Skyrider Holdings Ltd (Re), 2014 ABQB 764

Court of Queen ’ s Bench of Alberta Citation: Skyrider Holdings Ltd (Re), 2014 ABQB 764 Date: 20141211 Docket: BK03 115694 Registry: Edmonton In the Matter of the Bankruptcy of Skyrider Holdings Ltd. Between: Stella Prue Applicant - and - MNP Ltd., Trustee In Bankruptcy Respondent _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] In the context of an anticipated appeal pursuant to the provisions of s. 135(3) of the Bankruptcy and Insolvency Act , Stella Prue applies for an order directing Skyrider Holdings Ltd.’s Trustee to provide further and better particulars of the reasons for its disallowance of her claim.

[2] On November 12, 2014, Skyrider’s Trustee issued a Form 77 Notice of Disallowance to Ms. Prue. With respect to threetransactions which underlie Ms. Prue’s claim, it gave the following generalized reasons for disallowance: “The real property described as. . . sold by Stella Prue November 26, 2007 to a third party with sales proceeds of $. . . . paid to Skyrider Holdings Ltd. originates from(and subdivided from) real property legally described as . . . . originally owned by Skyrider Holdings Ltd. and transferred to Stella Pruefor no consideration on November 29, 2006.” With respect to the fourth basis of Ms.

Prue’s claim, the Trustee said: “Monies advancedthrough the RBC Line of Credit have not been proven to be expenditures of Skyrider Holdings Ltd. and were advanced at the direction ofDerek Prue who is a joint account holder on the RBC line of credit”. Derek Prue is the principal of Skyrider and is Ms. Prue’s son. TheNotice of Disallowance makes no reference to the Statute of Elizabeth. [3] The application is denied. [4] Although not styled as such, this application should probably be characterized as one for judicial review in the nature ofmandamus. The standard on such reviews is reasonableness.

Because the Trustee did give reasons, the law presumes those reasons to becorrect and adequate. Indeed, as Ms. Prue has been legally represented throughout, the Trustee’s reasons probably allow Ms. Prue’slawyer to assume that the Trustee was stating that the transactions which gave valuable corporate property to Ms. Prue for noconsideration were fraudulent conveyances, according to the Statute of Elizabeth, and could therefore not ground a claim. [5] However, even assuming that the Trustee’s reasons are inadequate, Ms. Prue has a statutory right to appeal the Trustee’sdecision.

The appeal referred to in s. 135(3) of the BIA is one of - an appeal on the record, an appeal by way of a fresh or de novohearing, or a hybrid of the two. Indeed, the circumstances of the situation here suggest that the appropriate type of appeal is one of thelatter two. Nonetheless, if the appeal is on the record, the Trustee’s reasons, or lack thereof, may presumably constitute a ground ofappeal. If the appeal is by way of a fresh hearing, or a hearing based on the materials before the Trustee together with additionalmaterials as authorized, then the Trustee’s reasons are immaterial.

Therefore, even assuming that the reasons provided by the Trustee toMs. Prue are inadequate, the balance of convenience does not favour prolonging the claim process by requiring the Trustee to givereasons.

Cases and authority cited: [6] By the court: Newfoundland and Labrador Nurses’ Union v Newfoundland and Labrador (Treasury Board) 2011 SCC62; Paragon Capital Corp. v Morgan 2014 ABCA 363; Apotex Inc. v Canada (Attorney General) (FCA), [1994] 1F.C. 742; affirmed (SCC), [1994] 3 S.C.R. 1100; Oil Lift Technology Inc. v Deloitte & Touche Inc. 2012 ABQB 357;Alberta Permit Pro (Re) 2011 ABQB 141; Galaxy Sports Inc. (Re) 2004 BCCA 284; Eskasoni Fisheries Ltd. (Re) (NS SC), [2000] N.S.J. No. 122. Appendix A: Notice of Disallowance 1.

Background [7] In January, 2014, Stella Prue submitted a Proof of Claim in the bankruptcy of Skyrider Holdings Ltd., which had gone intobankruptcy on December 19, 2013; she alleged an unsecured claim of $2,195,674.72, based on a judgment, and a secured claim of$2,045,536.00, plus interest and costs, based on a mortgage. Stella Prue is the mother of the principal of Skyrider, Derek Prue. At para. 5of her Proof of Claim, Ms. Prue acknowledged her relationship with the debtor; however, she stated that she had not dealt with the debtorin a non-arm’s length manner. [8] In April, 2014, Ms.

Prue submitted additional information and documents to the Trustee. These documents included a LoanAgreement, dated February 4, 2011, pursuant to which the Lender, Stella Prue, and the Borrowers, Derek Prue and Skyrider HoldingsLtd. agreed to rewrite the original promissory notes and to execute a new promissory note in the amount of $2,045,536.00. [9] In June, 2014, the Trustee requested additional information from Ms. Prue. Between August 6 and August 25, 2014, Ms.Prue provided additional information to the Trustee. [10] On November 12, 2014, the Trustee forwarded a Notice of Disallowance in Form 77 to Ms.

Prue; the Notice is attached asAppendix A. In

summary, however, it states that, with respect to three real properties which form part of the basis of Ms. Prue’s claim,two of those properties were sold by her in November 2007 and the third was sold by her in October 2009. The proceeds of those saleswere then loaned to Skyrider. However, all of the properties had originally been owned by Skyrider and had been transferred to Ms. Pruefor no consideration in November 2006.

The Notice of Disallowance also states that monies advanced through a bank line of credit hadnot been proven to be expenditures of Skyrider but had been advanced at the direction of Derek Prue who is a joint account holder on theline of credit. [11] Ms.

Prue brings this application for three areas of relief: an order extending the time to appeal the Trustee’s disallowance; anorder directing the Trustee to provide her “with further and better particulars with respect to the reasons contained in the Disallowance,including the legal principles in support of the Disallowance”, and for an order setting out a litigation

schedule for the appeal. Theparties were able to agree on the first and third issues; the court was asked only to resolve the dispute arising out of the second claim.With respect to the second issue, Ms. Prue has particularized: The Trustee’s reasons contained in the Disallowance are insufficient to allow Ms. Prue to file a meaningful appeal, as the Disallowancecontains no legal basis for the disallowance of portions of the Proof of Claim. [12] Ms.

Prue indicates that part of the reason she had requested additional time to file her appeal is that she is looking foradditional evidence relevant to the two concerns raised by the Trustee. [13] Alberta’s Rules of Court provide: 3.15(1) An originating application must be filed in the form of an originating application for judicial review if the originating applicant

seeks from the Court any one or more of the following remedies against a person or body whose decision, act or omission is subject to judicial review: (

a) an order in the nature of mandamus, prohibition, certiorari, quo warranto or habeas corpus; (

b) a declaration or injunction. [ 14 ] The pertinent provisions of the BIA include: Admission and Disallowance of Proofs of Claim and Proofs of Security Trustee shall examine proof 135.

(1) The trustee shall examine every proof of claim or proof of security and the grounds therefor and may require further evidence in support of the claim or security. Determination of provable claims

(1.1) The trustee shall determine whether any contingent claim or unliquidated claim is a provable claim, and, if a provable claim, the trustee shall value it, and the claim is thereafter, subject to this section, deemed a proved claim to the amount of its valuation. Disallowance by trustee

(2) The trustee may disallow, in whole or in part, (

a) any claim; (

b) any right to a priority under the applicable order of priority set out in this Act; or (

c) any security. Notice of determination or disallowance

(3) Where the trustee makes a determination under subsection (1.1) or, pursuant to subsection (2), disallows, in whole or in part, any claim, any right to a priority or any security, the trustee shall forthwith provide, in the prescribed manner, to the person whose claim was subject to a determination under subsection (1.1) or whose claim, right to a priority or security was disallowed under subsection (2), a notice in the prescribed form setting out the reasons for the determination or disallowance. Determination or disallowance final and conclusive

(4) A determination under subsection (1.1) or a disallowance referred to in subsection (2) is final and conclusive unless, within a thirty day period after the service of the notice referred to in subsection (3) or such further time as the court may on application made within that period allow, the person to whom the notice was provided appeals from the trustee’s decision to the court in accordance with the General Rules. 2. Should the court grant Ms.

Prue an order in the nature of mandamus against the Trustee? [ 15 ] The court should not order the Trustee to provide better particulars of its reasons. [ 16 ] The Trustee has facially complied with its obligation to provide reasons for its disallowance of Ms. Prue’s claim.

a) What is the nature of Ms. Prue’s application? [ 17 ] The court concludes that Ms. Prue’s application is, technically, one for judicial review of a decision of a statutory decision maker, and the particular type of review requested is in the nature of mandamus. [ 18 ] It is important to characterize Ms. Prue’s application in order to apply the correct standard of review. Because the Trustee is, in the situation here, a statutory decision maker, the standard of review of the Trustee’s decision is reasonableness. [ 19 ] Ms.

Prue’s failure to make her application in the correct format is unimportant in the circumstances here since the objectives of Rule 3.15 relating, for example, to timing, notice, and the provision of a return, have all been achieved here by other means

b) Are the Trustee’s reasons inadequate? [ 20 ] Ms. Prue states that the Trustee’s reasons for dismissal are inadequate because they do not spell out any legal basis for denying the claim. In particular, she states that the requirements of the BIA require a bankrupt only to disclose, in its statement of affairs, transactions during the 5 years preceding the act of bankruptcy. Here, Skyrider went into bankruptcy in December 2013 and the transfer of its real estate to Ms. Prue occurred in November, 2006; therefore, claims Ms.

Prue, the circumstances of the transfer are presumptively outside any period relevant to the bankruptcy. [ 21 ] The issue of the five year period for which a bankrupt must provide information in its statement of affairs is a red herring in

the situation here. Nothing in the BIA limits the Trustee’s inquiries to the 5 year period immediately prior to the bankruptcy or sanitizesall transactions occurring earlier than the five year period.

Nor does the statute in any way restrict the Trustee’s ambit of decisions tofraudulent preferences, for example, as opposed to fraudulent conveyances. [22] The standard with respect to reasons given by a statutory decision maker has recently been set by the Supreme Court ofCanada in Newfoundland and Labrador Nurses’ Union 12 It is important to emphasize the Court's endorsement of Professor Dyzenhaus's observation that the notion of deference toadministrative tribunal decision-making requires "a respectful attention to the reasons offered or which could be offered in support of adecision".

In his cited article, Professor Dyzenhaus explains how reasonableness applies to reasons as follows: "Reasonable" means here that the reasons do in fact or in principle support the conclusion reached.

That is, even if the reasons in factgiven do not seem wholly adequate to support the decision, the court must first seek to supplement them before it seeks to subvert them.For if it is right that among the reasons for deference are the appointment of the tribunal and not the court as the front line adjudicator,the tribunal's proximity to the dispute, its expertise, etc, then it is also the case that its decision should be presumed to be correct even ifits reasons are in some respects defective. [Emphasis added.] (David Dyzenhaus, "The Politics of Deference: Judicial Review and Democracy", in Michael Taggart, ed., The Province ofAdministrative Law (1997), 279, at p. 304).

See also David Mullan, "Dunsmuir v. New Brunswick, Standard of Review and Procedural Fairness for Public Servants: Let's TryAgain!" (2008), 21 C.J.A.L.P. 117, at p. 136; David Phillip Jones, Q.C., and Anne S. de Villars, Q.C., Principles of Administrative Law(5th ed. 2004), at p. 380; and Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 63. 13 This, I think, is the context for understanding what the Court meant in Dunsmuir when it called for "justification, transparency andintelligibility".

To me, it represents a respectful appreciation that a wide range of specialized decision-makers routinely render decisionsin their respective spheres of expertise, using concepts and language often unique to their areas and rendering decisions that are oftencounter-intuitive to a generalist. That was the basis for this Court's new direction in Canadian Union of Public Employees, Local 963 v.New Brunswick Liquor Corp., (SCC), [1979] 2 S.C.R. 227, where Dickson J. urged restraint in assessing the decisionsof specialized administrative tribunals.

This decision oriented the Court towards granting greater deference to tribunals, shown inDunsmuir's conclusion that tribunals should "have a margin of appreciation within the range of acceptable and rational solutions" (para.47). 14 Read as a whole, I do not see Dunsmuir as standing for the proposition that the "adequacy" of reasons is a stand-alone basis forquashing a decision, or as advocating that a reviewing court undertake two discrete analyses -- one for the reasons and a separate one forthe result (Donald J. M. Brown and John M.

Evans, Judicial Review of Administrative Action in Canada (loose-leaf), at s. 12:5330 and12:5510). It is a more organic exercise -- the reasons must be read together with the outcome and serve the purpose of showing whetherthe result falls within a range of possible outcomes.

This, it seems to me, is what the Court was saying in Dunsmuir when it toldreviewing courts to look at "the qualities that make a decision reasonable, referring both to the process of articulating the reasons and tooutcomes" (para. 47). 15 In assessing whether the decision is reasonable in light of the outcome and the reasons, courts must show "respect for the decision-making process of adjudicative bodies with regard to both the facts and the law" (Dunsmuir, at para. 48).

This means that courts shouldnot substitute their own reasons, but they may, if they find it necessary, look to the record for the purpose of assessing thereasonableness of the outcome. 16 Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would havepreferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis.

A decision-maker isnot required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion (ServiceEmployees' International Union, Local No. 333 v. Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382, atp. 391). In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it todetermine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met. 17 The fact that there may be an alternative

interpretation of the agreement to that provided by the arbitrator does not inevitably lead tothe conclusion that the arbitrator's decision should be set aside if the decision itself is in the realm of reasonable outcomes. Reviewingjudges should pay "respectful attention" to the decision-maker's reasons, and be cautious about substituting their own view of the properoutcome by designating certain omissions in the reasons to be fateful. 18 Evans J.A. in Canada Post Corp. v.

Public Service Alliance of Canada, 2010 FCA 56, [2011] 2 F.C.R. 221, explained in reasonsupheld by this Court (2011 SCC 57) that Dunsmuir seeks to "avoid an unduly formalistic approach to judicial review" (para. 164). Henotes that "perfection is not the standard" and suggests that reviewing courts should ask whether "when read in light of the evidencebefore it and the nature of its statutory task, the Tribunal's reasons adequately explain the bases of its decision" (para. 163).

I found thedescription by the Respondents in their Factum particularly helpful in explaining the nature of the exercise: When reviewing a decision of an administrative body on the reasonableness standard, the guiding principle is deference. Reasons are notto be reviewed in a vacuum - the result is to be looked at in the context of the evidence, the parties' submissions and the process. Reasonsdo not have to be perfect.

They do not have to be comprehensive. [para. 44] . . . 21 It strikes me as an unhelpful elaboration on Baker to suggest that alleged deficiencies or flaws in the reasons fall under the categoryof a breach of the duty of procedural fairness and that they are subject to a correctness review. As Professor Philip Bryden has warned,"courts must be careful not to confuse a finding that a tribunal's reasoning process is inadequately revealed with disagreement over theconclusions reached by the tribunal on the evidence before it" ("Standards of Review and Sufficiency of Reasons: Some Practical

Considerations" (2006), 19 C.J.A.L.P. 191, at p. 217; see also Grant Huscroft, "The Duty of Fairness: From Nicholson to Baker and Beyond", in Colleen M. Flood and Lorne Sossin, eds., Administrative Law in Context (2008), 115, at p. 136). 22 It is true that the breach of a duty of procedural fairness is an error in law. Where there are no reasons in circumstances where they are required, there is nothing to review . But where, as here, there are reasons, there is no such breach.

Any challenge to the reasoning/result of the decision should therefore be made within the reasonableness analysis. 23 The arbitrator in this case was called upon to engage in a simple interpretive exercise: Were casual employees entitled, under the collective agreement, to accumulate time towards vacation entitlements? This is classic fare for labour arbitrators. They are not writing for the courts, they are writing for the parties who have to live together for the duration of the agreement. Though not always easily realizable, the goal is to be as expeditious as possible. 24 As George W.

Adams noted: The hallmarks of grievance arbitration are speed, economy and informality. Speedy dispute resolution is important to the maintenance of industrial peace and the ongoing economic needs of an enterprise. Adjudication that is too expensive contributes to industrial unrest by preventing the pursuit of meritorious grievances that individually involve small monetary values but collectively constitute a weathervane of employee satisfaction with the rules negotiated.

The relative informality of grievance arbitration is facilitated by much less stringent procedural and evidentiary rules than those applicable to court proceedings.

Informality permits direct participation by laymen, enhances the parties' understanding of the system and minimizes potential points of contention permitting everyone to focus on the merits of a dispute and any underlying problem... . ... appeal to a higher authority by way of judicial review may be needed to correct egregious errors, to prevent undue extension of arbitral power and to integrate the narrow expertise of arbitrators into the general values of the legal system.

The very existence of judicial review can be a healthy check on the improper exercise of arbitral responsibility and discretion. (Canadian Labour Law (2nd ed. (loose-leaf)), at s. 4.1100 to 4.1110) 25 Arbitration allows the parties to the agreement to resolve disputes as quickly as possible knowing that there is the relieving prospect not of judicial review, but of negotiating a new collective agreement with different terms at the end of two or three years.

This process would be paralyzed if arbitrators were expected to respond to every argument or line of possible analysis. 26 In this case, the reasons showed that the arbitrator was alive to the question at issue and came to a result well within the range of reasonable outcomes. I would dismiss the appeal with costs. (Emphasis added) [ 23 ] I have quoted the portion of the decision dealing with grievance arbitration only because the objectives of speed, economy and informality are, in the circumstances of bankruptcy, just as important as they are in the context of grievance arbitration.

This importance is highlighted by the statutory requirements of the BIA that the Trustee’s decision is final and that any disagreement with the Trustee’s disallowance must be brought on quickly. [ 24 ] Seen from the perspective outlined above, it is not obvious that the Trustee’s reasons are deficient: the Trustee stated that the “creditor” obtained the property as a gift and therefore is not in a position to claim the proceeds of the property as a debt. In determining whether those reasons are adequate, a court would take into account the fact that Ms. Prue was represented throughout by a law firm.

A court would also take into account that a law firm could be presumed to be aware of some aspects of the operation of common law, such as the Statute of Elizabeth, recently commented upon by our Court of Appeal in Paragon Capital Corp. : 9 We can quickly dispense with the submission that the trial judge erred in his understanding of the law and in applying it to the facts as he found them. We find no error here. 10 The reasons of the trial judge are found at 2013 ABQB 339 .

In brief, he correctly enunciated the legal principles flowing from the Statute of Elizabeth (UK), 13 Eliz I, c 5 and the Fraudulent Preferences Act, RSA 2000, c F-24 .

He also correctly outlined the burden of proof and the evidence required to shift that burden, referring to the judgment of Moody v Ashton, 2004 SKQB 488 , 248 DLR (4th) 690, and specifically, the following passage (at para 141): In other words, although proof of fraudulent intent to defeat creditors is required in all cases where the necessary consequence of the impugned transaction is to defeat creditors, proof of fraudulent intent will be presumed absent cogent and credible evidence to the contrary.

Where there is such cogent and credible evidence to the contrary, the presumption of fraud no longer applies, the evidentiary burden of proving fraud shifts back to the creditor and the court must determine, on a consideration of all of the evidence available to it, whether the creditor has established on a balance of probabilities that the transferor had the fraudulent intent to defeat his or her creditors. [ 25 ] The portion of Hall J.’s decision to which the Court of Appeal was referring is: 5 The Statute of Elizabeth, prohibits fraudulent conveyances. Justice Clackson, in Proulx v.

Proulx 2002 ABQB 151 , 316 AR 150, set out the principles defining the remedy in the Statute of Elizabeth at paragraph 14 as follows: i. There must be a conveyance of either real or personal property; ii. The transaction must have been for no or nominal consideration; iii. It must have been the intent of the settlor to defraud, hinder or delay his creditors;

iv. The intent of the settlor may be inferred from his circumstances and the circumstances of the settlement or may be the result of directevidence; v. The fact that there was no consideration or voluntary consideration will in most cases justify the inference of necessary intent absentevidence rebutting that inference; vi. Inference of intent will be strong if the settlor was insolvent at the time of settlement or the settlement effectively denuded him ofassets sufficient to cover the existing obligations; vii.

The party challenging the conveyance must be a creditor or someone with a legal or equitable right to claim against the settlor; viii. The conveyance must have had the intended effect. [26] I dare say that even a member of the public with no legal training would assume that corporations cannot just give awayvaluable assets without explanation. [27] In

summary, therefore, I am not satisfied that the reasons given by the Trustee are, in the circumstances here, insufficient.

c) If the Trustee’s reasons were inadequate, should the Trustee be required to give particulars of its reasons? [28] Even if the court were to assume that the reasons given by the Trustee were inadequate, based on the principles on which acourt should order a tribunal to do something – that is where it should order mandamus – as found in the Federal Court of Appeal’sdecision in Apotex which reasons were approved by the Supreme Court of Canada – this is a situation in which the applicant has anotherremedy – an appeal – which makes the mandamus application unnecessary. [29] Mandamus is, of course, a discretionary remedy.

The situations in which mandamus should be granted were usefully set outby Robertson J.A. in the Court of Appeal judgment in Apotex as follows: Mandamus-The Principles 45 Several principal requirements must be satisfied before mandamus will issue. The following general framework finds support in theextant jurisprudence of this Court (see generally O'Grady v. Whyte, (FCA), [1983] 1 F.C. 719 (C.A.), at pages 722-723, citing Karavos v. Toronto & Gillies, (ON CA), [1948] 3 D.L.R. 294 (Ont.

C.A.), at page 297; and Mensinger v.Canada (Minister of Employment and Immigration), (FC), [1987] 1 F.C. 59 (T.D.), at page 66. 1. There must be a public legal duty to act: Minister of Employment and Immigration v. Hudnik, (FCA), [1980] 1 F.C.180 (C.A.); Jefford v. Canada, (FCA), [1988] 2 F.C. 189 (C.A.); Winegarden v. Public Service Commission andCanada (Minister of Transport) (1986), 5 F.T.R. 317 (F.C.T.D.); Rossi v. The Queen, (FC), [1974] 1 F.C. 531 (T.D.);Canadian Wildlife Federation Inc. v.

Canada (Minister of the Environment), (FC), [1989] 3 F.C. 309 (T.D.); affd (FC), [1990] 2 W.W.R. 69 (F.C.A.); Bedard v. Correctional Service of Canada, (FC), [1984] 1 F.C. 193(T.D.); Carota v. Jamieson, (FC), [1979] 1 F.C. 735 (T.D.); affd (FCA), [1980] 1 F.C. 790 (C.A.);and Nguyen v. Canada (Minister of Employment and Immigration), (FCA), [1994] 1 F.C. 232 (C.A.). 2. The duty must be owed to the applicant: Rothmans of Pall Mall Canada v. Minister of National Revenue (No. 1),(FCA), [1976] 2 F.C. 500 (C.A.); Distribution Canada Inc. v.

M.N.R., (FC), [1991] 1 F.C. 716 (T.D.); affd (FCA), [1993] 2 F.C. 26 (C.A.); Secunda Marine Services Ltd. v. Canada (Minister of Supply & Services) (1989), 38Admin. L.R. 287 (F.C.T.D.); and Szoboszloi v. Chief Returning Officer of Canada, [1972] F.C. 1020 (T.D.); see also Jefford v. Canada,supra. 3. There is a clear right to performance of that duty, in particular: (

a) the applicant has satisfied all conditions precedent giving rise to the duty; O'Grady v. Whyte, supra; Hutchins v. Canada (NationalParole Board), (FCA), [1993] 3 F.C. 505 (C.A.); and see Nguyen v. Canada (Minister of Employment andImmigration), supra; (

b) there was (

i) a prior demand for performance of the duty; (ii) a reasonable time to comply with the demand unless refused outright; and (iii) a subsequent refusal which can be either expressed or implied, e.g. unreasonable delay; see O'Grady v. Whyte, supra, citing Karavosv. Toronto & Gillies, supra; Bhatnager v. Minister of Employment and Immigration, (FC), [1985] 2 F.C. 315 (T.D.);and Canadian Wildlife Federation Inc. v. Canada (Minister of the Environment), supra. 4. Where the duty sought to be enforced is discretionary, the following rules apply: . . . 5. No other adequate remedy is available to the applicant: Carota v.

Jamieson, supra; Maple Lodge Farms Ltd. v. Government ofCanada, supra; Jefford v. Canada, supra; Harelkin v. University of Regina, (SCC), [1979] 2 S.C.R. 561; and see Canada(Auditor General) v. Canada (Minister of Energy, Mines and Resources), (FCA), [1987] 1 F.C. 406 (C.A.); appealdismissed (SCC), [1989] 2 S.C.R. 49. 6. The order sought will be of some practical value or effect: Friends of the Oldman River Society v. Canada (Minister of Transport),

(FCA), [1990] 2 F.C. 18 (C.A.), per Stone J.A., at pages 48-52; affd (SCC), [1992] 1 S.C.R. 3, perLa Forest J., at pages 76-80; Landreville v. The Queen, [1973] F.C. 1223 (T.D.); and Beauchemin v. Employment and ImmigrationCommission of Canada (1987), 15 F.T.R. 83 (F.C.T.D.). 7. The Court in the exercise of its discretion finds no equitable bar to the relief sought: Penner v. Electoral Boundaries Commission(Ont.), (FC), [1976] 2 F.C. 614 (T.D.); Friends of the Oldman River Society v. Canada (Minister of Transport), supra. 8.

On a "balance of convenience" an order in the nature of mandamus should (or should not) issue. [30] Here, the Trustee had a statutory, non-discretionary, obligation to give reasons, those reasons had to be given to Ms. Prue, andthere is no equitable bar to the relief sought. However, there is another adequate remedy available to Ms. Prue: the appeal in s. 135 of theBIA. An appeal under that

section is one of – an appeal on the record, an appeal by way of a fresh - or de novo - hearing, or a hybrid ofthe two: Oil Lift Technology Inc.; Alberta Permit Pro; Galaxy Sprorts Inc.; Eskasoni Fisheries Ltd. The circumstances here suggestthat one of the latter two types of appeal is the type of appeal that is envisaged in the legislation: given the

summary nature of theprocess leading up to a Disallowance, and the short time lines to appeal, it seems entirely likely that the legislator intended that a personwhose claim was disallowed – here a claim in excess of $2 million – ought to have the right to a full hearing of its position, which canonly occur in a de novo or fresh hearing. On a fresh hearing, or even on a hybrid of a fresh hearing and a hearing which contains materialfrom the original process, the reasons of the Trustee for disallowing the claim are, of course, irrelevant: new material will presumablyhave to be assessed.

However, even if the appeal envisaged in s. 135 is a true appeal, i.e. an appeal on the record, the alleged absence ofreasons is a possible ground of appeal. Therefore, because there will be an appeal of one type or another, the appeal process will itselfover-ride the Trustee’s conclusion. Given the fact that Parliament obviously intended these matters to be dealt with as quickly as fairlypossible, on a balance of convenience it would be counter-productive to slow down the appeal process by requiring the Trustee to givebetter particulars of its reasons. [31] In

summary, for the reasons given, Ms. Prue’s application to have the Trustee give particulars of its reasons for disallowanceis denied. 3. Costs [32] If the parties are not agreed on costs, I may be spoken to within 30 days after the release of this decision. Heard on the 9th day of December, 2014. Dated at the City of Edmonton, Alberta this 10th day of December, 2014. J.B. Veit J.C.Q.B.A.

Appearances: Trevor A. Batty, Burnet, Duckworth & Palmer LLP for the Applicant, Ms. Prue Stephen J.

Livingstone, McLennan Ross LLP for the Respondent, the Trustee Appendix A Take notice that: As trustee acting in the matter of the bankruptcy of Skyrider Holdings Ltd., we have disallowed your claim (or your right to priority or your security on the property) in whole, pursuant to subsection 135(2) of the Act, for the following reasons: 1) The real property described as legal 0729273, Block 1, Lot 3 sold by Stella Prue November26, 2007 to a third party with sales proceeds of $649,000 paid to Skyrider Holdings Ltd. originates from (and subdivided from) real property legally described as SE-13-54-3 W5M, originally owned by Skyrider Holdings Ltd. and transferred to Stella Prue for no consideration on November29, 2006; 2) The real property described as legal SE-13-54-3-W5M sold by Stella Prue November 26, 2007 to a third party with sales proceeds of $290,000 paid to Skyrider Holdings Ltd. originates from (and subdivided from) real property legally described.as SE-13-54-3 W5M, originally owned by Skyrider Holdings Ltd. and transferred to Stella Prue for no consideration on November 29, 2006; 3) The real property described as legal 0723502 sold by Stella Prue October 7, 2009 to a third party with sales proceeds of $130,000 paid to Skyrider Holdings Ltd. originates from (and subdivided from) real property legally described as SE-13-54-3 W5M, originally owned by Skyrider Holdings Ltd. and transferred to Stella Prue for no consideration on November29, 2006; and 4) Monies advanced through the RBC Line of Credit have not been proven to be expenditures of Skyrider Holding Ltd. and were advanced at the direction of Derek Prue who is a joint account holder on the RBC line of credit.

And further take notice that if you are dissatisfied with our decision in disallowing your claim in whole (or a right to rank or your security or valuation of your claim), you may appeal to the court within the 30-day period after the day on which this notice is served, or within any other period that the court may, on application made within the same 30-day period, allow.