



COURT OF APPEAL FOR ONTARIO

CITATION: RREF II BHB IV Portofino, LLC v. Portofino
    Corporation, 2015 ONCA 906

DATE: 20151221

DOCKET: M45402 (C60169)

MacPherson, Sharpe and van Rensburg JJ.A.

BETWEEN

RREF II BHB IV Portofino, LLC

Applicant

and

Portofino Corporation

Respondent

Tony Van Klink, for the appellant, BDO Canada Limited,
    Receiver of Portofino Corporation

Gino Morga, Q.C., for the respondent, Remo Valente Real Estate
    (1990) Limited

David A. Taub, for RREF II BHB IV Portofino, LLC

Heard: December 17, 2015

ENDORSEMENT

[1]

The respondent, Remo Valente Real Estate (1990) Limited (Valente) is
    the plaintiff in a pending civil action. Valente obtained a pre-trial order requiring
    the defendant, Portofino Corporation (Portofino), to post security for its
    claim of oppression and breach of contract. Valente succeeded at trial on the
    oppression claim but that judgment was reversed on appeal and the contract
    claim was remitted for trial. A further order (of Quinn J.) was made in the
    civil action, that the security, consisting of a letter of credit, continue in
    place.

[2]

Before the contract claim was tried, the appellant was appointed by the
    court as Portofinos receiver pursuant to s. 243 of the
Bankruptcy and
    Insolvency Act
, R.S.C. 1985, c. B-3

(the BIA) at the request of
    a secured creditor, Bank of Montreal. The banks security in Portofino was
    assigned to RREF II BHB IV Portofino, LLC. The receivership order expressly provided
    that the civil action was not stayed.

[3]

The appellant receiver then moved for an order to release the security.
    The motion was brought in two proceedings: for advice and directions in the
    receivership proceedings and for the variation of the order of Quinn J. in the
    civil action, so that the letter of credit could be cancelled. The motion
    judge, Carey J., declined to cancel the letter of credit. The appellant seeks
    to appeal that order to this court. The order is a single order, styled in both
    the civil action and the receivership proceedings.

[4]

The appellant contends that it has a right to appeal this interlocutory
    order under sections 193(a) or (c) of the BIA on the basis that the order was
    made in the receivership. However, in July 2015 the appellant brought a motion
    before a single judge of this court in chambers seeking leave to appeal the
    order under s. 193(e) of the BIA. In argument, the appellant asserted that
    it had a right of appeal (without leave) under sections 193(a) and (c), but
    requested leave to appeal, if necessary.

[5]

In deciding the appellants motion, the chambers judge expressed doubt
    as to whether the provisions of the BIA relied upon were applicable, suggesting
    that the proper appeal route was to the Divisional Court. He denied leave to
    appeal under s. 193(e) of the BIA and concluded there was no right to appeal
    under ss. 193(a) and (c). He did not quash the appeal, nor was he asked to
    do so.

[6]

The appellant now submits that, as a single judge, the chambers judge
    had no jurisdiction to make an order that had
the effect
of quashing
    its appeal: see
TFP Investments Inc. (Trustee of) v. Singhal
(1993), 3
    C.B.R. (3d) 225 (Ont. C.A.). Needless to say, that position is inconsistent
    with the appellants approach to the motion before the chambers judge, where
    all aspects of s. 193 were argued. Nevertheless, we agree that a single judge
    has no jurisdiction to quash an appeal and that only a panel of three judges
    can conclusively rule that this court does or does not have jurisdiction.

[7]

However, in our view, the appellants contention that an appeal lies to
    this court is misconceived.

[8]

The order appealed from is interlocutory. Under s. 19(1)(b) of the
Courts
    of Justice Act
, R.S.O. 1990, c. C.43, the appeal of an interlocutory order
    is to the Divisional Court, with leave.

[9]

Section 193 of the BIA authorizes the appeal of both interlocutory and
    final orders to this court, in the circumstances outlined in (a) through (d),
    or with leave of the court, under (e), but only an order made by a bankruptcy
    court judge is subject to the appeal routes in s. 193 of the BIA. Section 183
    provides that a bankruptcy court has jurisdiction in bankruptcy and in other
    proceedings authorized by the BIA.

[10]

The
    appellant says Carey J. was acting in proceedings authorized by the BIA,
    because one of the motions resulting in his order was a motion for directions
    in the receivership. This would mean that, simply by bringing the motion in
    both the civil action and the receivership, the appellant would have open the
    route to appeal to this court under s. 193 of the BIA
.


[11]

We
    disagree. Although the order under appeal was made at the request of a
    receiver, and styled in the receivership as well as the civil action, the
    relief sought was against the plaintiff in the civil action, and involved an
    attempt to vary an order made by another judge in that proceeding. The
    substance of what the receiver was seeking was a variation under rule 59.06 of
    the order of Quinn J., which was an order made in the civil action.

[12]

The
    act of styling the motion in the receivership as well as the civil action did
    not give the appellant automatic access to the appeal routes under the BIA. The
    jurisdiction of the court is governed by the substance of the order made. The
    order dismissed a motion to vary an order made in a civil action, and required
    the continued posting of security in that action. This was not an order in
    proceedings authorized by the BIA. As such, the proper route of appeal is to
    the Divisional Court, with leave.

[13]

As
    this court has no jurisdiction to entertain the appeal, the appeal is quashed.

[14]

The
    appellant receiver shall pay the costs of the respondent Valente, fixed at
    $5,000, inclusive of disbursements and applicable taxes. Although RREF II BHB
    IV Portofino, LLC appeared and supported the appellants position, no costs
    were sought by or from this party.

J.C. MacPherson J.A.

Robert J. Sharpe J.A.

K. van Rensburg J.A


