Clarity In Appeal Procedures Part II: The BIA Prevails – Or Does It?

In January, we wrote about a decision of Justice Watt of the Ontario Court of Appeal, which addressed the question of which appeal procedure must be followed in appeals of Orders made in proceedings constituted under both the Bankruptcy and Insolvency Act (the “BIA”)1 and the Courts of Justice Act (the “CJA”).2 His decision in Business Development Bank of Canada v. Astoria Organic Matters Ltd. and Astoria Organic Matters Canada LP3 concluded that, even where the initial Order references both statutes, any appeal must follow the appeal procedures prescribed by s. 193 of the BIA and the Bankruptcy and Insolvency General Rules (the “BIA Rules”) due to Parliament's exclusive jurisdiction over bankruptcy matters.

The appellant, SusGlobal Energy Belleville Ltd. (“SusGlobal”), appealed Justice Watt's decision to a panel of the Court of Appeal. In reasons released April 8, 2019, Justice Zarnett, for a unanimous bench, upheld Justice Watt's decision.4

Although the panel reached the same conclusion as Justice Watt, Justice Zarnett's reasons introduce an additional nuance into the appeal route analysis by concluding that the appeal route to be followed is dependent upon the jurisdiction pursuant to which the specific Order under appeal was granted; it is not enough to look at the jurisdiction pursuant to which the proceeding was constituted. In so concluding, Justice Zarnett adopted the reasoning set out in a recent chambers decision from the B.C. Court of Appeal, wherein Justice Groberman stated:

I acknowledge that, in a case such as the present one, where relief is sought under both common law equitable principles and the Law and Equity Act as well as the Bankruptcy and Insolvency Act, there can be some question as to whether the appeal provisions of the Bankruptcy and Insolvency Act are engaged. In my view, the answer depends on whether the order under appeal is one granted in reliance on jurisdiction under the Bankruptcy and Insolvency Act. Where it is, the appeal provisions of that statute are applicable. (emphasis added by Justice Zarnett)5

In BDC v. Astoria, the Order under appeal arose out of paragraph 8 of the original receivership Order, being the standard prohibition on commencing proceedings against the receiver without leave of the Court (theleave to sue provision). Accordingly, Justice Zarnett held that the appeal route to be followed would depend upon whether the Court's jurisdiction to include the leave to sue provision in the...