In proceedings under the Companies’ Creditors Arrangement Act, 1985 (CCAA), the Alberta Court of Appeal dismissed applications for permission to appeal orders refusing additional interrogatories and examinations or cross-examinations of a corporate officer of the court-appointed monitor.
In Coast Automotive Group Inc (Re), 2026 ABCA 123, Coast Automotive Group, Coast North Vancouver Auto Sales, Coast Auto Drayton, and 2461765 Alberta (the Coast Automotive Group) and S. Cheema, D. Parmar, H. Randhawa, and Deerfoot Atria Partners (the non-CCAA parties) filed applications seeking to:
- Compel the oral examination of a corporate representative of BDO Canada Limited, the Coast Automotive Group’s court-appointed monitor, regarding the contents of the monitor’s third report filed on Dec. 3, 2025
- Compel the monitor to provide affidavits answering certain interrogatories
- Require the monitor’s corporate representative to re-attend for cross-examination concerning the monitor’s fee affidavit sworn on Dec. 2, 2025
The Bank of Montreal applied for security for costs.
In orders dated Mar. 10, 2026, a chambers judge dismissed the Coast Automotive Group’s and the non-CCAA parties’ applications and granted the bank’s application for security for costs.
The judge ordered the non-CCAA parties to post security for costs in connection with the Coast Automotive Group’s and the non-CCAA parties’ cross-application, amounting to $100,000 and payable by Mar. 24.
The court set the hearing of the monitor’s application seeking its discharge and the termination of the CCAA proceedings for Apr. 17. For that same date, the court also scheduled hearings for the Coast Automotive Group’s and the non-CCAA parties’ cross-application to:
- Declare that they could proceed with a founder’s claim
- Further amend the amended and restated initial order
- Dispense with some of the monitor’s powers and court-ordered charges
- Impose a charge in favour of unidentified third-party funders of the founder’s claim
- Permit the monitor’s cross-examination regarding fees
- Continue the CCAA proceedings
- Authorize the Coast Automotive Group’s reorganization despite the realization of all assets
- Declare the monitor in a conflict of interest
- Seek a new monitor’s appointment
During oral submissions, the judge learned that the monitor filed a fifth monitor’s report on Apr. 13, which modified what the judge might consider on Apr. 17.
The monitor intended to request an extension of the CCAA proceedings to July 31, to accommodate the court’s and the chambers judge’s written decisions on Apr. 17.
Meanwhile, BDO planned to substitute its proposal to place the Coast Automotive Group into bankruptcy with a declaration under the Wage Earner Protection Plan Act, 2005, to ensure that the workers would receive unpaid wages.
The Coast Automotive Group and the non-CCAA parties urgently applied for permission to appeal and stay the chambers judge’s Mar. 10 orders.
Leave to appeal denied
In refusing permission to appeal, the Court of Appeal of Alberta addressed the four criteria, to be assessed collectively, in the relevant test.
First, the appeal court did not see any issues significant to the practice in the question of whether to compel the BDO corporate officer to attend oral examinations, to provide additional and better responses to interrogatories, or to re-attend for further cross-examination on the fee affidavit.
The appeal court also saw no significance to the CCAA practice in applying the settled law regarding restrictions on the cross-examination of court-appointed officers to the facts in this case.
Second, the appeal court did not consider the issues raised significant to the proceedings. The appeal court pointed out that the Coast Automotive Group and the non-CCAA parties previously had the opportunity to seek answers to relevant questions on the third report and the fee affidavit, which the chambers judge found fully sufficient.
Third, regarding whether the appeal was prima facie meritorious and not frivolous, the appeal court saw no demonstrable or unusual circumstances justifying further examination of the monitor.
The appeal court explained that the Coast Automotive Group and the non-CCAA parties, unhappy with the monitor’s response, were seeking information to support the founder’s claim, proceeding independently against the Bank of Montreal.
Fourth, the appeal court ruled that allowing additional interrogatories and further examinations or cross-examinations would delay the applications and the timely and orderly resolution of the CCAA proceedings. The appeal court found it in the parties’ best interests to proceed with the scheduled full-day applications.
The appeal court also dismissed the application to stay the Mar. 10 orders.
Lastly, the appeal court held that the chambers judge’s reasons showed that she considered the relevant factors and reasonably exercised her discretion in ordering security for costs. The appeal court saw no significance to the practice or the proceeding in an appeal against the discretionary order for security for costs.