Re Webster, 2026 ONSC 61

CITATION: Re Webster, 2026 ONSC 61

COURT FILE NO.: 31-02104858

DATE: January 5, 2026

ONTARIO

SUPERIOR COURT OF JUSTICE

IN BANKRUPTCY AND INSOLVENCY

IN THE MATTER OF THE BANKRUPTCY OF

GENEVIEVE SANG WEBSTER

(AKA GENEVIEVE ALEXANDRA KATHERINE SANG WEBSTER)

of the city of Toronto in the province of Ontario

BEFORE: Associate Justice Ilchenko, Registrar in Bankruptcy

Stephen Gillies (“Gillies”) for the Bankrupt, who also appears

Richard Killen, LIT (“Killen”) for Trustee in Bankruptcy, Richard Killen & Associates Ltd., (the “Trustee”), of the Bankrupt

Claudiu Suteu (“Suteu”), Opposing Creditor and father of child with Bankrupt – representing self

Superintendent of Bankruptcy not appearing

ENDORSEMENT

HEARD:

Initial Discharge hearing date of January 11, 2018 was adjourned by Registrar Jean sine die pending the resolution of custody and access issues by the Family Court, scheduled for April 2018;

Discharge hearing date of November 14, 2018 was adjourned by Registrar Jean sine die;

Discharge hearing date of September 20, 2022 adjourned by me to a Special Appointment Case conference;

Initial Special Appointment Case Conference for Discharge before me on May 16, 2023, setting initial timetable for exchange of materials

Second Case Conference on March 14, 2024, setting additional documentary requirements relating to Go-Fund Me funding for litigation received by Bankrupt and “loans from friends”, payments of legal fees by Bankrupt, employment details, and evidence of tax compliance;

Final Case Conference on April 15, 2025 after Trustee reported efforts at mediation by the Trustee have been futile;

Discharge Trial heard on August 7, 2025 for a full day by Zoom.

1The Bankrupt appears on her discharge hearing (the “Discharge Hearing” or the “Discharge”). The Bankrupt is requesting an absolute discharge from Bankruptcy.

2On March 30, 2016 the Bankrupt made an assignment into Bankruptcy as a Summary Administration Bankruptcy under the Bankruptcy and Insolvency Act, RSC 1985, B-3. (the "BIA").

3All underlined and bolded text in these reasons is emphasis added by me for these reasons.

4The Court has considered all materials and arguments raised by all of the parties on this Discharge Hearing. Any failure by the Court to refer in these reasons to specific arguments and materials raised does not reflect that the Court has not considered those arguments.

FAMILY LAW PROCEEDINGS BETWEEN BANKRUPT AND SUTEU

5Before the Bankruptcy, Zisman, J. of the Ontario Court of Justice (Family Decision) issued a decision on September 29, 2015 in Webster v. Suteu 2015 ONCJ 538 (the “Zisman, J. Joint Parenting Reasons”) after a 13 day trial, where both parties were represented.

6The Family Law proceedings commenced in or around 2012, almost 14 years prior to the Discharge Hearing.

7Zisman, J. ruled on joint custody for their son Dean, who is a child with special needs, as well as access, parenting decision-making, providing access to information and records, medical decisions, education, retention of medical and therapeutic professionals, and restraint on the Bankrupt making complaints of parental abuse against Suteu, as well as other parental alienation issues.

8This decision varied a consent Order of Zuker, J. from June 13, 2012 on the basis of material change occurring.

9The following paragraphs of the 76 page, 268 paragraph Zisman, J. Joint Parenting Reasons (released 6 months prior to the assignment into Bankruptcy) summarize some of her findings of fact, and many issues relevant to this Bankruptcy Discharge heard almost 10 years later, and findings of credibility with respect to the Bankrupt relevant to the discharge:

“[63] As in cases such as this where there is high conflict and there are allegations by the parties against each other and many contradictions between versions of events, the court must assess the credibility of the parties and their respective witnesses. Although I will detail specific issues regarding credibility in my review of evidence, I wish to generally outline my findings of credibility.

64The mother would not concede anything positive about the father. The mother testified that she could not attend appointments with the father or would need to speak to service providers before they met the father as the father would “trash” her. Both the mother and maternal grandmother testified that they had to “crash” an appointment that Dr. Flanders, the new paediatrician, set up to meet with the father so that they could hear what he said and ensure he did not “trash” the mother. But none of the professionals who testified stated that the father said anything negative about the mother rather he was only trying to obtain information about his son. On the other hand, the mother went out of her way to portray the father in a negative light to almost every professional involved in the child’s care.

65In many instances I found that the mother exaggerated, was inconsistent, nonresponsive, and contradicted the evidence of neutral professional witnesses and of the written reports. Where there is a discrepancy between the evidence of the mother and any neutral professional witnesses or statements in any written medical, police or therapist report I accept that evidence over the mother’s evidence.

171I find in this case there is overwhelming evidence that there has been a material change in circumstances that has affected or is likely to affect the best interests of this child. I find that the following material changes in circumstances have occurred:

c) The mother suspended the father’s access for months whereas the original order contemplated access would not only continue but expand;

i) The mother has actively interfered with father’s relationship with the child and has taken steps to block the progression of the father’s relationship with the child;

j) The mother has refused to consent to a reasonable expansion of access and the lifting of supervision and conditions in accordance with the provision of the consent Order that in theory could have allowed the progression of father’s relationship with the child;

k) The mother is either raising unfounded allegations against the father or her stated concerns and fears are irrational;

l) The mother has used the existing Order to frustrate father’s attempts to become more involved in the child’s life;

n) The ongoing conflict between the parties and the actions of the parties, in particular the mother is completely contrary to the spirit of the custody Order; and

193I find that the mother has used the stipulation in the consent Order of June 13, 2012 that her address be redacted and that the father has supervised access or later that access exchanges be at a police station or supervised access centre to perpetuate her image of the father as an abuser and someone to be feared. She has told numerous professionals that these stipulations are in the court Order for a purpose.

194I find that there is no evidence to suggest that the father has committed any acts of violence or abuse that in any way impact on his parenting abilities.

202With respect to the ability to encourage a relationship with the other parent, I find that the mother has continually marginalized the father’s role and limited his contact and involvement with Dean.

22. The mother has complained to multiple professionals about the father resulting in repeated involvement and investigation by the children's aid society;

203It is clear that the mother has expended a great deal of energy to exclude the father from this child’s life. The mother’s actions in this case are a stark example of how a sole custodial parent can use her sole decision making power to the determinant of the child’s well-being.

224For the facts set out earlier, it is clear that the mother can simply not be trusted any longer to be the sole custodial parent. Although traditionally joint custody is only ordered where there is co-operation and respect between parents, as indicated above courts are increasingly ordering joint custody where it is necessary to preserve the balance of power between the parties and where one party is primarily responsible for the lack of co-operation and lack of communication.

225Throughout the father has been respectful of the mother and contrary to the mother’s evidence he has not spoken disparagingly about her. He has demonstrated extreme patience with the many demands made of him by the mother and tolerated some very disturbing behavior and allegations against him by the mother. He has tolerated sitting in appointments by himself while the mother brings an entourage with her for these appointments. If the father had a more developed relationship with Dean I might have considered a change of primary residency and if the mother continues on the same path she has followed this may be the end result. I find that the father would discharge his legal obligation to encourage a relationship with the mother if the roles were reversed. By contrast the mother has disparaged the father at every opportunity she has had and has not been able to separate her views about the father from her child’s best interests. She has maintained a rigid and distorted view of the father as a dangerous outsider and abuser.

247I find that the mother breached not only the spirit and intent of the order with respect to Dean’s schooling but the actual terms of the order. This is further evidence that the mother is intent on pursuing what she believes is in Dean’s best interests regardless of any court order. I am therefore persuaded that the father is the parent who should have the final decision making authority regarding Dean’s schooling. I have confidence that the father will consult with and include the mother in any decisions regarding schooling and that he will be willing to follow recommendations of the school or any other service providers.

257Based on the mother’s knowledge of autism and the contacts she has established with various agencies, I considered that perhaps the father should be given final decision making regarding medical issues and the mother regarding issues regarding autism. But based on the mother’s lack of compliance and her interpretation of previous court orders, I find that the mother would find ways of misinterpreting what constituted medical versus autism decisions and that such a division of decision making would cause more conflict between the parties and confusion for the service provides.

258I therefore find that the father should have final decision making with respect to all health related decisions including any decisions with respect to Dean’s autism. There should not be many decisions that should cause disputes in view of the very detailed order that will be made that includes a requirement to follow the recommendations of health care professionals. I find that father is the parent who can be trusted to consult with the mother and if they cannot agree then I find he can be trusted to make a decision that is in the child’s best interests. The father has no hidden agenda against the mother whereas the mother has shown herself to be a parent whose anger against the father has clouded her judgment so that she has made decisions that are not in Dean’s best interests.

262I find that there is no evidence to suggest the father cannot provide a safe and secure home environment for Dean nor is there any evidence that because of Dean’s special needs he cannot gradually transition to spending more time in his father’s care.

263I find that quite to the contrary due to Dean’s special needs and the amount of time and energy each parent needs to devote to caring for him that sharing his care is to his benefit.

266Neither party will be permitted to bring such a review or initiate any further motions to change without prior leave of the court. I make this order because of the enormous financial costs of this trial and the emotional toil of such a highly contested trial on both parents. Further, as with any change some dysregulation is expected and it is not to anyone’s benefit for either parent to return to court every time there is some upset or tantrum by Dean.

267I expect the parties to abide by the terms of the order and if they can appreciate that each parent has an important role in this child’s life and if they can learn to co-operate then I believe Dean’s transition to spending more time in his father’s care will proceed much more smoothly. I will remain seized of the matter to deal with any issues with respect to the implementation of this order and any future court proceedings.”

10Zisman, J. then set out an extremely detailed 38 point parenting plan to attempt to remove any ambiguity as to the rights and responsibilities of the Bankrupt and Suteu with respect to their child, Dean.

11Unfortunately, that was not the end of the family proceedings. The Bankrupt appealed the Zisman, J. Joint Parenting Reasons and brought a motion for a stay pending appeal and to introduce fresh evidence.

12Del Frate, J of the Superior Court in Webster v Suteu, 2015 ONSC 7886 (the “Del Frate, J. Stay and Security for Costs Reasons”) rejected the Bankrupt’s Motion for Stay pending appeal stating:

“[15] At this stage, it is not my responsibility to determine and decide the appeal. It is clear however that Zisman J. made considerable findings of fact based on the evidence adduced at the trial. It is also clear that on various occasions she made adverse findings of credibility against the applicant and in particular:

“[T]he mother exaggerated, was inconsistent, non-responsive, and contradicted the evidence of neutral professional witnesses and of the written reports. Where there is discrepancy between the evidence of the mother and any neutral professional witnesses or statements in any written medical, police or therapist report, I accept that evidence over the mother’s evidence.” Para. 65 of the Reasons.

16The trial judge found that:

[T]he father presented as a caring and concerned parent who despite all of the obstacles the mother has put in his way, has persevered to maintain a relationship with his son. I find that where there is a contradiction between his evidence and the evidence of the mother or the maternal grand-mother, the father’s evidence is to be preferred. Paragraph 67 of the Reasons.

17Most telling, are the findings made at paragraph 171 where she states that:

a. The father and child have bonded, the supervised access visits went well and as a result, access ought to be expanded, the father is more involved in the diagnosis and treatment of the child’s health issues. The father has demonstrated a strong commitment to the child, and mother has actively interfered with the father’s relationship with the child and has taken steps to block the progression of the father’s relationship with the child.

b. The mother has refused to consent to a reasonable expansion of access and the lifting of supervision and conditions according to the provisions of the consent order.

c. Mother is either raising unfounded allegations against the father or her stated concerns and fears are irrational.

d. The mother has frustrated the father’s attempts to become more involved with the child.

18As a result of these findings, Zisman J. awarded joint custody and expanded the access on a graduated basis. It appears to me that such findings and such an order were made in the best interests of the child after having observed the parties, the witnesses, and considered the expert opinions at the trial.

19The evidence on this motion, although contradictory, is that access has been expanded. According to the applicant, the child has serious consequences as a result of the expanded visits. The respondent indicates that the child is progressing quite well and he should have even greater time to spend with him.

20Considering the findings made Zisman J. about the applicant’s tendency to exaggerate and her preference to accept the respondent’s evidence, I place more weight on the respondent’s evidence than on the applicant’s. Numerous examples such as allegations of sexual misconduct by the respondent against the child have been made by the applicant but after a review by the CAS, such allegations were dismissed outright. A reasonable conclusion is that the respondent is continuing her campaign of exaggeration of her observations, all to cast the respondent in a bad light.

21The evidence of Miss Laframboise is also suspect in view of the evidence that she gave at trial and the findings of fact of her testimony by Zisman J.

22In my view, the trial judgment is sound and staying the order at this stage would cause irreparable harm to the child since the progression of the bonding between the child and the father would be curtailed. Increasing the contact is more beneficial than maintaining the status quo. Accordingly, the motion to stay is denied.”

13Concurrently, Suteu brought a security for costs motion of the Bankrupt’s Appeal. De Frate, J. found in favor of Suteu finding:

“[27] Applying these principles to the facts of this case, the following facts are not in dispute. Firstly, the applicant is impecunious. Secondly, there has been extensive litigation and court appearances and some 15 days of trial where in all of these proceedings, the applicant has not been successful. Thirdly, the cost of initiating or defending these proceedings by the respondent has had an enormous economic impact on him. Fourthly, there is no indication that the applicant will temper her aggressive and unreasonable behaviour in attempting to achieve what she believes should be done in spite of the recommendations of experts and the decisions of the court.

28The only recourse that the respondent has in recovering his costs, is an order offsetting the costs against any child support that he is obliged to pay. Although in some cases this type of order may have a deterrent effect on a party, such effect is not viable in this case since the applicant is on social assistance. Accordingly, whatever monthly amount she receives from the appropriate agencies will continue and there are no consequences to her conduct.

29In my view, this is a case involving exceptional circumstances and security for costs ought to be awarded.

30I consider that the respondent is requesting $30,000. I also consider the financial situation that the applicant is in. Obviously that sum is beyond her ability to pay. I also consider that to date, her numerous counsel, have been paid some $34,000 in fees. That money must be coming from somewhere. If she is to continue, perhaps those sources are open to her to post the security for costs.

31Taking all of these factors into consideration, I order that the applicant post the sum of $20,000 as security for costs within the next 60 days.”

14The Bankrupt and Suteu were back before Zisman, J. on January 12, 2016 on a motion by Suteu to vary the Zisman, J. Joint Parenting Reasons and to find the Bankrupt in Contempt of the Orders made by Zisman, J. The Bankrupt brought a cross-motion to order a mental health examination of Suteu and for the Office of the Children’s Lawyer to be appointed for Dean.

15In Webster v. Suteu, 2016 ONCJ 39 (the “Zisman J. Contempt Reasons”) issued on January 20, 2016 (71 days before the Bankruptcy), Zisman, J. found the Bankrupt in contempt of her orders and granted sole custody of Dean to Suteu:

“[98] Several court decisions[6] have recognized that if there is long waiting list for a trial that this is also a consideration in making temporary orders. In this case the first trial was only completed about four months ago, it is extremely unlikely that another trial will be scheduled until the Fall. Further, there is the issue of costs of further litigation. The issue of the father’s costs for the first trial has not yet been determined but he is seeking in excess of $70,000. The mother has been ordered to provide $20,000 as security for costs for the appeal. I would anticipate that the father may seek either or both security of costs or that any outstanding cost order be paid before the matter proceeds any further.

99At the time of the trial I indicated that if the mother continued to make unfounded allegations, inspections of the child for marks and bruises, made unnecessary trips to the hospital emergency department and caused ongoing investigations that her conduct would raise child protection concerns due to her emotional harm of the child. I find that in the four short months since I released my decision that is exactly what has happened.

100It is also clear that the mother’s behaviour will not stop. I attempted to fashion an order that preserved the mother as the primary parent but also ensured that the father had an increasing role in the child’s life and that the mother would no longer be able to undermine the important role of the father in the child’s life.

101At this stage, I find that there are only two choices namely, leave my order as is on the clear expectation that the mother will continue not to abide by the terms of the order, that she will continue to make unfounded allegations and continue to ensure the father’s role and contact with the child is diminished. Or I can change custody and the primary residence of the child.

102I find that on a temporary basis, the best interests of this child require that the father become the sole custodial parent, that he is solely responsible for all decisions regarding the child and that the child reside in his primary care. I also find that in the short term the mother’s access must be supervised in order that the child can settle into his new home with his father and that the mother is prevented from undermining or interfering with this parenting arrangement.

103As a result of this change of custody and residence, there will also be a temporary order terminating the father’s obligation to pay child support.

104The mother’s cross-motion requested an order that the Office of the Children's Lawyer be appointed. There was no evidence or submissions on what utility this referral would provide to the court. A multitude of service providers have been involved in this child’s life. The children's aid society has continued to have an open file and it is clear from the case notes that the mother, her family members and others on the mother’s behalf have inundated the society workers with telephone calls and demands for meetings. I expect that if the Office of the Children's Lawyer were appointed that office would also face the same level of intensity and that the investigator assigned would quickly become overburdened. There is an abundance of evidence about this child and the involvement of yet another agency that the mother will attempt to convince of her case would not be helpful to the court and would be intrusive to the child.

105The mother also requested a mental health assessment of the father. No rationale for this request was made nor were there any details. I find that there is no basis upon which to make such an order.

106The mother also requested that Dr. Flanders remain as the child’s paediatrician and that the father be required to participate in the IBS program. In view of the order I am making that the father be the sole custodial parent he shall be at liberty to choose a new paediatrician and determine what if any programs he and the child shall participate in.”

16Zisman, J. granted Suteu sole custody and varied her prior Order to implement that change with respect to the parenting and medical treatment of Dean, found the Bankrupt in contempt and scheduled the hearing to sentence the Bankrupt:

“[114] Having found the mother in contempt of various terms of the order of September 29, 2015, the next step in a contempt proceeding is sentencing. Sentencing in contempt proceedings, and in particular in family law proceedings, should be comprised of two components. It should be restorative to the victim of the contempt and punitive to the contemnor. To accomplish the former requires the sentence correlate to the conduct that produced the contempt and to accomplish the latter requires the sentence not reflect a marked departure from those imposed in like circumstances.

115In this case, the court attempted through its earlier order to assist the parents in achieving some normality in their relationship so that the child would be shielded from any further conflict. It has now become increasingly obvious that this goal was not achieved and may never be achieved and as a result of the Motion to Change the residence of the child has now been changed.

116In the context of this contempt proceeding, it may be that the mother will now understand that Orders must be complied with and that the mother is not permitted to continue to do whatever she wishes.

118There is a very wide discretion with respect to penalties. The purpose of the proceedings and the sentence is to ensure compliance with the past or future orders of the court.

119In this case, the mother is in receipt of social assistance and therefore does not have a source of her own funds to pay a fine or a penalty.

120The father did not seek a term of imprisonment. He only wishes the mother to comply with the court orders.

121As a result of the temporary court order the mother will have an opportunity to show the court that she has learnt her lesson and that she is prepared to comply with future court orders.

122I therefore intend to adjourn the sentencing phase of this contempt motion to permit the mother the opportunity to show that she is now prepared to abide by the terms of a court order.”

17At the sentencing hearing for the Contempt at Sang v. Suteu, 2016 ONCJ 161(the “Zisman, J. Contempt Sentencing Reasons”), on March 21, 2016, (a Monday, 9 days or 6 business days before the Bankruptcy assignment, which was made the following week on a Wednesday) Zisman, J. sentenced the Bankrupt as follows:

“[13] I do not find that either a fine or an order that the mother pay the father’s costs on a full recovery basis for this motion would serve any useful purpose. The mother is of limited financial means and she has already been ordered to pay substantial costs as a result of the trial in this matter.

14The purpose of the sentencing is deterrence both general and specific. The punishment for contempt should serve as a disincentive to both the contemptor and others who are inclined to disobey court orders.

15In this case, the mother has breached the court order on numerous occasions. There were at least ten alleged breaches of the terms of the court order. Although I did not find that the evidence met the standard of proof required for a finding of contempt father nevertheless the mother’s behaviour has been consistent throughout. She did not change her behaviour after the motion to change trial. The mother has shown a lack of insight into the importance of the father being involved in the child’s life and in the decisions that are made about his health and education. She has shown no insight into how her behaviour is not in the best interests of her son.

16It is difficult to fashion a punishment that is appropriate in these circumstances as the child is already in the temporary custody of the father and he has been granted the right to make decisions about the child’s well-being. But there are ongoing court proceedings and there will be further court orders that the mother will be required to comply with. An appropriate sentence in this case should be fashioned so that the mother changes her behaviour and recognizes that it is in a child’s best interests that both parents be involved in a child’s life and that there are not further breaches of court orders.

17I therefore make the following order:

1. The Applicant shall fully comply with all court orders with respect to the ongoing and any further court proceedings regarding the child; and

2. The Applicant shall provide written proof that she has attended a course of individual counselling with a qualified therapist who has addressed at least the issues of the Applicant understanding of the importance of the Respondent’s role in the child’s life and the importance of resolving conflict. Within 12 months, the Applicant shall further provide a report from her therapist to the Respondent and the court confirming that Applicant has changed her views about the Respondent’s relationship with the child and has attained an ability to work co-operatively with the Respondent.

18Also on March 21, 2016 (a Monday, 9 days or 6 business days before the Bankruptcy assignment, which was made the following week on a Wednesday) Zisman, J. issue her costs Order for the trial in Sang v. Suteu, 2016 ONCJ 160(the “Zisman, J. Costs Reasons”), finding:

“[29] In determining the amount of costs, I have considered the legal principles and the following factors as set out in Rule 24 (11) as follows:

a. the importance, complexity or difficulty of the issues:

The issue of what parenting arrangements are in a child’s best interests is the most important issue in any family law case. This is of particular importance and increases the complexity where the child, as in this case, has many special needs. This case was complex due to the many factual and legal issues that arose. There were many professional witnesses involved and extensive records due to the child’s medical issues and the involvement of the children's aid society. It was made more difficult due to the mother’s interference with the father’s ability to obtain access to information about the child for many years preceding the trial and even during the trial process.

b. the reasonableness or unreasonableness of each party’s behavior in the case:

It is submitted by mother’s counsel that she acted reasonably as she made many concerted and repeated attempts to resolve the dispute by agreeing to mediation in advance of the trial as offered by the children's aid society which was refused by the father. It is submitted that she acted reasonably as she agreed along with the father to attend before another judge mid-trial to resolve the issues and although unsuccessful the mother was prepared to return to again attempt to settle during another break in the trial process. It is submitted that the father refused unless the mother made significant concessions. It is submitted that the father acted unreasonably in refusing to mediate before the trial and refusing to return to the settlement process during the trial. No details were provided by either counsel with respect to the contents of the mid-trial settlement discussions. I am not in a position to therefore ascertain which party was being unreasonable. It is also submitted that the mother acted reasonably as she made two offers to settle.

However, the mother’s offers to settle were unreasonable both with respect to the parenting proposal and the extent of the father’s financial contributions. It is understandable that the father would not agree to attend mediation as the mother’s attempts to diminish the father’s role in the child’s life were long standing as was her rigidity and lack of compromise.

The mother was unreasonable in not accepting the father’s offer to settle which would have avoided the entire trial process. The father was only seeking what I consider to be reasonable access and the ability to be advised and participate in the child’s medical and therapeutic appointments. Further, even if she was not prepared to accept the offer to settle she could have agreed to proceed by way of a motion based on written materials without the necessity of a lengthy trial.

Although I would not find the mother acted in bad faith, as that concept has been defined in the case law that is, behavior carried out with intent to inflict financial or emotional harm on the other party, conceal information or to deceive that party or the court,[8] the mother’s conduct was certainly egregious. As I found in the trial decision the mother marginalized the father, breached court orders, refused to communicate or permit the father to participate in a meaningful way in the child’s life and withheld important information. Although the mother may have acted out of love for the child and on the genuine belief of the rightness of her actions she acted totally unreasonably throughout this litigation and her actions significantly increased the father’s costs.

c. the lawyer’s rates:

Counsel for the father who was called to the bar in 2002, his usual hourly rate is $350 but he charged his client a reduced rate of only $125. Counsel for the mother agrees that this reduced rate in reasonable. I would add that the usual rate would also have been reasonable.

d. the time properly spent:

Counsel for the father submits that all of the work done was necessary to put the facts and law before the court. Father’s counsel prepared and organized almost all of the materials for the trial and mother’s counsel relied on the disclosure briefs he prepared. Father’s counsel arranged for all of the professional witnesses to be summonsed to court, except the one witness called on behalf of the mother.

It was necessary for the father to bring a pre-trial motion for questioning of several witnesses as those witnesses refused to voluntarily participate. Counsel for the father faced several challenging disclosure issues due in large part to the lengths the mother had gone to in order to obstruct his access to information.

Mother’s counsel submits that the time spent was excessive. However, I find that the amount of time spent was increased because of the actions of the mother. Without the thoroughness of the preparation and able presentation of this case by counsel for the father, much of the evidence regarding the child’s best interests and the mother’s obstruction of the father’s involvement in the child’s life would not have been available to the court.

e. the expenses properly paid and payable:

Disbursement expenses of $11,684.92 are claimed. The expenses were understandably high in this case due to the cost of the pre-trial questioning, payments for obtaining records from various institutions, photocopying and assembly of many exhibit records, document and case law briefs, witness fees and process server fees.

I agree with counsel for the mother that the expense of $2,260 for father’s counsel’s law clerk to take notes during the trial should be deducted as this is discretionary expense.

f. any other relevant matter:

Counsel for the mother submits that the mother is of limited financial means as her only income is the receipt of Ontario Works and she is now in receipt of a reduced amount of income from Ontario Works as the child is not presently in her care.

A party’s ability to pay costs is a relevant consideration.[9] However, a party’s limited financial circumstances should not be used as a shield against any liability for costs especially when that party has acted unreasonably. Parties of limited means do not engage in litigation without risk. As stated by Justice Robert Spence in Peres v. Poupore,[10] “in family law litigation, and in particular for parties of modest means, it behooves those parties to act reasonably and avoid trial if at all possible.”

The mother was represented by experienced counsel at trial and therefore she must have known that there would be an onerous financial consequence to proceeding to trial. But as mother’s counsel submitted that the mother did not pay him for the trial, there was no financial consequence to the mother to proceed to trial and it appears that she could therefore litigate with impunity.

The only financial consequences in this case are to the father. The father is of limited means, he earns about $50,000. The father withdrew $25,649.49 from his RRSP’s, drew on his lines of credit in the amount of about $33,800, borrowed $11,854 on his credit card and borrowed a further $5,700 from friends to finance the trial.

No submissions were made on behalf of the mother as to what amount she was prepared to pay or how she was proposing a cost order be paid. It appears that the mother is content to simply permit the court to make a cost order in the knowledge that the father would for all practical purposes be unable to enforce the order as she has no assets and is in receipt of Ontario Works.

If the court simply made a cost order with no payment terms then the purpose of a cost order that is, to indemnify successful litigants, to encourage settlement and discourage and sanction inappropriate behavior by litigants, would be defeated. In considering the financial means of parties, the court should also consider the financial means of the successful party and the cost of litigation to him. The father has had to sacrifice his future financial security and he has incurred substantial debt due to the mother’s unreasonable behavior in not settling this case. After all when he commenced this litigation all the father was seeking was reasonable access and to have a meaningful role in his son’s life.

30In considering all of these factors, I find that the father is entitled to full recovery of his costs although I have deducted from the bill of costs the expenses for the law clerk at trial. I am also mindful that the bill of costs is already heavily reduced due to the modest hourly rate charged by father’s counsel. The mother’s counsel did not present any information about the mother’s prospects to earn income now that she does not have the child in her care. The mother is young, educated and an intelligent woman and no reason was given for her inability to now earn a reasonable income. I find that there is no reason she should not be able to pay a minimum of $500.00 per month to the father on account of costs and while I appreciate this amount is somewhat arbitrary, the mother did not to make any proposals to the court with respect to payment of a cost order.

Order as follows:

1. The Applicant Genevieve Sang Webster shall pay to the Respondent Claudiu Suteu costs fixed at $68,552.00 inclusive of disbursements and applicable taxes.

2. The Applicant shall repay the amount of costs at a minimum of no less than $500.00 per month as of April 1, 2016.

3. This order is without prejudice to the ability of the Respondent to seek to set-off of this cost order from any future obligation he may have to pay the Applicant child support. If the Applicant is in receipt of Ontario Works, any such request shall be on notice to counsel for the City of Toronto.

4. The Respondent is not precluded from seeking any other enforcement measures against the Applicant.

5. The Applicant shall advise the Respondent within 30 days of obtaining any employment and provide him with a copy of her employment contact, if any and provide him with a copy of a current pay stub.

6. The Applicant shall provide to the Respondent a copy of her Notice of Assessment annually as of June 30, 2016 as long as the cost order remains unpaid.

19On April 4, 2016, 4 days after the Bankruptcy (the Monday after the assignment into Bankruptcy – written costs submissions having been completed by February 8, 2016), Del Frate, J. also issued his costs reasons (the “Del Frate, J. Costs Reasons”) at Webster v Suteu, 2016 ONSC 2255, where he found:

“[9] As I outlined in my reasons for granting security for costs, the applicant is undeterred in her quest to prevent the respondent from having a meaningful relationship with his son. In spite of the opinions of experts and the comments of the trial judge, she still believes that her position is the right one. When sanctioned, she plays the poverty card and continues in her irresponsible approach to the ongoing issues (primarily access) in this litigation. What she fails to understand is that impecuniosity does not grant a litigant the right to unrestricted access to the courts. Such access has to be exercised responsibly and reasonably.

10In my view, the applicant has not taken a realistic and reasonable position either in this motion or in her prior proceedings. Accordingly, costs must be imposed to prevent a continued abuse of the court system.

11In assessing such costs, the factors enunciated in Rule 24 must be considered. I agree with the applicant’s position that the actual issues were not complicated; however the preparation of the materials would have taken more than the normal time necessary considering the extensive prior proceedings.

12I find that the respondent has been more than fair in requesting $125 per hour as opposed to the normal rate of $350. Still, I must consider that this litigation involves custody and that the applicant is impecunious. Accordingly, I award the sum of $6,500 for fees plus the appropriate HST on the fees of 13% being $845 and disbursements inclusive of HST of $1,409.40 for a total of $8,754.40. This amount is to be paid within 60 days.”

20Despite the costs orders made, and the assignment into bankruptcy by the Bankrupt on March 30, 2016, the family law proceedings continued after Bankruptcy. There were several motions to vary Orders to permit attendance by the Bankrupt’s father at Dean’s kindergarten graduation and pre-trial evidentiary and documentation motions.

21Then, in G.S.W. v. C.S., 2018 ONCJ 286, Sherr, J. of the Ontario Court heard another 8 day trial starting April 16, 2018, almost 2 years after the Bankruptcy, where both the Bankrupt and Suteu sought to vary the terms of the Zisman, J. Joint Parenting Reasons, as amended by the Zisman, J. Contempt Reasons.

22In a 63 page, 329 paragraph decision (the “Sherr, J. Final Parenting Order”), Sherr J. expanded the Bankrupt’s access to Dean, but very cautiously, having found:

“[290] However, the mother still has a long way to go to obtain a sufficient level of insight into her behaviour that would make the court comfortable with making an order for the extensive access requested by her. Her level of insight is very much a work in progress. For instance:

a) She still rejects most of Justice Zisman’s findings and has reported to professionals that she feels the judge was biased and rubber-stamped the father’s position.

b) The mother still claims that she never provided false information to professionals about the father, despite Justice Zisman’s explicit findings that she had done this.

c) The mother continued to tell professionals in 2016 and early 2017 that the father had physically abused her, was aggressive, didn’t accept the child’s autism diagnosis, had turned down access she offered and had chosen not to attend meetings for the child. All of these allegations had been rejected by Justice Zisman.

d) The mother still claims that she didn’t secretly involve professionals with the child despite Justice Zisman’s explicit finding that she had done this.

e) The mother strongly stated in her trial affidavit that the child’s medical and educational needs are being neglected, despite significant evidence to the contrary. At trial, the mother was less forceful on these issues. However, she still appears reluctant to accept that these needs of the child are being dealt with appropriately by the father.

f) The mother was still preoccupied at trial about correcting errors she claims have been made in the records of the society and the TSAC.

g) The mother sincerely feels that she has done everything in her power to move her relationship with the father forward, but her actions don’t always back this up. For instance:

i. She filed a lengthy trial affidavit attacking the father’s parenting skills, honesty and motives. The affidavit did not acknowledge any of the positive things the father has done for her and especially for the child.

ii. She has not paid any support for the child.

iii. She asked for Dr. Flanders to be the child’s doctor when she is aware of the doctor’s extremely negative view of the father.

h) She still demonstrates an unjustifiably heightened sense that the child is at risk of harm in the father’s care, because of his inability to properly address the child’s medical, social and educational needs (despite her statement at trial that the child is safe with him).

i) She remained focused on the litigation ahead of the child’s interests. She used all of the loans and fundraising proceeds for the purpose of the litigation, instead of financially supporting the child. She was determined to obtain evidence that the child was not doing well in the father’s care.

j) She maintains a deep distrust of the father that is not supported by the evidence. When asked if she accepted the findings of the police, the hospital and the society that the abuse allegations against the father were not verified, she could only say (after much deliberation), “I don’t know”.

k) She does not fully appreciate how her deep mistrust of the father is adversely influencing her actions.

l) She continues to externalize blame for her limited contact with the child and takes limited responsibility for her actions – she is always misunderstood and not properly heard. She still maintains that the child’s teacher, the society and the TSAC workers fabricated evidence against her.

m) The mother still believes that she was suspended from the TSAC due to false statements, not her own conduct. She still is unable to draw the connection between her improved visits with the child since September, 2017 and the changes in her behaviour (focusing on the child and not collecting evidence against the father).

n) The mother continues to either breach orders or breach the spirit of court orders to obtain an advantage, as set out in paragraph 266 above.

o) The mother continues to engage at times in dishonest, manipulative and secretive behaviour to achieve her objectives, as set out in paragraph 265 above.

p) The mother continues to exercise poor judgment, as set out in paragraph 267 above.

23The paragraphs cited by Sherr, J. relating to the conduct of the Bankrupt that resulted in these findings state:

“[265] The evidence showed that the mother has at times been manipulative and dishonest. Justice Zisman set out many examples of this behaviour in her decisions. This behaviour has continued. None of the $30,000 the mother obtained from loans and fundraising proceeds went into her bank account. The mother said that the fundraising monies went directly to her lawyers. She said that she received two loans of $8,000 each from two friends that were given to her in cash. The mother admitted that she has not reported any of these loans or fundraising proceeds to legal aid or to social assistance. She did not report the fundraising proceeds to the Trustee in Bankruptcy. It was apparent that the monies were not put into her bank account (at the very least the loans) as they might have been discovered by legal aid, social assistance officials or the father. The mother was clearly trying to avoid paying the father any of the costs awarded by the court.

266The mother also still breaches court orders or breaches the spirit of court orders if it suits her interests. This makes her a poor candidate for a joint or parallel parenting order. She can’t be trusted. Justice Zisman found the mother in contempt of the final order and cited several other breaches of the final order. The mother has breached other court orders as follows:

a) She continued to examine the child at the TSAC for marks and bruises and photograph him from February to June, 2016, contrary to the final order.

b) She breached the final order (and the contempt sentence to comply with court orders) by discussing with medical professionals her view that the father had abused and intimidated her.

c) She failed to provide the father with copies of her employment contracts as required, despite multiple requests. She only provided her recent employment contract on the second day of trial after another court order was made to produce it.

d) She failed to provide timely financial disclosure as ordered, requiring a further production motion by the father.

e) She breached the order that the clinical notes of Dr. Mehta and Dr. DeCunha be delivered directly to the father’s lawyer by either the doctors or the mother’s counsel. Instead, the mother delivered these records. The father alleges that the mother removed clinical notes (including invoices) from the clinical notes she delivered to the lawyer.

f) The mother, despite multiple requests, did not deliver her job search list to the father until the second day of trial. Even then, the search was sparse and of little use.

g) The court directed that the mother’s trial affidavit be no more than 48 pages. The mother broke the spirit of that order, to obtain a litigation advantage, by using a small font.

h) The mother has not complied with three court costs orders, including two orders made after she filed for bankruptcy.

i) The mother has avoided payment of costs orders by not having the loans and fundraising proceeds deposited into her bank account.

267Both parents should have reasonably good judgment for a joint or parallel parenting order to work. The father’s judgment is reasonably good. However, the mother has shown alarmingly poor judgment. For example:

a) She breached the final order on multiple occasions.

b) She breached the contempt sentence to comply with all court orders.

c) She made false allegations of physical abuse, with intimations of sexual abuse against the father.

d) She condoned her family and friends making similar allegations against the father to the society.

e) She exposed the child to multiple interviews and intrusive examinations as a result of these false allegations.

f) She brought at least 8 people to the turnover of the child to the father on January 23, 2018, making this a more dramatic, tense and stressful experience for the child.

g) She engaged in conflict with the TSAC staff, resulting in her suspension from the program.

h) When she first attended the TSAC, the mother frequently discussed adult matters in front of the child, inspected him and made complaints about the father.

i) When Justice Zisman dismissed the mother’s motion to bring her father to the child’s 2017 graduation, she chose not to attend the graduation.

j) The mother has paid no child support. She hasn’t offered to pay for any services that might help the child, such as speech and language therapy. She has prioritized the litigation and being vindicated over the child’s interests.

k) The mother’s friends started three fundraising campaigns for her. The mother approved of these campaigns. In one campaign, the child’s picture and details of his medical history are on the internet. The mother claims that she had never seen this. The court finds her denial to be highly unlikely.

24Sherr, J. also found:

“[271] The court remains concerned that the mother has not fully addressed her issues that led to the custody transfer. She provided sparse evidence of compliance with the counseling requirement set out in Justice Zisman’s contempt decision. The court questions whether the counseling she obtained was intensive enough to address what appear to be deep-rooted issues of trust.

272The evidence is overwhelming that it is in the child’s best interests for the father to be granted sole custody. He has demonstrated that he is the parent best able to meet the child’s needs, make the best decisions for the child, protect him from conflict and promote his relationship with the other parent.”

25With respect to the failure of the Bankrupt to pay any child support or expenses, very relevant to the Bankruptcy Discharge, Sherr, J. stated:

“[243] This court is very critical of the mother’s failure to pay any child support to the father since the child came into his care.

244The mother claimed that she could not pay child support because she was on social assistance until March, 2018 and had no money. The mother spent the $30,000 she received from loans and fundraising proceeds during this time on the litigation – not a penny was paid for child support.

245Financially supporting your children is an important component of responsible parenting. The mother has failed the child in this respect and has prioritized her own needs over those of the child. See: Jama v. Mohamed, [2015] ONCJ 619; Cuevas v. Allen, 2017 ONCJ 562; Pinda v. Pankiw, 2018 BSSC 190.

312The court finds the father’s position on this issue to be generous, particularly since the mother has paid no child support. The father has solely paid for the child’s Kumon costs, before and after-school costs and extracurricular activity expenses, while significant costs orders have been ignored by the mother.

313The mother did not actively seek work after the custody transfer. In September, 2016 she enrolled part-time in a counseling and advocacy program at George Brown College. The mother did not complete the program and stopped going to school in April, 2017. The mother acknowledged that she took the program more out of interest. It did not really provide a career opportunity.

314The mother did not provide a job search list (despite court orders) until after the trial. It was sparse with few meaningful details of job searches. The court finds that the mother has been deliberately unemployed.

315The mother did not provide a reasonable excuse for her unemployment. If the father had sought a start date for support of February 1, 2016, she might have been able to justify a period of unemployment as she adjusted to the harsh reality of losing primary care of the child. The court would have also considered that she had been out of the work force and on public assistance for over four years. However, over one year later, these excuses are no longer viable.

316This leads to the issue of how much income to impute to the mother. The mother is an intelligent, capable person. She attended the general arts program at Centennial College. She started, but did not complete, a paramedic program. She has worked as a nanny, as a teacher’s assistant in a daycare, as a receptionist at an insurance company and as a corporate services assistant earning annual income of about $40,000.

317The court finds that the mother was capable of earning annual income of $25,000 from April 1, 2017 to the end of March, 2018.

318The guidelines table amount for one child at this income is $200 each month from April through November, 2017 and $199 each month from December, 2017 through March, 2018. This totals $2,396 for the period up to March 31, 2018.

319The court will permit the mother to pay the support owing at the rate of $100 each month, starting on June 1, 2018. However, if she is more than 30 days late in making any ongoing or arrears payment, the entire amount of arrears shall immediately become due and payable.”

26Sherr, J. also issued an Order limiting further litigation by requiring leave be granted, stating:

“[320] There has been far too much litigation between the parties. They have been litigating since 2012. They were provided with a 15-day trial by the court in August, 2015 and started new court proceedings within three months of the final decision. They were then provided with another eight-day trial. The litigation needs to stop. It has been relentless. It is harming the parties and will eventually harm the child.

321The court has the ability and an obligation to other court users to control its court process to ensure that the objectives of rule 2 are met. This is particularly the case when there has been a long court history involving multiple court attendances, multiple orders, two trials and multiple costs awards that have not been paid. See: Tiveron v. Collins, 2017 ONCA 462.

322This is an appropriate case to require the parties to seek leave of the court before they start any new court process. This does not mean that the parties are barred from court. What it means is that a judge and not the parties shall ultimately determine if there is sufficient merit to bring the case back to court.

323The process to seek leave to bring the case back to court will be set out in the order.

324To maintain consistency, I will case manage the case if it returns to court unless I am unavailable. Court staff should bring any Form 14B directly to me.

325The parties are forewarned that there will need to be a compelling issue affecting the child’s best interests before leave will be granted to return to court. They need to start learning other ways to resolve their disputes. The court strongly recommends that they use an alternate dispute process such as mediation before bringing a Form 14B motion.”

27Sherr, J. issued another very detailed Order. The portions of relevance to this Discharge Hearing, state:

“[326] All prior orders are to be terminated.

327A final order shall go on the following terms:

r) The mother shall pay the father the sum of $2,396 for her child support obligations accrued up to March 31, 2018. The mother may pay this amount at the rate of $100 each month, starting on June 1, 2018. However, if she is more than 30 days late in making any ongoing or arrears support payment, the entire amount of the arrears owing at that time shall immediately become due and payable.

s) The mother shall pay the father the guidelines table amount of child support for one child of $275 each month, starting on April 1, 2018, based on her annual income of $32,240.

t) Nothing in this order precludes the Family Responsibility Office from collecting arrears from any government source, such as HST or income tax returns, or any lottery or prize winnings.

u) A support deduction order shall issue.

v) The mother shall provide the father by June 30th each year, starting in 2019, with complete copies of her income tax return and notice of assessment.”

28The Parties could not agree on costs of the Trial, so Sherr J. also made a costs order in G.S.W. v. C.S., 2018 ONCJ 378 (the “Sherr, J. Costs Order”), where Sherr, J. found, after comparing the Offers to Settle of the parties with the successes achieved:

“[46] The father was awarded over $68,000 in costs for the trial that took place before Justice Roselyn Zisman in 2015. The parties were well aware going into this trial about the costs consequences if they were unsuccessful.

[47] The court considered the mother’s ability to pay the costs order. See: MacDonald v. Magel (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.). A party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs. See: Snih v. Snih, 2007 CanLII 20774 (Ont. SCJ pars. 7-13). In the case of Takis v. Takis, [2003] O.J. No. 4059 (S.C.J.), the court found that the respondent’s lack of income and assets, though a relevant consideration, could not be used as a shield in unnecessary litigation.

48The court adopts the comments of Justice Heather McGee in Mohr v. Sweeney, 2016 ONSC 3338, 2016, where she writes, “those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings.”

49Justice Robert Del Frate of the Ontario Superior Court of Justice awarded costs of $8,754 against the mother on April 5, 2016, when she unsuccessfully tried to stay Justice Zisman’s trial decision. The court has considered his comments in paragraph 6 of his costs decision where he writes about the mother: …What she fails to understand is that impecuniosity does not grant a litigant the right to unrestricted access to the courts. Such access has to be exercised responsibly and reasonably.

50The mother earns annual income of about $32,000 and has no assets. However, as noted in the trial decision, she has been able to access significant monies to fund extensive litigation. In this proceeding she was able to raise over $30,000 from friends and internet fundraising campaigns to pay for lawyers and experts. During this time she paid no child support.

51Taking into account these considerations, the mother shall pay the father’s costs fixed in the amount of $15,000, inclusive of fees, disbursements and HST.

52The court will permit the mother may pay the costs at the rate of $250 each month, starting on July 1, 2018. However, if she is more than 30 days late in making any child support or costs payment, the entire amount of costs then owing shall immediately become due and payable.

53The father asked that the costs be payable as support and enforced by the Family Responsibility Office. He points to the fact that the mother filed for bankruptcy almost immediately after receiving Justice Zisman’s costs decision for the 2015 trial and none of it was collected.

54In Sordi v. Sordi, 2011 ONCA 665 the court wrote at paragraph 25:

The court has considerable discretion over how to deal with a request that legal costs be designated as support for the purposes of enforcement by FRO, a designation that is complicated when, as here, in addition to support, a number of other issues are litigated. In this case the trial judge approached the problem one way - he did his best to identify the portion of the trial consumed by the support dispute, assigned a cost amount to it and ordered that amount designated as support. He may have chosen not to attempt to perform what is admittedly a somewhat arbitrary dissection of costs. But he cannot be faulted for doing what he did. The statute and case law support an approach of this nature: see Hatcher v. Hatcher, [2009] O.J. No. 3342, [2009] W.D.F.L. 5320, at paras. 30-36 (Ont. S.C.)

55While the court has sympathy for the father it will only make the order sought by him for the costs that were actually attributable to the support issues. The court estimates that roughly 15% of the time was spent on this issue. However, the father was completely successful on this issue, so the court finds that 20% of the overall costs award is attributable to support.

56A final order shall go on the following terms:

a) The mother shall pay the father costs of $15,000, inclusive of fees, disbursements and HST.

b) The mother may pay the costs at the rate of $250 each month, starting on July 1, 2018. However, if she is more than 30 days late in making any child support or costs payment, the entire amount of costs then owing shall immediately become due and payable.

c) The sum of $3,000 for the costs order shall be payable as support and shall be enforced by the Family Responsibility Office as an incident of support.

29It appears from Suteu’s evidence that the $15,000 costs Order issued by Sherr, J. above was in fact paid by the Bankrupt. However, these costs, incurred post-bankruptcy, would not be “claims provable in bankruptcy” that would be discharged by an Order of Discharge in Bankruptcy in any event, as would any other amounts ordered to be paid to Suteu after the date of Bankruptcy of March 30, 2016.

30I have reproduced the findings of Zisman, J., Del Frate, J. and Sherr, J. at length, as virtually the entirety of the proven claims in the Bankruptcy Estate consist of costs awards in favour of Suteau, the opposing creditor, granted against the Bankrupt in the family law proceedings days prior to her making an assignment into Bankruptcy.

31The factors considered by Zisman, J., Del Frate, J. and Sherr, J. in the determination of the costs awards are relevant to the characterization of the proven claim of Suteu, and are evidence relevant to the proving of facts under s.173 of the BIA.

THE BANKRUPTCY PROCEEDINGS

32The Bankrupt is a first time Bankrupt.

33The Bankrupt is now 46 years old, has remarried, and had a child with her new husband in 2022.

34The total proven claims in the Bankruptcy Estate are $85,398. The claims by Suteu are:

$68,552 – trial costs,

$4000 - assorted debts claimed to be owing to Suteu,

$3,500- Costs granted by Zisman, J. on temporary motions, and

$8,754- costs for appeal and security for costs before Del Frate, J., totalling $84,806 or 99.3% of the Proven Claims.

35The only other proven claim is from TD Canada Trust for $592.48 for a credit card.

36There were also unproven claims declared by the Bankrupt for National Student Loans for $10,000 and Child Tax Benefit overpayment of $400. There was also an unproven claim to Gelman Associates, her family law lawyers for $5000.

37No other Creditor is opposing the Discharge. The Trustee initially opposed the discharge, but withdrew the opposition.

38The Trustee has filed Eight (8) Supplementary s.170 Reports and an omnibus Report over the decade since the assignment into Bankruptcy (collectively the “s.170 Report”).

39No surplus income was found to be payable by the Bankrupt. To date the Trustee has collected a total of $2559.13 in the Estate, mostly from collection of HST refunds of $1633 and payments of $765 by the Bankrupt.

40As of July 17, 2025, the date of the 8th and Final Supplementary Report, the Trustee reports that there are no unresolved administrative issues in the Estate. As this is still a Summary Administration Bankruptcy, the fees of the Trustee are regulated by the Summary Administration Tariff.

41In the Original s.170 Report for this Discharge Hearing the asset values reported by the Bankrupt in the Statement of Affairs (the “Statement of Affairs”) as at March 30, 2016 totalled $8900, of which the realizable value was estimated at Zero, after provincial exemptions for household goods and a vehicle.

Pre-Trial Case Conferences and Attempts at Mediation by the Trustee

42As part of the Case Conferences before me prior to the Discharge Hearing, given the situation where the Opposing Creditor Suteu is effectively the only creditor in the Bankruptcy as a result of costs awards made in the family law proceedings, and because the Bankrupt and Suteu share a child with special needs together, I asked that the Trustee attempt to mediate between the parties, as an alternative to the discharge hearing, and the enforcement of jurisprudence binding on this Court relating to discharges arising from family law proceedings.

43I made the following endorsements at Case Conferences, advising the parties of the issues, the likely binding jurisprudence in Bobyk, Richardson and Matthews (as each is defined below), and the likely outcome of a discharge hearing.

January 31, 2023

I have discussed with the Parties and the Trustee, that as the Bankrupt and the Opposing Creditor are parents of a Child together, and the Opposing Creditor Ex-spouse of the Bankrupt is virtually the only creditor in this Bankruptcy, that a discharge hearing where the Jurisprudential strictures of Re Bobyk/Re Matthews/Re Richardson/ Kozak v Richter, particularly in the context were the debts owing to the Opposing Creditor are at least in part the result of Court costs awards in the context of contempt proceedings, would suggest an outcome that may be pre- destined, but that the effort of obtaining that discharge Order may be better spent on their Child than on professional fees.

I have asked Mr. Gillies to speak to his client and determine through the offices of Mr. Killen whether there can be a consensual resolution of this discharge in that context.

If consensus can be reached then Mr. Killen can put this discharge on the regular short discharge list.

If consensus cannot be reached, then the parties are to schedule another Case Conference before me and I will impose a schedule for the exchange of materials to serve as the examination in chief on the discharge to reduce the time required to hear this matter, which will NOT be a reopening of the Family Law Proceedings.

Mr. Suteu will not have to file additional case conference materials on the next case conference, unless he wishes to, which hopefully will not be necessary.

May 16, 2023

As I have noted previously the Bankrupt and the Opposing Creditor

are parents of a Child together, and the Opposing Creditor Ex-spouse of the Bankrupt is virtually the only creditor in this Bankruptcy.

I advised previously, and again today, that a discharge hearing is a summary hearing where the Jurisprudential strictures of Re Bobyk/Re Matthews/Re Richardson/ Kozak v Richter, particularly in the context were the debts owing to the Opposing Creditor are at least in part the result of Court costs awards in the context of contempt proceedings, prevent the re-litigating of the prior family law proceedings.

Mr. Killen made a valiant effort to try to mediate a consensual resolution of this discharge in that context, but was not successful.

…[scheduling and materials filing timetable]

March 14, 2024

Having reviewed the Materials provided by the Parties in response to my prior

endorsement, there needs to be further evidence from the Bankrupt in Affidavit Form, served on Mr. Suteu and the Trustee by May 1, 2024, (and filed with the Court and in Caselines) on the following issues raised in Mr. Suteu's materials and responded to in her October 30, 2023 Affidavit:

1. Details of the "Go-Fund me" funding that she obtained at some point either before or during the Bankruptcy, including:

-dates of receipts of funding from Go-Fund Me" or whatever other funding she Received

-dates of "loans from friends", the identity of the friends the amounts received and the identity of the recipients of those funds and what amounts, as well as details of any repayments of the "loans from friends"

-dates of payments of lawyers and others from those receipts, the amounts of the payments and the identity of the recipients.

2. Details of her alleged employment either before or after the Bankruptcy, including,

the dates of employment, the amounts received, the employer, and the Income and

Expense statements provided to the Trustee under s.68 of the BIA to enable the

Surplus Income Calculation.

3. Given the length of the Bankruptcy, evidence of tax compliance while Bankrupt, and evidence of any post-bankruptcy debt incurred.

I will need no further materials from Mr. Suteu.

As the Trustee will have to serve an additional Report in any event prior to the Hearing in accordance with s.170(2), I would ask that this Report have substantive comments on the Bankrupt's evidence on those issues set out above.

[scheduling and materials timetable for hearing]

April 14, 2025

Despite my repeated urging for the parties to resolve their differences for the sake of their child, and the Trustee's efforts at mediating, and after giving the parties more than ample time to do so, there has been no resolution, and a judicial intervention is necessary to allow the Trustee to complete the administration of the Bankruptcy Estate.

Discharge hearing is scheduled before me for 1 day at 10 AM on August 7, 2025, to proceed by Zoom.

All court materials required by my prior endorsement to be filed by the Bankrupt, and the opposing creditor to be filed through the Bankruptcy Portal and uploaded to Caselines by July 11th, 2025, if they have not already done so in accordance with my prior Orders, to enable the Trustee to have ample time to review and file the Trustee's Supplementary Report in accordance with the BIA and my prior endorsements.

44The Trustee reported on the outcome of these attempted mediations that I asked the Trustee to undertake between the Bankrupt and Suteu:

“6. At a case conference held on December 12th 2022 Associate Justice Ilchenko made an endorsement whereby the opposing creditor was to determine, through the trustee's office whether there can be a consensual resolution of the discharge. After 7 mediation meetings via Zoom telecommunication the parties could not reach an agreement on the discharge terms and the mediator, the trustee, terminated the mediation process and made application for a case conference per the court's direction.

7. In early January, 2024, Mr. Gillies approached the trustee requesting that one last attempt be made to reach a mediated agreement on discharge terms. After obtaining Mr. Suteu's consent to one more try the trustee arranged another Zoom conference for January 22ⁿᵈ, 2024. Unfortunately, though some movement took place, mutually agreeable terms could not be reached.”

45The Court thanks the Trustee for his efforts, but as was evident at the Discharge Hearing, the decade since the Bankruptcy has not softened the positions of the parties evident from the reasons of Zisman, J., Del Frate, J. and Sherr, J.

Bankrupt’s Evidence

46The Bankrupt swore an Affidavit dated July 28, 2023 (the “Bankrupt’s Affidavit”). That affidavit, despite stating “I set out the following not to re-litigate the family law proceeding but only to give this honourable court a sense of context in which that proceeding occurred” proceeds to then do so for 57 paragraphs and 495 pages with exhibits.

47Much of the evidence provided does attempt to recast and justify, in 2023, the Bankrupt’s conduct in the family law proceedings going back to 2012, and cast the activities of Suteu in a bad light, and the statements made in this affidavit contradict explicit opposite findings made by Zisman, J. Del Frate, J. and also by the Sherr, J.

48Most concerning is the following paragraph of the Bankrupt’s Affidavit:

“32. Justice Zisman since recused herself from hearing Claudiu’s summary judgment motion, and subsequent appearances were before Justice Sherr.”

49I have read every word of every Judgment and endorsement made by all of the Justices that previously dealt with the Bankrupt and Suteu, filed on this Discharge Hearing or that I could locate, and can find no endorsement from Zisman, J. where she legally found the need to recuse herself.

50In fact, the Sherr, J. Final Parenting Order it appears that the majority of the pre-trial motions for the Trial eventually heard by Sherr, J. starting April 15 2018 were heard by Zisman, J. up to and including April 5, 2018, 10 days before the start of the trial.

51Recusal of judges is a very serious issue, as recognized in Beard Winter LLP v. Shekhdar, 2016 ONCA 493(“Shekhdar”) where Doherty, J.A. stated on a motion to recuse him on an appeal:

“[10] It is important that justice be administered impartially. A judge must give careful consideration to any claim that he should disqualify himself on account of bias or a reasonable apprehension of bias. In my view, a judge is best advised to remove himself if there is any air of reality to a bias claim. That said, judges do the administration of justice a disservice by simply yielding to entirely unreasonable and unsubstantiated recusal demands. Litigants are not entitled to pick their judge. They are not entitled to effectively eliminate judges randomly assigned to their case by raising specious partiality claims against those judges. To step aside in the face of a specious bias claim is to give credence to a most objectionable tactic.

11In my view, a reasonably objective observer would give no weight to the claims of partiality advanced by the moving party in his 61-page document. The challenged decisions were made by a unanimous three-judge panel. To my knowledge, none were appealed. The moving party is certainly entitled to his own opinion about the adequacy of the reasons and the correctness of those decisions. However, the personal opinion of the losing litigant as to the quality and correctness of the court’s decision counts for little when assessing a partiality claim. It is understandable that losing litigants sometimes firmly believe that the court got it all wrong. To jump from that conclusion to allegations of racism and corruption is irresponsible and irrational.

12The moving party’s subjective opinion about the tone of my voice, my appearance and attentiveness during the proceedings cannot, standing alone, overcome the strong presumption in favour of judicial impartiality. His assessments are necessarily subjective. It is perhaps not surprising that a losing litigant takes offence with the tone or appearance of the judge delivering the decision against the losing litigant.

13A reasonable observer, in considering the allegations made by the moving party, would also take into account that this moving party has made similar allegations of serious misconduct against a great many people involved in the judicial process, including many judges. The moving party offers no evidence that any of the many allegations he has made have ever been made out to the satisfaction of anyone other than himself.

14There is no air of reality to the moving party’s allegations of bias. I did not recuse myself.”

52In an environment where a Judge is Case-Managing a matter, such as this one where it appears that Zisman, J. was case managing this matter days before the second trial, judicial bias allegations are dealt with Vermette, J. stated in Lee v. Magna International Inc., 2021 ONSC 6764

“[44] As stated, the test is an objective one. While it is not unusual that a losing litigant honestly and, from their perspective, reasonably perceives the proceedings as unfair and the judge as partial, to equate that personal perception of bias with a reasonable apprehension of bias is to incorrectly use a subjective and inherently partial perspective to decide whether a proceeding was conducted impartially: see Peart at para. 54. The personal opinion of the losing litigant as to the quality and correctness of the court’s decision counts for little when assessing a partiality claim: see Beard Winter LLP v. Shekhdar, 2016 ONCA 493 at para. 11 (“Beard Winter LLP”).

45An allegation of a reasonable apprehension of bias must overcome the strong presumption of judicial impartiality. That presumption reflects the long and strong history of judicial independence and integrity in this country: see Peart at para. 39 and Kelly v. Palazzo, 2008 ONCA 82 at para. 20 (“Kelly”). Reasonable apprehension of bias claims are fact-driven. The party who makes the allegation must establish a reasonable apprehension of bias on the balance of probabilities. See Peart at para. 40. Cogent evidence is required to make out an allegation of judicial bias. Suspicion is not enough. See Marchand at para. 131.

46It takes much more than a demonstration of judicial impatience or even downright rudeness to dispel the strong presumption of impartiality. The moving party’s subjective opinion about the tone of the judge’s voice, or the judge’s appearance and attentiveness during the proceedings cannot, standing alone, overcome the strong presumption in favour of judicial impartiality. Baseless allegations of bias or of a reasonable apprehension of bias founded on a perceived slight or discourtesy that occurred during a proceeding do a disservice to the administration of justice. See Kelly at para. 21 and Beard Winter LLP at para. 12.

47In order to maintain the integrity of the court’s authority, allegations of bias must, as a general rule, be brought forward as soon as it is reasonably possible to do so: see R. v. Curragh Inc., 1997 CanLII 381 (SCC), [1997] 1 S.C.R. 537 at para. 11.

48The mere making of a complaint to the Canadian Judicial Council, by itself, does not amount to cogent evidence sufficient to displace the presumption of impartiality: see Aganeh v. Aganeh, 2017 ONSC 5733 at para. 36. In Doncaster v. Chignecto-Central Regional School Board, 2013 NSCA 59 at para. 13, the Nova Scotia Court of Appeal stated the following on this issue:

Obviously the mere filing of a complaint with the Canadian Judicial Council does not pull the trigger for recusal. If that were the case, one could simply file a complaint and “pick off” a judge, one by one until the complainant either found one to his liking (“judge shopping”) or there were no judges left to hear the case. Such a result is neither the law nor in the public interest.

See also Jayaraj v. Metcap Living Management Inc., 2021 ONSC 503 at para. 9, and R. v. J.L.A., 2009 ABCA 344 at para. 30. Thus, no inference is drawn that a judicial officer will treat a litigant unfairly or in a biased manner because the litigant has objected to the judicial officer’s conduct: see Peoples Trust Company v. Atas, 2018 ONSC 58 at para. 172.

49As stated by Doherty J.A. in Beard Winter LLP at para. 10:

It is important that justice be administered impartially. A judge must give careful consideration to any claim that he should disqualify himself on account of bias or a reasonable apprehension of bias. In my view, a judge is best advised to remove himself if there is any air of reality to a bias claim. That said, judges do the administration of justice a disservice by simply yielding to entirely unreasonable and unsubstantiated recusal demands. Litigants are not entitled to pick their judge. They are not entitled to effectively eliminate judges randomly assigned to their case by raising specious partiality claims against those judges. To step aside in the face of a specious bias claim is to give credence to a most objectionable tactic.

c. Purpose of case management

50Before applying the principles set out above to this case, it is important to factor into the analysis the fact that this case was assigned to me for case management pursuant to Rule 77 of the Rules of Civil Procedure. One of the purposes of case management under Rule 77 and the broad powers given to judges under Rule 50.13(6) with respect to case conferences is “to prevent parties from taking technical positions that may have all kinds of good tactical reasons but which do not advance the resolution of the merits, are unhelpful, costly for the parties, or a waste of judicial resources”: see Apotex Inc. v Eli Lilly and Company, 2021 ONSC 3448 at para. 9.

51In CN v. Holmes, 2011 ONSC 4837 at para. 59, Justice Brown (as he then was) made some comments regarding the reasonable and proper expectations of parties about the case management of cases on the Commercial List. The same considerations apply to the case management of cases under Rule 77 of the Rules of Civil Procedure. Justice Brown stated the following:

I wish to make one final comment concerning the reasonable and proper expectations of parties about the case management of these proceedings in light of section 33 of the Commercial List Practice Direction which enunciates the policy that one judge should hear the whole of a matter on the Commercial List. In Abrams v. Abrams I offered the following observations about how case management inevitably operates under such a system:

It is apparent that Mr. Abrams has challenged my jurisdiction to make such directions because they do not accord with the way he wishes to litigate this proceeding. Judicial management of high-conflict cases, such as this one, involves, at times, a certain amount of “judicial squeezing” in order to advance the case to a hearing in a timely and proportionate manner. Not all parties take kindly to such squeezing. But, it is worth recalling the comments made by Master Haberman in her decision in Mother of God Church v. Balolis where one party sought the recusal of a case management master with whose directions it did not agree:

It is understood that, in a case managed environment, there will be times when the master forms an impression about how one party or the other has been conducting itself as a result of this repeated exposure. If the view is unfavourable, that, in and of itself, does not give rise to a basis for recusal. One must still meet the test that has been articulated by the Supreme Court of Canada. Similarly, if the master’s repeated dealings with the parties and the issues gives rise to a sense that there is more merit to one side than the other, that, too, will not suffice to prevent further handling of the case. That is precisely what case management was intended to do - create an expeditious and cost effective way to resolve all aspects of the disputes that come before the courts, by allowing judges/masters to become familiar with the case through repeated exposure. [Emphasis added.]

In other words, some amount of judicial squeezing accompanies litigation management. If some pinching occurs, that does not signal a lack of jurisdiction or bias, but simply a necessary degree of judicial hammering to bang a case back into proper procedural shape. The recent adoption of the principle of proportionality signals that the sound of the judicial hammer will only get louder.

52It has been recognized that, because of the nature of case management, the test for reasonable apprehension of bias is more stringent in a case-managed environment. When addressing reasonable apprehension of bias in the case management context, the question is whether the judicial officer has decided the matter to the extent that he or she is no longer capable of being persuaded by the evidence to be filed (if any) and legal arguments to be raised in subsequent motions. Whether there is a reasonable apprehension of bias must be assessed from the point of view of a person who is informed and has an understanding of the nature and rules of case management, as well as the public interests that it serves: see Cosentino v. Dominaco Developments Inc., 2018 ONSC 4092 at paras. 46-51, 58; Control & Metering Ltd. v. Karpowicz (1994), 17 O.R. (3d) 431, 1994 CanLII 7233 (Gen. Div.); and Fatahi-Ghandehari v. Wilson, 2019 ONSC 3584 at paras. 12-14.

53This sworn statement by the Bankrupt alleging that Zisman, J. “recused herself”, while providing no evidence whatsoever of a recusal motion being brought, and without providing any endorsement by Zisman, J. ACTUALLY recusing herself, was made 5 years AFTER Sherr, J. stated the following in the Sherr, J. Final Parenting Order:

“[7] At the trial management conference the court took note of the excessive material filed by the parties on the motions to change.3 Significant portions of the material filed appeared to be an attempt to retry the trial that had taken place before Justice Zisman. Much of the material was repetitive, immaterial and clearly inadmissible.

12The father complied with the page limit for his trial affidavit. The mother breached the spirit of the order by filing a trial affidavit with small font. This was indicative of a pattern of behaviour by the mother that started in the case before Justice Zisman and continued in this case. This rule stretching was completely unnecessary as large portions of the mother’s affidavit were repetitive and many paragraphs were struck, having been found inadmissible.9

62This decision by Justice Zisman was clearly meant as a wake-up call to the mother. Unfortunately, instead of listening to the messages Justice Zisman was giving her, the mother chose to reject them and escalated her negative behaviour.

99Except for my findings about Dr. Flanders, set out in part 13.2 below, nothing in the evidence led at trial caused the court to differ from any of Justice Zisman’s findings of fact in her reasons for decision dated January 20, 2016, or her assessment of what needed to be done for the child at that time.18

261The mother presented as a generally mistrustful person. She feels that Justice Zisman is biased against her.

290However, the mother still has a long way to go to obtain a sufficient level of insight into her behaviour that would make the court comfortable with making an order for the extensive access requested by her. Her level of insight is very much a work in progress. For instance:

a) She still rejects most of Justice Zisman’s findings and has reported to professionals that she feels the judge was biased and rubber-stamped the father’s position.”

54As the analysis above indicates, allegations of bias and requests for recusal are taken with the utmost in seriousness by the Court, and are always responded to by the Court with Reasons. The fact that the Bankrupt has provided no details and no such reasons in any of the Bankrupt’s affidavits compels me to find that this statement in the Bankrupt’s Affidavit is in its totality false.

55Applying the test by Doherty, J.A. in Shekhdar, if making unfounded allegations of bias with no evidence to try to obtain the recusal of a judge is “…a most objectionable tactic” then implying that Zisman, J. “recused herself” as a result of bias, when there is not a scintilla of evidence that any such recusal occurred, is an even more “…objectionable tactic”.

56The only real issue relating to the Bankruptcy in the Bankrupt’s Affidavit was the Bankrupt challenging the claim by Suteu in the proof of claim to $4000 in expenses, out of Suteu’s total claim of $84,806, stating:

“37. My own recollection is that he did not give me either $4,000.00 or $6,000.00. He did give me some money to help out during my pregnancy, I recall receiving $400.00. In my Reply I acknowledged receiving $4,000.00 but that was in error.”

57Whatever the truth of this expense claim, and the Bankrupt first admitting in her Reply of the veracity of the claim, then resiling from that admission a decade and a half later, there is no evidence whatsoever that:

i) The Bankrupt ever obtained an Order withdrawing her admission in her pleadings before Bankruptcy;

ii) The Trustee disallowed the Proof of Claim of Suteu in whole or in part to exclude that claim in the 10 years of administration of the Bankruptcy estate;

iii) An Order expunging this $4000 amount has been obtained.

58In addition, despite the pages spent in the Bankrupt’s affidavit evidence and Factum devoted to this $4000 issue, there is no answer to the other $81,000 found to be owing by the Bankrupt to Suteu by the pre-bankruptcy costs orders of Zisman, J. and Del Frate, J.

59Also attached to the Bankrupt’s Affidavit for this hearing were hundreds of pages of pamphlets and experts reports and affidavits of experts, that both Zisman, J. and Sherr, J. appear to have had issues with in the combined 23 days of the two Trials heard by them, and also contains offers to settle that were made in 2015 that may be covered by settlement privilege.

60The Bankrupt then served a 29 paragraph, 69 page Reply Affidavit sworn October 30, 2023 (the “Bankrupt’s Reply Affidavit”) replying to the September 29, 2023 Suteu Affidavit (as defined below) with the Bankrupt beginning and closing with:

“3. I fear that if I don't respond his allegations will be accepted on their face as true, but at the same time fear that when I do I will be positioned as re-engaging before this Honourable Court the matters that were before the family court. I well appreciate that the discharge hearing is not the forum to re-litigate the family law proceeding.

and

28. I do not know how these allegations by Mr. Suteu are relevant to the issues before this Honourable Court and I respond to these paragraphs very reluctantly - I fear that if I don't respond his allegations will be accepted on their face as true, but at the same time fear that when I do I will be positioned as re-engaging before this Honourable Court the matters that were before the family court. I well appreciate that the discharge hearing is not the forum to re-litigate the family law proceeding.”

61The other 25 paragraphs sandwiched between those two paragraphs, again:

1. re-litigated the family law dispute, and made statements that contradicted the explicit findings of Zisman, J., Del Frate, J. and Sherr, J.;

2. included further allegations against Suteu that post-dated the Sherr, J. Final Parenting Reasons, despite prior warnings from Zisman, J., Del Frate, J. and Sherr, J. against the making of unfounded allegations against Suteu, and included details of further attempts at involving the Children’s Aid Society;

3. published private email exchanges with teachers;

4. took quotes out of context from Zisman, J. Joint Parenting Reasons without advising that Zisman, J. granted full custody to Suteu in the Zisman, J. Contempt Reasons and Zisman, J. Contempt Sentencing Reasons, and why she did so, inter alia finding the Bankrupt in contempt of her prior Orders;

5. provided further minutia of who asked for what adjournments of various hearings going back 10 years;

6. attempted to, yet again, relitigate findings made by both Zisman, J. and Sherr, J. relating to the autism diagnosis for Dean and the reaction of Suteu to it, at variance to actual findings of fact repeatedly made to the contrary by both Judges.

62Of actual relevance to the Discharge Hearing were the following paragraphs:

“19. Paragraphs 212 - 220 - I did not raise funds between "loans and online fundraising". I did raise some money through GoFundMe, an online fundraising platform. The balance of the legal expenses were paid with what money I had and by friends directly. Respectfully, Mr. Suteu's comments are speculative and conjecture to support his apparent theory that I somehow had - or have- hidden assets or income. I did not and I do not.

20. Paragraphs 221 - 225. I have fully disclosed my financial circumstances to my Trustee Mr. Killen. My counsel explained to Mr. Suteu the Trustee's role and obligations to him, to me and to the Court including those related to disclosure. Now shown to me and marked as Exhibit F to this my affidavit is a true copy of my counsel's letter to Mr. Suteu dated January 16, 2018 in which Mr. Suteu was informed of the foregoing.

21. Mr. Killen has explained to me my obligations to him including my disclosure obligations to him and the Court. Mr. Suteu has been told all of this and for a time had the benefit of legal advice from Ms. Holder, an experienced insolvency lawyer. Notwithstanding, he continues to speculate that I had, or have, access to hidden funds that I have not disclosed to my Trustee in breach of my obligations to my Trustee and insists that I make disclosure directly to him.

22. I have earlier provided to my Trustee and Income and Expense Statement and understand that I am required to provide prior to this matter returning to Court an updated Income and Expense statement to my Trustee and I will do so.”

63On the topic of the crowdfunding and loans from friends, Sherr, J. made the following explicit findings of fact in the Sherr, J. Final Parenting Order:

“[216] The father offered to have visits supervised by a private for-pay supervised access program. The mother rejected this suggestion and as a result had no access until the visits began again in September, 2017 at the TSAC. The mother did not want to pay for the visits. However, she was able to obtain over $30,000 between loans from friends and internet fundraising campaigns run on her behalf during this period to pay for lawyers and experts. She could and should have put some of that money into seeing her child.

244The mother claimed that she could not pay child support because she was on social assistance until March, 2018 and had no money. The mother spent the $30,000 she received from loans and fundraising proceeds during this time on the litigation – not a penny was paid for child support.

265The evidence showed that the mother has at times been manipulative and dishonest. Justice Zisman set out many examples of this behaviour in her decisions. This behaviour has continued. None of the $30,000 the mother obtained from loans and fundraising proceeds went into her bank account. The mother said that the fundraising monies went directly to her lawyers. She said that she received two loans of $8,000 each from two friends that were given to her in cash. The mother admitted that she has not reported any of these loans or fundraising proceeds to legal aid or to social assistance.38 She did not report the fundraising proceeds to the Trustee in Bankruptcy. It was apparent that the monies were not put into her bank account (at the very least the loans) as they might have been discovered by legal aid, social assistance officials or the father. The mother was clearly trying to avoid paying the father any of the costs awarded by the court.

38 The mother deposed that she was on social assistance up until March, 2018.

266The mother also still breaches court orders or breaches the spirit of court orders if it suits her interests. This makes her a poor candidate for a joint or parallel parenting order. She can’t be trusted. Justice Zisman found the mother in contempt of the final order and cited several other breaches of the final order.39 The mother has breached other court orders as follows:

h) The mother has not complied with three court costs orders, including two orders made after she filed for bankruptcy.

i) The mother has avoided payment of costs orders by not having the loans and fundraising proceeds deposited into her bank account.

267Both parents should have reasonably good judgment for a joint or parallel parenting order to work. The father’s judgment is reasonably good. However, the mother has shown alarmingly poor judgment. For example:

j) The mother has paid no child support. She hasn’t offered to pay for any services that might help the child, such as speech and language therapy. She has prioritized the litigation and being vindicated over the child’s interests.

k) The mother’s friends started three fundraising campaigns for her. The mother approved of these campaigns. In one campaign, the child’s picture and details of his medical history are on the internet. The mother claims that she had never seen this. The court finds her denial to be highly unlikely.42

42 Not surprisingly, the internet campaigns contain a narrative very critical of the father, and very different from Justice Zisman’s trial findings.

290However, the mother still has a long way to go to obtain a sufficient level of insight into her behaviour that would make the court comfortable with making an order for the extensive access requested by her. Her level of insight is very much a work in progress. For instance:

i) She remained focused on the litigation ahead of the child’s interests. She used all of the loans and fundraising proceeds for the purpose of the litigation, instead of financially supporting the child. She was determined to obtain evidence that the child was not doing well in the father’s care.”

And the Sherr, J. Costs Order:

“[50] The mother earns annual income of about $32,000 and has no assets. However, as noted in the trial decision, she has been able to access significant monies to fund extensive litigation. In this proceeding she was able to raise over $30,000 from friends and internet fundraising campaigns to pay for lawyers and experts. During this time she paid no child support.”

64These findings by Sherr, J., contradict in their entirety the statements made in paragraph 19 of the Bankrupt’s Reply Affidavit made 5 years later regarding the loans from friends and fundraising.

65Also not explained in paragraphs 19-22 of the Bankrupt’s Reply Affidavit is where the Bankrupt obtained the funds to pay the Sherr, J. Costs Award of $15,000, while Bankrupt, if she “did not and does not” have hidden assets or income.

66As a result of these statements made in the tennis match of Affidavits in 2023 between the Bankrupt and Suteu:

• attempting to recast the Family Law litigation going back at least a decade at that point; and

• my alarm that the Bankrupt in sworn testimony in the 2023 Reply Affidavit appeared to contradict findings of fact made by Sherr, J. 5 years previously; while simultaneously

• appearing to admit under oath to breaches of her duties as a Bankrupt to advise her Trustee of significant payments made to her while Bankrupt, and the misuse of those funds that could constitute after-acquired property owned by the Trustee; and

• that some of this funding may have been received by the Bankrupt while also receiving income-limited social assistance from Ontario Works, as found by Zisman, J. and Del Frate, J.

in my March 14, 2024 Case Conference endorsement I required:

“1) Details of the "Go-Fund me" funding that she obtained at some point either before or during the Bankruptcy, including:

-dates of receipts of funding from Go-Fund Me" or whatever other funding she Received

-dates of "loans from friends", the identity of the friends the amounts received and the identity of the recipients of those funds and what amounts, as well as details of any repayments of the "loans from friends"

-dates of payments of lawyers and others from those receipts, the amounts of the payments and the identity of the recipients.

2. Details of her alleged employment either before or after the Bankruptcy, including, the dates of employment, the amounts received, the employer, and the Income and Expense statements provided to the Trustee under s.68 of the BIA to enable the Surplus Income Calculation.

3. Given the length of the Bankruptcy, evidence of tax compliance while Bankrupt, and evidence of any post-bankruptcy debt incurred.”

67In response to these Orders the Bankrupt swore a 107 page Affidavit dated April 30, 2024 relating to fundraising, income, tax compliance and post-Bankruptcy debt (the “Bankrupt’s Income Affidavit”) the relevant portions of which state:

“Fundraising and Donations

2. My friends and others organized fundraising campaigns to assist with my legal fees. I do not have all of the details of their efforts. One campaign was organized by Suzanne Fish and others in January 2017. It was called “Jump for Gen” and it raised approximately $11,000.00. I was not involved in that fundraising. Now shown to me and marked as Exhibit A to this my affidavit is a screenshot of the first and last frame of a YouTube video about Jump for Gen, available at https://youtu.be/C3Zd6XpbaeU. My understanding from Ms. Fish is that donors raised funds from other sponsors to jump in the lake [sic] and that the sponsor would make the donation through fundraising sites like gofundme or CanadaHelps.

3. Another campaign was organized by Tanya Sakharov. This campaign raised $6,865.00 and closed in March, 2016. Now shown to me and marked as Exhibit B to this my affidavit is a true copy of Tanya’s email to me, dated March 14, 2016 in which the fundraising platform Chuffed.org advised of the results.

Loans from Friends

4. I did not receive any loans from friends.

Gifts

5. My friend Mary Laframboise contributed approximately $35.000.00 towards my legal fees charged by the Gelman & Associates law firm. This was a gift from Mary. Now shown to me and marked as Exhibit C to this my affidavit is a true copy of Mary’s email dated April 29, 2024 to my lawyer Stephen Gillies in this respect.

Payments to Lawyers

6. Now shown to me and marked as Exhibit D to this my affidavit is a true copy of a letter dated April 14, 2016 from Gelman & Associates confirming that $34,737.50 was paid to that firm.

7. Now shown to me and marked as Exhibit E to this my affidavit is a letter dated April 30,2024 from Natalie Kuyumcu confirming that her firm was paid $31,738.03. Ms. Kuyumcu also represented me during a portion the custody and access matter with respect to our son Dean.

8. Stephen Gillies also represented me on the custody and access matter including Mr. Suteu’s motion to change. Mr. Gillies provided his services pro bono.

9. MacDonald & Partners represented me on a motion to stay the OCL order pending

appeal. I understand from Susan Fish that the funds raised by her and her friends were

used to pay that firm’s retainer. Now shown to me and marked as Exhibit F to this my affidavit is a true copy of that firm’s invoice dated October 1, 2016. Now shown to me and marked as Exhibit G to this my affidavit is a true copy of an email dated October 11, 2016 from Ms. Fish to Mr. Gary Joseph of that firm regarding the discount provided by Mr. Joseph and regarding Ms. Fish’s fundraising efforts.

10. MacDonald and Partners subsequently sued in the Toronto Small Claims Court for the outstanding balance of their account in the amount of $6,639.52. Now shown to me and marked as Exhibit H to this my affidavit is a true copy of the invoice from MacDonald and Partners dated December 1, 2026 evidencing this amount. That claim was subsequently settled on payment of $75.00. Now shown to me and marked as Exhibit Ito this my affidavit is a true copy of the Acknowledgment and Receipt dated April 8, 2019 evidencing that settlement and payment.

11. Trevor Smith represented me on appeal. Now shown to me and marked as Exhibit J to this my affidavit are true copies of Mr. Smith’s invoices that I could find. I did provide Mr. Smith with a small retainer but do not remember the exact amount, nor do I have a record of the amount. I do recall that the retainer was exhausted prior to the first appearance and that Mr. Smith and a younger lawyer Ashley Jacobs continued on a pro bono basis.

My Employment History Before and After My Assignment Into Bankruptcy

12. Prior to my bankruptcy and during the OCL proceeding I was in receipt of assistance from the Ontario Works Program.

13. On March 12, 2018 I was successful in obtaining full‐time employment with the ABC Academy daycare as an Early Childhood Assistant. Now shown to me and marked as Exhibit K to this my affidavit is a letter of reference dated March 23, 2018 from the daycare, evidencing the start oy [sic] my employment there.

14. On March 31, 2020 I was laid off from the ABC Daycare during the pandemic. Now shown to me and marked as Exhibit L to this my affidavit is a true copy of my lay‐off notice dated March 17, 2020.

15. On August 31, 2020 I was successful in obtaining employment as an administrative assistant with the Bob Rumball Centre for the Deaf. My employment continued until I went on pregnancy leave for my second child. I experienced significant complications during that pregnancy and was required to be on medical leave beginning on or about August 1, 2021. Tragically, my baby was stillborn full term in September 2021.

16. My husband and I are now blessed with a wonderful 17 month old daughter Ava. During my pregnancy I was required to be on medical leave beginning August 2021 because of the complications experienced during my earlier pregnancy and my then current pregnancy. Now shown to me and marked as Exhibit M to this my affidavit is a copy of a medical note dated July 22, 2021 from the Special Pregnancy program at Mount Sinai Hospital with respect to that medical leave. After Ava was born in November 2022 I went on extended parental leave which ended in February of this year.”

68This Affidavit also attached:

1. the Income and expense statement for August 2022;

2. Notices of Assessment for 2017 to 2022

3. Tax Return for 2023.

69Paragraph 21 of the Bankrupt’s Income Affidavit states, that as at April 30, 2024:

“21. I have not incurred any post‐bankruptcy debts.”

70What is disturbing about this additional evidence is that, on the evidence before the Court at the 2018 Trial, including the Bankrupt’s sworn trial testimony then, Sherr, J. made the findings of fact that:

“None of the $30,000 the mother obtained from loans and fundraising proceeds went into her bank account. The mother said that the fundraising monies went directly to her lawyers. She said that she received two loans of $8,000 each from two friends that were given to her in cash. The mother admitted that she has not reported any of these loans or fundraising proceeds to legal aid or to social assistance”

71Now, 6 years later, in this sworn testimony in the Bankrupt’s Income Affidavit:

1. “4. I did not receive any loans from friends.”

2. Mary Laframboise gifted to the Bankrupt $35,000 that the Bankrupt then used to pay lawyers, herself, directly, supported by the letters attached as exhibits from Mary Laframboise and Gelman and Associates.

3. The fundraising campaigns totalled an additional approx. $17,865;

4. McDonald & Partners sued her for unpaid legal bills incurred while a Bankrupt and settled for $75.00

72Not in the actual Bankrupt’s Income Affidavit, but in the Exhibits C and D attached to it, are statements that suggest the payments were not made “directly” by friends to lawyers as found by Sherr, J. based on the Bankrupt’s then-testimony, but that the $35,000 in moneys paid by Laframboise were paid to the Bankrupt directly, who paid it to lawyers, but in the 2014-2015 period, possible either before Bankruptcy or after, or both. The letter from Gelman says “Ms. Webster paid these fees starting in August, 2014 through July 2015” but makes no mention of Laframboise.

73Another lawyer, Natalie Kuyumcu states in her April 30 2024 letter at Exhibit E that her representation was for the period post-bankruptcy beginning in the summer of 2016 and ending the summer of 2017, prior to the trial before Sherr, J. and:

“My legal fees, disbursements and HST were paid with funds from third parties or raised by third parties who had compassionately undertaken fundraising efforts to enable the client to take legal steps which the client strongly believed were necessary to protect her child and serve her child’s best interests. The total fees, disbursements and HST collected in the client’s matter were $31,738.03.”

74So that amount may be additional to, and not part of, the Laframboise $35,000 that Laframboise says was paid to Gelman and Associates pre or post Bankruptcy.

75I note that Del Frate, J. assessed the testimony of the same Mary Laframboise:

“[21] The evidence of Miss Laframboise is also suspect in view of the evidence that she gave at trial and the findings of fact of her testimony by Zisman J.”

76So from this sworn testimony the Bankrupt received both post-bankruptcy, and now possibly pre-bankruptcy, gifts and fundraising likely in excess of $47,000, exceeding the $30,000 found by Sherr, J. that Bankrupt now says consisted entirely of “gifts” and fundraising, with no loans from friends, despite her prior testimony.

77It is also possible that the moneys paid by Laframboise to the Bankrupt pre-bankruptcy, were also in addition to the $30,000 in post Bankruptcy amounts received by the Bankrupt from crowdfunding and loans from friends as found by Sherr, J.

78If Natalie Kuyumcu is correct, then the Bankrupt has failed to account where the differential of the at least $31,738.03 paid to her came from as she only admits to receiving crowdfunding in the Bankrupt’s Income Affidavit of approx. $17,865. Where did the rest of the funding come from, that I ordered her to disclose in detail, twice?

79McDonald & Partners appeared to be paid out of the $11,000 raised by Suzanne Fish, based on Exhibit G, but if that was the case where did the money come from to pay Natalie Kuyumcu? The Bankrupt’s numbers in the Bankrupt’s Income Affidavit with respect to the accuracy of the funding that I ordered her to disclose, twice, cannot be correct.

80The Bankrupt’s testimony on this issue before Sherr, J. in 2018 upon which Sherr, J. made many findings of fact and law, and awarded costs against the Bankrupt, cannot be reconciled with the Bankrupt’s sworn testimony on this topic in the Bankrupt’s Income Affidavit sworn in 2024.

81Either the Bankrupt’s testimony to Sherr, J. was false, or her testimony in the Bankrupt’s Income Affidavit is false.

82It should also be noted that throughout the period the Bankrupt was receiving this crowdfunding, gifts and “loans from friends” as found by Sherr, J., the Bankrupt was receiving Ontario Works assistance, which has strict requirements for the accurate declaration of income received below certain thresholds to maintain eligibility.

83In the Bankrupt’s Supplementary Affidavit sworn July 28, 2025 (the “Bankrupt’s Supplementary Affidavit”) the Bankrupt:

1. attached her 2024 tax return and notice of assessment;

2. Advised of her re-marriage in 2021 and the birth of her child in 2022 and prior tragedy with her first child with her new husband;

3. An income and expense summary for the household indicating that her only current income is approx. $400 per month for Canada Child Benefit;

4. That she uses two credit cards and attaches an Equifax Credit Report.

84The 2024 Tax return, but not in this affidavit, reveals that the Bankrupt earned total income of $33,158 in 2021 composed of EI maternity and parental benefits of $11,000, employment earnings of $20,658 and other income of $1500. In 2022 the employment income fell to $11,405, EI maternity and parental benefits stayed the same and total income fell to $24,641. In 2023 there was no employment income and the only income was EI maternity and parental benefits of $9908, with no reported support payment income.

85The June 2025 Income and expense statement shows a total family income for a family of 4 of $4566 with expenses of $4494, none of which appear remarkable.

86The Equifax Credit Report dated July 14, 2025 is in only the Bankrupt’s current married name “Genevieve Maurano”, and not in her prior names “Genevieve Alexandra Katherine Sang Webster” and “Genevieve Sang Webster”.

87The Report does not reveal any past or current Bankruptcies, Judgments, or collection activity, possibly due to the 10 year + history of this Bankruptcy. There are no credit inquiries at all listed under this Report under this name, whether for the current credit cards or otherwise.

88There is a Canadian Tire Bank credit card opened in September 2017 that had a reported balance as at July 2025 of $20,181 with a credit limit of $20,000 that either the Bankrupt is making minimum payments of $364 on, although there is a “actual payment” for that month of $1,757. The payment responsibility is described as “Individual” so this is not a joint account with her husband.

89The other credit card is from TD with a credit limit of $500 and a balance of $413. This credit card was obtained in October 2023.

90Both credit cards had been obtained prior to the date that the Bankrupt’s Income Affidavit was sworn, making the following statement in that prior affidavit false:

“21. I have not incurred any post‐bankruptcy debts.”

Evidence of Suteu

91The Income and Expense statement lists “Spouses Debt payments” of $300, but is unclear whether that refers to these cards, or cards held by her husband on his own.

92Suteu filed a Notice of Opposition to Discharge dated December 17, 2016. It is not the conventional form of opposition as it does not specify the specific s.173 Facts, but the grounds of opposition can be discerned from the wording of the Notice:

“1. The bankrupt's assets are of a value less than 50 cents on the dollar of her unsecured liabilities.

2. The bankrupt's conduct, before and after filing for bankruptcy, during the extensive court proceedings in which we have been involved in family court (including a 15 days trial). We have a child together; he is 5 years old now and has a few special needs

3. The bankrupt's behavior caused significant damage to my financial situation. This damage has a direct impact on the child as I am sole custodia1 parent, the child lives with me fu.11 time and I provide for him alone.

4. The bankrupt has failed to comply with many orders of the Court. The Court found the bankrupt in contempt of various orders.

5. The bankrupt has put me to unnecessary expense by frivolous or vexatious defense to my actjons properly brought against her. She counterattacked with a number of legal actions without merits which were dismissed by the Court.

6. The bankrupt has, less than three months before the date of bankruptcy, brought a frivolous or vexatious action against me. On January 12, 2016 the bankrupt asked the Court to change the trial decision. The Court dismissed her request.

7.. The assignment in bankruptcy was filed days following, and for the purpose of frustrating the Cost decision of Honorable Justice Zisman dated March 21, 2016. As well to frustrate the pending Cost decision of Honorable Justice Del Prate, released on April 05, 2016 and Cost Endorsement of Honorable Justice Zism.an released on April 27, 2016. The bankrupt did not pay a penny on. account of these costs.

8, The bankrupt did not make a viable proposal.

9. The overwhelming majority of the bankrupt's liabilities declared in her statement of affairs are related to our legal case in family court in which the bankrupt's behavior played a significant role

10. The bankrupt is able and manages to find sources to fund her legal proceedings while she is in receipt of Ontario Works and deems herself impecunious.

11. Since the assignment for bankruptcy, the bankrupt resisted to two opportunities to settle our case in family Court, she changed lawyers three times and is presently asking the Court to allow additional litigation (and precisely a new multiple days trial) that would cost 10's of thousands of dollars. At the same time she continues to breach Court Orders.

12. The bankrupt did not pay a penny on the account of child support or other extra expenses related to the child since the custody was reversed and the child moved to me in January 2016.

13. As of this date I am nearly 100% proven creditor in this bankruptcy.”

93Suteu filed a 239 paragraph, 103 page (with exhibits) Affidavit sworn September 29, 2023 (the “Suteu Affidavit”) that essentially provided a chronology of the Family Law Proceedings and summarized the findings of Zisman, J., Del Frate, J. and Sherr, J. As those reasons and Orders are determinative on their own, they do not need to be introduced through the Affidavit, and I will use the actual wording of these Judges in their reasons and orders without embellishment or interpretation by Suteu.

94From these grounds it would appear that the grounds that Suteu is proceeding on are s.173(1)(a)(f)(g)(n) and (o).

95To summarize the grounds of oppositions at this Discharge by the Suteu:

Creditor

Proven Claim

a

b

c

d

e

f

g

h

i

j

k

l

m

n

o

Suteu

$84,806 (99% of proven claims)

X

X

X

X

X

Testimony of the Bankrupt at the Discharge Hearing

96The Bankrupt was examined first by Suteu, then by the Court.

97The Bankrupt’s sworn testimony with respect to the questions asked by Suteu generally was that she could not remember details of:

1. Payments made to her lawyers, either before or after Bankruptcy;

2. Whether she advised the Trustee of post-bankruptcy credit cards;

3. Whether she advised the credit card providers of her Bankrupt status when she applied for credit;

4. Whether she advised the Trustee that she had been sued post-bankruptcy by McDonald & Partners and settled with them for her legal fees owing;

5. When Mary Laframboise gave her cash to pay Gelman and Partners the amounts of legal fees owing, and whether she actually paid those legal bills before or after Bankruptcy;

6. How the difference was paid between the total amounts of legal fees that the Bankrupt’s various counsel filed bills of costs for in various proceedings and the total amount of fundraising that the Bankrupt admitted was raised to pay her legal fees;

7. Whether the amounts paid to MacDonald & Partners by TD Bank Draft by “Genevieve Webster” was paid from the Bankrupt’s own bank account.

98The Bankrupt did confirm in her testimony:

1. She did pay to Suteu the post-Bankruptcy $15,000 costs award granted by Sherr, J.;

2. That she never instructed Tanya Sakharov or any of her other friends to use the fundraising money to pay Suteu’s outstanding costs awards;

3. That Mary Laframboise gave the Bankrupt $35,000 in cash as a gift to pay the Gelman and Partners legal bills, and that she, not Mary Laframboise, paid the Gelman and Partners;

4. But also, that she never directly received funds from the fundraising campaigns;

5. That she will be returning to work once her daughter begins attending kindergarten.

99One key issue was in relation to the Bankrupt’s assertion in the Bankrupt’s Income Affidavit that:

“4. I did not receive any loans from friends”

At the Discharge Hearing, Suteu introduced an email from Gillies to the Trustee dated December 18, 2017 that Registrar Jean had required to be provided to Suteu where Gillies responded to questions from the Trustee as follows on behalf of the Bankrupt:

“As you are aware, questions have been raised concerning certain aspects of your financial situation and as trustee of your bankruptcy it is our responsibility to investigate these matters.

Please provide us with answers to the following questions:

• Did the Statement of Affairs you signed at the time of the filling of your bankruptcy, March 30th, 2016, properly disclose all the assets/property owned or possessed by you at that date?

Yes

• Since filing for bankruptcy, have you been the recipient of any "windfall" of any kind of property?

No

• Since filing for bankruptcy, have you incurred and new debts? If so, to whom and how much do you currently owe those creditor(s)?

Yes:

D. Howard - $8,000

M. Laframboise - $4,000

D. Royer - $8,000”

100After an period of fencing between Suteu and Gillies about the admissibility of the email, and objections to the formulation of questions by Suteu, I admitted the email as probative evidence and I asked the Bankrupt the following series of questions about this email that I made Exhibit 7 to the Trial (page 90 starting at line 20):

“EXHIBIT NUMBER 7: Answers Given to Trustee Questions, December 21, 2017 - produced and marked

THE COURT: Exhibit Number 7, so that’s going to be the - I’ll do the - I’ll call out the answers, I’ll say the answers given to the trustee’s questions by counsel for the Bankrupt dated December 21st, 2017. Okay. In particular, there was a question from the trustee at the instance of Mr. Suteu. Since the filing of bankruptcy, have you incurred any due debts, if so, to whom, and how much do you owe these creditors? The answer that was provided by your counsel was yes, D. Howard, $1,000.00, M. Laframboise, L-A-F-R-A-M-B-O-I-S-E, $4,000.00, and D. Royer (ph), $8,000.00. Do you recall providing that information through your counsel to the trustee in 2017?

A. I don’t specifically recall providing that information, but the information - can I correct one thing?

THE COURT: Sure.

A. It wasn’t E) you said - I think you said - I don’t have the document in front of me.

THE COURT: Yeah, no, okay.

A. I think you said D. Royer?

THE COURT: It was - there was D. Howard, a D. Royer, and an M. Laframboise.

A. So, the D. Royer should be corrected to K. Royer, I think that’s just a typo.

THE COURT: Oh, okay. So, who is K. Royer?

A. Kevor (ph) Royer is a family friend.

THE COURT: Okay. And D. Howard?

A. Daniel Howard was a friend of mine. Unfortunately, he has since passed away from brain cancer. He was a friend of mine.

THE COURT: Okay. And Mary Laframboise that you mentioned in paragraph 5 of Exhibit 6 that contributed approximately 35,000 towards your legal fees, is that the same M. Laframboise?

A. Yes, yes, it is.

THE COURT: Okay. Now, in your affidavit, which is Exhibit 6, you said I did not receive any loans from friends. These appear to have been loans from friends based on your answers, is that testimony in your recent affidavit Exhibit 6 still true?

A. Those are gifts, so I may have - the wording “loan” should have been “gift”.

THE COURT: Okay. Because the wording was “if so, to whom, and how much do you currently owe to those creditors”, creditors, not gifts, and you say yes, and you list these people.

A. Okay. I don’t recall being asked about gifts, so I apologize if I’ve used the wrong word, but those are gifts, were gifts.

THE COURT: Okay. And the other two answers that were here are as of 2017, December 18, sorry. December 21st, 2018, when these answers were provided. Is the answer did the statement of affairs you signed at the time of filing your bankruptcy March 30th, 2016, properly disclose all the assets property owned or possessed by you at that date, yes, was that correct at the time?

A. Sorry, could you repeat that? I’m sorry.

THE COURT: Did the statement of affairs you signed at the time of the filing of your bankruptcy, March 30th, 2016, property disclose all of the assets, property owned or possessed by you at that date?

A. I believe so.

THE COURT: Okay. The other question that was raised was “since the filing for bankruptcy, have you been the recipient of any ‘windfall’ of any kind of property?” You answered no.

A. No.

THE COURT: Was that answer correct as of December 21st, 2017?

A. I believe so.

THE COURT: Would you like to - is that answer correct now throughout the entirety of the bankruptcy?

A. So, the question if I --

THE COURT: Did you get a windfall during the bankruptcy?

A. Do I guess the - GoFundMe, would that fall under - under the --

THE COURT: Well, I mean it’s not ideally worded. I mean you stated in - December of 2017 that you received no windfalls of any kind. I mean you - it appears that you did receive people, through some methodology, monies were obtained by people through various funding sources and provided to pay your legal bills.

A. No, I didn’t receive that money directly then. Perhaps I should have expanded.”

101This email from 2017 was before the second trial before Sherr, J. As I noted previously- Sherr, J. in 2018 made the following findings of fact based on the Bankrupt’s testimony before regarding loans from friends:

265The evidence showed that the mother has at times been manipulative and dishonest. Justice Zisman set out many examples of this behaviour in her decisions. This behaviour has continued. None of the $30,000 the mother obtained from loans and fundraising proceeds went into her bank account. The mother said that the fundraising monies went directly to her lawyers. She said that she received two loans of $8,000 each from two friends that were given to her in cash. The mother admitted that she has not reported any of these loans or fundraising proceeds to legal aid or to social assistance.³⁸ She did not report the fundraising proceeds to the Trustee in Bankruptcy. It was apparent that the monies were not put into her bank account (at the very least the loans) as they might have been discovered by legal aid, social assistance officials or the father. The mother was clearly trying to avoid paying the father any of the costs awarded by the court.”

102So now, despite:

a. Sherr, J. finding that there were at the date of the trial in 2018 at least 2 “loans” from friends in the amount of $8,000 based on the Bankrupt’s testimony before her;

b. An email to the Trustee from Gillies in 2017 advising the Trustee that the Bankrupt “owed” D. Howard and D. Royer $8,000, corroborating what Sherr, J. found, and “owed” Mary Laframboise another $4,000 which apparently Sherr, J. was not advised of;

The Bankrupt is now saying all of that prior evidence to Sherr, J., and specific information provided to the Trustee by Gillies, which the Bankrupt has a duty to accurately provide under the BIA, was not correct and that these were not “loans” but were all “gifts”.

103From her testimony before me I find that the Bankrupt:

1. was evasive and forgetful whenever confronted by uncomfortable facts, but had clear memory and recollection of details when asked questions that she thought benefitted her;

2. made false statements in the Bankrupt’s Income Affidavit, resiling from the characterization of the various “loans” from friends as found by Sherr, J. and as the Trustee was advised in 2017, by her own lawyer, Gillies;

3. made false statements in her Statement of Affairs that omitted advising of the large pre-bankruptcy preferential payments she made to her counsel;

4. failed to advise her trustee of post-bankruptcy monies received and used to make more likely preferential payments of pre-bankruptcy debts to her counsel utilizing monies that the Trustee may have had an interest in as after-acquired property.

LAW AND ANALYSIS

Law related to determination of discharge of the Bankrupt generally

104The general principles related to discharge were summarized by Hallett, J. in Crowley, Re 1984 CanLII 5444 (NS SC), 1984 CarswellNS 25, [1984] N.J. No. 52, 152 A.P.R. 390, 29 A.C.W.S. (2d) 462, 54 C.B.R. (N.S.) 303, 66 N.S.R. (2d) 390, (“Crowley”) which has been cited with approval or followed more than 95 times, including by many Judges and Registrars in Bankruptcy of the Ontario Superior Court of Justice:

“1 What are the principles that the court should apply in considering an application for discharge by a bankrupt? There are very few Supreme Court of Canada decisions on the subject and the sections of the Bankruptcy Act, R.S.C. 1970, c. B-3, provide little guidance as to how the judge who hears an application for a discharge is to exercise his discretion. The only clear guideline is that if one of the facts mentioned in s. 143 is proven, then the court cannot grant an absolute discharge. Where the difficulty comes in is under what circumstances should a bankrupt who does not qualify for an absolute discharge be ordered to pay money to the trustee or consent to a judgment as a condition of his discharge or merely have the inconvenience of having his discharge suspended for a period of months. There seem to be two basic and conflicting themes that run through the decisions of the courts on this subject. On the one hand, the courts emphasize the purpose of the Bankruptcy Act is not only to provide for an orderly scheme of distribution of the assets of a bankrupt amongst his creditors but to allow a bankrupt to get on with his life unfettered by the burden of debt which he had incurred. Typical of such statements is that contained in Indust. Accept. Corp. v. Lalonde, 1952 CanLII 2 (SCC), [1952] 2 S.C.R. 109, 32 C.B.R. 191, [1952] 3 D.L.R. 348, where Estey J., in a unanimous decision of the court, stated at pp. 356-57:

The purpose and object of the Bankruptcy Act is to equitably distribute the assets of the debtor and to permit of his rehabilitation as a citizen, unfettered by past debts. The discharge, however, is not a matter of right and the provisions of ss. 142 and 143 plainly indicate that in certain cases the debtor should suffer a period of probation. The penalty involved in the absolute refusal of discharge ought to be imposed only in cases where the conduct of the debtor has been particularly reprehensible, or in what have been described as extreme cases. The conduct of the debtor in this case, while not sufficient, with great respect, to justify the absolute refusal, does justify his discharge only subject to the imposition of terms.

It is to be noted that in the Lalonde case the Supreme Court of Canada allowed an appeal and imposed a condition on the bankrupt that he consent to judgment in the amount of $5,000 as the cost of obtaining his discharge.

2 While one of the principal purposes and objects of the Bankruptcy Act is to permit the rehabilitation of a debtor as a citizen, unfettered by his past debts, there are many cases in which a bankrupt in modest circumstances and with dependents is ordered to consent to a judgment in a percentage of his indebtedness. Typical of this class of cases is Kozack v. Richter, 1973 CanLII 166 (SCC), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612. The [C.B.R. (N.S.)] headnote adequately summarizes the fact of that case as follows:

The appellant suffered injuries in a motor vehicle accident which was caused by the wilful and wanton misconduct of the bankrupt. After the appellant recovered judgment for $12,909.03 plus costs of $1,194, the respondent filed an assignment in bankruptcy. The bankrupt was a wage-earner with a large family in modest circumstances. The Judge of the Court of Queen's Bench hearing the application for discharge of the bankrupt suspended the discharge for three months. The Court of Appeal for Saskatchewan varied the order and required the bankrupt to consent to judgment for $1,800 without interest payable at the rate of $50 per month.

Held (ABBOTT J. dissenting), the bankrupt was required to consent to judgment in the amount of $7,200 plus the costs of the hearing in the Supreme Court of Canada as a condition of his discharge. This amount was payable at the rate of $50 per month. The application of the provisions of the Bankruptcy Act should result in a plaintiff receiving recovery for personal injuries caused by the gross negligence of the bankrupt. The Bankruptcy Act was not intended to enable a judgment debtor to get rid of a judgment for damages. Abbott J. would have dismissed the appeal on the ground that the judicial discretion exercised by the Court below was reasonable and should not be interfered with by a second appellate Court. He also found that no distinction exists under the Bankruptcy Act between a bankruptcy arising out of trade debts and one arising out of the commission of a tort.

3 Pigeon J., writing for the majority of the court (there was one dissent), stated at p. 225:

In the present case, respondent's bankruptcy was precipitated by his condemnation to pay damages to the appellant. This being due to a finding of "wilful and wanton misconduct" on his part, certainly his financial predicament cannot be said to have arisen "from circumstances for which he cannot justly be held responsible". The Courts below did not ignore this provision. However, the sanction meted out in the first instance was purely nominal. In the Court of Appeal, respondent was in effect ordered to make payments that would hardly cover more than appellant's costs in the trial Court and in the Court of Appeal. Although respondent is a wage-earner with a large family in very modest circumstances, I cannot agree that the proper application of the provisions above quoted should result in a plaintiff making no recovery for personal injuries caused by gross negligence. It would mean that motorists in respondent's situation would be able to tell such a claimant: "There is no use suing me, if you lose you will have to pay the costs, if you win I will make an assignment in bankruptcy and you will get nothing."

4 The dilemma facing a judge in considering an application for discharge is reflected in the following two quotations from Bankruptcy Law of Canada (1984), vol. 1, by Houlden and Morawetz, at pp. H-18 and H-19, para. H10:

It is incumbent upon the court to guard against laxity in granting discharges so as not to offend against commercial morality. It is nevertheless the duty of the court to administer the Bankruptcy Act in such a way as to assist honest debtors who have been unfortunate: Re Beerman and Sands(1925), 5 C.B.R. 781 (Ont. S.C.)...

The purpose of the Bankruptcy Act is to enable someone who has had financial misfortune or a series of misfortunes to be purged or relieved of the consequences and to obtain a new start financially. It is not to be considered as a process which can be resorted to on a regular basis with a view to washing out one's debts: Re Lebel(1979), 31 C.B.R. (N.S.) 320 (Ont. S.C.).

5 Despite the inherent difficulty created by these two conflicting themes, the case law does provide some firm footing to assist a judge in the exercise of his discretion when determining how to apply the provisions of s. 142 of the Bankruptcy Act in any particular case. The following are some principles, procedures and evidentiary considerations that a judge might follow on a discharge application in determining whether or not to impose conditions of payment as a cost of the discharge. I take the view that a mere suspension in any case is pointless although authorized. Therefore, in most cases the court will be choosing between granting an absolute discharge or imposing a condition that requires some payment by the bankrupt.

6 First, each case must be decided on its own facts. That statement has been made in countless cases. Re Gigault(1981), 37 C.B.R. (N.S.) 119 (Ont. C.A.), is but one. That is a simplistic statement but nevertheless very true, as is evident from a reading of the cases. This is so because s. 142 of the Bankruptcy Act provides no guidance for the exercise of the judge's discretion except that he must refuse an absolute discharge if a s. 143 fact is proven against the bankrupt. The court must look carefully at the causes of the bankruptcy.

7 Second, in considering the application for discharge, the court must have regard to not only the interests of the bankrupt and his creditors but also to the interest of the public: Re Sceptre Hardware Co., 1922 CanLII 365 (SK KB), 3 C.B.R. 734, [1923] 1 W.W.R. 966, [1923] 1 D.L.R. 1201 (Sask.). This concept was well stated by Wetmore L.J.S.C., in Re Abbott; Abbott v. Royal Bank of Can.(1983), 1983 CanLII 592 (BC SC), 50 C.B.R. (N.S.) 182, 48 B.C.L.R. 387 (S.C.), where he said [p. 184], "The court must always balance the public interest in commercial morality with its interest in the re-establishment of the debtor".

8 Third, if, as is usually the case, the assets of the bankrupt are not of a value equal to 50 cents in the dollar of the bankrupt's unsecured liabilities, the onus of proving that this fact arose from circumstances for which the bankrupt cannot justly be held responsible is on the bankrupt: Re Lougheed, 1939 CanLII 513 (BC SC), 54 B.C.R. 428, 21 C.B.R. 180, [1940] 1 W.W.R. 31.

9 Fourth, the court is not bound by the trustee's report but it is prima facie evidence with respect to the facts contained therein: Re Hoerner, Williamson & Co.(1925), 5 C.B.R. 613 (C.S. Que.). The trustee's report should be carefully considered by the court. The trustee should be in attendance at the discharge hearing so that he can be called by either the bankrupt or a party opposed to the application to explain the basis for his conclusions, be they favourable or unfavourable to the bankrupt. Pursuant to s. 140(5) of the Act the statements in his report to the court are prima facie evidence but often no reasons are given for the opinions expressed. For example, in the case before me the trustee's report simply says the causes of the bankruptcy were "misfortune" and that the conduct of the debtor was not subject to censure. While the trustee was present in court, he was not called. It might have been helpful had he been cross-examined as to the "misfortune" he perceived so that the court could assess the reliability of his opinion.

10 Unless contradicted by the evidence, the court must accept the statements in the trustee's report: Re Barrick(1980), 36 C.B.R. (N.S.) 286 (B.C.C.A.). The onus is on the party opposing the application for discharge to adduce sufficient evidence to justify the court disregarding a trustee's report that is favourable to the bankrupt. By producing a favourable report the bankrupt has met the initial burden of proving that the fact that the assets are not equal to 50 cents in the dollar of his unsecured liabilities arose from circumstances for which he cannot justly be held responsible. It is then up to the creditor opposing to bring before the court evidence upon which the court could come to a contrary conclusion: Dawson Auto Parts Ltd. v. Dorais, 1944 CanLII 230 (QC CA), [1944] R.L. 405, 26 C.B.R. 52 (C.A.).

11 Fifth, if the application for discharge is opposed, the bankrupt should be available for cross-examination: Re Hood, 1975 CanLII 1976 (ON HCJ), 21 C.B.R. (N.S.) 128 (Ont.).

12 Sixth, an order for discharge should only be outrightly refused if the debtor's conduct has been "particularly reprehensible, or in ... extreme cases". What is meant by this statement in Indust. Accept. Corp. v. Lalonde [at p. 200] is that only rarely will there be an outright refusal of a discharge but rather the court will consider one of the other alternatives of suspension or attaching conditions to the discharge where an absolute discharge cannot be granted because a s. 143 fact has been proven unless the debtor's conduct has been particularly reprehensible or in extreme cases.

13 Seventh, in considering if an order should be made that involves the payment of money by the bankrupt as a condition of his discharge, the court must bear in mind that he is entitled to have available for the maintenance of himself and his family a reasonable amount out of his after-acquired income: Clarkson v. Tod, 1934 CanLII 5 (SCC), [1934] S.C.R. 230, 15 C.B.R. 253, [1934] 2 D.L.R. 316; Re Bayliss and Doerksen(1982), 40 C.B.R. (N.S.) 16 (Ont. H.C.). Accordingly, it is generally necessary for the court to have before it evidence of the bankrupt's income and living expenses so the court's discretion can be rationally exercised.

14 Eighth, the court does not view with favour assignments made to avoid paying a large claim of a single judgment creditor where judgment was obtained as a result of the discreditable conduct of the debtor. Under such circumstances, the courts have generally imposed a condition that the bankrupt consent to judgment in a partial amount of the claim: Kozack v. Richter, supra. This approach has most recently been followed by the Ontario Court of Appeal in Re Gigault, supra, and Re Balson(1982), 46 C.B.R. (N.S.) 319. In the Gigault case, the judge who heard the application in the first instance had required as a condition of discharge that the bankrupt consent to judgment in a very nominal amount and in the Balson case an absolute discharge had been granted. The Ontario Court of Appeal in both cases imposed meaningful payments as a condition of discharge.

15 Ninth, where a bankrupt takes a reasonable risk in embarking on a new adventure which fails because of economic factors over which he has no control, the bankrupt has satisfied the onus under s. 143(1)(a) of proving that the fact that his assets were not of a value equal to 50 cents in the dollar arose from circumstances for which he cannot justly be held responsible: Re Bayliss and Doerksen, supra.

16 Tenth, the Act provides no guidelines for the exercise by the judge of his discretion whether to suspend or impose conditions where a factor mentioned in s. 143 is proven. The discretion of the judge is very broad and should not be interfered with on appeal unless the judge, in arriving at his decision, has omitted the consideration of or misconstrued some facts or violated some principle of law: Indust. Accept. Corp. v. Lalonde, supra.

17 In recent years there has been a trend by this court to impose conditions of payment on the bankrupt as the price for his discharge. This reflects the feeling of the public as stated through the decisions of this court that abuses of the bankruptcy process are perceived. While the vast majority of the public are wrestling with their finances to make ends meet, there is a small percentage, albeit a large number of persons, who are availing themselves of the provisions of the Bankruptcy Act and, in particular, the discharge provisions, to walk away from the debts which they have accumulated. Imposing a condition that a bankrupt consent to judgment in a reasonable percentage of his unsecured liabilities under certain circumstances is not to frustrate the object of the Bankruptcy Act. In fact, not to do so in many cases may offend the integrity of the discharge procedure. Where a debtor owes a substantial number of creditors, it is reasonable that he be freed from their harassment and get on with earning a living under peaceful conditions but subject to a reasonable judgment in favour of the trustee who, based on his knowledge of the debtor's circumstances, can exercise a sensible discretion in collection procedures; it being understood that under no circumstances should a judgment be entered against a bankrupt which he would be unable to pay over a reasonable period of time. Each case must be judged on its own facts as to the causes of the bankruptcy and a decision made as to whether it is appropriate under the circumstances to impose conditions of payment on the bankrupt as a price for his discharge.”

105As noted by the Court of Appeal in the leading case on the issue of refusal of discharge Bank of Montreal v. Giannotti 2000 CanLII 16928 (ON CA), 2000 CarswellOnt 4110, [2000] O.J. No. 4272, 104 A.C.W.S. (3d) 26, 138 O.A.C. 316, 197 D.L.R. (4th) 266, 21 C.B.R. (4th) 199, 51 O.R. (3d) 544 (“Giannotti”):

“11 There is no question that a principal purpose of the Bankruptcy and Insolvency Act (”BIA”) is the rehabilitation of unfortunate debtors. As expressed by Houlden and Morawetz in their treatise, Bankruptcy Law of Canada (3rd ed., rev., Vol. 1, 1998) at p. 1-5:

The Act permits an honest debtor, who has been unfortunate in business, to secure a discharge so that he or she can make a fresh start and resume his or her place in the business community.

12 However, the rehabilitation of the debtor must be balanced with the interests of creditors who have lost money because of the bankrupt’s conduct. This requirement of a balanced approach in discharge hearings was well articulated by Adams J. in Re Goodman (January 19, 1995), Doc. 31-267911 (Ont. Bktcy.), at para. 1:

The rehabilitative purpose of bankruptcy legislation is well understood. See Re Willey (1981), 38 C.B.R. (N.S.) 24 (Ont. S.C.). Individuals and society generally benefit from a process by which the crushing burden of financial debt can be lifted, thereby permitting a bankrupt to resume the life of a useful and productive citizen. See Re Shakell . . . (1988), 70 C.B.R. (N.S.) 270 (Ont. S.C.) Equally important, however, is the integrity of the bankruptcy process itself. While the central purpose of the statute is to enable the honest but unfortunate debtor to make a fresh start, parity of treatment between debtors and fairness to creditors need to be kept in mind.

13 Both Adams J. and Houlden and Morawetz use two adjectives to describe a debtor who should be entitled to the relief of a discharge - “unfortunate” and “honest”. I have no doubt that Mr. Giannotti has been unfortunate. The downturn in the real estate market in the late 1980s and early 1990s ruined many developers. Mr. Giannotti, with millions of dollars in personal guarantees behind his companies, was one of them.

14 However, I do not think that the adjective “honest” applies to the manner in which Mr. Giannotti conducted himself in this proceeding. My review of his testimony at the discharge hearing leads to the inevitable and overwhelming conclusion that Mr. Giannotti has not told the truth to his creditors, his trustee in bankruptcy, or the court at the discharge hearing. In Re Gestetner, Sharpe J. (Ont. Gen. Div.) said, at para. 7:

An honest but unfortunate debtor is entitled by the law to have a fresh financial start. The applicants may have been unfortunate, but I find that they have not been honest. In my view, they are not entitled to have the fresh start the law allows them unless they are prepared to be honest with their creditors and with the court. The court has an obligation to ensure that the integrity of the bankruptcy law is maintained. The applicants have refused to provide the court with the information required to make an appropriate judgment. In light of the evidence the applicants have offered and the level of disclosure they have made as to the true state of their financial affairs, I find that they are not entitled to discharges on any terms.

15 I agree entirely with the philosophy manifest in this passage - a dishonest debtor, and a debtor unwilling to make full disclosure of his financial affairs, is entitled to no relief under the BIA. For several reasons, I find that every word of the above passage applies to Mr. Giannotti and, therefore, like the bankrupts in Re Gestetner, he was entitled to no relief at his discharge hearing.

16 First, Mr. Giannotti did not co-operate with his trustee in bankruptcy as the trustee sought to administer his estate. Pursuant to s.170 of the BIA, the trustee filed a report on February 19, 1999 in which he criticized Mr. Giannotti in a number of aspects, including his refusal to provide information about a family trust, his inability to explain why he disclosed different years of birth on his statement of affairs and during his examination by the official receiver, and his failure to co-operate in appearing for an examination pursuant to s.163 of the BIA.

17 In a supplementary report dated June 1, 1999, filed three weeks before the discharge hearing, the trustee expanded on his criticism of Mr. Giannotti. According to the trustee, Mr. Giannotti was continuing in his refusal to provide information about a family trust, he had put the trustee to unnecessary expense by frivolous and vexatious actions regarding his s.163 examination, he had refused to comply with undertakings after the s.163 examination, and he refused or was unable to answer questions about how rent and office expenses were being paid for a business in which Mr. Giannotti appeared to be involved after he became bankrupt.

18 In my view, the integrity of the bankruptcy system requires a bankrupt to co-operate with the trustee. See Mancini (Trustees of) v. Mancini (1987), 63 C.B.R. (N.S.) 254 (Ont. S.C.), Re Adelman(1945), 26 C.B.R. 152 (Ont. S.C.), and Re Rahall, 1997 CanLII 14970 (AB QB), 49 C.B.R. (3d) 268 (Alta. Q.B.). The trustee is appointed by order of the court. After a receiving order is made by the court, the trustee administers the bankrupt’s estate on behalf of the court. Accordingly, a bankrupt who seeks relief, by way of discharge, from the court must co-operate fully with the trustee before seeking that relief. Mr. Giannotti did not comply with this obligation.”

25 The factors and conduct that I have summarized clearly placed Mr. Giannotti within s. 173 of the BIA. The bankruptcy judge could not have granted him an absolute discharge; his options were to grant either a suspended discharge or a conditional discharge, or to refuse to order any kind of discharge. The bankruptcy judge chose a combination of a suspended discharge and a conditional discharge.

26 The case law establishes that a complete refusal of any type of discharge is an unusual order given the BIA’s emphasis on rehabilitation of the debtor. In Re Adelman, Urquhart J. said that a refusal of discharge “is a harsh step . . . which should be resorted to only in extraordinary cases” (supra, at p. 153). However, in this case, given Mr. Giannotti’s conduct and testimony, a refusal of any kind of discharge was, in my view, required. Mr. Giannotti was simply too unco-operative, evasive and untruthful with both the trustee and the bankruptcy judge.

27 The BIA seeks to provide relief to honest and unfortunate debtors. The word ‘honest’ introduces a strong element of integrity into the administration of the Act. In my view, a reasonable member of the public would seriously question the integrity of the BIA if Mr. Giannotti was given any form of relief at this juncture. He has not been honest with the trustee or the bankruptcy court. He is free to re-apply for a discharge, but he must co-operate with the trustee and make full disclosure of the relevant facts.”

SPECIFIC S.173 FACTS OPPOSED ON:

s.173(1)(a)- The assets of the bankrupt are not of a value equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities, unless the bankrupt satisfies the court that the fact that the assets are not of a value equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities has arisen from circumstances for which the bankrupt cannot justly be held responsible;

106Suteu opposed under s.173(1)(a).

107In Wambera, Re, 1992 CarswellOnt 194, 15 C.B.R. (3d) 237, 36 A.C.W.S. (3d) 905 Rutherford stated the following:

“11 While the submission of the trustee has merit to it, I think the paragraph must refer to the realizable value of the assets at the time of liquidation. If Parliament had intended it to mean the value, after deducting administration costs, which would logically include all of the trustee's expenses in administering the estate, it would not have been difficult to express that intent. However, it would not be possible to determine that net cost until all the trustee's expenses are known and the disposition upon discharge taken into account. I think the proper meaning to be attributed to the provision is, therefore, the raw value of the assets as liquidated, and in this case, therefore, the value exceeds 50¢ on the dollar on the amount of unsecured liabilities.”

108Houlden & Morawetz states at “§ 7:151. Assets not of a Value Equal to 50 Cents on the Dollar—Appropriate Date for Determining the Value of the Assets”:

“Section 173(1)(a) seems to be clear that it is the value of the assets available for payment of the claims of unsecured creditors that is the relevant value. Ordinarily, this value will not be difficult to determine. If, for example, the dividend to ordinary creditors is only 10 cents on the dollar, there can be no doubt that the assets are not of a value equal to 50 cents on the dollar. However, as unsecured creditors include preferred creditors, there could be difficulty in deciding if the assets are equal to 50 cents on the dollar where preferred creditors are paid in full and ordinary creditors receive 45 cents on the dollar. In such a case (which will be rare), it would require an arithmetical calculation to determine if the assets were of a value equal to 50 cents on the dollar when the claims of preferred and ordinary creditors are lumped together.”

109As stated by Houlden & Morawetz § 7:150. Assets not of a Value Equal to 50 Cents on the Dollar—Onus of Proof:

“If the trustee reports that the assets of the bankrupt are not of a value equal to 50 cents on the dollar, then the onus shifts to the bankrupt to satisfy the court that the failure has arisen from circumstances for which he or she cannot justly be held responsible: s. 173(1)(a)s. 173(1)(a) per Samson v. Alliance nationale (1935), 17 C.B.R. 304, 60 Que. K.B. 311 (C.A.); Re Lougheed (1939), 1939 CanLII 513 (BC SC), 21 C.B.R. 180, 54 B.C.R. 428, [1940] 1 W.W.R. 31 (S.C.); Re Ferguson (1950), 30 C.B.R. 180 (Ont. S.C.); Re Maguire (1984), 1984 CanLII 451 (BC SC), 54 C.B.R. (N.S.) 9 (B.C. S.C.); Re Ng (1996), 1996 CanLII 306 (BC SC), 1996 CarswellBC 575, 39 C.B.R. (3d) 59 (B.C. S.C.). If the bankrupt fails to satisfy the onus, the court will find that a fact has been proved under s. 173(1)(a): Re Good (1989), 1989 CanLII 4816 (SK QB), 74 C.B.R. (N.S.) 297, 78 Sask. R. 1 (Q.B.).

Whether the bankrupt has met the onus depends on the particular facts of the case: Re Frison (2000), 2000 CarswellSask 622, 20 C.B.R. (4th) 228, 2000 SKQB 427, 198 Sask. R. 143 (Q.B.); Re Lawless (1987), 65 C.B.R. (N.S.) 117 (P.E.I. S.C.).”

110Upon such a finding being made Hallett J. states in Crowley:

“if, as is usually the case, the assets of the bankrupt are not of a value equal to 50 cents in the dollar of the bankrupt's unsecured liabilities, the onus of proving that this fact arose from circumstances for which the bankrupt cannot justly be held responsible is on the bankrupt: Re Lougheed, 1939 CanLII 513 (BC SC), 54 B.C.R. 428, 21 C.B.R. 180, [1940] 1 W.W.R. 31.”

111In her Statement of Affairs the Bankrupt declared no assets divisible by creditors. There are $85,398 in proven claims, 99% to Suteu.

112Accordingly, on the totality of the evidence before me, and for all of the reasons that I have set out, the first part of the s.173(1)(a) test is proven, that the value of the assets is less than fifty cents on the dollar of the proven unsecured liabilities of the Bankrupt, based on the statements in the Reports and the sworn admissions of asset value made by the Bankrupt in her Statement of Affairs.

113I find that the Bankrupt has NOT satisfied the onus of proving that the assets of the bankrupt are not of a value equal to fifty cents on the dollar.

“Justly Held Responsible” Analysis

s.173(1)(a)- Doctrine of using Bankruptcy to avoid Judgments

114The central argument raised by Gillies was that the Bobyk/Richardson/Mathews line of cases are inapplicable in this case, as:

1. they are based on Kozack v. Richter.

2. Not all bankruptcies caused by judgments are subject to that doctrine; and

3. In order for the doctrine to apply there has to be a finding that “reprehensible” behaviour or “wilful and wanton misconduct” created the judgment against the Bankrupt, in order to prove a s.173(1)(a) fact has arisen "from circumstances for which he cannot justly be held responsible", and in this case the conduct of the Bankrupt does not fall within that type of conduct.

4. Specifically as stated in the Bankrupt’s factum:

“45. It is trite law that the integrity of the insolvency regime is in the interest of the public. The ratio of Bobyk recognizes that interest and recognizes that that interest would not be served - and the integrity of the insolvency regime diminished- if bankruptcy was used to deprive an innocent spouse of her entitlement to an equalization payment, or to avoid the consequences of wilful and wanton behaviour, or behaviour that was reckless, negligent or morally culpable.

46. Bobyk and the cases that follow do not present a bright test that precludes discharge in all family law cases, or in all cases where the opposing creditor was bankrupt; rather, they require the Court to balance their jurisprudential strictures against those factors identified in Zivic and against the overarching policy objectives of the insolvency regime and the unique facts each case presents.

47. The bankrupt effectively lost her relationship with her autistic son, and he with her. The bankrupt relied upon expert advice which warned that the opposing creditor's plan for the child would place the child at risk, was completely inadequate and did not take into consideration the profoundly adverse impact on the child, likely for his lifetime, and which would be harmful and damaging to the child's current and future wellbeing.

48. The bankrupt did not force the opposing creditor into litigation. The opposing creditor refused all attempts to mediate, preferring instead to litigate, and the bankrupt was left with an impossible choice: acquiesce to the opposing creditor's damaging proposal for the child and lose her relationship with her son or litigate.

49. Respectfully, the choice she made was consistent with the public's interest in the welfare of children. Respectfully, a reasonable member of the public would not fault the bankrupt for the choice she was forced to make.”

115The classic statement in Kozack v. Richter (1973), 1973 CanLII 166 (SCC), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612, (“Kozack v. Richter”) is by Pigeon, J.:

5 In the present case, respondent's bankruptcy was precipitated by his condemnation to pay damages to the appellant. This being due to a finding of "wilful and wanton misconduct" on his part, certainly his financial predicament cannot be said to have arisen "from circumstances for which he cannot justly be held responsible". The Courts below did not ignore this provision. However, the sanction meted out in the first instance was purely nominal. In the Court of Appeal, respondent was in effect ordered to make payments that would hardly cover more than appellant's costs in the trial Court and in the Court of Appeal. Although respondent is a wage-earner with a large family in very modest circumstances, I cannot agree that the proper application of the provisions above quoted should result in a plaintiff making no recovery for personal injuries caused by gross negligence. It would mean that motorists in respondent's situation would be able to tell such a claimant: "There is no use suing me, if you lose you will have to pay the costs, if you win I will make an assignment in bankruptcy and you will get nothing."

116In Kozack v. Richter the discharge condition imposed was that the Bankrupt pay 50% of the Judgment as a condition of discharge.

117Gillies made the point that in this case the judgment arose from a motor vehicle accident where the passenger in a vehicle driven by the Bankrupt suffered serious head injuries in a collision with a train at a grade crossing in the City of Regina, likely in the context where the driver may have been drunk.

118In the trial decision, 1969 CanLII 580 (SK QB), 1969 CarswellSask 98, 72 W.W.R. 193, the Trial Judge described the Bankrupt’s conduct as:

“It is now clear that the test of liability to be applied herein is that stated by Sir Lyman Duff, C.J. in McCulloch v. Murray, where he said at p. 145:

... All these phrases, gross negligence, wilful misconduct, wanton misconduct, imply conduct in which, if there is not conscious wrong doing, there is a very marked departure from the standards by which responsible and competent people in charge of motor cars habitually govern themselves.

16 In my view there was such a marked departure. I base this decision upon the following points:

17 (1) The defendant's speed, although not very great, was greater than was safe in the circumstances of the time and place, particularly considering that he intended to turn in a short time to the right and into the parking lot at the Holiday Inn.

18 (2) The defendant was well acquainted with Albert St. and particularly this part of it. He was well aware that the railway crossing existed and if he had seen the flashing red lights he would immediately have known their purpose.

19 (3) He failed to see the warning lights from a distance or close up and he failed to see the rail-liner and its brilliant headlight facing more or less toward him and fully visible for a period of five to seven seconds.

20 I have given considerable thought to the quantity of beer and rum consumed by the defendant. Although he had at least five bottles of beer during the afternoon, there is no evidence that the defendant had any beer after he left the Regina Hotel except for a slight amount at the home of the plaintiff's aunt and uncle. He did, however, have two drinks of rum at the Oriental Bowl between 9:00 p.m. and 10:00 p.m., just before the accident. On this evidence I do not feel that I could be justified in holding that what he had consumed was sufficient to cause him to be impaired in his driving at 10:00 p.m. or that it would affect his judgment as a driver.

21 The defendant's negligence consisted of his failure to see what was there to be seen. This was considerably more than momentary inattention. He displayed no vigilance whatsoever. He drove from 4th Ave. to the crossing, a distance of over 900 feet, facing six large, flashing, red lights and did not see them. They were easily seen by the other drivers, Lapine and Wright, who testified. Wright saw the rail-liner when it was still 30 yards west of Albert St. and before it entered the roadway at all. Because of the angle at which the rail-line crosses Albert St., there are 85 feet of rail on either side of the median. Assuming that the rail-liner would not be visible to the defendant until it entered Albert St. (the evidence indicates that it should have been visible prior to that) the rail-liner, at 10 m.p.h. or 15 feet per second, would be visible for between five and six seconds to the defendant before the rail-liner entered the lane in which the defendant was driving.”

119Gillies made the point that there are differences in the types of judgment that are subject to the doctrine in this case, and this was reflected in Pigeon, J.’s reasoning:

“Counsel for the appellant has referred us to a number of cases dealing with analogous situations on applications for discharge. Among recent cases, the following may be noted: Rice v. Copeland (1965), 1965 CanLII 532 (MB QB), 51 W.W.R. 227, 7 C.B.R. (N.S.) 288, 51 D.L.R. (2d) 147 (Man.), in which the bankruptcy was similarly precipitated by a claim for damages arising out of a car accident which was said to be due to driving in an intoxicated condition. Dickson J. (as he then was) ordered the bankrupts to pay as a condition of their discharge 25 per cent of their unsecured liabilities. He said (at p. 232):

In Re McIntosh (1958), 1958 CanLII 260 (MB QB), 26 W.W.R. 541, 37 C.B.R. 212, 16 D.L.R. (2d) 207 (Man.), Williams C.J.Q.B. agreed with the judgment of Smily, J. in Re Buell, 1954 CanLII 342 (ON HCJ), [1955] O.W.N. 421, 35 C.B.R. 53, [1955] 4 D.L.R. 137, that although the Bankruptcy Act [R.S.C. 1952, c. 14] is available to an insolvent not engaged in business, the Act was never intended to enable a judgment debtor to get rid of a judgment for damages and with no other purpose to serve than the convenience and comfort of the debtor.

In Sederoff v. Vigneault, [1942] Que. K.B. 44, 23 C.B.R. 288 (C.A.), the debtor had gone into bankruptcy to escape payment of a judgment in damages arising out of an automobile collision. The bankruptcy judge, in the exercise of his discretion, suspended the discharge until the debtor had paid 50 cents in the dollar on the amount of his unsecured liabilities. The court of appeal refused to interfere.”

120Houlden & Morawetz “§ 7:134. Conditional Discharge—Bankruptcy to Avoid Payment of a Judgment”, agrees that this doctrine is not applicable to every judgment against the Bankrupt:

“Where a judgment has been obtained against a bankrupt arising out of negligent or other wrongful conduct and the bankrupt goes into bankruptcy to avoid payment of the judgment, the court will, if the bankrupt has the capacity to make payments, make a conditional order of discharge. In these cases, the fault of the bankrupt that gave rise to the judgment is an important factor: Re Heinonen (1990), 1990 CanLII 387 (BC CA), 3 C.B.R. (3d) 1, 51 B.C.L.R. (2d) 195, 75 D.L.R. (4th) 354, 1990 CarswellBC 385 (C.A.); Re Graham (1992), 16 C.B.R. (3d) 58, 1992 CarswellBC 528 (B.C.S.C.).

Even though a creditor has not yet obtained judgment when the bankrupt files an assignment in bankruptcy, but the assignment is filed to avoid paying a claim for damages, the court will apply Kozack v. Richter (1973), 1973 CanLII 166 (SCC), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612, and if the bankrupt has surplus income, it will make a conditional order: Re Riley (1989), 76 C.B.R. (N.S.) 298 (Ont. S.C.).”

121However:

“A judgment for damages for breach of contract is in a different category from a judgment for damages for negligence, since it does not involve conduct that is reprehensible. However, it is also in a different category from a judgment for a commercial debt. If, therefore, an assignment is filed to avoid payment of such a judgment, the judgment is a factor to be considered in deciding whether or not the court should make a conditional order of discharge: Re Raftis (1984), 53 C.B.R. (N.S.) 19, affirmed (1985), 57 C.B.R. (N.S.) 318 (Ont. C.A.).” (“Raftis”)

122In Raftis, Anderson J. stated:

“14 An examination of the cases which treat of that problem will establish that in many, if not most of them, the judgment which was under consideration was one which stemmed from some reprehensible conduct on the part of the defendant, the subsequent bankrupt. If one were to consider a scale of the various types of judgments with which one might be concerned, that would be at one end of the scale. At the other end of the scale is the simple judgment for a commercial debt. I have expressed previously the view, and I have no recollection now as to whether it is reported, that such a judgment adds little to the considerations which the court must have in mind on the application for discharge. A debt is a debt in that context. One might put that at the other end of the scale. Somewhere in between would appear to be the judgment which is involved in the case before me which is a judgment for damages for breach of a contract. I have concluded that it does not partake of the same nature and quality as those where the conduct of the defendant was reprehensible. I have likewise decided that it is not a factor which can be entirely ignored. To do so would make a mockery of the three-day trial before Mr. Justice Trainor and of the judgment which was the consequence of that trial.”

123In determining to impose a payment condition of the Bankrupt in Raftis, avoiding the judgment imposed, the Court in Raftis stated:

“6 The financial difficulties which brought about this bankruptcy had their genesis in an agreement of the bankrupt and her husband to purchase a house from the objecting creditor. The agreement of purchase and sale was entered into in June 1981 and called for a closing in September. The capacity of the bankrupt and her husband to meet the obligation imposed by this agreement was dependent upon the sale of the house which they then owned at a price in the vicinity of that which they had been advised was realistic and appropriate. As events developed, the real estate market was adversely affected by a number of factors with the consequence that no sale of their house at any such price as had been anticipated was possible. The agreement with the objecting creditor was unconditional and the bankrupt and her husband found themselves in the unenviable but by no means original position of being unable to complete the transaction because the sale upon which they had depended for its completion had not been made.”

124And the Court in Raftis found in those circumstances, applying the test set out above:

“23 Indeed, it is impossible to avoid the conclusion upon listening to the evidence of the bankrupt that she does not recognize the possibility, much less the propriety, of some significant financial inconvenience being attendant upon her present status. In my view there must be a condition requiring payment and that payment must be a significant percentage of the judgment debt.

24 Taking a midway position between the higher and lower estimates of potential income, one would arrive at $54,000 a year as the middle point. In my view a payment by way of condition in the sum of $60,000 would be appropriate. I do not consider that such an order would, to paraphrase the language of Mr. Justice Smily in Re White, leave the debtor so burdened that she could not support her family "or otherwise perform the ordinary duties of citizenship". If such a liability were in contemplation by the bankrupt and her husband for the accomplishment of some positive objective such as the acquisition of some desirable asset, I have little doubt that an obligation of that size would be assumed without undue apprehension.”

125Kozack v Richter, and the line of cases that follow it, is not the only line of cases stating similar principles on discharge involving a debtor owing a large judgment to a creditor filing for Bankruptcy to avoid it.

126In in Re Sager (1984), 52 C.B.R. (N.S.) 309 (Ont. S.C.), Saunders, J. stated:

“There is well-established authority that the bankruptcy process should not be used to avoid a judgment debt which arises out of improper conduct of the debtor. The courts have said on many occasions that a discharge should only be granted if there is a substantial payment to the creditors.”

127In Chodos, Re 1992 CarswellOnt 207, [1992] O.J. No. 84, 31 A.C.W.S. (3d) 192, 9 C.B.R. (3d) 230, D. Lane, J. stated:

“21 There is another line of authority which is of importance in the assessment I must make. The debtor's state of mind in entering bankruptcy is also of importance. If his motivation is simply to escape a particular judgment the court will scrutinize his application for discharge closely to determine whether he should be permitted merely to get rid of the judgment or whether he can afford to pay something on it in the light of his financial situation as a whole. This principle I take to be slightly different from Kozack in that it is not dependent upon the judgment having arisen out of circumstances for which the debtor can be regarded as morally responsible. It is simply a question of whether or not he has made legitimate use of the bankruptcy process. In this connection, see: Re Buell (1954), 1954 CanLII 342 (ON HCJ), [1955] O.W.N. 421, 35 C.B.R. 53, [1955] 4 D.L.R. 137 (S.C.) (Smily J.); Re White (1964), 7 C.B.R. (N.S.) 111 (Ont. S.C.).”

128The argument raised by the Bankrupt in this case requires an analysis of what kinds of conduct was found to be “reprehensible” per Raftis or “wilful and wanton misconduct” per Kozak v Richter doctrine applies, or as formulated by the Bankrupt “behaviour that was reckless, negligent or morally culpable.”

129Kozack v. Richter has been considered more that 157 times. It has only been distinguished (to my ability to determine) on the facts 12 times, mostly in situations relating to whether a “judgment” had been obtained, or in motor vehicle cases in Saskatchewan in relation to the subtleties of the particular motor vehicle insurance regime in that Province.

130I cannot find, and counsel could not point me to, any case involving a judgment arising from family law proceedings that the doctrine in Kozack v. Richter was raised and was not followed or was distinguished in a discharge context.

Family law cases applying Kozack v. Richter

131In prior discharge hearings that I have heard (Re Zivic 2022 CarswellOnt 8530, 2022 ONSC 3604 (“Zivic”) and Re Psavka 2025 CarswellOnt 14011, 2025 ONSC 4888 (“Psavka”) I applied prior Ontario jurisprudence relating to the treatment of judgments made in prior family law proceedings at discharge, and specifically under s.173(1)(a) of the BIA.

132In Bobyk, Re, 1995 CanLII 7384 (ON SC) (“Bobyk”) Feldman, J. (as she then was) dealt with the discharge of a Bankrupt husband after family litigation in circumstances similar to this case that she describes as follows:

“[1] FELDMAN J.: – Mr. and Mrs Bobyk went through acrimonious Family Law Act and child support litigation over a five year period. Ultimately after trial Mr. Bobyk was ordered to make an equalization payment of over $30,000 after Mrs. Bobyk had offered to settle for as little as $10,000. The equalization payment was funded from monies held in trust after sale of the matrimonial home to the bankrupt’s mother who lives next door to that home.

2The judgment of Ferrier J. discloses that Mr. Bobyk’s disputes on the equalization claim were largely devoid of merit, claiming debts to his sisters one of which was not proved and the other which was abandoned at trial. He also claimed assets at marriage which were not proved. Ultimately Mrs Bobyk was also awarded substantial costs. Within days of the costs order, Mr. Bobyk filed for bankruptcy. His only creditors listed are his sister for $2,700, his lawyer for under $200, his mother for $57,000 and his wife for $41,000 the amount of the costs order. His mother did not prove in the bankruptcy. The Family Support Enforcement Plan collects the portion of the costs award referrable to the child support component of the litigation. Twenty-seven thousand dollars of the award is related to the costs of the equalization portion of the trial.

5It appears that this is a situation where Mr. Bobyk elected to go bankrupt in order to avoid paying his wife the legal costs he was ordered to pay. It is clear that he is living on very limited resources and has no extra money at the moment from which to make a payment. Although he says he does not have access to family funds anymore, by providing a home, a car, and meals it is clear that his family is very willing to assist him to the extent he needs.

7In my view this is a situation akin to Kozack v. Richter [(1973), 1973 CanLII 166 (SCC), 20 C.B.R. (N.S.) 223 (S.C.C.)] where the Bankruptcy Act is not to be permitted to be used to avoid a judgment for tort or for a matrimonial proceeding. I note that this is not a case where Mr. Bobyk has more income or assets than he says at the moment, nor is there assault or physically abusive treatment involved as in several of the other cases cited in the court. Nevertheless our court process cannot condone a situation where spouses force each other through the financially and emotionally onerous burden of matrimonial litigation without taking responsibility for the financial consequences of losing.”

8I accept that Mr. Bobyk cannot at the moment pay any amount as a condition of his discharge. But he will be able to do so once he no longer has the child support payments to make. In my view the most appropriate disposition is for Mr. Bobyk to consent to judgment in favour of the trustee in the amount of 70% of proved claims with payment of $600 a month on the judgment to commence when the child support obligation of $600 a month for the eldest child is complete. Costs of this proceeding on a solicitor and client basis will be payable to Mr. Klotz out of the estate.”

133In Re Richardson (1998) 5 C.B.R. (4th) 28041 R.F.L. (4th) 141, 1998 CarswellOnt 3054 (Ont. Bktcy.), ("Richardson") the bankrupt made an assignment in bankruptcy to avoid paying his wife $75,000 owing on a judgment for equalization of matrimonial assets. The court ordered that, unless the bankrupt executed a consent to judgment in favour of the trustee for $50,000 of the $75,000 awarded to his wife, the bankruptcy was to be annulled. In that case Lane, J. stated:

"7 The whole of the evidence shows that this bankruptcy was an attempt by Mr. Richardson to rid himself of a single obligation: the $75,500 owing to his former wife under the judgment of Zelinski J.

8 The Court will not countenance the use of the bankruptcy machinery for the primary purpose of evading a debt owing to a spouse; such debts are not analogous to commercial obligations: Crew, Re (1987), 1987 CanLII 4134 (ON HCJ), 63 C.B.R. (N.S.) 244 (Ont. H.C.); Matthews, Re (1993), 1993 CanLII 16070 (ON CTGD), 17 C.B.R. (3d) 103 (Ont. Bktcy.). In those cases, conditional discharges were imposed in circumstances not unlike our own.

9 It was submitted that the bankruptcy ought to be annulled. There is jurisdiction to do so where there has been an abuse of process, but the power must be exercised with care, and after a consideration of all of the facts. An important fact is that already discussed: the bankruptcy was solely to avoid the obligation to the former wife. As well, the amount was not so large that, with the will to do so and an aggressive reaction to the adverse developments in his business, he could not have handled it. The will is what is conspicuously absent. It is a fact that the present income of the bankrupt is much less than had been the case. While his refusal to seek other sources of income is indicative of an improper attitude as I have noted, it is not to be assumed that he can actually obtain additional work and income. Equally, it cannot be assumed that he will never earn more, as he has not tried to do so. In my view, this is a case where it is appropriate to ensure that the bankrupt's substantial earning capacity is tapped for the benefit of the creditor. The choice the Court must make seems to be this: either to annul the bankruptcy and so revive the full amount of the judgment; or to impose a consent to a fresh judgment in favour of the Trustee for a lesser amount. If the bankruptcy were annulled, not only would the judgment be revived, there is the possibility that Revenue Canada would reconsider its claims for personal income tax for the years before 1996 which, according to the bankrupt, were waived as against the Trustee. That could make it more difficult for the opponent to collect on her judgment. Unless there is a substantial change in the bankrupt's earnings, the choice is, in one sense, an academic exercise, for there is no money to fund a meaningful payment schedule, given the support and insurance payments payable to and on behalf of the former wife which are not affected by the discharge. However, in another sense, the choice is meaningful. The bankrupt ought not to be left with the option of remaining comfortably bankrupt, supported by his new spouse and simply not taking up the discharge by refusing to consent to judgment. That leaves the former wife in the worst of both worlds. Therefore I order that the bankruptcy be annulled effective August 31, 1998, unless in the interval the bankrupt executes a consent to judgment in favour of the Trustee in the amount of $50,000. If the consent is executed, upon the Trustee filing a certificate of its execution, the bankrupt will be discharged without further condition. If the annulment takes effect, any assets remaining in the hands of the Trustee beyond his reasonable fees shall be returned to the bankrupt, and the bankrupt shall pay the costs of the opponent in these proceedings fixed at $1,000. In any event, a copy of these Reasons shall be sent by the Trustee to the creditors together with the Order as it is ultimately taken out."

134In Re Matthews 1993 CanLII 16070 (ON CTGD), 1993 CarswellOnt 188, 17 C.B.R. (3d) 103, 44 R.F.L. (3d) 243), ("Matthews") followed by Lane, J. in Richardson, O'Driscoll, J. (as he then was) found that under s. 178(1)(c) of the BIA, a discharge from bankruptcy does not release the bankrupt from debt or liability for support or maintenance of a wife or children. The discharge will, however, release the bankrupt from liability for the equalization payment.

135O'Driscoll, J. (as he then was) found that the evidence showed that at no time had the bankrupt brought an application to vary or rescind the order as to the arrears, and that the findings of the judge in the matrimonial proceedings with respect to the bankrupt's character were correct: the bankrupt would make every effort to avoid payment of the equalized amount and to avoid supporting his children and former wife. He stated that a voluntary assignment in bankruptcy, however, is not to be used as a convenient way to shed a judgment, especially a matrimonial judgment, and that there was no reason in this case to allow the bankrupt to walk away from the equalization payment.

136A discharge was granted, conditional upon the bankrupt consenting to a judgment in favour of the trustee in the sum of $307,079.65 and upon the payment of that amount at a rate of $2,000 per month, which was calculated as 50% of the equalization claim granted to the wife in the Family law proceeding that the Bankrupt was seeking to avoid.

137O'Driscoll, J. (as he then was) stated in his conclusions:

"23 1. My view of the bankrupt's demeanour and actions is simply an echoing of Judge O'Connell's.

24 2. In my view, the bankrupt wanted to shed his responsibility to his former wife and to his children by making an assignment in bankruptcy. He hoped to cast off equalization debt and continue in his ways of not fulfilling the support obligation imposed upon him by law.

25 3. The bankrupt does not present as a man who has been a victim of unhappy circumstances. He caused the circumstances and is now attempting to avoid the consequences of what he has done. He has legal training (a fact told to me by Ms Kearney and not by the bankrupt).

26 4. A voluntary assignment in bankruptcy is not to be used as a convenient way to shed a judgment, especially regarding matrimonial matters.

27 a) In Rice v. Copeland (1965), 1965 CanLII 532 (MB QB), 51 D.L.R. (2d) 147, 151-2, Dickson, J. (as a trial judge sitting in bankruptcy), wrote:

In Re McIntosh (1958), 1958 CanLII 260 (MB QB), 16 D.L.R. (2d) 207, 26 W.W.R. 541, 37 C.B.R. 212, Williams, C.J.Q.B., agreed with the judgment of Smily, J., in Re Buell, 1954 CanLII 342 (ON HCJ), [1955] 4 D.L.R. 137, [1955] O.W.N. 421, 35 C.B.R. 53, that although the Bankruptcy Act is available to an insolvent not engaged in business, the Act was never intended to enable a judgment debtor to get rid of a judgment for damages and with no other purpose to serve than the convenience and comfort of the debtor.

28 b) Re Gigault (1981), 37 C.B.R. (N.S.) 119, 121 (Ont. C.A.). Houlden, J.A.:

The court does not regard with favour the filing of an assignment in bankruptcy for the purposes of getting rid of a judgment such as that held by the appellant: Kozack v. Richter, 1973 CanLII 166 (SCC), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612.

29 c) See Re Crew (1987), 1987 CanLII 4134 (ON HCJ), 63 C.B.R. (N.S.) 244, 247, Henry, J.:

It is my opinion that a judgment disposing of issues between the parties to a marriage breakdown (including a common law relationship) is to be regarded by the court in the same category as an action for damages: see the judgment of the Supreme Court of Canada in Kozack v. Richter, 1973 CanLII 166 (SCC), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612 [Sask.]. The court does not countenance the action of a spouse to avoid payment of a judgment debt to the other spouse by invoking the machinery of the Bankruptcy Act. This principle I confine to the present facts where the judgment debt is the major debt owed by the bankrupt to the creditor. Interspousal claims and judgment debts enforcing them are not in the same category as trade debts or other commercial debts. . . .

30 5. I see no reason why the bankrupt should be allowed to walk away from the equalization payment owing to his former wife, the person who has looked after all the needs of their two children over these many years.

VI. Result

31 There will be an order that the discharge of the bankrupt will be conditional upon his consenting to a judgment in favour of the trustee in the sum of $307,079.65, and further conditional upon the payment of that amount to the trustee at the rate of $2,000 per month commencing March 1, 1993, and monthly thereafter."

138In Crew, Re 1987 CanLII 4134 (ON HCJ), 1987 CarswellOnt 165, 36 D.L.R. (4th) 143, 3 A.C.W.S. (3d) 219, 58 O.R. (2d) 575, 63 C.B.R. (N.S.) 244, 6 R.F.L. (3d) 220, (“Crew”) cited in Matthews, above, Henry, J. was dealing with the discharge where the opposing creditor was the former common law wife of the Bankrupt who had obtained a judgment against the Bankrupt relating to division of jointly owned property.

139The complete quote from Henry, J. at the discharge hearing in ordering that the Bankrupt pay 50% of the proven unsecured claims stated:

“18 It is my opinion that a judgment disposing of issues between the parties to a marriage breakdown (including a common law relationship) is to be regarded by the court in the same category as an action for damages: see the judgment of the Supreme Court of Canada in Kozack v. Richter, 1973 CanLII 166 (SCC), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612 [Sask.]. The court does not countenance the action of a spouse to avoid payment of a judgment debt to the other spouse by invoking the machinery of the Bankruptcy Act. This principle I confine to the present facts where the judgment debt is the major debt owed by the bankrupt to the creditor. Interspousal claims and judgment debts enforcing them are not in the same category as trade debts or other commercial debts which most frequently give rise to bankruptcy proceedings. There is, however, no fixed rule in this respect; the court must look at all the circumstances of the particular case in reaching a decision in how to exercise its discretion to grant a discharge or refuse it, or to grant a conditional discharge.”

140It should be noted that Henry, J. in Crew does not impose any additional “reprehensible” conduct standard that must be met of the Bankrupt’s conduct in the family law proceedings. None of Bobyk, Richardson or Matthews ever do the Raftis analysis of “reprehensible” or the Kozack v. Richter formulation "wilful and wanton misconduct”. These tests seem to be confined of analysis of situations where the judgment debtor with contractual or tortious debt seeks bankruptcy to compromise the Judgment debt, not in cases of family law Judgments.

141In each of Bobyk, Richardson, Matthews and Crew, the courts determined that judgments made in family law proceedings are, because of their matrimonial subject matter, subject to the Kozack v Richter doctrine, without there being an additional requirement that the conduct of the debtor be “reprehensible” or “wilful and wanton misconduct.”

142Other similar cases where Bankrupts were found to be “justly held responsible” under s.173(1)(a) for filing for Bankruptcy to avoid payment orders of various kinds granted in family law proceedings, based on the nature of the judgment itself, without explicitly applying an additional “reprehensible” or “wilful and wanton misconduct” test, are Patterson, Re 2000 CanLII 19827 (SK QB), 2000 CarswellSask 26, [2000] S.J. No. 20, 15 C.B.R. (4th) 245; Belanger c. Marcil 2019 CarswellOnt 19635, 2019 ONCS 6703, 313 A.C.W.S. (3d) 241; Carrier, Re 2000 CanLII 7885 (QC CA), 2000 CarswellQue 2032, 2000 J.E. 1917, [2000] J.Q. No. 3260, 100 A.C.W.S. (3d) 11, J.E. 2000-1917, REJB 2000-20340 (Quebec C.A.)(judgment was for physical and psychological damage to ex-wife and children); Swerid, Re 2007 CarswellMan 304, 2007 MBQB 173, [2007] M.J. No. 278, 159 A.C.W.S. (3d) 169, 216 Man. R. (2d) 300, 35 C.B.R. (5th); Underhill, Re 2003 CarswellBC 1247, 2003 BCSC 774, [2003] B.C.J. No. 1210, 122 A.C.W.S. (3d) 207, 45 C.B.R. (4th) 307 (“Underhill”); Meehan, Re 2009 CarswellNS 709, 2009 NSSC 374, 183 A.C.W.S. (3d) 639, 285 N.S.R. (2d) 178, 905 A.P.R. 178; Ganden, Re 2006 CarswellAlta 1449, 2006 ABQB 806, [2006] A.J. No. 1397, [2007] A.W.L.D. 10, [2007] A.W.L.D. 8, [2007] W.D.F.L. 1, 153 A.C.W.S. (3d) 26, 26 C.B.R. (5th) 194, 428 A.R. 287; and Ng, Re 1996 CanLII 306 (BC SC), 1996 CarswellBC 575, [1996] B.C.W.L.D. 1055, [1996] W.D.F.L. 798, [1996] B.C.J. No. 597, 39 C.B.R. (3d) 59, 62 A.C.W.S. (3d) 18 .

143In Underhill Registrar Scarth summarizes the policy behind the protection of judgments made particularly in Family Proceedings, on facts very similar to the conduct of this Bankrupt:

“15 The issue before the court is whether the bankrupt has established that the reason why her assets are less than 50 cents on the dollar is not attributable to her "fault": Westmore v. McAfee (1988), 1988 CanLII 187 (BC CA), 67 C.B.R. (N.S.) 209 (B.C. C.A.). In considering s. 173(1)(a) in the family law context, the courts have concluded that the court process cannot condone a situation where spouses force each other through the financially and emotionally onerous burden of matrimonial litigation without taking responsibility for the financial consequences of losing: Bobyk, Re (1995), 1995 CanLII 7384 (ON CTGD), 37 C.B.R. (3d) 25 (Ont. Gen. Div.), applying Kozack v. Richter (1973), 1973 CanLII 166 (SCC), 20 C.B.R. (N.S.) 223 (S.C.C.); see also Crew, Re (1987), 1987 CanLII 8301 (ON HCJ), 6 R.F.L. (3d) 220 (Ont. H.C.). In Crew the court ordered payment of an amount equal to fifty cents on the dollar of unsecured debts; in Bobyk the court required a consent to judgment for 60% of unsecured debts.

16 This line of cases was considered in Mitchell, Re (April 19, 2001), Doc. Vancouver 199308VA00 (B.C. S.C.). There the opposing creditor was the former spouse of the bankrupt who had been awarded scale 5 costs following a nine-day custody trial which the trial judge said should never have taken place. Martinson, J. adopted the analysis in Bobyk and ordered the bankrupt to consent to judgment for 60 percent of proven claims. She stated, at para. 28:

. . .In a custody case the focus of the court is on what is in the best interests of the children. While parents can ask the court to determine what is in the best interests of the children, one parent ought not to be permitted to in effect say to the other parent: "There is no use disagreeing with my view of custody. I am taking this to court, as I have nothing to lose. If you lose you will have to pay the costs. If you win I will make an assignment in bankruptcy and you will have to pay your own costs."

17 Mr. Bode submits that, like Mr. Mitchell, Ms. Underhill is responsible for the circumstances in which she finds herself, having pursued a needless custody trial. Mr. Rogers submits that Mitchell can be distinguished on the basis that the costs awarded there were on a higher scale to reflect the bankrupt's conduct of the litigation and the trial was originally set for four days but took nine, rather than seven as in Wanless. He also refers to Benham, Re (1996), 1996 CanLII 8281 (ON CTGD), 45 C.B.R. (3d) 294 (Ont. Bktcy.) where the registrar, although making a conditional order, declined to make a substantial order for payment on the basis that the bankrupt did not make his assignment in order to avoid his former wife's claim.

18 Here, as in Mitchell, the opposing creditor has a judgment for costs awarded following a trial relating to custody. Custody had been settled between the parties prior to Ms. Underhill's decision to move to Ottawa. Ms. Underhill proceeded with the custody litigation despite the recommendations of Dr. Posthuma and the offer from Mr. Wanless. In so doing, she was motivated more by her own interests than those of the children. Her assignment was made shortly after settling the costs with Mr. Wanless. Unlike the situation in Benham, there was no attempt by Ms. Underhill to obtain financing to pay the settlement. The costs judgment in favour of Mr. Wanless is Ms. Underhill's major debt; payments are being made on the credit card debts.

19 In my view, the principle set out in Bobyk and Mitchell applies to this case. Having lost at trial, Ms. Underhill seeks to be relieved of the financial burden of that loss. She raises the spectre of further litigation should she and Mr. Wanless now not agree on a co-parenting arrangement. In making the move to Ottawa and in forcing the matter of custody to trial, Ms. Underhill incurred the liabilities which resulted in her assignment into bankruptcy. It was not disputed that her assets are worth less than 50 cents on the dollar. I have concluded that Ms. Underhill has not established that she cannot justly be held responsible for the state of her assets as required by s. 173(1)(a).”

144As the Suteu proven claim in the estate is $84,806 or 99.3% of the Proven Claims, it is clear to me that the costs award made by Zisman, J., and the looming costs award by Del Frate, J. in favour of Suteu, were clearly the precipitating factor for the Bankrupt making an assignment into Bankruptcy 6 business days after the Zisman, J. Costs Order and Zisman, J. Contempt Sentencing Order were issued, and the looming Del Frate, J. Costs Order that was actually issued days after the Bankruptcy.

145Applying the tests in Bobyk, Richardson, Matthews, and Crew, the costs awards made after the Zisman, J. Joint Parenting Order and the finding of Contempt and imposition of costs in the Zisman, J. Contempt Sentencing Order, the Zisman, J. Costs Order, and the Del Frate, J. Costs Order, should have the same treatment as the judgments in those leading cases due to being issued in Family Law Proceedings, as those leading cases do not require any finding of additional “reprehensible conduct” or “wilful and wanton misconduct”, contrary to the legal argument made by Gillies on behalf of the Bankrupt.

146The Bankrupt also argued that the doctrine in Bobyk should not be enforced as that line of cases was to prevent spouses from avoiding equalization Orders, and in this case the Bankrupt and Suteu were never spouses, never cohabited and there was no equalization Order.

147Firstly, that misstates Bobyk where the entirety of the debt remaining owing to the former spouse in Bankruptcy was for a costs award issued immediately prior to Bankruptcy in the matrimonial proceeding, as in this case, not equalization.

148In Crew, the parties were common law spouses, not legally married.

149From all of the cases, as stated in Underhill, it appears that the imposition of the doctrine occurs because:

“… the courts have concluded that the court process cannot condone a situation where spouses force each other through the financially and emotionally onerous burden of matrimonial litigation without taking responsibility for the financial consequences of losing”

The jurisprudence does not support the distinction raised by the Bankrupt that the debt created through Matrimonial Litigation sought to be erased in Bankruptcy must be a particular type of judgment, such as equalization, or the distinctions raised that the matrimonial litigation is not being conducted by actual “spouses” or is dependant on the parties cohabiting.

150The Bankrupts suggestion that there must be a spousal cohabitation for the Bobyk/Richardson/Matthews/Crew doctrine to apply is not supported by the jurisprudence. If there is sufficient relationship between the parties to support more than a decade of family law litigation determining child custody and support issues, such as here, then the doctrine is applicable.

151The other paragraphs from the Bankrupt’s factum I have cited, make the argument that the Opposing Creditor has not met the onus to prove that the conduct of the Bankrupt in the Family Law Litigation was “…wilful and wanton behaviour, or behaviour that was reckless, negligent or morally culpable”, and that therefore a s.173(1)(a) cannot be proven.

152In support the Bankrupt cites Re Gill (1988), 1988 CanLII 3259 (BC SC), 69 C.B.R. 132 (B.C.S.C. In Bankruptcy) (“Gill”) at para. 14 and 15 as standing for the proposition:

For a bankrupt to be justly held responsible for the assets being less than 50 cents in the dollar, there must be some element of culpability or blameworthiness, some recklessness or blind disregard by the bankrupt for his own financial well-being.

153First of all, on the facts, the Bankrupt in Gill went bankrupt as a result of the failure of a restaurant business and the purchase of a second income property. This was not a Family Law case. The Court in this case found in the paragraphs cited:

“15 In the circumstances of this application, I find the bankrupt to be financially imprudent and incompetent with respect to business matters, but do not find any wilful blindness or recklessness that would allow me to conclude that he should be found justly responsible for his assets being less than 50 cents in the dollar.”

154Neither Kozack v Richter, nor Raftis, are cited in Gill, and it does not appear from the decision that the Bankrupt was seeking to avoid a particular large judgment debt.

155Essentially, Gill is complementary to the Raftis test, in dealing with the s.173(1)(a) test in cases of ordinary business failure. Based on the jurisprudence I have described above, the Raftis test for a “ordinary business failure” factual situation requires some additional finding in the nature of the Bankrupt’s conduct such as the Raftis “reprehensible” conduct to prove a s.173(1)(a) fact. This does not apply to debts arising from Family Law proceedings such as this one, and Gill is not applicable to this case.

156As I also stated at the hearing, the decisions and findings of Zisman, J., Del Frate, J. and Scherr, J. do not have to be “proven” by Suteu. They are in and of themselves evidence regarding the Bankrupt’s conduct for the purposes of determining a s.173 fact.

157Gillies also argued that the Bankrupt was following the advice of her counsel and assorted counsellors and medical professionals in the litigation, but lost and had the costs awards issued against her. The Bankrupt argues in her factum that it was Suteu that was prosecuting the litigation and that:

“The bankrupt did not force the opposing creditor into litigation. The opposing creditor refused all attempts to mediate, preferring instead to litigate, and the bankrupt was left with an impossible choice: acquiesce to the opposing creditor's damaging proposal for the child and lose her relationship with her son or litigate”

The argument was that as the Bankrupt was following the advice of professionals and experts in the litigation, her conduct could not have been “reprehensible” or “wilful and wanton misconduct”.

158However, given the forceful wording of Zisman, J. and Del Frate, J., and the subsequent findings of Sherr, J that I have quoted at length in these reasons in relation to the Bankrupt’s conduct, which findings of fact are binding upon me, the Bankrupt was found to be entirely responsible for the costs awards and her contempt of the Orders of Zisman, J., and the Judges in those decisions rejected the defence that she was following the advice of professional and medical advisors.

159These arguments raised 8 years later with respect to the findings of fact and law of Zisman, J. and Del Frate, J. and 5 years later by Sherr, J. are ENTIRELY relitigating those findings, that I have had to set out in detail in these reasons.

160The Bankrupt mentions in her Factum that the specific professionals whose advice the Bankrupt says she was following, and was therefore not culpable under her interpretation of the Bobyk/Richardson/Matthews/Crew tests, were Dr. DeCunha and Dr. Sloman.

161Firstly, Dr. DeCunha was not listed as a witness at trial before Zisman, J. and the report from Dr. DeCunha referred to in the Bankrupt’s Factum is from 2017, two years AFTER the Bankruptcy.

162Sherr, J. assessed and completely excluded the testimony of Dr. De Cunha, and the Report of Dr DeCuhna that the Bankrupt quotes and relies on in her Factum 5 years later, as follows:

141The court excluded Dr. DeCunha’s evidence because it was so seriously flawed that it did not even meet the standard of threshold reliability. The evidence was not relevant and not necessary. It was one-sided and unbalanced. It was not fair or objective. Despite Dr. DeCunha executing the Form 20.1, the court was unable to qualify her as an expert in this case. Accordingly, Dr. DeCunha’s evidence did not pass the first stage of the White Burgess test. Her evidence would also not have passed the second stage of the White Burgess test – the gatekeeper step. The unreliability of her evidence, combined with its unfairness and lack of objectivity dictates that its probative value is outweighed by its prejudicial effect.

142Dr. DeCunha described her report as a “paper review”. She has never been qualified as an expert for conducting paper reviews – only for assessments ordered by the court. She conceded that such a report has limitations and does not follow the same protocols and standards that would be followed in preparing an assessment. The court finds that the report’s limitations are far too significant to be viewed as reliable and admitted into evidence.

143The serious flaws in the report were as follows:

a) Dr. DeCunha never saw the child. It should be fundamental for an expert providing the opinions that Dr. DeCunha provided to see the child, not just once, but several times, alone, and separately with the mother and the father. It is also important for the expert to observe the child over a period of time. A “paper review” was seriously inadequate to support such opinions.

b) Dr. DeCunha testified that paper reviews are usually used for clinical and treatment purposes. They are not used for forensic purposes.

c) Dr. DeCunha never met the father or spoke to his lawyer. This was not only important to obtain their perspectives and to have a balanced report, but to obtain important information about the child. Dr. DeCunha should not have been providing opinions about the father’s understanding of the child’s needs without first providing him with the opportunity to speak to her. It is noteworthy that the mother specifically instructed Dr. DeCunha not to speak to the father or her lawyer. This was one of the limitations of her report that Dr. DeCunha admitted.

d) Dr. DeCunha only reviewed documents provided to her by the mother. She was unilaterally retained by the mother who paid for her report.

f) The mother did not provide important background documents to Dr. DeCunha – in particular Justice Zisman’s reasons for decision dated January 20, 2016. It was critical for her to read these reasons before opining on parenting plans. It meant that Dr. DeCunha only had the mother’s skewed version of why custody was transferred and the mother’s access was supervised. The mother did provide Dr. DeCunha with Justice Zisman’s September 29, 2015 reasons for decision. It became apparent to the court during her cross-examination during the voir dire that it was unlikely that Dr. DeCunha had read them. This was baffling. It should have been fundamental to Dr. DeCunha’s understanding of the case, the child’s functioning at the time and the court’s concerns about the mother – including her credibility.

g) Due to her failure to read both reasons for decision, Dr. DeCunha was unaware that Justice Zisman had found that the mother had emotionally abused the child through her continual allegations against the father and the intrusive investigations. She was unaware that the child’s behaviour had seriously deteriorated in the mother’s care prior to the custody transfer as the child was exposed to the mother’s agitated state. She was not aware that the child had become much calmer and settled after the custody transfer. Instead, she attributed any of the child’s negative behaviours after the custody transfer (primarily with the mother) to a ruptured attachment. That may be true, but without having critical information to make this assessment, the court can place no value on this evidence.^20

h) The mother also did not provide Dr. DeCunha with an assessment of the child from Holland-Bloorview written in April, 2016 which set out significant gains made by the child.

i) The mother did not provide Dr. DeCunha with the child’s June, 2017 report card or his IBI service plans that would have shown the significant gains made by the child since the transfer.

j) The mother did not provide Dr. DeCunha with any affidavits from the court proceeding. This information would have shown: multiple reports to authorities by the mother and her friends about the father that were not verified, the child’s distress in the mother’s care and concerns of independent third parties about the mother’s ability to manage the child’s behaviour.

k) Dr. DeCunha has raised serious concerns about the child. She opines that his emotional functioning is declining, with more and more serious signs of psychopathology emerging over time. She opines that a dissociative process could be emerging. The child is being seen by multiple professionals. They actually know the child. None of these professionals have raised anything approaching these concerns.

l) Dr. DeCunha makes limited reference in her report to reports from multiple professionals involved with the child that his behaviour and overall functioning has been improving. She makes no reference to the child’s autism level significantly improving in the father’s care. She continued to refer to his autism level as moderate to severe, when it had actually improved to mild to moderate.

^20 Dr. DeCunha was defensive on this issue, stating, “I didn’t examine the legal context, it was not my job”.

163Dr. Sloman was also not called as a trial witness before Zisman, J. who made the following findings relating to Dr. Sloman in 2015 in the Zisman, J. Joint Parenting Reasons at paragraph [204]:

e) The mother attended with Dr. Sloman, a child for a psychiatrist, for a 4 hour appointment with Dean without prior notice to the father. The mother testified that she attended for a consultation and assistance in managing certain aspects of Dean’s behavior. If this was the real purpose of the consultation then there is no excuse for the mother not advising the father of the initial appointment so he could attend. Instead, after this first meeting the mother then advised the father that Dr. Sloman wanted to see him but did not reveal the reason. It became clear through the evidence that the mother’s true purpose had been for Dr. Sloman ^21 to conduct an assessment mid-trial and give an opinion about access;

21 The father after consulting with his counsel did not further participate in meetings with Dr. Sloman and counsel agreed that he would not be called as a witness

And

253I also find that the mother involved Dr. Sloman not for the purpose of helping Dean but to obtain an opinion regarding curtailing the father’s access. No professional recommended a psychiatrist become involved. The mother simply asked Dr. Flanders for a recommendation and he made it without exploring the need or purpose of such a referral and based on information he obtained solely from the mother. I agree with the father’s position that Dean has enough professionals involved in his life and unless there is a specific need to involve a new professional no one else should become involved. In this case the underhanded nature of the mother’s actions are also concerning as is the doctor agreeing to prepare an assessment without first fully informing both parties of his intentions especially at he was aware that there was an ongoing court case.

And at [268] regarding future care of Dean:

24. Dr. Sloman shall not be involved in the assessment, diagnosis or treatment of Dean and he shall not be involved in Dean’s care in any way.

164I find it utterly astonishing that Gillies signed a Factum that included extensive quotations from the Report of Dr. DeCunha as justifying the Bankrupt’s conduct in the family litigation, without advising the Court that:

1. the very same report had never been part of the evidence before Zisman, J. before she issued her Orders that resulted in the extensive costs awards in favour of Suteu that the Bankrupt is seeking to compromise in this Bankruptcy; and more particularly

2. the evidence of Dr. DeCunha had been savaged and completely excluded by Sherr, J. from the second trial due to the “…unreliability of her evidence, combined with its unfairness and lack of objectivity”.

Did Gillies and the Bankrupt think I wouldn’t look? Gillies was counsel for the Bankrupt at the Trial before Zisman, J. , and commissioned the Bankrupt’s affidavits, so this is not a case where the issues with this evidence were not known prior to the Bankrupt swearing these affidavits.

165In fact the following finding by Sherr, J. 5 years previously specifically contradicts the points that the Bankrupt is making in her Factum about the prescient nature of Dr. DeCunha’s report regarding Dean’s alleged behaviour:

“g) Due to her failure to read both reasons for decision, Dr. DeCunha was unaware that Justice Zisman had found that the mother had emotionally abused the child through her continual allegations against the father and the intrusive investigations. She was unaware that the child’s behaviour had seriously deteriorated in the mother’s care prior to the custody transfer as the child was exposed to the mother’s agitated state. She was not aware that the child had become much calmer and settled after the custody transfer. Instead, she attributed any of the child’s negative behaviours after the custody transfer (primarily with the mother) to a ruptured attachment. That may be true, but without having critical information to make this assessment, the court can place no value on this evidence.”

166Similarly, the conduct of the Bankrupt with respect to taking Dean to Dr. Sloman, was a mid-trial maneuver by the Bankrupt that Zisman, J. stated:

“…the underhanded nature of the mother’s actions are also concerning as is the doctor agreeing to prepare an assessment without first fully informing both parties of his intentions especially at he was aware that there was an ongoing court case.”

167Again I find it astonishing that the Bankrupt and Gillies cited in the Bankrupt’s Factum as a mitigating factor the opinion of Dr. Sloman, and the conduct of the Bankrupt obtaining Dr. Sloman’s opinion mid-trial, without advising this Court that:

i) Dr. Sloman was never called as a witness by Zisman, J.,

ii) Zisman, J. found both the Bankrupt’s and Dr. Sloman’s conduct disturbing,

iii) Dr. Sloman was specifically prevented from providing care for Dean by Zisman, J., and

iv) the Dr. Sloman incident was one of the basis’ for Zisman, J. making the parenting Orders she did giving Suteu control of retaining medical professionals.

168How did they think this Court discovering this on its own would help the Bankrupt’s case?

169Finally, the statements made a paragraph 48 of the Bankrupt’s Factum,

“48. The bankrupt did not force the opposing creditor into litigation. The opposing creditor refused all attempts to mediate, preferring instead to litigate, and the bankrupt was left with an impossible choice: acquiesce to the opposing creditor's damaging proposal for the child and lose her relationship with her son or litigate”

were previously argued before Zisman, J. and were completely and totally rejected by Zisman, J. in the Zisman, J. Costs Reasons:

“q23 It is submitted by mother’s counsel that she acted reasonably as she made many concerted and repeated attempts to resolve the dispute by agreeing to mediation in advance of the trial as offered by the children's aid society which was refused by the father. It is submitted that she acted reasonably as she agreed along with the father to attend before another judge mid-trial to resolve the issues and although unsuccessful the mother was prepared to return to again attempt to settle during another break in the trial process. It is submitted that the father refused unless the mother made significant concessions. It is submitted that the father acted unreasonably in refusing to mediate before the trial and refusing to return to the settlement process during the trial. No details were provided by either counsel with respect to the contents of the mid-trial settlement discussions. I am not in a position to therefore ascertain which party was being unreasonable. It is also submitted that the mother acted reasonably as she made two offers to settle.

However, the mother’s offers to settle were unreasonable both with respect to the parenting proposal and the extent of the father’s financial contributions. It is understandable that the father would not agree to attend mediation as the mother’s attempts to diminish the father’s role in the child’s life were long standing as was her rigidity and lack of compromise.

The mother was unreasonable in not accepting the father’s offer to settle which would have avoided the entire trial process. The father was only seeking what I consider to be reasonable access and the ability to be advised and participate in the child’s medical and therapeutic appointments.

Further, even if she was not prepared to accept the offer to settle she could have agreed to proceed by way of a motion based on written materials without the necessity of a lengthy trial. Although I would not find the mother acted in bad faith, as that concept has been defined in the case law that is, behavior carried out with intent to inflict financial or emotional harm on the other party, conceal information or to deceive that party or the court,⁸ the mother’s conduct was certainly egregious. As I found in the trial decision the mother marginalized the father, breached court orders, refused to communicate or permit the father to participate in a meaningful way in the child’s life and withheld important information. Although the mother may have acted out of love for the child and on the genuine belief of the rightness of her actions she acted totally unreasonably throughout this litigation and her actions significantly increased the father’s costs.”

170Again how could Gillies sign a Factum making that argument, when it was clear that it had been previously rejected by Zisman, J. and in fact was one of the reasons that Zisman, J. awarded costs against the Bankrupt that led to her bankruptcy?

171Applying the Bobyk/Richardson/Matthews/Crew tests, I find that Bankrupt assigned herself into Bankruptcy to avoid the costs awards made in favour of Suteu by Zisman, J. and Del Frate, J. in the family law proceedings days before and just after Bankruptcy. As a result I find that a s.173(1)(a) fact has been proven.

172Additionally, I find that the findings of fact and law made by Zisman, J., and Del Frate, J., (that I have set out in detail) relating to the Bankrupt’s conduct which necessitated the costs awards made by Zisman, J. and Del Frate, J. in favour of Suteu was “or other wrongful conduct” or “reprehensible conduct” per Raftis and “wilful and wanton misconduct” per Kozack v. Richter, despite it appearing not to be a requirement of the tests in Bobyk, Richardson, Matthews, and Crew, and the other “Family Law” jurisprudence I have summarized.

173As a result, a s.173(1)(a) fact has been proven under both the Bobyk, Richardson, Matthews, and Crew tests for Family Law litigation based judgments being avoided in Bankruptcy AND on the general Kozack v. Richter/Raftis tests.

s.173(1)(f) the bankrupt has put any of the bankrupt’s creditors to unnecessary expense by a frivolous or vexatious defence to any action properly brought against the bankrupt;

and

s.173(1)(g) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, incurred unjustifiable expense by bringing a frivolous or vexatious action;

Position of Opposing Creditor:

174Suteu argued that the Bankrupt’s defence, appeals and cross-claims in the Family Law proceedings, leading to the costs awards and findings of contempt constituted s.173(1)(f) and a s.173(1)(g) facts.

175Whatever the extensive faults Zisman, J. and Del Frate, J. found with the Bankrupt’s case in the Family Proceeding, and the manner in which she and her counsel conducted it, which I have detailed above, there were no findings by any of these Judges in those hearings prior to Bankruptcy, or by Sherr, J. after bankruptcy, that the subject matter of that litigation was “frivolous”, or the defence constituted a “vexatious defence” or “vexatious proceeding” within the meanings of those terms in the decision of Henry, J. in Re Lang Michener et al. and Fabian et al. 1987 CanLII 172 (ON HCJ), [1987] CarswellOnt 378, [1987] OJ No 355 (QL), 59 O.R. (2d) 353, [1987] O.J. No. 355, 37 D.L.R. (4th) 685 (“Fabian”), whether within the s.173(1)(g) timelines, or otherwise.

176The Court finds that there is insufficient admissible evidence to make finding under s. 173(1)(f) and s.173(1)(g)of the BIA on a balance of probabilities.

s.173(1)(n) the bankrupt, if the bankrupt could have made a viable proposal, chose bankruptcy rather than a proposal to creditors as the means to resolve the indebtedness; and;

177Suteu argued the Bankrupt could have made a viable proposal but provided no particular admissible evidence to prove this fact.

178Houlden & Morawetz § 7:179. Choosing Bankruptcy Rather Than a Proposal states:

“The fourteenth fact in s. 173 is that the bankrupt chose bankruptcy rather than a proposal as the means to resolve the bankrupt's indebtedness: s. 173(1)(n). To establish this fact, the party opposing the discharge must establish that the making of a proposal was a practical alternative for the bankrupt.

An objective examination of the circumstances is required to ascertain if the choice of bankruptcy has been detrimental to creditors. In making this determination, the court must consider the assets available and the future earning potential of the bankrupt: Re Drummie (2002), 37 C.B.R. (4th) 241, 2002 CarswellNB 342, 2002 NBQB 315 (N.B.Q.B.).”

179The Court finds that there is insufficient admissible evidence to make a finding under s. 173(1)(n) of the BIA on a balance of probabilities, employing the test in Drummie.

s.173(1)(o)

(o) The bankrupt has failed to perform the duties imposed on the bankrupt under this Act or to comply with any order of the court;

180Suteu also opposed under s.173(1)(o).

181The basis of the objection is set in paragraphs 209 to 225 of the Suteu Affidavit, namely that the Bankrupt:

1. Failed to advise the Trustee that she had become employed after March of 2018, while Bankrupt;

2. She had raised $30,000 between loans from friends and crowdfunding, while bankrupt, to continue to finance her litigation against Suteu, as found by Sherr, J., and failed to advise the Trustee of this possible after-acquired property;

3. Made preferential payments of legal fees to her family law counsel and expert witnesses before assigning herself into bankruptcy;

4. Failed to provide to the Trustee her sources of funding of her litigation with him, both before and during the Bankruptcy.

182Because of these concerns raised in the Suteu Affidavit, as detailed above, I made the specific Orders requiring that the Bankrupt produce:

“1) Details of the "Go-Fund me" funding that she obtained at some point either before or during the Bankruptcy, including:

-dates of receipts of funding from Go-Fund Me" or whatever other funding she Received

-dates of "loans from friends", the identity of the friends the amounts received and the identity of the recipients of those funds and what amounts, as well as details of any repayments of the "loans from friends"

-dates of payments of lawyers and others from those receipts, the amounts of the payments and the identity of the recipients.

2. Details of her alleged employment either before or after the Bankruptcy, including, the dates of employment, the amounts received, the employer, and the Income and Expense statements provided to the Trustee under s.68 of the BIA to enable the Surplus Income Calculation.

3. Given the length of the Bankruptcy, evidence of tax compliance while Bankrupt, and evidence of any post-bankruptcy debt incurred.”

183The requirement for the Bankrupt to comply with this Order was reiterated in my April 15^th^, 2025 Endorsement.

184As I have set out in detail above, it appears from the Bankrupt’s Income Affidavit that the Bankrupt received crowdfunding and a gift from Mary Laframboise used to pay her legal fees post Bankruptcy in excess of $47,000. Sherr, J. had previously found that this funding was $30,000 and that there were also two loans of $8000 each, based on the Bankrupt’s prior testimony at the 2018 Trial.

185The Bankrupt’s new testimony in the Bankrupt’s Income Affidavit that all of the crowdfunding and the monies received from Mary Laframboise were gifts makes this even more serious as stated in Houlden & Morawetz § 5:561. After-acquired Property:

“By s. 67(1)(c), the property of a bankrupt that is divisible among creditors comprises all property that may be acquired by or devolve on the bankrupt before his discharge. However, after-acquired property is different from other property of the bankrupt inasmuch as until the trustee intervenes, all transactions by an undischarged bankrupt with a person dealing with the bankrupt in good faith and for value in respect of such property are valid and the person acquiring the property from the bankrupt receives a good title: see § 5:562 “Transactions in Good Faith and for Value in Respect of After-acquired Property”.

The effect of s. 99(1) is not to vest after-acquired property in the bankrupt until the trustee in bankruptcy intervenes; rather, under the subsection, after-acquired property vests immediately in the trustee in bankruptcy: s. 67(1)(c); Re Pascoe, [1944] 1 All E.R. 281, [1944] Ch. 219, 113 L.J. Ch. 152, 170 L.T. 169, 108 J.P. 126, 60 T.L.R. 236, 88 Sol. Jo. 102, 42 L.G.R. 245 (C.A.); Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701, 1997 CarswellMan 455, 1997 CarswellMan 456, [1997] S.C.J. No. 94, 152 D.L.R. (4th) 1, 219 N.R. 161, 123 Man. R. (2d) 1, 159 W.A.C. 1, 97 C.L.L.C. 210-029, 36 C.C.E.L. (2d) 1, 3 C.B.R. (4th) 1, [1999] 3 W.W.R. 86, [1997] L.V.I. 2889-1 (S.C.C.); Lasersight Inc. v. Wiese (2001), 31 C.B.R. (4th) 44, 2001 CarswellBC 2968, 2001 BCSC 1791 (B.C.S.C.); Watt v. Beallor Beallor Burns Inc. (2004), 2004 CanLII 18877 (ON SC), 1 C.B.R. (5th) 141, 2004 CarswellOnt 429 (Ont. S.C.J.), affirmed (2004), 2004 CanLII 19821 (ON CA), 1 C.B.R. (5th) 149, 2004 CarswellOnt 2291 (Ont. C.A.).”

186There is no evidence before me that the Bankrupt ever advised the Trustee that she had received as an undischarged Bankrupt, or had utilized, the now at least $47,000+ she admits to receiving post Bankruptcy in the Bankrupt’s Income Affidavit, or the at least $30,000 Sherr, J. found she received and failed to disclose to the Trustee.

187Sherr, J. made the specific factual finding on the evidence before her, including the Bankrupt’s prior testimony that:

“[265] The evidence showed that the mother has at times been manipulative and dishonest. Justice Zisman set out many examples of this behaviour in her decisions. This behaviour has continued. None of the $30,000 the mother obtained from loans and fundraising proceeds went into her bank account. The mother said that the fundraising monies went directly to her lawyers. She said that she received two loans of $8,000 each from two friends that were given to her in cash. The mother admitted that she has not reported any of these loans or fundraising proceeds to legal aid or to social assistance. She did not report the fundraising proceeds to the Trustee in Bankruptcy. It was apparent that the monies were not put into her bank account (at the very least the loans) as they might have been discovered by legal aid, social assistance officials or the father. The mother was clearly trying to avoid paying the father any of the costs awarded by the court.

188The Bankrupt’s gift/loan dance continued in the Bankrupt’s testimony at the hearing when it appeared that not only did the Bankrupt’s evidence in the Bankrupt’s Income Affidavit contradict her apparent trial testimony before Sherr, J. it also contradicted what Gillies advised the Trustee in the 2017 in the Exhibit 7 email, which corroborated the Sherr, J. finding, and cross-examined the Bankrupt’s sworn testimony in the Bankrupt’s Income Affidavit.

189Given the broad definition of “Property” in sections 2 and 67 of the BIA, if the Trustee had been advised, there is a case to be made that all of these monies received by the Bankrupt now claimed to be “gifts” were after-acquired Property of the Bankrupt that could have been collected by the Trustee for the benefit of creditors, and in particular Suteu, had the Bankrupt advised the Trustee of its receipt. Similarly, there was the possibility that the $34,000 in “cash” that the Bankrupt used to pay Gelman and Partners before Bankruptcy could have been recovered under s.95 of the BIA by the Trustee, had the Trustee been advised. But the Trustee was not advised, as found by Sherr, J.

190Under the provisions of s.158 of the BIA are listed the following duties of the Bankrupt relevant to this Discharge:

"A bankrupt shall:

(a) make discovery of and deliver all his property that is under his possession or control to the trustee or to any person authorized by the trustee to take possession of it or any part thereof;

(b) deliver to the trustee all books, records, documents, writings and papers including, without restricting the generality of the foregoing, title papers, insurance policies and tax records and returns and copies thereof in any way relating to his property or affairs;

(e) make or give all the assistance within his power to the trustee in making an inventory of his assets;

(f) make disclosure to the trustee of all property disposed of within the period beginning on the day that is one year before the date of the initial bankruptcy event or beginning on such other antecedent date as the court may direct, and ending on the date of the bankruptcy, both dates included, and how and to whom and for what consideration any part thereof was disposed of except such part as had been disposed of in the ordinary manner of trade or used for reasonable personal expenses;

(k) aid to the utmost of his power in the realization of his property and the distribution of the proceeds among his creditors;

(n.1) inform the trustee of any material change in the bankrupt's financial situation;

(o) generally do all such acts and things in relation to his property and the distribution of the proceeds among his creditors as may be reasonably required by the trustee, or may be prescribed by the General Rules, or may be directed by the court by any special order made with reference to any particular case or made on the occasion of any special application by the trustee, or any creditor or person interested;

191With respect to discharges where a ground of opposition under s.173(1)(o) is proven, (now) Justice Mills in Re: Wolf Rubin, Bankrupt (2018), 2018 ONSC 501, 2018 CarswellOnt 671, 56 C.B.R. (6th) 291 (Ont. S.C.J.)(“Wolf-Rubin”) stated:

"[31] There is no question the bankrupt has failed to perform the duties imposed upon him under the BIA. He has failed to deliver all books, records, documents, writings and papers which in any way relate to his property or affairs. He failed to submit a properly sworn Statement of Affairs that discloses full particulars of his assets and liabilities, the names and addresses of his creditors, the cause of his insolvency and the disposition of his assets.

32In considering the bankrupt's discharge application, I am guided by the principles set out by Anderson J. in Re Raftis[3] wherein the court must have regard not only to the interest of the bankrupt and his creditors, but also to the interests of the public in ensuring the integrity of the bankruptcy and insolvency system is at all times protected. While the honest but unfortunate debtor is to be provided the opportunity of a new start, the bankruptcy courts are not to be considered clearing-houses or viewed as charitable institutions for relief from debt, however incurred. Certainly, discharge from bankruptcy is not a matter of right.

33A dishonest debtor and a debtor unwilling to make full disclosure of his financial affairs, is entitled to no relief under the BIA."

192In Re Biskupski 2023 ONSC 1694, I summarized the jurisprudence relating to the fulfilment of duties under the BIA, and in particular the finding of a s.173(1)(o) fact:

"[147] There is a paucity of jurisprudence regarding the content of the duty of continuing to assist the Trustee in the administration of an estate. The wording of the applicable sections of s.158 is instructive:

“a) make discovery of and deliver all his property that is under his possession or control…”

“d) …showing the particulars of the bankrupt’s assets the names and addresses of the bankrupt’s creditors, the securities held by them respectively, the dates when the securities were respectively given and such further or other information as may be required”

“(k) aid to the utmost of his power in the realization of his property…”

“(o) generally do all such acts and things in relation to his property…as may be reasonably required by the trustee”

148The statutory wording regarding "all his property" and "the particulars of the Bankrupt's assets" and "aid to the utmost of his power" and "...do all such acts and things in relation to his property...as may be reasonably required by the trustee" all indicate as statutory intent to impose on bankrupts a high standard in proving that they have fulfilled their duties under the BIA, not merely a factual compliance.

149As stated in Jefferson, the BIA imposes a duty on the Bankrupt to "...actively aid his Trustee or his creditors in mitigating the damage wrought by his assignment." and not "...remain passive and hope that the financial storm would blow over."

150Despite the efforts of his able counsel to cast the Bankrupt's behavior as "strongly supporting" his compliance with his duties in aiding the Trustee in taking possession of the Opoka, the evidence I have cited above and in the Chronology does not bear this out, and I cannot find that this Bankrupt's conduct constituted "...actively aid(ing) his Trustee", per Jefferson to locate and secure the Opoka "...to the utmost of his power"."

193These findings of (now) Justice Mills in Wolf Rubin are also applicable:

“16 The Bankruptcy and Insolvency Act ("BIA") is intended to provide the honest but misfortunate debtor an opportunity to become financially rehabilitated without an overwhelming burden of debt. In exchange for this opportunity, a bankrupt is required to fully, faithfully and honestly complete a Statement of Affairs that outlines the bankrupt's assets and discloses any assets that have been disposed of prior to the assignment, provides a listing of all liabilities, discloses the bankrupt's employment/business history and any prior insolvency filings, and identifies the cause of the financial difficulties which have led to the assignment.

17 The bankrupt was careless and indifferent to his obligations of truthful and complete disclosure on his Statement of Affairs. The errors and omissions are so pervasive, I must conclude the bankrupt either deliberately concealed information or was entirely reckless in completing and then swearing as to the truth of the contents of his Statement of Affairs.”

194This doctrine is not limited to disclosure in the Statement of Affairs. In Re Rosenfeld, 2002 CarswellOnt 2668, [2002] O.J. No. 3158, 116 A.C.W.S. (3d) 10, 38 C.B.R. (4th) 73, affirmed 2004 CanLII 15992 (ON CA), 2004 CarswellOnt 2337, [2004] O.J. No. 2459, 131 A.C.W.S. (3d) 583, 188 O.A.C. 93, 4 C.B.R. (5th) 70 (“Rosenfeld”) Hoy, J. (as she then was) made the following finding in determining that the Bankrupt had not fulfilled his duties under the BIA:

“18 Although requested to do so, Mr. Rosenfeld did not deliver documents to substantiate the source of the monies that funded his lifestyle during his bankruptcy. He did not deliver cancelled cheques or copies of cheques issued in payment of various lawyers' accounts. He did not provide to the Trustee the guarantee in respect of the account of Caloosa Trading Ltd., an off-shore company, which he executed almost immediately before making an assignment into bankruptcy. These are significant failures where, as here, there is concern that the bankrupt has undisclosed funds offshore.

20 I concur that Mr. Rosenfeld has clearly failed to fulfill the duties on a bankrupt”

195As stated by Lane J. in Martino (Re), 2007 CanLII 30754 (ON SC) (“Martino”):

“[20] In summary, I accept the Trustee’s evidence that the level of co-operation fell far short of the openness expected of Bankrupts. Persons seeking the benefit of relief from their debts must make total disclosure of their affairs. It is not good enough to say, as these Bankrupts say through their counsel, that it is not their fault that the Trustee did not ask the right questions. This is not a game of ‘Catch me if you can’, and those who play that game can expect little sympathy from the court.”

196Given all of the issues I have raised with the contradictions between the Bankrupt’s Income Affidavit and the findings of Sherr, J. regarding the crowdfunding, and the actual contradictions between her sworn testimony and the contents of the exhibits to her own affidavit, I find that the Bankrupt has not complied with my Orders of March 14, 2024 and April 14, 2025 that the Bankrupt provide full disclosure of the funding arrangements for the litigation she engaged in post-Bankruptcy.

197The Bankrupt also admits to obtaining, and utilizing at least two credit cards post Bankruptcy, contrary to the provisions of s.158(a.1) of the BIA and Superintendent Directive No. 3 Duties of the Bankrupt to Deliver Credit Cards to the Trustee.

198In the context of this Discharge Hearing, on all of the evidence before me, that I have set out in great detail, and documents produced to date by the bankrupt and set out by the Trustee, in exercising my discretion as Registrar, and in applying the principals Rosenfeld set out above, I have found that the Bankrupt has breached her duties under s.158(a)(a.1)(b)(e),(f),(k),(n.1) and (o) of the BIA.

199Therefore, I find that, on the totality of the evidence, and in exercising my Registrar’s discretion a fact has been proven under s.173(1)(o) of the BIA on the totality of the evidence that I have reviewed, per Crowley.

Section 4.2 Duty of Good Faith

200As I have noted several times in prior cases, the Discharge Jurisprudence cited herein mostly predates the amendment of the BIA in 2019 to codify the Duty of Good Faith as a cornerstone principle underlying the BIA.

201The provisions of s.4.2 of the BIA, read:

Good faith

4.2 (1) Any interested person in any proceedings under this Act shall act in good faith with respect to those proceedings.

Good faith — powers of court

(2) If the court is satisfied that an interested person fails to act in good faith, on application by any interested person, the court may make any order that it considers appropriate in the circumstances.

202The jurisprudence provides that the duty of Good Faith applies to Debtors, Creditors and s.4.2 adds that “all interested persons” are subject to the “Good Faith Principle” in proceedings under the BIA.

203Mah, J. in CWB Maxium Financial Inc v 2026998 Alberta Ltd, 2021 ABQB 137, (“CWB”) that the Court is to consider under s.4.2 of the BIA:

“40 As a new provision, there is a dearth of case law to guide its application. However, it is obvious that the debtors and the secured creditors here are interested parties within the meaning of the section and that “with respect to” means invoking and conducting insolvency proceedings under the BIA.”

59 I summarize and conclude on this point as follows:

“• Interested persons in proceedings under the BIA are statutorily required to act in good faith with respect to those proceedings.

• Based on previous caselaw, the statutory requirement of good faith in the insolvency context requires that an interested party not bring or conduct proceedings for an oblique motive or improper purpose.

• Whether dishonesty has occurred in a given case is fact-specific and may, depending on the circumstances, include lies, half-truths, omissions and even silence.

• The conduct of the party alleged to have breached the good faith requirement should be assessed in light of the intent and policy objectives of the BIA.”

204In interpreting the identically worded s.18.6 of the CCAA, Romaine, J. in Bellatrix Exploration Ltd (Re) 2020 CarswellAlta 2545, 2020 ABQB 809, [2020] A.J. No. 1453, [2021]A.W.L.D. 478, [2021] A.W.L.D. 481, [2021] A.W.L.D. 483, [2021] A.W.L.D. 568, 327 A.C.W.S.(3d) 166, 86 C.B.R. (6th) 191 (“Bellatrix”) states:

“105 As noted by Dr. Janis Sarra in “La bonne foi est une considération de base — Requiring Nothing Less than Good Faith in Insolvency Law Proceedings”, Annual Review of Insolvency Law, eds Janis Sarra & Barbara Romaine, Toronto: Thomson Reuters Canada, 2014:

The court will find bad faith conduct where a debtor, creditor or their professionals fail to meet the requirements to act candidly, honestly, forthrightly and reasonably in their dealings with one another and the court; where parties act capriciously and arbitrarily; or where they lie or otherwise knowingly mislead each other about matters relating to the insolvency proceedings.”

205Recently my colleague Associate Justice Rappos reviewed the purposes of s.4.2 in the context of prior “good faith” jurisprudence from outside of the BIA, in the context of expunging the proof of claim filed by an ex-spouse in a Bankruptcy proceeding. In Re Gregoriou, 2024 ONSC 5972 he states:

“[44] Subsection 4.2(1) of the BIA provides that any interested person in any proceedings under the BIA shall act in good faith with respect to those proceedings. Subsection 4.2(2) provides that if the Court is satisfied that an interested person fails to act in good faith, on application by any interested person, the Court “may make any order that it considers appropriate in the circumstances” [emphasis added].

45The phrase “good faith” is not defined in the statute.

46Subsection 4.2 was introduced into the BIA in 2019. The purpose of the amendment was to ensure that all parties act honestly, reasonably, and candidly throughout bankruptcy proceedings, the failure of which may be appropriately sanctioned.[6] The amendment was said to “give courts another tool to ensure fairness” in the insolvency process.[7]

47In CWB Maxium Financial Inc. v. 2026998 Alberta Ltd., Justice Mah considered the requirements of the section in the context of the actions of a secured lender and held that

(a) the statutory requirement of good faith in the insolvency context requires that an interested party not bring or conduct proceedings for an oblique motive or improper purpose;

(b) the common law relating to the organizing principle of good faith in contractual performance may be used to inform the good faith requirement in section 4.2; and

(c) conduct of the party alleged to have breached the good faith requirement should be assessed in light of the intent and policy objectives of the BIA.[8]

48Ms. Gregoriou asks that the Court rely on the Supreme Court of Canada’s decision in Bhasin v. Hrynew[9] (“Bhasin”) in considering the requirement of good faith under section 4.2.

49Bhasin deals with good faith and contractual performance. The Supreme Court determined that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily.[10] That parties should conduct contractual performance in an honest, candid, forthright and reasonable manner.[11] The Supreme Court referred to the broad duty of good faith recognized by the Civil Code of Quebec. It noted that the duty includes determining whether conduct is unacceptable according to the standards of reasonable people.[12]”

206Pre-s.4.2 discharge jurisprudence reflects these principles, such as the decisions of Mills, J. in Wolf-Rubin, and the Ontario Court of Appeal in Giannotti on the terms of the Order of Discharge the Court should grant for a dishonest uncooperative Bankrupt.

207As I have dealt in detail in relation to the behavior of the Bankrupt, for the purposes of s.4.2 of the BIA I find that:

i. The Bankrupt, in her behavior relating to the failure to provide accurate information to the Trustee and to this Court related to her crowdfunding and “loans from friends” as found by Sherr, J., and admitted to by her own counsel to the Trustee in 2017 in Exhibit 7, and having to be compelled by my Orders to provide answers that were still incomplete, and which answers apparently contradicted her testimony before Sherr, J., were “…lies, half-truths, omissions and even silence”;

ii. The Bankrupt filing materials before me, including sworn affidavits and facta that yet again tried to re-litigate matters long ago decided by Zisman, J., Del Frate, J. and Sherr, J., made further allegations against Suteu and that also contradicted prior findings of Zisman, J. Del Frate, J. and Sherr, J.;

iii. The Bankrupt in making the utterly unsupported allegation that Zisman, J. “recused herself” under the test by Doherty, J.A. in Shekhdar, that I found was employing“…a most objectionable tactic”;

were each fundamentally not in compliance with her duty to act in good faith under s.4.2 of the BIA, and in accordance with the intent and policy objectives of the BIA, based on the analysis of Mah, J. in CWB and Romaine, J. in Bellatrix.

208Breaches of this statutory duty under s.4.2 by the Bankrupt, in contravention of the principles of the BIA, must be considered by the Court in formulating a proper disposition on Discharge per the principles in Wolf-Rubin and Giannotti.

DISPOSITION

209In the context of this discharge, on all of the evidence before me, and in particular the testimony of the Bankrupt that I have set out in detail, and as a result of the admissions made by the Bankrupt before me, under oath, and from the documentation produced to date by the bankrupt and set out by the Trustee in each of the S.170 Reports, and in exercising my discretion as Registrar, I have found that facts under s.173(1)(a) and (o) of the Bankruptcy and Insolvency Act have been proven.

210Accordingly, as s.173 facts having been proven, as noted in Giannotti, under the provisions of s.172(2) of the BIA, I cannot grant the Bankrupt an absolute discharge, and can only grant either a suspended discharge or a conditional discharge, or to refuse to order any kind of discharge.

Refusal of Discharge:

211Suteu did not specifically requested a refusal of discharge, but the circumstances of this Bankruptcy require the Court to conduct the analysis.

212The most emphatic statement of the purpose of a refusal of discharge, and an imposition of a sentence of bankruptcy for life, were the oral reasons of Houlden, J. (as he then was) in Re Donald Joseph Murray (carrying on business as Furniture Discount Barn), September 9th, 1971 (unreported) (“Murray”)

“HOULDEN, J. (Orally);

I have read carefully all the papers in this application. I have been doing bankruptcy work since 1948 and I think that your conduct is the worst that I have seen.

In my opinion you should never be discharged from bankruptcy.

I am going to refuse discharge and I believe you should never be granted a discharge but should remain a bankrupt for the rest of your life.

I have had the reporter make a note of what I am saying so that these comments will be available to any judge who presides in this court at a future date if you see fit to reapply for a discharge.

In my judgment, you are a menace to the business community.”

213From a prior decision in the same bankruptcy by Registrar Poultney in Murray, Re (1970) CarswellOnt 76, 14 C.B.R. (N.S.) 142 the facts on which Justice Houlden pronounced a life sentence at discharge, involved (at minimum) the bankrupt personally obtaining boats from unsuspecting vendors by purporting to purchase them in the name of a non-incorporated corporation, taking possession, and then purporting to pay for the boats with non-negotiable cheques in the name of a non-incorporated corporation, that also lacked a required second signature by a second signing officer, who also did not appear to exist.

214Mills, J. (now) in Re: Wolf Rubin, Bankrupt, 2018 ONSC 501 (“Re Wolf Rubin”) refused discharge in the following circumstances:

“[7] Then commenced the cross-examination and it was as though an entirely different person took occupation of the seat. The bankrupt, although unfailingly polite, became difficult, obstructionist, painfully literal and obfuscated on the most simple and direct inquiries. …the disparity in the manner of his evidence between examination in chief and cross-examination was too significant to be anything other than a deliberate and continued attempt to thwart the efforts of the Opposing Creditors to challenge the conduct and affairs of the bankrupt.

“[8] …The bankrupt claimed not to understand the meaning of simple words and phrases … The bankrupt refused to accept simple propositions when put to him, frequently claiming not to understand the nature of the question.

9It quickly became apparent during the cross-examination, the bankrupt was simply refusing to answer any questions he felt might call into question the manner in which he conducted his business affairs prior to the assignment and his conduct throughout the administration of the estate. The bankrupt operated multimillion dollar international businesses and yet he claimed not to understand simple terms of commerce.”

215I find that this Bankrupt, like the Bankrupt in Giannotti, given the Bankrupt’s conduct and testimony, was:

“…[the Bankrupt] was simply too unco-operative, evasive and untruthful with both the trustee and the bankruptcy judge.”

216As stated in Giannotti:

“…the BIA seeks to provide relief to honest and unfortunate debtors. The word ‘honest’ introduces a strong element of integrity into the administration of the Act. In my view, a reasonable member of the public would seriously question the integrity of the BIA if this Bankrupt was given any form of relief at this juncture. He has not been honest with the trustee or the bankruptcy court. He is free to re-apply for a discharge, but he must co-operate with the trustee and make full disclosure of the relevant facts.”

217Like the bankrupt in Giannotti, I find that this Bankrupt, is an unrepentant Bankrupt, continuing to blame Suteu and Zisman, J. for her problems.

218Her evidence in her Affidavits, and in her testimony and behaviour before me was evasive, contradictory and dismissive of the interests of Suteu, effectively her only creditor.

219Despite the withering assessments by Zisman, J., Del Frate, J. and Sherr, J. of her conduct, and specific findings of contempt made against her, the Bankrupt has not gained any insight that her conduct and behaviour is at the root of her problems, and continues to argue matters long ago decided by the Courts.

220The decisions and costs awards by Zisman, J. and Del Frate, J that are the basis of the proven claim of Suteu in this Bankruptcy were absolutely clear that it was the Bankrupt’s conduct and findings of contempt that resulted in the very large cost awards that were the cause of this Bankruptcy.

221I have no sense that the Bankrupt is rehabilitated after a decade in Bankruptcy.

222Having set out all of the contradictions I have found between the Bankrupt’s current testimony, her prior testimony and the contradictions between her current evidence and specific findings made by the Courts long ago, I have no difficulty in determining that the Bankrupt is a “…dishonest debtor, and a debtor unwilling to make full disclosure of her financial affairs”, BUT I am NOT prepared to refuse the Bankrupt’s discharge, despite the factual similarity to Wolf-Rubin or Giannotti.

223A Refusal in these circumstances may create the situation warned against by Ground, J. in Re Koenigs 2003 CanLII 26183 (ON SC), 2003 CarswellOnt 230, [2003] O.J. No. 468, [2003] O.T.C. 56, 119 A.C.W.S. (3d) 882, 39 C.B.R. (4th) 231 (“Koenigs”):

“12 In view of my finding that numerous bankruptcy facts have been established, the court must either dismiss the applications or issue an order for a conditional and/or suspended discharge. Although the past history of this matter and the behaviour of the bankrupts and the findings as to bankruptcy facts established might well justify a simple dismissal of the applications, such an order, in my view, would be counter-productive and would simply result in further discharge applications being brought at some point in the future with a repetition of the same evidence that has been before this court, and with the incurring of additional time and expense on behalf of Hufcor and the Trustee and further court time.”

224I find that on the review of the totality of the evidence presented to me at this Discharge Hearing this Bankrupt is not an “honest and unfortunate debtor deserving of a fresh financial start…”, and has not been rehabilitated in the 10 years she has been bankrupt.

225A refusal of the Bankrupt’s discharge in this case would not recover any amounts to repay the costs of the Trustee in fulfilling its duties under the BIA, or recover any amounts for Suteu, the only effective creditor in this estate.

226All it would result in would be at some point later in time the refighting of the same issues that Suteu and the Bankrupt have been fighting now for almost 14 years.

227Consequently, for these factual reasons, and on the legal tests in s.172(2) and Giannotti, which are binding upon me, the Bankrupt is undeserving of an absolute discharge, but for the reasons I have set out above, and in applying the jurisprudence in Bobyk, Richardson, Matthews, Crew, Mancini, Martino, Wolf-Rubin and Koenigs, and in exercising my Registrar’s Discretion, I do not refuse an Order of Discharge, but instead find that on these tests a Conditional Order of discharge is required.

Terms of Conditional Discharge Order:

228Suteu requested the following alternative relief in his Factum:

“(a) - an order for discharge with a condition to pay to the Trustee such amount as determined by the Trustee, to ensure that at the distribution to the creditors, Suteu will receive $27,000. The payment of the total amount, is to be paid as follow: $15,000 within 3 months from the date of the order, and the rest of the amount within one year (or less if the bankrupt wishes to pay after).

The bankrupt will be discharged as soon as she paid the full amount; or in the alternative

(b) an order for discharge with a condition to pay to the Trustee a total of $50,000 (about 58% of the proven debt) at a rate of minimum $500/month, with a further term to the order, that the trustee may seek its discharge if the bankrupt fails to make the payments as required for three consecutive months. The bankrupt can make faster payments. (Suteu is aware that this would be long term order to pay, and most likely should include a clause for consent to judgment after that she is serious about making the payments, this to be considered and discussed further); or in the alternative,

(c) - an order for refusal of discharge; and

(d) - costs.

229In Katz, Re 2013 CarswellOnt 16850, 2013 ONSC 7426, 235 A.C.W.S. (3d) 603, 7 C.B.R. (6th) 53, (“Katz”), the Bankrupt was being totally supported by family members and trusts, and had no income. Katz was a real estate developer with several real estate development companies which had failed. He had, similarly, $10 Million in creditors, and prior to bankruptcy had disclosed high net worth on his net worth statements, but at bankruptcy claimed to have no assets. The Bankrupt was not working, but living off of gifts from his mother.

230D.M. Brown, J. (as he then was) stated:

“75 From the evidence I make the following findings of fact:

(i) Katz is 46 years old, an experienced residential real estate developer, who does not have any health problems which would prevent him from working;

(ii) Apart from the work which he performed during the year his present residence was built, Katz has not sought any full-time employment. As a result, he has not generated any surplus income for his creditors during the period of his bankruptcy;

(iii) Katz is able to maintain a very comfortable lifestyle because most of his needs are met by gifts he receives from his mother; his wife’s modest income only covers part of the expenses of Katz’s family; and,

(iv) In light of the gifts he continues to receive from his mother, Katz does not intend to look for future employment.

77 When on discharge hearings courts say that “it is time the bankrupt was able to put his past financial difficulties behind him and get on with his life”,6 the evidence usually discloses that the bankrupt wishes to return back into the work force or to engage in a new business thereby resuming his role as a productive member of society. That is not this case. Katz is a bankrupt who has done little gainful work since his bankruptcy and does not intend to do any because his mother has provided him with a steady stream of gifts over the past nine years which have allowed him and his family to live quite comfortably. In these circumstances, I adopt the comments made by Registrar Nettie in Kaufman, Re:

I find that the Bankrupt has chosen to remain unemployed and has the ability to resume earning an income virtually whenever he chooses. I find that his decision to behave in this manner is also something which cannot be condoned by the Bankruptcy Court.7

78 In reaching that conclusion I am not taking into account the income of the person who, as a matter of fact, supports Katz, that is to say his mother, Roslyn Fingold. I agree with the approach taken by Ground J. in the case of Ledrew, Re where the court was required to consider whether the income of the bankrupt’s wife should be taken into account as a factor in determining the amount of payments a bankrupt should make to the estate as a condition of discharge. In that case the wife was not under a legal obligation to support her husband because of the terms of their marriage contract. Ground J. concluded that he should not take the wife’s income into account stating:

To adopt the statement of Saunders J. in Re Baum, Greey is under no obligation, either legally or morally, to continue to shoulder LeDrew’s half of the household expenses and there is no guarantee that she will continue to do so. Accordingly, I am of the view that, in the case at bar, Greey’s income is not a factor to be considered in determining the quantum of any payments which LeDrew may be required to make to the estate nor is Greey under any obligation to disclose her income or to provide documents disclosing her income to the Trustee or to any creditor of the estate.8

79 In the present case I have no idea what income Roslyn Fingold earns. What the evidence does show, however, is that the gifts Katz has received from his mother over the past nine years have instilled in him an attitude that he need not look for gainful employment notwithstanding his ability to do so. It would undermine the integrity of our bankruptcy system, and creditors’ perceptions of the fairness of that system, if a bankrupt who showed no willingness to resume his role as a productive member of society, but instead chose to lead a very comfortable life off the largesse of his well-to-do family, nevertheless was granted an absolute discharge by this Court.

81 As to the amount of a payment, I adopt the principle stated by Lane J. in Martino, Re that a condition imposed by the court should be sufficiently burdensome to make the point that the bankrupt’s conduct cannot be tolerated, but should not be unduly hard to the bankrupt to bear once he decides to return to employment.9

82 Proven claims in the estate total approximately $10 million. The claims of the creditors who have filed notices of opposition total just over $2.031 million. The August 28, 2008 Report of the Trustee stated that Katz’s reported total income for 1999, 2000 and 2001 was $140,000, $375,000 and $284,000, respectively, or an average of about $266,000 per year. Although the Trustee did not have Katz’s tax returns for the two years immediately prior to the bankruptcy, the earlier returns provide some indication of the income level Katz was able to generate from his employment before his companies took a turn for the worse.

83 One creditor, Mr. Morra, submitted that the court should fix a payment at $2 million. I think that amount is completely unrealistic. A more reasonable suggestion, which balanced the rights of the bankrupt, the creditors and the integrity of the bankruptcy system, was that made by the Trustee which proposed a payment in the range of $150,000 to $300,000. On balance, I conclude that a payment in the amount of $250,000 would be fair. Katz is only 46 years old. If he so chooses, he has the prospect of at least two decades of gainful employment ahead of him. Imposing a payment of $250,000 would be burdensome, but not unduly so.”

231The application of Martino (Bankruptcy), Re, 2004 CanLII 17978 (ON SC) (“Martino”) by Brown, J.A. in Katz refers to this statement in imposing $300,000 conditional orders against each Martino brother, calculated by one years of dividends wrongly received when the company was insolvent:

“[35] In the present case, I have rejected the submission that these Bankrupts are now unemployable, and found that they lack only the motivation to secure employment. Were they to become employed, given the income their families now enjoy even without their contribution, they should be in a position to make a substantial payment to the Trustee without hardship to them or to their families.

40In my view, the Bankrupts cannot be discharged unconditionally on these facts without damaging the integrity of the bankruptcy system. The condition suggested by the Trustee is sufficiently burdensome to make the point that such conduct cannot be tolerated, but ought not to be unduly hard for the Bankrupts to bear, particularly once they decide to return to employment.”

232The Bankrupt has testified that she will be returning to the workforce once her daughter enters kindergarten, which may be as early as 2027. Previously, Sherr, J. found in 2018 [at 314] “The court finds that the mother has been deliberately unemployed.”:

“[316] This leads to the issue of how much income to impute to the mother. The mother is an intelligent, capable person. She attended the general arts program at Centennial College. She started, but did not complete, a paramedic program. She has worked as a nanny, as a teacher’s assistant in a daycare, as a receptionist at an insurance company and as a corporate services assistant earning annual income of about $40,000.

317The court finds that the mother was capable of earning annual income of $25,000 from April 1, 2017 to the end of March, 2018.”

233In the interim the Bankrupt is remarried, and has had a child.

234This Bankrupt has had a “suspended discharge” for almost 10 years which has obviously not aided in her rehabilitation. A further suspension is of no utility.

235Over that 10 year period she has accumulated in excess of $20,000 in post-bankruptcy debt on credit cards.

236As stated by Feldman, J. in Bobyk, in Ordering a 70% payment condition against the Bankrupt:

“[5] It appears that this is a situation where Mr. Bobyk elected to go bankrupt in order to avoid paying his wife the legal costs he was ordered to pay. It is clear that he is living on very limited resources and has no extra money at the moment from which to make a payment. Although he says he does not have access to family funds anymore, by providing a home, a car, and meals it is clear that his family is very willing to assist him to the extent he needs.

7In my view this is a situation akin to Kozack v. Richter [(1973), 1973 CanLII 166 (SCC), 20 C.B.R. (N.S.) 223 (S.C.C.)] where the Bankruptcy Act is not to be permitted to be used to avoid a judgment for tort or for a matrimonial proceeding. I note that this is not a case where Mr. Bobyk has more income or assets than he says at the moment, nor is there assault or physically abusive treatment involved as in several of the other cases cited in the court. Nevertheless our court process cannot condone a situation where spouses force each other through the financially and emotionally onerous burden of matrimonial litigation without taking responsibility for the financial consequences of losing.”

237The policy behind Bobyk, and many of its facts are exactly similar. The Bankrupt owes a significant costs awards to her former spouse as a result of her conduct in the family law proceedings as found by Zisman, J. and Del Frate, J.

238In similar factual circumstances Courts have ordered:

a. In Bobyk the condition ordered for a $41,000 matrimonial costs order and total creditors of $100,000 was:

“To consent to judgment in favour of the trustee in the amount of 70% of proved claims with payment of $600 a month on the judgment to commence when the child support obligation of $600 a month for the eldest child is complete.”

b. In Richardson for a $75,000 of equalization payments avoided:

“The bankrupt ought not to be left with the option of remaining comfortably bankrupt, supported by his new spouse and simply not taking up the discharge by refusing to consent to judgment. That leaves the former wife in the worst of both worlds. Therefore I order that the bankruptcy be annulled effective August 31, 1998, unless in the interval the bankrupt executes a consent to judgment in favour of the Trustee in the amount of $50,000”

c. In Matthews:

“31 There will be an order that the discharge of the bankrupt will be conditional upon his consenting to a judgment in favour of the trustee in the sum of $307,079.65, and further conditional upon the payment of that amount to the trustee at the rate of $2,000 per month commencing March 1, 1993, and monthly thereafter”;

d. In Crew Henry, J. ordered the Bankrupt pay 50% of the proven unsecured claims;

e. In the very similar Underhill:

“An order requiring a substantial payment towards Ms. Underhill's unsecured debts is warranted. Having taken into account all the relevant circumstances, including Ms. Underhill's financial situation, I am satisfied that it is appropriate to make the order sought by Mr. Wanless. Ms. Underhill's discharge will be conditional on her payment to the estate of $450 per month for four years, for a total of $21,600 (by my calculation, 43 percent of proven claims). Ms. Underhill has the right to prepay at any time.”

239It appears that the Bankrupt has made preferential payments to her former counsel for pre-bankruptcy debt, made payments to counsel post-bankruptcy and also paid off the post-bankruptcy costs award owing to Suteu, using unknown sources of revenue. So the Bankrupt, despite protestations of impecuniosity, has paid significant amounts to her counsel, but none to Suteu to pay for his pre-bankruptcy costs awards.

240Given my findings regarding the failure of the Bankrupt to fulfill her duties, breaches of the duty of good faith under s.4.2, in addition to the s.173(1)(a) and (o) facts being proven the Bankrupt cannot be discharged with a mere short suspension on these facts without damaging the integrity of the bankruptcy system, as per Katz and Martino.

241I find that based on the reasons cited above and on the totality of the evidence admitted on this Discharge Hearing, and employing my Registrar’s Discretion, that this Bankrupt, based on the findings of Sherr, J. regarding her employability and imputed income, and the admission that she may be returning to the workforce as early as 2027, can be in a position to comply with a payment obligation.

242I pleaded with the Bankrupt and Suteu in multiple case conferences to consider the interests of Dean first, and to fashion a solution to this Bankruptcy discharge themselves that reflect those interests. I asked the Trustee to mediate the discussion, which he did in 8 sessions. The Bankrupt and Suteu did not fashion their own solution that would fit their and Dean’s needs, forcing me to do so.

243I have considered and carefully weighed the evidence before me, the credibility of the witnesses appearing before me, including the Bankrupt, and in coming to my determination of the proper conditional Order I have considered the factors enumerated by Hallett, J. in Re Crowley to be considered on discharge, being:

1. That on the one hand, the courts emphasize the purpose of the BIA is not only to provide for an orderly scheme of distribution of the assets of a bankrupt amongst creditors but to allow a bankrupt to get on with life unfettered by the burden of the debt incurred.

2. That is incumbent upon this Court to guard against laxity in granting discharges so as not to offend against commercial morality, in fulfilling the duty of this Court to administer the BIA in such a way as to assist honest debtors who have been unfortunate while at the same time not allowing the discharge system to become a process which can be resorted to on a regular basis with a view to washing out one's debts.

3. That the principals in the jurisprudence can assist a judge in the exercise of discretion when determining how to apply the provisions of the BIA in any particular case, namely:

a) each case must be decided on its own facts and the Court must look carefully at the causes of the bankruptcy;

b) the Court must have regard to not only the interests of the bankrupt and the creditors but also the interests of the public, and the court must always balance the public interest in commercial morality with its interest in the re-establishment of the debtor;

c) where the assets of the bankrupt are not of a value equal to 50 cents in the dollar of the bankrupt's unsecured liabilities, the onus of proving that this fact arose from circumstances for which the bankrupt cannot justly be held responsible is on the bankrupt;

d) the court is not bound by the trustee's report but it is prima facie evidence with respect to the facts contained therein, and should be carefully considered by the court, and, unless contradicted by the evidence, the court must accept the statements in the trustee's report;

e) an order for discharge should only be outrightly refused if the debtor's conduct has been "particularly reprehensible, or in ... extreme cases”, and the court will consider one of the other alternatives of suspension or attaching conditions to the discharge;

f) in considering if an order should be made that involves the payment of money by the bankrupt as a condition of discharge, the court must bear in mind that the Bankrupt is entitled to have available for the maintenance of the Bankrupt and family a reasonable amount out of after-acquired income, but;

g) the court does not view with favour assignments made to avoid paying a large claim of a single judgment creditor where judgment was obtained as a result of the discreditable conduct of the debtor, and under such circumstances, the courts have generally imposed a condition that the bankrupt consent to judgment in a partial amount of the claim;

h) that where a bankrupt takes a reasonable risk in embarking on a new adventure which fails because of economic factors over which there is no control, the bankrupt has satisfied the onus under of proving that the fact that the assets were not of a value equal to 50 cents in the dollar arose from circumstances for which the Bankrupt cannot justly be held responsible; and

i) the Act provides no guidelines for the exercise by the judge of discretion whether to suspend or impose conditions where a s.173 fact is proven, and the discretion of the judge is very broad and should not be interfered with on appeal;

6 The imposition of conditions of payment on the bankrupt as the price for discharge reflects the feeling of the public, as stated through the decisions of this Court, that abuses of the bankruptcy process are perceived, and where it is perceived that a bankrupt is availing themselves of the provisions of the BIA to walk away from the debts which they have accumulated, then imposing a condition that a bankrupt consent to judgment in a reasonable percentage of his unsecured liabilities under certain circumstances is not to frustrate the object of the BIA, and to not do so in many cases may offend the integrity of the discharge procedure, particularly where a debtor owes a substantial number of creditors, and it is reasonable that he be freed from their harassment and get on with earning a living under peaceful conditions, but only subject to a reasonable judgment in favour of the trustee who, based on the Trustee’s knowledge of the debtor's circumstances, can exercise a sensible discretion in collection procedures, but each case must be judged on its own facts as to the causes of the bankruptcy and a decision made as to whether it is appropriate under the circumstances to impose conditions of payment on the bankrupt as a price of discharge.”

244In applying all of the factors that I have considered and enumerated above, and in assessing the ability of the Bankrupt to pay a conditional order, and in employing by broad discretion as Registrar under the BIA, I Order that the Bankrupt be discharged on the completion and fulfillment of the following payment conditions:

1. The Bankrupt shall make a further payment to the Trustee in the amount of 50% of the Proven Claims of all of the Creditors being $85,398 for a payment amount of $42,699, which chose in action can also be assignable by the Trustee to Creditors under s.38.

2. These payments shall be at a rate of minimum $200/month, increasing to $500 per month on the earlier of the Bankrupt returning to the workforce or when the child support obligation owing to Suteu by the Bankrupt for Dean is complete, as ordered by Sherr, J. or by further order of the Family Court. This will avoid the Bankruptcy Court unduly interfering with the support order of the Family Court. Currently Dean is 14 years old. At the Trial Gillies made the submission that the support obligation may end as early as 16 years of age. This also deals with the issue of increased payments once the Bankrupt returns to the workforce when her daughter attends kindergarten.

3. If the chose in action representing the payment amount of the discharge Order is not assigned to creditors under s.38, the Trustee may seek its discharge if the Bankrupt fails to make the payments as required for three consecutive months.

4. The bankrupt can make faster payments or in larger amounts, at any time.

5. If this Order and these payment conditions are assigned by the Trustee to creditors under s.38, then the Trustee may proceed to discharge once all duties of the Trustee under the s.38 Order are fulfilled.

245In addition, employing my discretion as a Registrar in Bankruptcy under the provisions of the BIA, I order that the Bankrupt be discharged upon completion and performance of the following additional conditions of discharge, to the satisfaction of the Trustee, to deal with the breaches of the Bankrupt’s duties as found by me:

1. The Bankrupt provide proof to the Trustee that she has filed all post-bankruptcy personal income tax returns during the period in which she remains undischarged, including the provision of all tax returns, notices of assessment and proof of payment, and that these documents the Trustee is explicitly permitted to provide these documents to Suteu, unredacted by the Bankrupt;

2. The Bankrupt submit to the Trustee for cancellation all outstanding credit cards, but I am specifically NOT requiring that the Bankrupt remain undischarged if she cannot prove that she has paid her post-bankruptcy credit card debt, as her obligations under the pre-bankruptcy Family Law Orders should be paramount;

3. That the Bankrupt at all times while Bankrupt fulfill her s.158(n.1) duties and advise the Trustee and Suteu of any material change in her financial condition, and, in particular, any return by the Bankrupt to the workforce and full and complete details regarding her employment, salary, and monthly net and gross income, and any other documentation and information required by the Trustee;

4. That the style of cause be amended on Notice to the OSB to add the Bankrupt’s current legal name Genevieve Maurano to maintain the accuracy of the OSB records.

246Should these non-payment based additional conditions not be met, at the sole determination of the Trustee, within 12 months of the date of this Order, the Trustee may proceed to its discharge, however if the payment conditions of this Order are assigned by the Trustee to creditors under s.38, then the Trustee may proceed to discharge once all duties of the Trustee under the s.38 Order are fulfilled.

Costs:

247The end result of the Discharge Hearing is a divided success for virtually every party, as in each case no party obtained all of the relief they were requesting, or the Order of Discharge they requested.

248In these circumstances I consider it appropriate that all of the parties, other than the Trustee, bear their own costs of this Discharge Hearing.

249The Trustee may be paid its costs, out of the Estate, under the Summary Administration Tariff, or after ordinary taxation under the regular taxation provisions of the BIA if there is a conversion to Ordinary Administration.

Associate Justice Ilchenko

Registrar in Bankruptcy

Superior Court of Justice