Stuart Brotman

The Registrar and customers of a bankrupt motor vehicle leasing company appealed the dismissal of their motion to vary a vesting order and for leave to sue the trustee in bankruptcy.

The vesting order had transferred the bankrupt's lease portfolio to assignees free and clear of customer claims for security deposits.

The Court of Appeal dismissed the appeal, finding that the appellants' proprietary or economic rights were not directly affected by the order, as the contractual obligation to refund deposits remained with the bankrupt.

The court also held that a motion to vary under s. 187(5) of the BIA or Rule 37.14 cannot be used to substantively change an order or as a substitute for an appeal.

The appellants sought to examine a representative of the trustee in bankruptcy regarding its reports and an order permitting the assignment of thousands of leases without customer representation.

The motion judge adjourned the motion, directing the parties to exchange written questions and answers first.

The Court of Appeal dismissed the appeal, finding the motion judge correctly exercised his discretion to adjourn the motion and await the trustee's answers before adjudicating the merits, including whether an affidavit is required under s. 215 of the Bankruptcy and Insolvency Act.

The court-appointed interim receiver brought a motion to lift a stay pending appeal of an order approving the sale of the bankrupt companies' assets.

The appellants opposed the sale.

The Court of Appeal found that the appeal had questionable merit and that delaying the sale of the business as a going concern would cause manifest prejudice.

The motion was allowed, the stay was lifted, and the receiver was authorized to complete the sale.