ENDORSEMENT OF CIVIL MOTION, APPLICATION OR CASE CONFERENCE
SHORT TITLE OF PROCEEDINGS: IN THE MATTER OF THE Bankruptcy of Mark David Dietrich
BEFORE: Associate Justice Perron
HEARD ON: January 5 2026
COUNSEL: Chantal Gingras, Trustee Mark Dietrich, Bankrupt Marc-André Renaud, Creditor Mr. Marcotte, Counsel for Mr. Renaud in civil action (observing)
ENDORSEMENT:
This was the hearing of Mr. Dietrich’s application for discharge. He filed for bankruptcy two years ago on January 23, 2024. It is a summary administration file.
There are facts under section 173 of the Bankruptcy and Insolvency Act under subsections (a) and (j) : the assets of the bankrupt are not of a value equal to fifty cents on the dollar of the amount of the unsecured liabilities, and Mr. Dietrich previously filed a consumer proposal which was fully performed in 2000.
Mr. Renaud and Victoria McMahon are creditors. They were included in the mailing list of the creditors’ package and received the Notice of Intention on or about January 23, 2024. They filed a Notice of Objection to the Bankrupt’s Discharge on or about September 23, 2025.
Mr. Renaud and Ms. McMahon filed a Proof of Claim on May 27, 2025. The Trustee admitted their claim for the full amount of $206,257.90. Their claim arises from alleged defects with the property they purchased from Mr. Dietrich in 2022 including cleanup of mould. According to the Trustee, the supporting documents attached to the claim included invoices, a valuation and an engineer’s report containing an assessment of damages.
Mr. Renaud and Ms. McMahon have also commenced civil proceedings in Quebec seeking to recover damages. Mr. Dietrich is a defendant in the action along with other individuals involved in the sale.
The Proof of Claim and the documents related to the civil action were not in evidence before me. The only document filed by the opposing creditors was their Notice of Objection.
In the Notice of Objection, Mr. Renaud and Ms. McMahon seek an audit or tracing of the sale proceeds and all the bankrupt’s transactions from 2022. They also seek the appointment of an inspector to oversee the administration, and they wish to examine Mr. Dietrich under oath.
The matter was previously returnable on October 27, 2026. Associate Justice Fortier adjourned the hearing at Mr. Renaud’s request because he stated that his counsel was not available. Associate Justice Fortier ordered that Mr. Renaud serve and file a motion record and a short factum outlining the relief requested prior to the return date of the hearing.
At the outset of the hearing today, Mr. Marcotte stated that he was counsel for Mr. Renaud in the civil proceedings and questioned why he was here. I confirmed with Mr. Renaud that he had not filed any material despite Associate Justice Fortier’s directions in October. Mr. Renaud said that the Trustee told him that all materials had been filed. He stated that he thought the parties would just be discussing the issues today and that he did not get a copy of Associate Justice Fortier’s endorsement.
The Trustee stated that she sent Mr. Renaud and Mr. Marcotte a copy of Associate Justice Fortier’s endorsement on November 10, 2025 by email.
I reminded Mr. Renaud that this was the discharge hearing and that he was the party responsible for serving and filing a motion record and a factum to support the relief he was seeking in accordance with Associate Justice Fortier’s directions. Because the matter was previously adjourned, and he therefore had an opportunity to deliver materials, I also told Mr. Renaud that I would not grant another adjournment.
I stood the matter down briefly and provided an opportunity for Mr. Renaud to speak with Mr. Marcotte. On return from the short break, Mr. Renaud confirmed that he would be representing himself today and that Mr. Marcotte would only be observing.
All of the parties were affirmed and provided their evidence. I also provided an opportunity for Mr. Renaud to ask questions of Mr. Dietrich. However, I limited the questioning on documents to questions on the bank statements previously delivered by Mr. Dietrich to the Trustee, which statements were provided to Mr. Renaud. Because Mr. Renaud did not deliver any other materials, it was not appropriate to permit questioning on documents that were not previously served and filed.
The Trustee’s evidence is that Mr. Dietrich sold his property to Mr. Renaud and Ms. McMahon in February 2022 which is within the 5 year review period prior to the bankruptcy filing. The net proceeds of sale were $217,000. Mr. Dietrich was cooperative and provided the Trustee with the required statements, other documents and information to permit the Trustee to investigate the various payments and transactions made by Mr. Dietrich. The review included transactions, gifts and payments made to relatives and others in excess of $500.
The Trustee provided a breakdown of the major transactions and payments which included a payment of $70,000 to Mr. Dietrich’s ex-wife pursuant to a separation agreement, payments to creditors for various credit facilities (BMO, MBNA, Home Depot, Scotiabank) and payment of $20,000 to his brother for rent.
Most of the more significant payments were made prior to Mr. Dietrich’s receipt of a demand letter in the summer of 2023 from Mr. Renaud and Ms. McMahon regarding the property dispute. Following the demand letter, the more significant payments were made to a lawyer, a building inspector, Metcalfe Properties (for 3 months’ rent) and to open a new bank account.
Overall, the Trustee did not have any concerns with the transactions and the allocation of funds, or any concerns with respect to Mr. Dietrich’s obligations as a bankrupt. The only transaction that was nebulous according to the Trustee was the $20,000 payment to the brother, but the Trustee was satisfied with the explanation provided (that the funds were for rent). The Trustee also raised whether it was appropriate for Mr. Dietrich to have purchased seemingly all of his meals at fast food chains in view of his financial circumstances, but again, the spending did not reach the point of being rash or extravagant.
In addition, the Trustee confirmed that she received the balance of funds that remained in Mr. Dietrich’s bank accounts (approximately $11,000) as well as proceeds that Mr. Dietrich received from his mother’s inheritance post-filing.
The Trustee holds approximately $42,000 for distribution to creditors. Apart from Mr. Renaud and Ms. McMahon, the only other creditor that has filed a proof of claim is Scotiabank in the amount of $528.84. Mr. Renaud and Ms. McMahon will therefore receive almost the totality of the dividend.
During his testimony, Mr. Dietrich clarified that the payment of $20,000 to his brother was repayment of various funds that his brother previously lent to him in 2021 for living expenses including minimum payments on his credit facilities. There was also repayment of smaller loans to each of his sisters. There are no documents to evidence the loans. He also clarified that he paid $959 a month to his brother as rent during the 19-month period that he lived with him.
Mr. Dietrich was also forthcoming about his limited employment from the fall of 2022 to early 2023 and the limited income he has earned following the sale of the property.
Mr. Dietrich’s evidence, including his responses to Mr. Renaud’s questions, appeared to me to be credible and honest. There is nothing that appears to be nefarious about the timing of the various payments in relation to Mr. Dietrich becoming aware of the civil action in the summer of 2023. There is also nothing to suggest that Mr. Dietrich liquidated the sale proceeds to judgment proof himself or that he made preferential payments or gifts to non-arm’s length parties.
For example, when asked why he waited a few months after the closing of the transaction to make the $70,000 payment to his ex-wife, Mr. Dietrich explained that the agreement he had made with his spouse prior to the sale of the property was that she would receive half of the proceeds remaining after he paid all of his debts. This explanation is consistent with the Trustee’s evidence of the timing of the payments to the various financial instructions. The Trustee also reviewed the written agreement between Mr. Dietrich and his former spouse.
Mr. Renaud also stated that he is not accusing Mr. Dietrich of fraud. Mr. Renaud and Ms. McMahon are simply seeking to “avoid a full discharge” pending an investigation. Their position is that a more fulsome explanation needs to be provided for all of the transactions following the sale of the property and that, at a minimum, the $20,000 payment that Mr. Dietrich made to his brother should be held back because that was a payment to a non-arm’s length party.
Regarding the status of the civil action, Mr. Renaud indicated that they deposed Mr. Dietrich in July 2024 despite the fact that leave of the Court was not sought to lift the stay in bankruptcy. It appears that Mr. Dietrich’s lawyer consented to the deposition and it did not last long because of objections to the questions posed. In any event, as indicated above, there are other parties named as defendants in that action against whom the action will continue.
Mr. Dietrich’s discharge from bankruptcy is within the exercise of the Court’s discretion. Some of the factors that the Court may consider on an application for a first-time bankrupt are: the necessity of providing relief for a bankrupt from his financial obligations, the integrity of the bankruptcy process itself and the public perception of the integrity of the process, and the amount that the creditors may receive on their claims by way of dividend (see Re Shakell (1988), 70 C.B.R. (N.S.) 270 (Ont. S.C.).
I have also considered that Mr. Renaud and Ms. McMahon could have availed themselves of several steps under the Bankruptcy and Insolvency Act to obtain the relief that they were seeking but they failed to do so.
They could have requested a meeting of creditors when they filed their Proof of Claim. They did not do so. At the meeting, they could have moved to appoint themselves as inspectors in the bankruptcy. They did not do so. At the meeting, they could have requested that the bankrupt be examined under oath. They did not do so. In addition, they were ordered by Associate Justice Fortier to deliver materials prior to the return of the hearing today. They did not do so.
Because the opposing creditors are not alleging that Mr. Dietrich committed fraud in the bankruptcy, and in view of the evidence that I heard from each of the parties today and my findings above regarding Mr. Dietrich’s evidence, it would not be appropriate to adjourn the hearing and order that the bankruptcy administration start again from scratch which is effectively what the opposing creditors seem to be requesting.
Mr. Dietrich has been forthcoming and cooperative with the Trustee and has complied with his obligations under the Act. He is entitled to relief from his financial obligations.
The opposing creditors have not provided any evidence of facts that may affect the integrity or the public perception of the process. In addition, the opposing creditors will receive the majority of the dividend in the bankruptcy, and they are free to continue with their civil action against the other defendants involved in the sale of the property.
I find that it is appropriate for Mr. Dietrich to be discharged from bankruptcy.
During the hearing, the Trustee stated that she would have recommended an absolute discharge. In the draft Order that she submitted to me after the hearing at my directions, she confirmed the section 173 facts and has inserted a paragraph for me to insert conditions.
Pursuant to section 172(2) of the Act, I cannot grant an absolute discharge because there are section 173 facts. I therefore now understand the Trustee’s comments during the hearing to have meant that if there were no section 173 facts, she would have recommended an absolute discharge notwithstanding the opposition of Mr. Renaud and Ms. McMahon.
Although I did not state this when I delivered my oral reasons to the parties during the hearing, I confirm that I find that it is appropriate to grant Mr. Dietrich’s discharge without any conditions but subject only to a suspension period of 10 days from the date of the hearing which suspension will expire on January 15, 2026.
I have signed the draft Order as revised by me following the hearing, and the Order shall be issued.
Date: January 14, 2026
Associate Justice Perron