Background
2615333 Ontario Inc., a mortgagee of properties in Ajax known as the Harwood Properties, obtained the appointment of TDB Restructuring Limited as receiver in 2021. The properties were subject to development arrangements with the Town of Ajax that constrained any sale. After an approved sales process failed to produce a completed transaction, the receiver agreed to sell the properties to the Town.
The Superior Court approved that sale after applying the principles governing court approval of receivership transactions. It found that the receiver had robustly marketed the properties, reasonably declined to pursue conditional or unreliable alternatives, and had not acted improvidently despite an appraisal suggesting a higher value. The mortgagee sought to appeal, arguing principally that the sale price did not reflect fair market value, that the Town would not face the same development burdens as an arm’s-length purchaser, and that the Town had used confidential bid information.
The Court’s Holding
The Court of Appeal held that the mortgagee had no appeal as of right under s. 193(c) of the Bankruptcy and Insolvency Act. Although that provision applies where the property involved exceeds $10,000 in value, the appellant also had to establish a loss on the evidentiary record. The conditional proposal, the non-binding commitment from a bidder that had previously defaulted, and the appraisal established only a speculative possibility of a better price—not a clear loss exceeding $10,000.
The court also denied leave under s. 193(e). The proposed appeal raised fact-specific rather than generally important insolvency issues, lacked prima facie merit, and would unduly delay the receivership. Challenges to the development restrictions amounted to an impermissible collateral attack on earlier, unappealed orders, while the motion judge’s findings about the receiver’s business judgment and the absence of improper disclosure were entitled to deference. No costs were awarded.
Key Takeaways
- An appeal as of right under BIA s. 193(c) requires evidence of an actual loss exceeding $10,000, not merely an appraisal or speculation that a better price might have been obtained.
- A party cannot use an appeal from a sale-approval order to attack restrictions imposed by earlier receivership orders that it did not appeal.
- Leave under BIA s. 193(e) may be refused where the issues are fact-specific, the proposed appeal lacks prima facie merit, and delay would prejudice the insolvency process and unsecured creditors.
Why It Matters
The decision reinforces Ontario’s narrow interpretation of the statutory rights of appeal in insolvency proceedings. Courts assessing loss under s. 193(c) will examine the substance and reliability of competing offers, rather than simply comparing stated prices or appraised values.
It also confirms the substantial deference given to a supervising judge’s assessment of a receiver’s marketing efforts and business judgment, especially after unsuccessful sales efforts and where proposed alternatives are conditional, unreliable, or inconsistent with existing court orders.