Stanley J. Kershman

The court considered a motion by msi Spergel Inc., as Administrator, for approval of Danny Angelatos’s consumer proposal under the Bankruptcy and Insolvency Act.

Canadian Tire Bank opposed, arguing Angelatos was not eligible because his assets exceeded his liabilities and creditors were willing to make arrangements outside the proposal.

The court found Angelatos met the definition of “insolvent person” under the BIA, as he was unable to meet his obligations as they became due, and distinguished the authorities relied on by the Bank.

The court also found the proposal was reasonable and fair to both debtor and creditors, given the family’s circumstances and the creditors’ approval.

The proposal was approved, and costs awarded to the Administrator.

On a motion to lift a stay of proceedings under the Bankruptcy and Insolvency Act, the court identified significant discrepancies between the bankrupt's Net Worth Statement and Statement of Affairs, including an undisclosed life insurance policy, retirement account, and business interest.

The court also noted a questionable rent increase involving a landlord connected to the bankrupt's father.

The court directed the Licensed Insolvency Trustee to examine the bankrupt under oath regarding these matters and report back within 60 days.

This motion was brought by creditors (Moving Parties) to lift the automatic stay of proceedings against a discharged bankrupt (Defendant) under s. 69.4 of the Bankruptcy and Insolvency Act (BIA).

The Moving Parties alleged that the bankrupt obtained loans through fraudulent misrepresentation, a debt not released by discharge under s. 178(1)(e) BIA.

The court found that the bankrupt made false representations about his company's financial health prior to receiving funds, which the creditors relied upon.

The court determined it was equitable to lift the stay, allowing the creditors to continue their civil action against the bankrupt.

The applicant sought a declaration regarding the continued validity and use of a registered right of way over the respondents' properties.

The respondents argued the right of way was extinguished or abandoned due to the construction of an alternate public road, abuse of right, or implied release, and sought to modify or extinguish it.

The court found the right of way remained in full force and effect, rejecting the respondents' arguments for extinguishment or abandonment.

However, the court permitted the respondents to erect unlocked gates and signs to restrict use to deeded owners and their guests.

The Trustee brought a motion to determine whether the increase in equity in the bankrupt's property, which was sold post-bankruptcy, was after-acquired property belonging to the estate.

The bankrupt brought a cross-motion claiming entitlement to the proceeds and damages.

The court found that the bankrupt was not an honest but unfortunate debtor, having failed to comply with his duties under the Bankruptcy and Insolvency Act, including failing to disclose surplus income.

The court held that the increase in equity was after-acquired property vesting in the Trustee, rejecting the bankrupt's arguments based on an equity agreement and promissory estoppel.

The Trustee's motion was granted, and the cross-motion was dismissed.

This decision addresses whether legal costs incurred to obtain a declaration that a debt survives bankruptcy under section 178(1)(d) of the Bankruptcy and Insolvency Act (BIA) also survive the bankrupt's discharge.

The plaintiff had previously obtained a ruling that its debt against a defendant survived his bankruptcy.

The parties agreed on the quantum of costs ($50,000) for that prior motion, but disputed whether these costs were also non-dischargeable.

The plaintiff argued that the costs were an intrinsic consequence of the judgment.

The defendants contended that these were post-bankruptcy debts, separate from the original debt, and did not fall under BIA exceptions.

The court, distinguishing the case from those where bankruptcy had not yet occurred, held that it would be inequitable for the underlying debt to survive bankruptcy while the costs necessary to secure that declaration did not.

The court found the costs to be an intrinsic aspect of the judgment and therefore ordered that they also survive the bankrupt's discharge.

No costs were awarded for the present costs motion.

The plaintiff, 1159273 Ontario Inc., brought a motion for summary judgment seeking damages for wrongful dismissal, HST, and interest, arguing it was a dependent contractor of the defendant, The Westport Telephone Company Limited.

The court analyzed the factors for determining contractor status, including exclusivity, control, provision of tools, business risk, and integration, considering the complex corporate and tax planning structures involved.

The court found that the plaintiff was an independent contractor, not a dependent one, and dismissed the plaintiff's claim.

The court also noted the plaintiff's failure to mitigate damages.

The Trustee in bankruptcy brought a motion to enforce a settlement agreement with the bankrupt's former spouse, Sonya Tessier, regarding the proceeds from the sale of a jointly owned property.

The Trustee had been discharged but had registered its interest on the property's title prior to discharge.

Ms. Tessier argued the Trustee lacked standing without reappointment and that the settlement should not be enforced due to her lawyer's alleged lack of instructions and resulting prejudice.

The court reappointed the Trustee nunc pro tunc, finding it had the inherent authority to do so to safeguard creditors' interests.

The court enforced the settlement agreement, determining it was binding and that Ms. Tessier failed to demonstrate compelling circumstances to justify setting it aside, rejecting her arguments regarding the "fresh start philosophy" and alleged prejudice.

The plaintiff brought a cross-motion to declare that a default judgment debt owed by the defendant, a corporate director, survived his bankruptcy under s. 178(1)(d) of the Bankruptcy and Insolvency Act.

The defendant had breached the trust provisions of the Construction Lien Act by allowing construction financing funds to be used for non-project purposes.

The court found that the defendant, as a fiduciary, misappropriated trust funds through willful blindness and failure to oversee the corporation's finances.

The court declared that the judgment debt of $181,133.23 plus costs survived the bankruptcy.

The moving party, a creditor of the bankrupt, obtained a section 38 order under the Bankruptcy and Insolvency Act to pursue the partition and sale of a property co-owned by the bankrupt and the respondents.

Following the sale, the parties disputed the distribution of the net proceeds held in trust.

The court determined that the moving party was entitled to its costs for the section 38 application and a one-third share of the proceeds.

The court also ordered the respondents to account for funds they improperly drew from a secured line of credit after the partition and sale order was granted.

The respondents' claims for allowances related to mortgage payments and previous line of credit withdrawals by the bankrupt were dismissed.

The plaintiff municipality sought a declaration that its insurers had a duty to defend it in relation to a Director's Order issued by the Ministry of the Environment and Climate Change regarding environmental contamination.

The defendant insurers brought a Rule 21 motion to determine whether the Director's Order constituted a 'civil action' under their respective liability policies.

The court held that a regulatory proceeding, including an appeal of a Director's Order to the Environmental Review Tribunal, is not a 'civil action' as defined by the Rules of Civil Procedure or the Courts of Justice Act.

Consequently, the insurers had no duty to defend the municipality.

The Consumer Proposal Administrator brought a motion to tax its Final Statement of Receipts and Disbursements after the Office of the Superintendent of Bankruptcy (OSB) issued a negative comment letter.

The OSB objected to the Administrator claiming legal costs for a prior Revival Motion, arguing it exceeded the tariff in Rule 129 of the Bankruptcy Rules.

The court found that issue estoppel applied because the OSB had notice of the Revival Motion, did not object, and did not appeal the resulting order granting costs.

However, because the Administrator's own incorrect assumption about the deceased debtor's estate caused the default necessitating the Revival Motion, the court reduced the Administrator's tariff fees to offset the legal costs, approving a total of $4,760.40.

The bankrupt, a CPA and CMA, sought a discharge from his second bankruptcy.

The Trustee and a major creditor opposed the discharge, alleging the bankrupt failed to disclose assets, continued to operate his accounting business post-bankruptcy, and failed to perform his duties under the Bankruptcy and Insolvency Act.

The court found the bankrupt was not an honest and unfortunate debtor, having hidden assets, failed to keep proper books, and misled the Trustee.

The court granted a conditional discharge, requiring the bankrupt to pay $325,000 to the Trustee for the benefit of his creditors.

The bankrupt financed a vehicle in Alberta and subsequently moved to Ontario without notifying the secured creditor.

After the bankrupt filed for bankruptcy, the creditor learned of the relocation and registered its security interest in Ontario.

The trustee disallowed the creditor's secured claim on the basis that the interest was unperfected in Ontario at the date of bankruptcy.

The creditor appealed the disallowance.

The court dismissed the appeal, holding that the asset vested in the trustee on the date of bankruptcy and the subsequent registration could not grant the creditor priority over the trustee.

The bankrupt applied for a discharge, which was opposed by the Trustee and the Office of the Superintendent of Bankruptcy.

The court found that the bankrupt had failed to disclose assets, including a US bankruptcy filing and an assignment of funds, and had failed to accurately report his income for surplus income calculations.

The court granted a conditional discharge, requiring the bankrupt to pay $12,000 for surplus income and $4,800 for outstanding fees, and ordered that he must obtain leave of the court before filing for creditor protection in the future.

The plaintiff obtained a default judgment against the bankrupt defendant for breach of trust under the Construction Lien Act while the defendant was an undischarged bankrupt.

The plaintiff knew of the bankruptcy but did not disclose it to the Small Claims Court or seek to lift the stay of proceedings.

The plaintiff brought a motion 28 months later seeking a declaration that the judgment survived bankruptcy under s. 178(1)(d) of the BIA and for leave to enforce it.

The Superior Court dismissed the motion, finding the default judgment invalid due to material non-disclosure and declining to exercise its discretion to lift the stay of proceedings retroactively given the plaintiff's deliberate non-compliance and unexplained delay.

The plaintiffs brought a motion for summary judgment seeking payment on two defaulted charges/mortgages and possession of the secured properties.

The defendants had defaulted on payments and failed to pay out the charges at maturity.

One defendant did not appear, and the other appeared but filed no materials, arguing only that refinancing was difficult due to marital separation and lack of cooperation from the co-owner.

The court found no genuine issue for trial, granted summary judgment for the plaintiffs for the outstanding debt and possession of both properties, and assessed costs.

The court clarified that obtaining a Writ of Possession for a residential rental unit requires compliance with the Residential Tenancies Act.

The mother brought a motion seeking security for costs against the father in the amount of $25,000.

The father had previously been ordered to pay costs to the mother, declared bankruptcy, and subsequently brought a motion to change seeking sole custody and termination of child support.

The court found that the father ordinarily resides outside Ontario, has unpaid costs orders, and there is good reason to believe his motion to change is a waste of time or a nuisance.

The court ordered the father to pay $20,000 into court as security for costs.

This decision addresses the costs arising from a motion for court approval of a consumer proposal, necessitated by a creditor's objection.

The Administrator of Ocean Dezarie Bonneau's consumer proposal sought costs against Brenden Higgins, a creditor, after Higgins' extensive objections, including allegations of non-disclosure and fraud, were largely rejected by the court and the Office of the Superintendent of Bankruptcy.

The court found Higgins' actions caused the proceedings to become unduly protracted and that his objection was illogical, as a bankruptcy would have resulted in a lower dividend for creditors.

The Administrator was successful in obtaining approval of the proposal.

The court awarded partial indemnity costs to the Administrator, assessing them at $2,200, inclusive of disbursements and HST, payable by Higgins within 200 days, with an extended payment period granted due to his reduced income.

The moving party father brought a motion for make-up parenting time after the responding party mother suspended his access for three weeks, claiming she had COVID-19 symptoms and was self-isolating.

The court found that the mother made poor parenting decisions by allowing her husband, who had just returned from the United States, to isolate with her and the children while simultaneously denying the father his parenting time.

Determining it was in the child's best interests, the court granted the father two weeks of make-up time and ordered a temporary week-on, week-off schedule until the child returned to in-person schooling.