G. (W.) v. G. (K.), 2015 ONSC 6160
This case deals with the enforcement of a costs order as support where the payor has filed for bankruptcy.
Background
The Respondent was successful at a four-day trial on the main issues including spousal support for herself and child support to be paid by the Applicant. Following cost submissions by the parties, the judge ordered the Applicant to pay the Respondent $54,700 in costs.
Approximately a month later, the Respondent’s counsel, via letter to the Court, requested an Addendum to the costs decision to stipulate that the costs Order be enforceable under the Family Responsibility and Support Arrears Enforcement Act(henceforth “the Act”). The request was motivated by the fact that the Applicant had not paid any costs at that point and had also filed for bankruptcy. The Respondent’s counsel relied on the 2012 Court of Appeal case of de Somer v Martin as authority of the court to make such an Order.
The Applicant argued that the court lack authority to make such an Order since he had already filed for bankruptcy. Once he had filed for bankruptcy, the debt represented by the cost order was effectively extinguished by law under the Bankruptcy Actas a result of his declaration of bankruptcy.
Analysis
The judge sided with the Respondent and rejected the Applicant’s arguments for two reasons.
Firstly, it is on the discharge of bankruptcy that permanent extinguishment of certain debt occurs. The mere filing of bankruptcy does not trigger the permanent extinguishment of debts.
Secondly and most importantly, support payments are a type of debt that are not extinguishable under the Bankruptcy Act. Furthermore, refusing to grant the Respondent her relief via an enforcement Order merely because the Applicant filed for bankruptcy before the costs Order became enforceable would be a grossly unfair result. This was especially true in light of the fact that the Applicant filed for bankruptcy very soon after the costs Order was made in an attempt to avoid liability for costs.
The judge was further satisfied that, having regard to de Somer and the fact that spousal and child support were key issues at original trial, the court had authority to order the cost award be enforceable a support Order under the Act. As such, the Respondent was granted her request.