The trustee in bankruptcy reached a settlement with a creditor regarding her claim to the bankrupt's property.
Another creditor opposed the settlement.
The motion judge found the settlement unreasonable because it did not preserve the opposing creditor's priority for solicitor's costs under the Bankruptcy and Insolvency Act, and he amended the settlement to protect her priority.
The Court of Appeal allowed the appeal, holding that the motion judge erred by amending and imposing a settlement on the parties, and by giving the opposing creditor's claim priority over other claims.
The Court found the original settlement reasonable given the litigation risks and directed the trustee to complete it.