Christopher Brindley Horkins

A bankruptcy trustee brought a motion to set aside the bankrupt’s automatic discharge after failing, through inadvertence, to send the statutory notices of impending discharge to creditors.

The court considered whether it had jurisdiction under the Bankruptcy and Insolvency Act to invalidate an automatic discharge arising from such procedural irregularity.

Applying prior authorities and the principles under s. 187(9) of the Act, the court held that the failure to provide notice constituted an irregularity in a bankruptcy proceeding causing potential injustice to creditors who were deprived of the opportunity to oppose the discharge.

Evidence indicated unresolved issues concerning the bankrupt’s disclosure obligations and potential surplus income, suggesting that a discharge hearing could lead to a materially different result.

The court therefore set aside the automatic discharge and directed the trustee to issue proper notices to creditors.

The applicants sought removal of an arbitrator in an ongoing franchise dispute arbitration on the basis of reasonable apprehension of bias.

The concern arose because the arbitrator, acting as counsel in another similar franchise case, had retained the same accounting expert whose report was filed by the respondents in the arbitration.

The court held that an objective and informed person could reasonably apprehend bias where the arbitrator had previously relied on the same expert in similar litigation and would be required to assess that expert’s credibility and qualifications in the arbitration.

Although no actual bias was proven, the professional relationship and prior reliance on the expert were sufficient to raise a reasonable apprehension of bias.

The court therefore exercised its authority under the Arbitration Act, 1991 to remove the arbitrator and directed the parties to attempt to agree on a replacement.