



COURT OF APPEAL FOR ONTARIO

CITATION: Hillmount Capital Inc. v. Pizale,
    2021 ONCA 364

DATE: 20210528

DOCKET: M52200 (C68999)

Strathy C.J.O., Brown and Miller
    JJ.A.

BETWEEN

Hillmount Capital Inc.

Respondent

(Applicant)

and

Celine Brittany Pizale and
    Richard Stanley Pizale

Moving
    Parties/Appellants

(Respondents)

Jamie Spotswood and Rachel Migicovsky,
    for the moving parties/appellants, Celine and Richard Pizale

Robert Macdonald and Teodora Prpa, for
    the receiver, Zeifman Partners Inc.

Behn Conroy, for the purchasers,
    Patricia and David Armstrong

Shana Nodel, for second mortgagees,
    1713691 Ontario Inc. and Boris Nodel

Terry M. Walman, for first mortgagee,
    Elle Mortgage Corporation

Heard: February 8, 2021 by video conference

BROWN J.A.:

I.        OVERVIEW

[1]

The appellants, Celine and Richard Pizale, owned
    a partially-renovated residential property on Lyndhurst Avenue in Toronto (the
    Property). In June 2020 the first mortgagee, Hillmount Capital Inc.
    (Hillmount), applied for an order appointing the respondent, Zeifman Partners
    Inc., as receiver of the Property (the Receiver). Koehnen J. granted such an
    order on June 19, 2020 (the Appointment Order).

[2]

The Receiver marketed the Property on an as is
    basis and entered into an agreement of purchase and sale with Patricia and
    David Armstrong (the Purchasers). By orders dated January 8, 2021, Conway J.
    granted a sale approval and vesting order (the Approval Order), together with
    an administration order approving the Receivers activities, as well as
    increasing its borrowing authority to $250,000.00 (the Administration Order).

[3]

On January 15, 2021, the Pizales filed a notice
    of appeal of the Motion Judges January 8 orders. Two motions then ensued
    before the Chambers Judge.

[4]

First, the Receiver moved for orders (i)
    declaring that the Pizales do not have an automatic right of appeal under ss.
    193(a)-(d)
of the
Bankruptcy and Insolvency Act
,
    R.S.C., 1985, c. B-3 (the 
BIA
),
and (ii) denying them leave to
    appeal the Approval and Administration Orders under
BIA
s. 193(e).

[5]

The Pizales then brought a motion for (i) a
    declaration that they have a right to appeal to this court from the Approval and
    Administration Orders under s. 193(c), which states that an appeal lies to
    the Court of Appeal if the property involved in the appeal exceeds in value
    ten thousand dollars, or (ii) alternatively, leave to appeal the orders
    pursuant to s. 193(e) and a stay of the Approval and Administration Orders
    pending their appeal.

[6]

By order dated February 4, 2021 the Chambers
    Judge declared that the Pizales did not have an automatic right of appeal and
    denied them leave to appeal (the Chambers Order). He ordered that the sale of
    the Property should proceed.

[7]

The Pizales thereupon brought an urgent panel
    review motion pursuant to s. 7(5) of the
Courts of Justice Act
, R.S.O.
    1990, c. C.43 (
CJA
), to set aside the Chambers Order and, if
    necessary, stay the Approval and Administration Orders.

[8]

The panel heard the motion on February 8, 2021,
    the day scheduled for the closing of the sale of the Property. At the
    conclusion of the hearing the panel dismissed the Pizales motion, with reasons
    to follow. These are those reasons.

II.       BACKGROUND

The Property and the receivership

[9]

The Pizales were in the process of renovating
    the Property when Hillmount, the first mortgagee, applied for the appointment
    of a receiver. At the time, there were four mortgages registered against the
    Property: (i) the first mortgage to Hillmount for approximately $3.35 million,
    later assigned to Elle Mortgage Corporation (Elle); (ii) an $800,000 second
    mortgage to 1713691 Ontario Inc. and Boris Nodel; (iii) a third mortgage for
    $569,359 to Harold Wine, Gad Caro, and Marshall Morris; and (iv) a $325,000
    fourth mortgage to Weihao Zhang. The Pizales had been in default under the
    first mortgage for a number of months prior to the Receivers appointment.

[10]

The Appointment Order authorized the Receiver to
    take possession of the Property, preserve, market, and sell it. The Receiver
    was authorized to borrow up to $150,000 from Hillmount. Given the significant
    costs required to complete the renovation of the Property, the limited
    borrowing authority given to the Receiver clearly indicated that its mandate
    under the Appointment Order was to sell the Property on an as is basis.

[11]

As described by the Motion Judge in her
    endorsement, the Receiver initially listed the Property for sale at $4.8
    million, which was higher than the appraisals it had obtained for a sale on an
    as is basis. Notwithstanding numerous showings of the Property, that listing
    price did not attract any offers. In mid-September 2020, the Receiver reduced
    the listing price to $4.15 million. Several offers were received, which the
    Receiver pursued. The Receiver entered into a Sale Agreement with the
    Purchasers for a purchase price that was higher than its two as is appraisals
    and any other offers received by the Receiver.

The decision of the Motion Judge

[12]

The Receiver moved for court approval of the
    Sale Agreement. In its Second Report, the Receiver stated that if the Sale
    Agreement was not approved, it did not believe it would be able to sell the
    Property for an equal or higher price.

[13]

The Pizales opposed the Receivers motion. They
    wanted to regain possession of the Property, complete the renovations, and sell
    it for an as complete or as renovated price. The second mortgagees also
    opposed the sale. Elle, the assignee of the first mortgage, and the third and
    fourth mortgagees opposed any sale of the Property but supported a discharge of
    the Receiver. Notwithstanding those positions, no motion to discharge the
    Receiver was brought before the Motion Judge.

[14]

The Motion Judge approved the Sale Agreement,
    concluding that the evidence showed the proposed sale satisfied the principles
    set out in
Royal Bank v. Soundair Corp.
(1991), 4 O.R. (3d) 1(C.A.).
    She rejected the submissions made in opposition to the sale stating, at para.
    26 of her endorsement:

It was only after the Sale Agreement was
    entered into that the mortgagees (after making certain arrangements with the
    Respondents) joined forces to mount a coordinated opposition to the [Approval
    and Vesting Order]. Their reasons for doing so are not apparent on the face of
    the record and consist only of a stated opposition. The mortgagees and
    Respondents failed to engage in the court-authorized receivership and sales
    process at any time prior to the signing of the Sale Agreement. The Receiver,
    after conducting a legitimate and proper sales process, entered into an
    agreement with the Purchasers, which the mortgagees and Respondents are now seeking
    to have this court reject. They are seeking to prevent the sale altogether. I
    have considered and weighed the interests of all parties and find that there is
    no basis for this court to allow the objections of the mortgagees and
    Respondents to prevent the Receiver from concluding its agreement with the
    Purchasers.

[15]

The Motion Judge also granted the Administration
    Order, which was unopposed save for the Receivers fees and disbursements, for
    which the Receiver intended to seek approval at a later date.

The decision of the Chambers Judge

[16]

The Pizales submitted to the Chambers Judge that
    their appeal fell within
BIA
s. 193(c). The Chambers Judge noted that
    the Pizales accepted the jurisprudence summarized in the chambers decision in
2403177
    Ontario Inc. v. Bending Lake Iron Group Limited
, 2016 ONCA 225, 347 O.A.C.
    226 (
Bending Lake
),
[1]
that
BIA
s. 193(c) does not apply to orders that: are procedural in nature; do not bring
    into play the value of the debtors property; or do not result in a loss. The
    Chambers Judge concluded that the Pizales appeal did not fall within
BIA
s. 193(c) for three reasons: (i) the Pizales critiques of the Approval
    Order all related to the manner in which the Property was sold and therefore
    concerned matters of procedure that did not give rise to an automatic right of
    appeal; (ii) the Pizales appeal did not bring into play the value of the
    Property; and (iii) the Approval Order would not result in a loss. The Chambers
    Judge rejected the Pizales argument that an automatic right of appeal lay in
    respect of the Administration Order for the same reasons he rejected the
    argument for the Approval Order.

[17]

The Chambers Judge then concluded that the
    Pizales should not be granted leave to appeal under
BIA
s. 193(e). He
    did not regard their appeal as raising an issue of general importance to the
    practice in bankruptcy/insolvency matters or the administration of justice as a
    whole. Instead, it was an attempt to relitigate a dispute between the Pizales
    and the receiver that will have little importance to bankruptcy/insolvency
    matters beyond the parties. Nor did the Chambers Judge view the Pizales
    appeal as
prima facie
meritorious. He found the Motion Judges
Soundair
analysis to be complete and the grounds do not raise a serious issue to be
    appealed. Finally, the Chambers Judge held that granting leave would risk
    losing the sale to the Purchasers, thereby placing into question the whole
    integrity of the sales process.

III.      THE STANDARD OF REVIEW

[18]

On a panel review of the order of a single judge
    pursuant to
CJA
s. 7(5), the panel may interfere with the order if the
    chambers judge failed to identify the applicable principles, erred in principle
    or reached an unreasonable result:
DeMarco v. Nicoletti
, 2017 ONCA
    417, at para. 3;
Yaiguaje v. Chevron Corporation
, 2017 ONCA 827, 138
    O.R. (3d) 1, at para. 21;
Struik v. Dixie Lee Food Systems Ltd.
, 2018
    ONCA 22, at paras. 5-6.

IV.     THE ISSUES RAISED BY THE REVIEW
    MOTION

[19]

On this motion to review, the Pizales advance
    three main arguments to set aside the Chambers Decision.

[20]

First, they contend the Chambers Judge erred by
    applying the legal principles concerning
BIA
s. 193(c) in a too
    restrictive or narrow way.

[21]

Second, the Pizales submit that the Chambers
    Judge misconstrued their arguments about why they had an automatic right of
    appeal under
BIA
s. 193(c). They were not alleging improvident sale or
    an improper sale process. Instead, they were alleging that the receivership was
    spent so there was no need to liquidate the Property. In their submission,
    the purpose of the receivership was achieved when Hillmount, the applicant
    creditor, was made whole and assigned its first mortgage to Elle. According to
    the Pizales, given that assignment the Motion Judge should have given more
    weight to the objections to the sale by the Pizales and remaining creditors.
    Instead, the Approval Order wrongfully preferred preserving the integrity of
    the sales process over the substantive interests of the Pizales and their
    creditor mortgagees.

[22]

More specifically, the Pizales submit that the
    Chambers Judge erred in concluding that:

(i)

the Approval and Administration Orders were
    procedural in nature when the Pizales were arguing that the orders prejudiced
    their substantive rights;

(ii)

the Approval Order did not put the value of the
    Property in question. The Pizales submit that the appraisals they filed put
    that value in question;

(iii)

the Pizales did not retain an interest in the
    Property and therefore its value was not in question. The Pizales argue that
    while the receivership changed the nature of their interest in the Property, it
    did not extinguish it; and

(iv)

the Approval Order did not result in a loss of
    at least $10,000. According to the Pizales, the Chambers Judge ignored the
    increase in their exposure to their creditors resulting from the sale of the
    Property on an as is rather than as complete basis.

[23]

Finally, the Pizales submit the Chambers Judge
    erred in failing to grant leave to appeal as he misconstrued the bases of the
    Pizales opposition to the Approval Order and their grounds of appeal.

V.      FIRST ISSUE: DID THE CHAMBERS JUDGE APPLY THE CASE LAW
    CONCERNING
BIA
s. 193(c) TOO NARROWLY?

[24]

Section 193(c) of the
BIA
states that
    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.

[25]

Before the Chambers Judge, the Pizales
    acknowledged that
BIA
s. 193(c) does not apply to certain types of
    orders, specifically those identified in
Bending Lake
. That decision
    observed, at para. 53, that the case law holds that
BIA
s. 193(c)
    does not apply to orders (i) that are procedural in nature,
[2]
(ii) that do not bring into play the value of the debtors property
[3]
or (iii) do not result in a loss.
[4]
The last principle derives from two Supreme Court of Canada cases,
Orpen
    v. Roberts
, [1925] S.C.R. 364, at p. 367, and
Fallis and Deacon v.
    United Fuel Investments Ltd.
, [1962] S.C.R. 771.

[26]

Notwithstanding this acknowledgement, the
    Pizales contend that the Chambers Judge failed to apply those principles in
    what they style as the less restrictive approach set out in the decision of the
    Saskatchewan Court of Appeal in
MNP Ltd. v. Wilkes
, 2020 SKCA 66, 449
    D.L.R. (4th) 439 (
Wilkes
).

[27]

To deal with that submission, I shall address
    two issues: (i) the significance, if any, of the narrow and broad
    interpretation labels regarding s. 193(c) found in some of the case law; and
    (ii) the practical difference, if any, of the approach in
Wilkes
in
    contrast to that found in the cases summarized in
Bending Lake
.

The narrow and broad interpretation
    dichotomy

[28]

Although the Pizales rely on some appellate
    decisions from other provinces to advocate for a broad interpretation of the
    automatic rights of appeal in
BIA
ss. 193(a)-(d), they ignore
    panel decisions of this court that have expressly taken a narrow approach to
    the interpretation of those appeal rights due to the broad automatic stay on
    appeal contained in
BIA
s. 195.
[5]

[29]

For example, several weeks after the
Bending
    Lake
decision, a panel of this court released reasons in
Enroute
    Imports Inc. (Re)
,

2016
    ONCA 247, 35 C.B.R. (6th) 1. At issue on that appeal was an order concerning
    the ability to examine a representative of the bankrupt. The panel stated, at
    para. 5:

The case law considering
    s. 193(c) from this court makes clear that, given the broad nature of the stay
    imposed by s. 195 of the
BIA
, the right
    of appeal without leave under s. 193(c) must be narrowly construed. In
    addition, the appeal must directly involve property exceeding $10,000 in value
:
Crate Marine Sales Limited (Re)
, 2016 ONCA 140,
Robson Estate v. Robson
(2002)
,
33 C.B.R. (4th) 86 (Ont. C.A.),
Business Development Bank of Canada v. Pine Tree Resorts Inc.
, 2013 ONCA 282, 115 O.R. (3d) 617, and
Ontario
    Wealth Management Corporation v. Sica Masonry and General Contracting Ltd.
, 2014 ONCA 500, 17 C.B.R. (6th) 91. (emphasis added)

[30]

The panel found that the order at issue did not
    fall within s. 193(c) for two reasons: the entitlement to conduct an examination
    was procedural in nature and did not directly involve property, and the
    appellants argument that the motion judge erred in finding that the proposal
    was reasonable and made in good faith did not put the property directly in
    issue. The panel also denied leave to appeal.

[31]

The next year, a panel in
Romspen Investment
    Corporation v. Courtice Auto Wreckers Limited
, 2017 ONCA 301, 47 C.B.R.
    (6th) 1, leave to appeal refused, [2017] S.C.C.A. No. 238, followed
Enroute
    Imports
in holding that the right of appeal under s. 193(c) must be
    narrowly construed and limited to cases where the appeal directly involves
    property exceeding $10,000 in value: at para. 22.

[32]

These statements by two panels of this court
    strike a different analytical stance than the comments by the chambers judge in
Wong v. Luu
, 2013 BCCA 547, 348 B.C.A.C. 155, at para. 23, that the
    right of appeal under
BIA
s. 193 is broad, generous and
    wide-reaching. I would further note that the decisions in
Wong
and
Wilkes
did not address the effect of the automatic stay in s. 195 on the
    interpretation of ss. 193(a)-(d), a factor this court has considered
    significant for its interpretative approach.

[33]

That said, the recent panel decision of this
    court in
Davidson (Re)
, 2021 ONCA 135, 86 C.B.R. (6th) 1, determined
    that it was not necessary in that case to engage in a debate over whether
BIA
s. 193(c) should be given a narrow or broad interpretation: at paras. 9-10. In
    that case, the panel assumed that s. 193(c) applied but dismissed the appeal on
    the merits.

The state of the case law

[34]

When one looks past the labels of narrow and
    broad, one discovers that a consensus appears to exist in the case law about how
    to answer s. 193(c)s question of whether the property involved in the appeal
    exceeds $10,000. As I will explain, the Pizales submission greatly overstates
    the differences between the operative principles described in
Wilkes
and
    the case law summarized and categorized in
Bending Lake
.

[35]

Wilkes
held
    that a courts primary task when examining whether an automatic right of appeal
    exists is to answer the question raised by s. 193(c) and determine whether the
    property involved in the appeal exceeds $10,000. Writing for the court,
    Jackson J.A. continued, at para. 61:

Courts have used different ways of giving
    meaning to s. 193(c), but it is still the words of the statute that govern.
    Thus, in
Fallis
, by its adoption of what the Court had said in
Orpen
,
    the test is stated as,
What is the loss which the
    granting or refusing of the right claimed will entail?
In
Fogel
,
    the Court asked what is the value in jeopardy (at para 6). In
McNeil
,
    the Chambers judge observed that [t]he property involved in the appeal  may
    be determined by comparing the order appealed against the remedy sought in the
    notice of appeal (at para 13). In
Trimor
, the Chambers judge added to
    the
OrpenFallis
test by stating [t]he focus of the inquiry under s.
    193(c) is the amount of money at stake  (at para 10). All of these
    expressions are consistent with the statutory language present in s. 193(c).

[36]

As mentioned above at para. 25,
Bending Lake
summarized the case law as identifying three types of orders that do not fall
    within the ambit of
BIA
s. 193(c). The first type the case law
    identifies is an order that does not result in a loss, as described in the
Orpen
and
Fallis
cases, which were the focus of the courts analysis in
Wilkes
.
    The need for an order to result in a loss to fall within s. 193(c) was framed
    slightly differently by the Alberta Court of Appeal in
Re Bearcat
    Exploration Ltd. (Bankrupt)
, 2003 ABCA 365, 339 A.R. 376, where the court
    stated, at para. 10, that an appeal under
BIA
s. 193(c) must in
    substance be about the value of the property, not just any claim related to
    bankruptcy. Or, as put by panels of this court in
Enroute Imports
and
Courtice Auto Wreckers
, the appeal must directly involve property
    exceeding $10,000 in value.

[37]

Bending Lake
also pointed out that the jurisprudence treated two other types of orders as
    falling outside of s. 193(c): those that do not bring into play the value of
    the debtors property; and those that are procedural in nature. Excluding those
    types of orders from the ambit of s. 193(c) is consistent with  and indeed
    flows logically from  the loss principle articulated in the
Orpen/Fallis
cases.

[38]

By its nature the second type of order - one that
    does not bring into play the value of the debtors property - would not result
    in a loss or put property value in jeopardy. For example, it is well-established
    in the
BIA
s. 193(c) jurisprudence that an order appointing a receiver
    or interim receiver usually does not bring into play the value of the debtors
    property as it simply appoints an officer of the court to preserve and monetize
    those assets subject to court approval.
[6]

[39]

The third type of order that the case law places
    outside of s. 193(c) is a procedural order, which really is a sub-set of orders
    that do not bring into play the value of the debtors property. The case law
    identifies various procedural orders of this kind: the dismissal of the
    bankrupts motion to strike out the petition against him;
[7]
the conduct of an examination of the bankrupt;
[8]
an order declining leave to examine the bankrupt;
[9]
approval of the trustees proposed auction process;
[10]
directions regarding the conduct of a trial;
[11]
an appeal process order;
[12]
an order denying a union leave to apply for certification during
    receivership;
[13]
and
    an order granting an adjournment.
[14]
In some circumstances, a sale approval order, on analysis, may be
    merely procedural in nature.
[15]

[40]

Wilkes
acknowledges that it is solidly established in the jurisprudence that there is
    no right of appeal under s. 193(c) from a question involving procedure
alone
:
    at para. 61 (emphasis in original). Indeed, a few months after the release of
Wilkes
,
    Jackson J.A., sitting as a chambers judge, concluded in
Re Harmon
    International Industries Inc.
, 2020 SKCA 95, 81 C.B.R. (6th) 1, that leave
    was required to appeal a receivers sale process order stating, at paras.
    34-35:

Thus, what the Court has before it is an Order
    that authorizes a
list price
of $3.8 million for the Millar Avenue
    Building. It does not propose a sale price of $3.8 million.
All that the Order does is establish a process for the sale of
    the property.
Any proposed sale must still be confirmed.

At this point, the claim
    of loss is without any foundation at all. It is, as such, entirely speculative
. It assumes that the listing agent will not market the property to
    its fullest potential or that the receiver will place an improvident sale
    before the Court of Queens Bench to be confirmed and the Court will confirm
    it. It is possible that Harmon will apply to Elson J. under s. 185(7) of the
BIA
or wait until it is determined that the property is proposed to be sold for
    less than what Harmon believes it is worth and place the Brunsdon Appraisal
    before Elson J. at that time. It is also possible that Harmon will obtain other
    financing so as to permit it to buy the property at the list price or the
    property will sell for an amount acceptable to Harmon. In my view,
the Order does not directly have an impact on the proprietary
    or monetary interests of Harmon or crystallize any loss at this time. It
    concerns a matter of procedure only. It is merely an order as to manner of
    sale, as was the case in
Dominion
    Foundry Co. (Re)
(1965), 52 DLR (2d) 79 (Man CA).
No
    value is in jeopardy, and no party can claim a loss as a result.
In my
    view, the property involved in the proposed appeal does not exceed in value
    $10,000 as those words are used in s. 193(c) of the
BIA
. Thus, I
    conclude it was necessary for Harmon to apply for leave to appeal. (Emphasis
    added.)

[41]

However,
Wilkes
makes an additional
    point. Merely because the question in issue is procedural does not necessarily
    mean there is not property value involved in the appeal that exceeds $10,000.
    Section 193(c) requires a court to analyze the economic effect of the order
    sought to be appealed: at paras. 62-63.

[42]

I agree. What is required in any consideration
    of whether the appeal of an order falls within
BIA
s. 193(c) is a
    critical examination of the effect of the order sought to be appealed. Such an
    examination requires scrutinizing the grounds of appeal that are advanced in
    respect of the order made below, the reasons the lower court gave for the
    order, and the record that was before it. The inquiry into the effect of the
    order under appeal therefore is a fact-specific one; it is also an
    evidence-based inquiry, which involves more than merely accepting any bald
    allegations asserted in a notice of appeal:
Bending Lake
, at para. 64.
Wilkes
concurs on this point, holding, at para. 64, that the loss
    claimed must be sufficiently grounded in the evidence to the satisfaction of
    the Court determining whether there is a right of appeal, a point repeated in
    the subsequent chambers decision in
Re Harmon International Industries
,
    at para. 32.

[43]

While the amendment of the
BIA
in 1992
    to include Part XI dealing with Secured Creditors and Receivers increased the
    practical need for the timely adjudication of appeals launched from orders made
    under the Act, an approach to the application of s. 193(c) that requires a
    fact-specific, evidence-based critical scrutiny of the effect of the order
    sought to be appealed should foster the remedial objectives of Canadas
    insolvency statutes to provide for 
timely
,
efficient
and
    impartial resolution of a debtors insolvency:
9354-9186 Quebec Inc. v.
    Callidus Capital Corp.
, 2020 SCC 10, 444 D.L.R. (4th) 373, at para. 40
    (emphasis added.)

[44]

There will be cases where the effect of an order
    sought to be appealed is such that an appeal lies as of right under
BIA
s. 193(c) but the respondent takes the view that the appeal is without merit or
    the automatic stay under
BIA
s. 195 would cause undue delay or prejudice
    in the bankruptcy proceeding. In such cases, it is open to the respondent to
    move to cancel the automatic stay. A motion to cancel the stay prompts a
    judicial assessment of the merits of the appeal, the appellants litigation
    conduct, and the relative prejudice that cancelling or maintaining the stay
    would have on interested persons and the interests of justice generally:
Royal
    Bank of Canada v. Bodanis
, 2020 ONCA 185, 78 C.B.R. (6th) 165 (Chambers),
    at paras. 11-14;
After Eight Interiors Inc. v. Glenwood Homes Inc.
,
    2006 ABCA 121, 391 A.R. 202 (Chambers), at para. 6;
Pelletier (Re)
,
    2020 ABCA 450, 86 C.B.R. (6th) 108 (Chambers), at para. 45.

Conclusion

[45]

The Pizales contention that the Chambers Judge
    erred by applying too restrictive an approach to s. 193(c) is based on a
    dichotomy in the case law that is more illusory than real, more semantic than
    substantive. While the cases under s. 193(c) have explained the interpretative
    task using differing language (as is to be expected in a body of jurisprudence
    under a national statute), at their core the cases share common ground in
    attempting to discern the operative effect of the order sought to be appealed:
    does the order result in a loss or gain, or put in jeopardy value of property,
    in excess of $10,000?

[46]

The Chambers Judge identified the applicable
    legal principles. I see no basis to interfere with his decision on that ground.

VI.     SECOND ISSUE: DID THE CHAMBERS JUDGE MISAPPREHEND THE
    PIZALES KEY ARGUMENTS?

[47]

I shall now consider the Pizales submission
    that the Chambers Judge misapprehended the key elements of their arguments. The
    Pizales advance two main arguments:

(i)

The Chambers Judge erred in holding that as a result of the Approval
    Order they had not suffered a loss of greater than $10,000; and

(ii)

The Chambers Judge misapprehended their
    principal ground of appeal, which is not based on allegations of an improvident
    sale or improper sale process but rather based on a failure of the Motion Judge
    to properly weigh the interests of the creditors and debtor, favouring process
    in so doing. As part of this submission the Pizales contend that the
    receivership was spent upon Hillmounts assignment of its first mortgage to
    Elle, which meant that there was no need for a sale of the Property.

The loss argument

[48]

The Pizales are not arguing that since the
    Property is worth more than $10,000, a loss of greater than that amount is
    established for purposes of
BIA
s. 193(c). Instead, they submit
    that appraisals showed they had equity in the Property greater than $10,000 when
    the Property was valued on an as complete basis. The Receivers sale
    jeopardized that equity and approval of the sale would increase their liability
    exposure to their mortgagees as compared to a sale on an as complete basis. As
    they submitted in their factums: the Approval Order entails a loss of their
    rights to retain the Property as its value increases and sell it when the
    renovations are complete if they so choose (Jan. 19 factum, para. 53); what
    they want to do is retain ownership of the Property (Jan. 25 factum, para. 7).

[49]

The Chambers Judge understood the Pizales
    argument. At para. 26 of his reasons he wrote: As I understand this argument,
    if the renovations were completed, they could achieve a higher price for the
    home and the gap between what the receiver is selling the house for and what
    could be obtained if the Pizales were permitted to finish the renovation would
    represent the loss. He rejected the submission that the Approval Order would
    result in a loss to the Pizales, concluding that the motion judge made strong
    findings that the receiver did not act improvidently.

[50]

I do not regard the Chambers Judges conclusion
    as one based on an error in principle or an unreasonable result.

[51]

Central to the Pizales submission is their
    assertion that selling the Property in a renovated state would fetch a higher
    sales price. The evidence before the Motion Judge and Chambers Judge strongly
    indicated that such would be the case. But, for the purposes of a s. 193(c)
    analysis, that is neither here nor there. That is because the parameters of the
    Receivers sale were set, for all practical commercial purposes, by the terms
    of the Appointment Order made earlier on June 19, 2020.

[52]

The Appointment Order was made when the Property
    was in an unfinished state and a significant expenditure of funds would be
    required to complete the renovations. The Appointment Order authorized the Receiver
    to take possession of the Property and market it for sale. It did not authorize
    the Receiver to complete the renovations the Pizales had started to make.
    Indeed, para. 19 of the Appointment Order limited the Receivers authority to
    borrow from Hillmount to $150,000, an amount that would not come close to
    completing the needed renovations.

[53]

The Appointment Order had the effect of
    authorizing a process to market the Property on an as is basis or, as put by
    the Receiver in one of its factums, the Appointment Order contemplated a
    liquidation process, not a renovation process. That order, not the Approval
    Order, put in jeopardy any difference in value between the sale of the Property
    on an as complete and as is basis. Accordingly, the Approval Order did not
    result in any loss beyond that already worked by the Appointment Orders
    authorization of the Receiver to market the Property on an as is basis. Put
    another way, the Pizales appeal of the Approval Order seeks to unwind the
    economic effect of the Appointment Order, which the Pizales did not appeal.

[54]

The Pizales advance a supplementary argument,
    contending that even on an as is sale basis the Approval Order resulted in a
    loss to them because the price fetched by the Receiver was less than one of
    their as is appraisals. They argue that the Chambers Judge exacerbated the Motion
    Judges error in finding that none of the Pizales appraisals considered the
    Property on an as is basis.

[55]

I am not persuaded by this submission. After the
    Receiver had entered into the Sale Agreement and moved for approval, the
    Pizales filed two appraisals of the Property:

(i)

a December 30, 2020 appraisal by Heather Markoff, which valued the
    Property on an as complete basis at $6.9 million. The report recorded the
    land value as if vacant at $5 million and estimated the Propertys as is
    market value at $5.955 million, although the author stated that she was unable
    to locate current sales activity in a partially complete state of construction
    at time of sale; and

(ii)

a January 4, 2021 Colliers appraisal, which estimated the as
    complete value of the Property at $6.075 million.

[56]

The Pizales also had obtained a June 2020
    appraisal from TM Appraisers Inc., which opined that the fair market value of
    the Property on an as if complete basis was $7.5 million. It listed the land
    value as if vacant at $5 million by extraction and contained an As Is
    Addendum that estimated the as is value at $6.525 million. According to the
    Receiver, this appraisal was before Koehnen J. in redacted form but not
    produced in response to the Sale Agreement.

[57]

Although the Motion Judge referred in her
    reasons to the December 2020 and January 2021 appraisals, she did not make
    express reference to the as is value found in the December 2020 appraisal. I
    do not view her failure to do so as amounting to an error that somehow brings
    the as is value of the Property into question. As the Motion Judge noted in
    her reasons: the Receiver listed the Property at $4.8 million, a price higher
    than the appraisals it had received; 23 showings elicited no offers; the
    Receiver lowered the listing price, which resulted in its receipt and
    negotiation of a number of offers but no deal; and, finally the Receiver
    accepted the early November 2020 offer from the Purchasers, which was higher
    than its two appraisals and any other offer received. Against those efforts by
    the Receiver, and the absence of any alternative transaction presented by the
    Pizales or their creditors, the fact that the Purchasers offer was lower than
    the as is appraisals received by the Pizales spoke loudly to the reality of
    the existing market for the partially completed Property:
Pricewaterhousecoopers
    Inc. v. 1905393 Alberta Ltd
, 2019 ABCA 433, 98 Alta. L.R. (6th) 1, at
    para. 15. In those circumstances, it is no surprise that the Motion Judge did
    not treat the as is estimate as a relevant indicator of market conditions.

[58]

Accordingly, I am not persuaded that the
    Chambers Judge erred in concluding that the Approval Order did not result in a
    loss greater than $10,000 and, as a result, the Pizales appeal did not fall within
BIA
s. 193(c).

The spent receivership argument

[59]

Although that is sufficient to dispose of the
    Pizales panel review motion, I wish briefly to address the Pizales submission
    that when Hillmount assigned its first mortgage to Elle, it was made whole.
    They argue that with the original applicant creditor no longer part of the
    receivership and the remaining mortgagees opposed to the sale, the receivership
    was spent, with the result that there was no need for the Propertys sale.

[60]

The Motion Judges reasons provide a complete
    answer to that submission. The Motion Judge spent considerable time in her
    reasons considering and weighing the interests of the various parties: at
    paras. 18-26. She wrote that:

(i)

The reasons for the mortgagees opposing the sale
    were not apparent on the face of the record;

(ii)

The mortgagees and Pizales failed to engage in
    the court-authorized receivership and sales process at any time prior to the
    signing of the Sale Agreement;

(iii)

The Receiver conducted a legitimate and proper
    sales process; and, significantly,

(iv)

The mortgagees and Pizales did not put on the table any alternative
    transaction or bring a motion to discharge the Receiver.

[61]

On the last point, in its December 1, 2020
    Acknowledgement in favour of the Receiver and Hillmount, Elle specifically
    acknowledged that it understood (i) the Receivership is not at an end by
    virtue of the undersigned accepting the Assignment; and (ii) until terminated
    by Court order, the Receivership remains in full force and effect.

[62]

In light of those circumstances, the Motion Judges
    conclusion that, having weighed the interests of all parties there was no basis
    to allow their objections to prevent the Receiver from concluding the
    agreement, was a reasonable one.

VII.    THIRD ISSUE: DID THE CHAMBERS JUDGE ERR IN FAILING TO GRANT
    LEAVE TO APPEAL PURSUANT TO
BIA
s. 193(e)?

[63]

In seeking to set aside the Chambers Judges
    refusal to grant leave to appeal the Approval Order pursuant to
BIA
s.
    193(e), the Pizales largely repeat the arguments they make in respect of s. 193(c).
    I have already dealt with those arguments. I would only add that the Chambers
    Judge, applying the well-known test for granting leave to appeal set out in
Business
    Development Bank of Canada v. Pine Tree Resorts
[16]
and the deference appropriate to the discretionary decision of the Motion
    Judge,
[17]
concluded that the Pizales appeal would have little importance to
    bankruptcy/insolvency matters beyond the parties, did not raise a serious issue
    for appeal, and would hinder the receivership and risk losing the sale to the
    Purchasers. Those conclusions were reasonable ones, anchored as they were in
    the record. I see no basis to interfere with the Chambers Judges refusal to
    grant the Pizales leave to appeal.

VIII.   FOURTH ISSUE: THE ADMINISTRATION
    ORDER

[64]

The Administration Order approved the Receivers
    activities described in its Second Report and First Supplement to the Second
    Report and increased the Receivers borrowing authority from $150,000 to
    $250,000. Before the Motion Judge, the Pizales did not oppose the issuance of
    the Administration Order.

[65]

The Pizales sought to appeal, or seek leave to
    appeal, the Administration Order. Before the Chambers Judge they made two
    arguments: (i) the Administration Order is inextricably linked to the issues
    regarding the Approval Order, so that if they had a right to appeal the
    Approval Order or were granted leave to do so, they were entitled to appeal the
    Administration Order; and (ii) the Administration Order creates a loss as it
    authorizes the Receiver to borrow a further $100,000.

[66]

In its Second Report dated December 4, 2020, the
    Receiver stated that any additional amounts borrowed would be applied to the
    Receivers existing fees and any future fees or expenses leading up to the
    closing of the sale. Accordingly, the purpose of the further borrowing approved
    by the Administration Order is to enable the Receiver to complete its efforts
    to sell the Property on an as is basis. The increased borrowing power is
    ancillary to the exercise of the Receivers powers under the Appointment Order
    and does not result in any further jeopardy of value than that worked by the
    Appointment Order. Accordingly, for purposes of the s. 193(c) analysis, the
    operative effect of the Administration Order is, as the Pizales describe,
    inextricably linked with the effect of the Approval Order, which the Chambers
    Judge correctly found did not fall within s. 193(c).

[67]

The Chambers Judge dismissed the Pizales motion
    in respect of the Administration Order for the reasons supporting his dismissal
    of their motion regarding the Approval Order. That was a reasonable conclusion
    for him to reach on the record. I see no basis to interfere with it.

IX.     DISPOSITION

[68]

For the reasons set out above, I would dismiss
    the Pizales panel review motion.

[69]

If the parties are unable to agree on the costs
    of the motion, any party seeking costs of the motion may deliver brief written
    cost submissions of up to five pages in length within 10 days of the release of
    the reasons. Any party against whom costs are sought may deliver brief
    responding cost submissions within 5 days thereafter.

Released: May 28, 2021 G.R.S.

David Brown
    J.A.

I agree.
    G.R. Strathy C.J.O.

I agree.
    B.W. Miller J.A.





[1]
Application for leave to appeal under
BIA
s. 193(e) dismissed: 2016 ONCA 485, 37 C.B.R. (6th) 173.



[2]

Re Dominion Foundry Co
.
, (1965) 52
    D.L.R. (2d) 79 (Man. C.A.);

Alternative
    Fuel Systems Inc. v. EDO (Canada) Ltd. (Trustee of)
, 1997 ABCA 273, 48
    C.B.R. (3d) 171 (Chambers).



[3]

Business Development Bank of Canada v. Pine Tree
    Resorts Inc
.
, 2013 ONCA 282, 115 O.R. (3d) 617 (Chambers), at
    para. 17.



[4]

Trimor Mortgage Investment Corporation v. Fox
,
    2015 ABCA 44, 26 Alta. L.R. (6th) 291 (Chambers).



[5]
Section 195 states, in part, that all proceedings under an order or judgment
    appealed from shall be stayed until the appeal is disposed of, but the Court of
    Appeal or a judge thereof may vary or cancel the stay  if it appears that the
    appeal is not being prosecuted diligently, or for such other reason as the
    Court of appeal or a judge thereof may deem proper.



[6]

Simonelli v. Mackin
, 2003 ABCA 47, 320
    A.R. 330 (Chambers), at paras. 18-20;
Re
    Bearcat Exploration Ltd
.
, at para. 10;
Business Development Bank of Canada v. Pine Tree
    Resorts
,
at para. 17;
7451190
    Manitoba Ltd. v. CWB Maxium Financial Inc. et al
.
, 2019 MBCA 95
    (Chambers), at para. 18;
Buduchnist Credit
    Union Limited v. 2321197 Ontario Inc
.
, 2019 ONCA 588, 72 C.B.R.
    (6th) 245, at para. 12;
CWB Maxium Financial
    Inc. v. 2026998 Alberta Ltd
.
, 2020 ABCA 118 (Chambers), at paras.
    1-2.



[7]

Simonelli
, at paras. 26-27.



[8]

Enroute Imports Inc. (Re)
, at para. 6.



[9]

Davidson
    (Re)
, at para. 6.



[10]

IceGen
    Inc. (Re)
, 2016 ONCA 902, 42 C.B.R. (6th) 183 (Chambers), at para. 3, leave
    to appeal under s. 193(e) dismissed, 2016 ONCA 907, 42 C.B.R. (6th) 175.



[11]

2003945
    Alberta Ltd. v. 1951584 Ontario Inc.
, 2018 ABCA 48, 57 C.B.R. (6th) 272
    (Chambers), at para. 21.



[12]

Sangha
    v. Bhamrah
, 2017 BCCA 434, 6 B.C.L.R. (6th) 1, at paras. 9-12.



[13]

Courtice Auto Wreckers
, at para. 22.



[14]

ATB
    Financial v. Coredent Partnership
, 2020 ABCA 83, 77 C.B.R. (6th) 190
    (Chambers), at para. 6.



[15]

Athabasca
    Workforce Solutions Inc. v. Greenfire Oil & Gas Ltd.
, 2021 ABCA 66, 87 C.B.R.
    (6th) 26 (Chambers), at para. 14.



[16]
The
    test set out in
Pine Tree Resorts
was adopted by a panel of this court
    in
Impact Tool & Mould Inc. v. Impact
    Tool & Mould Inc. Estate
, 2013 ONCA 697, at para. 3.



[17]

Reciprocal
    Opportunities Incorporated v. Sikh Lehar International Organization
, 2018
    ONCA 713, 426 D.L.R. (4th) 273, where this court stated, at para. 54, that an
    appeal court will interfere only where the judge considering the receivers
    motion for approval of a sale has erred in law, seriously misapprehended the
    evidence, exercised his or her discretion based upon irrelevant or erroneous
    considerations, or failed to give any or sufficient weight to relevant
    considerations.


