2015 MBCA 7, 2015 MBCA 7

Citation: Governo v. IDAM Enterprises Ltd. et al., Date: 20150121 2015 MBCA 7 Docket: AI14-30-08148; AI14-30-08169 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Alan D. MacInnes Madam Justice Diana M. Cameron Mr. Justice William J. Burnett BETWEEN : AIDA GOVERNO ) W. M. Onchulenko ) for the Appellant (Applicant) ) ) MANUEL GOVERNO ) D. J. Kroft and ) A. W.

Challis (Respondent) Appellant ) for MNP Ltd., Interim ) Receiver of the - and - ) Respondents ) IDAM ENTERPRISES LTD. and ) GIJA ENTERPRISES LTD. ) Appeal heard and ) Decision pronounced: (Respondents) Respondents ) January 21, 2015 MacINNES J.A. (for the Court): [ 1 ] The appellant appeals two orders made by the supervising judge in respect of the receivership of IDAM Enterprises Ltd. (IDAM) and GIJA Enterprises Ltd. (GIJA). [ 2 ] The first order pertains to the appellant’s motion for disclosure of the corporate records of IDAM and GIJA to permit him to obtain from his accountants an audit and advice as to a possible claim against the applicant and MNP Ltd. (the receiver).

We are satisfied that the supervising judge erred in that his order dismisses the motion whereas, in fact, it would appear from the submissions of the parties made before him that there was a consent agreement for disclosure of those records subject to certain conditions. [ 3 ] The second order pertains to the receiver’s motion with respect to the completion of the receivership of IDAM and GIJA.

Paragraph 6 of the order provides that any liability of the receiver in respect of the assets, undertaking and property of IDAM and GIJA in respect to its administration of the receivership is extinguished. [ 4 ] The result of that provision in the order is to take away from the appellant any remedy which he might have against the receiver, should it appear following the audit, that there is a basis for proceeding against the receiver in respect of its conduct in administering the receivership. [ 5 ] It is our view that, in making the order extinguishing the liability of the receiver, the supervising judge erred in the exercise of his discretion, the effect of the order amounting to an injustice as against the appellant. [ 6 ] In the result, we would allow the appeals in respect of both orders. [ 7 ] We would set aside the order of the supervising judge dismissing the appellant’s motion for production of corporate records and would substitute an order that the documents and records of IDAM and GIJA be provided to the appellant in accordance with the following procedure.

The documents in question will be provided by counsel for the receiver to Mr. Onchulenko, counsel for the appellant. Mr. Onchulenko will make those documents available for review by the appellant’s accountants. The appellant will have access to those documents in the presence of his accountants and on condition that, when he exercises access, a representative of the receiver will be present throughout and that the appellant will pay the cost of that representative for his attendance.

[ 8 ] Should there be any issue pertaining to the disclosure of the documents, in particular as regards any redaction of documents or otherwise, the parties will return at the earliest possible date before the supervising judge, who will determine the issue. [ 9 ] As regards the second order, we would vary para. 6 to provide that there will be a period of 60 days from production of the documents within which the appellant and his accountants will be permitted to review the documents, and, the appellant will be required to commence action against the receiver, should he see fit to do so.

Failing commencement of action by the appellant against the receiver within the 60-day period, para. 6 will become operative such that any liability of the receiver in respect to the assets, undertaking and property of IDAM and GIJA, and in respect of its administration of the receivership of IDAM and GIJA, would then be extinguished. [ 10 ] To the extent indicated, the appeals are allowed with costs to the appellant in the receivership. J.A. J.A. J.A.