Publications

By Scott McGrath

DO YOU HAVE AN AUTOMATIC RIGHT OF APPEAL? 
IT DEPENDS ON WHO YOU ASK.

INTRODUCTION

The Bankruptcy and Insolvency Act, R.S.C. 1985, c B-3 (the “BIA”) provides four instances in which a party is entitled to an automatic right to appeal a decision, which includes situations in which “the property involved in the appeal exceeds in value ten thousand dollars.” The application of this provision has varied across Canada and is sometimes referred to in the case law as the “narrow” or the “broad” interpretations. This article explores these varied interpretations in different provinces.

APPEAL RIGHTS

Appeal rights pursuant to the BIA are limited by section 193.  The BIA grants automatic rights of appeal in four instances, and then permits an appellate judge to grant leave in any other case:

Appeals

Court of Appeal

193         Unless otherwise expressly provided, an appeal lies to the Court of Appeal from any order or decision of a judge of the court in the following cases:

(a)        if the point at issue involves future rights;

(b)       if the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings;

(c)        if the property involved in the appeal exceeds in value ten thousand dollars;

(d)       from the grant of or refusal to grant a discharge if the aggregate unpaid claims of creditors exceed five hundred dollars; and

(e)        in any other case by leave of a judge of the Court of Appeal.

Because the BIA is a federal statute, it is applied in all provinces across the country.  That can sometimes give rise to differing interpretations and treatments of the same statutory provisions in different jurisdictions.  Such is the case with s. 193 of the BIA and specifically s. 193(c), which provides for an automatic right of appeal “if the property involved in the appeal exceeds in value ten thousand dollars”.  This has given rise to two differing interpretations, sometimes referred to as the “narrow” and the “broad” interpretations, and each are discussed below.

THE NARROW INTERPRETATION

The narrow interpretation has been adopted in Ontario and was perhaps best summarized in 2403177 Ontario Inc. v. Bending Lake Iron Group Limited.[1]  Bending Lake concerned a receivership wherein the debtor’s major asset was an undeveloped iron ore mine site in northern Ontario.  The Court approved a sales process for the debtor’s property and, as a result of that sales process, the receiver sought court approval of an asset purchase agreement it had entered into with a third-party buyer.

The debtor opposed the motion seeking approval of the asset purchase agreement and sought a postponement of the sale of the property.  The sale was ultimately approved by the motion judge, and the debtor pursued an appeal.  A dispute arose between the parties to the proposed appeal over whether there was an automatic right of appeal pursuant to s. 193.  A motion for directions was heard before Brown J.A.

Justice Brown acknowledged that there was a pre-existing dispute in the case law about how to interpret s. 193(c); on the one hand, there was the camp who believed that the objectives of the BIA were fostered by a “broad, generous and wide-reaching” interpretation of appeal rights in s. 193, while the second camp believed that the interpretation of appeal rights must be made “within the context of the demands of ‘real time litigation’ characteristic of contemporary insolvency restructuring proceedings.”[2]

Justice Brown favoured the second camp.  He noted, among other things, that a wide interpretation of the $10,000 threshold would mean that a right of appeal would exist in almost every case because very few insolvency cases would involve property that did not exceed that threshold.[3]  Justice Brown also noted that the court should strive, wherever possible, for consistency between the BIA and the CCAA, which has no automatic right of appeal and requires leave to appeal to be granted for all cases.[4]

Ultimately, Brown J.A. concluded that a narrow approach was preferred, and that an appeal would only be captured by s. 193(c) if required by the consideration of three principles – that the section does not apply to: (i) orders that are procedural in nature; (ii) orders that do not bring into play the value of the debtor’s property; or (iii) orders that do not result in a loss (meaning that the order in question must contain some element of a final determination of the economic interests of a claimant in the debtor).[5]

In the result, Brown J.A. found that all three principles weighed against the appeal falling within s. 193(c), finding that the debtor’s complaints were largely procedural in nature, did not bring into play the value of the debtor’s property, and that the allegations of an improvident sale did not have a sufficient evidentiary basis.

In addition to being followed in many cases in Ontario since first decided, Bending Lake has also been referenced with approval in Alberta (Bending Lake itself relied upon cases from Alberta in setting out its interpretation of s. 193(c)).  Cases such as Mantle Materials Group, Ltd. v. Travelers Capital Corp.[6] and Manitok Energy Inc. (Re)[7] have relied on Bending Lake and recited the principle that s. 193(c) is meant to perform a “gatekeeping function” and thus should be interpreted narrowly.[8]

THE BROAD INTERPRETATION

The Saskatchewan Court of Appeal expressly decided not to follow Bending Lake in MNP Ltd. v. Wilkes.[9]  The facts in Wilkes were that the debtor, King Edward Apartments Inc., was put into receivership by its secured creditor, Atrium Mortgage Investment Corporation.  The receiver applied for an order approving the sale of two lawsuits that the debtor had commenced to the secured creditor for $200,000.

This motion was opposed by a group of the debtor’s shareholders, who argued that the lawsuits were truly valued in excess of $10 million and that their improvident sale to the secured creditor would increase the shareholders’ exposure to the secured creditor pursuant to their personal guarantees.

The sale of the lawsuits was approved, and the shareholders sought an appeal.  The Saskatchewan Court of Appeal found that they had an automatic right of appeal pursuant to s. 193(c), and in doing so refused to follow Bending Lake.

Justice Jackson, writing for the Court, found that there was not a sufficient basis to limit the meaning of the words in s. 193(c).  She found that it was not necessary to apply the three principles from Bending Lake, was unpersuaded that the appeal rights from the BIA had to be influenced by those in the CCAA, and found that the Court’s task when determining whether s. 193(c) applies is to “determine first and foremost whether the appeal involves property that exceeds in value $10,000, i.e., to answer the question posed by s. 193(c).”[10] 

Justice Jackson found that the court may well find that the appeal involves a question of procedure alone and therefore s. 193(c) will not apply, but found it would be wrong to assume that no appeal of a procedural order could satisfy the language in s. 193(c) and therefore it was unhelpful to start with a question that asks whether the appeal involves a question of procedure alone, which would be asking “the second question first.”[11]

Justice Newbury of the British Columbia Court of Appeal in Crowe Mackay & Company Ltd. v. 0731431 B.C. Ltd.[12] expressly elected to follow the approach adopted in Wilkes rather than Bending Lake.  Of some persuasive effect in that case was that the underlying order was not decided in the context of “real time litigation” as described in Bending Lake, but rather was the result of a 90-day trial of five proceedings at a time when the administration of the bankrupt estates was no longer an active process.[13]

The British Columbia Court of Appeal reaffirmed its acceptance of the reasoning in Wilkes in its more recent decision in QRD (Willoughby) Holdings Inc. v. MCAP Financial Corporation.[14]

Last year, the New Brunswick Court of Appeal was faced with the question of the appropriate interpretation of s. 193(c) in its decision in Jason Chin Chen Liu v. Grant Thornton Limited.[15]  Justice French, writing for the Court, conducted a comprehensive review of the two lines of authority that had emerged from other provinces and ultimately decided to follow the Wilkes line of cases, concluding that he was not convinced that a narrow construction of s. 193(c) was justified.[16]

The Québec Court of Appeal referred to the discrepancy in other provinces in its recent decision in Bernard c. Banque Laurentienne du Canada,[17] but found it did not have to prefer one approach over the other in the context of that case.[18]

THE NARROW INTERPRETATION CONTINUES TO APPLY IN ONTARIO

For its part, the Ontario Court of Appeal’s interpretation of s. 193(c) remains narrow.  In North House Foods Ltd. (Re)[19] the Court followed the Bending Lake test without any reference to the broader interpretations since-adopted in other provinces.  The Court noted that the provision was to be interpreted narrowly and it “could not have been Parliament’s intention to cast a wide net over the $10,000 qualification, as otherwise most cases would meet that description.”[20]  The Court recited the three principles from Bending Lake and found that because the appellant could not “establish the third required characteristic” that the order under appeal resulted in a loss to the appellant, this alone was “fatal” to the appellant’s s. 193(c) argument.[21]

The Ontario Court of Appeal also recently released its reasons in Unity Health Toronto v. 2442931 Ontario Inc.,[22] which was a three-member panel review of a decision of a single judge finding that, contrary to the assertions of the moving party, there was no right of appeal pursuant to s. 193(c).  The Court again recited only case law from Ontario, confirming that the interpretation of s. 193(c) was narrow, and describing the three principles from Bending Lake as setting out three types of cases that will not fall within the ambit of s. 193(c).[23]

CHARTING THE PATH FORWARD

Some courts have tried to minimize the differences between the “narrow” and “broad” lines of cases and insisted that they are simply using different terminology to describe the same framework.[24]  While the result of applying these varying tests may well be the same for the vast majority of cases, the approaches as described by the courts appear to be motivated by fundamentally different concerns.  As the New Brunswick Court of Appeal stated in Jason Chin when describing the results in cases both before and after Bending Lake and Wilkes, “[r]ationalizing all such decisions would be no easy task…”.[25] This may be an area where guidance from the Supreme Court of Canada would be beneficial.

While more jurisdictions seem to favour the broad approach, the majority of cases are decided pursuant to the narrow approach because Ontario hears the most appeals pursuant to the BIA of all the provinces.  Simply noting up s. 193[26] of the BIA for 2025 reveals that there were 16 cases last year that expressly referenced s. 193 of the BIA.  Of those, ten were from Ontario, three from Alberta, and one each from New Brunswick, Saskatchewan and Québec. 

There were six reported cases from the Ontario Court of Appeal in 2025 in which an appellant sought to have its appeal fit within the confines of s. 193(c).  In all six cases the Ontario Court of Appeal applied the narrow approach and found that it did not.[27]

The takeaway for litigants is that the right to appeal decisions made pursuant to the BIA is most restricted in Ontario.  This may be seen as beneficial or undesirable to different parties given the circumstances in any particular case.  To the extent that a party that is initiating insolvency proceedings pursuant to the BIA has a choice over which jurisdiction in which to commence its proceeding, it would do well to consider the potential appeal rights as a factor when making its determination.

[1] 2016 ONCA 225. [Bending Lake]

[2] Bending Lake at para. 47.

[3] Ibid at para. 51.

[4] Ibid at paras. 50 and 52.

[5] Ibid at paras. 53 and 61.

[6] 2023 ABCA 339. [Mantle Materials]

[7] 2022 ABCA 260.

[8] Mantle Materials at para. 9.

[9] 2020 SKCA 66. [Wilkes]

[10] Wilkes at para. 64.

[11] Ibid.

[12] 2022 BCCA 158

[13] Ibid at para. 54.

[14] 2024 BCCA 318

[15] 2025 NBCA 83. [Jason Chin]

[16] Ibid at para. 76.

[17] 2025 QCCA 1145.

[18] Ibid at para. 8.

[19] 2025 ONCA 563.

[20] Ibid at para. 28.

[21] Ibid.

[22] 2026 ONCA 82.

[23] Ibid at para. 37.

[24] See discussion in Hillmount Capital Inc. v. Pizale, 2021 ONCA 364 at paras. 28-44.

[25] Jason Chin at para. 77.

[26] One must acknowledge the weaknesses of noting up statutory sections electronically, including that not all cases are reported. The figures in this publication should therefore be considered as instructive only.

[27] Unity Health Toronto v. 2442931 Ontario Inc., 2025 ONCA 93; Marshallzehr Group Inc. v. La Pue International Inc., 2025 ONCA 124; North House Foods Ltd. (Re), 2025 ONCA 563 (leave was granted pursuant to s. 193(e)); Cameron Stephens Mortgage Capital Ltd. v. Conacher Kingston Holdings Inc., 2025 ONCA 732 (leave was granted pursuant to s. 193(e)); Proex Logistics Inc. (Re), 2025 ONCA 832 (leave was granted pursuant to s. 193(e)); Royal Bank of Canada v. 1434399 Ontario Inc., 2025 ONCA 878.  Note that the Court of Appeal for Ontario recently found that bankruptcy orders do qualify for automatic appeals pursuant to s. 193(c) in Aquino (Re), 2026 ONCA 132.