Port Capital Development (EV) Inc. (Re)

2022 BCSC 1655 Port Capital Development (EV) Inc. (Re)

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Port Capital Development (EV) Inc. (Re), 2022 BCSC 1655 Date: 20220922 Docket: S205095 Registry: Vancouver In the Matter of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended - and - In the Matter of the Business Corporations Act, S.B.C. 2002, c. 57, as amended - and - In the Matter of a Plan of Compromise and Arrangement of Port Capital Development (EV) Inc. and Evergreen House Development Limited Partnership Before: The Honourable Justice Fitzpatrick Reasons for Judgment (Extension of Time to Appeal) Counsel for 1296371 B.C. Ltd.: R. Clark, K.C. Counsel for the Monitor, Ernst & Young Inc.: P. Bychawski Counsel for Domain Mortgage Corp.: S. Stephens Counsel for Aviva Insurance Company of Canada: W. Roberts S. Hannigan Counsel for Solterra Acquisitions Corp.: K. Jackson T. Posyniak Place and Date of Hearing: Vancouver, B.C. August 29, 2022 Place and Date of Decision with Written Reasons to Follow: Vancouver, B.C. August 29, 2022 Place and Date of Written Reasons: Vancouver, B.C. September 22, 2022

INTRODUCTION [1] On July 22, 2022, I approved a sale of the petitioners' unfinished development property to Solterra Acquisitions Corp. ("Solterra"): see Port Capital Development (EV) Inc. (Re), 2022 BCSC 1464 [2022 Sale Reasons]. [2] One of the secured creditors, 1296371 B.C. Ltd. ("129"), who was not present with counsel at that hearing, or present at the hearings leading to that decision, later indicated its intention to appeal my decision. However, 129 did not take steps to perfect its appeal/leave to appeal until the eve of the filing deadline, and then did not undertake the necessary procedures in the Court of Appeal to perfect the appeal before the deadline. [3] On August 18, 2022, 129 filed and served its leave to appeal, which is beyond the 21-day appeal period. [4] 129 now seeks an order of this Court granting an extension of the time to file an appeal/leave to appeal to August 18, 2022. Major stakeholders in this proceeding, including the first and second secured creditors, Solterra and the Monitor, oppose any extension. [5] On August 29, 2022, I dismissed 129's application for an extension of the time to appeal my order, with written reasons to follow. These are those reasons.

BACKGROUND FACTS [6] Since its inception in May 2020, this proceeding under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended [CCAA], has had a long and tortious history. [7] The events from May 2020-early-July 2022 are summarized in the 2022 Sale Reasons at paras. 8-27 (defined terms are found there). For the sake of completeness in these reasons, I will briefly provide a recap: a) May 2020-June 2021: the petitioners ran a lengthy and difficult sale and investment solicitation process (SISP) which resulted in competing bids. On June 15, 2021, I approved an offer from Solterra Acquisitions Corp. ("Solterra") and rejected 129's offer: Port Capital Development (EV) Inc. (Re), 2021 BCSC 1272 [2021 Sale Reasons] at paras. 5-26; b) July-September 2021: 129 appealed the 2021 Sale Reasons. Leave was obtained and a five-justice division was convened: Port Capital Development (EV) Inc. v. 1296371 B.C. Ltd., 2021 BCCA 319 at para. 3 [BCCA Leave Reasons]. On appeal, the court overturned my decision and approved 129's offer, accepting that the petitioners should be given an opportunity to refinance the debt and continue seeking restructuring options in this proceeding. Macario Reyes acts as the principal and directing mind for both the petitioners and 129. The petitioners were supported throughout by its major secured creditors, including Aviva Insurance Company of

Canada ("Aviva"): Port Capital Development (EV) Inc. v. 1296371 B.C. Ltd., 2021 BCCA 382 [Port Capital BCCA]; c) October 2021: the petitioners refinanced their debt through new loans from Domain Mortgage Corp. ("Domain") and 129/Aviva (who advanced monies using pre-sale deposit funds); d) December 2021-February 2022: by December 2021, the petitioners ran out of cash to finance ongoing costs. However, in early 2022, I approved further financing from Domain to fund ongoing expenses: Port Capital Development (EV) Inc. (Re), 2022 BCSC 370; and e) April-July 2022: the petitioners arranged for a development partner (Enso Holdings Ltd. ("Enso")) and refinancing through a $20 million loan from Mandate. This transaction was approved by the Court. However, Mandate's loan did not close. By early July 2022, Domain's loan had matured and demand was made. In addition, ongoing expenses incurred by the petitioners in this proceeding, including a critical one with respect to the maintenance of the assets, were unpaid and accruing. Professional fees, including those of the Monitor and the petitioners' counsel, were also unpaid. The Administration Charge was exceeded. [8] In early July 2022, the secured creditors--Domain and Aviva--acted. Domain filed applications to terminate the CCAA proceedings and appoint a receiver to immediately undertake a further sales process. Aviva filed an application

to grant the Monitor enhanced powers to run a "simplified" sales process or "SSISP". [9] On July 13, 2022, I heard Domain's receivership application, which the petitioners did not oppose. However, against the stark choice of a receivership, with its attendant delay and costs in that proceeding before any sale could be arranged, the major stakeholders present--the petitioners, Domain, Aviva and the Monitor--agreed to delay that result and seek another outcome on an urgent basis. This led to later hearings before the Court as all those parties urgently attempted to find another and better solution for the stakeholders. Those later hearings took place on July 18 and 22, 2022. The details of all three hearings are outlined in the 2022 Sale Reasons at paras. 33-50. [10] On July 22, 2022, I exercised my discretion to consider and approve Solterra's offer of $18.5 million: 2022 Sale Reasons at paras. 51-61. An order was granted to that effect (the "Sale Order"). [11] The closing of the Solterra transaction is currently scheduled for September 20, 2022. 129's APPEAL EFFORTS [12] The deadline for 129 to file its notice of appeal/notice of application for leave to appeal the Sale Order and to serve it on all parties was within 21 days of the Sale Order, or August 12, 2022: CCAA, s. 14(2). [13] The only evidence as to the circumstances of 129's appeal efforts are outlined in the Affidavit

of Darlene Purdy #1 sworn August 24, 2022. Briefly, the facts are: a) On August 5, 2022, 129's counsel advised most of the counsel present at the July 2022 hearings (not Aviva) that he had been retained to seek leave to appeal. From those communications, 129's counsel stated that he was aware of the need to file by August 12, 2022. He asked for the other counsels' availability, indicating that the Court of Appeal Rules require a hearing date to be set in the filing materials; b) On August 8, 2022, after a brief exchange of emails, counsel agreed that any leave application would be heard on September 7, 2022, and the closing of the Solterra sale would not occur prior to that; c) On August 12, 2022, the last day in the appeal period, 129's counsel prepared its appeal materials, including a notice of application for leave to appeal and an application record. Just before 4:00 p.m., when counsel's legal assistant began uploading the materials to the Court of Appeal's website, counsel's staff encountered problems in filing the appeal materials and they did not succeed in doing so prior to 4:00 p.m.; d) At 4:39 p.m. and 4:41 p.m. on August 12, 2022, 129's counsel's staff forwarded unfiled copies of the notice of application for leave to appeal and the application record to other counsel; e) In the morning of August 15, 2022, 129's counsel and its staff were advised by the Court of

Appeal registry that under the Rules, a notice of appeal had to be filed as an initiating document referencing the fact that the party is also seeking leave to appeal. The other parties were advised by email that 129 intended to proceed with the correct documentation. Attempts to file the correct documents were made later throughout the day; f) Late in the day of August 15, 2022, the Court of Appeal accepted the filing of the notice of appeal, which referenced that leave was required. 129's counsel's filing was "courtesy rejected" as it was not in the correct form. The grounds for leave to appeal were stated to be: 1. The Learned Chambers Judge erred in law in granting an order in breach of the rules of natural justice.

2. The Learned Chambers Judge erred in principle in failing to consider potentially higher offers, failing to direct service on the Appellant who, along with Aviva Insurance Company of Canada had the only financial interest in a higher price and failing to require production of a private agreement between Aviva and Solterra Acquisitions Corp. g) On August 16, 2022, 129's counsel sent filed copies of the appeal materials to counsel who had appeared on July 22, 2022; h) On August 18, 2022, 129's counsel forwarded copies of the appeal materials to the entire service list, then perfecting the appeal; and i) On August 19, 2022, Solterra's counsel, supported by Domain and Aviva, advised 129's counsel that the Court of Appeal had no jurisdiction under the CCAA to consider the application for leave to appeal since the appeal had been filed outside of the time limit.

RELEVANT AUTHORITIES RE TEST FOR EXTENSION [14] Given that 129 failed to perfect its appeal within 21 days, it falls to this Court--not the Court of Appeal--to consider whether any extension of time should be granted: CCAA, s. 14(2); Bank of Montreal v. Cage Logistics Inc., 2003 ABCA 36 [Cage Logistics]; Vanguard Inc. v. Royal Bank of Canada, 2004 SKCA 99 at para. 3. [15] In Cage Logistics at para. 6, Justice Wittman reproduced and emphasized certain portions s. 14 of the CCAA, as follows: The C.C.A.A. provisions that are relevant to this application are ss. 13 and 14. They state as follows: 14.(1) An appeal under section 13 lies to the highest court of final resort in or for the province in which the proceeding originated. (2) All appeals under section 13 shall be regulated as far as possible according to the practice in other cases of the court appealed to, but no appeal shall be entertained unless, within twenty-one days after the rendering of the order or decision being appealed, or within such further time as the court appealed from, or, in the Yukon Territory, a judge of the Supreme Court of Canada, allows, the appellant has taken proceedings therein to perfect his appeal, and within that time he has made a deposit or given sufficient security according to the practice of the court appealed to that he will duly prosecute the appeal and pay such costs as may be awarded to

the respondent and comply with any terms as to security or otherwise imposed by the judge giving leave to appeal. [Bold emphasis added in original] [16] In Cage Logistics, Wittman J.A. discussed the unique aspects of CCAA proceedings that must have informed Parliament in deciding to vest jurisdiction to consider any extension of time to appeal in this Court, and not an appeal court: [17] I am, however, persuaded that I must interpret ss. 13 and 14 of the C.C.A.A. together, especially when the express words accord with the philosophy of the C.C.A.A. I agree that the difference in wording between s. 13 and s. 14 in describing the access to and powers of various courts is to avoid creditors or other would-be appellants from applying for leave in an untimely fashion so as to disrupt or derail a plan of arrangement. Parliament has indicated that, with the exception of the Yukon territory, the discretion to extend time is vested solely in the court appealed from. In other words, in the supervising judge who is in a unique and informed position to exercise that discretion according to the particular circumstances and stage of the C.C.A.A. proceedings then before her. [Emphasis added.] [17] 129 refers to various authorities which discuss the considerations where an appellant seeks an extension of time to appeal: Davies v. Canadian Imperial Bank of Commerce, [1987] B.C.J. No. 1479

(B.C.C.A.) at para. 20; Westbank Holdings Ltd., v. Westgate Shopping Centre Ltd., 2009 BCCA 370 [Westbank Holdings] at para. 25; Salfinger v. Salfinger, 2013 BCCA 217 at para. 16. 129 relies on these factors or considerations. [18] The above authorities are well taken and are clearly still good law, and I will address the considerations set out in those authorities. [19] However, insolvency proceedings bring before the Court a unique set of circumstances. I do not suggest that different factors apply in insolvency matters where an extension is sought. What I do suggest is that any extension application must be assessed within the context of the circumstances that apply in insolvency matters which gives rise to a unique lens through which the extension factors can be considered. [20] This approach is supported by the approach taken to an application for an extension of time to appeal in Industrial Alliance Insurance and Financial Services Inc. v. Wedgemount Power Limited Partnership, 2018 BCCA 283 at para. 30 [Wedgemount] and Forjay Management Ltd. v. 625536 B.C. Ltd., 2019 BCCA 368 [Forjay Management] at para. 33. [21] Therefore, I will apply the factors cited by 129, while accounting for the additional factors set out in Wedgemount which are particularly suitable for extension applications in insolvency proceedings. At para. 30 of Wedgemount, Justice Groberman outlined certain

factors which serve as a guide to the exercise of the court's discretion on an extension application: a) Was there an intention to apply for leave before the expiry of the time for doing so? b) Did the appellant communicate the intention to the respondents? c) Was the delay lengthy? d) Did the applicant act expeditiously to seek an extension of time? e) Is there an explanation for the delay? f) Is there prejudice to the respondents consequent on the delay? g) Is there merit to the application for leave? h) Is it in the interests of justice that the extension be granted? [22] 129 bears the onus of satisfying all of the above factors. [23] Both Wedgemount and Forjay Management involved court-ordered receiverships granted under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3; they were not CCAA proceedings. However, the court's discussion in those cases as to a proper approach to a request for an extension of time in an insolvency matter is very helpful here. Those comments provide confirmation as to the Court's consideration of any extension application in the unique circumstances that pertain in insolvency matters.

DISCUSSION [24] I propose to follow the Wedgemount factors in my analysis below. In doing so, I will draw up Groberman J.A.'s approach to some of these factors in insolvency matters. Intention to Appeal / Communication / Delay / Seeking Extension [25] No stakeholder takes issue with 129 having met its onus in respect of the first four factors. 129 formed the intention to seek leave to appeal within the appeal period and its counsel communicated that to other counsel. In addition, the delay (August 12-18, 2022) was not lengthy. Finally, 129 moved expeditiously to seek an extension of the time to appeal in late August 2022. [26] These four factors favour an extension. Is there an Explanation for the Delay? [27] It is apparent that the late filing of the appeal took place arising from counsel's error, which typically favours an extension. This is unfortunate; however, that fact does not overwhelm the analysis and obviate the need to consider all of the relevant factors on this extension application. Counsel error is but one of those factors. 129 has not referred to any decision that would elevate the significance of counsel error so as to overwhelm the other factors. [28] Many of the respondents take the position that 129 did not meet its onus to provide a reasonable explanation for the delay, as 129's counsel waited until the 11th hour before filing its materials. The respondents

posit that 129's failure to discover its error in identifying the materials that had to be filed before the deadline does not constitute a reasonable explanation. [29] The respondents refer to the urgency of the matter, particularly the scheduled closing of the Solterra transaction on September 20, 2022. The respondents say that 129 failed to move with alacrity in what were undoubtedly urgent circumstances, in that 129 waited two weeks to announce its intention to appeal and then waited until the last minute to (attempt to) file the appeal materials. In essence, 129 took over three weeks to perfect its appeal in the midst of an eight-week scheduled closing period, while significant costs were being incurred by the stakeholders. [30] 129 is no stranger to appealing decisions of this Court, including sale approvals in this proceeding. Indeed, in its earlier appeal, 129 had no trouble meeting the required time limits to file its appeal, although the filing was arguably not done with any particular alacrity then as it was only filed the second last day before the deadline (which in any event, allowed the leave application to be heard well in advance of the scheduled sale closing date). [31] Mr. Reyes and his counsel have failed to adduce any evidence to explain why the appeal materials were in the wrong form, and why they did not attempt to file those materials until the eve of the

deadline. As such, this Court and the respondents are precluded from undertaking a fulsome analysis of this factor. [32] Rather, 129's counsel only made submissions on the point. He stated that the delay in filing was simply "how long it took". He refers to having to read transcripts of the July 2022 hearings in assessing any appeal, which I accept as reasonable since he was not 129's counsel at the time (although 129's prior counsel was also not present so he would have had to read transcripts too). However, there is no basis upon which to assess whether this assertion is reasonable or not since there no evidence from 129 or counsel on this point, including when the transcripts were received. [33] As a matter of practice, evidence should be before the court in the form of affidavits, not counsel's submissions at the time of the hearing. To proceed in this manner is to put opposing counsel in an unfair position to assess the matter, while also unreasonably requesting that the Court accept counsel's submissions without supporting evidence on what is a point of controversy. [34] This factor causes me some concern, for the reasons expressed by the respondents; specifically, that 129 failed to act with urgency despite the exigent circumstances, and 129's counsel's carelessness in neglecting to inform itself about the Rules. 129's apparent lackadaisical approach to advancing an

appeal from the Sale Order is consistent with my earlier assessments of Mr. Reyes' attitude in these proceedings, namely to delay the matter as he now attempts to do in order to buy him more time to find a solution to the petitioners' financial woes: 2021 Sale Reasons at paras. 90-91; and, 2022 Sale Reasons at para. 56. [35] Despite the lack of evidence on this issue, the respondents did not press the issue to a large degree. Accordingly, while not ideal, I will accept 129's explanation for the delay, despite the fact that the evidence before the Court does not explicitly explain the delay: Wedgemount at para. 34. [36] Accordingly, this factor also favours an extension. Is there Prejudice to the Respondents from the Delay? [37] 129 says that the prejudice enquiry is limited to any prejudice that would have arisen from the extension being sought. 129 says that no prejudice arises on the part of the respondents. Conversely, 129 will be prejudiced in that it will lose its right to seek leave to appeal. [38] In Wedgemount, Groberman J.A. stated: [38] In assessing the prejudice occasioned by the delay in filing the leave application, it is important to recognize what is being considered is prejudice arising between the end of the appeal period and the date that the leave application was filed: see Re Braich, 2007 BCCA 641. While the evidence in this case is equivocal, I am prepared

to accept that no great expenditures or prejudice arose between May 28, 2018 the last day for timely filing of the application from the second judgment and June 1, 2018 when the document was filed. [Emphasis added.] [39] Viewed in this manner, I agree that the three-day window between the appeal date (August 12, 2022) and the time when the appeal was perfected (August 18) did not give rise to any prejudice on the part of the respondents. [40] Having said that, there are elements of prejudice that do arise, which are significant. I will address those issues below when discussing the interests of justice factor. Is there Merit to the Application for Leave? [41] I will begin this discussion by noting what is obvious--namely that this Court is in an odd position to be analyzing the merits of its own decision as part of this application. This "awkwardness" was noted in Royal Bank of Canada v. Cow Harbour Construction Ltd., 2010 ABQB 637 at paras. 27-28, but the court was nevertheless required to undertake that task, as directed by Parliament in s. 14(2) of the CCAA. [42] I agree that the question of merit is confined to considering whether the leave application is bound to fail because it is "vexatious, frivolous or entirely without merit": Davies at para. 34; Westbank Holdings at para. 36-37; Salfinger at paras. 17 and 25. If the matter were to proceed to a leave application, then

obviously whether leave would be granted would be in the hands of the Court of Appeal. [43] The parties agree that the decision in the Sale Order was a discretionary one made by me as the supervising judge who has performed that role since the inception of this CCAA proceeding. I have heard every application in this Court since that time. [44] It is beyond question that, across Canada, appeal courts approach leave to appeal applications in respect of CCAA decisions with caution and will only grant leave "sparingly" with respect to discretionary decisions in this Court. [45] In Edgewater Casino Inc. (Re), 2009 BCCA 40 [Edgewater], Justice Tysoe stated: [17] It is my view that the same test applicable to all other leave applications should be utilized when considering an application for leave to appeal from a CCAA order. In British Columbia, the test involves a consideration of the following factors: (a) whether the point on appeal is of significance to the practice; (b) whether the point raised is of significance to the action itself; (c) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and (d) whether the appeal will unduly hinder the progress of the action. [18] This is not to suggest that I disagree with the above comments of Macfarlane J.A. in Pacific National Lease. To the contrary, I agree with his comments, but I do not believe

that he established a special test for CCAA orders. Rather, his comments are a product of the application of the usual standard used on leave applications to orders that are typically made in CCAA proceedings and a recognition of the special position of the supervising judge in CCAA proceedings. In particular, a consideration of the third and fourth of the above factors will result in leave to appeal from typical CCAA orders being given sparingly. [19] The third of the above factors involves a consideration of the merits of the appeal. Most orders made in CCAA proceedings are discretionary in nature, and the normal reluctance to grant leave to appeal is heightened for two reasons alluded to in the comments of Macfarlane J.A. [20] First, one of the principal functions of the judge supervising the CCAA proceeding is to attempt to balance the interests of the various stakeholders during the reorganization process, and it will often be inappropriate to consider an exercise of discretion by the supervising judge in isolation of other exercises of discretion by the judge in endeavouring to balance the various interests. Secondly, CCAA proceedings are dynamic in nature and the supervising judge has intimate knowledge of the reorganization process. The nature of the proceedings often requires the supervising judge to make quick decisions in complicated circumstances. These

considerations are reflected in the comment made by Madam Justice Newbury in New Skeena Forest Products that "[a]ppellate courts also accord a high degree of deference to decisions made by Chambers judges in CCAA matters and will not exercise their own discretion in place of that already exercised by the court below" (para. 20). [21] The fourth of the above factors relates to the detrimental effect of an appeal on the underlying action. In most non-CCAA cases, the events giving rise to the underlying action have already occurred, and a consideration of this factor involves the prejudice to one of the parties if the trial is adjourned or if the action cannot otherwise move forward pending the determination of the appeal. CCAA proceedings are entirely different because events are unfolding as the proceeding moves forward and the situation is constantly changing - some refer to CCAA proceedings as "real-time" litigation. [22] The fundamental purpose of CCAA proceedings is to enable a qualifying company in financial difficulty to attempt to reorganize its affairs by proposing a plan of arrangement to its creditors. The delay caused by an appeal may jeopardize these efforts. The delay may also have the effect of upsetting the balance between competing stakeholders that the supervisory judge has endeavoured to achieve. [24] As a result of these considerations, the application of the

normal standard for granting leave will almost always lead to a denial of leave to appeal from a discretionary order made in an ongoing CCAA proceeding. ... [Emphasis added.] [46] Following Edgewater and earlier authorities, the Court of Appeal has consistently applied this test in affording a deferential approach to discretionary decisions in CCAA matters by this Court: Quest University Canada (Re), 2020 BCCA 364 at paras. 22-25; BCCA Leave Reasons at para. 45-48. [47] This approach was also endorsed in 9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10 [Callidus] at para. 53-54. In Callidus at para. 47, Chief Justice Wagner spoke of the "unique supervisory role for judges" in CCAA proceedings. At para. 53, the Court stated that an appeal court owed a "high degree of deference" to discretionary decisions in the court below and should only intervene if the supervising judge erred in principle or exercised his or her discretion unreasonably. [48] The same approach has been taken in insolvency proceedings involving receiverships, where appeal courts will afford a high degree of deference in respect of discretionary decisions made by a supervising judge in managing a proceeding: Wedgemount at para 43; Forjay Management at para 37. [49] In Forjay Management, at paras. 36-39, the court declined to extend the time to appeal, finding that there was no reasonable prospect

that the appeal will succeed and that it was not in the interests of justice to grant the extension. The court found no error in the exercise of discretion and no arguable case that the conclusions were based on a palpable and overriding error. In Wedgemount, the court reached the same conclusions, as I will discuss in more detail below. [50] Accordingly, consideration of the merits is engaged on an extension application (Wedgemount) which is then directed to the merits that would be considered on a leave application (Edgewater). [51] 129's proposed appeal is centered on three arguments: a) it was denied "natural justice" when the Sale Order was made "without any notice to [129] or opportunity [for 129] to afford it being heard"; b) it was an error in principle, when advised of two potential offers for a higher price, for the Court not to structure a process that could allow them to be advanced; and c) the Court failed to direct Aviva's production of an agreement reached between Aviva and Solterra. i. Notice Issue [52] Firstly, 129 raises a notice issue. I summarized the course of the three July 2022 hearings in detail in the 2022 Sale Reasons at paras. 33-50. In particular, I addressed the notice issue to parties on the service list, as raised by the petitioners' counsel in the afternoon of July 22, 2022 (Friday), in the 2022 Sale Reasons at para. 56(g). I have also now had

the benefit of refreshing my memory by reading the transcripts of all of these hearings. [53] The July 13, 2022 (Wednesday) hearing began with both Domain and Aviva's application before the Court. At the outset, Aviva's counsel indicated that he hoped to have a binding letter of intent (LOI) for a sale in hand for the afternoon, as a result of which Aviva indicated that it was not proceeding with its application. When asked by the Court whether the petitioners had any proposal in the face of Domain's application to appoint a receiver, counsel indicated "no". He indicated that he only had a conditional financing commitment which he considered was not sufficient to resist the application. The matter was stood down to 2:00 p.m. and, at that time, Aviva's counsel indicated he had an agreement in principle with Solterra. The Court heard Domain's counsel's submissions on the receivership application. [54] At the end of that hearing, the path confirmed by all parties, and accepted by the Court was this: the Court would not decide Domain's application until possibly July 18, 2022 (Monday). In the meantime, the parties would seek out potential alternatives to a receivership. At that time, the Monitor discussed the potential alternatives available to the stakeholders in what were described as urgent circumstances: (1) grant the receivership; (2) allow Aviva to seek to revive a sale from

previous bidders (including Solterra), in which efforts were ongoing; (3) grant Aviva's application to continue the sales process within the CCAA; and (4) continue the CCAA. Counsel specifically referred to July 22, 2022 as being the "drop dead date" in terms of either the receivership or finding another solution. [55] On July 13, 2022, the petitioners' counsel also indicated that his client (Mr. Reyes) was going to continue his efforts to find binding commitments for refinancing. [56] The underlying difficulty for all concerned--that gave rise to the urgency--was that costs and expenses were mounting quickly, as noted in the Monitor's Thirteenth Report dated July 11, 2022 and as discussed by the Monitor's counsel at the hearing. The petitioners had continued to fail to pay ongoing receivables. Professional fees were unpaid and, to some extent, were not covered by the Administration Charge, leaving those professionals exposed. Finally, the ongoing carrying costs for the stakeholders were said to exceed $500,000 per month, including critical site preservation costs, Domain's interest and taxes. On July 13, 2022, the petitioners' counsel confirmed that his client was not in a position to cover the ongoing expenses and costs. [57] On July 18, 2022, the parties (including the petitioners' counsel) appeared again and discussed the status of matters. Numerous counsel referred to an

LOI from Enso for a $20 million sale, as arranged by Mr. Reyes (2022 Sale Reasons at para. 40). Stakeholders indicated their support for that option. Again, counsel referred to being back by no later than July 22, 2022 to either approve a sale (at that time, to Enso) or grant the receivership. The petitioners' counsel articulated their support for the approval of the Enso transaction later that week, subject to Mr. Reyes' ongoing efforts to find refinancing (referring to three parties being "at the table" with them). [58] In the 2022 Sale Reasons at paras. 43-50, I have described the events at the July 22, 2022 hearing in detail. At bottom, the only definitive non-binding transaction that had emerged was Solterra's offer. As before, the petitioners' counsel indicated ongoing efforts to get refinancing and requested a two-week adjournment (but provided no offer to refinance the costs accruing in the meantime). [59] It is correct to say that Aviva's application to approve the Solterra transaction was only specifically raised in its notice of application filed later at the July 22, 2022 hearing. That was the application that the Court directed Aviva to file in order to put the matter properly before the Court. In that application, Aviva specifically sought to abridge the time for service and dispense with formal service on parties on the service list. [60] On July 22, 2022, what

was submitted by counsel, and accepted by the Court, was that effective in early July 2022, a sales process had been implemented with a return to the market (concentrated on earlier bidders), under the supervision of the Monitor, with the intention to bring forward a transaction for approval no later than July 22, 2022 (failing which the receivership would proceed). [61] In the 2022 Sale Reasons at para. 56(g), I noted that the petitioners' counsel raised the matter of service of Aviva's application. [62] 129's present argument that it had "no notice" of the application to approve the Solterra offer is disingenuous to say the least. In 129's notice of application, and in its evidence, it refers only to Domain and Aviva's applications filed in early July 2022 and then to the ultimate hearing date of July 22, 2022. No mention is made whatsoever of the events of July 13 and 18, 2022 when the stakeholders were addressing the state of affairs and the options to them. However, neither I nor the other stakeholders have forgotten the events of the two earlier hearings. [63] 129 was served with notice of Domain and Aviva's applications. The petitioners, as represented by counsel at all hearings in July 2022, were well aware of the unfolding of events from July 13-22, 2022. The petitioners' knowledge is the knowledge of Mr. Reyes, as their directing mind. Further, Mr. Reyes' knowledge is the knowledge of 129, as its controlling shareholder and directing mind: BCCA Leave Reasons at para. 11; Port Capital BCCA at para. 12. [64] As I stated in the 2022 Sale Reasons at para. 56, the manner in which the July 2022 hearings unfolded was a classic example of "real time litigation", as was described in Edgewater at para.

21. At paras. 56(g)-(i) of the 2022 Sale Reasons, I made findings of fact and reached conclusions from those facts and the reasonable inferences that arose: (g) I reject the Petitioners' complaints about the Solterra Offer being considered on very short notice. Mr. Reyes, as the person instructing counsel for the Petitioners, was well aware of Domain and Aviva's applications and also, Aviva's stated intentions to revive a sale on July 13, 2022. In fact, over the last weeks, Mr. Reyes has been making efforts to generate his own offer, to no effect; (h) As he has done many times in this proceeding, Mr. Reyes only wishes to avoid a sale at this time to buy himself more time; however, it is crystal clear that any further time will come at a significant cost and risk to other stakeholders. In essence, Mr. Reyes' only remaining "kernel of a plan" is simply delay; (i) I accept that the Solterra Offer has arisen without any further formal sales process and in a very expedited manner. This is an aspect of the "real time litigation" that these proceedings require. However, there is no evidence to suggest that any further sales process--whether by a receiver or through the SSISP--would produce a superior offer to the Solterra Offer, either in terms of price or closing terms. As such, no unfairness arises; [65] I accept that CCAA proceedings do not occupy a special category of litigation

where the normal rules of service and notice go by the wayside. Procedural fairness is an important aspect of any CCAA proceeding and this one is no exception. In my experience, the importance of notice was not necessarily respected in the early days of CCAA litigation, but considerably more rigour has been required in past decades and the Court remains vigilant in requiring notice and service, as appropriate, in order to ensure fairness in the process. However, the fact of the matter is that the exigencies inherent in CCAA proceedings do not always allow the parties and the Court to abide by strict and immutable notice periods. Matters happen quickly and organically and often, decisions have to be made in what are urgent and complex circumstances (Edgewater at paras. 20-21). [66] That is what happened here. This Court was fully aware of the notice and service issues on July 22, 2022, but those issues were attenuated by the fact that Mr. Reyes, who was the directing mind for 129 as well as the person instructing the petitioners' counsel throughout the July 2022 hearings, was fully aware of the sales process; including what was intended and anticipated timelines. Further, Mr. Reyes actively participated in that sales process, and was fully aware that all parties were working toward a transaction that could be presented to the Court for approval so as to avoid a receivership. Mr.

Reyes was personally present at the continuation of the July 22, 2022 hearing by video, as was the petitioners' counsel and counsel for the Hynes Group, another party presented by Mr. Reyes as a potential offeror. [67] My earlier findings of fact in that respect are now further supported by evidence introduced by Aviva showing various communications with Mr. Reyes in the period from July 13-22, 2022. For example, on July 20, 2022, Aviva's representative emailed Mr. Reyes two separate times stating that he expected a Solterra bid to be awarded on July 22 if no other option materialized. [68] On July 22, 2022, all stakeholders, with the exception of the petitioners and 129 (indirectly), supported an immediate sale, as did the Monitor. [69] I have no doubt that, if the Enso transaction had emerged as the best option, the petitioners and 129 would not have faced any opposition to court approval on July 22, 2022 by reason of objections based on lack of notice or a lack of a formal application. In fact, Enso's LOI dated July 18, 2022 specifically required court approval by July 22, 2022. [70] It is very telling that Mr. Reyes had failed to introduce any evidence on this application to support his argument that 129 had "no notice". The simple truth is that he did have actual notice, albeit not specific and formal notice of the terms of the Solterra offer. [71] My discretion to

consider and grant the Sale Order on July 22, 2022 was an exercise of discretion pursuant to the CCAA. In Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6, the Court accepted that procedural decisions in CCAA matters--including dispensing with or shortening notice--are to be accorded considerable deference: [218] Given their expertise and their knowledge of particular cases, CCAA judges are well placed to decide how best to ensure that the interests of the plan beneficiaries are fully represented in the context of "real-time" litigation under the CCAA. In other circumstances, a CCAA judge might find that it is feasible to give notice directly to the pension beneficiaries. In my view, notice, though desirable, may not always be feasible and decisions on such matters should be left to the judicial discretion of the CCAA judge. ... Ultimately, the appropriate response or combination of responses should be left to the discretion of the CCAA judge in a particular case. ... [Emphasis added.] [72] In Wiebe v Weinrich Contracting Ltd., 2020 ABCA 396, the court also considered procedural fairness in CCAA proceedings, including where urgent circumstances arise: [31] This broad and flexible authority means a high degree of deference is afforded to a supervising judge making a discretionary decision in the CCAA context. An appellate court may intervene if there was an error in

principle or the discretion was exercised unreasonably: 9354-9186 Québec inc v Callidus Capital Corp, 2020 SCC 10 at para 53 [Callidus]. It may also intervene if there was a breach of procedural fairness, if the breach had a negative impact on affected parties' rights: Sun Indalex Finance, LLC v United Steelworkers, 2013 SCC 6, [2013] 1 SCR 271 at paras 73-74 (per Deschamps J) and paras 275-276 (per LeBel J, dissenting, but not on whether the duty of procedural fairness applies to CCAA proceedings). [49] It is well known that the content of the duty of procedural fairness is sensitive to context: see Baker v Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 SCR 817 at paras 21-22, 174 DLR (4th) 193 on this point in relation to administrative bodies. The context and purpose of CCAA proceedings can affect the specifics of the duty. Sometimes, emergent matters arise and quick decisions on complex matters are needed, and the content of the duty of procedural fairness necessarily reflects that. Indeed, s 11(1) of the CCAA recognizes that applications within CCAA proceedings may have to be made ex parte in appropriate circumstances, or on the supervising judge's own motion, without application or notice to some or all affected parties. [Emphasis added.] [73] Is there any merit to 129's argument that it was not accorded procedural fairness in respect of

this matter? In my view, No. In the 2022 Sale Reasons at para. 56, I fully summarized the factors that informed by decision. 129 does not point to any error in the exercise of my discretion or argue that my conclusions were based on a palpable and overriding error. 129's argument rests solely on the technical position that it only received formal notice of Aviva's notice of application in the afternoon of July 22, 2022 just before the hearing. While strictly true, this position ignores, conveniently, the entire context of the hearings in July 2022 which was the basis upon which I exercised my discretion to proceed, after concluding that Mr. Reyes/129 was accorded procedural fairness. I see no prospect that leave to appeal would be granted on the notice issue, in light of the exercise of my discretion in these circumstances. ii. Alternative Potential Offers [74] 129's second argument on appeal is that this Court erred in principle when, advised of two "potentially higher offers", it did not structure a process that could allow them to be advanced. [75] This argument is also without merit. At para. 48 of the 2022 Sale Reasons, I did consider the potential transactions put forward by Mr. Reyes, before concluding at para. 56(i) that: there is no evidence to suggest that any further sales process--whether by a receiver or through the SSISP--would produce a superior offer to the

Solterra Offer, either in terms of price or closing terms. As such, no unfairness arises; [76] If 129 is really arguing that I failed put sufficient weight on these "potential" offers, that argument is also without merit. As Wagner C.J. stated in Callidus at para. 53, appeal courts are cautioned not to substitute their own discretion in place of the supervising judge. [77] Many decisions made in ongoing restructuring efforts are based not only on past events, but a supervising judge's best assessment as to possible future events. This circumstance happens routinely in restructuring matters when the Court is confronted with a "possibility" versus a "reality". For example, parties may come to the court with a conditional LOI for financing or a conditional sale. The court must assess the viability of that potential transaction in terms of whether it has a reasonable prospect of materializing and when. It can be the case that the court accepts the only confirmed option before it--applying the old adage "a bird in hand is worth two in the bush". Hopes of a better transaction materializing can and often are just that; hopes. [78] The respondents also point to the fact that, despite the petitioners' assertions on July 22, 2022 that they just needed a short period of time to put together a better deal, no further transaction has since emerged that would test the conclusions reached by

the Court on July 22, 2022 (albeit obviously with hindsight). [79] 129's response to this point is that it decided to proceed on the basis of the record before the Court on July 22, 2022. [80] However, 129 is no stranger to obtaining and presenting evidence in support of its position in appeal hearings as "new evidence". In Port Capital BCCA, at paras. 44-49, the court admitted, as "new evidence", affidavits of Mr. Reyes stating that he had later secured the financing that he needed to keep the development afloat. In admitting this "new evidence", at para. 48, the court relied on its decision in Barendregt v. Grebliunas, 2021 BCCA 11 [Barendregt BCCA] at paras. 32-33 [81] In Barendregt BCCA at paras. 29-38, Justice Voith declined to apply the Palmer test to this "new evidence" (i.e. evidence that only arose after the decision in the lower court). Rather, at para. 34, he concluded that the court had a basis to intervene if the lower court made assumptions about future events but the "new evidence" established the assumptions are incorrect. Further, Voith J.A. stated: [43] Accordingly, depending on the circumstances, new evidence may be admitted if it establishes that a premise or underpinning or understanding of the trial judge that was significant or fundamental or pivotal has been undermined or altered. [82] In Port Capital BCCA at para. 49, the Court of Appeal specifically

relied on the principle that they had a basis to intervene if the premise for this Court's decision had been altered, stating that it was important to work with "accurate information". Mr. Reyes' "new evidence" was admitted on that basis and contributed to the result, whereby the Court of Appeal approved 129's offer, which had since become fully financed and secured. [83] However, in Barendregt v. Grebliunas, 2022 SCC 22 [Barendregt SCC], the court specifically rejected the reasoning in Barendregt BCCA. The Court found that the Palmer test still applied and was focused on the party's actions at the time of the original hearing in terms of why this evidence was not presented at the hearing and whether the "new evidence" should be admitted: [60] The reason why "new" evidence was unavailable for trial may have its roots in the parties' pre-trial conduct. For facts arising after trial, courts should consider whether the party's conduct could have influenced the timing of the fact they seek to prove. Consider this case. If finances are at issue and a party does not take steps to obtain a financing commitment until after trial, the court may ask why the evidence could not have been obtained for trial. Parties cannot benefit from their own inaction when the existence of those facts was partially or entirely within their control. Again, litigants must put their best foot forward at

trial. In the end, what matters is that this criterion properly safeguards finality and order in our judicial process. [61] In sum, the focus of the due diligence criterion is on the litigant's conduct in the particular context of the case. Considering whether the evidence could have been available for trial with the exercise of due diligence is tantamount to the requirement that the evidence could not, with the exercise of due diligence, have been obtained for trial. Where a party seeks to adduce additional evidence on appeal, yet failed to act with due diligence, the Palmer test will generally foreclose admission. [Emphasis added.] [84] The Barendregt proceedings involved a family relocation issue. Obviously, family issues arise in dynamic situations and some flexibility is usually required to properly adjudicate what can be very delicate reissues. In Barendregt, the chambers judge had assessed the father's ability to refinance his residence as was relevant to that issue. On appeal, the father presented evidence as to financing he later obtained, seeking to reverse the chamber judge's conclusion that there was no realistic prospect of him refinancing his residence: Barendregt SCC at paras. 86-87. The Court stated: [88] Allowing the father to resolve these concerns and redraw the factual landscape at the eleventh hour of the appeal occasioned considerable unfairness. In

effect, he was allowed to relitigate the same issues on the basis of more favourable facts, displacing the corrective function of the appellate court. Nothing on the record indicates that he was prevented from obtaining the financing commitments before trial. This ran firmly against the interest in finality and order that due diligence is meant to safeguard. [85] In Barendregt SCC at para. 1, the Court stated that "[a]n appeal is not a retrial". [86] I would rephrase that comment for these CCAA proceedings in relation to Port Capital, in that an appeal is not an opportunity to continue highly dynamic restructuring proceedings by seeking a different decision by an appeal court (Callidus at paras. 53-54) and in so doing, attempt to remediate deficiencies in that party's evidence before the lower court to provide a basis upon which the appeal court can come to a different decision. [87] Finally, I would add that, in my view, the court's approach in Port Capital BCCA, in applying Barendregt BCCA, has the very real potential to undermine Parliament's intention in investing court supervision of these matters in the trial courts, not courts of appeal. Parliament's approach has been recognized time and time again in appeal courts across Canada, emphasizing that significant deference is owed to the presider who is very familiar with the proceedings and the dynamics in what is usually a

fast paced and ever-changing environment. [88] Mr. Reyes has made no attempt to present any other offers to date; nor has he presented any evidence as to his due diligence efforts that may have explained his inability to present alternate offers prior to July 22, 2022. The lacunae of evidence as to other options that might be available to the stakeholders at this time is also relevant in respect of the interests of justice factor discussed below. [89] Accordingly, 129's argument respecting alternative potential offers has no merit. iii. Production of Agreement Issue [90] Finally, 129 argues in its notice of appeal that this Court was in error in not compelling Aviva to produce an agreement between it and Solterra. [91] When the parties came before me on July 22, 2022, with the Solterra offer in hand, Aviva's counsel fully disclosed that it had a "back-end revenue sharing piece" with Solterra. Counsel also reported that the Monitor had been advised of the terms of that agreement and had not raised any issues with it. [92] The fact of the matter is that no other stakeholder, including petitioners' counsel and Mr. Reyes, made any mention of this Aviva/Solterra agreement on July 22, 2022, let alone asked the Court to direct that it be produced to them. The first mention of it is found in 129's notice of appeal/leave to appeal. If that issue had been raised on July 13, 2022, I would

have asked for counsels' positions and addressed the matter before coming to a decision. Without that scenario having taken place, I see no merit in 129's argument on appeal. iv. Summary: Merits [93] In summary, I am not persuaded that there is any merit on a leave application, where a Court of Appeal chambers judge would determine that this aspect of the leave test is satisfied. I consider that there is little prospect that a chambers appeal judge would view the alleged grounds as sufficiently meritorious to justify the matter proceeding to an appeal of the Sale Order, as this appeal is frivolous and vexatious. [94] Having said that, the merits (or lack thereof) are only one factor to be considered: Salfinger at para. 21. [95] In summary, this factor does not favour an extension. Is it in the Interests of Justice that the Extension be Granted? [96] Even if I had considered that this appeal was not frivolous and vexatious and not doomed to fail, at best 129's arguments are weak. In any event, I consider the interests of justice factor provides full support for my decision on this extension application. [97] The interests of justice are the overarching consideration in terms of whether an extension should be granted, with the prior factors informing that question: Davies at para. 30; Westbank Holdings at para. 38; Perren v. Lalari, 2009 BCCA 564 at para. 33; Salfinger at para.

16. [98] On a leave application, the court in Quest University stated: [22] The criteria for leave to appeal were stated by Saunders J.A. in, Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326 (B.C. C.A. [In Chambers]), at para. 10: [10] The criteria for leave to appeal are well known. As stated [in] Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (B.C. C.A.) they include: (1) whether the point on appeal is of significance to the practice; (2) whether the point raised is of significance to the action itself; (3) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and (4) whether the appeal will unduly hinder the progress of the action. See also Chavez v. Sundance Cruises Corp. (1993), 77 B.C.L.R. (2d) 328 (B.C. C.A.). [23] Even where the four criteria have been met, leave may still be denied where granting it would not be in the interests of justice: Movassaghi v. Aghtai, 2010 BCCA 175 at para. 27 (Smith J.A. in Chambers). [Emphasis added.] [99] 129's appeal does not raise any issue of significance to the practice. While the issue is significant to the proceeding, the result of the 2022 Sale Reasons was not "sprung" on Mr. Reyes and without warning. Despite the Court of Appeal's comments in Port Capital BCCA at paras. 77-78, I had not forgotten, nor have I now forgotten, the

well‑known authorities that discuss the statutory objectives of the CCAA (Port Capital BCCA at paras. 58-67). Mr. Reyes has had over two years to attempt to find a solution to the petitioners' financial difficulties. I have no hesitation concluding that he has been given ample time, including from the Court of Appeal, to find such a solution. He had failed to do so by summer 2021 and he has failed to do so now. [100] It is well taken that many interests are at play in this proceeding, including 129's and those of the various respondent creditors. In that respect, a consideration of the interests of justice requires that the Court balance those respective interests toward arriving at a just and fair conclusion: Perren at para. 33, citing Haldorson v. Coquitlam (City), 2000 BCCA 672 at para. 9. [101] Under the interests of justice factor, I will consider the fourth factor that would be considered on a leave application, namely whether the appeal would unduly hinder the progress of the action. [102] 129 argues in its extension application, in an attempt to avoid the test that leave will only be granted "sparingly", that no further balancing of the stakeholder interests is required that might be hindered by an appeal. 129 states: 27. This is the end of the CCAA proceedings. All that is left is to sell the assets at the highest price achievable with the proceeds to be distributed to

the creditors. Indeed, the applications properly before the Learned Chambers Judge were simply asking for approval of two different ways to accomplish that end. There is no more balancing of interests to engage the Court's ongoing supervisory function. [103] In support, 129 cites Tysoe J.A.'s comments in Edgewater: [24] As a result of these considerations, the application of the normal standard for granting leave will almost always lead to a denial of leave to appeal from a discretionary order made in an ongoing CCAA proceeding. However, not all of the above considerations will be applicable to some orders made in CCAA proceedings. Thus, in Westar Mining [Re Westar Mining Ltd. (1993), 75 B.C.L.R. (2d) 16], McEachern C.J.B.C., while generally agreeing with the comments made in Pacific National Lease [Re Pacific National Lease Holding Corp. (1992), 72 B.C.L.R. (2d) 368], believed that the considerations mentioned by Macfarlane J.A. were not applicable in that case because the CCAA proceeding had effectively come to an end with the sale of the principal assets of the debtor company. ... [Emphasis added.] [104] However, the facts and considerations that led Tysoe J.A. to not accord deference to the chambers judge in Edgewater, as described in para. 25, were distinguishable from those present at this time. That is, in Edgewater, the appeals would not have delayed or jeopardized the

reorganization process, and the knowledge gained by the chambers judge during the reorganization process were not relevant to his decisions in the decision being appealed. [105] The same cannot be said here. Similarly, the circumstances discussed in Westar Mining Ltd. v. Office and Technical Employees Union, Local 378, [1993] B.C.J. No. 158 (B.C.C.A.) [Westar Mining] upon which 129 relies (cited in Edgewater at paras. 14 and 24) are distinguishable. At para. 58 of Westar Mining, MacEachern C.J. agreed with the usual approach to leave applications (upheld on appeal [1993] 2 S.C.R. 448). However, in that case, he noted that the considerations that underpin the "sparingly" test were no longer present in that matter. By then, the assets had been liquidated and what remained was to determine priorities to a fund. [106] This CCAA proceeding has not come to an end. The development property is a wasting asset and continues to be so. This Court has approved an unconditional offer, but it has yet to close. There is no fund that has been created for the stakeholders. The secured stakeholders have yet to receive any recovery of the amounts owing to them. Payment of amounts owed to professionals under the Administration Charge has yet to occur, as they are not being paid by the petitioners. As such, I consider that this proceeding is still very much extant in terms of this Court's

supervisory jurisdiction to shepherd the process to a conclusion that achieves the best available option for the stakeholders. [107] 129 says that, if the extension is granted, any subsequent leave application or appeal would not impact the sale to Solterra. [108] At para. 12 of the Sale Order, the beneficiaries of the Administration Charge--the Monitor and its counsel, and the petitioners' counsel--were granted a Supplemental Administration Charge on the assets, not to exceed $150,000. This provision was intended to protect those professionals from amounts already owed and which was effectively unsecured. However, that charge ranks subordinate to the Administration Charge of $100,000 and Domain's security, and will therefore only be recoverable if a sale generates sufficient monies to repay Domain. [109] Mr. Reyes/129 argues that 129 will be irreparably harmed by a closing of the Solterra sale. He says that any "chance" for a higher price will be lost. 129 seeks to minimize the risk of the Solterra offer not proceeding. 129 suggests that an expedited appeal would allow the Court of Appeal many options, including ordering a stay after the September 7, 2022 leave application and/or convening an appeal before closing. [110] I have no information as to the potential logistics of such a scenario. Assuming a successful leave application on September 7, 2022, that leaves only 13 days before the scheduled closing. The circumstances here are very unlike what 129 faced in the Court of Appeal on the earlier leave application. In that case, leave was granted on August 20, 2021 and the appeal was scheduled to be heard September 21, 2021, about a week ahead of the scheduled closing on September 30, 2021: BCCA Leave Reasons at para.

3. In principle, that period within which to prepare the appeal sounds reasonable, given the materials that would need to be filed. If leave was granted and if that timing held here, any appeal would be after the closing, rendering it moot. In that event, 129 would have to rely on obtaining a stay if they obtained leave. [111] Even by September 7, 2022, it is reasonable to infer that the parties and Solterra will be incurring substantial costs in anticipation of the sale closing in 13 days, which include costs of the Monitor (now tentatively secured under the Supplemental Administration Charge in the Sale Order now being challenged). [112] At para. 53, the chambers judge considered the risk of Solterra withdrawing from the transaction to be highly unlikely. [113] The evidence before me suggests that Solterra's second attempt to purchase the development has significant limitations in terms of whether it will extend beyond the scheduled closing date. Solterra's counsel argues: In this case, 129's proposed appeal puts Solterra's offer at risk. 129's appeal would likely lead to the loss of Solterra's offer because Solterra has no intention of extending and cannot be expected to extend its closing date beyond September 20, at the cost of a very high increase in the purchase price, only to accommodate 129's appeal, from which Solterra derives absolutely no benefit. Solterra's option

to extend for 30 days is only a punitive costly last resort to confirm financing. An appeal would hinder the ability of the parties to realize on a viable sale of the Project and cause more significant and unnecessary costs to accrue. Solterra has been here once before. It expended significant sums on appeal last time, only to have this CCAA end up in the same spot a year later. It is not going through a pointless appeal process. [114] I accept that, at times, positions taken by a purchaser must be taken with a grain of salt. However, in Solterra's circumstance's, I accept this submission and conclude that it is highly unlikely that Solterra will choose to extend the closing of its offer to accommodate any appeal. For these reasons, the situation in 2021 is distinguishable from the case at bar. [115] As all of the respondents forcefully argue, granting the extension so as to allow 129 to proceed to a leave application (and possibly an appeal) has the real potential to threaten the only viable, unconditional offer that is before the Court to address the urgent financial issues that have arisen. [116] In Wedgemount, Groberman J.A. stated: [44] This is "real-time" litigation, where the ability of the receiver to realize on the assets of Wedgemount will depend on being able to move quickly, and without entitlement issues being clouded by an appeal. The evidence before the court

convinces me that there is a very real chance that delays and uncertainties inherent in an appeal will drastically reduce the amount that Deloitte can ultimately realize on a sale of the project. [45] I am therefore of the view that a judge hearing the leave applications would inevitably conclude that leave should not be granted. As I find the leave applications themselves would be doomed to failure, I decline to extend time to bring the application. [117] Similarly, in Quest University, the court concluded that granting leave to appeal would unduly hinder the progress of the action. At paras. 35-36, the court concluded that granting leave would likely cause the only viable option (a sale) to collapse "with catastrophic effects" and "disastrous consequences for the myriad stakeholders". [118] Finally, these same considerations were discussed in Institutional Mortgage Capital Canada Inc. v. Plaza 500 Hotels Ltd., 2020 BCCA 193. There, an approved sale by this Court was challenged on appeal. The evidence before the court addressed the length of time the mortgage had been in default, the ongoing accumulation of debt and the risk of losing a sale with the prospect of any future sale being at a lesser price (para. 58). At paras. 92-93, Justice Goepel found that these circumstances supported his conclusion that the interests of justice weighed against granting leave. [119] In my

view, 129/ Mr. Reyes' attempts to appeal are, as I concluded in the 2022 Sale Reasons in para. 56, driven solely by his wish to delay this proceeding so that he can keep his "hopes" of completing the development himself alive. However, he only seeks to do so at the expense of the other stakeholders who bear the significant costs and risk of any further delay. [120] There is no money to allow further time to see another sales process fully unfold in either this proceeding or a receivership. Ongoing site expenses are already outstanding in excess of $413,000. Someone has to pay these amounts, failing which site security for the only valuable asset will be compromised. Mr. Reyes makes no offer to fund these ongoing costs. Any delay of the closing, of even a month, will result in Domain's further financing costs continuing to consume the amounts that Aviva hopes to receive from the Solterra sale. The costs of a receivership would also erode or eliminate any recovery to Aviva. In the very near future, Aviva will not be able to recover any money. The longer this matter is delayed, the greater the risk that even Domain will suffer a loss. [121] The professionals secured by the Administration Charge have not been paid for over six months, including the Court's appointed Monitor. This was the case in early‑July 2022, when the Monitor was exposed for its fees to the extent of $120,000.

That amount has no doubt increased. A monitor can resign but it remains a requirement of the CCAA that a monitor be in place and it is not realistic to expect another professional firm to get involved with the immediate prospect of not being paid for its services. In the Sale Order, the parties consented to the Supplemental Administration Charge to secure the Monitor and its counsel (and petitioners' counsel) for most of its shortfall, but that falls behind Domain's priority, so time is money in terms of that charge being a real benefit for the Monitor and its counsel. [122] The factors that supported the Court of Appeal's decision to grant leave to appeal in 2021 are not present here: BCCA Leave Reasons at paras. 17 and 52-53. Domain and Aviva, whose financial interests are on the line, do not support the extension or leave application. The petitioners, 129, and Mr. Reyes do not have a financing offer in hand to support a continuation of the CCAA proceeding. Finally, I conclude that there is significant risk to the Solterra offer arising from any delay from an appeal. [123] Mr. Reyes' verbal offer, communicated through counsel, at the conclusion of this hearing to pay the ongoing Monitor's expenses is too little, too late and too vague, for the reasons stated above. So too would I discount 129's submission that it would be open to this Court or the Court of Appeal to order

security as part of any order granting the extension or leave. In BCCA Leave Reasons at para. 57, the court ordered $10,000 as security for costs. However, this amount is minimal at best and does not come near to addressing the significant losses that have happened and will happen in the future. [124] At bottom, 129's strategy to delay has the very real potential to cause serious and escalating risk to all stakeholders, including Aviva and Domain, and the Monitor (and parenthetically, 129 itself). [125] As is well known, the Monitor occupies a unique position in CCAA proceedings, performing an independent oversight role to assist the Court. A monitor is required to consider the interests of all stakeholders, toward the overall objective in CCAA proceedings of treating all stakeholders as "advantageously and fairly as the circumstances permit": Century Services Inc. v. Canada (Attorney General), 2010 SCC 60 at para. 70; Callidus at para. 75. [126] The Monitor performed that role in the course of the July 2022 hearings and ultimately supported both the appropriateness and effectiveness of the sales process undertaken over that time and, also supported approval of the Solterra offer on July 22, 2022 (2022 Sale Reasons at para. 56(k)). [127] The Monitor continues in its role on this application. At this hearing, the Monitor asserts that: a) The stakeholders are in a worse position

now than in summer 2021 when the Solterra Backup Offer was approved. The current Solterra offer is approximately $5 million less than the Solterra Backup Offer. Those detrimentally affected include the pre-sale purchasers, who have lost most of their $8 million in deposits (2022 Sale Reasons at para. 56(c)); and b) The Solterra offer is the only offer available, given deteriorating market conditions. Further, the Monitor states that there is risk of the Solterra offer collapsing as a result of any appeal. [128] The Monitor states quite starkly that prolonging this proceeding will likely result in significant and potentially irreparable prejudice to the stakeholders. The Monitor emphasizes that the petitioners, 129 and Mr. Reyes have failed to put forward any plan to mitigate the current outstanding costs or the ongoing and potential risks that arise from delay. [129] There is no doubt that 129's position must be considered in the balancing exercise when assessing what the interests of justice require. As matters stand, 129 will garner a small recovery from the Solterra sale but any delay from an appeal will eliminate that. On the other hand, the costs and risks to the other stakeholders far outweighs whatever hopes Mr. Reyes may still hold for this development. While Mr. Reyes is content to "roll the dice" with other stakeholders' monies in pursing his dreams, I am not. [130] I

conclude that the delays and uncertainties inherent in any leave application and possible appeal have the real chance to scupper the Solterra deal and create the likely result that the stakeholders, even possibly Domain, will suffer losses. In that event, I consider it extremely unlikely that a chambers appeal judge would grant leave to appeal as it is manifestly not in the interests of justice to allow any appeal proceeding to go forward.

CONCLUSION [131] 129's application for an extension of time to appeal the Sale Order is dismissed. "Fitzpatrick J."