    obvious. Caselaw holds that it refers to future legal rights and not to
    procedural rights or commercial advantages or disadvantages that may accrue
    from the order challenged on appeal  Rights that presently exist, but may be
    exercised in the future or altered by the order under appeal are present rights
    and not future rights [Citations omitted.]

[22]

Doherty J.A. went on to adopt, at para. 19, the view expressed
in
Elias v. Hutchison
, at paras. 100-101,

that s.
    193(a) of the
BIA
must refer to rights which could not at the present
    time be asserted but which will come into existence at a future time.

[23]

More recently, Blair J.A., in
Business Development Bank of Canada v. Pine
    Tree Resorts Inc.
,
[4]
stated, at para. 15:

Future rights are future legal rights, not
    procedural rights or commercial advantages or disadvantages that may accrue
    from the order challenged on appeal. They do not include rights that presently
    exist but that may be exercised in the future.

[24]

The Debtors argument that the Approval and
    Vesting Order involves the future rights of affected Aboriginal communities
    is vague and difficult to follow. Nevertheless, I do not accept it for several
    reasons.

[25]

First, for an order to involve future rights, it
    must involve the future rights of those with an economic interest in the debtor
    company  i.e. its creditors or shareholders.
[5]
On the sale approval motion, the Debtor did not adduce evidence that any
    affected Aboriginal community had such an economic interest in the Debtor,
    nor did any affected Aboriginal community adduce such evidence on the motion.
    The Receiver, in its December 21, 2015 Supplemental Report to its Third Report,
    informed the court that based on its review of the Debtors creditors listing,
    no Aboriginal groups are creditors of [the Debtor].

[26]

Second, at this stage of the process it does not
    lie in the Debtors mouth to contend that the Receiver failed to give proper
    notice to affected Aboriginal communities. The time to raise such an issue
    was when the Receiver sought approval of the SISP Order, yet the Debtor
    consented to that order.

[27]

Third, to the extent that the Approval and
    Vesting Order affects the rights of those with an economic interest in the
    Debtor, it affects the present, existing rights of the Debtors creditors and
    shareholders, not their future rights.

[28]

Finally, it is clear from Mr. Wetelainens
    affidavit that the Debtors real complaint about the effect of the Approval and
    Vesting Order is one concerning the commercial advantages or disadvantages
    that may accrue from the order challenged on appeal. Mr. Wetelainen objected
    to the Sale Agreement because its approval would wipe out shareholder equity
    and preclude efforts by the shareholders to raise financing to pay out the Debtors
    secured creditors. That has nothing to do with future rights within the
    meaning of s. 193(a).

[29]

I conclude that the point in issue in the
    Debtors challenge of the Approval and Vesting Order does not involve future
    rights within the meaning of s. 193(a) of the
BIA
.

V.

SECTION 193(b): WILL THE APPROVAL AND VESTING
    ORDER AFFECT OTHER CASES OF A SIMILAR NATURE IN THIS PROCEEDING?

A.

Positions of the parties

[30]

The Debtor submits that the Approval and Vesting
    Order is likely to affect other cases of a similar nature in the receivership
    proceeding.  In its factum, the Debtor argues that in granting the Approval and
    Vesting Order the motion judge failed to deal with the rights of the affected
    Aboriginal communities, an issue the Debtor wishes to raise on its appeal. The
    Debtor argues that the same issue will lie at the heart of its motion before
    the motion judge later in May seeking leave to sue the Receiver. The Debtor
    contends that because the Approval and Vesting Order likely will affect its
    motion for leave to sue the Receiver, s. 193(b) of the
BIA
applies.

[31]

The Receiver disputes that the issues on appeal
    would impact other issues in the receivership.

B.

Analysis

[32]

The jurisprudence under s. 193(b) of the
BIA
has
    consistently interpreted the section as meaning that a right of appeal will lie
    where the decision in question will likely affect another case raising the
    same or similar issues in the same bankruptcy proceedings.
[6]
The cases have expressed different views on whether the decisions covered by s.
    193(b) can only concern rights asserted against the bankrupt by parties other
    than the bankrupt, or whether the issue may concern rights asserted by multiple
    persons against the bankrupt, rather than one persons rights arising in
    multiple contexts.
[7]
Regardless, s. 193(b) must concern real disputes likely to affect other cases
    raising the same or similar issues in the same bankruptcy or receivership
    proceedings.
[8]

[33]

Section
    193(b) possesses several anachronistic features.  First, while permitting an
    appeal of right on an issue that likely will arise again in an insolvency
    proceeding might appear to foster the efficient conduct of insolvency
    proceedings, in reality any automatic appeal right will slow down insolvency
    proceedings which usually operate on a real-time basis. As well, the language
    of s. 193(b) does not measure the overall significance of the issue to the
    proceeding  minor issues which might arise again are treated in the same
    fashion as major ones. Finally, most contemporary insolvency litigation sees
    one judge assigned to manage the proceeding from its inception to its end.
    Under a one judge model of case management, common or repeat issues tend to
    get grouped together for adjudication at one time, not at different stages of
    the proceeding.

[34]

I do not accept the Debtors submission that the
    Approval and Vesting Order is likely to affect other cases of a similar nature
    in the receivership proceedings.

[35]

The Receiver filed evidence on this motion which
    shows the Debtor did not raise any issue about a receivers constitutional duty
    to consult affected Aboriginal communities either in its materials or during
    its submissions on the sale approval motion. The Debtor does not dispute this
    evidence. Accordingly, the Debtor will be seeking to raise the duty to consult
    issue for the first time on appeal.

[36]

In the normal course, appeals are not the proper
    forum in which to raise brand new issues that significantly expand or alter the
    landscape of the litigation.
[9]
The burden rests on an appellant to persuade the court that all the facts
    necessary to address the point are before the court as fully as if the issue
    had been raised in the court below.
[10]
It is far from clear that the Debtor would succeed in persuading this court that
    the interests of justice require an exception to this normal course of
    litigation. The Debtor faces several high hurdles.

[37]

First, the Debtor consented to the SISP Order
    which authorized the Receiver to proceed with the sales process.  The Debtor
    did not raise the issue of a duty to consult affected Aboriginal communities about
    a sale at that time; it is difficult to conceive how it can do so now.

[38]

Second, it is very doubtful that the Debtor has
    standing to advance on appeal an argument based on the duty to consult. As the
    Supreme Court of Canada explained in
Behn v. Moulton Contracting Ltd.
,
[11]
at para. 30:

The duty to consult exists to protect the collective rights of
    Aboriginal peoples. For this reason, it is owed to the Aboriginal group that
    holds the s. 35 rights, which are collective in nature But an Aboriginal group
    can authorize an individual or an organization to represent it for the purpose
    of asserting its s. 35 rights. [Citations omitted.]

[39]

No evidence was led on this motion to suggest
    that any Aboriginal group had authorized the Debtor to represent it for the
    purpose of asserting rights under s. 35 of the
Constitution Act
,
1982
.

[40]

Third, s. 193(b) of the
BIA
requires
    that the order sought to be appealed is likely to affect other cases of a
    similar nature in the bankruptcy proceedings. Here, the Approval and Vesting
    Order disposed of all the property of the Debtor. Consequently, there will not
    be any other case dealing with the disposition of the Debtors property in this
    receivership.

[41]

The final hurdle is that only after the Debtor
    received the January 8, 2016 reasons of the motion judge granting the Approval
    and Vesting Order did it launch its motion for leave to sue the Receiver for its
    alleged breach of the duty to consult. That sequence of events strongly
    suggests that, having unsuccessfully opposed the Receivers sale, the Debtor
    looked for some procedural device to fit itself into s. 193(b). Its motion for
    leave to sue the Receiver was the result.  In my view, a party cannot create a
    case after the impugned order was made in order to invoke s. 193(b).
    Consequently, the Debtors pending motion for leave to sue does not qualify as
    a case of a similar nature in the receivership.

[42]

For those reasons, the Approval and Vesting
    Order does not fall within s. 193(b) of the
BIA
.

VI.

SECTION 193(c): DOES THE PROPERTY INVOLVED IN
    THE APPEAL EXCEED IN VALUE $10,000?

A.

Positions of the parties

[43]

The Debtor submits that the Approval and Vesting
    Order will transfer property in excess of $10,000 and, therefore, falls within s.
    193(c) of the
BIA
because the property involved in the appeal exceeds in value ten
    thousand dollars.

[44]

While the actual sale price is subject to a
    confidentiality order pending the closing of the transaction, there is no
    dispute that the sale price significantly exceeds $10,000. Nor is there any
    dispute that if the transaction closes, the Debtors secured lenders will
    suffer a significant shortfall.
[12]

[45]

On its part, the Receiver submits that an
    approval and vesting order forms part of the methods a receiver employs to
    dispose of a debtors assets and, as such, is a matter of procedure that does
    not fall within s. 193(c).

B.

Analysis

[46]

The history of the interpretation of s. 193(c)
    is an unusual one. Under the modern approach to statutory interpretation,
the
    words in a statute must be read in their entire context, in their grammatical
    and ordinary sense, and in keeping with the scheme and object of the Act.
[13]
By contrast,
as the Manitoba Court of Appeal observed at para.
    9 in
Re Dominion Foundry Co.,
[14]
the
    interpretation of the phrase the property involved in the appeal found in s.
    193(c) historically has proceeded in a different fashion, drawing heavily upon cases
    interpreting a similar provision in the federal
Winding-Up Act
,
[15]
as well as on the jurisprudence considering former provisions in the
Supreme
    Court of Canada Act
which linked the right to appeal to
    the amount or value of the matter in controversy.
[16]

[47]

Courts
    have observed that the availability under s. 193(e) of a right to seek leave to
    appeal in circumstances falling outside those captured by automatic rights of
    appeal in ss. 193(a) to (d) signals the need for appeal courts to control
    bankruptcy proceedings in order to promote the efficient and expeditious
    resolution of the bankruptcy, one of the principal objectives of bankruptcy
    legislation.
[17]
However, courts across the country tend to part company on whether securing
    those objectives of the
BIA
is fostered by a broad, generous and
    wide-reaching interpretation of the appeal rights contained in
BIA
ss. 193(a) to (d)  with the bar set low to fall within s. 193(c)
[18]
 or by interpretations conducted within the context of the demands of real
    time litigation characteristic of contemporary insolvency and restructuring
    proceedings.
[19]

[48]

In my view, two contextual factors should inform
    any application of the sub-section.

[49]

First, the predecessor section to the modern s.
    193(c) was enacted in 1919, at a time when the then
Bankruptcy Act
did not include the right to seek leave to appeal in the event a
    decision did not fall within one of the categories giving automatic rights of
    appeal. As Doherty J.A. observed in
Re Ravelston Corp.
, the earlier absence in s. 193 of an ability to seek leave to
    appeal prompted courts to give categories of appeals as of right a wide and
    liberal interpretation in order to avoid closing the door on meritorious
    appeals. The 1949 inclusion of the leave to appeal right now found in s. 193(e)
    removes the need for such a broad interpretative approach.

[50]

Second, Canadas other major insolvency statute,
    the
Companies Creditors Arrangement Act
,

R.S.C. 1985, c. C-36 (the
CCAA
),
contains, in s. 13, an across-the-board requirement to obtain leave
    to appeal from any order made under that Act. The automatic right of appeal
    provisions in ss. 193(a) to (d) of the
BIA
do
    not work harmoniously with the
CCAA
s appeal
    regime.

[51]

For example, if one were to accept the Debtors
    argument that whenever the value of the property transferred by a sales
    approval and vesting order exceeded $10,000 an appeal as of right to this court
    exists, then, as the Manitoba Court of Appeal noted, at para. 7, in
Re
    Dominion Foundry Co.
, an appeal as of right would exist
    in almost every case because very few insolvency cases would involve property that
    did not exceed the statutory threshold. Blair J.A. repeated that concern in
Business Development Bank of Canada v. Pine
    Tree Resorts Inc.
, at para. 17. By contrast, a
    challenge to a sales approval and vesting order obtained by a debtor company
    under the
CCAA
would require obtaining leave
    to appeal under s. 13 of that Act.

[52]

In my view, no principled basis exists to distinguish
    the treatment of a sale by a receiver or trustee, from that by a
CCAA
debtor company. In each case, approval of the sale would require
    consideration of the types of principles articulated in
Royal Bank
    of Canada v. Soundair
.
[20]
A need for the legislative harmonization of appeal rights in insolvencies is
    apparent.

[53]

In
    my view, these contextual factors militate against employing an expansive
    application of the automatic right of appeal contained in s. 193(c) and,
    instead, point to the need for an approach which is alive to and satisfies the
    needs of modern, real-time insolvency litigation. I shall employ such an
    approach in applying the following three principles that have emerged from the jurisprudence:
    s. 193(c) does not apply to (i) orders that are procedural in nature, (ii) orders
    that do not bring into play the value of the debtors property, or (iii) orders
    that do not result in a loss.

Is the order procedural in nature?

[54]

The caselaw holds that s. 193(c) of the
BIA
does not
    apply to decisions or orders that are procedural in nature, including orders
    concerning the methods by which receivers or trustees realize an estates
    assets.

[55]

In
Re Dominion Foundry Co.
, the motion judge
    had dismissed a request to set aside a sale of assets by a trustee in
    bankruptcy on the grounds that the sale was improvident and the trustee had
    acted improperly. The Manitoba Court of Appeal held, at para. 20, that although
    the sale involved assets whose value exceeded the statutory threshold, an order
    concerning the method by which the trustee disposed of assets did not fall
    within s. 193(c). Consequently, where a person seeks to challenge an order on
    appeal by calling into question the methods
employed by a trustee to
    dispose of the assets of the bankrupt, the order involves a matter of procedure
    which does not fall within s. 193(c).

[56]

The Alberta Court of Appeal reached a similar
    result in
Alternative Fuel Systems Inc. v. EDO (Canada) Ltd. (Trustee
    of)
.
[21]
There, the trustee had invited tenders for the purchase of the bankrupts
    equipment. When tenders closed, the trustee determined that Alternatives
    tender was the highest. Once another tenderer, Impco Technologies Inc., found
    out that it was not the highest bidder, it submitted a second tender offering
    substantially more than Alternative.  The trustee sought directions from the
    court.  The bankruptcy judge directed the trustee to accept Impcos second,
    higher tender. Alternative filed a notice of appeal and moved before the
    Alberta Court of Appeal for a determination that it could appeal as of right
    under s. 193(c) because the value of the property involved exceeded the
    statutory threshold.

[57]

OLeary J.A., following
Re Dominion
    Foundry Co.
, held that Alternative had no right of appeal
    under s. 193(c). He reasoned, at para. 12, that the bankruptcy judges order
    was essentially a procedural direction to the trustee in the face of
    Alternatives challenge to the method by which the equipment was sold,
    by-passing the tender process.

[58]

In the present case, the overwhelming majority
    of the Debtors grounds of appeal are process-related, involving issues
    concerning the Debtors dealings with Legacy Hill following the Receivership
    Order, the Receivers disclosure of information about the Sale Agreement, the
    negotiation process it followed with Legacy Hill, its treatment of persons
    affected by the Sale Agreement, and the adequacy of notice it gave to affected
    Aboriginal communities. Those grounds of appeal are procedural in nature and
    do not fall within s. 193(c).

Does the order put into play the value of the
    Debtors property?

[59]

The second principle emerging from the caselaw
    is that s. 193(c) is not engaged where the decision or order does not call into
    play the value of the debtors property. In
Business Development Bank of Canada v. Pine Tree
    Resorts Inc.,
Blair J.A. considered whether an
    order appointing a receiver over assets of debtor corporations that exceeded
    $10,000 in value fell within s. 193(c). He concluded that it did not stating,
    at para. 17, that an order appointing a receiver does not bring into play the
    value of the property; it simply appoints an officer of the court to preserve
    and
monetize those assets
, subject to court approval.

[60]

In the present case, the Approval and Vesting
    Order marked the final step in the Receivers monetization of the Debtors assets.
    The property of the Debtor is to be converted through the Sale Agreement into a
    pool of cash and, as stated in the Approval and Vesting Order, the net
    proceeds from the sale of the Purchased Assets shall stand in the place and
    stead of the Purchased Assets. The ground of appeal advanced by the Debtor to
    the effect that the sale process should be postponed to let shareholders re-finance
    the company does not bring into play the value of the Debtors property, so s.
    193(c) does not apply.

Does the order result in a gain or loss?

[61]

Finally, for s. 193(c) to apply, the order in
    question must contain some element of a final determination of the economic
    interests of a claimant in the debtor. In
Trimor Mortgage Investment Corporation v. Fox
,
[22]
Paperny J.A. described this aspect of s. 193(c) at para. 8:

The test to be applied under this section was
    originally articulated in
Orpen v Roberts
, [1925] SCR 364 at
    367, [1925] 1 DLR 1101, and confirmed in
Fallis and Deacon v
    United Fuel Investments Ltd.
, [1962] SCR 771, 4 CBR (NS) 209,
    which set out that the amount or value of the matter in controversy is the loss
    which the granting or refusal of that right would entail.

[62]

The Approval and Vesting Order did not determine
    the entitlement of any party with an economic interest in the Debtor to the
    sale proceeds.  In that sense, no interested party gained or lost as a result
    of the order.

[63]

However, one ground of appeal set out in the
    Debtors notice of appeal is that the motion judge erred in law in finding that
    the Receiver had not acted improvidently. In its factum, the Debtor contends
    that the Receivers sale of its property is improvident because it would result
    in a loss of $125 million to its shareholders. In support of that ground of
    appeal, on this motion the Debtor relied on a memo prepared by Broad Oak
    Associates dated February 3, 2014, half a year before the Receivership Order
    was made. Using an iron ore pellet price of US$100 per tonne, Board Oak placed
    the value of a fully-developed Bending Lake iron ore project in the range of
    US$100 million to $300 million. This, the Debtor argues, shows that the
    Approval and Vesting Order selling its undeveloped mine site assets resulted in
    a loss to shareholders of an amount exceeding $10,000 in value, giving it a
    right to appeal under s. 193(c).

[64]

I do not accept the Debtors submission. The
    determination of whether the property involved in the appeal exceeds ten
    thousand dollars is a fact-specific one. In order to bring itself within s.
    193(c), the Debtor must do more than make a bald allegation of improvident
    sale.  This is real-time insolvency litigation in which delays in the
    proceeding can prejudice the amounts fetched by a receiver on the realization
    process.  The Debtor must demonstrate some basis in the evidentiary record considered
    by the motion judge that the property involved in the appeal would exceed in
    value $10,000, in the sense that the granting of the Approval and Vesting Order
    resulted in a loss of more than $10,000 because the Receiver could have
    obtained a higher sales price for the Debtors property. Bald assertion is not
    sufficient, otherwise a mere bald allegation of improvident sale in a notice of
    appeal could result in an automatic stay of a sale approval order under
BIA
s. 195 as the appellant pursues its appeal.
[23]

[65]

In the present case, the evidentiary record
    discloses that there were no competing bids for the Debtors property for the
    motion judge to consider; only Legacy Hill expressed a serious enough interest to
    lead to a Sale Agreement with the Receiver.

[66]

Neither the Debtor nor its shareholders put
    before the motion judge a valuation of the Debtor made near in time to the
    execution of the Sale Agreement. Mr. Wetelainen did not attach the pre-receivership
    Broad Oak memo to the affidavit he placed before the motion judge. By contrast,
    the Receiver reported to the motion judge that the market price of iron ore had
    declined to the mid-US$50 per tonne range, making a court sanctioned sales
    process very challenging in the current market conditions. The market price for
    iron ore reported by the Receiver was far below the pre-receivership assumptions
    used by Broad Oak.

[67]

Nor did Mr. Wetelainen depose on the sale
    approval motion that the Debtors property was worth over $100 million.
    Instead, in his affidavit he stressed the need to postpone the sale to allow
    the Debtors shareholders time to negotiate a compromise of the secured debt
    and then pay off the compromised debt.

[68]

Finally, the Debtors secured lenders supported
    the Sale Agreement, notwithstanding that they would suffer a significant
    shortfall on the sale.

[69]

Taken together, those facts do not disclose any
    basis in the evidentiary record for the Debtors assertion that the sale would
    result in a loss of rights greater than $10,000 because the Receiver could have
    obtained a higher price for the Debtors property. Accordingly, I am not
    persuaded that there is any evidentiary basis to the Debtors bald assertion in
    its notice of appeal that the Approval and Vesting Order sanctioned an improvident
    sales transaction which resulted in a loss to the Debtor within the meaning of
    s. 193(c).

[70]

I conclude that the Approval and Vesting Order
    does not fall within s. 193(c) of the
BIA
.

VII.

DISPOSITION

[71]

For these reasons, I granted the Receivers
    motion and ordered that the Debtor requires leave to appeal from the Approval
    and Vesting Order. The Debtors notice of appeal dated January 13, 2016 is
    quashed.

[72]

The parties agreed to the following timetable
    for the filing of materials on the Debtors leave to appeal motion:

(i)

The Debtor would file
    its leave materials by March 28, 2016;

(ii)

The Receiver would file
    any responding materials by April 4, 2016;

(iii)

The Debtor would file
    reply materials, if any, by April 11, 2016.

[73]

I directed that the leave materials be placed
    before a panel for consideration on April 12, 2016. I did so, in part, to
    obviate the need for Debtors counsel to travel down to Toronto for an oral
    Chambers leave motion.

[74]

The parties may serve their leave materials
    electronically.  Although the parties will need to file the appropriate number
    of hard copies of their materials in accordance with the
Rules of Civil Procedure
, they may file with the court an electronic copy either by email or
    by USB key. The date of electronic filing will be deemed the date of the filing
    of the materials with the court.

[75]

The parties agreed that the costs of this motion
    would be reserved to the panel hearing the leave to appeal motion.

David Brown
    J.A.

[1]
Now, the
Winding-up and Restructuring Act
, R.S.C. 1985, c. W-11, s. 103.
    See
In re Union Fire Insurance Co.
(1886), 13 O.A.R. 268, (C.A.) at pp.
    294-295.

[2]
(1981), 14 Alta. L.R. (2d) 268; 121 D.L.R. (3d) 95, [1981] A.J. No. 896 (C.A.).

[3]
(2005), 24 C.B.R. (5th) 256 (Ont. C.A.)

[4]
2013 ONCA 282, 115 OR (3d) 617.

[5]

See
Ditchburn
    Boats & Aircraft (1936) Ltd., Re
(1938), 19 C.B.R. 240 (Ont. C.A.), at
    p. 242 quoting with approval
In Re Kern Agencies Ltd.
(1931), 12 C.B.R.
    279 (Sask. C.A.), at p. 281.

[6]

Wong v. Luu
, 2013 BCCA 547, at para. 21.

[7]

See
Wong v. Luu
, at para. 21, and the
    Quebec jurisprudence summarized in
Re Norbourg Gestion dactifs inc.,
2006 QCCA 752, 33 C.B.R. (5th) 144 at paras. 9-11.

[8]

Global Royalties Ltd. v. Brook
, 2016 ONCA 50, at para. 19.

[9]

Perez
    v. Salvation Army in Canada
(1998), 42 O.R. (3d) 229, 171 D.L.R. (4th) 520 (C.A.), at para. 11.

[10]

Kaiman
    v. Graham
, 2009 ONCA 77, 245
    O.A.C. 130, at para. 18.

[11]
2013 SCC 26, [2013] 2 S.C.R. 227.

[12]
In its Third Report dated November 30, 2015, the Receiver informed the court
    that the Debtors liabilities totaled approximately $12.4 million consisting of
    (i) secured loans from the applicant in excess of $3.5 million, (ii) payroll
    deduction and HST claims by the Canada Revenue Agency of approximately
    $405,000, and (iii) unsecured liabilities of close to $8.5 million.

[13]

Rizzo & Rizzo Shoes Ltd., Re

(1998), 154 D.L.R.
    (4th) 193 (S.C.C.) at para. 21
;

Bell ExpressVu
    Ltd. Partnership v. Rex

2002 SCC 42, 212 D.L.R. (4th) 1 (S.C.C.) at para. 26
.

[14]
(1965), 51 W.W.R. 679.

[15]
Such as
Faillis and Deacon v. United Fuel Investments Ltd
, [1962] S.C.R.
    771, at p. 774.

[16]

Trimor
    Mortgage Investment Corporation v. Fox
, 2015 ABCA 44, at para. 8;
Galaxy Sports Inc. v.
    Abakhan & Associates Inc.
, 2003 BCCA 322, 44 C.B.R. (4th) 218 at para.
    12;
Newfoundland and Labrador Refining Corporation v. IJK Consortium
,
    20098 NLCA 23, 52 C.B.R. (5th) 8 at para.
18.

[17]

Wong v. Luu,
at para. 23;
Re Norbourg Gestion dactifs inc
, at para. 9.

[18]

Wong v. Luu
, at para. 23.

[19]

Re Stelco Inc
. (2005), 8 C.B.R. (5th) 150 (Ont. C.A.), at para. 4.

[20]
(1991), 4 O.R. (3d) 1 (C.A.).

[21]
1997 ABCA 273, 48 C.B.R. (3d) 171.

[22]
2015 ABCA 44.

[23]
See, for example,
Faillis and Deacon v. United Fuel Investments Ltd.
where, at pp. 773-774 the Supreme Court of Canada described the specific
    evidence of loss contained in the record.