Legal Blog

Declaration for Survival of Bankruptcy

Matthews Equipment Limited v. Yalda Contracting Inc. 2021 Ont SCJ

Default judgment, on notice, as against the general contractor and its two directors. Sub requested a declaration that the judgment survive any future bankruptcy. None of the defendants had become bankrupt and the judge held that the allegations in the statement of claim were insufficient to show that the judgment arose, not as the result of simple inadvertence, negligence or incompetence, but out of fraud or misappropriation pursuant to section 178(1)(d) of the Bankruptcy and Insolvency Act. Accordingly, the judge refused to grant the declaration. It would have to be adjudicated on a proper record when and if an issue arose during a bankruptcy proceeding.

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