Case information

Bankruptcy and insolvency — Immunity from seizure — Civil procedure — Appeals — Appeals as of right — Proposed bankrupt seeking to prioritize environmental reclamation obligations over claims of secured creditor — Respondent claiming to have an appeal as of right under the terms of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”) — What are “assets unrelated to the environmental condition or damage”, as referenced in paragraph 159 of Orphan Well Association v. Grant Thornton Ltd., 2019 SCC 5, and are those assets available to satisfy end-of-life environmental obligations ahead of a distribution to creditors? — Whether the various formulations of the test for declaring that a litigant has an appeal as of right pursuant to section 193(c) of the BIA should be reconciled into a single constituent test?

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The respondent, Mantle Materials Group, Ltd. (“Mantle”) was in the business of operating gravel pits on public and private lands, some of which were subject to Environment Protection Orders (“EPOs”). The applicant, Travelers Capital Corp. (“Travelers”) financed Mantle’s purchase of equipment for use in its operations and Mantle granted Travelers a designated first priority purchase-money security interest over the equipment. On July 14, 2023, Mantle filed a notice of intention to make a proposal under s. 50.4 of the BIA. The main plank of the proposal was the completion of the reclamation work to satisfy the outstanding EPOs. Mantle subsequently obtained a court order authorizing various priority charges on the bankrupt estate that would not allow payment to any creditors before Mantle had satisfied its end-of-life obligations stemming from the EPOs. Travelers submitted that it had priority with respect to its security interest that should not be postponed until after the remediation work was completed. The motion judge held that all of Mantle’s assets were available first to satisfy the EPO requirements ahead of any secured creditors under the BIA. Travelers took the position that it had an appeal as of right. The Court of Appeal disagreed and also dismissed Travelers’ application for leave to appeal.