Rocchina Battista Frino

This decision is an appeal by Alan Saskin from the order of Associate Justice Ilchenko, sitting as Registrar in Bankruptcy, refusing an absolute discharge and imposing conditions under the Bankruptcy and Insolvency Act.

The court reviews the procedural history, the evidence, and the legal standards for discharge, including the meaning of "moral blameworthiness" under s. 173(1)(a) and the duties of a bankrupt under s. 173(1)(o).

The appeal is dismissed, with the court finding no error in the Registrar's factual or legal conclusions.

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 bankrupt brought a motion to strike certain evidence filed by a creditor, Alpa Stairs and Railings Inc., in response to the bankrupt's motion to expunge Alpa's proof of claim.

The bankrupt sought to strike portions of an affidavit sworn by Alpa's representative, arguing it contained inadmissible hearsay, opinion, and argument, and relied on transcripts of examinations under s. 163 of the Bankruptcy and Insolvency Act of individuals who were not parties to the proceeding.

The court struck several paragraphs and exhibits from the affidavit that violated rules against hearsay and opinion evidence.

However, the court held that the s. 163 examination transcripts themselves were admissible evidence on the expungement motion under s. 163(3) of the BIA.

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.