Executive Summary: Key Legal and Evidentiary Issues

• Ms. Sun applied in chambers for a three-week adjournment of the creditors’ bankruptcy application, relying on oral submissions and describing her filed response and affidavit as a “placeholder” to oppose the application.

• The applicants relied on the summary procedure under the Bankruptcy and Insolvency Act and General Rules, emphasizing the notice requirements in Rules 70 and 74 and opposing any delay in the hearing of their bankruptcy application.

• The applicants’ materials stated that over $12 million is owing to Lanyard and over $33 million to Peterson, while the net realizable value of Lanyard’s security is estimated at $7 million and Peterson’s at zero.

• The court considered s. 43(10) and (11) of the BIA and applied the approach in Smith (Re), 2025 BCSC 1099, and Immeubles Zenda ltée/Zenda Realties Ltd. et A. Schuster Holdings Inc., confirming that the debtor bears the onus of showing “other sufficient reason” for a stay or adjournment.

• Ms. Sun’s affidavit set out detailed information about her financial circumstances and four real estate development projects (Shawn Oaks, the Oakridge Lands, the Foster Martin Development, and the Lord Street Development), as well as related receivership and foreclosure proceedings involving her and her companies.

• The court found that Ms. Sun and her counsel had ample opportunity to marshal evidence and that she had not met her onus under s. 43(11) BIA; the request for a three-week adjournment was denied, the applicants were granted leave to reset their bankruptcy application for a two-hour hearing, and the costs of the January 8, 2026 hearing were left to be dealt with as part of the bankruptcy application.

Factual background and parties

The matter arises in the Supreme Court of British Columbia, in bankruptcy and insolvency, in respect of the bankruptcy of Helen Chan Sun, also known as Xiao Zhi Sun. The applicants are Lanyard Investments Inc., the general partner of LFC Heather 21 Limited Partnership, and City Mortgage Investment Corporation (collectively referred to as “Lanyard”), together with Peterson Investment Group Inc. (referred to with Lanyard as the “applicants”). The respondent is Ms. Sun. The proceeding came before the Honourable Justice Jones in chambers on January 8, 2026, with oral reasons for judgment released on January 13, 2026. The applicants seek a bankruptcy order against Ms. Sun. Before that application could be heard, Ms. Sun, through counsel, sought an adjournment of the applicants’ bankruptcy application for three weeks.

Procedural history and substituted service

The applicants’ application for a bankruptcy order was filed on November 28, 2025. They were initially unsuccessful in personally serving Ms. Sun. Several efforts were made to effect personal service, and the applicants’ counsel requested that Ms. Sun’s counsel seek instructions from their client. On December 16, 2025, on the applicants’ motion, the court ordered substituted service of the bankruptcy application on counsel for Ms. Sun, and on Ms. Sun by email and by posting the documents to the front gate of the residence known to be her residence. In accordance with that order, the documents were emailed to Ms. Sun and her counsel on December 16, 2025, and posted at the residence. The applicants’ application record was filed on December 29, 2025, with an estimated hearing time of 10 minutes, for a hearing set on January 5, 2026. On January 2, 2026, the Friday before the scheduled Monday hearing, Ms. Sun filed an application response opposing the bankruptcy relief, estimating that the application would take one day. The application was not heard on January 5; instead, it came before Justice Jones late in the day on January 8, 2026.

No separate written materials were filed specifically on the adjournment application. The adjournment request was argued on counsels’ oral submissions, together with the applicants’ bankruptcy application record and Ms. Sun’s supplemental application record, which included her application response and her affidavit sworn December 31, 2025 and filed January 2, 2026.

Ms. Sun’s position on the requested adjournment

Ms. Sun’s counsel did not refer to any applicable rules or authorities in support of the adjournment request. The request was based on counsel’s submission that he had not had time to go through what he described as the complexities of Ms. Sun’s real estate development projects, creditors, and financial information, or to meet with her to prepare and file more fulsome materials. Counsel submitted that the materials Ms. Sun had filed were a “placeholder” intended to ensure she had some materials on the record to oppose the bankruptcy application. He further submitted that the applicants had security for their claim, that they were not at risk, and that there would be no prejudice to them from a short adjournment, compared to what he characterized as the extreme prejudice of a bankruptcy to Ms. Sun. As one specific concern, counsel pointed to one of Ms. Sun’s projects in White Rock, said to be in the final stage of completion, and submitted that a bankruptcy could require an amendment to the disclosure statement relating to a significant volume of over $133 million in pre-sale contracts.

Applicants’ position and statutory framework

The applicants submitted that the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (BIA), and the Bankruptcy and Insolvency General Rules, C.R.C., c. 368, provide for a bankruptcy application to be brought by summary proceedings to allow for a fair, quick and efficient administration of a debtor’s estate. They referred to Rule 70 of the Rules, which requires at least 10 days’ notice of the hearing of the bankruptcy application to the debtor, and Rule 74, which requires a debtor contesting the application to serve notice at least two days before the hearing date. The applicants also pointed to their evidence regarding the amounts owing and the value of their security. Their application materials state that over $12 million is owing to Lanyard and over $33 million to Peterson. The applicants estimate the net realizable value of the security held by Lanyard at $7 million and the net realizable value of the security held by Peterson at zero.

The court referred to s. 43 of the BIA, which governs applications for bankruptcy orders. Subsection 43(10) provides for a stay of proceedings where the debtor appears and denies the truth of the facts alleged in the application. Subsection 43(11) states that the court may, “for other sufficient reason,” make an order staying the proceedings under an application, either altogether or for a limited time, on such terms and conditions as the court thinks just.

Authorities on discretionary stays and onus on the debtor

The applicants referred to Smith (Re), 2025 BCSC 1099, a decision of Justice Fitzpatrick granting bankruptcy orders. In that case, Justice Fitzpatrick also addressed an alternative request by two individual debtors for a short stay of the bankruptcy application. She held that the onus lies on the debtor to establish the “other sufficient reason” required for a stay under s. 43(11). At paragraph 83 of Smith, Justice Fitzpatrick referred to the decision in Immeubles Zenda ltée/Zenda Realties Ltd. et A. Schuster Holdings Inc., 2020 QCCS 3450, which in turn cited Goulakos (Syndic de), 2016 QCCS 84. Zenda states that the court’s discretion to stay a bankruptcy application under ss. 43(7) and 43(11) BIA “should not be exercised lightly, but on the basis of sound judicial reasoning, credible evidence, according to common sense and in a manner which does not cause an injustice.”

In Smith, the debtors argued that they were wealthy, able to pay their debts, and wished to engage an insolvency professional. The bankruptcy application was served on March 17, 2025, and the hearing took place approximately six weeks later, on April 30 and May 7, 2025. The debtors said they retained counsel on April 3, 2025, and met with insolvency practitioners on April 7, April 9 and April 14, 2025. Additionally, about eight months before the bankruptcy application, on July 2, 2024, a creditor had obtained an order appointing a receiver over the assets of two of the debtors’ companies and lands of a third company, as well as judgments against several of their companies and the two individual debtors personally. Justice Fitzpatrick found that the debtors had ample opportunity to marshal appropriate evidence in support of their position, denied their request for a short adjournment, and granted the bankruptcy orders. She noted that by the time of her reasons, the applications had been outstanding for many months and that there did not appear to be anything to be gained by a short further delay, even assuming the debtors had wealth to satisfy their debts.

Timing, holidays, and Ms. Sun’s existing insolvency proceedings

In Ms. Sun’s case, substituted service of the bankruptcy application was effected on December 16, 2025, and the hearing ultimately took place on January 8, 2026, approximately three weeks later. The court acknowledged that the period between service and the hearing included three statutory holidays: Christmas, Boxing Day, and New Year’s Day. However, the court noted that Ms. Sun’s affidavit indicates that companies with which she is associated have been the subject of insolvency and foreclosure proceedings since at least early 2025. Justice Jones considered this relevant to counsel’s submission that there had been insufficient time to review the complexities of Ms. Sun’s real estate projects, creditors, and financial information.

Details of Ms. Sun’s assets and related proceedings

Ms. Sun’s application response and affidavit include details of her financial circumstances in her business as a real estate developer. She describes her present assets as investments in a number of real estate development projects in Vancouver and White Rock, and sets out some details of the financial status of those developments. She identifies herself as the Chief Executive Officer of Landmark Premiere Properties Ltd., which she describes as a management company pursuing development opportunities through various project-specific corporations. Her affidavit describes four development projects:

1. The Shawn Oaks Development
   Ms. Sun’s affidavit describes the Shawn Oaks Development as including a number of buildings with 72 strata-titled residential units near West 38th Avenue and Oak Street in Vancouver. The two Shawn Oaks companies have submitted a rezoning proposal for the property to the City of Vancouver. Landmark Premiere Properties and Ms. Sun are corporate and personal guarantors of mortgages against the land, the two creditors being Peterson, one of the present applicants, and TCC Mortgage Holdings Inc. A receivership order (the “Shawn Oaks Receivership Order”) was made on February 13, 2025, becoming effective on February 18, 2025, appointing a receiver over the assets of Landmark Shawn Oaks Development Ltd. and Shawn Oaks Holdings Ltd. Ms. Sun states that, to her knowledge, no offers to purchase the Shawn Oaks property have been accepted by the receiver. On March 13, 2025, by Order Nisi of Foreclosure, TCC obtained judgment against the two Shawn Oaks companies, Landmark, and Ms. Sun personally, as guarantors, jointly and severally, in the sum of $74,374,751.44. On April 14, 2025, by another Order Nisi of Foreclosure, Peterson obtained judgment against the same parties, jointly and severally, in the sum of $28,781,874.09.

2. The Oakridge Lands
   Ms. Sun’s affidavit also describes another development property referred to as the “Oakridge Lands.” In relation to that property, the present applicant Lanyard is the first secured creditor against the lands. On June 9, 2025, by Order Nisi of Foreclosure, Lanyard obtained judgment against Landmark, two Oakridge companies, and Ms. Sun personally, as guarantors, jointly and severally, for $15,282,950.34. A receiver-manager over the Oakridge Lands was appointed on June 20, 2025. On October 2, 2025, Associate Judge Robinson approved the sale of one parcel of land for $3,208,000. On that application, one of Mr. Hyndman’s colleagues from his firm appeared for Ms. Sun, the two Oakridge companies, and Landmark.

3. The Foster Martin Development
   Ms. Sun’s affidavit further refers to the Foster Martin Development, a three-building project in White Rock. The reasons note that this is one of the real estate development projects in which she has investments.

4. The Lord Street Development
   Finally, Ms. Sun’s affidavit describes the Lord Street Development, consisting of six residential lots located at West 65th Avenue and Lord Street in Vancouver.

Ms. Sun’s affidavit does not refer to any other assets beyond these four real estate development projects.

Assessment of the need for further materials

Justice Jones observed that Ms. Sun’s counsel did not explain how the “placeholder” materials filed in response to the bankruptcy application needed to be supplemented in order to provide a more fulsome response. The court found that Ms. Sun’s existing materials already provide considerable detail about her present assets and debts, the status of her development projects, and the related insolvency and foreclosure proceedings. The reasons note that Ms. Sun’s present counsel, Mr. Hyndman, appeared for Ms. Sun and Landmark Premiere Properties Ltd. on the Shawn Oaks Receivership application in early 2025, and that one of his colleagues appeared for Ms. Sun, the Oakridge companies, and Landmark on the Oakridge sale approval application. In light of this involvement and the detailed nature of Ms. Sun’s affidavit, the court concluded that Ms. Sun and her counsel had ample opportunity to marshal appropriate evidence in support of their position.

Court’s conclusion on the adjournment request and resulting orders

Justice Jones held that, similar to Smith (Re), Ms. Sun had not met her onus under s. 43(11) of the BIA to establish sufficient reason to temporarily stay the bankruptcy application. The court found that, given the prior receivership and foreclosure proceedings and the detailed materials already filed, there was no sufficient basis to grant the requested three-week adjournment. Ms. Sun’s request for an adjournment of the bankruptcy application for three weeks was therefore denied.

The court ordered that the applicants are granted leave to set the hearing of their application for a bankruptcy order in chambers with a time estimate of two hours, subject to any agreement of the parties on a different time estimate, or further order of the court. Justice Jones stated that he is not seized of the matter. As to costs, the court directed that the costs for the January 8, 2026 hearing will be considered part of the bankruptcy application itself.