Melanson (Re)

Melanson (Re)

The motions were dismissed because the bank demonstrated no changed circumstances required for relief under s.187(5), and no continuing injustice warranting annulment under s.63(1) where the creditor voted for the amended proposal, had notice of the approval hearing and did not oppose it, and was bound by its agent's ostensible authority; errors of law or mistaken assessments at approval are matters for appeal, not reopening under s.187(5) or annulment absent the statutory grounds.

Citation
2018 NSSC 279
Parties
Debtor/proponent: Barclay Elmer Melanson; Creditor: B2B Bank; Trustee Under the Proposal: Alan Marshall Associates Inc.; Third Party/spouse Subject to Release: Jennifer Jo-Anne Melanson
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
2 November 2018
Procedural Posture
Bankruptcy and Insolvency Proposal Approval and Post Approval Challenge / Motion Under S.187(5) to Amend Approved Proposal and Alternative Motion Under S.63 to Annul Proposal; Decision on Reopening Approval
Outcome
Dismissed the motion to amend under s.187(5) and the alternative motion to annul the proposal under s.63(1); costs reserved
Legal Topics
Proposal Approval, Third Party Release, Annulment of Proposal, S.187(5) BIA, S.63 BIA, Ostensible Authority, Third Party Beneficiary Rule
Source Language
English
Bankruptcy and Insolvency Law Contract Law Civil Procedure Proposal Approval Third Party Release Annulment of Proposal S.187(5) BIA S.63 BIA +2 more

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Parties

Barclay Elmer Melanson

Debtor/proponent

B2B Bank

Creditor

Alan Marshall Associates Inc.

Trustee Under the Proposal

Jennifer Jo-Anne Melanson

Third Party/spouse Subject to Release

Procedural Posture

Bankruptcy and Insolvency Proposal Approval and Post Approval Challenge / Motion Under S.187(5) to Amend Approved Proposal and Alternative Motion Under S.63 to Annul Proposal; Decision on Reopening Approval

Legal Issues

  1. 1 Whether the court should amend an approved proposal under s.187(5) BIA
  2. 2 Whether the court should annul the proposal under s.63(1) BIA for continuing injustice
  3. 3 Whether a release of a non-proposing third party in a proposal is effective/enforceable

Ratio Decidendi

The motions were dismissed because the bank demonstrated no changed circumstances required for relief under s.187(5), and no continuing injustice warranting annulment under s.63(1) where the creditor voted for the amended proposal, had notice of the approval hearing and did not oppose it, and was bound by its agent's ostensible authority; errors of law or mistaken assessments at approval are matters for appeal, not reopening under s.187(5) or annulment absent the statutory grounds.

Court Disposition

Dismissed the motion to amend under s.187(5) and the alternative motion to annul the proposal under s.63(1); costs reserved

Orders

  • Dismissed application under s.187(5) BIA to amend the approved proposal
  • Dismissed alternative application under s.63(1) BIA to annul the proposal