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ARTICLE · 09 SEPTEMBER 2016

Contempt And Bankruptcy: Striking The Right Balance

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In its recent decision in Walchuk v Houghton, the Court of Appeal for Ontario clarified the interaction between the stay provisions of the Bankruptcy and Insolvency Act and motions for contempt of court orders.

CanadaInsolvency/Bankruptcy/Re-Structuring
Scott McGrath
Scott McGrath
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In its recent decision in Walchuk v Houghton, 2016 ONCA 643, the Court of Appeal for Ontario clarified the interaction between the stay provisions of the Bankruptcy and Insolvency Act (BIA) and motions for contempt of court orders.

THE AUTOMATIC STAY PROVISIONS OF THE BIA

The BIA stays proceedings against a debtor when the debtor files a notice of intention to file a proposal (s. 69) or upon the debtor's bankruptcy (s. 69.3).

A main goal of the BIA is to provide for the orderly and fair distribution of the bankrupt's property among its creditors. The stay provisions of the BIA further this goal by preventing a creditor from instituting proceedings that could give it an advantage over other creditors1.

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