Lin (Re)

Lin (Re)

On the evidence that was before the trustee the promissory notes were demand notes and the six-year limitation expired in October 2001, leaving no enforceable underlying debt and no consideration for the November 2007 mortgage, which therefore constituted a void settlement/preference under ss.91 and 95 BIA; the trustee was entitled to disallow the secured and unsecured claims. However, the court found the appellant's proposed fresh evidence (notably the December 2002 and December 2004 agreements and affidavits) was credible and could reasonably be expected to affect the result and thus should be admitted for further disposition; appeal standard of review is correctness for legal issues.

Citation
2010 BCSC 264
Parties
Bankrupt: Annie Hsiao Hsiu Lin; Appellant / Creditor: Anna Hsueh-Lin Lin; Trustee in Bankruptcy: MacKay & Company Ltd.; Creditor / Respondent: Harvinder Sanghera
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
26 February 2010
Procedural Posture
Bankruptcy Appeal Under Bankruptcy and Insolvency Act / Appeal From Trustee's Disallowance of Proof of Claim and Application to Admit Fresh Evidence (s.135(4))
Outcome
Appeal would be dismissed on the material before the trustee but the appellant's fresh evidence is admitted; matter reserved for further directions to determine whether ultimate determination is by court or returned to trustee and for costs
Legal Topics
Fraudulent Preference, Settlements (s.91 Bia), Equitable Mortgage, Limitation Periods, Promissory Estoppel, Admission of Fresh Evidence, Standard of Review
Source Language
English
Bankruptcy and Insolvency Property Law Evidence Law Civil Procedure Limitation Law Fraudulent Preference Settlements (s.91 Bia) Equitable Mortgage +4 more

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Parties

Annie Hsiao Hsiu Lin

Bankrupt

Anna Hsueh-Lin Lin

Appellant / Creditor

MacKay & Company Ltd.

Trustee in Bankruptcy

Harvinder Sanghera

Creditor / Respondent

Procedural Posture

Bankruptcy Appeal Under Bankruptcy and Insolvency Act / Appeal From Trustee's Disallowance of Proof of Claim and Application to Admit Fresh Evidence (s.135(4))

Legal Issues

  1. 1 Whether the appellant held an enforceable underlying debt supporting a secured or unsecured claim
  2. 2 Whether the November 21, 2007 mortgage was void as a fraudulent preference or settlement under ss.95 and 91 BIA
  3. 3 Whether an equitable mortgage existed over the Ash Street property

Ratio Decidendi

On the evidence that was before the trustee the promissory notes were demand notes and the six-year limitation expired in October 2001, leaving no enforceable underlying debt and no consideration for the November 2007 mortgage, which therefore constituted a void settlement/preference under ss.91 and 95 BIA; the trustee was entitled to disallow the secured and unsecured claims. However, the court found the appellant's proposed fresh evidence (notably the December 2002 and December 2004 agreements and affidavits) was credible and could reasonably be expected to affect the result and thus should be admitted for further disposition; appeal standard of review is correctness for legal issues.

Court Disposition

Appeal would be dismissed on the material before the trustee but the appellant's fresh evidence is admitted; matter reserved for further directions to determine whether ultimate determination is by court or returned to trustee and for costs

Orders

  • Fresh evidence (affidavits and December 2002 and December 2004 agreements) admitted for the purposes of the appeal
  • Appeal dismissed on the basis of the evidence before the trustee (trustee's disallowance upheld on that material)