Service of a notice of disallowance and the bankruptcy appeal period

Unless the court challenges the impermissibility, an insolvency bankruptcy trustee's decision to deny a claim is final and binding. After receiving a notice of disallowance, a person with a disallowed claim has thirty days to appeal. Courts have regularly ruled that there is no authority to prolong the appeals process when the thirty-day window has passed.

What do The Bankruptcy and Insolvency Rules Declare?

The Bankruptcy and Insolvency General Rules claimed that because the courier delivered the statement of disallowance, the appeal deadline was prolonged by ten days in the Pavlov case involving two parties with interests in insolvency service bankruptcy that were denied.

The Bankruptcy and Insolvency Act, RSC 1985, § B-3 requires that any notification or other documentation supplied or transmitted be sent "at least ten days before the show to which it pertains if it is sent from the post or by delivery." The parties sought to rely on this requirement in Rule 6(2)(b). According to the claimants, the disallowance was the "event," and the rejection took place ten days after the courier served the letter of disqualification.

How Can The Bankruptcy Appeal Period Affect You?

In most cases, an appeal of bankruptcy and company liquidation should be filed within 30 days of the day the order being appealed is delivered. Nevertheless, in requests made by the Rules, an appeal to the Court of Appeal should be filed within ten days of the day the appealed-from ruling is delivered.

While there are instances when the shortened appeal period is apparent, such as in appeals from decisions made during an insolvency service bankruptcy procedure, there is another potential hazard in situations where it needs to be clarified if this reduced appeal period occurs. In one recent case, Forjay Management Ltd v 625536 BC Ltd 2019, BCCA 368, it was determined that the 10-day appeal limit applied to an appeal from an order made in a repossession action.

In Forjay, the defendant appealed a decision allowing a receiver to distribute sale profits to certain mortgage holders. Because the appellant had only requested restrictions for the order by the Supreme Court Civil Rules and the court's fundamental jurisdiction, the judge dismissed the appellant's contention that the 30-day timeframe should extend. The BIA controlled the appeal on the grounds of importance because the original order designating the administrator complied with the BIA and the Law and Equity Act, RSBC 1996, c 253.

The 10-day period also applied because the allocation order was made by a court that deduced its inherent jurisdiction from the BIA; the strength to authorize a receiver to disburse money raised to creditors is "implicit" in the BIA. The order's ability to appoint the receiver envisions the allocation order. The appeal was rejected because it was filed 24 days after the order had been issued, and no delay was given.

Forjay is just one illustration of the dangers that may occur to an applicant when the shortened appeal period's use is not immediately apparent. Expert assistance is essential for parties considering - or responding to - a challenge in an insolvency setting.

What is the Lesson Learned about Bankruptcy Appeal Periods?

The court acknowledged that this was a "unique" approach but held that because an impermissibility is not considered an event by the General Rules, Rule 6(2)(b) did not prolong the appeal time. Another illustration of how crucial it is to adhere to bankruptcy and company liquidation appeal deadlines is provided by Pavlov (Re). Parties must make sure they have filed their appeals in the time since, after it has passed, courts cannot lengthen an appeal deadline.

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