In the matter of Chandos Construction Ltd v Restructuring Deloitte Inc, the Supreme Court of Canada issued a judgment on the anti-deprivation rule, which is intended to prevent contracts from frustrating statutory and common law rules relating to insolvency. The Court established that a clause triggered by an event of insolvency or bankruptcy and which has the effect of removing value from the insolvent’s estate is void and unenforceable.

Introduction

Before July 2016, in order to wind-up a strata corporation voluntarily through a liquidator in B.C., unanimous approval of the strata owners was generally required. The unanimity requirement made strata wind-ups a rare event, and consequently it was exceedingly difficult for owners to sell a strata complex in its entirety for redevelopment. In an influential 2015 report, the B.C. Law Institute (“BCLI”) identified some of the problems with the unanimity requirement: