



COURT OF APPEAL FOR ONTARIO

CITATION: Ting (Re), 2019 ONCA 768

DATE: 20190930

DOCKET: M50799 (C66547)

Brown
    J.A. (Motion Judge)

In the
    Matter of the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B-3, as Amended

And in
    the Matter of a Proceeding in the Hong Kong Special Administrative Region Re: James
    Henry Ting (in Bankruptcy)

Application
    of Cosimo Borrelli and Jacqueline Walsh of Borrelli Walsh Limited Under Section
    269 of the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B-3, as Amended

Robert Rastorp and Arash Jazayeri, for
    the moving party Andrew Henry Ting

Ilan Ishai, for the responding party
    Cosimo Borrelli and Jacqueline Walsh, the Foreign Representatives and trustees
    in bankruptcy of James Henry Ting

Heard: September 26, 2019

REASONS
    FOR DECISION

OVERVIEW

[1]

The moving party, Andrew Henry Ting, is the son of James Henry Ting, who
    has been adjudged bankrupt by a Hong Kong court. Earlier this year, a judge of
    the Commercial List enforced letters of request from the Hong Kong court and
    ordered Andrew to produce documents relating to his fathers bankruptcy estate
    and attend for examination. This court quashed an appeal from that order.
    Andrew has applied for leave to appeal to the Supreme Court of Canada from the
    order of this court. He now moves for a stay of the production and examination
    order pending the determination of his leave application.

BACKGROUND

[2]

James was adjudged bankrupt by order of the High
    Court of the Hong Special Administrative Region dated November 29, 2016 (the
    Bankruptcy Order).

[3]

The record strongly suggests that James did not
    appeal the Bankruptcy Order.

[4]

By order dated October 6, 2017, Conway J.,
    sitting on the Commercial List, granted an Initial Recognition Order pursuant
    to s. 269 of the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B-3
    (the 
BIA
), recognizing the Hong Kong bankruptcy proceeding against
    James as a foreign main proceeding (the Initial Recognition Order).

[5]

James did not appeal the Initial Recognition
    Order, nor has he moved to set it aside on any basis.

[6]

On June 14, 2018, the Hong Kong court issued a
    letter of request seeking the assistance of the Ontario courts to order Andrew
    to produce certain documents relating to his fathers assets and affairs and to
    attend for examination. In August 2018, the trustees in bankruptcy of James
    estate, Cosimo Borrelli and Jacqueline Walsh (the Trustees), moved on the
    Commercial List for an order to enforce the letter of request.

[7]

Andrew opposed the order.

[8]

By order dated January 15, 2019, Penny J.
    recognized and enforced the letter of request, ordered Andrew to produce the stipulated
    documents, and required him to attend for examination (the January 15 Order).

[9]

On January 25, 2019 Andrew launched two
    challenges in this court to the January 15 Order. First, he filed a motion for
    leave to appeal under
BIA
s. 193(e). At the same time, he filed a
    notice of appeal that contended he could appeal as of right to this court
    pursuant to
BIA
s. 193(b) because the order or decision is likely to
    affect other cases of a similar nature in the bankruptcy proceedings.

[10]

By order dated May 30, 2019, a panel of this
    court dismissed Andrews motion for leave to appeal. Andrew was ordered to pay
    costs of $1,500. Although Andrew had not paid those costs as of the date of the
    hearing of this motion, his counsel undertook that the respondent would be paid
    within 48 hours.

[11]

By order dated June 21, 2019, a different panel
    of this court quashed Andrews appeal (the Order to Quash), writing:

No appeal as of right lies to this court under
    s. 193(b). Leave to appeal has been refused under s. 193(e). The motion to
    quash is granted. The appeal is quashed. Costs are fixed in the amount of $10,000
    all inclusive.

[12]

On September 18, 2019 Andrew filed with the
    Supreme Court of Canada his application for leave to appeal materials.

[13]

Andrew now moves for two forms of relief. First,
    he seeks leave to transcribe the digital audio recording of the June 21, 2019
    hearing before this court: 
Practice
    Direction Concerning Civil Appeals at the Court of Appeal for Ontario, (March
    1, 2017),
at 17.3. Andrew wishes to file the transcript on his
    application for leave to appeal. At the hearing,
I
    granted Andrew leave to prepare a transcript of the hearing.

[14]

Second, Andrew
moves under s. 65.1(1) of the
Supreme Court Act
, R.S.C. 1985, c. S-26, for an order staying the January 15 Order and
    this courts Order to Quash, pending the determination of his application for
    leave to appeal.

GOVERNING PRINCIPLES

[15]

The test for granting a stay pending an
    application for leave to appeal to the Supreme Court of Canada is
    well-established. The moving party must demonstrate that: (i) there is a
    serious issue to be adjudicated on its proposed appeal, including that the
    appeal raises an issue of public or national importance; (ii) it will suffer
    irreparable harm if the stay is not granted; and (iii) the balance of
    convenience favours granting the stay. These three components are interrelated
    in that the overriding question is whether the moving party has shown that it
    is in the interests of justice that the court grant a stay:
Iroquois Falls
    Power Corporation v. Ontario Electricity Financial Corporation
, 2016 ONCA
    616, at paras. 14 and 15;
Livent Inc. v. Deloitte & Touche
, 2016
    ONCA 395, 131 O.R. (3d) 784, at para. 7.

ANALYSIS

Serious issue to be adjudicated

[16]

Andrew submits that his application for leave to
    appeal raises a serious issue of public importance that merits consideration by
    the Supreme Court of Canada. He argues that the Initial Recognition Order was
    obtained on an improper basis because the Trustees did not give James notice of
    their application to seek that order. It follows, Andrew contends, that the
    defective Initial Recognition Order could not provide a proper basis for Penny
    J. to make his January 15 Order enforcing the letters of request. As well, that
    defect taints this courts Order to Quash.

[17]

Central to Andrews argument is his contention
    that neither Penny J. nor this court gave proper consideration to
BIA
s. 284(1), which is found in Part XIII of the
BIA
dealing with
    Cross-Border Insolvencies, and states:

Nothing in this Part prevents the court, on the
    application of a foreign representative or any other interested person, from
    applying any legal or equitable rules governing the recognition of foreign
    insolvency orders and assistance to foreign representatives that are not
    inconsistent with the provisions of this Act.

[18]

Andrew
    contends that there is a legal or equitable rule that a person affected by an
    order must be given notice of the proceeding brought before a court to seek the
    order. James was not given notice of the application to seek the Initial
    Recognition Order as the Trustees did not serve him.

[19]

In their August 2017 affidavit in
    support of that application, the Trustees
stated they
    were unaware of the current whereabouts of [James] Ting. Andrew argues that
    statement was misleading. He points to a June 1, 2019 letter from the Trustees
    that demonstrates they knew about several addresses at which they could have
    attempted to serve James with the application for the Initial Recognition
    Order. As a result, Andrew submits, the Initial Recognition Order was not based
    on a proper foundation as it failed the basic Canadian tests of correctness and
    fairness. Andrew also argues that this court erred in failing to give proper
    consideration to the Trustees June 1, 2019 letter at the June motion to quash
    hearing.

[20]

In
    my assessment, the grounds for leave to appeal advanced by Andrew are very
    weak.

[21]

First,
    I have strong doubts that the ground of appeal articulated by Andrew amounts to
    a question of public or national importance. Although the orders he challenges
    were made in a proceeding under a federal statute, his complaint focuses on
    fact-specific aspects of the proceeding, in particular the adequacy of the
    notice given for the application seeking the Initial Recognition Order.

[22]

Second,
    while a party affected by a request for an order generally is entitled to
    notice through service of the originating documents, the court has the
    discretion to dispense with service:
Bankruptcy and
    Insolvency General Rules
, C.R.C., c. 368, r. 3; Ontario
Rules of Civil Procedure
, r. 16.04(1). Conway J., who
    granted the Initial Recognition Order, expressly dispensed with service: at
    para. 1.

[23]

Third,
    I agree with the conclusion of Penny J. that Andrews challenge to the
    procedural regularity of the Initial Recognition Order constitutes an
    impermissible collateral attack on that order.

[24]

Fourth,
    the conclusion of this court in its Order to Quash endorsement that no appeal
    as of right lies under
BIA
s. 193(b) in the
    circumstances of this case reflects the prevailing jurisprudence. As stated in
2403177 Ontario Inc. v. Bending Lake Iron Group Limited
,
    2016 ONCA 225,
396 D.L.R. (4th) 635,
at para. 32:

The jurisprudence under s. 193(b) of the
BIA
has consistently interpreted the section as meaning that a right of appeal will
    lie where the decision in question will likely affect another case raising the
    same or similar issues in the same bankruptcy proceedings. The cases have
    expressed different views on whether the decisions covered by s. 193(b) can
    only concern rights asserted against the bankrupt by parties other than the
    bankrupt, or whether the issue may concern rights asserted by multiple persons
    against the bankrupt, rather than one persons rights arising in multiple
    contexts. Regardless, s. 193(b) must concern real disputes likely to affect
    other cases raising the same or similar issues in the same bankruptcy or
    receivership proceedings.

[25]

Finally, I query whether it was open to Andrew
    to pursue an appeal as of right after this court had denied him leave to appeal
    under
BIA
s. 193(e).

[26]

These
    very significant weaknesses in Andrews grounds for leave to appeal weigh
    strongly against granting a stay order.

Irreparable harm

[27]

Andrew
    submits that if a stay is not granted, he will suffer irreparable harm of two
    sorts. First, he will be subjected to compelled examination and production
    pursuant to an order that he contends was improperly obtained. For all
    practical purposes, that would render his leave to appeal application moot.
    Second, Andrew notes that the Trustees have brought a motion to find Andrew in
    contempt of the January 15 Order, which is scheduled to be heard on October 4, 2019.
    Absent a stay, Andrew argues that his liberty interest would be placed at risk
    before the Supreme Court of Canada deals with his leave to appeal application.

[28]

I accept Andrews submission. In
The Queen
    v. O'Connor
, 2001 NSCA 47,
193 N.S.R. (2d) 8,
Cromwell J.A., sitting as a Chambers judge of the Nova Scotia Court of Appeal,
    recognized that irreparable harm can result from the wrongful release of
    information, in the event that a stay is not granted pending appeal, but the
    appeal later succeeds: at para. 14. As he stated, in part, at paras. 16 and 17:

[O]nce access to information is granted, it
    cannot be undone if the order for access is subsequently reversed on appeal.
    The harm is irreparable in the sense that a legal wrong has been committed
    which cannot be compensated or reversed. In some cases, the injury resulting
    from disclosure will be minimal, but that does not detract, in my view, from
    the proper characterization of the wrongful disclosure as constituting
    irreparable harm. As Cory and Sopinka, JJ. said in
RJR MacDonald
, [[1994]
    1 S.C.R. 311,] irreparable refers to the nature of the harm rather than its
    magnitude. The essence of the concept is a wrong which cannot be undone or
    cured. The unlawful disclosure of information, even where it does not injure
    anyone, is a wrong which cannot be undone or cured and is, therefore, capable
    of being irreparable for the purposes of a stay pending appeal.

[T]he disclosure of the contested information
    will generally render the effects of a successful appeal nugatory. There is
    ample authority for the proposition that where that is the result of the
    refusal of a stay pending appeal or judicial review, irreparable harm has been
    shown. [Citations omitted.]

See also:
White v. E.B.F.
    Manufacturing Ltd.
, 2005 NSCA 17,
229 N.S.R. (2d)
    375,
at para. 24.

[29]

In
    the present case, to refuse a stay would render Andrews appeal moot: he would
    have to produce documents to the Trustees and attend for examination, all the
    while challenging the validity of the order compelling him to do so. This
    prospect of irreparable harm weighs in favour of granting a stay. It is not
    adequately mitigated by the Trustees proffer of an undertaking to apply the deemed
    undertaking rule to the documents produced and the transcript of the
    examination.

Balance of convenience and the overall interests of justice

[30]

The
    Trustees point out that the amount the bankrupt, James, owes his creditors
    exceeds US$1 billion. They submit that the delay caused by granting a stay
    would frustrate their efforts to realize upon the bankrupts assets and
    decrease the likelihood that the bankrupts creditors are properly compensated.

[31]

The
    Supreme Court of Canada most likely will deal with Andrews leave application
    within the next four or five months. Given that the Initial Recognition Order
    was made almost two years ago, one could regard the passage of a further four
    or five months as not constituting an unduly long delay in the administration
    of this aspect of this bankrupts estate.

[32]

However,
    in considering the balance of convenience, I must take into account another
    perspective. On June 21, 2019, Andrew became subject to the full force of the
    obligations imposed by the January 15 Order. Andrew did not comply with the
    order, which required the production of documents within 14 days. Instead, he
    did nothing. He waited two and one-half months before initiating this stay
    motion it on September 6, 2019. As well, he did not commence his application
    for leave to appeal until towards the end of the 60-day appeal period (which
    excluded July). Those delays, combined with Andrews refusal to comply with the
    January 15 Order, lead me to concur with the observation made by McEwen J. in
    his September 12, 2019 endorsement that Andrew has moved too slowly in
    bringing his motion before the [Court of Appeal].

[33]

While
    Andrews dilatory conduct is not sufficient, in and of itself, to deny Andrew a
    stay, it does point to the need to find a proper balance between his request
    for further appellate consideration of his complaint about a defective
    enforcement process and the Trustees duties to move ahead with the
    administration of his bankrupt fathers estate. The need for such balance is
    especially acute given the very weak grounds for leave to appeal advanced by
    Andrew.

[34]

I
    conclude that such a balance can be achieved by granting a stay, but on terms
    which ensure that while Andrews appeal is not rendered moot, some effect is
    given to a valid request for assistance by the Hong Kong court. Consequently, I
    will grant a stay of the order of this court dated June 21, 2019 pending
    disposition of Andrews application for leave to appeal to the Supreme Court of
    Canada but, pursuant to s. 65.1(1) of the
Supreme Court
    Act
, I grant that stay on the following terms, which I deem
    appropriate:

(i)

Term 1: On
    or before Wednesday, October 9, 2019, Andrew shall file with the Commercial
    List Office in proceeding CV-17-581645 CL, in a sealed envelope:

a.

Copies of all documents specified in paras. 1 and 2 of Schedule 1 to the
    Letter of Request, which is attached to the January 15 Order as Schedule A; and

b.

A sworn or affirmed affidavit from Andrew deposing that he has made full
    production of all documents within his possession, custody or power specified
    in paras. 1 and 2 of Schedule 1 to the Letter of Request;

(ii)

Term 2: On or before
    Wednesday, October 9, 2019, Andrew, through his counsel of record, shall inform
    counsel for the Trustees that he has complied with the above Term 1;

(iii)

Term 3:
If
    Andrew does not comply with Terms 1 and 2 by 5 p.m. on Wednesday, October 9,
    2019, then this stay of the Order to Quash and January 15 Order shall expire
    and be of no further force or effect
; and

(iv)

Term 4: If Andrew complies
    with Terms 1 and 2 by 5 p.m. on Wednesday, October 9, 2019, then the sealed
    documents and affidavit filed with the Commercial List Office shall remain
    sealed until the disposition by the Supreme Court of Canada of Andrews application
    for leave to appeal. If the Supreme Court of Canada grants leave to appeal, the
    sealed documents and affidavit shall remain sealed until the disposition of
    that appeal. Upon the dismissal of the leave to appeal application or, if leave
    is granted, upon the disposition of the appeal, either party may apply to a
    judge of the Commercial List for the return or release of the documents in
    accordance with the disposition made by the Supreme Court of Canada of Andrews
    proceeding before that court.

DISPOSITION

[35]

For the reasons set out above, I grant Andrew
    leave to prepare a transcript of the June 21, 2019 hearing before this court.
    In addition, I grant Andrews motion for a stay but on the terms set out in
    para. 34 above.

[36]

Each party shall bear their own costs of this
    motion.

David
    Brown J.A.


