The applicants sought a bankruptcy order against the respondent mining company under s. 43(1) of the Bankruptcy and Insolvency Act.
The court held the applicants had not established creditor status because their asserted claims were contingent and actively disputed in an existing action accompanied by a substantial counterclaim.
The court also found no act of bankruptcy within s. 42(1), rejecting reliance on an insolvency admission in pleadings because of absolute privilege and finding insufficient evidence that liabilities were generally unpaid.
In any event, the application was dismissed under s. 43(7) because it was brought for an improper purpose, namely to eliminate the respondent's counterclaim and gain control over its mining claims.
