Federal Law–Civil Law Harmonization Act, No. 2 (S.C. 2004, c. 25)
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Assented to 2004-12-15
PART 1AMENDMENTS TO CERTAIN ACTS
R.S., c. B-3; 1992, c. 27, s. 2Bankruptcy and Insolvency Act
Marginal note:1997, c. 12, s. 16
17. Section 15.1 of the French version of the Act is replaced by the following:
Marginal note:Déclaration
15.1 Le syndic est réputé être un fiduciaire pour l’application de la définition de fiduciaire à l’article 2 du Code criminel.
Marginal note:1994, c. 26, s. 7
18. (1) Subsections 16(1) and (2) of the Act are replaced by the following:
Marginal note:Security to be given by trustee
16. (1) Every trustee duly appointed shall, as soon as they are appointed, give security in cash or by bond or suretyship of a guaranty company satisfactory to the official receiver for the due accounting for, the payment and the transfer of all property received by the trustee as trustee and for the due and faithful performance of the trustee’s duties.
Marginal note:Security to be given by trustee
(2) The security required to be given under subsection (1) shall be given to the official receiver in favour of the creditors generally and may be enforced by any succeeding trustee or by any one of the creditors on behalf of all by direction of the court, and may be increased or reduced by the official receiver.
Marginal note:R.S., c. 31 (1st Supp.), s. 3
(2) Subsection 16(3) of the English version of the Act is replaced by the following:
Marginal note:Trustee to take possession and make inventory
(3) The trustee shall, as soon as possible, take possession of the deeds, books, records and documents and all property of the bankrupt and make an inventory, and for the purpose of making an inventory the trustee is entitled to enter, subject to subsection (3.1), on any premises on which the deeds, books, records, documents or property of the bankrupt may be, even if they are in the possession of an executing officer, a secured creditor or other claimant to them.
19. Subsection 19(1) of the French version of the Act is replaced by the following:
Marginal note:Assistance juridique
19. (1) Le syndic peut, antérieurement à la première assemblée des créanciers, obtenir un avis juridique et prendre les procédures judiciaires qu’il peut juger nécessaires pour recouvrer ou protéger les biens du failli.
Marginal note:1997, c. 12, s. 18
20. Subsection 20(1) of the Act is replaced by the following:
Marginal note:Divesting property by trustee
20. (1) The trustee may, with the permission of the inspectors, divest all or any part of the trustee’s right, title or interest in any real property or immovable of the bankrupt by a notice of quit claim or renunciation by the trustee, and the official in charge of the land titles or registry office, as the case may be, where title to the real property or immovable is registered shall accept and register in the land register the notice when tendered for registration.
21. Subsection 26(3) of the Act is replaced by the following:
Marginal note:Records may be inspected
(3) The trustee shall permit the books, records and documents referred to in subsection (2) to be inspected and copies of them made by the Superintendent, the bankrupt or any creditor or their representative at any reasonable time.
22. (1) Paragraph 30(1)(b) of the Act is replaced by the following:
(b) lease any real property or immovable;
(2) Paragraph 30(1)(e) of the Act is replaced by the following:
(e) employ a barrister or solicitor or, in the Province of Quebec, an advocate, or employ any other representative, to take any proceedings or do any business that may be sanctioned by the inspectors;
(3) Paragraph 30(1)(g) of the Act is replaced by the following:
(g) incur obligations, borrow money and give security on any property of the bankrupt by mortgage, hypothec, charge, lien, assignment, pledge or otherwise, such obligations and money borrowed to be discharged or repaid with interest out of the property of the bankrupt in priority to the claims of the creditors;
Marginal note:1997, c. 12, s. 22(1)(F)
(4) Paragraph 30(1)(k) of the Act is replaced by the following:
(k) elect to retain for the whole part of its unexpired term, or to assign, surrender, disclaim or resiliate any lease of, or other temporary interest or right in, any property of the bankrupt; and
Marginal note:1997, c. 12, s. 24
23. Paragraph 36(2)(d) of the Act is replaced by the following:
(d) if required by the inspectors, register a notice of the appointment in the land register of any land titles or registry office where the assignment or bankruptcy order has been registered; and
24. Subsection 38(2) of the French version of the Act is replaced by the following:
Marginal note:Droits du créancier
(2) Lorsque cette ordonnance est rendue, le syndic cède et transfère au créancier tous ses droits, titres et intérêts sur les biens et droits qui font l’objet de ces procédures, y compris tout document à l’appui.
25. (1) Subsection 41(4) of the Act is replaced by the following:
Marginal note:When estate deemed fully administered
(4) When a trustee’s accounts have been approved by the inspectors and taxed by the court and all objections, applications, oppositions, motions and appeals have been settled or disposed of and all dividends have been paid, the estate is deemed to have been fully administered.
(2) Subsection 41(9) of the French version of the Act is replaced by the following:
Marginal note:Mainlevée de la garantie
(9) La libération d’un syndic sous le régime du présent article entraîne la mainlevée de la garantie fournie en conformité avec le paragraphe 16(1).
26. The heading of Part II of the Act is replaced by the following:
BANKRUPTCY ORDERS AND ASSIGNMENTS
27. (1) Paragraph 42(1)(b) of the Act is replaced by the following:
(b) if in Canada or elsewhere the debtor makes a fraudulent gift, delivery or transfer of the debtor’s property or of any part of it;
(2) Paragraph 42(1)(c) of the English version of the Act is replaced by the following:
(c) if in Canada or elsewhere the debtor makes any transfer of the debtor’s property or any part of it, or creates any charge on it, that would under this Act be void or, in the Province of Quebec, null as a fraudulent preference;
Marginal note:1997, c. 12, s. 26
(3) Paragraph 42(1)(e) of the Act is replaced by the following:
(e) if the debtor permits any execution or other process issued against the debtor under which any of the debtor’s property is seized, levied on or taken in execution to remain unsatisfied until within five days after the time fixed by the executing officer for the sale of the property or for fifteen days after the seizure, levy or taking in execution, or if any of the debtor’s property has been sold by the executing officer, or if the execution or other process has been held by the executing officer for a period of fifteen days after written demand for payment without seizure, levy or taking in execution or satisfaction by payment, or if it is returned endorsed to the effect that the executing officer can find no property on which to levy or to seize or take, but if interpleader or opposition proceedings have been instituted with respect to the property seized, the time elapsing between the date at which the proceedings were instituted and the date at which the proceedings are finally disposed of, settled or abandoned shall not be taken into account in calculating the period of fifteen days;
(4) Paragraph 42(1)(g) of the French version of the Act is replaced by the following:
g) s’il cède, enlève ou cache, ou essaie ou est sur le point de céder, d’enlever ou de cacher une partie de ses biens, ou en dispose ou essaie ou est sur le point d’en disposer, avec l’intention de frauder, frustrer ou retarder ses créanciers ou l’un d’entre eux;
(5) Subsection 42(2) of the English version of the Act is replaced by the following:
Marginal note:Unauthorized assignments are void or null
(2) Every assignment of an insolvent debtor’s property other than an assignment authorized by this Act, made by an insolvent debtor for the general benefit of their creditors, is void or, in the Province of Quebec, null.
Marginal note:1992, c. 1, s. 14(1), c. 27, s. 15
28. The heading before section 43 and sections 43 to 45 of the Act are replaced by the following:
Application for Bankruptcy Order
Marginal note:Bankruptcy application
43. (1) Subject to this section, one or more creditors may file in court an application for a bankruptcy order against a debtor if it is alleged in the application that
(a) the debt or debts owing to the applicant creditor or creditors amount to one thousand dollars; and
(b) the debtor has committed an act of bankruptcy within the six months preceding the filing of the application.
Marginal note:If applicant creditor is a secured creditor
(2) If the applicant creditor referred to in subsection (1) is a secured creditor, they shall in their application either state that they are willing to give up their security for the benefit of the creditors, in the event of a bankruptcy order being made against the debtor, or give an estimate of the value of the applicant creditor’s security, and in the latter case they may be admitted as an applicant creditor to the extent of the balance of the debt due to them after deducting the value so estimated, in the same manner as if they were an unsecured creditor.
Marginal note:Affidavit
(3) The application shall be verified by affidavit of the applicant or by someone duly authorized on their behalf having personal knowledge of the facts alleged in the application.
Marginal note:Consolidation of applications
(4) If two or more applications are filed against the same debtor or against joint debtors, the court may consolidate the proceedings or any of them on any terms that the court thinks fit.
Marginal note:Place of filing
(5) The application shall be filed in the court having jurisdiction in the judicial district of the locality of the debtor.
Marginal note:Proof of facts, etc.
(6) At the hearing of the application, the court shall require proof of the facts alleged in the application and of the service of the application, and, if satisfied with the proof, may make a bankruptcy order.
Marginal note:Dismissal of application
(7) If the court is not satisfied with the proof of the facts alleged in the application or of the service of the application, or is satisfied by the debtor that the debtor is able to pay their debts, or that for other sufficient cause no order ought to be made, it shall dismiss the application.
Marginal note:Dismissal with respect to some respondents only
(8) If there are more respondents than one to an application, the court may dismiss the application with respect to one or more of them, without prejudice to the effect of the application as against the other or others of them.
Marginal note:Appointment of trustee
(9) On a bankruptcy order being made, the court shall appoint a licensed trustee as trustee of the property of the bankrupt, having regard, as far as the court considers just, to the wishes of the creditors.
Marginal note:Stay of proceedings if facts denied
(10) If the debtor appears at the hearing of the application and denies the truth of the facts alleged in the application, the court may, instead of dismissing the application, stay all proceedings on the application on any terms that it may see fit to impose on the applicant as to costs or on the debtor to prevent alienation of the debtor’s property and for any period of time that may be required for trial of the issue relating to the disputed facts.
Marginal note:Stay of proceedings for other reasons
(11) The court may for other sufficient reason make an order staying the proceedings under an application, either altogether or for a limited time, on any terms and subject to any conditions that the court may think just.
Marginal note:Security for costs
(12) Applicants who are resident out of Canada may be ordered to give security for costs to the debtor, and proceedings under the application may be stayed until the security is furnished.
Marginal note:Bankruptcy order on another application
(13) If proceedings on an application have been stayed or have not been prosecuted with due diligence and effect, the court may, if by reason of the delay or for any other cause it is considered just, substitute or add as applicant any other creditor to whom the debtor may be indebted in the amount required by this Act and make a bankruptcy order on the application of the other creditor, and shall, immediately after making the order, dismiss on any terms that it may consider just the application in the stayed or non-prosecuted proceedings.
Marginal note:Withdrawing application
(14) An application shall not be withdrawn without the leave of the court.
Marginal note:Application against one partner
(15) Any creditor whose claim against a partnership is sufficient to entitle the creditor to present a bankruptcy application may present an application against any one or more partners of the firm without including the others.
Marginal note:Court may consolidate proceedings
(16) If a bankruptcy order has been made against one member of a partnership, any other application against a member of the same partnership shall be filed in or transferred to the same court, and the court may give any directions for consolidating the proceedings under the applications that it thinks just.
Marginal note:Continuance of proceedings on death of debtor
(17) If a debtor against whom an application has been filed dies, the proceedings shall, unless the court otherwise orders, be continued as if the debtor were alive.
Marginal note:Application against estate or succession
44. (1) Subject to section 43, an application for a bankruptcy order may be filed against the estate or succession of a deceased debtor.
Marginal note:Personal liability
(2) After service of an application for a bankruptcy order on the executor or administrator of the estate of a deceased debtor, or liquidator of the succession of a deceased debtor, the person on whom the order was served shall not make payment of any moneys or transfer any property of the deceased debtor, except as required for payment of the proper funeral and testamentary expenses, until the application is disposed of; otherwise, in addition to any penalties to which the person may be subject, the person is personally liable for the payment or transfer.
Marginal note:Act done in good faith
(3) Nothing in this section invalidates any payment or transfer of property made or any act or thing done, in good faith, by the executor, administrator of the estate or liquidator of the succession before the service of an application referred to in subsection (2).
Marginal note:Costs of application
45. (1) If a bankruptcy order is made, the costs of the applicant shall be taxed and be payable out of the estate, unless the court otherwise orders.
Marginal note:Insufficient proceeds
(2) If the proceeds of the estate are not sufficient for the payment of any costs incurred by the trustee, the court may order the costs to be paid by the applicant.
Marginal note:1997, c. 12, s. 27(F)
29. Subsection 46(1) of the Act is replaced by the following:
Marginal note:Appointment of interim receiver
46. (1) The court may, if it is shown to be necessary for the protection of the estate of a debtor, at any time after the filing of an application for a bankruptcy order and before a bankruptcy order is made, appoint a licensed trustee as interim receiver of the property or any part of the property of the debtor and direct the interim receiver to take immediate possession of the property or any part of it on an undertaking being given by the applicant that the court may impose with respect to interference with the debtor’s legal rights and with respect to damages in the event of the application being dismissed.
Marginal note:1992, c. 27, s. 16(1)
30. Subsection 47.2(1) of the Act is replaced by the following:
Marginal note:Orders respecting fees and expenses
47.2 (1) If an appointment of an interim receiver is made under section 47 or 47.1, the court may make any order respecting the payment of fees and disbursements of the interim receiver that it considers proper, including an order giving the interim receiver security, ranking ahead of any or all secured creditors, over any or all of the assets of the debtor in respect of the interim receiver’s claim for fees or disbursements, but the court shall not make such an order unless it is satisfied that all secured creditors who would be materially affected by the order were given reasonable advance notification and an opportunity to make representations to the court.
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