



COURT OF APPEAL FOR ONTARIO

CITATION: Business Development Bank of Canada v. Astoria
    Organic Matters Ltd., 2019 ONCA 269

DATE: 20190408

DOCKET: M50086 (C65512)

Feldman, Paciocco and Zarnett JJ.A.

BETWEEN

Business Development Bank of Canada

Applicant

and

Astoria Organic Matters Ltd. and Astoria Organic
    Matters Canada LP

Respondents

Melvyn L. Solmon, Frank Bennett and Rajiv Joshi, for the
    moving party SusGlobal Energy Belleville Ltd.

Steven Graff and Miranda Spence, for the responding
    party BDO Canada Ltd.

Heard: February 15, 2019

On motion to set aside the orders of Justice David Watt
    of the Court of Appeal for Ontario, dated December 10, 2018.

Zarnett J.A.:

Introduction

[1]

A receiver is appointed under both Canadas
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c. B-3 (
BIA
), and Ontarios
Courts
    of Justice Act
, R.S.O. 1990, c. C.43 (
CJA
). The receivership
    order contains a leave to sue provision under which the receiver cannot be
    sued without consent or leave of the court. What appeal route is available to a
    party who has been denied permission to sue? Is the appeal governed by the
BIA
,
    which provides for appeals as of right only in some cases, requires leave to
    appeal in other cases, and sets a short time limit for an appeal or a request
    for leave to appeal? Or is the appeal governed by the
CJA
, under which
    final orders may be appealed as of right to this court within a longer time
    limit than that in the
BIA
?

[2]

The moving party SusGlobal Energy Belleville
    Ltd. (SusGlobal) wishes to appeal orders of the Superior Court that:

a)

denied SusGlobal leave to sue the responding party BDO Canada Ltd. (BDO)
    in its capacity as court-appointed receiver of Astoria
Organic Matters
    Ltd. and Astoria Organic Matters Canada LP
; and,

b)

denied SusGlobals request to re-open its original application for leave
    so that it could file fresh evidence.

[3]

On a motion before a single judge of this court
    (the chambers judge), SusGlobals attempt to appeal was effectively
    terminated. The basis of the chambers judges decision was that the
BIA
,
    not the
CJA
, governed SusGlobals appeal; the provisions of the
BIA
providing for appeals as of right were not applicable to the appeal; and no grounds
    for granting leave to appeal existed.

[4]

On this motion, SusGlobal challenges the
    decision of the chambers judge, raising only the issue of the correctness of
    the conclusion that the applicable appeal route is under the
BIA
, not
    the
CJA
. It argues that solely the
CJA
is applicable to its
    appeal.

[5]

I would dismiss SusGlobals motion. The proper appeal route is
    the
BIA
when the order sought to be appealed was made in reliance on
    jurisdiction under the
BIA
. That is the case here. The Superior Court
    dismissed SusGlobals request to sue the receiverthe dismissal SusGlobal
    wishes to appealin reliance on the leave to sue provision in the receivership
    order. The courts authority to include that provision in the receivership
    order flowed by necessary implication from the statutory power to appoint a
    receiver under s. 243(1) of the
BIA
. I recognize that the
CJA
also provided such authority as part of the statutory power in s. 101 to
    appoint a receiver. But since authority for the leave to sue provision is found
    both in the
BIA
and the
CJA
, and since the receiver was appointed
    under both statutes, the appeal is governed by the
BIA
as a matter of
    paramountcy.

Background

[6]

Business Development Bank of Canada was a
    secured creditor of Astoria Organic Matters Ltd. and Astoria Organic Matters
    Canada LP (Astoria). Upon Astorias insolvency, the Bank applied for an order
    under s. 243(1) of the
BIA
and s. 101 of the
CJA
appointing BDO
    as receiver of Astoria. On April 13, 2017, Hainey J. granted that request.
    The order appointing BDO as receiver (the receivership order) provided in
    relevant part as follows:

2. THIS COURT ORDERS that pursuant to section
    243(1) of the
BIA
and section 101 of the
CJA
, BDO Canada Limited is hereby appointed Receiver, without security,
    of all of the assets, undertakings and properties of the Debtors acquired for,
    or used in relation to a business carried on by the Debtors, including all
    proceeds thereof (the Property)

3. THIS COURT ORDERS that the Receiver is
    hereby empowered

(l) to sell, convey,
    transfer, lease or assign the Property or any part or parts thereof out of the
    ordinary course of business

8. THIS COURT ORDERS that no proceeding or enforcement process
    in any court or tribunal (each, a Proceeding), shall be commenced or
    continued against the Receiver except with the written consent of the Receiver
    or with leave of this Court.

[7]

Paragraph 8, which is at the heart of this
    appeal, is identical to the paragraph of the same number included in the
    Commercial List of the Superior Court of Justices Model Receivership Order.

[8]

BDO, as court-appointed receiver, sold assets to
    SusGlobal under an Asset Purchase Agreement dated July 27, 2017. Shortly after
    closing SusGlobal complained about the amount of raw organic waste accumulated inside
    one of the facilities it had purchased, and the expenses of about $750,000 it
    had to incur as a consequence. SusGlobal claimed BDO had breached obligations owed
    to it and was responsible to compensate SusGlobal for its expenses. BDO denied
    responsibility on multiple bases, including the As is Where is clause in the
    Asset Purchase Agreement.

[9]

SusGlobal brought an application for permission
    to sue BDO under the leave to sue provision in para. 8 of the receivership
    order. On May 17, 2018, McEwen J. dismissed the application, finding that SusGlobals
    allegations were not supported by evidence disclosing a
prima facie
case. On November 8, 2018, McEwen J. refused SusGlobals request to reopen the application
    to allow SusGlobal to file fresh evidence.

[10]

SusGlobal filed appeals from both decisions. Its
    notices of appeal were timely if the
CJA
, under which there is a 30-day
    time limit for commencing an appeal, governed the appeal route. They were late
    if the
BIA
, which imposes a 10-day time limit, governed. The notices of
    appeal alleged various errors in McEwen J.s decisions. They also asserted that
    SusGlobal could appeal the decisions as of right to this court under s. 6(1)(b)
    of the
CJA
, because they were final orders of a judge of the Superior
    Court. In the alternative, if the
BIA
governed the appeal route, SusGlobal
    asked for an extension of time to comply with the time limits in the
BIA
and to appeal, or be granted leave to appeal, under it.

[11]

The narrow issue before us does not require a
    review of whether the grounds of appeal SusGlobal wants to raise have merit.
    All that is in issue on this review motion is the proper appeal route.

The Decisions of the Chambers Judge

[12]

SusGlobal moved before the chambers judge for
    orders:

a)

that its notice of appeal had been properly served and filed under
    s. 6 of the
CJA
; or,

b)

in the alternative, granting it an extension of time of 19 days in
    order to serve an appeal under s. 193(c) of the
BIA
; or,

c)

in the further alternative, granting it an extension of time of 19
    days to seek leave to appeal and granting leave to appeal pursuant to s. 193(e)
    of the
BIA
.
[1]

[13]

In a separate motion, SusGlobal moved before the
    chambers judge for orders:

a)

declaring that the appeal from the application judges decision
    denying SusGlobal leave to introduce fresh evidence is governed by s. 193(c) of
    the
BIA
, or in the alternative s. 6 of the
CJA
, such that
    leave to appeal is not required; or

b)

in the alternative, granting leave to appeal pursuant to s. 193(e)
    of the
BIA
.


[14]

The chambers judge dismissed the motions. He
    held that the
BIA
was the governing authority for the appeal, not the
CJA
;
    the root authority under which BDO was appointed was s. 243(1) of the
BIA
;
    appeals from decisions or orders made in proceedings instituted under the
BIA
are governed by the
BIA
, not the
CJA
; and the reference in the
    receivership order to the
CJA
did not have the effect of ousting the
BIA
as the source of appellate authority, nor could it as a matter of federal
    paramountcy.

[15]

The chambers judge went on to hold that SusGlobals
    appeals did not fit within any of the grounds in the
BIA
that permit
    appeals to this court as of right, including s. 193(c) of the
BIA
, cited
    by SusGlobal. Nor was the chambers judge prepared to exercise his discretion to
    grant leave to appeal under s. 193(e) of the
BIA
. Accordingly, he held
    that in a case where there was no right to appeal under the
BIA
and
    where granting leave to appeal under the
BIA
was not warranted, no
    extension of time to appeal or seek leave was warranted. He also held that
    there was no reviewable error in the application judges discretionary decision
    not to admit SusGlobals proposed fresh evidence.

[16]

SusGlobal does not challenge the conclusions of
    the chambers judge referred to in para. 15 above. Instead, it argues that those
    conclusions are derivative of his conclusion about which statute governs the
    appeal route. SusGlobal argues that the
CJA
governs the appeal route.
    It follows, according to SusGlobal, that it did not require leave to appeal or
    an extension of time, because its appeal was as of right under the
CJA
and
    was filed in time
.

The Positions of the Parties

[17]

SusGlobal does not contest that the receivership
    order was properly made and the receiver properly appointed, including under
    the
BIA
. It argues that power exists under both the
BIA
and the
CJA
to appoint a receiver, and both were explicitly referred to in,
    and formed the basis for, the receivership order. What is in issue, it argues,
    is the source of the authority for the leave to sue provision in the
    receivership order. SusGlobal argues that, since the Supreme Court of Canada
    held in
Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd.
,
    2015 SCC 53, [2015] 3 S.C.R. 419, at paras. 68 and 73, that provincial laws
    governing receivers were not rendered inoperative by s. 243 of the
BIA
,
    a receivership order may properly contain provisions authorized only by provincial
    law, in addition to provisions authorized by the
BIA
. As long as there
    is no operational conflict between the provincial and federal law and the
    provincial law does not frustrate the federal laws purpose, the provincial law
    will continue to apply alongside the federal law (here, s. 243):
Lemare
    Lake
, at paras. 15-17. The source of authority for a provision in the receivership
    order determines the proper appeal route from a disposition made under that
    provision.

[18]

SusGlobal argues that the source of the courts power
    to include the leave to sue provision in the receivership order is not found in
    the
BIA
. The
BIA
extends that kind of protection in s. 215,
    but the scope of the protection does not include the type of receiver appointed
    here. Rather it refers to, among other persons, interim receivers who may be
    appointed under other provisions of the
BIA
, such as ss. 46(1) and
    (2). The
BIA
extends other protections to receivers in s. 251, which
    are not applicable here. SusGlobals position is that the sole source of the
    authority for including the leave provision in the receivership order must
    therefore be provincial law flowing from s. 101 of the
CJA
and the related inherent jurisdiction of the court
.

[19]

It follows, SusGlobal argues, that it is appealing
    a decision in which the motion judge gave effect to a
provision
of the receivership order that was made under the
CJA
,
    even if other aspects of the receivership order were authorized by the
BIA
.
    The appeal from such a decision should be governed by the
CJA
, and
    should lie as of right to this court.

[20]

BDO argues that the proceedings giving rise to
    and arising out of the receivership order are
BIA
proceedings; the
    reference in the receivership order to the

CJA
was unnecessary.
    The
BIA
and not the
CJA
appeal provisions should apply to any
    appeal in such proceedings:
Canada (Superintendent of Bankruptcy) v. 407
    ETR Concession Company Limited
, 2012 ONCA 569,
295 O.A.C. 373,
at paras. 19-20. Parliament has constitutional authority over the
    procedure in all matters relating to bankruptcy:
Re Solloway Mills &
    Co. Ltd., In Liquidation, Ex Parte I.W.C. Solloway
(1934)
, [1935] O.R. 37 (C.A.), at
    pp. 43, 47
. It should not be necessary to parse each provision
    of the order to determine its source. The appeal provisions of the
BIA
and
CJA
are in operational conflict and therefore the
BIA
provisions prevail under the doctrine of paramountcy. If the appeal provisions
    do not conflict, it is because it is possible to comply with both schemes. The
    only way to comply with both schemes is to follow the more restrictive
    provisions in the
BIA
appeal route.

[21]

BDO further argues that if it is necessary to
    determine the source of the power to include the leave to sue provision in the
    receivership order, it is found in the
BIA
s. 243(1)(c) power to appoint
    a receiver to take any other action that the court considers advisable. Alternatively,
    it is found in s. 215, which includes receivers within the category of
    trustees, since s. 243(4) dictates that the only persons who can be appointed
    as receivers are trustees.

Relevant Statutory Provisions

BIA Provisions

[22]

The
BIA
provides fo
r the appointment of a receiver as a court officer:

243 (1)
Subject to subsection (1.1), on
    application by a secured creditor, a court may appoint a receiver to do any or
    all of the following if it considers it to be just or convenient to do so:

(a)
take possession of all or substantially
    all of the inventory, accounts receivable or other property of an insolvent
    person or bankrupt that was acquired for or used in relation to a business
    carried on by the insolvent person or bankrupt;

(b)
exercise any control that the court
    considers advisable over that property and over the insolvent person's or
    bankrupt's business; or

(c)
take any other action that the court
    considers advisable.

[23]

The
BIA
provides in s. 215
    that leave of the court is required for actions against certain persons:

215
Except by leave of the court, no
    action lies against the Superintendent, an official receiver, an interim
    receiver or a trustee with respect to any report made under, or any action
    taken pursuant to, this Act.

[24]

The
BIA
has a specific provision
    proscribing actions against a receiver in certain circumstances. Section 251
    provides:

251
No action lies against a
    receiver for loss or damage arising from the sending or providing by the
    receiver of a notice pursuant to section 245 or a statement or report pursuant
    to section 246, if done in good faith in compliance or intended compliance with
    those sections.

[25]

The
BIA
provides, as to
    appeals, as follows:

193
Unless otherwise expressly
    provided, an appeal lies to the Court of Appeal from any order or decision of a
    judge of the court in the following cases:



(c) if the property involved in the appeal exceeds in
    value ten thousand dollars;



(e) in any other case by leave of a judge of the
    Court of Appeal.

[26]

An appeal or motion for leave to appeal must be commenced within 10
    days of the making of the order or decision sought to be appealed: see rr.
    31(1), (2),

Bankruptcy and Insolvency General Rules
,
    C.R.C., c. 368
.

CJA Provisions

[27]

The
CJA
also provides for the appointment
    of a receiver. Section 101(1) provides that a judge of the Superior Court may,
    where it appears just or convenient to do so, appoint one by interlocutory
    order; s. 101(2) permits the court to include terms in such an order that are
    considered just:

101
(1)
In
the Superior Court of Justice, an
    interlocutory injunction or mandatory order may be granted or a receiver or
    receiver and manager may be appointed by an interlocutory order, where it
    appears to a judge of the court to be just or convenient to do so.

(2) An order
    under subsection (1) may include such terms as are considered just.

[28]

Section 6(1)(b) of the
CJA
provides for an appeal to this
    court from certain final orders of the Superior Court. Such an appeal must be
    commenced within 30 days of the making of the order appealed from: see r.
    61.04(1),
Rules of Civil Procedure
,
R.R.O. 1990, Reg. 194
.

Analysis

(1)

Determining the appeal route requires determining the basis for the
    leave to sue provision in the receivership order

[29]

The question of how one determines the applicable
    appeal route when a receiver has been appointed under s. 243(1) of the
BIA
and under provincial law was addressed in
Industrial Alliance Insurance and
    Financial Services Inc. v. Wedgemount Power Limited Partnership
, 2018 BCCA
    283, 61 C.B.R. (6th)

196. There, a receiver was appointed under both
    the
BIA
and British Columbias
Law and Equity Act
, R.S.B.C.
    1996, c. 253. The receiver applied for a declaration that a third party (BC
    Hydro) did not have a unilateral right to terminate an agreement with the
    debtor. The British Columbia Supreme Court refused to stay the receivers
    application in favour of arbitration, and ruled that the agreement could not be
    terminated. BC Hydro sought to appeal. In holding that the
BIA
appeal
    route governed, Groberman J.A. stated, at para. 21:

I acknowledge that, in a case such as the present one, where
    relief is sought under both common law equitable principles and the
Law and
    Equity Act
as well as under the
Bankruptcy and Insolvency Act
,
    there can be some question as to whether the appeal provisions of the
Bankruptcy
    and Insolvency Act
are engaged. In my view, the answer depends on
whether
    the order under appeal is one granted in reliance on jurisdiction under the
Bankruptcy
    and Insolvency Act
. Where it is, the appeal provisions of that statute
    are applicable. [Emphasis added.]

[30]

After finding that the orders sought to be
    appealed were made by a judge purporting to act pursuant to powers conferred
    by the
BIA
, Groberman J.A. held that the appeal provisions of the
BIA
applied: at para. 24.

[31]

I agree with that approach. Applying it here,
    the question is whether the leave to sue provision, under which McEwen J.
    exercised authority to dismiss SusGlobals application for leave to sue the
    receiver, was included in the receivership order pursuant to jurisdiction
    flowing from the
BIA
.

[32]

That question is one of statutory
    interpretation, informed by the historical understanding of the relationship between
    a leave to sue provision and a receivership, and by how the authority to
    include such provisions was understood before s. 243(1) was enacted, when
    appointments were made solely under provincial law. Before turning to the
    language of the
BIA
and the applicable interpretive principles, I
    discuss those background points.

(2)

The relationship between a leave to sue provision and a court-ordered receivership

[33]

Provisions of receivership orders that require consent
    or court permission for a court-appointed receiver to be sued have a long pedigree.
    Case law dating back almost a century considered it settled law that a
    receiver appointed by the Court cannot be sued without leave:
Trusts &
    Guarantee Co. v. Oakwood Clubs
(1931), 40 O.W.N. 581 (H.C.J.). Text
    writers consider the inclusion of such provisions to be common practice and
    customary, whether the receiver is appointed under the
BIA
or some
    other authority:

Bennett on Receiverships
, 3d ed. (Toronto:
    Thomson Reuters, 2011) at p. 283; L.W. Houlden, Geoffrey B. Morawetz &
    Janis P. Sarra,
Bankruptcy and Insolvency Analysis
, 4th ed.
(Toronto: Thomson Reuters,
    2009), The Bankruptcy and Insolvency Act at
L§26;
Halsburys
    Laws of Canada,
Receivers and Other Court Officers (2017 Reissue)
, at HRC-91,
    92. The inclusion of a leave to sue provision in Ontarios Model Receivership
    Order, British Columbias Model Receivership Order, the Alberta Template
    Receivership Order, and Nova Scotias Receivership Order, among others, illustrates
    their widespread, practically uniform use.

[34]

In
Ontario (Ontario Securities Commission)
    v. Gaudet
(1988), 65 O.R. (2d) 424 (H.C.J.), at p. 426, Reid J. described
    why a leave to sue provision is ubiquitous. It is essential to a
    court-appointed receivership:

A receiver is an officer of the court. The
    leave requirement is usual in an order appointing a receiver. For the proper
    and orderly conduct of a receivership it has traditionally been regarded as
    essential that the receiver be party to all proceedings against the assets
    under its care, and that the estate be protected against groundless or
    unjustified proceedings.
For these and other reasons the condition that
    leave be obtained is commonly included; indeed, I am not aware of any
    receivership order lacking one. In my view, it is essential.

[Emphasis
    added.]

[35]

In
Hamilton Wentworth Credit Union Ltd. v.
    Courtcliffe Parks Ltd.
(1995), 23 O.R. (3d) 781 (Gen. Div.), R.A. Blair J.
    (as he then was) provided further explanation about the essential relationship
    between leave to sue provisions and receiverships. He stated that a leave to
    sue provision is required to preserve the integrity of the courts role as
    supervisor over the preservation and realization of the assets within its
    administration. The court has an obligation, in ensuring the properly and
    orderly conduct of the receivership, to protect the estate from groundless or
    unjustified proceedings: at pp. 787-88. See also
Manitoba Securities
    Commission v. Crocus Investment Fund
, 2006 MBQB 192, at para. 14.

[36]

The essential and customary nature of a leave to
    sue provision in court-ordered receiverships informs the analysis of the source
    of the courts authority to include it.

(3)

The authority for leave to sue provisions
    under provincial law

[37]

Before Parliament amended the
BIA
in 2009
    to include s. 243(1), appointments of receivers under provincial legislation included
    leave to sue provisions. What was the source of the authority for those
    provisions?

[38]

In
Hamilton Wentworth
, which involved a
    receivership order made under the
CJA
, R.A. Blair J. situated the
    authority to include a leave to sue provision both in the courts inherent
    jurisdiction and in the statutory authority in the
CJA
to appoint the
    receiver. He stated, at p. 787:

An order requiring that leave be obtained before steps are
    taken that will affect the assets under that administration is therefore, in my
    view, within the jurisdiction of the court, by virtue of its inherent
    jurisdiction
and by virtue of its statutory jurisdiction respecting the
    appointment of receivers
where it appears to a judge of the court to be
    just [or] convenient to do so: the
Courts of Justice Act
, R.S.O. 1990,
    c. C.43, as amended. [Emphasis added.]

[39]

McCawley J. expressed a similar view in relation to the Manitoba
    equivalent of s. 101 of the
CJA
in
Crocus Investment
, at para. 14
:

In Canada, it is
    common practice in situations where the court has appointed a Receiver to
    prohibit legal proceedings against the debtor and the Receiver unless leave of
    the court is first obtained. In addition to the inherent jurisdiction of
    the court to control its process,
the authority to
    do so in this jurisdiction is found in s. 55 of
The Court
    of Queens Bench Act
, C.C.S.M. c. C280
. [Emphasis added.]

[40]

I take two main points from these authorities,
    given that s. 243(1) of the
BIA
was enacted against the backdrop of
    already existing provincial legislation authorizing the appointment of
    receivers.

[41]

First, there are similarities among the language
    of the
CJA
relied on in
Hamilton Wentworth
, the language of
The
    Court of Queens Bench Act
discussed in
Crocus Investment
, and
    the language of the
BIA
. They all speak of the court appointing a
    receiver when it considers it to be just or convenient to do so.

[42]

Second, although
Hamilton Wentworth Credit
    Union
and
Crocus Investment
relied on statutory authority
and
inherent
    jurisdiction, the Supreme Court of Canada has since clarified that, in the
    insolvency context, statutory authority is to be considered before inherent
    jurisdiction (see the discussion below at paras. 62-63). A finding of statutory
    authority makes any reference to inherent jurisdiction unnecessary.

(4)

In light of the principles of interpretation, s. 243(1) includes the
    authority for a leave to sue provision

[43]

Against that backdrop, I turn to s. 243(1) of
    the
BIA
. It provides that a court may appoint a receiverif it considers
    it to be just or convenient to do so. The receiver may be appointed to take
    any action the court considers advisable, including to take possession of property
    of the insolvent person, exercise control over that property and the insolvent
    persons business, etc.

[44]

The modern approach to statutory interpretation instructs a court to
    consider the words of a statute
in their entire
    context and in their grammatical and ordinary sense harmoniously with the
    scheme of the Act, the object of the Act, and the intention of Parliament:
Belwood
    Lake Cottagers Association Inc. v. Ontario (Environment and Climate Change)
,
    2019 ONCA 70, at para. 39, citing
Montréal (City) v. 2952-1366
    Québec Inc.
, 2005 SCC 62, [2005] 3 S.C.R. 141, at
    paras. 9-12, and
Rizzo & Rizzo Shoes Ltd. (Re)
, [1998] 1 S.C.R.
    27, at p. 41. While there is a presumption that the plain meaning of a
    statutes words reflect Parliaments intention, that plain meaning is only one
    aspect of the modern approach:
Belwood Lake
, at para. 42. The court
    must read statutory provisions in their entire context. This involves
    considering the history of the provision at issue, its place in the overall
    scheme of the Act, the object of the Act itself, and Parliament's intent both
    in enacting the Act as a whole, and in enacting the particular provision at
    issue:
Chieu v. Canada (Minister of Citizenship and Immigration)
,
    2002 SCC 3, [2002] 1 S.C.R. 84, at para. 34.

[45]

Since the modern approach to statutory interpretation is contextual,
    the fact that s. 243(1) of the
BIA
lacks express words to the effect that
    a court may include a leave to sue provision when appointing a receiver is the
    beginning, not the end of the analysis. A proper understanding of the sections
    words in their context and in light of the purpose of the legislation leads to
    the conclusion that Parliament must be taken, by necessary implication, to have
    clothed the court with the power to require leave to sue a receiver appointed
    under s. 243(1).

[46]

Parliament enacted s. 243(1) in the context of the legal landscape
    set out above. It is unlikely that Parliament would have authorized the court
    to appoint a receiver and at the same time excluded the power to do so with
    provisions considered to be essential to the courts role in a receivership. Further,
    Parliament legislated that a receiver should be appointed when just or convenient,
    using language also found, for example, in the
CJA
. The terms essential
    to a receivers appointment and to the courts role in a receivership inevitably
    inform a courts assessment of whether it may be just or convenient to appoint a
    receiver. It is therefore also unlikely that Parliament intended the court to
    appoint a receiver when just or convenient while depriving the court of the
    power to include an essential term in the appointment. A leave to sue provision
    is essential to a receivership; it is required to preserve the integrity of the
    courts role as supervisor of the receivership.

[47]

Reading s. 243(1) as providing the power to include
    a leave to sue provision accords with Parliaments purpose in enacting s.
    243(1), as set out by the Supreme Court in the course of its paramountcy
    analysis in
Lemare Lake Logging
.
Abella and
    Gascon JJ., writing for the majority, described the purpose of s. 243 as the
    establishment of
a regime allowing for the appointment
    of a national receiver, thereby eliminating the need to apply for the
    appointment of a receiver in multiple jurisdictions and increasing efficiency:
Lemare Lake
,
at paras. 45, 67
.

[48]

Since Parliaments purpose in enacting the
    provision was to eliminate the need for a patchwork of receivers appointed
    under provincial legislation, it follows that the courts power to appoint a
    national receiver under s. 243(1) of the
BIA
comprehends the power to
    include essential receivership terms. At the time that the two bills
    establishing and amending s. 243 received royal assent (Bill C-55 in 2005 and
    Bill C-12 in 2007), the courts power to include a leave to sue provision in a
    receivership order was firmly entrenched  leave to sue provisions were
    ubiquitous and were considered essential.
[2]
Parliament is presumed to have known the facts relevant to the conception and
    operation of its legislation: Ruth Sullivan,
Sullivan on the Construction
    of Statutes
, 6th ed. (Toronto: LexisNexis, 2014) at p. 205.

[49]

Further, accepting SusGlobals position would
    run counter to the purpose of s. 243(1). On SusGlobals argument, since a leave
    to sue provision can only be grounded in provincial authority, and since each
    provinces authority does not normally extend beyond that province, a national
    receiver appointed under the
BIA
would have to seek a leave to sue
    provision from a court in each province. This is exactly the patchwork scenario
    that s. 243(1) was enacted to avoid.

[50]

In my view, the power to include a leave to sue provision in a
    receivership order is thus necessarily implied by the statutory power to
    appoint a receiver in s. 243(1). In
ATCO Gas & Pipelines Ltd. v.
    Alberta (Energy & Utilities Board)
, 2006 SCC 4, [2006] 1 S.C.R. 140, at
    para. 51, Bastarache J. set out the rationale for the doctrine of jurisdiction
    by necessary implication:

The mandate of this Court is to determine and apply the intention
    of the legislature without crossing the line between judicial interpretation
    and legislative drafting. That being said, this rule allows for the
    application of the doctrine of jurisdiction by necessary implication;
the powers conferred by an enabling statute are construed to
    include not only those expressly granted but also, by implication, all powers
    which are practically necessary for the accomplishment of the object intended
    to be secured by the statutory regime created by the legislature
.
    [Emphasis added; citations omitted.]

See also
R. v. Cunningham
,
    2010 SCC 10, [2010] 1 S.C.R. 331, at paras. 19-20.

[51]

Though
ATCO Gas
dealt with the enabling
    statute of an administrative tribunal and
Cunningham
dealt with a court
    established by statute, the same reasons for applying the doctrine of necessary
    implication in those contexts exist here. By expressly empowering a court, in
    the
BIA
,
to appoint a receiver as a court officer authorized to
    take a broad range of actions when just or convenient to do so, Parliament must
    be taken to have clothed the court with the power to make orders that are essential
    to the functioning of its officer, the court-appointed national receiver, and to
    the courts role in supervising it.

[52]

This view is fortified when one looks at the
    scope of what a receiver appointed under s. 243(1) of the
BIA
may be
    empowered to do. The breadth of that is informed, in part, by what courts
    considered an interim receiver could be empowered to do under the former s.
    47(2) of the
BIA
. As Moir J. noted in
Railside Developments Ltd. (Re)
,
    2010 NSSC 13, 62 C.B.R. (5th) 193, at para. 66, Parliament used, in s. 243(1),
    the general words of the former s. 47(2) that had applied to interim receivers.
    Prior to its amendment, s. 47(2) read as follows:

(2) The court may direct an interim receiver
    appointed under subsection (1) to do any or all of the following:

(a) take possession of all or part of the
    debtor's property mentioned in the appointment;

(b) exercise such control over that
    property, and over the debtor's business, as the court considers advisable; and

(c) take such other action as the court
    considers advisable.

[53]

In
GMAC Commercial Credit Corporation - Canada
    v. T.C.T. Logistics Inc.
, 2006 SCC 35, [2006] 2 S.C.R. 123, the Supreme
    Court commented on the breadth of the former s. 47(2), while also cautioning
    that the section was not open-ended, at para. 45:

These statutory parameters, though sufficiently
    flexible to authorize a wide range of conduct dealing with the taking,
    management, and eventual disposition of the debtor's property, are not
    open-ended. The powers given to the bankruptcy court under s. 47(2) are powers
    to direct the interim receivers conduct. That section does not, explicitly or
    implicitly, confer authority on the bankruptcy court to make unilateral
    declarations about the rights of third parties affected by other statutory
    schemes.

[54]

Reading s. 243(1) and the courts powers thereunder
    as sufficiently flexible to authorize a wide range of conduct dealing with the
    taking, management, and eventual disposition of the debtors property is
    consistent with the court having the power to include a leave to sue provision in
    a receivership order. A receiver directed by the court to take possession and
    control of property and to sell it, for example, may be subject to claims by
    those with whom the court has directed or authorized the receiver to deal. This
    is a central reason for the leave to sue provisions necessity.

[55]

Finding that s. 243(1) includes the power to authorize
    a leave to sue provision by necessary implication does not confer an open-ended
    power on the court. Though a leave to sue provision affects when third parties
    may sue the receiver, it does not eliminate the right to sue or involve making
    unilateral declarations about the rights of third parties affected by other
    statutory schemes. This is especially so given the low threshold for obtaining
    permission to sue: see
Holmes v. Schonfeld Inc.
, 2016 ONCA 148,
    at para. 29, citing
GMAC
, at para. 59
.

(5)

Sections 215 and 251 of the
BIA
do not alter the conclusion
    that the
BIA
provides the authority to include a leave provision in a
    receivership order

[56]

SusGlobal argues that Parliament specified, in
    s. 251, when a receiver is to be protected from suit, and that that contradicts
    the notion that the
BIA
authorizes a leave to sue provision. I
    disagree. Section 251 deals with circumstances under which a receiver cannot be
    sued at all. It does not displace the right of the court to include an essential
    term in a receivership order requiring court permission to launch claims for
    matters falling outside of s. 251.

[57]

SusGlobal also relies on the failure to
    specifically include a receiver in s. 215 to argue that s. 243(1) of the
BIA
does not authorize a leave to sue provision. In my view, even accepting that s.
    215 of the
BIA
does not specifically include receivers would not
    change the conclusion that s. 243(1) does authorize such provisions.

[58]

Section 215 provides that certain officials
    cannot be sued without court permission. Some of the enumerated officials, such
    as the Superintendent or an official receiver, are not appointed by court order
    (although some, such as official receivers, are deemed to be officers of the
    court): see ss. 5(1), 12(2). Trustees in bankruptcy can be empowered without a
    court order: see s.14. Even interim receivers, who are court-appointed, fill a
    role that is a creature of the
BIA
,
with specific statutory limits on their activities and powers: see for example
    s. 47.

[59]

Section 243(1) receivers, on the other hand, are
    court-appointed and take their powers from the court appointment order. And it
    is those types of receivers who, when appointed under other statutes, were
    historically clothed with customary and common terms essential to their
    appointment, such as that found in the receivership orders leave to sue
    provision. The
BIA
power of appointment carries with it the power to
    impose that type of term. It would be anomalous to read s. 215 as providing for
    the protection of the officials specified in it, while also
prohibiting
the court from including, in a s. 243(1)
BIA
appointment, a term
    essential to the very receivership s. 243(1) contemplates.

[60]

I also note, contrary to SusGlobals argument,
    that some cases have treated s. 215 as though it applied to receivers appointed
    under s. 243(1) of the
BIA:
see
Crate Marine Sales Ltd. (Re)
,
    2017 ONSC 178, 45 C.B.R. (6th) 267, at paras. 22, 59, and
Romspen
    Investment Corporation v. Courtice Auto Wreckers
, 2016 ONSC 1808, 36
    C.B.R. (6th) 141, at paras. 4, 55-57, revd but not on this point 2017 ONCA
    301,
138 O.R. (3d) 373,
leave to appeal refd [2017]
    S.C.C.A. No. 238. In
Romspen
, this court treated an appeal from a
    refusal to grant permission to sue as governed by the
BIA
appeal routes.
    Both
Crate Marine
and
Romspen
, however, did not deal with any
    argument that s. 215, due to its wording, should be taken not to apply to
    receivers appointed under s. 243(1). They did not address the arguments
    SusGlobal or BDO make here about that wording and therefore did not decide the
    issue. Given my conclusion that s. 243(1) authorizes the inclusion of leave to
    sue provisions in receivership orders, it is unnecessary to further deal with the
    s. 215 point here. The leave to sue provision can stand as authorized by the
BIA
without resort to s. 215. It is certainly not prohibited by s. 215.

(6)

Resorting to inherent jurisdiction is unnecessary

[61]

As noted above, SusGlobals argument is, in
    part, that inherent jurisdiction related to the
CJA
is a source of power
    for the leave to sue provision, and that this also takes the appeal route
    outside of the
BIA
. I do not agree that resort to inherent jurisdiction
    is necessary or that it would take the appeal route where SusGlobal wants it to
    go.

[62]

In
Century Services Inc. v. Canada (Attorney
    General)
, 2010 SCC 60, [2010] 3 S.C.R.
    60, at paras. 64-65,
the Supreme Court endorsed the hierarchical approach
    to interpreting insolvency legislation suggested by
Justice
    Georgina R. Jackson and Dr. Janis Sarra
 namely, that courts should
    first look to statutory authority, exhausting their statutory interpretive
    function before resorting to inherent jurisdiction:
Georgina
    R. Jackson & J. Sarra, Selecting the Judicial Tool to get the Job Done: An
    Examination of Statutory Interpretation, Discretionary Power and Inherent
    Jurisdiction in Insolvency Matters, in Janis P. Sarra, ed.,
Annual
    Review of Insolvency Law

2007
(Toronto: Thomson Reuters, 2008)
    at p. 42
. Although
Century

Services
involved an
    interpretive issue respecting the
Companies Creditors Arrangement Act
,

R
.S.C., 1985 c. C-36, Jackson
    and Sarras approach encompasses insolvency legislation more generally.

[63]

The Supreme Court endorsed Jackson and Sarras
    approach outside of the insolvency context in
Endean v. British Columbia
,
    2016 SCC 42, [2016] 2 S.C.R. 162. They cautioned that inherent jurisdiction
    should be relied upon sparingly, at para. 24:

The courts have recognized that, given the broad and loosely
    defined nature of these powers, they should be exercised sparingly and with
    caution:
Caron
, at para. 30. It follows that courts should first
    determine the scope of express grants of statutory powers before dipping into
    this important but murky pool of residual authority that forms their inherent
    jurisdiction. As The Honourable Georgina Jackson and Janis Sarra write, [i]t
    is only where broad statutory authority is unavailable that inherent
    jurisdiction needs to be considered as a possible judicial tool to utilize in
    the circumstances. [Citations omitted.]

[64]

Because of my conclusion that s. 243(1) confers
    power to include a leave to sue provision, considering inherent jurisdiction is
    unnecessary.

I note, however,
    that s. 183(1) preserves the inherent jurisdiction of the Superior Court
    sitting in
BIA
matters:
Kingsway General Insurance Company v. Residential
    Warranty Co. of Canada Inc. (Trustee of)
, 2006 ABCA 293, 25 C.B.R. (5th)
    38, at para. 19. Section 183(1) reads:

183 (1)
The following courts are invested with such
    jurisdiction at law and in equity as will enable them to exercise original,
    auxiliary and ancillary jurisdiction in bankruptcy and in other proceedings
    authorized by this Act during their respective terms, as they are now, or may
    be hereafter, held, and in vacation and in chambers:

(a) in the Province of Ontario, the Superior Court of Justice.

[65]

Accordingly, referring to a power as flowing
    from inherent jurisdiction does not necessarily take an appeal out of the
BIA
stream. Because the power in question here is statutory, it is unnecessary to
    consider that issue further.

(7)

The
BIA
appeal route governs

[66]

Since para. 8 of the receivership order, the leave to sue provision,
    is authorized by the statutory authority to appoint a receiver in s. 243(1) of
    the
BIA
,
SusGlobals
    complaint loses its force. It does not matter that such a provision is or could
    also be grounded in the
CJA
power to appoint a receiver. As long as
    the
BIA
is one of the sources that authorizes the leave to sue provision,
    an appeal from an order made under it necessarily implicates a provision
    sourced in the
BIA
.

[67]

In cases like this, where the courts power may be grounded in the
BIA
or the
CJA
, the doctrine of paramountcy would prevent an appellant
    from resorting to the
CJA
appeal provisions as they are in operational
    conflict with those of the
BIA
in respect of timing and leave
    requirements. To the question May one appeal without leave and do so after 10
    days have expired? one enactment says yes and the other says no, meeting
    the test for operational conflict
:
see

Alberta
    (Attorney General) v. Moloney
,
2015 SCC 51, [2015] 3 S.C.R. 327
, at para. 19, citing
Multiple Access Ltd. v.
    McCutcheon
, [1982] 2 S.C.R. 161, at p. 191; see also
Lemare Lake
,
at paras. 18-19
.
The only
    manner in which the appeal provisions could be found not to conflict is if it were
    possible to comply with both schemes. Because the
BIA
provisions are
    more restrictive than the
CJA
provisions, complying with both schemes entails
    complying with the
BIA
provisions. Either way, SusGlobal was required
    to follow the
BIA
appeal route.

Conclusion

[68]

SusGlobal has failed to show an error in the
    underlying premise of the chambers judges decisions, namely that the
BIA
governed SusGlobals proposed appeals. That premise was correct. The authority
    that grounded the application judges refusal to grant SusGlobal leave to sue
    the receiver is found in both the
BIA
and
CJA
. Federal
    paramountcy dictates that the
BIA
appeal provisions govern. SusGlobals
    motion must therefore be dismissed.

[69]

BDO is entitled to its costs of the motion,
    fixed at $15,000 inclusive of disbursements and HST.

Released: April 8, 2019 (K.F.)

B. Zarnett J.A.

I agree. K. Feldman J.A.

I agree. David M. Paciocco
    J.A.





[1]

The requests for an extension of time under the
BIA
and for leave to
    appeal under the
BIA
were brought, respectively, under r. 31(1) of the
Bankruptcy and Insolvency General Rules
, C.R.C., c. 368, and s. 193(e) of the
BIA
, which specify that
    a single judge may grant the requested relief. The parties proceeded on the
    basis that the availability of that relief was wrapped up with the question of
    which route governed the appeal; hence the question of whether the appeal was
    properly under the
CJA
. BDO did not move to quash the appeal, which is relief only a panel
    of this court can grant.



[2]
Leave to sue provisions were contained in both Ontario and British Columbias
    2004 Model Receivership Order, for instance.


