Background
Four brothers — Mark, Corey, Sheldon, and Jay Libfeld — each hold a 25% beneficial interest in The Conservatory Group, a sprawling Ontario real estate enterprise comprising more than 520 entities engaged in residential land development and home building. After the brothers’ relationship deteriorated irreparably, a six-week trial before McEwen J. resulted in a 2021 judgment ordering the wind-up and sale of Conservatory under the supervision of a court-appointed Sales Officer, Ernst & Young Inc., pursuant to s. 207 of the Business Corporations Act (Ontario) (OBCA) and s. 35 of the Partnerships Act. Among Conservatory’s most valuable assets were the Raki and Richview residential development projects, in which Conservatory held a 40% interest and DG Group (Durban Properties Inc. and Sentinel Land Corporation) held the remaining 60%.
Because Conservatory’s interest in those projects could only be marketed as a minority stake — an arrangement unlikely to maximize value — the Sales Officer and DG Group spent several years negotiating a partition arrangement to convert the joint-venture interests into separately marketable lots. By October 2025 they reached agreement (the “Raki First Agreements”), and DG Group moved for court approval. On November 24, 2025, Conway J. issued the “Raki Order,” authorizing and directing the Sales Officer to enter into those agreements on behalf of Conservatory’s project-holding corporations and to take all steps necessary to complete the separation.
Mark and Corey Libfeld, who had objected to the arrangement on the ground that it imposed new commercial agreements on their holding companies beyond the Sales Officer’s mandate, appealed the Raki Order directly to the Court of Appeal for Ontario. DG Group, the Sales Officer, and the other two brothers moved to quash those appeals, arguing the Raki Order was interlocutory and therefore appealable only to the Divisional Court with leave.
The Court’s Holding
Writing for a unanimous three-judge panel, Thorburn J.A. (Favreau and Wilson JJ.A. concurring) granted the motions to quash. Applying the long-standing test from Hendrickson v. Kallio — whether the order determines the real matter in dispute or merely something collateral while the merits remain to be decided — the court held that the Raki Order is interlocutory. It does not resolve the substantive rights of the Libfeld brothers to the proceeds of the sale; it is simply a mechanism to include the Raki and Richview project lands in the court-ordered Sale Process in a form that can actually be marketed. The court drew directly on its 2023 ruling that the Sale Process Order itself was “clearly interlocutory,” reasoning that the Raki Order is similarly a step in implementing, not concluding, the wind-up judgment.
The court also rejected the argument that the order’s effect on DG Group — a non-party to the original application — rendered it final. Distinguishing Smerchanski v. Lewis and P1 v. XYZ School, Thorburn J.A. noted that DG Group had participated throughout the proceedings, including before McEwen J. on the Sale Process Order, and held a direct contractual interest in the assets being wound up. The involvement of a third party does not automatically make an order final.
As an independent and alternative ground, the court held that the Raki Order was in any event made “under” the OBCA within the meaning of s. 255 of that Act — the provision that routes appeals from OBCA orders to the Divisional Court. Because the motion judge’s authority was rooted in the 2021 wind-up judgment (itself grounded in s. 207(2) of the OBCA), the power she exercised was “sufficiently close” to that legislative source to bring the appeal within the Divisional Court’s exclusive jurisdiction, whether or not the order was interlocutory.
Key Takeaways
- Post-judgment orders that implement or advance a court-supervised wind-up and sale process are interlocutory, not final, and must be appealed to the Divisional Court with leave — not directly to the Court of Appeal.
- The involvement of a non-party in an order does not automatically render that order final; courts will look at whether the non-party has been a participant in the broader proceeding and whether the order affects substantive rights rather than simply advancing a court-approved process.
- Under s. 255 of the OBCA, an order need only be “sufficiently close” to an OBCA legislative source to be treated as made under the Act, channeling any appeal — interlocutory or final — to the Divisional Court.
- A Sales Officer appointed to wind up a complex corporate group may, under broadly worded judgment and sale-process orders, negotiate and implement partition arrangements with third-party co-owners to convert illiquid minority interests into marketable lots, so long as those steps are integrally related to the sale process.
Why It Matters
This decision reinforces the principle that Ontario courts will treat the implementation machinery of a court-ordered wind-up as a continuing, supervised process rather than a series of discrete final determinations. Practitioners advising minority shareholders or partners in judicially managed dissolutions should expect that challenges to specific sale-process steps — even steps that alter existing contractual arrangements — will ordinarily be confined to the Divisional Court, subject to the leave filter, rather than proceeding as of right to the Court of Appeal.
The ruling also has practical significance for large multi-owner real estate ventures where a court-appointed officer must untangle overlapping ownership structures to achieve marketable title. The court’s endorsement of the Sales Officer’s authority to negotiate partition agreements with a 60% co-owner — over the objection of half of the minority interest — signals that Ontario courts will give substantial deference to Sales Officers pursuing value-maximizing strategies within broadly worded wind-up mandates.