R. Battista Frino

The bankrupt, a former real estate developer, sought an absolute discharge from bankruptcy.

The discharge was opposed by the Trustee, the Canada Revenue Agency, and several creditors, who argued that the bankrupt's assets were less than 50 cents on the dollar for reasons he could be held responsible for, and that he failed to perform his duties under the Bankruptcy and Insolvency Act.

The court found that the bankrupt had engaged in an asset protection strategy, incurred significant personal liabilities without the means to pay them, and failed to disclose his true post-bankruptcy lifestyle and use of a corporate credit card.

The court declined to refuse the discharge entirely but imposed a substantial conditional order requiring the bankrupt to pay $960,000 and fulfill various outstanding duties.

The creditor brought a motion for security for costs against the bankrupt in response to the bankrupt's motion to expunge the creditor's proof of claim.

The creditor argued that the bankrupt's expungement motion was frivolous and vexatious under Rule 56.01(1)(e) of the Rules of Civil Procedure.

The court reviewed the evidence, including allegations of breach of trust under the Construction Act, and found that the creditor failed to meet the high standard required to prove the expungement motion was devoid of merit or had virtually no chance of succeeding.

Applying a holistic approach, the court dismissed the motion for security for costs.

In a bankruptcy proposal proceeding, the fourth mortgagee brought a motion for a vesting order to purchase the debtor's property, while a competing purchaser brought a cross-motion to set aside a previous vesting order on the basis of lack of notice.

The court found that the competing purchaser had been unfairly deprived of notice and the opportunity to participate in the hearing.

The court terminated all previous agreements of purchase and sale and ordered a new confidential bidding process to ensure fairness.