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Cross-Examination-Bankruptcy

In re Gagnon 2019 Ont SCJ (MC)

As a general rule, an applicant for a bankruptcy order will not be permitted to establish its case by compelling evidence from the respondent debtor. A creditor had issued an action for a fraudulent conveyance and, on the same day, also had issued a petition for bankruptcy alleging the same fraudulent conveyance and the debtor’s alleged inability to pay his debts as they came due. The debtor defended both the application and the action. The creditor then brought a motion in the action for a certificate of pending litigation. When the debtor filed an affidavit in support of resisting the motion, the creditor sought to cross-examine on the affidavit. The Master refused to allow this cross-examination, holding that civil court procedures could not be used to thwart substantive bankruptcy laws.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.