





CITATION:
Lechcier-Kimel
          (Re), 2011 ONCA 590



DATE: 20110913



DOCKET: M40253 (C53831)



COURT OF APPEAL FOR ONTARIO



Weiler J.A. (In Chambers)



In the Matter of the Bankruptcy of Jack
Lechcier-Kimel
, of the City of Toronto, in
          the                                                           Province of Ontario



Jonathan H.
Wigley
, for the moving
          party/responding party by way of cross-motion, HSBC Bank Canada



Cameron Wetmore, for the responding party/moving party by way
          of cross-motion, Jack
Lechcier-Kimel



Heard: August 24, 2011



On appeal from the order of Justice
          David M. Brown of the Superior Court of Justice dated March 24, 2011, and on
          a motion and cross-motion for directions.



Weiler J.A. (in chambers):



[1]

HSBC Canada Bank (HSBC) brought a motion to be added as
    a creditor in the bankruptcy application of Jack
Lechcier-Kimel
(JLK).  HSBCs motion was granted.  JLK filed a notice of appeal from that
    decision.  HSBC brought a motion for an
    order that JLK requires leave of this court to pursue an appeal pursuant to s.
    193(e) of the
Bankruptcy and Insolvency
    Act,
R.S.C. 1985, c. B-3, as amended (
BIA
).  In the event that leave is required, HSBC
    submits that I should refuse to grant leave on the basis that JLKs appeal has
    no merit.  Finally, and in the
    alternative, if leave is granted, HSBC seeks an order expediting the appeal and
    security for costs.

[2]

JLK argues that leave is not required but, if leave is
    required, JLK has now brought a cross-motion requesting leave.  JLK also submits that, if leave is required,
    a panel of three judges should decide the leave application as opposed to a
    single judge sitting in chambers.  JLK further
    submits that it has a good, arguable appeal and would agree to an order
    expediting the hearing of the appeal.

[3]

I must first deal with the question of whether leave is
    required and whether a single judge can grant leave.

[4]

The relevant portions of s. 193 of the
BIA
provide as follows:

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;

...

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

[5]

The original
    bankruptcy application was brought with respect to both JLK and his spouse,
Mahavash

Lechcier-Kimel
(MLK).  By consent order, there are now two separate
    proceedings.  In the proceeding involving
    MLK, on the question of whether an appeal from an order adding an applicant
    creditor requires leave, Gillese J.A. held that leave is necessary and that
    adding a party does not raise a point involving future rights.  I agree with her.  In
Elias v. Hutchison
(1981), 121 D.L.R. (3d) 95 (Alta. C.A.), the court dealt
    with whether leave was required to appeal an order dismissing an application to
    sue the trustee.  The court held that
    there was no appeal as of right.  The
    appeal did not involve future rights since future rights are those rights that are
    not asserted at the present time but that will come into existence at a future
    time.  The issue was whether a present
    right to sue the trustee existed.  The
    definition of future rights in
Elias
was
    approved by this court in
Ravelston
Corp. (Re)
,
    2005
CanLII
63802 (ON CA), at para. 19.  As in
Elias,
the case before me does not involve future rights since the issue is HSBCs
    present right to be added as a creditor.


[6]

Since the decision of Gillese J.A., counsel for MLK has
    brought a further motion before Armstrong J.A. to set aside her order on the
    basis that the notice of motion did not clearly indicate that a motion for leave
    to appeal was to be heard and for that reason responding counsel did not
    appear. Armstrong J.A. has dismissed that motion.

[7]

The issue of leave and whether leave should be granted
    was fully argued before me.

[8]

On the question of whether a single judge can grant
    leave or whether the decision ought to be made by a panel, I note that s. 193
    specifically states that leave can be granted by a judge of the Court of
    Appeal.  Thus, leave is required and a
    single judge of this court can grant leave.

[9]

I now turn to the question of whether leave should be
    granted.  On an application for leave to
    appeal under s. 193(e) of the
BIA
,
    one factor that is considered in all cases is whether the appeal is
prima facie
meritorious.  In this regard, while not assessing or
    deciding on the ultimate merits of the proposed appeal, the applicant must
    convince the court that the appeal raises arguable points that create a
    realistic possibility of success on the appeal: see
Ravelston
Corporation Limited (Re)
,

2007 ONCA 268, at paras. 11-12.

[10]

Before me,
    JLK advances two primary grounds of appeal.  The first is that the motions judge erred in finding that the applicant
    creditor, Community Trust Company (CTC), was not prosecuting the proceedings
    with due diligence and effect as required by s. 43(13) of the
BIA
.  At para. 21 of his reasons, the motions judge
    observed that, during the cross-examination of Tara
Rolston
on her affidavit, counsel for CTC stated that CTC was not seeking to pursue
either
of the applications for
    bankruptcy at that point (which was over a year from the bankruptcy
    application). The motions judge held, at para. 22, Mr.
Reininger
,
    as counsel for a party, made a clear statement binding on the applicant, CTC,
    which is admissible as evidence of CTCs intentions regarding these
    applications.  JLK submits that
    counsels statement cannot be relied upon and treated as evidence as the
    statement is unsworn and was not specifically adopted by the affiant being
    cross-examined.

[11]

This first ground of appeal does not meet the test. The
    statement by CTCs counsel was an admission by counsel on behalf of his client.
    Counsel for JLK has provided no authority to suggest that the motions judge
    made a palpable and overriding error in relying on this admission.

[12]

Moreover, this ground of appeal advanced by JLK is the
    same ground advanced in the MLK proceedings.  In MLK, Gillese J.A. held that she would
    refuse to grant leave as the purported appeal from the decision adding a party
    is without merit and the issue it raised is not of significance to the
    practice or the MLK bankruptcy application, as paragraph 2 of the order of 24
    March 2011 specifically preserves all of Ms.
Lechcier-Kimels
rights and defences on the MLK bankruptcy application. Those comments are
    equally applicable here.

[13]

The second
    ground of appeal is that the motions judge erred in not exercising his discretion
    to decide a question of law and in leaving that question to the hearing of the
    bankruptcy application. The question of law is whether the entire bankruptcy
    proceedings are a nullity.  Inasmuch as
    the original application for bankruptcy was brought with respect to both JLK
    and MLK, as opposed to a separate application against each of them, JLK submits
    that the entire proceedings are a nullity and not a defect that can be cured
    under the
BIA.
JLK submits that the motion judges deferral
    of the question of law offends the principle that proceedings should be
    conducted in the least expensive manner and that the motions judge erred in
    principle in adjourning the question to the trial of the bankruptcy, which was
    scheduled for a month later.

[14]

This ground of appeal also does not meet the test. No
    authority has been provided to me to support the submission that it is an error
    in principle for a judge to adjourn a question of law to the trial of the
    bankruptcy.  Indeed, important issues of
    law are often decided based on a full factual record.  While the parties would often like to know the
    outcome of an important legal issue to assist them in preparing for trial - thus
    potentially saving time and money - that goal alone does not trump the judges
    exercise of discretion and force him or her to decide the question of law
    before the trial of the bankruptcy application.

[15]

Accordingly, I would refuse leave to appeal. In view of
    my decision, it is unnecessary for me to deal with the alternative relief
    requested.

[16]

Costs of this motion are to HSBC and, on consent, are
    fixed in the amount of $5,000, inclusive of disbursements and all applicable taxes.

RELEASED:  September
    13, 2011


