The applicant brought a motion to annul the respondent’s assignment into bankruptcy, arguing it was filed to stay ongoing family law proceedings and avoid an equalization payment.
The court examined the respondent’s financial circumstances and the timing of the bankruptcy filing under s. 181(1) of the Bankruptcy and Insolvency Act and the principles governing abuse of process.
The respondent had relatively modest debts, significant equity in the matrimonial home, and exempt assets including a pension and RRSPs, indicating he was solvent.
The court concluded that the assignment was motivated by an attempt to derail the family litigation and evade equalization obligations.
The bankruptcy was annulled and property was vested in the applicant to facilitate payment of legitimate creditors and advance the equalization process.
