Ontario Court Of Appeal Holds No Leave Required In Appeals Of Bankruptcy Orders

On March 6, 2020, the Ontario Court of Appeal (the “OCA”) released its decision in Royal Bank of Canada v. Bodanis (“Bodanis”),1 holding that two debtors, each having an estate exceeding $10,000 in value, had appeals of their bankruptcy orders as of right under section 193 of the Bankruptcy and Insolvency Act2 (the “BIA”) and thus did not need to seek leave to appeal.

Section 193 reads as follows:

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

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

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

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

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

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

Hearing companion motions for directions brought by the creditor who had obtained the bankruptcy orders (the “Bank”), Justice Nordheimer found that only subsection 193(c) could potentially allow the bankrupts to avoid seeking leave under subsection 193(e).

In an earlier OCA decision, 2403177 Ontario Inc. v. Bending Lake Iron Group Limited (Bending Lake Iron), Justice Brown had distilled the jurisprudence on the application of subsection 193(c) down to three principles: the section does not apply to orders in...