MUNRO (RE), 2014 ABQB 636

Veit j

6.8: Questioning witness before hearing

Case Summary

The Applicants sought to lift the Respondents’ bankruptcy Stay on the grounds that the Applicant’s claim would survive the bankruptcy but their recovery on the Judgment would be prejudiced by delay if the Stay was not lifted. Further, if they could proceed and get a Judgment against the Respondents, they would be in a position to access the Real Estate Fraud Prevention Fund. The Application was contested on the basis that the Applicants did not meet the very low threshold required to establish that there was some evidence of some substance to the allegations of fraud.

Veit J. found that the Applicants had not provided sound reasons for granting the Stay. In particular, the Applicants had not established that their Claim would survive bankruptcy. Further, access to the Real Estate Fraud Prevention Fund engaged the same concerns as the claim of fraud, and therefore in these circumstances the potential access was not a reason to lift the Stay. Veit J. found no independent evidence to support the Applicants’ claim of fraud or misrepresentation. Justice Veit observed that the Applicants took the relatively unusual step of using Rule 6.8 to examine the Respondent, Sally Munro. Evidence obtained under Rule 6.8 was evidence “of the examiner”. Veit J. was not surprised that the evidence of Ms. Munro was that she did nothing improper. In the result, Veit J. denied the Plaintiffs’ Application to lift the bankruptcy Stay.

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