K. Page

The applicant sought directions regarding a creditor claims and distribution process under the Bulk Sales Act for residual net sales proceeds of $5,458.91.

The motion was unopposed.

The court approved the order but expressed significant discomfort with the applicant's use of the Bulk Sales Act, noting that the statute is designed to protect creditors 'in full', whereas in this case, trade creditors would receive virtually nothing after professional fees and priority claims were paid.

The court suggested that the Bulk Sales Act should be limited to situations where creditors will be paid in full, with insolvency legislation used otherwise.

The appellant appealed a Registrar's order that suspended the bankrupt's discharge for one day without imposing any financial conditions, despite her significant income tax debt.

The Superior Court of Justice found that the Registrar erred in law by questioning the validity of the Crown's proven tax claim, which had not been disallowed by the Trustee.

The appeal was allowed, and the bankrupt was ordered to pay $8,000 as a condition of her discharge, balancing the policy objectives of the Bankruptcy and Insolvency Act with her current financial and family circumstances.

An appeal from a trustee’s disallowance of a property claim in bankruptcy.

The appellant spouse asserted beneficial ownership of the matrimonial home pursuant to a settlement agreement executed prior to the bankrupt’s insolvency, transferring the bankrupt’s equity in satisfaction of debts owed to her.

The court considered whether the unregistered transfer created a resulting or constructive trust such that the property was excluded from the bankrupt’s estate under s. 67 of the Bankruptcy and Insolvency Act.

The court accepted evidence that the parties intended the transfer to repay funds advanced to the bankrupt’s business and concluded that the bankrupt retained no beneficial interest in the property.

The appeal was allowed and the trustee’s disallowance set aside.