Spencer Jones

The applicant bank sought the appointment of a receiver over the respondent debtors and judgment against the individual guarantor following defaults on credit facilities totaling over $2 million.

The debtors failed to provide required reporting and did not cure the default after demands and notices under the Bankruptcy and Insolvency Act were issued.

The court found the bank was contractually entitled to appoint a receiver and enforce the guarantee.

The application was granted, a receiver was appointed, and judgment was entered against the guarantor for $1,988,777.37 plus full indemnity costs.

The applicant sought an order compelling the respondents to deliver books, records, and equipment to the court-appointed receiver, and a declaration that the respondents breached the Receivership Order.

The respondents argued that their pending application for leave to appeal the Receivership Order automatically stayed the proceedings.

The court held that while filing an appeal as of right triggers an automatic stay under section 195 of the Bankruptcy and Insolvency Act, filing an application for leave to appeal does not.

The court granted the requested orders, finding the respondents in clear breach of the Receivership Order.