COURT OF APPEAL FOR ONTARIO

CITATION: Zanewycz (Re), 2020 ONCA 561

DATE: 20200904

DOCKET: C68286 & M51555 (C68286)

van Rensburg, Pardu and Huscroft JJ.A.

In the Matter of the Bankruptcy of

Walter Andrew John Zanewycz

of the City of Thunder Bay

in the Province of Ontario

BETWEEN

Cheadles LLP

Applicant

(Respondent/Moving Party)

and

Walter Andrew Zanewycz

Respondent

(Appellant/Responding Party)

Walter Zanewycz, acting in person

K. Daniel Reason, for the respondent and the moving party, Cheadles LLP

Heard: August 31, 2020 by videoconference

On appeal from the bankruptcy order of Justice John S. Fregeau of the Superior Court of Justice dated April 6, 2020, adjudging the appellant, Walter Zanewycz, a bankrupt, with reasons reported at 2020 ONSC 2032. Motion by the respondent to quash the appeal.

REASONS FOR DECISION

[1] We dismissed the appellant’s appeal of an order adjudging him bankrupt, with reasons to follow. These are our reasons.

[2] The appellant retained the respondent law firm to represent him in matrimonial litigation. Over time, the appellant became indebted to the respondent and other individuals. In 2018, the appellant made a consumer proposal under the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, which was rejected by his creditors. The respondent issued an application for a bankruptcy order against the appellant on the grounds that the appellant’s debts exceeded one thousand dollars and that he had ceased to meet his liabilities generally as they became due. The appellant opposed the application.

[3] The appellant was adjudged bankrupt. The bankruptcy judge found that the bankruptcy application was properly issued and served on the appellant. The bankruptcy judge also found that the appellant owed debts to the respondent and his former spouse exceeding one thousand dollars, pursuant to judgments and costs orders. Moreover, the appellant acknowledged his debts to other creditors, including his mother and current partner, and conceded that his debts owing to various creditors, including the respondent, remained outstanding.

[4] The bankruptcy judge rejected the appellant’s arguments that due to ongoing litigation with the respondent and his former spouse, the appellant’s debts to the respondent would be “set off” against any damages awards he might receive and that these debts as well as the costs orders in favour of his former spouse were not final. He concluded that the appellant owed the respondent debts exceeding one thousand dollars and that he had committed an act of bankruptcy by failing to meet his liabilities as they were due in the six-month period preceding January 15, 2019, the date the bankruptcy application was issued.

[5] The appellant raises a number of the same arguments that he raised before the bankruptcy judge in opposition to the bankruptcy application. He has not cited any specific errors that would allow this court to intervene, nor, having reviewed the record, do we see any such error. In particular, there was no error in the bankruptcy judge’s conclusions on the procedural issues respecting the issuance and service of the application, or in his substantive determinations with respect to the debts owed by the appellant, including the fact that they were outstanding and that the appellant had failed to meet his liabilities generally as they became due.

[6] The appellant’s ongoing litigation with the respondent law firm and his ongoing matrimonial litigation do not affect the fact that the debts owed to these creditors were outstanding at the relevant time. Nor is it relevant that the appellant may have made offers to settle his debts, which were not accepted, or that he believes the debts, even those that have not been paid, to have somehow become “stale”. Finally, there is no merit in the arguments that the respondent was using the bankruptcy process for improper purposes, or that there were any procedural errors in the hearing that would or could have affected the basis on which the bankruptcy order was granted.

[7] For these reasons the appeal was dismissed. We also dismiss, as moot, the motion to quash the appeal. Costs to the respondent are fixed in the sum of $5,000, inclusive of disbursements and HST, to be paid from the bankrupt’s estate.

“K. van Rensburg J.A.”

“G. Pardu J.A.”

“Grant Huscroft J.A.”