Filings from the Office of the Superintendent of Bankruptcy (OSB) show a worrisome trend among Canadians. While bankruptcies are declining in Canada, consumers are filing "consumer proposals" in record numbers. The OSB received 5,327 consumer proposals in January 2018, an almost 20 per cent increase from the previous month and a 10 per cent increase from January 2017.
A recent decision of a British Columbia Master, sitting as a Registrar in Bankruptcy, has provided some much needed guidance to bankrupts and trustees with respect to non-exempt equity in a bankrupt's home where there is an agreement with the trustee.
Monies paid to a contractor in respect of an improvement on real property (the "Trust Funds") are subject to a trust (the "Trust") in favour of subcontractors, workers, and material suppliers, among others, who remain unpaid with respect to their work, services or materials (the "Beneficiaries"). The contractor is obligated to deal with the Trust Funds for the benefit of the Beneficiaries in accordance with the relevant builders' lien legislation. The contractors may be held liable for breach of the Trust if the Trust Funds are used for payments other than to Beneficiaries. In addition, third parties, such as directors of a corporate contractor, can also be held liable for breach of trust in a claim by the Beneficiaries if the Trust Funds are not used in accordance with the requirements of relevant legislation.
In Arrangement relatif à 9354-9186 Québec inc. (Bluberi Gaming Technologies Inc.) v. Ernst & Young Inc., 2018 QCCS 1040, the Supreme Court of Quebec recently permitted third party funding of a lawsuit in a proceeding under the Companies' Creditors Arrangement Act ("CCAA").