4.33: Dismissal for long delay

Case Summary

The Applicants, Roy Wiebe (“Wiebe) and Parkland Airport Development (“Parkland”) applied for leave to Appeal pursuant to section 13 of the Companies’ Creditors Arrangement Act, RSC 1985, c C-36 (the “CCAA”). Weinrich Contracting (“Weinrich”) had constructed an airport runway for Parkland but had not been paid in full pursuant to the contract with Parkland. In mid-2014, Weinrich filed a Statement of Claim against Parkland for their unpaid bill and against Wiebe for fraudulent misrepresentation leading up to the formation of the contract, among other things.

Before Weinrich’s claims were dealt with, Parkland became insolvent and entered CCAA proceedings in late 2016. Upon entering the CCAA proceedings, all Actions against Parkland were stayed, and the Order staying the Actions were extended many times (the “Stay Orders”). Limitation periods were also suspended by virtue of the Stay Orders. Arguably, only parts of Weinrich’s 2014 Action fell within the scope of some of the Stay Orders.

In April of 2019, the Case Management Justice for the CCAA proceedings granted an Order to approve the sale of Parkland’s lands to its first mortgagee (the “Sale Order”). The Sale Order also stated that claims against others were preserved and that legal claims would not be affected by the CCAA proceedings for failing to meet timelines.

In their Application for leave to Appeal the Sale Order made pursuant to section 13 of the CCAA, Wiebe and Parkland expressed concern that prior to the Sale Order, parts of the Weinrich claim were “vulnerable to being struck under the drop-dead rule” under the Stay Orders. The Applicants argued that the Sale Order created a greater scope for the claim to continue by the application of Rule 4.33(2)(a). Rule 4.33(2)(a) carves out an exception for the drop-dead rule of three years under Rule 4.33(2) if the Action is stayed or adjourned by an Order. Rule 4.33(10) was also plead, which states the Court cannot extend the drop-dead period.

Slatter J.A. considered the test that a Court will consider when an Application for leave to Appeal is made: (1) Whether the point on Appeal is of significance to the practice; (2) Whether the point raised is of significance to the Action itself; (3) Whether the Appeal is prima facie meritorious or frivolous; and (4) Whether the Appeal will unduly hinder the progress of the Action.

Justice Slatter granted leave to Appeal the Sale Order. Slatter J.A. found that a retroactive stay was of significance to the practice of insolvency law, of significance to the Weinrich claim, and was an arguable and/or meritorious issue which would not unduly hinder progress since the CCAA proceedings had largely concluded.

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