



COURT OF APPEAL FOR ONTARIO

CITATION:
Crown Capital Private Credit Fund v. Mill Street & Co.
    Inc., 2022 ONCA 194

DATE: 20220308

DOCKET: C69450

Feldman, Tulloch and Miller JJ.A.

BETWEEN

Crown Capital Private Credit Fund, LP, by its general partner, Crown
    Capital Private Credit Management Inc.

Applicant

and

Mill Street & Co. Inc.

Respondent

Micheal Simaan, for the appellants,
    997322 Ontario Inc., Monica Murad and Aaron Murad

Shayne Kukulowicz, Ted Frankel and
    Monique Sassi for the respondent, A. Farber & Partners Inc.

Heard: February 28, 2022 by video conference,
    with further submissions filed in writing

On
    appeal from the order of Justice Markus Koehnen of the Superior Court of Justice,
    dated May 5, 2021.

REASONS FOR DECISION

[1]

The appellants are Monica Murad and Aaron Murad,
    two members of the Murad family, who together with the corporations they
    control, both individually and together, were referred to by the Receiver
    throughout the receivership of Mill Street & Co. Inc. as the Murad Parties.
    Mill Street and its subsidiaries are owned by members of the Murad family.

[2]

The motion judge found that the Murad Parties raised
    ongoing obstacles to the operation of the receivership and obstructed the Receiver,
    including by asserting a fraudulent licensing agreement purporting to license
    certain software by one Murad entity to another. They produced a forged
    document to make this claim.

[3]

In order to facilitate the sale of the debtor
    companys interest in another Murad corporation, the motion judge made a
    non-competition order against all of the Murad Parties, including the
    appellants. Counsel at the hearing objected on behalf of the appellants because
    they were not specifically implicated in the obstruction or the fraudulent
    licensing agreement.

[4]

The motion judge determined that it was
    nevertheless appropriate to include the appellants in the order because the
    Murad companies are operated as family businesses with all members of the
    family involved. The Receiver referred to the Murads or the Murad Parties
    throughout its reports.

[5]

Section 193 of the
Bankruptcy and Insolvency
    Act
, R.S.C. 1985, c. B-3 sets out the jurisdiction for an appeal of an
    order made in a bankruptcy proceeding. The appellants submit that this court
    has jurisdiction under s. 193(a) or, in the alternative, that leave to appeal
    should be granted under s. 193(e).

[6]

Section 193(a) grants jurisdiction where the
    point at issue involves future rights. Caselaw has established that present
    rights altered by the order are not future rights:
Ravelston Corp. (Re)

(2005), 24 C.B.R. (5th) 256

(Ont. C.A.),

at para. 18. The
    right to compete is a present right. Therefore, there is no right of appeal
    under s. 193(a).

[7]

The three-part test for granting leave to appeal
    under s. 193(e) was recently restated in
James Henry Ting (Re)
, 2021 ONCA
    622, at para. 5: there must be an issue of general importance, that is
prima
    facie
meritorious, and the appeal would not unduly hinder the progress of
    the insolvency proceeding.

[8]

The appellants assert that the issue of making a
    non-competition order against a non-party is one of general importance.

[9]

However, that issue does not arise in this case
    because the appellants are Murad Parties in this receivership, so found by
    the motion judge, and have been treated as parties throughout the proceeding.

[10]

The appeal is therefore quashed, with costs payable to the
    respondent. If the parties are unable to agree on costs, the respondent may
    file a written submission of no more than two pages in length plus a bill of
    costs within four days of the date of the release of these reasons. The
    appellants may file a responding written submission of no more than two pages
    in length within seven days of the same date.

K. Feldman J.A.

M. Tulloch J.A.

B.W. Miller J.A.


