COURT OF APPEAL FOR ONTARIO
Zarnett J.A. (Case Management Judge)
In the Matter of the Bankruptcy of Avida 2015 Inc., of the City of Toronto, in the Province of Ontario
David T. Ullman, for the appellant, David Reale
Christopher J. Staples, for the respondent, Bank of Montreal
Patrick Corney, for the trustee
Heard: June 26, 2026
REASONS FOR DECISION
Background
1On September 22, 2025, a bankruptcy court judge made an order permitting the trustee in bankruptcy of Avida 2015 Inc. to initiate an auction for the sale of a cause of action that the appellant believes the trustee has against the respondent, Bank of Montreal (“BMO”). BMO is a creditor of the bankrupt estate. The bankruptcy judge specified that BMO would be permitted to bid in the auction, but she rejected the appellant’s position that BMO was required to make a cash bid. Rather, she ruled that BMO would be entitled to credit-bid up to the face value of its secured debt.
2On June 17, 2026, a panel of this court (the “leave panel”) granted the appellant leave to appeal the bankruptcy judge’s order: Avida 2015 Inc. (Re), 2026 ONCA 426. The leave panel observed that “whether a creditor may use a credit bid to acquire an asset that does not attach to its security” is “a matter of importance…to bankruptcy proceedings more generally”, and that the appeal was prima facie meritorious.
3Case management was directed “to assist the parties in having the appeal heard expeditiously and to address any requests for intervention that may be made.” A case management conference to address those matters was accordingly convened.
Perfection of the Appeal
4Because the appellant took the position that he had an appeal as of right from the bankruptcy judge’s order (and asked for leave only in the alternative), he approached the hearing before the leave panel as though it was the appeal itself. Counsel for the appellant advises that he currently sees no need to alter, expand or supplement his previously filed factum and other materials for what will now be the actual appeal, other than in response to any interventions that are allowed. On the other hand, counsel for BMO advises that he approached the hearing before the leave panel as a leave request and would like to file a revised factum for the appeal. Counsel for the appellant expressed concern about this.
5Since leave has been granted and the issue is important, the parties should have the opportunity to deliver and rely on the materials they consider to be most appropriate for the appeal itself.
6Accordingly, I direct that the appeal be perfected by July 15, 2026. The appellant may rely on his previously filed materials to perfect the appeal or deliver fresh materials to do so. In other words, he shall have the right, but not the obligation, to deliver fresh materials for the appeal by that date. If the appellant does not deliver fresh materials, the materials he filed for the hearing before the leave panel shall be considered his materials for the appeal, except for any reply to interveners permitted under para. 13 below.
7BMO’s materials for the appeal (except for any reply to interveners permitted under para. 13 below) shall be delivered by July 31, 2026. BMO may deliver fresh materials; if it does not do so by July 31, 2026, the materials it filed for the hearing before the leave panel shall be considered its materials for the appeal.
Motions to Intervene
8Intervention motions shall be determined in writing.
9Any interested person who seeks permission to intervene shall deliver their motion materials by August 19, 2026. The factum in support of any intervention request shall not exceed 10 pages.
10Any party opposing an intervention motion shall deliver their responding materials by August 26, 2026. Any factum in response to an intervention request shall not exceed five pages.
11Any proposed intervener wishing to respond to opposition to their intervention request may file a reply of no longer than three pages by September 2, 2026.
12Any interveners granted leave to intervene in the appeal shall deliver their materials on the appeal, including a factum not exceeding 10 pages, by September 16, 2026.
13Any party wishing to reply to any of the interveners’ materials on the appeal may deliver a reply of no longer than five pages by September 23, 2026.
Hearing Date and Time Allocations for Oral Argument
14The appeal will be heard on a date set by the Appeal Scheduling Unit. Two hours will be allocated for oral argument. The specific allocations as among the parties and any intervener(s) will be determined after any motion(s) to intervene have been decided.
Costs
15The appellant raised a question about costs of the hearing before the leave panel in light of an agreement the parties had. The leave panel directed that costs relating to that hearing were reserved to the panel hearing the appeal (Re Avida, at para. 10.) The effect of any agreement the parties may have had about costs may be raised before the hearing panel.
“B. Zarnett J.A.”