CITATION: CIBC Mortgages Inc. (Firstline Mortgages) v. Chartrand, 2010 ONCA 456
DATE: 20100621
DOCKET: C50804
COURT OF APPEAL FOR ONTARIO
Weiler, Blair and Rouleau JJ.A.
IN THE MATTER OF THE BANKRUPTCY OF MARCEL CHARTRAND, AN INDIVIDUAL RESIDING IN THE TOWN OF HAWKESBURY, COUNTY OF PRESCOTT, IN THE PROVINCE OF ONTARIO, BUSINESSMAN
BETWEEN
CIBC Mortgages Inc., Trading as Firstline Mortgages
Applicant (Appellant)
and
Marcel Chartrand
Respondent (Respondent)
Benjamin Frydenberg, for the appellant
Marcel Chartrand, acting in person
Heard: June 2, 2010
On appeal from the order of Justice Michel Z. Charbonneau of the Superior Court of Justice, dated June 22, 2009.
By the Court:
Background
[1] The respondent, Mr. Chartrand, owed a mortgage debt of approximately $237,474.75 to the appellant, Canadian Imperial Bank of Commerce (CIBC), including $37,000 for back taxes which CIBC paid.
[2] The Canada Revenue Agency (CRA) had a claim for unpaid GST in the amount of $175,000 for which it claimed a super priority by virtue of s. 222(1) of the Excise Tax Act, R.S.C. 1985, c. E-15, over the CIBC mortgage.
[3] CIBC brought an application for a bankruptcy order against Mr. Chartrand. The issue on this appeal is whether CIBC satisfied the requirements of ss. 43(1) and (2) of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 1; 1992, c. 27, s. 2., (the BIA) which state:
s. 43(1) Subject to this section, one or more creditors may file in court an application for a bankruptcy order against a debtor if it is alleged in the application that
(a) the debt or debts owing to the applicant creditor or creditors amount to one thousand dollars; and
(b) the debtor has committed an act of bankruptcy within the six months preceding the filing of the application,
if applicant creditor is a secured creditor.
(2) If the applicant creditor referred to in subsection (1) is a secured creditor, they shall in their application either state that they are willing to give up their security for the benefit of the creditors, in the event of a bankruptcy order being made against the debtor, or give an estimate of the value of the applicant creditor’s security, and in the latter case they may be admitted as an applicant creditor to the extent of the balance of the debt due to them after deducting the value so estimated, in the same manner as if they were an unsecured creditor.
[4] Inasmuch as CIBC did not wish to give up its security entirely, it had to give an estimate of the value of the security. For CIBC’s application to succeed, the unsecured portion of its claim had to exceed $1,000. In addition, it had to prove that Mr. Chartrand had committed an act of bankruptcy within the six months preceding the application.
[5] In its application dated March 5, 2008, CIBC estimated the value of its mortgage security to be $200,000, thus asserting that there was an unsecured balance owing of approximately $37,000. Mr. Chartrand disputed CIBC’s application.
[6] At the hearing, CIBC submitted two appraisal reports. The first dated March 6, 2007 valued the property at between $209,000 to $225,000; the second dated January 23, 2008 at $230,000. Mr. Chartrand, who represented himself,