Court ought not make ruling regarding claim surviving bankruptcy in advance of actual bankruptcy

Ontario civil | Bankruptcy and Insolvency

COURTS AND PROCEDURE

Court ought not make ruling regarding claim surviving bankruptcy in advance of actual bankruptcy

Plaintiffs owned property and hired defendant to perform renovations pursuant to two contracts. Plaintiff paid portion of money. Plaintiffs claimed work was never completed and only fraction of work was completed with minimal amount of materials supplied. Work done was substandard and had to be demolished and rebuilt by new contractors. Materials supplied were substandard and were wasted due to poor quality of work. Plaintiffs claimed funds paid to defendants in respect of construction contracts were to be held in trust under Construction Lien Act (Ont.) (CLA). Defendants had not commenced any bankruptcy proceedings or taken any steps under Bankruptcy and Insolvency Act (Can.) (BIA). Defendants intimated that they might eventually do so. Plaintiffs sought declaration that stay did not operate under s. 69.3 of BIA. Declaration denied. Defendants were not trustees for plaintiff under CLA and relationships were not analogous to case law. Fraud was not pleaded or proved. Misappropriation was not shown. Court ought not to make ruling regarding claim or judgment surviving bankruptcy in advance of any actual bankruptcy.
Bridgmohan v. 2218667 Ontario Ltd. (Jan. 22, 2014, Ont. S.C.J., E.M. Morgan J., File No. CV-12-454013) 237 A.C.W.S. (3d) 9

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