Joint Consumer Proposal and Proof of Claim
In order for creditors in Canada to make a claim in a consumer proposal or a bankruptcy the Bankruptcy and Insolvency Act (BIA) stipulates that it is necessary to file a proof of claim. Proof of claim will eventually be filed with the Office of the Superintendent of Bankruptcy (OSB) and it will have to include documentation that certifies the identity of the creditor, as well as evidence of the debt. One case that deals with the issue of proof of claim is In the Matter of the Consumer Proposal of Manal Kamel Matti and Anne Marie Matti (Debtors). The Debtors were husband and wife and had three daughters of which the eldest one was just about to start college. In 2004 the Debtors realized that they were encountering financial difficulties and started to consider their options. Thus, the Debtors decided to contact a Licensed Insolvency Trustee. A Licensed Insolvency Trustee is a debt management professional that is licensed by the OSB to manage and supervise consumer proposals and bankruptcies. The Debtors consulted a Licensed Insolvency Trustee for an initial free consultation on how to resolve their financial problems. This action resulted in several consultations from which the facts diverge between the Licensed Insolvency Trustee and the Debtors on the matter of any fees. However, for different reasons the Debtors later also contacted a second Licensed Insolvency Trustee in Quebec and decided to pursue the consumer proposal with this person instead. The first Licensed Insolvency Trustee duly filed for the court to make a claim for remuneration for the initial consultation the debtors made. Both the second Licensed Insolvency Trustee and the Debtors questioned this request by the first Licensed Insolvency Trustee and the court thus had to consider the matter. The court considered quantum meruit, which is a claim as unjust enrichment. This basically means that a service provided by one party under a contract can have a reasonable expectation of being compensated. In the present case the Debtors contacted the first Licensed Insolvency Trustee for a free initial consultation, but they also continued to request its services without properly informing that they had also been shopping around for a second Licensed Insolvency Trustee. The court found that contract law is in essence about enforcement of promises. These promises may be oral or written, but under the law both are still as valued, although obviously it may be difficult to prove a promise that is made orally. However, in the present case the court found that the first Licensed Insolvency Trustee had provided additional work after the first initial free consultation and therefore it would not be appropriate to not allow these claims in the joint consumer proposal of the Debtors. For more information about proof of claim and consumer proposals or indeed any professional debt management advice contact a licensed and renowned Licensed Insolvency Trustee.