Need a new lawyer!

[Manipulated]

TAYKEN,
Thank you so much for your hard work and research. I truly hope it helps others in the same type of situation. I've been away for a while and so not able to reply. The meeting of creditors went well. The ex's former lawyer had no problem not becoming an Inspector after my daughter voiced her concerns, so she has become the only Inspector on this case. Apparently, BDO wants to change the case from summary to ordinary as they have reached their cap on getting paid for a summary case (pardon me if the wording is not correct), and as the LIT explained, if there is more work to do on the case then they would not be getting anything out of it.

No matter what my daughter has won in the past 12 years will be for nothing now, it seems, since any WSIB money that ex is getting till age 65 (in 1 year) is protected no matter what. His WSIB case is also in CanLII and, although we have written proof that he committed fraud to obtain WSIB and have reported it to WSIB, we will never find out because of confidentiality laws. With no money for a lawyer and no where else to turn we are officially at the end of our rope. Due to the damage the ex did to her property, she still has no indoor plumbing, 4 electrical sockets, and poor heating (her house measured -6 degrees at one point this past winter) she might as well be homeless. So any money the judge did award is for naught. And ex has been living on fraudulent WSIB at now between $5500-6000 per month, tax free, since 2008.

Anyway, I'm afraid I've totally gone off the rails with this thread, but hopefully between this case now being public in CanLII and your expertise and research, even if just one victim of domestic violence reading this will have the courage and determination to stand up, then all will not totally be lost.

Thank you for at least listening....

 

[rockscan]

If she can, register the order with FRO! They will still garnish anything which means when he thinks he is safe and goes for his CPP, it will be garnished. My dad’s CPP was garnished until my mom died!

 

[Manipulated]

If she can, register the order with FRO! They will still garnish anything which means when he thinks he is safe and goes for his CPP, it will be garnished. My dad’s CPP was garnished until my mom died!

Hello rockscan:
Thanks for your response. She has already talked to FRO and they said they will not get involved unless it is for child support (which it isn't) or spousal support. The court ordered only about $3000 in spousal since it was a short marriage, and when my daughter tried to collect through FRO, he decided to pay it out of his pocket since FRO would have to garnish his WSIB payments and he doesn't want WSIB to know anything about his financials.

 

[Manipulated]

While I don't want to take away from your daughter's ordeal, I'm curious if this was actually necessary or even if you crowing about getting to this point is worth it. You probably spent a large sum of money to get to this point and there may be no win in it. It sounds like the judge wasn't interested in the case you presented and that perhaps it was a losing effort. You spoke about justice for your daughter but truly having her ex jailed was in fact justice as he paid for the crimes he was accused of as far as society is concerned. There are plenty of women out there who never even had that. And more who have lost their lives.

What your daughter needs is to get some therapy and move on with her life. Constantly fighting is a losing battle and only serves to extend the suffering she experienced. If she wins then good for her. If she loses, I hope you don't continue to push her on in this matter.

Sorry rockscan, just to be clear...I have supported her decisions 100% of the way. I have never pushed her on this matter, in fact, she has initiated everything to get justice. And hopefully you have read the decision of Justice Stothart from the 2023 decision on this matter in CanLII.

 

[Tayken]

Manipulated, this is actually a better update than it may feel like.

First, the meeting going well is important. The former trial counsel creditor stepping back from the inspector role was probably the best possible practical outcome. That avoided a fight about whether he was automatically disqualified, which was never the strongest argument anyway. The stronger argument was always the operative conflict concern: former litigation counsel, now a creditor, potentially holding privileged or confidential information about the bankrupt’s litigation conduct, disclosure, and bankruptcy planning. Galty B.V. (Re), 2021 ONSC 7250 is helpful for that point, but it must be used precisely. It does not say a lawyer-creditor can never be an inspector. It says an inspector must act for the general body of creditors and may be disqualified from acting or voting where there is an operative conflict.

Your daughter becoming the only inspector is significant. But she needs to understand what that means. She is not merely “her own representative” in that role. An inspector supervises aspects of the estate administration for the benefit of the creditors generally. That does not mean she stops protecting herself. It means she protects herself through proper estate administration: written resolutions, minutes, claims ledgers, receipts and disbursements, dividend sheets, fee review, and court directions where necessary.

Do not let the emotional exhaustion obscure what your daughter has already accomplished. The Bankruptcy Court lifted the stay so she may enforce the $130,000 general damages award, refused an absolute discharge, found the bankrupt was not an honest but unfortunate debtor, and imposed a conditional discharge requiring a further $115,712.26 payable at $1,000 per month. That is not “nothing.” It may not translate into fast collection, but it is a major legal result.

The next issue is the proposed change from summary administration to ordinary administration.

Do not assume that is automatically improper. A bankruptcy that starts as a small summary estate may become too complicated or too large to continue that way. Under the BIA, summary administration applies where the realizable assets, after secured claims are deducted, do not exceed the prescribed amount. The prescribed amount is currently $15,000. The Official Receiver may direct that the summary-administration provision cease to apply if the realizable assets exceed the prescribed amount, or if realization costs are a significant proportion of the assets and the Official Receiver considers the direction appropriate.

So the right response is not: “The LIT is only doing this to get paid.”

The right response is:

Please provide the statutory basis for the proposed conversion from summary administration to ordinary administration. Please confirm whether this is being directed by the Official Receiver, requested by the trustee, approved by the creditors, or to be approved by the court. Please also provide a written comparison of the expected trustee remuneration, disbursements, levy, reserve, and expected dividend under the summary-administration scenario and under the ordinary-administration scenario.

That is the correct question.

The LIT is entitled to be paid for real work. But the estate is not a fee-generating machine. In an ordinary administration, trustee remuneration is normally voted by the creditors by ordinary resolution. If it is not fixed that way, the trustee may claim up to 7.5% of realizations, subject to possible increase or reduction by the court.

That means your daughter, as the dominant creditor and now the only inspector, should not approve anything vague. She should ask for a projected fee budget and a dividend impact statement before any conversion, fee resolution, or final accounting is accepted.

She should immediately request, in writing:

Please provide the minutes of the creditors’ meeting confirming the inspector appointment.

Please provide the current statement of receipts and disbursements.

Please provide the current claims register.

Please provide the admitted amount of each creditor’s claim.

Please provide the current estate cash on hand.

Please provide the proposed interim dividend sheet.

Please provide all trustee fees, disbursements, taxes, levies and reserves proposed to be deducted.

Please confirm whether the $1,000 costs award from the stay motion is being treated as separate from the estate distribution.

Please confirm whether any interim dividend paid to me is a credit only and not a release, satisfaction, waiver or merger of my rights under the stay-lift order, the $130,000 damages award, the conditional-discharge order, the separate $1,000 costs award, or any future enforcement rights.

That last point is important.

... continued ...

 

[rockscan]

Sorry rockscan, just to be clear...I have supported her decisions 100% of the way. I have never pushed her on this matter, in fact, she has initiated everything to get justice. And hopefully you have read the decision of Justice Stothart from the 2023 decision on this matter in CanLII.

My comment was from a few years ago. Ignore my judgmental sound.

I feel for your daughter. These ex partners who get away with murder are disgusting.

 

[Tayken]

The $130,000 award now has a dual character. It is part of her proven claim in the bankruptcy, but the stay has also been lifted so she may pursue enforcement of that award outside the bankruptcy. That means payments must be credited carefully. She cannot collect the same dollar twice, but nobody should be permitted to characterize an interim estate dividend as wiping out the rights the Bankruptcy Court expressly preserved.

As inspector, she should also remember that the trustee’s final statement and dividend sheet matter. In an ordinary administration, the trustee’s final statement of receipts and disbursements and dividend sheet are submitted to the inspectors for approval before being sent on. That gives the inspector role real importance.

The other issue is the future s. 38 assignment. The March 2026 bankruptcy order contemplated that the conditional-discharge payment obligation could be assigned to creditors under s. 38. That should not be handled casually. Section 38 is a formal process. If the trustee refuses or neglects to take a proceeding that would benefit the estate, a creditor may seek a court order authorizing the creditor to proceed in the creditor’s own name, at the creditor’s own expense and risk. Once such an order is made, the trustee assigns the right, title and interest in the chose in action and supporting documents.

So if the trustee says there is “more work to do” and that summary fees are no longer enough, one practical question is whether the better route is:

1. distribute the current estate funds properly;
2. assign the conditional-discharge chose in action under s. 38 on clear terms;
3. provide all supporting documents;
4. then allow the trustee to seek discharge once its duties are complete.

That may or may not be the best answer. But it is the question I would ask an insolvency lawyer before agreeing to a long, open-ended administration that consumes estate money.

The WSIB point is painful, but your understanding may be largely correct. Section 64 of the Ontario Workplace Safety and Insurance Act says WSIB benefits cannot be assigned, garnished, charged or attached without the permission of the Board. There is a specific exception for support or maintenance orders under s. 65. A tort damages judgment is not the same thing as a support order.

That does not mean the bankruptcy result was pointless. It means collection may be difficult if WSIB is his only income and if there are no exigible assets. The conditional discharge still matters because he does not receive the full benefit of discharge unless the conditions are fulfilled. But it is fair to say that a civil judgment is only as good as the legally available property or income against which it can be enforced.

On the WSIB fraud allegation, be careful with wording. I would not post publicly that he is “living on fraudulent WSIB” unless WSIB or a court has made that finding. The safer and stronger wording is:

We have reported what we believe to be evidence of WSIB fraud to WSIB.

WSIB has a fraud-reporting process. But WSIB also treats claim-file information as personal and confidential. So it is entirely possible that you can report information and never be told the result. That does not mean nothing happened. It means the investigation, if any, is not your proceeding.

The house condition is a separate emergency. It should not be treated only as an enforcement issue. The family reasons already record the state of the home and the lack of ordinary services. If she has no proper heat, no indoor plumbing, and unsafe electrical service, she should also pursue housing-repair assistance directly, not only litigation recovery.

Depending on where the property is located, she should contact the local service manager and ask specifically about Ontario Renovates, emergency repair funding, homelessness prevention funding, and any discretionary housing-related benefits. For example, the District of Parry Sound DSSAB lists an Ontario Renovates accessibility grant program and housing contacts; other municipalities or DSSABs administer similar programs with different funding limits and intake rules.

She should also call 211 and ask for local emergency home repair, victim services, women’s services, housing stabilization and utility-assistance programs. This is not charity in the pejorative sense. This is exactly why those programs exist: to prevent unsafe housing and homelessness.

Because this is domestic-violence-related, she should also contact Legal Aid Ontario and ask about domestic-violence services. LAO provides confidential domestic-violence legal services, and there is a two-hour free legal advice program for domestic-violence survivors with no financial eligibility requirement, accessed through participating shelters or community legal clinics.

I would still strongly recommend a narrow consultation with a lawyer who actually understands the bankruptcy/family-law overlap. This does not have to be a full retainer. It can be a paid one- or two-hour document review. The questions are now very specific:

Should the estate be converted from summary to ordinary administration?

What fee impact will conversion have?

What power does your daughter have as sole inspector?

Should she approve or object to the proposed conversion?

Should she request a s. 38 assignment of the conditional-discharge chose in action?

How should payments be credited between the bankruptcy estate, the $130,000 damages award, the original costs, the equalization amount, and the separate $1,000 costs award?

What can realistically be enforced if the bankrupt’s main income is WSIB?

What wording must be avoided so she does not accidentally release or merge her preserved enforcement rights?

Those are questions for a lawyer who works in this exact overlap. This is not ordinary family-law enforcement anymore. This is estate administration, trustee remuneration, inspector authority, s. 38 assignment, conditional discharge, exempt income, and payment allocation.

My bottom line:

Your daughter has not lost. She won the discharge fight. She won the stay-lift fight. She became the sole inspector. The former trial counsel creditor did not become inspector. Those are meaningful wins.

But the file has now moved into the accounting-and-administration stage. That stage is less dramatic than the trial and the discharge hearing, but it can determine whether the legal win produces any actual recovery.

Everything now should be in writing.
No telephone understandings.
No vague fee discussions.
No informal “handover.”
No unexamined conversion to ordinary administration.
No approval of final accounts without a full receipts-and-disbursements statement and dividend sheet.
No merging of the separate $1,000 costs award.
No release of the $130,000 stay-lift/s.178 enforcement rights.
No public fraud allegations unless a court or WSIB has made that finding.

This is not the end of the road. It is the part of the road where the paperwork matters most.