Following a trial where the defendants were ordered to repay $25,000 to the plaintiff estate, the defendants declared bankruptcy.
The plaintiff sought a declaration that the debt survived the bankruptcy under section 178(1) of the Bankruptcy and Insolvency Act.
The court found it had jurisdiction to hear the matter as no formal order had been entered.
The court held that the defendants were acting in a fiduciary capacity when they held the deceased's money and that their failure to return it constituted misappropriation under s. 178(1)(d).
The debt therefore survived the bankruptcy.
Costs were awarded to the plaintiff on a substantial indemnity basis in the amount of $43,249.62.
