Legal Blog

Set Aside Bankruptcy Stay

Fiorito v. Wiggins 2017 Ont CA

Husband had been awarded $200,000 in costs after a bitter family law battle with wife. The court then ordered a review of access provisions. Before the review, husband brought a motion to obtain security for or payment of the $200,000 costs order as a condition of proceeding with the review. On that motion, wife filed evidence that she intended to pay the costs award and denied a suggestion that she intended to file for bankruptcy after the review to thwart husband’s claim. The motions judge only restrained wife from disposing of her RSPs and dissipating her assets. After the motion and during the review, wife assigned into bankruptcy. Husband then moved under section 69.4 of the Bankruptcy and Insolvency Act to lift the stay; although RSPs are exigible under Ontario law, they are not seizable upon a bankruptcy. The court granted that motion on equitable grounds for 4 reasons: (1) the debt arose from family law proceedings that husband had to pursue to have any relationship with his children; (2) wife had not paid anything towards the costs and husband would receive nothing once wife was discharged from bankruptcy; (3) wife reneged on assurances that she had made to the court in the previous motion; (4) none of the other creditors would be prejudiced because the lifting of the stay would have resulted only in husband being able to attack an asset (the RSP) that the other creditors would not have been able to attack regardless.

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