Executive Summary: Key Legal and Evidentiary Issues

• Applicants sought an extension of time to serve notices of appeal from Distribution Orders made on May 15, 2025, after their counsel mistakenly believed service and filing deadlines differed.

• Counsel filed the notices of appeal within the 30-day deadline but did not serve them until eight days after filing, on June 24, 2025.

• An inordinate delay of over six months elapsed between learning of the service error and filing the extension application on January 9, 2026.

• Respondents raised credible arguments that the Applicants lacked standing to challenge the distribution of the Trustee-Fee Refund and that their appeal grounds contradicted earlier court orders.

• Granting the extension would cause undue prejudice to respondents entangled in litigation spanning over a decade, with the Trust Proceeds already distributed.

• The Court dismissed the application, finding it was not in the interests of justice to grant the extension, and ordered the Applicants to pay lump sum costs of $1,230 to each group of represented respondents.

The origins of a decade-long dispute

The case of Wills v. Garcha, 2026 BCCA 56, arises from a five-lot subdivision project in Surrey, British Columbia, which involved numerous investors and joint venture interests. The project gave rise to competing proprietary claims among several parties, spawning complex litigation that began in 2014. Daljit Singh Garcha and Jaswinder Kaur Garcha (the "Garcha Parties") commenced a civil action against multiple defendants, including the Applicants — Douglas William Wills, Balbir Kaur Dale, Ranjit Singh Sangha, and Svender Singh Sangha. A separate group of plaintiffs, the Grewal Parties, also brought a civil action against several of the same defendants, including the Applicants. Three defendants (not including the Applicants) were subject to bankruptcy proceedings, with Crowe MacKay & Company Ltd. acting as Trustee in Bankruptcy. The Trustee denied the bankruptcy claims advanced by the Garcha and Grewal Parties, prompting those parties to appeal the notices of disallowance in the trial court.

The trial and its aftermath

The two civil actions and the three bankruptcy disallowance appeals were heard together by Justice Sewell in a trial spanning over 100 days. In Trial Decision #1 (April 1, 2021), Sewell J. determined which parties held interests in the project properties and their percentage shares in the Sales Proceeds, which had been placed in trust after the properties were sold. In Trial Decision #2 (October 1, 2021), the court addressed an application by the Garcha Parties under s. 37 of the Bankruptcy and Insolvency Act to challenge the fees charged by the Trustee and its legal counsel. Justice Sewell ruled in the Garcha Parties' favour, finding that the amount of fees charged by the Trustee to the bankrupt estate, including legal fees of its then-counsel, were too high, and required some of these fees to be repaid. These decisions were upheld on the Main Appeal, after a five-day hearing, in a decision delivered on October 11, 2023, resulting in a court-ordered Trustee-Fee Refund of approximately $1.947 million, which was placed in an interest-bearing trust account held by a law firm. Following a five-day costs assessment hearing, Associate Judge Muir delivered her decision apportioning costs on December 23, 2024.

The Distribution Orders and the service error

With costs settled, the Trustee prepared a Twelfth Report proposing the distribution of Trust Proceeds — comprising both the Sales Proceeds and the Trustee-Fee Refund — and brought applications in the related proceedings to obtain the Distribution Orders. On May 15, 2025, Justice G.C. Weatherill granted the Distribution Orders, specifying the exact amounts payable to each party, including payment out of accrued interest from the two trust accounts. The Applicants themselves received approximately $1.131 million. On May 22, 2025, the Applicants' counsel, Mr. Beesley, received instructions to appeal the Distribution Orders. Counsel was away from the office from May 27 to June 16, 2025, and filed the notices of appeal on June 16, 2025, within the 30-day filing deadline under R. 6 of the Court of Appeal Rules. However, he mistakenly believed he had 10 days after filing to serve the notices, when in fact R. 6 requires the parties to be served within 30 days of the pronouncement of the order under appeal. The notices were not served until eight days after filing, on June 24, 2025, by email.

A prolonged pattern of delay

That same day, the Trustee's counsel wrote back to counsel for the Applicants advising that they were out of time, citing relevant case law including Clock Holdings Ltd. v. Braich and Liebreich v. Farmers of North America, and advising that he would oppose an application for an extension of time, as an appeal would negatively impact the estates in bankruptcy. On June 25, 2025, the Applicants' counsel replied stating that extension materials would follow "shortly" and proposed a hearing date of July 7, 2025. On June 26, 2025, counsel for the Garcha Parties wrote indicating they would not consent to an extension of time and stated they could appear on July 7 if they received the application materials by 5 pm on June 27, 2025. However, silence from the Applicants followed for the rest of June, July, and August 2025. On September 9, 2025, Mr. Beesley wrote to the respondents indicating the Applicants were "looking at resetting the application for an extension of time in October" and that he had retained outside counsel, Mr. Friesen, for that purpose. Respondents provided their availability for October hearing dates, yet another six weeks of silence from the Applicants followed. On October 27, 2025, the Trustee's counsel wrote reminding the Applicants of the earlier correspondence and the fact it had been four months without application materials, and asked for confirmation that the appeal would not be proceeding. On November 3, 2025, the Trustee sent a follow-up advising that the lack of response was considered implicit confirmation that the appeal would not be proceeding against the estates in bankruptcy. The Applicants' counsel did not respond until almost a month later, and then not directly — on December 1, 2025, Mr. Friesen's firm proposed new hearing dates during the weeks of January 19 or 26, 2026. The extension application was not filed until January 9, 2026.

The legal test and the court's analysis

Justice Griffin, hearing the application in chambers on January 19, 2026, applied the Davies v. C.I.B.C. criteria for extending time to commence an appeal: whether there was a bona fide intention to appeal, when respondents were informed, whether respondents would be unduly prejudiced, whether the appeal has merit, and whether granting an extension serves the interests of justice. On the merits, the Applicants raised three alleged errors — (1) double counting of developer deposits; (2) misallocation of the Trustee-Fee Refund; and (3) double recovery of interest payable to the Garcha Parties — but presented their written argument only at the commencement of the hearing, without advance notice to the respondents. Critically, the Applicants had not obtained a transcription of the oral reasons given by G.C. Weatherill J. in making the Distribution Orders, making it, in the court's words, "next to impossible to assess the merits of the proposed appeal." The respondents, meanwhile, raised credible arguments casting serious doubt on the merits, suggesting that some of the issues were simply not capable arguments because they were directly contrary to terms of earlier orders made by Sewell J. and other court orders. As an example, the respondents suggested that the Applicants had no standing to challenge the distribution of the Trustee-Fee Refund and interest earned on those monies when held in trust, as that refund was directed by Sewell J. solely to the Garcha Parties and certain other 2007 Joint Venture parties, not to the Applicants.

Undue prejudice and the interests of justice

Regarding prejudice, the court found that granting the extension would cause undue prejudice to the respondents beyond just the ordinary prejudice of having to defend an appeal, noting the additional delay in the overall proceedings that would be caused by another appeal at this late juncture, including attendant delay in wrapping up the bankrupts' estates. In this case, the court observed, more than most, time is money, and delay simply adds to the costs burden. On bona fide intention, the court agreed with the respondents that the Applicants' inordinate delay in bringing the extension application demonstrated a lack of continuing intention to advance the appeal. The Applicants had taken no steps to advance the appeal in the meantime, including obtaining the judge's reasons and preparing a draft appeal record and factum — materials that were by then months past due.

The ruling and outcome

Justice Griffin dismissed the application for an extension of time to serve the notices of appeal, concluding it was not in the interests of justice to grant the extension. The court emphasized the broader harm to the judicial system if the rules are not enforced in most circumstances, noting that the rules exist to create procedural fairness and certainty for all parties. The Applicants had simply let the matter "drift along" for too long, to borrow a phrase the court drew from Hansen (Trustee of) v. Hansen. The respondents — the Garcha Parties, the Trustee, and the Malli/Chahal group — were the successful parties on this application. The Applicants were ordered to pay lump sum costs of $1,230 to each group of represented respondents. No exact amount of the underlying disputed distributions was determined, as the Applicants had not provided any estimate of the amount by which their distributions would be increased should they prevail on appeal, although they provided some figures as to the scale of some of the issues globally.