This Decision addressed whether procedural deficiencies in Bennington Financial's (“Bennington”) Appeal of a Registrar’s decision under the Bankruptcy and Insolvency Act (“BIA”) were curable and considered the Appeal's merits. The Registrar ruled that the Trustee of White Buffalo Mechanical Ltd. validly redeemed a leased truck and required Bennington to discharge its security.

Instead of filing the Appeal within the bankruptcy Action, as required, Bennington filed a new Civil Action, arguing that procedural errors could be corrected. The Trustee moved to strike the Civil Action, and the Applications Judge stayed it, instructing Bennington to refile in the bankruptcy Action and address the procedural issues. Despite these directions, Bennington continued in the Civil Action, prompting the Trustee’s Cross-Application to strike the Appeal under Rule 3.68. This Decision concerns these Applications.

Justice Mah lifted the Stay pursuant to Rules 1.3(1) and (2) for the purpose of dealing with the Applications. The Court stated that the Appeal was brought in the wrong forum and the proper question to answer was whether there was authority to cure such a defect. Justice Mah stated that Rule 1.5 allows the Court to relieve against non-compliance, however, in this case the non-compliance was in respect to the BIA General Rules, not the Rules of Court. Justice Mah conducted the analysis as if he stepped into the role as a Bankruptcy Judge, pursuant to the BIA and its General Rules. The Court found that Bennington’s non-compliance was a matter of form not substance and that there was no prejudice or injustice that could not be remedied by costs. Therefore, the Court did not strike the Originating Application under Rule 3.68 and accepted it as an Appeal of the Registrar’s Order.

The Court analyzed the merits of the Appeal and found that the Registrar’s findings were correct, and that Bennington did not reach the low threshold of proving that the Appeal had “arguable merit.” The fact that Bennington missed the filing deadline by one day did not change the status of the merits sufficient to grant an extension for filing the Appeal. The Court also determined that in the Trustee’s Cross-Application for dismissal of the Appeal, the Appeal also failed on the merits. The Court refused leave for Bennington to file the Appeal late because the Appeal was non-meritorious and, in the alternative, granted the Trustee’s motion for dismissal of the Appeal itself.