Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Marginal note:Oaths

• 236 (1) The clerk may for the purposes of this Part examine any person under oath and may administer oaths.

• Marginal note:Record

  (2) The clerk shall make a written record in summary form of all evidence given at a hearing.

Marginal note:If assignment or bankruptcy order made

• 237 (1) If a debtor in respect of whom a consolidation order has been issued under this Part makes an assignment under section 49, or if a bankruptcy order is made against the debtor under section 43, or if a proposal by the debtor is approved by the court having jurisdiction in bankruptcy under sections 59 to 61, any moneys that have been paid into court as required by the consolidation order and that have not yet been distributed to the registered creditors shall, immediately after the making of the assignment or bankruptcy order or the approval of the proposal, be distributed among those creditors by the clerk in the proportions to which they are entitled under the consolidation order.

• Marginal note:Proceedings may be taken under other Parts

  (2) The fact that proceedings have been taken under this Part does not prevent the taking of proceedings by or against the debtor under the provisions of any other Part of this Act.

• Marginal note:Idem

  (3) None of the provisions of Parts I to IX of this Act applies to proceedings under this Part.

Marginal note:Appeal

238 A decision or order of the court under this Part is subject to appeal in the same manner as if it were a judgment of the court in a civil action.

Marginal note:Clerk to report

• 239 (1) On the issue of any consolidation order, the clerk shall forward a copy thereof to the Superintendent.

• Marginal note:Idem

  (2) The clerk shall give to the Superintendent all reports that the Superintendent may require for the administration of this Part.

Marginal note:No dismissal, etc., of employees

239.1 No employer shall dismiss, suspend, lay off or otherwise discipline a debtor by reason only that the debtor has applied for a consolidation order under this Part.

Marginal note:No discontinuance of public utilities

• 239.2 (1) No public utility shall discontinue service to a debtor by reason only that the debtor

  • (a) is insolvent;

  • (b) has applied for a consolidation order under this Part; or

  • (c) has not paid for service rendered before the consolidation order was applied for.

• Marginal note:Cash payments

  (2) Nothing in subsection (1) shall be construed as requiring further supply of service for other than payment in cash.

Marginal note:Regulations

240 The Governor in Council may make regulations

• (a) prescribing the forms to be used under this Part;

• (b) respecting costs, fees and levies to be paid under this Part;

• (c) designating the “court” for the purpose of this Part in any province except Manitoba and Alberta;

• (d) adapting this Part to the court organization or other circumstances of a particular province;

• (e) varying, in respect of any province, the classes of debts and amounts thereof to which this Part applies;

• (f) changing or prescribing, in respect of any province, the classes of debts to which this Part does not apply;

• (f.1) respecting the transfer of proceedings to a province other than the province in which a consolidation order was originally issued; and

• (g) generally, for carrying into effect the purposes and provisions of this Part.

Marginal note:Audit of proceedings

241 The accounts of every clerk that relate to proceedings under this Part are subject to audit in the same manner as if the accounts were the accounts of a provincial officer.

Marginal note:Application of this Part

• 242 (1) The Governor in Council shall, at the request of the lieutenant governor in council of a province, declare, by order, that this Part applies or ceases to apply, as the case may be, in respect of the province.

• Marginal note:Automatic application

  (2) Subject to an order being made under subsection (1) declaring that this Part ceases to apply in respect of a province, if this Part is in force in the province immediately before that subsection comes into force, this Part applies in respect of the province.

PART XISecured Creditors and Receivers

Marginal note:Court may appoint receiver

• 243 (1) Subject to subsection (1.1), on application by a secured creditor, a court may appoint a receiver to do any or all of the following if it considers it to be just or convenient to do so:

  • (a) take possession of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt;

  • (b) exercise any control that the court considers advisable over that property and over the insolvent person’s or bankrupt’s business; or

  • (c) take any other action that the court considers advisable.

• Marginal note:Restriction on appointment of receiver

  (1.1) In the case of an insolvent person in respect of whose property a notice is to be sent under subsection 244(1), the court may not appoint a receiver under subsection (1) before the expiry of 10 days after the day on which the secured creditor sends the notice unless

  • (a) the insolvent person consents to an earlier enforcement under subsection 244(2); or

  • (b) the court considers it appropriate to appoint a receiver before then.

• Definition of receiver

  (2) Subject to subsections (3) and (4), in this Part, receiver means a person who

  • (a) is appointed under subsection (1); or

  • (b) is appointed to take or takes possession or control — of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt — under

    • (i) an agreement under which property becomes subject to a security (in this Part referred to as a “security agreement”), or

    • (ii) a court order made under another Act of Parliament, or an Act of a legislature of a province, that provides for or authorizes the appointment of a receiver or receiver-manager.

• Definition of receiver — subsection 248(2)

  (3) For the purposes of subsection 248(2), the definition receiver in subsection (2) is to be read without reference to paragraph (a) or subparagraph (b)(ii).

• Marginal note:Trustee to be appointed

  (4) Only a trustee may be appointed under subsection (1) or under an agreement or order referred to in paragraph (2)(b).

• Marginal note:Place of filing

  (5) The application is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor.

• Marginal note:Orders respecting fees and disbursements

  (6) If a receiver is appointed under subsection (1), the court may make any order respecting the payment of fees and disbursements of the receiver that it considers proper, including one that gives the receiver a charge, ranking ahead of any or all of the secured creditors, over all or part of the property of the insolvent person or bankrupt in respect of the receiver’s claim for fees or disbursements, but the court may not make the order unless it is satisfied that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations.

• Meaning of disbursements

  (7) In subsection (6), disbursements does not include payments made in the operation of a business of the insolvent person or bankrupt.

Marginal note:Advance notice

• 244 (1) A secured creditor who intends to enforce a security on all or substantially all of

  • (a) the inventory,

  • (b) the accounts receivable, or

  • (c) the other property

  of an insolvent person that was acquired for, or is used in relation to, a business carried on by the insolvent person shall send to that insolvent person, in the prescribed form and manner, a notice of that intention.

• Marginal note:Period of notice

  (2) Where a notice is required to be sent under subsection (1), the secured creditor shall not enforce the security in respect of which the notice is required until the expiry of ten days after sending that notice, unless the insolvent person consents to an earlier enforcement of the security.

• Marginal note:No advance consent

  (2.1) For the purposes of subsection (2), consent to earlier enforcement of a security may not be obtained by a secured creditor prior to the sending of the notice referred to in subsection (1).

• Marginal note:Exception

  (3) This section does not apply, or ceases to apply, in respect of a secured creditor

  • (a) whose right to realize or otherwise deal with his security is protected by subsection 69.1(5) or (6); or

  • (b) in respect of whom a stay under sections 69 to 69.2 has been lifted pursuant to section 69.4.

• Marginal note:Idem

  (4) This section does not apply where there is a receiver in respect of the insolvent person.

Marginal note:Receiver to give notice

• 245 (1) A receiver shall, as soon as possible and not later than ten days after becoming a receiver, by appointment or otherwise, in respect of property of an insolvent person or a bankrupt, send a notice of that fact, in the prescribed form and manner, to the Superintendent, accompanied by the prescribed fee, and

  • (a) in the case of a bankrupt, to the trustee; or

  • (b) in the case of an insolvent person, to the insolvent person and to all creditors of the insolvent person that the receiver, after making reasonable efforts, has ascertained.

• Marginal note:Idem

  (2) A receiver in respect of property of an insolvent person shall forthwith send notice of his becoming a receiver to any creditor whose name and address he ascertains after sending the notice referred to in subsection (1).

• Marginal note:Names and addresses of creditors

  (3) An insolvent person shall, forthwith after being notified that there is a receiver in respect of any of his property, provide the receiver with the names and addresses of all creditors.

Marginal note:Receiver’s statement

• 246 (1) A receiver shall, forthwith after taking possession or control, whichever occurs first, of property of an insolvent person or a bankrupt, prepare a statement containing the prescribed information relating to the receivership, and shall forthwith provide a copy thereof to the Superintendent and

  • (a) to the insolvent person or the trustee (in the case of a bankrupt); and

  • (b) to any creditor of the insolvent person or the bankrupt who requests a copy at any time up to six months after the end of the receivership.

• Marginal note:Receiver’s interim reports

  (2) A receiver shall, in accordance with the General Rules, prepare further interim reports relating to the receivership, and shall provide copies thereof to the Superintendent and

  • (a) to the insolvent person or the trustee (in the case of a bankrupt); and

  • (b) to any creditor of the insolvent person or the bankrupt who requests a copy at any time up to six months after the end of the receivership.

• Marginal note:Receiver’s final report and statement of accounts

  (3) A receiver shall, forthwith after completion of duties as receiver, prepare a final report and a statement of accounts, in the prescribed form and containing the prescribed information relating to the receivership, and shall forthwith provide a copy thereof to the Superintendent and

  • (a) to the insolvent person or the trustee (in the case of a bankrupt); and

  • (b) to any creditor of the insolvent person or the bankrupt who requests a copy at any time up to six months after the end of the receivership.