Ontario Civil

Bankruptcy and Insolvency

Property of bankrupt

Choses in action

Any right purchaser had in deposit was property vested in trustee when she was assigned in bankruptcy

Parties entered agreement of purchase and sale of condominium unit, under which purchaser advanced $293,685 plus $33,482 for upgrades. Purchaser made assignment into bankruptcy from which she was subsequently discharged. Purchaser subsequently lost her job and was unable to pay balance and therefore in breach of agreement of purchase and sale. Purchaser commenced claim against vendor for return of $263,685, as agreed in resale agreement of condominium unit that she had entered into vendor upon her failure to pay balance. Vendor brought counter-claim to invoke forfeiture provision of original agreement of purchase and sale to keep whole of purchaser’s advance. Application judge granted relief from forfeiture to purchaser but ordered monies be paid to trustee in bankruptcy since she failed to make full disclosure. Vendor appealed relief from forfeiture. Purchaser cross-appealed. Cross-appeal dismissed. Pursuant to s. 71 of Bankruptcy and Insolvency Act (Act) any right purchaser had in deposit was property vested in trustee when she was assigned in bankruptcy. Trustee remained undischarged as trustee and it had released none of purchaser’s property. In essence, monies belonged to trustee. It did not advance principles of Act for purchaser to advance, following her discharge, claim that she failed to disclose to trustee and then try to keep proceeds for herself.

Scicluna v. Solstice Two Limited (2018), 2018 CarswellOnt 2634, 2018 ONCA 176, Doherty J.A., David M. Paciocco J.A., and I.V.B. Nordheimer J.A. (Ont. C.A.); affirmed (2017), 2017 CarswellOnt 9520, 2017 ONSC 3674, Carole J. Brown J. (Ont. S.C.J.).

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