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CUSTODY AND ACCESS - Practice and procedure - Orders - Costs - Impact of bankruptcy

Thursday, October 19, 2017 @ 8:37 AM  


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Appeal by the mother of an order of the Superior Court of Justice lifting an automatic stay arising from the appellant’s bankruptcy. The parties were married in 1998 and separated in 2008. They had three children who were aged 15, 13 and 12. The appellant and the father were involved in a lengthy custody and access dispute that involved two trials and an appeal. $200,000 in costs were awarded to the father. During a further access review hearing that proceeded before the awarded costs were paid, the appellant made an assignment in bankruptcy. At issue on appeal was whether the bankruptcy judge erred in law by lifting the automatic stay arising from the bankruptcy to allow the father to enforce the $200,000 debt for costs against otherwise exempt assets of the appellant.

HELD: Appeal dismissed. The motion judge was entitled to find that the father would “in all likelihood, receive nothing” absent a lifting of the stay. Although the appellant characterized her decision to make an assignment into bankruptcy in the midst of the review hearing as a “change in [her] intention”, there was no explanation on the record for that change. The Court had previously relied on her representations that she intended to pay the costs and that she had no intention of filing for bankruptcy to avoid the payment. It was apparent that the motion judge did not accept that the appellant’s behaviour was a simple change of intention. The motion judge’s finding was reasonable based on the appellant’s statement of affairs. Although it was open for any creditor to oppose the discharge of the bankrupt, there was no guarantee that any order would have been made or that any funds would have been available. The bankruptcy regime included s. 69.4 of the BIA and the ability of the court to lift the stay in favour of a particular creditor in prescribed circumstances. The use of that provision in these circumstances did not denigrate the regime.

Fiorito v. Wiggins, [2017] O.J. No. 5149, Ontario Court of Appeal, J.I. Laskin, K.N. Feldman and B. Miller JJ.A., October 4, 2017. TLD-October162017007