Mar 23, 2021

Summary of Koroluk v KPMG Inc.

Koroluk v KPMG Inc., 2021 SKCA 10 (CanLII)
Civil Procedure - Appeal - Leave to Appeal, Statutes - Interpretation - Business Corporations Act
The applicant/respondent, KPMG, applied to quash the appeal of the appellant, the representative plaintiff in a proposed class action suit. The appellant filed the class action in 2019 against PrimeWest Mortgage Investment Corporation (PrimeWest) and its current or former directors. Shortly afterwards, PrimeWest brought an application pursuant to ss. 204(8), 210, 215 and 216 of The Business Corporations Act (BCA) seeking approval of its proposed voluntary liquidation and dissolution. The appellant opposed the terms of the proposed application, arguing that the directors should not be permitted to avoid potential liability in the class action via the liquidation proceeding. By consent, a reference to directors was removed, as were others, but a definition of “claim” set out in the Plan of Liquidation and Dissolution was neither altered nor was the reference to the class action removed. In December 2019, KPMG sought an order approving a claims process which was approved but the liquidation order (LO) did not remove all the references to which the appellant had objected. KPMG advised the appellant that as an identified creditor of PrimeWest, he was required to file a proof of claim. The appellant then applied for an order that the class action be excluded from the liquidation proceedings. KMPG concurrently applied for an order declaring that the class action was a claim pursuant to the claims process order. The chambers judge rejected the appellant’s submission that the class action was excluded, and interpreted the LO to mean that the class action was not excluded. The appellant appealed from the chambers judge’s fiat. KPMG argued in its application to quash the notice of appeal that the fiat was issued pursuant to Queen’s Bench rule 10-11 and not pursuant to the BCA. Therefore, there was no statutory right of appeal except as provided by the Court of Appeal Act, 2000 (CAA), in which case, leave to appeal was required under s. 8(1) because the fiat was interlocutory. The issues were whether the fiat: 1) was issued pursuant to the BCA; and 2) was interlocutory.
HELD: The application was denied. The court found with respect to each issue that: 1) the chambers judge addressed the applications of both the appellant and KPMG on the basis that the relief being sought was pursuant to the BCA and relied on the powers conferred on him by ss. 204(8) and 210. As s. 242 of the BCA provides a right of appeal that applies to orders made pursuant to it, leave was not required; and 2) in the context of this case, the fiat was final. The appellant had a right of appeal under s. 7(2) of the CAA and leave was not required. The fiat terminated the class action in its current form and recast it within the very different procedural context of the liquidation proceedings.