Court refuses application to stay sale of family home

The appellant argued that the sale of the family home could wait until the determination of the contingent creditor claims given that the trustees had confirmed that they wouldn't be distributing the proceeds of sale until that outcome was known. The appellant argued that she could be wholly successful in defending the contingent claims and that if she was, she would be able to pay the costs and expenses of the bankruptcy by borrowing funds from family. This would save the family home from being sold.

Originally, the court was looking to grant a stay of the possession and sale of the family home pending the outcome of the contingent claims, as there was no evidence of any significant prejudice to creditors due to a limited stay, compared to the clear and obvious risk of irreparable prejudice to the appellant if the family home were sold in circumstances where a sale was unnecessary. 

After allowing new evidence, the court was persuaded to change its view and the application was denied. Overall, the court was not satisfied that even in the event of successfully defending the contingent claims, the appellant would be able to meet the costs and expenses of bankruptcy (including significant necessary maintenance costs for the family home) without selling the family home. There was also risk of the family home declining in value in the meantime which meant that the sale should proceed now.

Tyshcenko (In Bankruptcy), Re