Default judgment debt for breach of construction trust survives director's bankruptcy due to misappropriation.
The plaintiff brought a cross-motion to declare that a default judgment debt owed by the defendant, a corporate director, survived his bankruptcy under s. 178(1)(d) of the Bankruptcy and Insolvency Act.
The defendant had breached the trust provisions of the Construction Lien Act by allowing construction financing funds to be used for non-project purposes.
The court found that the defendant, as a fiduciary, misappropriated trust funds through willful blindness and failure to oversee the corporation's finances.
The court declared that the judgment debt of $181,133.23 plus costs survived the bankruptcy.
Yanic Dufresne Excavation Inc. v. Saint Joseph Developments Ltd. et al., 2021 ONSC 6633