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Vancouver Business Bankruptcy, Insolvency and Restructuring Law Blog

No New Consideration Required for Modification to an Agreement

In a recent case out of the BC Court of Appeal, Rosas v Toca 2018 BCCA 191, the court altered the law surrounding contractual modifications to an existing agreement. Until now, in order for a modification to an existing contract to be legally binding, it has been required that there be some new consideration flowing between the parties. Consideration has been required in order to draw the line between gratuitous or morally based promises and those that were legally enforceable. 

Examination of bankrupts

When a debtor becomes bankrupt, there may be suspicion as to whether the bankrupt has made full disclosure of all assets or dealings with the bankrupt's assets prior to the bankruptcy. The bankrupt's conduct prior to discharge may also be in issue. The trustee in bankruptcy has the obligation to make inquiries, but if the bankrupt is uncooperative, or if information is required from someone other than the bankrupt, more aggressive steps may be required.

Secured lenders receiving payments in good faith without notice obligated to remit debtor's unpaid GST

A recent decision of the Federal Court of Canada should stand as a reminder that a borrower's unpaid taxes can take priority over secured lenders.

In Her Majesty the Queen v the Toronto-Dominion Bank, 2018 FC 538, the debtor had unpaid GST debts of approximately $68,000. In 2010, the debtor obtained loans from the Toronto-Dominion Bank (the "Bank"), all of which were secured against his home.

A Bank's Obligation to Act In Good Faith

In a recent case out of the Quebec Superior Court, Pourshafiey v Toronto-Dominion Bank 2018 QCCS 3202, a former client of the Toronto-Dominion Bank, Hossein Pourshafiey, sought an injunction and damages against TD Bank when TD Bank, without explanation, ended its banking relationship with him and his company. TD Bank provided 30 days' notice that it was closing a number of his and his company's accounts, 60 days' notice of closing his home equity line of credit, and no notice that it was closing the wire service that Mr. Pourshafiey's company relied upon in order to be able to transfer money to and from Iran for its clients - the crux of its business.

Further signs of Vancouver's real estate declining

The latest statistics show continuing slackening in Vancouver's residential real estate market. While signs of a slowdown in the single family detached market have been growing for some time, the latest figures point to the same trends beginning in the condo market as well.

Proposal creditors attacking the claims of other proposal creditors

When a non-consumer debtor files a proposal under the Bankruptcy and Insolvency Act ("BIA"), the creditors of the debtor have an opportunity to vote on the proposal. If the proposal is not accepted, the debtor is assigned into bankruptcy. In order to be accepted, a proposal must receive supporting votes from of a majority of the number of creditors, and those creditors must represent at least two thirds of the value of the claims against the debtor. Accordingly, a creditor with a large claim can in some cases control whether a proposal succeeds or fails. 

Superintendent's levy on secured claims in failed proposal proceedings

The Manitoba Court of Queen's Bench was recently asked to opine on whether the 5% levy payable in bankruptcy matters to the Superintendent of Bankruptcy pursuant to s. 147 of the Bankruptcy and Insolvency Act ("BIA") was applicable to secured creditors. Secured creditors generally operate outside of bankruptcy proceedings.

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