



COURT OF APPEAL FOR ONTARIO

CITATION: Dal Bianco v. Deem Management
    Services Limited, 2020 ONCA 585

DATE: 20200918

DOCKET: M51655 (C68214)

Juriansz, Tulloch and Jamal
    JJ.A.

BETWEEN

Donald Dal Bianco

Applicant (Appellant/Responding Party)

and

Deem Management Services Limited and

The Uptown Inc.

Respondents
    (Respondents/Responding Parties)

R. Brendan Bissell, for the moving
    party, the receiver, Crowe Soberman Inc.

David T. Ullmann and Brendan Jones, for
    the responding party, Donald Dal Bianco

Harold Rosenberg, for the responding
    party, Deep Foundations Contractors Inc.

Edward L. DAgostino, for the
    responding party, Kieswetter Excavating Inc.

No one appearing for OneSpace Unlimited
    Inc.

Jeffrey A. Armel, for the responding
    party, EXP Services Inc.

Eric Gionet, for the responding party,
    Maxion Management Services Inc.

Heard: September 3, 2020 by video conference

REASONS
    FOR DECISION

[1]

This motion seeks directions on whether an
    appeal lies to this court under s. 193 of the
Bankruptcy and
    Insolvency Act
, R.S.C. 1985, c. B-3, or to the Divisional Court under s.
    71(1) of the
Construction Act
, R.S.O. 1990, c. C.30, from the order of
    Gilmore J. of the Ontario Superior Court of Justice made on March 10, 2020 in a
    receivership. Gilmore J. ruled that certain construction lien claimants had
    priority over a mortgagee in the sale proceeds of a debtors property under s.
    78 of the
Construction Act
: see
Dal Bianco v. Deem Management
    Services et al.
, 2020 ONSC 1500.

[2]

The receiver was appointed in respect of the debtors
    property by order of Wilton-Siegel J. of the Ontario Superior Court under s.
    243(1) of the
Bankruptcy and Insolvency Act
and s. 101 of the
Courts
    of Justice Act
, R.S.O. 1990, c. C.43. The receiver moved before Gilmore J.
    for directions on whether the lien claimants or the mortgagee had priority to
    the proceeds of sale of the debtors property. The parties agreed to separate this
    issue from other issues in the receivership and to seek the courts ruling based
    on an agreed statement of facts.

[3]

If s. 193 of the
Bankruptcy and Insolvency
    Act
governs the appeal route from Gilmore J.s order, then the appeal lies
    to this court, potentially with leave of a judge of this court:

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

(a) if the point
at
    issue
involves future rights;

(b) if the order or decision is likely to
    affect other cases
of a
similar
nature
in the bankruptcy proceedings;

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

(d) from the grant of or refusal to grant a
    discharge if the aggregate unpaid claims of creditors exceed five hundred
    dollars; and

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

[4]

But if s. 71(1) of the
Construction Act
applies, an appeal lies to the Divisional Court as of right:

71
(1)  Except
as otherwise provided in this section, an appeal lies
    to the Divisional
Court
from a judgment
    or an order on a motion to oppose confirmation of a report under this Act.

[5]

The question of how to determine the appeal
    route when a receiver has been appointed under a combination of s. 243(1) of
    the
Bankruptcy and Insolvency Act
and provincial legislation was
    recently addressed by Zarnett J.A. in
Business Development Bank of Canada
    v. Astoria Organic Matters Ltd.
, 2019 ONCA 269, 69 C.B.R. (6th) 13. At
    paras. 29-31 of
Astoria
, Zarnett J.A. agreed with the reasoning of
    Groberman J.A. in
Industrial Alliance Insurance and Financial Services Inc.
    v. Wedgemount Power Limited Partnership
, 2018 BCCA 283, 61 C.B.R. (6th)
    196, at para. 21, that the operative question to determine the appeal route is
    whether the order under appeal is one granted in reliance on jurisdiction
    under the
Bankruptcy and Insolvency Act
. Where it is, the appeal
    provisions of that statute are applicable.

[6]

Zarnett J.A. explained that if the
Bankruptcy
    and Insolvency Act
is
one
of the sources of jurisdiction for the
    order under appeal, an appeal from an order made under it necessarily
    implicates a provision sourced in the [
Bankruptcy and Insolvency Act
]:
    at para. 66. The appeal route is then to this court. Even if provincial law is also
    a source of jurisdiction for the order under appeal and provides for a
    different appeal route, the principle of federal paramountcy resolves any
    conflict in favour of the appeal route under the
Bankruptcy and Insolvency
    Act
: at para. 67. See also
Third Eye Capital Corporation v. Ressources
    Dianor Inc./Dianor Resources Inc.
, 2019 ONCA 508, 435 D.L.R. (4th) 416, at
    paras. 128-131;
Buduchnist Credit Union Limited v. 2321197 Ontario Inc.
,
    2019 ONCA 588, 72 C.B.R. (6th)245, at paras. 10-11; and
Comfort Capital
    Inc. v. Yeretsian
, 2019 ONCA 1017, 75 C.B.R. (6th) 217, at para. 12.

[7]

Here, the order of Gilmore J. under appeal was
    granted
at least partly in reliance
on
    jurisdiction under the
Bankruptcy and Insolvency Act
.

[8]

The receiver had authority to seek the courts directions
    under s. 249 of the
Bankruptcy and Insolvency Act
and paragraph 34 of
    the receivership order. Section 249 of the
Bankruptcy and Insolvency Act
provides as follows:

249
A receiver may
apply
to the court for directions in relation to any
    provision of this Part, and the court shall give, in writing, such directions
, if any,
as it considers proper in the
    circumstances.

Paragraph 34 of the receivership
    order provides as follows:

34.
THIS COURT ORDERS
that the
    Receiver may
from time to time
apply to this
    Court for advice and directions in the discharge of its powers and
duties hereunder
.

[9]

Acting under these sources of authority, the
    receiver moved before Gilmore J. for directions regarding the discharge of
    its powers and duties as receiver under the
Bankruptcy and Insolvency Act
.
    The agreed statement of facts on the motion stated that the receiver had made
    certain distributions but has not been able to distribute [the] remaining
    funds from the proceeds of sale of the debtors property as a result of the
    competing priority claims between the construction lien claimants and the
    mortgagee.

[10]

Gilmore J. provided the courts directions on
    the priority dispute. The order under appeal confirms that the motion was
    brought partly under the
Bankruptcy and Insolvency Act
 to determine
    competing priorities under  the
Construction Act
between certain
    construction liens and a registered real property mortgage, in an APPLICATION
    UNDER Section 243(1) of the
Bankruptcy and Insolvency Act
and Section
    101 of the
Courts of Justice Act
.

[11]

We agree that the mere act of styling the motion
    in the receivership does not give automatic access to the appeal routes under the
    [
Bankruptcy and Insolvency Act
], because [t]he jurisdiction of the
    court is governed by the substance of the order made:
RREF II BHB IV
    Portofino, LLC v. Portofino Corporation
, 2015 ONCA 906, 33 C.B.R. (6th) 9,
    at para. 12. Here, however, the order under appeal was not just styled in the
    receivership. The substance of the order was in proceedings authorized by the
Bankruptcy
    and Insolvency Act
 it responded to a motion for the courts directions
    brought under s. 249 of the
Bankruptcy and Insolvency Act
to help the
    receiver distribute the remaining funds in the receivership.

[12]

Section 249 of the
Bankruptcy and Insolvency
    Act
was thus a source of jurisdiction for the courts order. To use the
    language of
Astoria
, at para. 29, the order under appeal was granted
    in reliance on jurisdiction under the
Bankruptcy and Insolvency Act
. This
    establishes that the appeal route is to this court.

[13]

As agreed by the parties, there will be no order
    as to costs.

R. G. Juriansz J.A.

M. Tulloch J.A. 

M. Jamal J.A.


