DATE: 2001-11-02
DOCKET: C35761/M27792
COURT OF APPEAL FOR ONTARIO
RE:
COMMERCIAL UNION LIFE ASSURANCE COMPANY OF CANADA (Plaintiff(Respondent)) - and - JOHN INGLE INSURANCE GROUP INC., ET AL. (Defendants(Appellants)) - and - WHITEMOUNT HOLDINGS INC. and WMH INC. (Respondents in Motion)
BEFORE:
FELDMAN J.A. (In Chambers)
COUNSEL:
Clive Elkin
For the appellant
Angelo D’Ascanio
For the respondent WMH Inc.
HEARD:
October 29, 2001
E N D O R S E M E N T
[1] This is an unusual motion for this court. The respondent in the appeal has obtained an order under Rule 63.01(5) lifting the stay of execution which otherwise attaches when an appeal is filed. However, the appellant has proved skilful in moving his receivables into new corporate entities with the result that execution on the judgment has proved very difficult for the respondent.
[2] One such corporate entity is WMH Inc., a corporation which has been found by Sachs J. to be, in effect, the alter ego of the appellant. Sachs J. was asked only to allow a garnishment against WMH Inc. to be effective to the extent of 20% of any payments on the basis that the garnishee was paying the appellant’s wages to the corporation WMH Inc. The respondent now wants this court to make an order allowing the sheriff to seize all assets of WMH Inc. without limitation.
[3] The final fact in the mix is that the appellant has filed a Notice of Intent to Make a Proposal under the BIA, and has followed with the Proposal. Under s. 69 of the BIA, all enforcement proceedings by creditors are now stayed. The appellant now argues that if the corporation is his alter ego, then the stay against the appellant applies to enforcement against the corporation as well. He says that the respondent judgment creditor should seek its remedy lifting the BIA stay on terms under s. 69(4) of the BIA in the Commercial List (or the Superior Court), not in this court.
[4] This court’s jurisdiction is said to be found first in Rule 63.01(5) because the stay pending appeal was lifted by this court, and in Rule 60.17(c) which provides:
60.17 Where a question arises in relation to the measures to be taken by a sheriff in carrying out an order, writ of execution or notice of garnishment, the sheriff or any interested person may make a motion for directions,
(c) where an appeal has been taken from the original order, to a judge of the court to which the appeal has been taken, at any place.
[5] With respect to Rule 60.17(c), I am not satisfied that the “order” referred to in that subsection is the original judgment under appeal, rather than a separate order made to the sheriff and which has been appealed. In any event, even if this court has jurisdiction to order the relief requested, in my view it ought not to do so in the current circumstances of this case.
[6] The judgment below is under appeal. There is now no stay of execution. However, matters arising in the enforcement of judgments are to be heard in the Superior Court and matters arising under the BIA in the Bankruptcy Court. In my view the relief requested here falls under both of those jurisdictions and is properly dealt with under the provisions of the BIA and the applicable Rules of Civil Procedure by the Superior Court, as was done by Sachs J.
[7] The Proposal as filed is problematic: it makes no mention of the appeal, nor does it refer to the obligation to pay legal fees in connection with the appeal as an expense of the appellant. Counsel assures the court that the trustee is aware of the appeal, and that he is aware of these proceedings and does not wish to attend. It may be otherwise if the matter is brought on in Bankruptcy Court.
[8] In order to preserve the status quo, while this matter is properly pursued in the appropriate forum, para. 2 of the interim order of Laskin J.A. shall remain in full force and effect until a further order is made by the Superior Court (or Commercial List) the matter to be brought on there by either party or by WMH Inc. on proper material.
[9] Costs of this motion fixed at $2,000 to be payable as directed by the Superior Court.