2017 ONSC 6986, 2017 ONSC 6986

CITATION : Wilson (Re), 2017 ONSC 6986 DIVISIONAL COURT FILE NO.: 449/17 DATE: 2017/11/21 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT IN THE MATTER OF THE BANKRUPTCY OF STEWART JARED KENT WILSON OF THE CITY OF MISSISSAUGA, IN THE REGIONAL MUNICIPALITY OF PEEL, IN THE PROVINCE OF ONTARIO BEFORE: Justice Frances Kiteley HEARD AT TORONTO: November 21, 2017 COUNSEL: Shahzad Siddiqui and Amar Mohammed , for the “Appellant” Sara Fatahi-Ghandehari Sarah Turgeon , for the “Respondent”, Trustee in Bankruptcy KITELEY J. ( Orally ) [ 1 ] This is a motion by the Trustee to quash the appeal brought by Ms.

Fatahi-Ghandehari from the order of Master Mills dated July 5, 2017. For the reasons that follow, the appeal is quashed because this Court does not have jurisdiction. Background [ 2 ] The Appellant is the former wife of Wilson. Wilson made an assignment in bankruptcy in April 2011 and he was discharged on June 15, 2012. In his disclosure to the Trustee, he did not list certain vehicles. [ 3 ] The parties separated in December, 2014. In the family law proceedings, Ms. Fatahi-Ghandehari claims an equalization of net family property and spousal support.

I need not detail those extensive proceedings for purposes of this motion. [ 4 ] In the course of the family law proceedings, Gray J. made an order dated March 3, 2015 in which he held that Mr. Wilson owned the vehicles in question. [ 5 ] The Trustee received a copy of that order and obtained an order re-appointing him. In the bankruptcy proceedings, in an order dated April 10, 2015, Pattillo J. made an order vesting the vehicles in the Trustee in Bankruptcy and an order that the debtor deliver up eight vehicles to the Trustee and to provide certain disclosure. The Court of Appeal dismissed Mr.

Wilson’s appeal of that order. [ 6 ] The Trustee brought a motion pursuant to s. 30 of the Bankruptcy and Insolvency Act (the “BIA”) which was heard by Master Jean, as Registrar in Bankruptcy, and she made an order dated January 31, 2017 in which she authorized and directed the Trustee to sell eight vehicles to Mr. Wilson’s mother. [ 7 ] Ms.

Fatahi-Ghandehari intended to bring a motion to vary that order, partly on the basis that she was not given notice of the motion heard January 31, 2017 and partly on the basis that the Trustee had not informed the Registrar in Bankruptcy of the order made by Price J. dated November 3, 2016 in the family law proceedings in which he ordered that Mr. Wilson preserve vehicles.

I assume for purposes of this motion to quash that the vehicles listed in the order made by Price J. are the same as those listed by the Registrar in Bankruptcy. [ 8 ] The Appellant’s counsel and counsel for the Trustee attended for a 9:30 a.m. appointment on the commercial list for purposes of scheduling the motion to vary.

Newbould J. made an endorsement dated May 10, 2017 that the motion should be brought before Master Jean. [ 9 ] The notice of motion was served and filed returnable July 4, 2017 indicating that it was to be before Master Jean. [ 10 ] On the date of the hearing of the motion, Master Mills presided. She made an order dated July 5, 2017 dismissing the motion

to vary. [ 11 ] On or about July 25, 2017, Ms. Fatahi-Ghandehari served a notice of appeal from that order to the Divisional Court in which she asked this Court to uphold the pre-existing order of Price J. dated November 3, 2016. [ 12 ] This motion is by the Trustee in Bankruptcy seeking to quash that appeal because the Divisional Court has no jurisdiction. Analysis [ 13 ] Master Mills has been appointed a Registrar in Bankruptcy pursuant to s. 184 of the BIA . If the order by Master Mills was made in her capacity as a Registrar in Bankruptcy, the appeal has to be quashed because this Court has no jurisdiction.

The appeal must be brought by motion within 10 days before a single judge in the commercial list in accordance with Rule 30(2) of the Bankruptcy and Insolvency General Rules . [ 14 ] The position taken on behalf of Ms. Fatahi-Ghandehari is that the order of Master Mills was not made in her capacity as a Registrar in Bankruptcy but in her capacity as a Master of the Superior Court and therefore the Divisional Court has jurisdiction. [ 15 ] This issue was unnecessarily complicated because the order of July 5 has not been signed and entered.

Counsel for the Trustee had prepared a draft order that counsel for the Appellant refused to approve because it includes the following: “Master J.E. Mills Registrar in Bankruptcy”. Neither counsel took advantage of Rule 59.03(10) to attend before Master Mills to have her sign the order.

As a result, we do not know from her, the capacity in which she believed she heard the motion. [ 16 ] For purposes of this motion to quash, I am satisfied that the order made by Master Mills was in her capacity as Registrar in Bankruptcy for these reasons. [ 17 ] The brief description of the reason for the attendance before Newbould J. indicated that Ms. Fatahi-Ghandehari was bringing a motion to vary the order of Master Jean dated January 31, 2017 pursuant to s. 30 (2 ) of the BIA Rules .

Newbould J. made an endorsement that that motion to vary should be dealt with by Master Jean, the Master who had heard the original motion. [ 18 ] The motion to vary was going to be contested and accordingly, it is implicit that counsel for the Appellant agreed that the Registrar in Bankruptcy could hear a contested motion pursuant to s. 192(i)(j). [ 19 ] The notice of motion that was served and filed returnable July 4, 2017 was in the style of cause and the action number of the bankruptcy proceeding. [ 20 ] The transcript of the hearing before Master Mills is in the motion material.

The submissions made indicate that she was hearing a motion to vary an order of a Registrar in Bankruptcy. Section 192(8) provides that any registrar in bankruptcy may act for any other registrar. Accordingly, Master Mills had the jurisdiction to hear the motion to vary and understood that was the nature of the motion before her. [ 21 ] At the end of submissions on July 4, 2017, counsel for the Appellant pointed out that Newbould J. had directed that the motion should be heard by Master Jean.

Both counsel indicated that they acquiesced in Master Mills having heard the motion. [ 22 ] Counsel for the Appellant takes the position that he was acquiescing in Master Mills having heard the motion as Master and not as Registrar in Bankruptcy. There is nothing in the transcript that suggests that he made that distinction. Based on the transcript, it was known that this was a motion to vary the order of a Registrar in Bankruptcy. Counsel provided no authority that a Master has jurisdiction to hear a motion to vary an order made by a Registrar in Bankruptcy.

For that reason, Master Jean could not have heard the motion as Master because she would not have had jurisdiction. [ 23 ] In the notice of motion returnable July 4, the grounds on which the Appellant relied included Rule 37.14 and Rule 1.04 of the Rules of Civil Procedure .

However, counsel for the Appellant agreed during submissions today that the motion was really pursuant to s. 187(5) of the BIA which is the equivalent of Rule 37.14. [ 24 ] Everything that relates to the record before Master Mills demonstrates that the motion was being argued before her in her capacity as a Registrar in Bankruptcy. [ 25 ] As indicated, the Appellant served a notice of appeal from the decision of Master Mills. The style of cause in the notice of appeal is the bankruptcy proceeding.

The grounds for appeal are essentially that the order of Price J. dated November 3, 2016 superceded the bankruptcy orders. Paragraph 9 of the notice of appeal indicates that “the learned Master has exceeded her jurisdiction given the pre-existing order of judges of the Superior Court and Court of Appeal”.

The grounds in the notice of appeal do not include an assertion that Master Mills was acting in any capacity other than Registrar in Bankruptcy. [ 26 ] In a letter to counsel for the Appellant dated July 27, 2017, counsel for the Trustee took the position that the appeal had to be pursuant to s. 192(4) of the BIA in accordance with Rule 30(2).

As counsel for the Appellant observed, the distinction between whether she was hearing it as Master or as Registrar in Bankruptcy did not surface until the notice of appeal was served and jurisdiction became an issue. [ 27 ] Based on the record before me which includes the motion before Master Jean, the attendance before Newbould J. in the commercial list, the motion before Master Mills and the notice of appeal, the order sought to be appealed was made by Master Mills in her capacity as Registrar in Bankruptcy.

Accordingly, the motion to quash the appeal is granted. [ 28 ] Counsel for the Appellant has brought a cross-motion for directions as to the appeal, for an order authorizing her to file fresh evidence in the appeal, for an order extending time to perfect the appeal and for permission to file, in the appeal, the transcript of the

hearing before Master Mills on July 4. I decline to hear that motion. Any motions seeking that relief must be brought before the commercial list which has jurisdiction for an appeal pursuant to Rule 30(2). [ 29 ] Before hearing submissions from counsel on the issue of costs, I observe that the long history of this case demonstrates a conflict between proceedings in family law pursuant to the Family Law Act (and perhaps the Divorce Act ) and pursuant to the BIA . At the time of his assignment in bankruptcy in 2011, the bankrupt did not reveal to the Trustee that he owned certain valuable vehicles.

He was discharged in bankruptcy in June 2012. The parties separated in December 2014 which, according to the Family Law Act is the valuation date and the date upon which her entitlement to an equalization of net family property is to be determined. [ 30 ] The Trustee was re-appointed in March, 2015 after Gray J. made the order that Mr. Wilson was the owner of the vehicles. There are complexities arising from the bankruptcy proceedings since April, 2015 and the family law proceedings arising from the valuation date in December, 2014.

This motion to quash is not the place to pursue those conflicts. [ 31 ] I have endorsed the Motion Record as follows: “Motion to quash appeal from order dated July 5, 2017 is granted for oral reasons given. Appellant shall pay costs of that motion fixed in the amount of $4,000.00 all inclusive. Motion by the Appellant for various orders including fresh evidence in the appeal: I decline to hear that motion as indicated in oral reasons given. While not agreed, counsel for Trustee had to prepare and some costs should be ordered.

Appellant shall pay costs of $2,000.00 all inclusive on that motion.” [ 32 ] In reviewing the file to finalize these reasons, I realized that the documents filed had an incorrect style of cause because at some point after the notice of appeal from the July 5, 2017 order was filed, someone had created a style of cause that indicated Ms. Fatahi-Ghandehari was the Appellant and the Trustee was the Respondent. The proper style of cause is reflected in these reasons. [ 33 ] In correcting the style of cause, I realized that there was an issue whether Ms.

Fatahi-Ghandehari has standing to appeal the order dated July 5, 2017. By referring to Ms. Fatahi-Ghandehari as “appellant”, I do not find that she has standing. Since I have granted the motion to quash, I need not direct counsel to make written submissions on the issue. If Ms. Fatahi-Ghandehari takes steps pursuant to Rule 30(2), the court will be in a position to make that determination. ___________________________ KITELEY J.

Date of Reasons for Judgment: November 21, 2017 Date of Release: November 24, 2017 CITATION : Wilson (Re), 2017 ONSC 6986 DIVISIONAL COURT FILE NO.: 449/17 DATE: 2017/11/21 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT IN THE MATTER OF THE BANKRUPTCY OF STEWART JARED KENT WILSON OF THE CITY OF MISSISSAUGA, IN THE REGIONAL MUNICIPALITY OF PEEL, IN THE PROVINCE OF ONTARIO

ORAL REASONS FOR JUDGMENT KITELEY J . Date of Reasons for Judgment: November 21, 2017 Date of Release: November 24, 2017