Digest Of The Week | Melanson (Re)

Debtor made proposal which was accepted by his creditor and approved by court — Proposal included clause releasing wife — Creditor bank sued debtor's wife — Representative at agency representing bank was not made aware of suit until after proposal had been accepted and approved — Bank brought motion for order under s. 187(5) of Bankruptcy and Insolvency Act amending proposal or order under s. 63 annulling proposal — Motion dismissed — Bank suffered no injustice justifying annulment under s. 63 — It was not clear that release was impermissible — Bank allowed what it now claims to have been impermissible — Bank had proposal for study, caused amended proposal that improved its recovery to be made, voted in favour of amended proposal, had notice of motion for approval and it let motion be heard without contest — Evidence provided by bank attempted to distance it from its agents — Bank only acted through agents, so when agent failed to read or understand term in proposal that was bank's failure — When agency was out of touch with lawyer suing wife it was result of banks failure to coordinate its agents or act through single agent to enforce related liabilities — It would be unjust to annul proposal allowed by bank on ground that bank now understood what it voted for.