When a trustee in bankruptcy disallows a claim in bankruptcy, the disallowance is final and conclusive unless the disallowance is appealed to the Court. A party with a disallowed claim must appeal within a thirty-day period after service of the notice of disallowance. Courts have consistently held that there is no jurisdiction to extend the time to appeal after the thirty-day period has expired.
In Pavlov (Re), 2022 BCSC 937, two parties with claims in bankruptcy that had been disallowed failed to appeal to the Court within the required time period, but argued that because the notice of disallowance was served by courier, the Bankruptcy and Insolvency General Rules, CRC, c 368 extended the appeal period by ten days.
In particular, the parties sought to rely on Rule 6(2)(b), which requires every notice or other document given or sent pursuant to the Bankruptcy and Insolvency Act, RSC 1985, c B-3 to be sent “at least 10 days before the event to which it relates, if it is sent by mail or by courier.” The claimants argued that the “event” was the disallowance itself, and the service of the notice of disallowance by courier meant the disallowance occurred ten days later.
Key takeaways on bankruptcy appeal periods in Canada
The Court noted that this was a “novel” argument but held that a disallowance is not an event under the General Rules such that Rule 6(2)(b) did not extend the appeal period. Pavlov (Re) serves as another demonstration of the importance of meeting the appeal deadlines in bankruptcy. As courts are unable to extend an appeal period once it has expired, it is critical that parties ensure that they have brought an appeal in time.
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