Shimon Sherrington

The Debtors (corporate and individual) sought leave to appeal two orders made in a receivership proceeding: an Approval and Vesting Order (AVO) for the sale of two residential properties and a Sale Procedure Order (SPO) for vacant development lands.

The Court of Appeal considered whether leave to appeal was required under s. 193 of the Bankruptcy and Insolvency Act and, if so, whether it should be granted.

The court concluded that leave was required under s. 193(e) as the orders did not fall under categories allowing appeal as of right (ss. 193(a)-(d)), primarily because they concerned present rights and methods of asset realization rather than affecting future rights or the value of property in a way that would trigger an automatic right of appeal.

The court further determined that leave should not be granted, finding the proposed appeal was not prima facie meritorious, as the lower court's discretionary decisions were entitled to deference, and the appeal did not raise issues of general importance.

Granting leave would also unduly hinder the insolvency proceeding.

The Plaintiffs moved for approval of Pierringer settlement agreements with Third Party Defendants.

The Citibank Defendants consented to the approval but cross-moved for conditions ensuring continued discovery rights, including the right to examine Michael Yurkovich as a party.

The court approved the Pierringer agreements, imposing the condition that Third Party Defendants retain their obligations as if they remained parties, specifically granting the Citibank Defendants discovery and cross-examination rights due to the non-arm's-length relationship between the Plaintiffs and Third Party Defendants.

The applicants (vendors) sought the release of $40 million from an $80 million escrow account, arguing that the respondents (purchasers) failed to provide timely and sufficient notice of an indemnity claim related to an undisclosed $213 million guarantee.

The respondents contended that proper notice was given, the deadline was tolled by agreement, and relief from forfeiture should apply.

The court dismissed the application, finding that notice was timely given to the vendors, the Tolling Agreement suspended any relevant deadlines, and the notice content was sufficient.

The court also stated that it would have granted relief from forfeiture due to the applicants' conduct and the disproportionate impact.

The appellants appealed a motion judge's order granting leave to amend a statement of claim.

The respondents moved to quash the appeal, arguing the order was interlocutory and thus the Court of Appeal lacked jurisdiction.

The court found the order to be interlocutory, confirming that appeals of such orders lie with the Divisional Court with leave, not the Court of Appeal.

The motion to quash was granted.