



COURT OF APPEAL FOR ONTARIO

CITATION: Urbancorp Toronto Management Inc. (Re), 2022 ONCA
    181

DATE: 20220303

DOCKET: M52860

Strathy C.J.O., Roberts and Sossin JJ.A.

In the Matter of the
Companies Creditors
    Arrangement Act
, R.S.C. 1985, c. C-36, as amended;

And in the Matter of a Plan of Compromise or Arrangement of Urbancorp Toronto
    Management Inc., Urbancorp (St. Clair Village) Inc., Urbancorp (Patricia) Inc.,
    Urbancorp (Mallow) Inc., Urbancorp (Lawrence) Inc., Urbancorp Downsview Park
    Development Inc., Urbancorp (952 Queen West) Inc., King Residential Inc.,
    Urbancorp 60 St. Clair Inc., High Res. Inc., Bridge On King Inc. (Collectively the
    Applicants) and the Affiliated Entities Listed In Schedule A Hereto

Neil Rabinovitch and Kenneth
    Kraft, for the moving party, Guy Gissin, in his capacity as Foreign
    Representative of Urbancorp Inc.

Robin B. Schwill, for the responding
    party, KSV Kofman Inc., in its capacity as Monitor

Bobby Kofman, Noah Goldstein and
    Robert Harlang, for the responding party, KSV Restructuring Inc.

Andrew Winton, for the responding
    party, Doreen Saskin

Heard: in writing

Motion for leave to appeal from
    the order of Chief Justice Geoffrey B. Morawetz of the Superior Court of
    Justice, dated September 16, 2021, with reasons at 2021 ONSC 5073.

REASONS
    FOR DECISION

[1]

Pursuant to s. 13 of the
Companies Creditors Arrangement Act
, R.S.C.
    1985, c. C-36 (the 
CCAA
), the moving party, in his capacity as
    Foreign Representative of Urbancorp Inc., seeks leave to appeal from the
    distribution order of the Supervising Judge of the Superior Court of Justice (the
    Supervising Judge) dated September 16, 2021, authorizing the court-appointed
    Monitor of the applicants to make a distribution to King Towns North Inc.
    (KTNI). KTNI is the owner of certain lands known as the Berm Lands and the
    landlord under a lease of these lands to certain entities, described below. The
    Monitor does not join in the appeal.

[2]

Section 13 provides that any person dissatisfied with an order or
    decision made under the
CCAA
may appeal from the order or decision
    with leave.

[3]

In determining whether leave should be granted, this court considers
    whether:

a.

the proposed appeal is
prima facie
meritorious or frivolous;

b.

the points on the proposed appeal are of significance to
    the practice;

c.

the points on the proposed appeal are of significance to
    the action; and

d.

the proposed appeal will unduly hinder the progress of the
    action.

See
Stelco Inc.

(Re)
(2005), 75 O.R.
    (3d) 5 (C.A.), at para. 24;
Nortel Networks Corporation (Re)
,
    2016 ONCA 332
, 130 O.R. (3d) 481, at para. 34, application for leave to
    appeal discontinued, [2016] S.C.C.A. No. 301;
Timminco Limited (Re)
,
    2012 ONCA 552, 2 C.B.R. (6th) 332, at para. 2;
DEL Equipment Inc. (Re)
,
    2020 ONCA 555, at para. 12.

[4]

Leave to appeal is granted sparingly and only where there are serious
    and arguable grounds that are of real and significant interest to the parties:
Nortel Networks
, at para. 34.

Background

[5]

The facts are set out in detail in the reasons of the Supervising Judge.
    We summarize only those facts necessary to explain our decision.

[6]

CCAA
proceedings of the Urbancorp group of companies (the
    Urbancorp Group) have been overseen by the Commercial List since 2016. In
    related proceedings, Urbancorp Renewable Power Inc. (URPI) has been in
    receivership since 2018. The Supervising Judge has been case managing both
    proceedings since 2019.

Urbancorps Geothermal Assets

[7]

The Urbancorp Group owned certain assets, described as the Geothermal
    Assets, located in four condominium buildings in Toronto. These assets
    provided heating and air conditioning to each condominium and included, among
    other things, assets located within the condominium building itself,
    below-ground wells to supply water to the heating and air conditioning systems,
    supply agreements with the various condominium corporations and a management
    agreement between the manager of the Geothermal Assets and the owners of those
    assets.

[8]

In the course of these proceedings, the Geothermal Assets pertaining to
    three of the condominiums were sold to Enwave Geo Communities LP (Enwave) for
    $24 million.

The Bridge Geothermal Assets

[9]

The assets at issue before the Supervising Judge (the Bridge Geothermal
    Assets) pertained to one of those condominiums, referred to as Bridge,
    located at 38 Joe Shuster Way in Toronto. At the time of the motion before the
    Supervising Judge, there was approximately $7.7 million available for
    distribution to stakeholders in relation to the Bridge Geothermal Assets.
    KTNIs claim was one of seven claims against those funds. The Monitor admitted
    six claims totaling $5.086 million, but disallowed KTNIs claim of $5.875
    million. As noted above, the Supervising Judge rejected the Monitors
    disallowance and allowed KTNIs claim.

The Berm Lands

[10]

In
    the case of the Bridge Geothermal Assets, the majority of the wells were
    located on a parcel of land adjacent to the Bridge condominium, referred to as
    the Berm Lands. KTNI was the owner of the Berm Lands.

The Berm Lease

[11]

Pursuant
    to a lease dated July 10, 2010 (the Berm Lease), the Berm Lands were leased
    by KTNI jointly to Vestaco Homes Inc. (Vestaco Homes), an Urbancorp-related
    entity which owned the Bridge Geothermal Assets, and URPI, which was the
    manager of the Geothermal Assets. The Berm Lease was set to expire on July 9,
    2060, with provision for renewals, making its term consistent with the relevant
    geothermal energy supply agreement.

[12]

All
    parties to the Berm Lease  KTNI as landlord and Vestaco Homes and URPI as
    tenants  were beneficially owned or controlled by the Saskin family. Alan
    Saskin signed the lease on behalf of each party. Pursuant to a declaration of trust
    dated December 27, 2012, KTNI is declared to be holding all of its interests in
    the Berm Lands in trust for Urbancorp Management Inc. (UMI). The Saskin
    Family Trust is considered to be the sole shareholder of UMI. Doreen Saskin,
    Alan Saskins spouse, claims to be a secured creditor of UMI for approximately
    $2.8 million.

[13]

The
    tenants interest in the Berm Lease was one of the assets sold to Enwave. Enwave
    allocated a value of $2.049 million to the Berm Lease. The Supervising Judge
    found that this was an appropriate valuation.

[14]

The
    Berm Lease initially provided for an annual rent of $200,000, payable to KTNI.
    In 2015, Urbancorp Inc. was in the process of raising funds from the issuance
    of bonds in Israel. There was evidence that in order to increase the value of
    the Geothermal Assets for the purpose of the bond issuance, Alan Saskin amended
    the Berm Lease to provide a rental of $100 per annum, rather than $200,000,
    because a payment of rent to a related company outside the bond structure would
    reduce the net income and the net value of the Bridge geothermal system, made
    up of the Bridge Geothermal Assets.
[1]

[15]

It
    was not disputed that $100 per annum was not a market rent for the Berm Lease.
    However, the Berm Lease provided that the lease could not be transferred or
    assigned without the consent of the landlord, KTNI. The effect was that a
    tenant that was not controlled or beneficially owned by the Saskin family could
    not benefit from a nominal rent at the expense of a Saskin-related landlord.

[16]

This
    brings us to the provision of the Berm Lease, referred to below as the
    Transfer Provision, which is at the heart of this dispute:

13.4(e) Where the Transferee pays or gives to the Transferor
    money or other value that is reasonably attributable to the desirability of the
    location of the Leased Premises or to leasehold improvements that are owned by
    the Landlord or for which the Landlord has paid in whole or in part, then at
    the Landlords option, the Transferor will pay to the Landlord such money or
    other value in addition to all Rent payable under this lease and such amounts
    shall be deemed to be further Additional Rent.

[17]

The
    effect of the Transfer Provision is that on a transfer of the lease, KTNI is
    entitled to the value of the lease. Doreen Saskin contended that the effect
    of this provision in the circumstances is that any amount of the proceeds of
    sale of the Geothermal Assets to Enwave that are attributable to the transfer
    of the Berm Lease should be allocated to KTNI.

The Sale of the Bridge Geothermal Assets to Enwave

[18]

In
    December 2020, over the objection of KTNI, the Supervising Judge approved the
    sale of the Bridge Geothermal Assets to Enwave. The order provided that the
    assignment was free of any payment obligations to KTNI that might arise
    pursuant to s. 13.4 of the Berm Lease. The sale order also provided that the
    allocation of the proceeds of sale was to be determined at a later date. As
    noted earlier, all claims against the Bridge Geothermal Assets, other than
    those related to the Berm Lease, have been resolved.

[19]

The
    Monitor disallowed KTNIs claim to a portion of the proceeds of sale of the
    Bridge Geothermal Assets to Enwave, giving the following reasons:

The Berm Lease is an asset of Vestaco Homes and URPI, as
    tenants, to the extent it provides for under market rent. The Berm Provision
    has the effect of stripping this value away from Vestaco Homes and URPI for no
    consideration. While this would be of little concern if all parties were
    related parties and solvent, the fact is that Vestaco Homes and URPI are now
    insolvent and subject to CCAA and receivership proceedings, respectively.
    Accordingly, in the Court Officers view, a clause set up between related parties
    to manage inter-group asset allocations and tax consequences should not be
    enforceable under the circumstances as a matter of equity and fairness when
    doing so would deprive the estates of value that they possessed on the filing
    date, for no consideration, with the consequential beneficiary being the sole
    officer and director of the Urbancorp Group, Alan Saskin, or members of his
    family.

The Court Officer believes that URPI was made a tenant under
    the Berm Lease as a matter of pure convenience as it was the manager of the
    Bridge Geothermal Assets for the benefit of Vestaco Homes, and the party who
    would be exercising access rights for repairs and maintenance. Commercially, as
    Vestaco Homes is the owner of the Bridge Geothermal Assets, which includes the geothermal
    piping located on the Berm Lands, it makes sense that the economic value of the
    Berm Lease would be allocated fully to it.

[20]

The
    Monitor moved before the Supervising Judge for directions concerning the
    distribution of the proceeds of the sale of the Geothermal Assets. The only
    contested issue related to which party was entitled to the funds reserved ($2.8
    million) in relation to the Berm Lease. The Monitor recommended that the amount
    allocated to the Berm Lease be for the benefit of the tenant Vestaco Homes and
    that KTNIs claim be disallowed. KTNI opposed this recommended proposal.

The Decision of the Supervising Judge

[21]

The
    central issue on the motion below was the interpretation and application of the
    Transfer Provision of the Berm Lease, and specifically whether the provision
    offended either the 
pari passu
 rule or the anti-deprivation rule,
    both of which were discussed and explained in the decision of the Supreme Court
    of Canada in
Chandos Construction Ltd. v. Deloitte Restructuring Inc.
,
    2020 SCC 25, 449 D.L.R. (4th) 293.

[22]

The
    Monitor, supported by the Foreign Representative of Urbancorp Inc., took the
    position that Vestaco Homes, one of the tenants, should receive the amount
    Enwave attributed to the Berm Lease. KTNI, supported by Doreen Saskin, opposed
    this proposal.

[23]

The
    Supervising Judge described the Monitors position as follows, at para. 17:

The Monitor is of the view that the Berm Lease is an asset of
    Vestaco Homes and URPI, as Tenants, to the extent it provides for under market
    rent. The Berm Provision has the effect of stripping this value away from
    Vestaco Homes and URPI for no consideration. The Monitor is of the view that a
    clause set up between related parties to manage inter-group asset allocations
    and tax consequences should not be enforceable under the circumstances as a
    matter of equity and fairness when doing so would deprive the estates of value
    that they possessed on the filing date, for no consideration, with the
    consequential beneficiary being the sole officer and director of the Urbancorp
    group, Alan Saskin, or members of his family.

[24]

The
    Supervising Judge rejected evidence tendered by Urbancorp Inc. concerning the
    drafting of the Berm Lease, the purpose of s. 13.4 and the decision to reduce
    the annual rent. He found that the affiant, Mr. Mandell, had failed to disclose
    a cooperation and immunity agreement he had made with the Foreign
    Representative and that his evidence was unreliable and would be disregarded.

[25]

As
    a result, the Supervising Judge based his determination of the issues on the
    documentary record. Applying the principles of contract interpretation
    (referring to
Ventas, Inc. v. Sunrise Senior Living Real Estate Investment
    Trust
, 2007 ONCA 205, 85 O.R. (3d) 254, at para. 24), he accepted the submission
    of Doreen Saskin concerning the interpretation of the Transfer Provision and
    found that, as a matter of contract interpretation, the portion of the
    distribution funds allocated to the Berm Lease was to be transferred to KTNI.
    He observed, at paras. 55-57:

Counsel to Ms. Saskin submits that the starting point for the
    interpretation of the provision is the plain language in s. 13.4(e) of the Berm
    Lease, which expressly states that the Transferor is required to pay the
    proceeds of transfer of the lease to the Landlord.

Counsel further submits that this provision needs to be read in
    the context of the objective factual matrix of the terms of the Berm Lease as a
    whole. This is a long-term lease between non-arms length parties for nominal
    rent and there is no dispute that the rent does not reflect the market value of
    the leasehold interest  which is precisely why EGC allocated $2 million in
    value to the lease. EGC paid URPI that sum to buy the right to pay $100
    annual rent to KTNI for so long as the Berm Lands were being used to generate
    geothermal energy. Accordingly, this is precisely the circumstance contemplated
    by s. 13.4(e) of the Berm Lease, and there is a contractual obligation for the
    portion of the Distribution Funds allocated to the lease to be transferred to
    KTNI.

I have been persuaded by the submissions of counsel to [Ms.]
    Saskin. In my view, the plain language of s. 13.4(e) of the Berm Lease
    establishes the basis for the claim of KTNI.

[26]

The
    Supervising Judge then turned to the Monitors submission that the Transfer
    Provision should be invalidated under either the
pari passu
rule or
    the anti-deprivation rule. The
pari passu
rule prohibits contractual
    provisions that allow creditors to obtain more than their fair share on the
    insolvency of the counterparty. The anti-deprivation rule, he said, protects
    third party creditors, by rendering void contractual provisions that, upon
    insolvency, remove value that would otherwise have been available to a debtors
    creditors from their reach: referring to
Chandos
.

[27]

In
    rejecting this submission, the Supervising Judge referred to and adopted the
    submissions made by counsel for Doreen Saskin. After setting out those
    submissions, the Supervising Judge observed, with respect to the
pari passu
rule, at para. 65:

In my view, the submissions put forth by Doreen Saskin on this
    issue are a complete answer to the arguments raised by the Monitor.
    Specifically, the Berm Lease makes clear that Vestaco does not have an interest
    in the transfer value of the lease  that value was retained by the landlord,
    KTNI in accordance with s. 13.4(e). The Berm Lease reserved the transfer value
    to KTNI and, accordingly, the
pari passu
rule, which invalidates
    contractual terms that prefer one creditor ahead of the others, does not come
    into play on these facts, because KTNIs interest in the Distribution Funds
    does not alter any scheme of distribution.

[28]

With
    respect to the anti-deprivation rule, counsel for Doreen Saskin submitted that
    the anti-deprivation rule requires as a precondition that the impugned term of
    a contract is triggered by an event of insolvency or bankruptcy. Counsel noted
    that the provision in the Berm Lease did not mention bankruptcy or insolvency
    and was agnostic as to whether the transfer occurs in the insolvency context
    or not. The Supervising Judge agreed, at para. 66:

The anti-deprivation rule does not apply as the relevant clause
    does not mention insolvency or bankruptcy. Rather, it applies to all transfers
    of the lease. The clause is triggered by the transfer of the lease.

[29]

The
    Supervising Judge concluded that s. 13.4(e) of the Berm Lease was not
    invalidated under either the
pari passu
rule or the anti-deprivation
    rule.

[30]

The
    Supervising Judge therefore ordered the Monitor to distribute $2.049 million to
    KTNI from the funds available for distribution, with the proviso that there be
    no distribution to Doreen Saskin until such time as her claim in the bankruptcy
    of UMI, KTNIs parent, had been fully and finally accepted by the trustee in
    bankruptcy of UMI.

The Moving Partys Submissions

[31]

The
    moving party submits that the proposed appeal is meritorious and is significant
    to the parties and the profession. He submits that it raises an issue of
    significance to bankruptcy practice concerning the application of the decision
    of the Supreme Court of Canada in
Chandos
, which he submits should be
    seen as a statement of first principles, rather than as a complete code. He
    submits that the practice needs to know whether the anti-deprivation rule can
    be excluded by drafting a provision that omits reference to the words
    bankruptcy or insolvency.

[32]

If
    granted leave to appeal, the moving party proposes to address the following
    issues:

a.

Whether
    the anti-deprivation rule applies in circumstances where an impugned provision
    is not expressly triggered by an event of insolvency, but the effect of the
    clause is to strip value from the insolvent debtors estate. The Supervising
    Judge elevated form over substance in the application of
Chandos
by
    finding that the anti-deprivation rule does not apply to provisions that do not
    expressly reference an event of insolvency. He failed to consider that,
    practically speaking, the only scenario in which s. 13.4(e) could apply would
    be an insolvency or bankruptcy. While the Supreme Court in
Chandos
held that the anti-deprivation rule does not apply to a provision that is not
    triggered by an event other than insolvency or bankruptcy, it did not find that
    the rule could be avoided by clever drafting where, as a practical matter, it
    could only apply in bankruptcy or insolvency;

b.

Whether the Supervising Judge failed to determine whether the value
    attributed to the Berm Lease is reasonably attributable to the desirability of
    the location of the Leased Premises within the meaning of the Transfer Provision;
    and

c.

Whether the Supervising Judge erred by failing to consider the evidence
    of both Mr. Mandell and Mr. Saskin concerning the factual matrix of the
    amendment of the lease.

[33]

The
    moving party submits that granting leave to appeal will not unduly delay the
    insolvency proceedings, which have been continuing since 2016. The asset has
    been monetized but there will be no distribution to Doreen Saskin until such
    time as her claim against UMI has been accepted by UMIs trustee in bankruptcy.

Discussion

[34]

The
    errors identified by the moving party are, at their highest, mixed questions of
    fact and law and will not be set aside in the absence of an extricable error of
    law or a palpable and overriding error in the assessment of the evidence.

[35]

In
    our view, the moving party has not satisfied the first branch of the test for
    leave. None of the alleged errors raise a
prima facie
meritorious
    issue for appeal.

[36]

As
    to the first proposed ground of appeal, we do not accept the moving partys submission
    that the Supervising Judge erred in his application of
Chandos
. It
    bears noting, as the Supreme Court did, that the anti-deprivation rule has
    relatively ancient roots in Canadian law, dating to
Watson v. Mason
(1876), 22 Gr. 574 (Ont. C.A.) and
Hobbs v. The Ontario Loan and Debenture Co.
,
    (1890) 18 S.C.R. 483. The rule was referred to by Blair J., as he then was, in
Canadian
    Imperial Bank of Commerce v. Bramalea Inc.
(1995), 33 O.R. (3d) 692 (Gen.
    Div.), in which he adopted the following summary of the rule, at p. 694:

A provision in an agreement which provides that upon an
    insolvency, value is removed from the reach of the insolvent persons creditors
    to which would otherwise have been available to them, and places that value in
    the hands of others  presumably in a contract other than a valid secured
    transaction  is void on the basis that it violates the public policy of
    equitable and fair distribution amongst unsecured creditors in insolvency
    situations.

[37]

He
    added, at p. 695:

I am satisfied that the principle which underlies the notion
    is the deprivation of the creditors interests in a bankruptcy as a result of a
    contractual provision that is triggered only in the event of bankruptcy or
    insolvency and which results in property that would otherwise be available to
    the bankrupt and the creditors, or its value, being diverted to which is in
    effect, a preferred unsecured creditor. [Citations omitted.]

[38]

In
Chandos
, the majority confirmed that the anti-deprivation rule exists
    in Canadian law and has not been judicially or statutorily eliminated.
    Referring to
Bramalea
, it described the rule as follows, at para. 31:

As
Bramalea
described, the anti-deprivation rule
    renders void contractual provisions that,
upon insolvency
,
    remove value that would otherwise have been available to an insolvent person's
    creditors from their reach. This test has two parts:
first,
    the relevant clause must be triggered by an event of insolvency or bankruptcy
;
    and second, the effect of the clause must be to remove value from the
    insolvent's estate. This has been rightly called an effects-based test.
    [Emphasis added.]

[39]

After
    stating that the focus of inquiry is on the effects of the provision rather
    than the intention of the parties in drafting it, the majority in the Supreme
    Court stated, at para. 35:

The effects-based rule, as it stands, is clear. Courts (and
    commercial parties)
do not need to look to anything other
    than the trigger for the clause and its effect
. The effect of a clause
    can be far more readily determined in the event of bankruptcy than the
    intention of contracting parties.
An effects-based
    approach also provides parties with the confidence that contractual agreements,
    absent a provision providing for the withdrawal of assets upon bankruptcy or
    insolvency, will generally be upheld
. [Emphasis added.]

[40]

The
    Court added, at para. 40:

All that said, we should recognize that there are nuances with
    the anti-deprivation rule as it stands. For example, contractual provisions
    that eliminate property from the estate, but do not eliminate value, may not
    offend the anti-deprivation rule (see
Belmont
,
at para. 160, per Lord Mance;
Borlands
    Trustee v. Steel Brothers & Co. Limited
, [1901] 1 Ch. 279; see also
Coopérants
).
Nor do provisions whose effect is triggered by an event
    other than insolvency or bankruptcy
. Moreover, the anti-deprivation rule
    is not offended when commercial parties protect themselves against a
    contracting counterparty's insolvency by taking security, acquiring insurance,
    or requiring a third-party guarantee. [Emphasis added.]

[41]

The
    emphasized portions of the above extracts make it clear that the focus of the
    concern is (a) whether the provision in question is triggered by an event of
    bankruptcy or insolvency and (b) whether the effect of the contractual
    provision is to deprive the estate of assets
upon
    bankruptcy
: see Lloyd W. Houlden, Geoffrey B. Morawetz & Janis P.
    Sarra,
The 2021 Annotated Bankruptcy and Insolvency Act
(Toronto:
    Thomson Reuters, 2021), at F§108. The Supreme Court in
Chandos
was
    clearly aware of the commercial importance of the issue when it stated that
    contractual agreements, absent a provision providing for the withdrawal of
    assets upon bankruptcy or insolvency, will generally be upheld.

[42]

As
    counsel for Doreen Saskin submitted before the Supervising Judge and reiterated
    in their written submissions, the Supreme Court confirmed in
Chandos
that the anti-deprivation rule does not apply to provisions the effect of which
    is not triggered by bankruptcy or insolvency:
Chandos
, at para. 40.
    The Transfer Provision was triggered by the transfer of the lease, not the
    insolvency of the Urbancorp Group and its affiliates.

[43]

We
    do not accept the submission of the moving party that the Supervising Judge
    elevated form over substance because the only circumstance in which the
    Transfer Provision could apply was an insolvency proceeding. In confirming an
    effects-based approach, as opposed to an intention-based (or commercial
    reasonableness) test, the Supreme Court emphasized the need for commercial
    certainty, at para. 35:

The effects-based rule, as it stands, is
    clear. Courts (and commercial parties) do not need to look to anything other
    than the trigger for the clause and its effect
. The effect of a clause
    can be far more readily determined in the event of bankruptcy than the
    intention of contracting parties.
An effects-based
    approach also provides parties with the confidence that contractual agreements,
    absent a provision providing for the withdrawal of assets upon bankruptcy or
    insolvency, will generally be upheld
. [Emphasis added.]

[44]

It
    cannot possibly be said, in the case of a 50-year lease, with provision for
    renewals, that the Transfer Provision could only ever apply in the case of
    insolvency or bankruptcy.

[45]

The
    interpretation of the Transfer Provision and the application of the
    anti-deprivation rule to the circumstances of this case is a question of mixed
    fact and law and the Supervising Judges decision in that regard is entitled to
    deference. We therefore see little merit to the proposed appeal on the first
    ground.

[46]

Nor
    do the remaining proposed grounds raise
prima facie
meritorious issues. These grounds
relate to the
    Supervising Judges interpretation of the agreement, including his assessment
    of the utility of the factual matrix in the interpretative exercise and his
    assessment of the evidence. Again, his interpretation is entitled to deference.
    While the Supervising Judge did not expressly consider whether the value of the
    Berm Lease was reasonably attributable to the location of the premises, it can
    be inferred that he did so. The proximity of the Berm Lands to the Bridge condominium,
    served by the wells on those lands, was undoubtedly a significant factor of its
    value.

[47]

In
    our view, none of the proposed grounds for appeal can be described as matters
    of importance to the practice. In the case of the application of the
    anti-deprivation rule,
Chandos
quite clearly lays out the framework,
    at para. 40: a contractual provision does not offend the anti-deprivation rule
    so long as it can be triggered by an event other than insolvency or bankruptcy.
    Further, the application of the rule will necessarily be fact-specific and
    dependent upon the interpretation of the particular terms of the contract in
    each individual case. For this reason, alleged interpretive errors by the
    Supervising Judge will be of limited assistance in future cases.

[48]

While
    the appeal may be of significance to this action, standing alone, this factor
    is insufficient to warrant granting leave
    to appeal in this case:
Nortel Networks
, at para. 95.

[49]

Having
    regard to these conclusions, the proposed appeal would unduly hinder the
    completion of the proceedings, which have been underway for nearly six years
    and are nearing completion. The allocation of the proceeds of the sale of the
    Bridge Geothermal Assets is one of the final steps.

[50]

Finally,
    we note that having completed his contractual analysis in the absence of any
    extricable error of law or palpable and overriding error, the Supervising Judge
    was entitled to make a discretionary decision as to the distribution of the
    sale proceeds. As the Supreme Court of Canada has recently noted, supervising
    judges in
CCAA
proceedings are entitled to broad discretion and
    appellate courts must exercise particular caution before interfering with
    orders made in accordance with that discretion:
Canada v. Canada North
    Group Inc.
, 2021 SCC 30, 460 D.L.R. (4th) 309, at para. 22. Intervention
    is only appropriate where the judge has erred in principle or exercised their
    discretion unreasonably:
Grant Forest Products Inc. v. The Toronto-Dominion
    Bank
, 2015 ONCA 570, 387 D.L.R. (4th) 426, at para. 98;
Laurentian
    University of Sudbury (Re)
, 2021 ONCA 199, 87 C.B.R. (6th) 243, at paras.
    19-20;
9354-9186 Québec inc. v. Callidus Capital Corp.
, 2020 SCC 10, 78
    C.B.R. (6th) 1, at paras. 53-54. We see no error in principle or unreasonable
    exercise of discretion in the making of the distribution order.

Disposition

[51]

For
    these reasons, the motion for leave to appeal is dismissed.

[52]

If
    not otherwise resolved, the parties may address the costs of this motion by
    written submissions. The responding party shall file its submissions within 15
    days of the release of these reasons. The moving party shall have 15 days to
    reply. The submissions shall not exceed three pages in length, excluding the
    costs outlines.

G.R. Strathy C.J.O.

L.B. Roberts J.A.

L. Sossin J.A.




SCHEDULE "A"

LIST OF NON APPLICANT AFFILIATES

Urbancorp Power Holdings Inc.

Vestaco Homes Inc.

Vestaco Investments Inc.

228 Queens Quay West Limited

Urbancorp Cumberland 1 LP

Urbancorp Cumberland 1 GP Inc.

Urbancorp Partner (King South) Inc.

Urbancorp (North Side) Inc.

Urbancorp Residential Inc.

Urbancorp Realtyco Inc.





[1]
For further clarity,
Vestaco Homes was added as a party to the
    Berm Lease at the time it was amended in 2015.


