Court File and Parties

CITATION: Burk Steel, Inc. v. Steelcon Group Ltd., 2015 ONSC 2637 DIVISIONAL COURT FILE NO.: 44/15 DATE: 20150423

SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT

RE: BURK STEEL, INC., Plaintiff/Respondent AND: STEELCON GROUP LTD., Defendant/Appellant

BEFORE: Lederer J.

COUNSEL: Jeremy Martin, for the Plaintiff/Respondent M. Michael Title, for the Defendant/Appellant

HEARD at Toronto: In Writing

Endorsement

[1] This is a motion for leave to appeal. An order was made within a bankruptcy. It required the representatives of the prospective appellant (the bankrupt) to be examined. They attended, but without the necessary documentation. A motion was brought seeking a finding that they were in contempt of the order. The motion judge found that the order had been breached, but there was no contempt. As a result of the breach, he ordered that the prospective appellants re-attend, that they provide access to the facilities of the business and its books and that the prospective respondent be paid its costs of the motion on a substantial indemnity basis.

[2] The prospective appellants do not dispute the outcome of the motion on its merits or claim that it was, in any way, incorrect. Instead, it is said that the motion was a nullity because it should have been brought in the Bankruptcy Court, as opposed to the civil motion list.

[3] The prospective respondent, Burk Steel, Inc. (“Burk Steel”) obtained a judgment, on consent, in Illinois against the prospective appellant, Steelcon Group Ltd. (“Steelcon”). Steelcon failed to make the payments required by the judgment. As a result, Burk Steel sought to have the judgment enforced in Ontario. An action was commenced and an order for summary judgment made in favour of Burk Steel. Steelcon still refused to pay. It filed an Assignment in Bankruptcy. On December 17, 2013, an order was made by Master Short directing that the officers of the bankrupt company attend an examination “for the purpose of investigating the administration of the estate of the bankrupt company”.

[4] The officers of the company did attend the examination, but the answers to undertakings were deficient. The parties agreed to continue the examination in writing, but Steelcon refused to acknowledge any correspondence from Burk Steel. As Burk Steel sees it, the examination was derailed. In response, it brought the motion for contempt.

[5] The motion was filed at the Superior Court. It referenced both the action which resulted in the summary judgment and the bankruptcy proceeding. It appeared on the civil motion list in the Superior Court.

[6] At the outset of the hearing, counsel for Steelcon objected. As a result of the bankruptcy, the action in which the motion had been brought had been stayed (see: Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 s. 69.3). Moreover, a motion for contempt had to be made to a judge in the proceeding in which the order to be enforced was made (see: Rules of Civil Procedure, R.R.O. 1990 O. Reg. 194, r. 60.11(1)). The order made by the Master arose within the bankruptcy proceedings and not the civil action which resulted in the summary judgment. Accordingly, counsel for Steelcon took the position that the motion could not proceed. It was a nullity. A nullity cannot be cured.

[7] The motion judge did not agree. He found that the motion was brought “in both emanations of this Court” recognizing that the Bankruptcy Court is in the Superior Court and that, in this instance, the bankruptcy file was referred to as part of the material filed. The order the motion judge considered was part of the bankruptcy proceeding. The order he made was part of that proceeding or that “emanation” of this Court and not the civil proceeding that had been stayed. Thus, there is no basis for the concern or the objection.

[8] There is no conflicting decision and there is no reason to doubt the correctness of what the motion judge has done. Even if there were, this is not a matter where it is desirable, or one of such importance, that leave to appeal should be granted (see: Rules of Civil Procedure, supra, r. 62.02(4)). All the motion judge has done is to act to see that these matters move forward in a way that avoids unnecessary delay.

[9] The motion for leave to appeal is dismissed.

[10] No submissions were made as to costs. There is no reason why costs should not follow the event. The motion was in writing. The parties did not appear. In the circumstances, I award costs to the responding party on the motion (Burk Steel) in the amount of $750.00.

LEDERER J.

Date: 20150423