Executive Summary: Key Legal and Evidentiary Issues

• The court considered whether appeal procedures under the Bankruptcy and Insolvency Act (BIA) or the Courts of Justice Act (CJA) governed a proposed appeal from an Approval and Vesting Order (AVO) and Ancillary Relief Order (ARO).
   
• Leave to appeal was required under section 193(e) of the BIA because none of the as-of-right grounds in sections 193(a) through (d) applied.
   
• Debtors sought an extension of time to file a late notice of appeal, along with an interlocutory and interim stay of the sale transaction closing.
   
• Receiver argued the motions represented a further attempt to delay a court-ordered sale process following a series of earlier challenges.
   
• Deference owed to a motion judge's discretionary refusal to adjourn a receivership motion was central to the leave analysis.
   
• Prejudice to the purchaser and other stakeholders from a stayed or terminated sale transaction weighed against the relief sought.
   

Facts of the case

Royal Bank of Canada (RBC) applied for the appointment of a receiver over the property of 1512632 Ontario Inc. o/a Cheema & Sons Transport and 2856586 Ontario Inc. (the Debtors) following loan repayment and other defaults. Grant Thornton Limited was appointed Receiver by order dated June 12, 2025. RBC held registered charges securing debt of $4,320,000, and Satish Chopra, the second mortgagee, held a charge of $1,100,000. The Appointment Order authorized the Receiver to market and sell the Debtors' real properties at 8412 and 8424 Goreway Drive, Brampton, Ontario, and to seek an approval and vesting order. On March 24, 2026, an earlier motion by the Debtors to vacate the receivership, discharge the Receiver, and approve a refinancing transaction was dismissed; the motion judge found the proposed refinancing plan was not fair and equitable to all creditors. The Debtors sought leave to appeal that endorsement under the CJA but never perfected the appeal. After a lengthy marketing process, the Receiver's motion for the AVO and ARO was originally scheduled for July 7, 2026, then rescheduled to July 14, 2026 to accommodate Debtors' counsel, who subsequently advised they were again unavailable without confirming alternate dates with the court. No responding materials were filed. New counsel appeared at the July 14 hearing only as agent to seek an adjournment; the motion judge declined and granted the AVO and ARO on an unopposed basis, supported by RBC and the Purchaser (Gateway Landscaping Group (2005) Inc. and 8412-8424 Goreway Drive Holdings Inc.), with the second mortgagee also not opposing. On July 30, 2026, new counsel served a notice of appeal and a motion record seeking a stay, prompting the motions before Osborne J.A.

Policy and legislative provisions at issue

The Receiver was appointed under s. 243(1) of the BIA and s. 101 of the CJA. The central issue was whether the BIA's appeal regime under s. 193 displaced the CJA's general appeal route under s. 19(1)(b), which the Debtors had originally relied on for the March 24, 2026 endorsement. Section 193(a)–(d) sets out circumstances in which an appeal lies as of right; otherwise, leave under s. 193(e) is required. Section 195 provides an automatic stay on appeal, which the court noted informs a narrow interpretation of the as-of-right grounds. The AVO had inadvertently included a provisional execution clause referencing s. 195, which the Receiver asked to have removed and did not rely on. Also engaged were Rule 3.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (governing extensions of time), and Rule 63.02 (governing stays pending appeal), the latter incorporating the test from RJR MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311.

Reasoning and analysis

Osborne J.A. held that the doctrine of paramountcy prevented the Debtors from relying on CJA appeal provisions in conflict with the BIA's timing and leave requirements, citing Business Development Bank of Canada v. Astoria Organic Matters Ltd., 2019 ONCA 269. Applying s. 193, none of subsections (a) through (d) were found to apply: no future rights were engaged under 2403177 Ontario Inc. v. Bending Lake Iron Group Limited, 2016 ONCA 225; the order was fact-specific and unlikely to affect similar cases under s. 193(b); it was procedural in nature and did not engage the value of the Debtors' property or result in a demonstrated loss exceeding $10,000 under s. 193(c), per Bending Lake and Continental Forwarding Limited v. Canadian Credit Men's Association Limited, [1965] M.J. No. 49; and s. 193(d) had no application. Leave was therefore required. Applying the three-part test from KingSett Mortgage Corporation v. 30 Roe Investments Corp., 2022 ONCA 479, the court found the proposed appeal raised no issue of general importance, was not prima facie meritorious, and turned on a discretionary adjournment refusal entitled to significant deference under AFC Mortgage Administration Inc. v. Sunrise Acquisitions (Elmvale) Inc., 2024 ONCA 764. The court further held that, even if leave had been granted, an extension of time would have failed for lack of an adequate explanation for the delay and given prejudice to the responding parties, and a stay would have failed under the RJR MacDonald test given the absence of a serious issue to be tried and an unfavourable balance of convenience.

Ruling and overall outcome

The Debtors' motion for an extension of time and a stay of the sale transaction was dismissed, while the Receiver's motion was granted: the court declared that the BIA governs the appeal procedures, that leave to appeal was required and had not been obtained, and leave was denied. Because leave was denied, the Receiver's alternative request for security for costs of $50,000 was not addressed and the balance of the relief sought was found to be moot. The decision did not result in any monetary award or damages; it resolved procedural and jurisdictional questions concerning the appeal route from the AVO and ARO in the underlying receivership proceeding.