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BANKRUPTCY & INSOLVENCY PROCEEDINGS - Appeals and judicial review - Practice and procedure - Effect on other proceedings - Courts - Jurisdiction - Stays - Pending concurrent proceedings

Monday, September 18, 2017 @ 2:18 PM  


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Application by the Alberta Energy Regulator and the Orphan Well Association for a stay of the enforcement of a majority decision of the Alberta Court of Appeal pending appeal to the Supreme Court of Canada. The majority decision at issue determined that a receiver and trustee in bankruptcy appointed under the Bankruptcy and Insolvency Act must use the sale-of-assets proceeds to pay a bankrupt’s secured creditors before it paid the Alberta Energy Regulator the amount it claimed was required to discharge the bankrupt’s obligation to shut-in abandoned wells. At issue on appeal was whether a single judge of the Alberta Court of Appeal had jurisdiction to grant a stay after a party filed an application for leave to appeal under Rule 25 of the Rules of the Supreme Court of Canada and ss. 40 and 58(1)(a) of the Supreme Court Act. If so, also at issue on appeal was whether a single judge had jurisdiction to issue an order that affected the acts of other receivers and bankruptcy trustees in other proceedings. And, finally, if the answer to the second question was yes, then at issue was whether the applicants met the three-part test for stays.

HELD: Application dismissed. The stay of enforcement could not be granted as a contrary outcome would have been heretical in nature. A single judge of the Alberta Court of Appeal had jurisdiction to grant a stay of proceedings even after the applicant filed and served an application for leave to appeal to the Supreme Court of Canada. Section 65.1(1) of the Supreme Court Act expressly stated that a judge of the court appealed from may “order that the proceedings be stayed with respect to the judgment from which leave to appeal [wa]s being sought”. But the Court of Appeal judgment under appeal only dismissed the appeal. It did not authorize or order the receiver and bankruptcy trustee to do anything. In addition, the trial decision’s main feature was a series of declarations stating the law and how it made lawful or unlawful the receiver and trustee’s and the Alberta Energy Regulator’s acts. As a result, there was nothing to stay. The Alberta Court of Appeal had no jurisdiction to suspend the precedential value of the decision and introduce another legal regime. It was not possible to stay the precedential effect of a Court of Appeal opinion and create a new legal regime that affected other receivers and trustees in bankruptcy who pursued their rights in debt enforcement proceedings. That was not an attribute of a legal system committed to the rule of law. Only the Supreme Court of Canada could alter the course set by the Alberta Court of Appeal decision.

Grant Thornton Ltd. v. Alberta Energy Regulator, [2017] A.J. No. 902 Alberta Court of Appeal, T.W. Wakeling J.A., August 30, 2017. Digest No. TLD-Sept182017001