“…the appellant’s discharge in bankruptcy nevertheless releases him from all claims provable in bankruptcy unless the claim is one that is excepted under s. 178 [of the Bankruptcy and Insolvency Act] or until the discharge is set aside or permission obtained to proceed with the claim: Janakowski v. Janakowski, 2000 CanLII 22587 (ON SC), [2000] O.J. No. 2650, 7 R.F.L. (5th) 117 (S.C.J.), at paras. 29-30.
The appellant accordingly submits that we should allow the appeal and grant him summary judgment. The matter is not so simple.
The relevant parts of ss. 178(1) and (2) of the BIA provide:
178(1) An order of discharge does not release the bankrupt from . . . . .
(c) any debt or liability . . . under an agreement for maintenance and support of a spouse, former spouse… . . . . .
(2) Subject to subsection (1), an order of discharge releases the bankrupt from all claims provable in bankruptcy.
In Berdette v. Berdette (1991), 1991 CanLII 7061 (ON CA), 3 O.R. (3d) 513, [1991] O.J. No. 788, 33 R.F.L. (3d) 113 (C.A.), Galligan J.A. indicated that the Family Law Act, R.S.O. 1990, c. F.3 is a debtor-creditor statute. The spouse with the greater net family property owes the spouse with the lessor net family property an equalization payment that can be satisfied by a money judgment or the transfer of property or a combination of both. If a spouse agrees to make an equalization payment in a separation agreement or a court makes an order for equalization under Ontario’s present Family Law Act, and the payor spouse subsequently makes an assignment or is petitioned into bankruptcy, an order of discharge will release the payor spouse from that liability: see The Honourable L.W. Houlden and The Honourable G.B. Morawetz, Bankruptcy and Insolvency Law of Canada, looseleaf (Toronto: Carswell, 1992) at 6-124.4, citing inter alia Blowes v. Blowes (1993), 1993 CanLII 8521 (ON CA), 16 O.R. (3d) 318, [1993] O.J. No. 2022, 49 R.F.L. (3d) 27, 21 C.B.R. (3d) 276 (C.A.). Section 178(1) of the BIA lists eight classes of debts that are not released by an order of discharge. As indicated above, one of these exceptions is support.
The word “support” in the BIA does not include a division of matrimonial property. See e.g., Van Norman v. Van Norman, 1993 CanLII 2474 (BC CA), [1993] B.C.J. No. 244, 44 R.F.L. (3d) 406, 18 C.B.R. (3d) 123 (C.A.). “Support” is not, however, defined under the BIA. In Moore v. Moore (1988), 1988 CanLII 4570 (ON SC), 67 O.R. (2d) 29, [1988] O.J. No. 2024 (H.C.J.), Campbell J. held that whether a particular amount claimed pursuant to a separation agreement is “support” within the meaning of the BIA is a question of fact to be determined with regard to the words of the agreement and the circumstances under which it was entered into. He instructed the fact finder as follows at para. 29:
The task in these cases is to determine as a question of fact whether the money owing under the agreement is really in the circumstances a form of maintenance and support, or is basically intended as maintenance and support, or is in effect maintenance and support or a substitute for it.”