Arnold Hyman Bornstein

The appellant, Stonehouse Group Inc., appealed a motion judge's decision denying enhanced refund interest on an overpayment of provincial tax.

The overpayment resulted from a disallowed loss carry back under the Corporations Tax Act, which was later reversed.

The motion judge interpreted s. 79(7) of the Act as precluding enhanced interest for loss carry back refunds.

The Court of Appeal allowed the appeal, finding the motion judge's interpretation incorrect.

The Court held that such an interpretation would unfairly deny any refund interest, contrary to the legislative intent of the interest payment provisions, which aimed to balance the rights of government and taxpayers and provide enhanced interest for compelled overpayments arising from disputes.

A bankrupt sought relief in a contested discharge proceeding arising from significant personal income tax debt exceeding one million dollars.

The bankrupt argued that procedural delays and lack of disclosure by the opposing creditor violated section 7 of the Canadian Charter of Rights and Freedoms and sought a remedy under section 24(1).

The court rejected the Charter arguments but held that procedural fairness required that a bankrupt know the case to be met when a creditor opposes discharge.

Exercising its discretion under the Bankruptcy and Insolvency Act, the court granted a conditional discharge requiring payment of $105,000 plus a structured income‑based payment obligation capped at $183,000 over ten years.

The court reduced the percentage typically required in tax‑driven bankruptcies in light of delay, disclosure concerns, and the circumstances in which the tax debt arose.