sept. 21. 2020

COURT OF APPEAL SUMMARIES (September 7 – September 18, 2020)

Dal Bianco v. Deem Management Services Limited, 2020 ONCA 585 (CanLII)

[Juriansz, Tulloch and Jamal JJ.A.]

Counsel:

R. Brendan Bissell, for the moving party, the receiver, Crowe Soberman Inc.

David T. Ullmann and Brendan Jones, for the responding party, D. Dal Bianco

Harold Rosenberg, for the responding party, Deep Foundations Contractors Inc.

Edward L. D’Agostino, for the responding party, Kieswetter Excavating Inc.

No one appearing for OneSpace Unlimited Inc.

Jeffrey A. Armel, for the responding party, EXP Services Inc.

Eric Gionet, for the responding party, Maxion Management Services Inc.

Keywords: Bankruptcy and Insolvency, Receiverships, Priority, Construction Law, Construction Liens, Civil Procedure, Appeals, Jurisdiction, Federal Paramountcy, Bankruptcy and Insolvency Act, RSC 1985, c. B-3, ss. 193, 243(1), 249, Construction Act, RSO 1990, c. C.30, ss. 71(1), 78, Courts of Justice Act, RSO 1990, c. C.43, s. 101, Business Development Bank of Canada v. Astoria Organic Matters Ltd., 2019 ONCA 269, Industrial Alliance Insurance and Financial Services Inc. v. Wedgemount Power Limited Partnership, 2018 BCCA 283, Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508, Buduchnist Credit Union Limited v. 2321197 Ontario Inc., 2019 ONCA 588, Comfort Capital Inc. v. Yeretsian, 2019 ONCA 1017, RREF II BHB IV Portofino, LLC v. Portofino Corporation, 2015 ONCA 906

FACTS:

A receiver was appointed in respect of the debtor’s property by order of the Ontario Superior Court under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act. The receiver moved for directions on whether the lien claimants or the mortgagee had priority to the proceeds of sale of the debtor’s property. The motion judge ruled that the construction lien claimants had priority. A dispute subsequently arose regarding the correct appeal route from the motion judge’s order.

ISSUES:

Does an appeal from the impugned order of the Ontario Superior Court in receivership lie to the Court of Appeal of Ontario under s. 193 of the Bankruptcy and Insolvency Act or to the Divisional Court under s. 71(1) of the Construction Act?

REAONSING:

The Court of Appeal. The operative question to determine the appeal route is whether the order under appeal was one granted in reliance on jurisdiction under the Bankruptcy and Insolvency Act. Where that has occurred, the appeal provisions of that statute apply. If the Bankruptcy and Insolvency Act is one of the sources of jurisdiction for the order under appeal, an appeal from an order made under it necessarily implicates a provision sourced in that Act. Thus, the appropriate appeal route is to the Court of Appeal. Even if provincial law is also a source of jurisdiction for the order under appeal and provides for a different appeal route, federal paramountcy resolves any such conflict in favour of the appeal route under the Bankruptcy and Insolvency Act.

The receiver had authority to seek the court’s directions under s. 249 of the Bankruptcy and Insolvency Act and paragraph 34 of the receivership order. Under these sources of authority, the receiver moved for directions regarding the discharge of its powers and duties. The agreed statement of facts on the motion stated the receiver had made certain distributions, but had not been able to distribute the remaining funds from the sale of the debtor’s property due to competing priority claims between the construction lien claimants and the mortgagee.

The motion judge provided directions on the priority dispute. The motion was brought partly under the Bankruptcy and Insolvency Act in an “APPLICATION UNDER Section 243(1) of the Bankruptcy and Insolvency Act and Section 101 of the Courts of Justice Act”.

The mere act of styling the motion in the receivership does not give automatic access to the appeal routes under the Bankruptcy and Insolvency Act. Rather, the jurisdiction of the court is governed by the substance of the order made. In this case, the substance of the order was in proceedings authorized by the Bankruptcy and Insolvency Act, as it responded to a motion for the court’s directions brought under s. 249 to assist with distributing the remaining funds in the receivership. Therefore, s. 249 of the Bankruptcy and Insolvency Act was a proper source of jurisdiction for the court’s order.

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