



COURT OF APPEAL FOR ONTARIO

CITATION:  Zanewycz (Re), 2020 ONCA 561

DATE: 20200904

DOCKET: C68286 & M51555 (C68286)

van Rensburg, Pardu and Huscroft
    JJ.A.

In
    the Matter of the Bankruptcy of

Walter
    Andrew John Zanewycz

of
    the City of Thunder Bay

in
    the Province of Ontario

BETWEEN

Cheadles
    LLP

Applicant

(Respondent/Moving
    Party)

and

Walter
    Andrew Zanewycz

Respondent

(Appellant/Responding
    Party)

Walter Zanewycz, acting in person

K. Daniel Reason, for the respondent and
    the moving party, Cheadles LLP

Heard: August 31, 2020 by
    videoconference

On appeal from
    the bankruptcy order of Justice John S. Fregeau of the Superior Court of
    Justice dated April 6, 2020, adjudging the appellant, Walter Zanewycz, a
    bankrupt, with reasons reported at 2020 ONSC 2032. Motion by the respondent to
    quash the appeal.

REASONS FOR DECISION

[1]

We dismissed the appellants appeal of an order
    adjudging him bankrupt, with reasons to follow. These are our reasons.

[2]

The appellant retained the respondent law firm
    to represent him in matrimonial litigation. Over time, the appellant became
    indebted to the respondent and other individuals. In 2018, the appellant made a
    consumer proposal under the
Bankruptcy and Insolvency Act
, R.S.C.,
    1985, c. B-3, which was rejected by his creditors. The respondent issued an
    application for a bankruptcy order against the appellant on the grounds that
    the appellants debts exceeded one thousand dollars and that he had ceased to
    meet his liabilities generally as they became due. The appellant opposed the
    application.

[3]

The appellant was adjudged bankrupt. The
    bankruptcy judge found that the bankruptcy application was properly issued and
    served on the appellant. The bankruptcy judge also found that the appellant
    owed debts to the respondent and his former spouse exceeding one thousand
    dollars, pursuant to judgments and costs orders. Moreover, the appellant
    acknowledged his debts to other creditors, including his mother and current
    partner, and conceded that his debts owing to various creditors, including the
    respondent, remained outstanding.

[4]

The bankruptcy judge rejected the appellants
    arguments that due to ongoing litigation with the respondent and his former
    spouse, the appellants debts to the respondent would be set off against any
    damages awards he might receive and that these debts as well as the costs
    orders in favour of his former spouse were not final. He concluded that the
    appellant owed the respondent debts exceeding one thousand dollars and that he
    had committed an act of bankruptcy by failing to meet his liabilities as they
    were due in the six-month period preceding January 15, 2019, the date the bankruptcy
    application was issued.

[5]

The appellant raises a number of the same
    arguments that he raised before the bankruptcy judge in opposition to the
    bankruptcy application. He has not cited any specific errors that would allow
    this court to intervene, nor, having reviewed the record, do we see any such
    error. In particular, there was no error in the bankruptcy judges conclusions
    on the procedural issues respecting the issuance and service of the
    application, or in his substantive determinations with respect to the debts
    owed by the appellant, including the fact that they were outstanding and that the
    appellant had failed to meet his liabilities generally as they became due.

[6]

The appellants ongoing litigation with the respondent
    law firm and his ongoing matrimonial litigation do not affect the fact that the
    debts owed to these creditors were outstanding at the relevant time. Nor is it relevant
    that the appellant may have made offers to settle his debts, which were not
    accepted, or that he believes the debts, even those that have not been paid, to
    have somehow become stale. Finally, there is no merit in the arguments that
    the respondent was using the bankruptcy process for improper purposes, or that
    there were any procedural errors in the hearing that would or could have
    affected the basis on which the bankruptcy order was granted.

[7]

For these reasons the appeal was dismissed. We
    also dismiss, as moot, the motion to quash the appeal. Costs to the respondent
    are fixed in the sum of $5,000, inclusive of disbursements and HST, to be paid
    from the bankrupts estate.

K.
    van Rensburg J.A.

G.
    Pardu J.A.

Grant
    Huscroft J.A.


