Saul Jonas

The applicant sought a declaration that a 1991 default judgment against him was discharged by his bankruptcy and absolute discharge later that same year.

The respondent argued the debt survived under s. 178(1)(d) of the Bankruptcy and Insolvency Act because it allegedly arose from misappropriation of trust funds under the Construction Lien Act.

The court held that the default judgment, obtained from the registrar on unpaid invoices, did not incorporate a finding of breach of trust and that the pleadings and deemed admissions were insufficient to establish misappropriation.

The court also declined to vary or amend the judgment under Rules 19.08 or 59.06 or order a trial of the issue, citing delay and prejudice caused by the loss of records and witnesses over more than two decades.

The court declared that the debt was discharged by the applicant’s bankruptcy.

The applicant purchaser sought a declaration that an open building permit relating to a garage constituted a valid objection to title under an agreement of purchase and sale for residential property.

The respondent estate argued the permit was inconsequential because no work had been undertaken and the permit merely authorized construction rather than requiring it.

The court held that an outstanding building permit creates potential exposure to municipal inspections, work orders, remedial construction, and litigation, thereby affecting the purchaser’s use and enjoyment of the property.

Given the uncertainty surrounding whether the permit could be closed and the potential cost of compliance, the permit constituted a defect going to the root of title.

The purchaser’s requisition requiring the permit to be closed was therefore valid and the respondent had not shown good title.