Background
Bank of Montreal brought proceedings against Valantina Khello and sought to have a motion resolved in the Superior Court of Justice. The underlying dispute concerned the character of a debt — a question with significance in bankruptcy proceedings. On May 1, 2025, Justice Marvin Kurz of the Superior Court dismissed the Bank’s motion without resolving the substantive question of how the debt should be characterized.
The Bank appealed to the Court of Appeal for Ontario, raising arguments about the correctness of the motion judge’s decision. The respondent, Khello, did not appear on the appeal. The panel heard the matter and rendered its decision orally on June 16, 2026.
The Court’s Holding
The Court of Appeal quashed the appeal on jurisdictional grounds, holding that the order under appeal was not a final order. The court acknowledged that significant issues had been raised about the correctness of the motion judge’s decision, but noted that in dismissing the motion he had not resolved the substantive dispute between the parties regarding the character of the debt.
Because the motion judge’s order left the debt characterization question open and unresolved, the order was interlocutory rather than final. The Court of Appeal therefore lacked jurisdiction to hear the appeal, and it was quashed accordingly. The court noted that Bank of Montreal remains free to pursue the debt characterization issue before the Bankruptcy Court.
Key Takeaways
- The Court of Appeal for Ontario has jurisdiction to hear appeals from final orders; a dismissal of a motion that does not resolve the underlying substantive dispute is an interlocutory order, not a final one.
- Even where an appellate court identifies potentially meritorious arguments about the correctness of the decision below, it must quash an appeal if it lacks subject-matter jurisdiction.
- A party whose motion is dismissed without determination of the substantive issue retains the ability to raise that issue in the appropriate forum — here, the Bankruptcy Court.
Why It Matters
This brief decision is a practical reminder of the final/interlocutory order distinction that governs appellate jurisdiction in Ontario. Counsel must carefully assess whether an order finally disposes of a claim or issue before pursuing an appeal to the Court of Appeal; a motion dismissal that leaves the core dispute alive is ordinarily interlocutory, regardless of how important or contested the underlying issue may be.
For creditors litigating debt characterization in insolvency contexts, the case also signals that the Bankruptcy Court is the proper venue for such determinations when a superior court motion has been dismissed without a substantive ruling.