Ontario civil | Debtors and Creditors | Receivers | Actions involving receiver
Creditor successfully applied for appointment of receiver over debtors’ assets. Application had been brought and granted under both s. 243(1) of Bankruptcy and Insolvency Act (BIA) and s. 101 of Courts of Justice Act (CJA). Receivership order contained “leave to sue provision” (LTSP) under which receiver could not be sued without consent or leave of court. Receiver sold some assets to purchaser, and purchaser discovered issue with certain property that would require about $750,000 to remedy. Purchaser unsuccessfully brought application for leave to bring action against receiver, and its request to reopen application based on fresh evidence was denied. Purchaser pursued appeal under CJA, and alternatively under BIA, and court of appeal motion judge ultimately found BIA was governing statute and denied leave to appeal. Purchaser brought motion for order setting aside judgment of motion judge. Motion dismissed. Proper appeal route was under BIA when order sought to be appealed was made in reliance on jurisdiction under BIA, as was case here. Court’s authority to include LTSP in receivership order had flowed by necessary implication from statutory power to appoint receiver under s. 243(1) of BIA. While s. 251 of BIA deals with circumstances under which receiver cannot be sued at all, this did not displace right of court to include LTSP for matters falling outside of s. 251. Fact that s. 215 of BIA essentially provided statutory LTSP for certain parties did not preclude court from extending such protection to receivers. While CJA also provided authority to include LTSP, appeal was governed by BIA as matter of federal paramountcy.
Business Development Bank of Canada v. Astoria Organic Matters Ltd. (2019), 2019 CarswellOnt 5177, 2019 ONCA 269, K. Feldman J.A., David M. Paciocco J.A., and B. Zarnett J.A. (Ont. C.A.).
