DATE: 20060616

DOCKET: C44626 & C44627

COURT OF APPEAL FOR ONTARIO

IN THE MATTER OF THE BANKRUPTCY OF HOJ NATIONAL LEASING CORP. OF THE CITY OF TORONTO IN THE PROVINCE OF ONTARIO

RE:

THE REGISTRAR, ONTARIO MOTOR VEHICLE DEALERS ACT AND MOTOR VEHICLE DEALERS COMPENSATION FUND AND JOHN DOE AND ALL OTHER CUSTOMERS OF THE BANKRUPTS (Appellants) – and – A. FARBER & PARTNERS INC. (Respondent)

BEFORE:

BORINS, MACFARLAND and ROULEAU JJ.A.

COUNSEL:

Larry A. Banack and Nancy Shapiro

for the appellants

Stuart Brotman

for the respondent, A. Farber & Partners Inc.

Deobrah E. Palter

for the respondent, CFI Trust

HEARD & RELEASED ORALLY:

June 14, 2006

On appeal from the order of Justice Sidney N. Lederman of the Superior Court of Justice dated December 9, 2005.

E N D O R S E M E N T

[1] This is an appeal from an order of Lederman J. The appellants seek to examine a representative of A. Farber & Partners Inc., Trustee in Bankruptcy of the Estates of HOJ National Leasing Corp. and HOJ National Leasing Inc. (the “trustee”) on its reports to the court and regarding an order obtained by the trustee permitting it to assign thousands of leases between HOJ National Leasing Corp. and HOJ National Leasing Inc. and their customers, without representation from any of the customers whose rights were affected.

[2] Lederman J.’s order directed the parties to exchange written questions and answers, and, if the responses were considered unsatisfactory, to return to court.

[3] In our view the motion judge correctly exercised his discretion in adjourning the motion to permit the submission of questions in writing to the trustee and awaiting the receipt of the trustee’s answers. Consequently, he quite properly did not adjudicate the merits of the motion, including whether on a motion pursuant to s. 215 of the Bankruptcy and Insolvency Act it is sufficient for a trustee to respond by filing a report or whether an affidavit is required.

[4] On the return of the motion the appellant will have the opportunity to renew his argument, if so advised, on the basis of the trustee’s answers. At that time, of course, the motion judge will have the opportunity to consider the merits, including the s. 215 issue, which it was unnecessary for Lederman J. to address. If the appellant is then dissatisfied with the result, this court will have a proper record on which to consider the merits of the motion.

[5] Consequently, we would dismiss the appeal with costs. In our view, this appeal was completely unnecessary. We would award costs to the respondent A. Farber & Partners Inc. in the amount of $6,330.00 plus GST. Although this appeal relates to two proceedings, only one order is required.

“S. Borins J.A.”

“J. MacFarland J.A.”

“Paul Rouleau J.A.”