



COURT OF APPEAL FOR ONTARIO

CITATION: Royal Bank of Canada v. Bodanis,
    2020 ONCA 185

DATE: 20200306

DOCKET: M51328 (C67467)

M51356 (C67464)

Nordheimer J.A. (Motions Judge)

BETWEEN

Royal Bank of Canada

Moving
    Party

(Respondent)

and

David Bodanis

Responding
    Party

(Appellant)

AND BETWEEN

Royal Bank of Canada

Moving
    Party

(Respondent)

and

Irenka Bodanis

Responding
    Party

(Appellant)

Rachel Moses, for the moving party

Scott Rosen, for the responding parties

Heard: March 2, 2020

REASONS FOR DECISION

[1]

There are companion motions in these two
    bankruptcy proceedings that seek directions. The moving party asserts that the appellants
    in these matters do not have an appeal as of right but rather must seek leave
    to appeal. In the alternative, the moving party says that the automatic stay
    that would result from an appeal as of right ought to be cancelled.

[2]

Both appellants owe monies to the moving party
    and others pursuant to various judgments and costs awards totalling in the
    hundreds of thousands of dollars. They have owed these monies, in some cases,
    for many years. In November 2018, the moving party commenced bankruptcy
    applications against the appellants. A trial was held on these applications and,
    at its conclusion, on August 12, 2019, the trial judge granted bankruptcy
    orders. The appellants then filed appeals from those orders.

[3]

The first issue is whether there is an appeal as
    of right. The conclusion on that issue turns on the wording of s. 193 of the
Bankruptcy
    and Insolvency Act
, R.S.C., 1985, c. B-3, which reads:

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]

Each of ss. 193(a), (b) and (c) are invoked in
    this case. I agree that neither ss. 193(a) nor (b) apply. Based on the analysis
    contained in
Ravelston Corp (Re)
(2005), 24 C.B.R. (5th) 256 (Ont.
    C.A.), I conclude that a bankruptcy order does not involve future rights. Similarly,
    there is no evidence in this case that the bankruptcy orders will likely affect
    another case raising the same or similar issues in the same bankruptcy
    proceedings, unlike the situation in
Wong v. Luu,
2013 BCCA 547, 55
    B.C.L.R. (5th) 129, at para. 21. Consequently, s. 193(b) does not apply.

[5]

However, in my view, s. 193(c) does apply to
    this case. Clearly, the value of the property involved in this appeal exceeds $10,000.
    Indeed, there is no dispute that that is the case. However, the moving party submits
    that the bankruptcy orders, which appoint a Trustee in Bankruptcy, simply
    preserve the assets of the bankrupt and therefore do not involve property of
    more than $10,000. The moving party relies on observations made in certain
    other cases including
Business Development Bank of Canada v. Pine Tree
    Resorts Inc.,
2013 ONCA 282, 115 O.R. (3d) 617,
2403117 Ontario Inc.
    v. Bending Lake Iron Group Limited,
2016 ONCA 225, 369 D.L.R. (4th) 635,
    and
Buduchnist Credit Union Limited v. 2321197 Ontario Inc.,
2019 ONCA
    588, 72 C.B.R. (6th) 245.

[6]

Each of those decisions is distinguishable from
    the case at hand. In all three of those cases, the order being appealed was an
    order appointing a Receiver over certain properties. It was not a bankruptcy
    order as is the case here. There are distinctions between orders appointing a Receiver
    and bankruptcy orders appointing a Trustee in Bankruptcy. Among those
    distinctions is the fact that, unlike a Receiver, the Trustee in Bankruptcy
    does not require court approval in order to monetize the bankrupts assets
    (except in limited circumstances). Instead, the Trustee has a duty to dispose
    of the bankrupts assets and distribute the proceeds amongst the creditors,
    subject to the inspectors approval.

[7]

In relying on these decisions, the moving party
    points out the commentary that has been made in them that s. 193(c) ought to be
    narrowly construed in order to avoid conflict with other statutes, particularly
    the
Companies Creditors Arrangement Act
, R.S.C., 1985, c. C-36. As
    laudable a goal as that may be, it cannot be used to, in effect, read the subsection
    out of the statute. On that point, counsel for the moving party fairly concedes
    that, if the interpretation of s. 193(c) that she urges in this case were to be
    adopted, the subsection would not apply to any bankruptcy proceeding, since all
    of them will realistically involve assets totalling more than $10,000.

[8]

While I appreciate the concerns that are used to
    justify the narrow approach, I do not see how a court can invoke those concerns
    in order to avoid the plain wording of the statute. The basic principle of
    statutory interpretation is that the words of an Act are to be read in their
    entire context and in their grammatical and ordinary sense harmoniously with
    the scheme of the Act, the object of the Act, and the intention of Parliament:
Rizzo & Rizzo Shoes Ltd (Re),
[1998] 1 S.C.R. 27, at para. 21. If
    there is a pressing concern on this issue, it is one that Parliament must
    address.

[9]

While the facts of each case may determine
    whether s. 193(c) properly applies, in my view, it clearly applies here where
    the appellants entire property have been taken out of their control and placed
    into the hands of a Trustee in Bankruptcy, who has the right to dispose of that
    property and distribute it among the creditors, without further court
    intervention. The orders here are more akin to the type of orders that were
    considered in
Crate Marine Sales Ltd (Re),
2016 ONCA 140, 33 C.B.R.
    (6th) 169, and
Comfort Capital Inc v. Yeretsian
, 2019 ONCA 1017, where
    an appeal as of right was found to exist. Consequently, I conclude that the
    appellants have an appeal as of right.

[10]

That conclusion then raises the second issue: should
    this court cancel the automatic stay that results from an appeal? Section 195 of
    the
Bankruptcy and Insolvency Act
reads:

Except to the extent that an order
    or judgment appealed from is subject to provisional execution notwithstanding
    any appeal therefrom, all proceedings under an order or judgment appealed from
    shall be stayed until the appeal is disposed of, but the Court of Appeal or a
    judge thereof may vary or cancel the stay or the order for provisional
    execution if it appears that the appeal is not being prosecuted diligently, or
    for such other reason as the Court of Appeal or a judge thereof may deem
    proper.

[11]

In considering whether the automatic stay should
    be cancelled, the court will principally consider two factors: (1) the merits
    of the appeal and (2) the relative prejudice to the parties:
First National
    Financial GP Corp. v. Golden Dragon HO 10 Inc.
,

2019 ONCA 873, 74
    C.B.R. (6th) 1, at para. 40;
Yewdale v. Campbell, Saunders Ltd.
(1995)
,
9 B.C.L.R. (3d) 252 (C.A.), at para. 15.

[12]

In this case, while the appeals may not be entirely
    meritless, they are ones that appear to only challenge either the trial judges
    exercise of discretion in refusing an adjournment, or his factual findings that
    an act of bankruptcy had been committed. Their chances of success cannot be
    seen as being very high.

[13]

In addition, I fail to see any prejudice to the
    responding parties if the automatic stay is cancelled. Their sole significant
    asset appears to be their residence and it is already the subject of mortgage
    proceedings by the Toronto-Dominion Bank. Another factor is, as the trial judge
    noted, that the responding parties have a history of delay. Further, there is
    some evidence of the responding parties improper dealings with their property,
    as evidenced by a fraudulent conveyance action that was commenced in 2014.

[14]

All of these considerations favour the moving
    party. Consequently, I conclude that the automatic stay under s. 195 should be
    cancelled.

[15]

The moving party is entitled to its costs of
    these motions fixed at $5,000, inclusive of disbursements and HST.

I.V.B.
    Nordheimer J.A.


