In a recent Ontario Superior Court case, the court confirmed a 1961 superior court decision that a court can not make a declaration as to the survival if a debt, pre-bankruptcy, even if the debt will survive from a person based on a exception under the BIA.
In Bridgemohan v. 2218667 Ontario Ltd 2014 ONSC the court confirm the decision of itself in Kemper Re (1961), 2 C.B.R. (NS) 130 (ONT SC).
The facts are not of particular importance: only that a fraud occurred involving a Contruction Lien Act claim, and the Defendants were found liable.
However, the Plaintiffs sought a declaration from the court that Section 69.3(1) of the BIA didn’t apply, and therefore by extension, the debt would not be discharged by bankruptcy.
The judge denied this request. He stated that this was not a bankruptcy court, and he wouldn’t and shouldn’t make this declaration.
Therefore, if a creditor is trying to pursue this line of action, or a debtor is trying to avoid it, they must go to bankruptcy court.
Please feel free to call me to deal with any problems along these lines.