14.5: Appeals only with permission

Case Summary

The Court of Queen’s Bench granted Lightstream Resources Ltd. (“Lightstream”) protection as a debtor company under the Companies’ Creditors Arrangement Act, RSC 1985, c C-36 (“CCAA”). The Plaintiffs had commenced oppression Actions against Lightstream, and they sought an Order directing Lightstream to enter into a security exchange agreement pursuant to Section 242(3)(e) of the Business Corporations Act, RSA 2000, c B-9 (“BCA”). The Court resolved the oppression Actions within the context of the CCAA proceeding, and concluded that the Plaintiffs were bound to fail and that there was no issue to be tried. The Plaintiffs applied for permission to present two questions to a panel of the Court of Appeal for consideration. The first question was whether the Justice of the Court of Queen’s Bench failed to apply the correct test for an appropriate remedy for oppressive conduct, and the second was whether the Justice erred in using the context of the CCAA proceeding to restrict the availability of the oppression remedy in a manner contrary to law and public policy.

Wakeling J.A. noted that under Rule 14.5 if no statute stipulated the standard that a Court must apply in order to grant permission to Appeal, the Court of Appeal was to ask if there were “serious and arguable grounds that are of real and significant interest to the parties”. Additionally, Wakeling J.A. set out four questions the Court should consider to narrow the focus of the inquiry and to determine if the proposed Appeal warranted the attention of a panel of the Court of Appeal: whether the question was one of significant importance to persons who were interested in the proper and efficient administration of the CCAA or the BCA, or any other identifiable segment of the public; and whether the answer to the question determined a significant issue within the proceeding or the outcome of the proceeding. If the answers to the two questions were “yes”, the Appeal raised a “significantly important issue”. The third consideration was the likelihood that the potential Appellant’s question would be favourably answered for the potential Appellant to a point high enough to justify a second hearing that put the ultimate disposition into doubt and required the attention of a panel of Justices. In making this consideration, the Court must note that an Appeal Court will only set aside a decision of a supervising Justice if he or she committed an error of law, clearly misapprehended an important fact or made a decision that was obviously wrong. Assuming that permission to Appeal was granted and that the Appeal was brought with reasonable diligence, the Court should finally consider whether the time for the Appeal unduly hindered the proceedings under the CCAA.

Wakeling J.A. noted that even if the potential Appellant failed to satisfy these four factors, the Court had discretion to permit an Appeal if the Court was satisfied that the contested decision was clearly wrong.

In this case, Justice Wakeling concluded that the Plaintiffs’ questions were of significant importance to the parties and the segment of the community interested in the administration of the CCAA and the BCA. However, the Application for permission to Appeal was denied as the Plaintiffs were unlikely to prevail on Appeal and granting permission to Appeal would unduly hinder the progress of the proceedings under the CCAA.

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