Canada: CanaSea PetroGas Group Holdings Limited (Re): Single Judge May Hear CCAA Leave Application

In his November 20, 2014 decision in CanaSea PetroGas Group Holdings Limited (Re), Sharpe J.A. of the Ontario Court of Appeal did not accept the respondents' submissions that he should decline to hear an application for leave to appeal a CCAA decision because only a three-judge panel should hear such an application. He accepted that it was usual practice to have a three-judge panel hear the application, and there are advantages to this practice, but that he nonetheless had jurisdiction and should exercise it. In the result, however, he declined to grant leave.

In the proceeding, the moving parties originally obtained an ex parte order (Sharpe J.A. noted he was not satisfied that there was any need to obtain the order ex parte). This order was later set aside by the respondents. The moving parties sought leave to appeal the order setting aside the ex parte order, arguing they had been denied procedural fairness.

The first issue Sharpe J.A. had to decide was whether he should decline to hear the motion:

[8]        The respondents submit that as a single judge, I should decline to hear this motion for leave to appeal and defer the matter to be dealt with in writing by a panel of the court.

[9]        The CCAA, s. 13, provides:

Except in Yukon, any person dissatisfied with an order or a decision made under this Act may appeal from the order or decision on obtaining leave of the judge appealed from or of the court or a judge of the court to which the appeal lies and on such terms as to security and in other respects as the judge or court directs.

[10]      It is clear from the wording of s. 13 that a motion for leave to appeal in a CCAA proceeding may be heard either by a judge of the court or by the court: see Re 1078385 Ontario Ltd. (2004), 16 C.B.R. (5th) 152; 206 O.A.C. 17, at para. 2: "Section 13 of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, provides the moving party with the procedural option of bringing a leave motion to a single judge"; Re Country Style Food Services Inc.  [2002] O.J. No. 1377, 158 O.A.C. 30 (Ont. C.A.). While the usual practice is to bring CCAA leave motions before a panel in writing (see Re Air Canada (2003), 173 O.A.C. 154) and while there are no doubt advantages to proceeding before a full panel in writing, both to the party seeking leave and to the court, I am not persuaded that there is any proper basis shown upon which I should decline to hear this motion.

Leave to appeal was nonetheless denied:

[18]      It is firmly established that the test for leave to appeal in insolvency proceedings is stringent where it involves the exercise of discretion as to the assessment of competing interests and the availability of the special protection afforded by the CCAA: see Re Country Style Food Services Inc., at para. 16; Regal Constellation Hotel Ltd., (2004) 71 O.R. (3d) 355; 242 D.L.R. (4th) 689; [2004] O.J. No. 2744 at para. 22.

[19]      In my view, this case falls squarely within the category in which deference is owed to the CCAA judge and where leave to appeal will be refused. It was for the CCAA judge to assess the evidence as to the nature of the debts from which the moving parties seek relief, the nature of the financial relationship between the various components of the CanaSea Group and the degree of connection between the alleged insolvency and Canada. There was ample evidence in the record to support the findings he made and I am far from persuaded that he made any error in principle or that he misapprehended the evidence.

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