The appellant received unemployment insurance benefits to which he was not entitled, resulting in a debt to the respondent Commission.
The appellant subsequently made an assignment in bankruptcy.
During the bankruptcy, the respondent reimbursed itself for the overpayment by deducting the amount from subsequent unemployment insurance benefits payable to the appellant.
The appellant sought a declaration that this deduction was unlawful.
The Supreme Court of Canada held that the deduction contravened the stay of proceedings under section 49(1) of the Bankruptcy Act, as the provision broadly covers any kind of recovery, judicial or extrajudicial, and is not limited to property divisible among creditors.
