Last week, Brandon wrote about mortgage fraud
and how if you are convicted of mortgage fraud, how bankruptcy will not help
the person eliminate that debt by their discharge from bankruptcy.
This week, Brandon writes about a recent
decision of the Ontario Superior Court of Justice on fraudulent misrepresentation.
And the bottom line is the same if you're found guilty of fraudulent
misrepresentation and therefore the other party suffered
damages. That debt will not be released by an order of discharge.
My name is Ira Smith,
President of
Ira Smith Trustee & Receiver Inc.
Both Brandon Smith and myself are available to answer any questions you may
have, either about this Brandon's Blog or anything else at all.
So shoot us a message, give us a phone call.
We would love to speak with you.
Even though I've given you the bottom line,
I hope you can watch until the end of this
video, because I know you will find it informative.
This week's, Brandon's Blog is titled Fraudulent Misrepresentation:
Our Authoritative Guide On What (Really) Goes Into Fraudulent Misrepresentation.
So, first, Brandon gives an overview of what fraudulent misrepresentation is.
He discusses the three types
of misrepresentation, of which fraudulent misrepresentation is one.
He then discusses what are the legal consequences of making false statements.
Then he gets into the court case.
What's the process for suing someone for fraudulent misrepresentation?
And Brandon describes the court case, how it started.
Bank of Montreal started with a notice of motion suing a company
and its Director, who was also the guarantor of the company's debt.
He goes through the evidence that was
brought out for fraudulent misrepresentation.
In the court case, the company and the Director did not defend.
The Bank of Montreal was able to get judgment based on its evidence alone.
The company had applied for three
different loan facilities, the first one being the main one was under
the Canada Small Business Administration Financing Act.
And the company made certain representations,
declarations in writing to Bank of Montreal and supplied
an invoice for the equipment it purportedly purchased.
It turns out those declarations were all false, and the invoice was fraudulent.
The invoice was not real,
and the company never bought any equipment at all, let alone any equipment that would
qualify under the Canadian Government loan program.
So Bank of Montreal was able to prove,
by its own evidence, fraudulent misrepresentation.
It got judgment not only for the full amount owed from all three loan
facilities, but also punitive damages were awarded to the bank.
And the bank also got a declaration
that the debt owed was a result of fraudulent misrepresentation.
The judge went through a careful analysis for the claim of fraudulent
misrepresentation, and he even discussed the five elements
of a fraudulent misrepresentation claim that Brandon discusses down below.
The judge even noted that although Bank
of Montreal did not ask for a declaration that the debt survives any bankruptcy
of the Director under Section 178(1)(e), of the Bankruptcy and Insolvency Act,
it is clear on the face of the evidence that it would be such a debt.
So if the Director ever files for bankruptcy, and based on last week's
case Brandon described, Bank of Montreal can certainly go back
to court and get either the existing judgment amended or a new judgment
declaring the debt to fall under the category of fraudulent
misrepresentation, which, under section 178(1)(e)of the BIA,
is not discharged upon the person's discharge from bankruptcy.
So I hope you can read the entire
Brandon's Blog below, because I know you will get value from it.
Again, both Brandon Smith and myself are available to answer any questions you
may have, either about this Brandon's Blog or anything else at all.
So shoot us a message, give us a phone call.
We would love to hear from you.