Kevin Dias

The Attorney General appealed a decision discharging the bankrupt, arguing that the bankrupt's personal income tax debt exceeded the threshold under s. 172.1 of the Bankruptcy and Insolvency Act.

At the time of the discharge hearing, the bankrupt had unpaid income tax assessments totalling approximately $4.478 million, of which $4.424 million was subject to outstanding appeals to the Tax Court of Canada.

The Court of Appeal held that assessed amounts of personal income tax under appeal are contingent claims that the trustee can refuse to admit as proven claims.

Therefore, these amounts are not included in calculating the bankrupt's personal income tax debt under s. 172.1(1).

The appeal was dismissed.

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.

A bankrupt applied for discharge from bankruptcy where the majority of his unsecured debt consisted of personal income tax debt exceeding $200,000 and representing more than 75% of his liabilities.

The Crown opposed discharge, arguing that the bankrupt’s right to reside rent‑free in a home held in a discretionary trust should be treated as income when calculating surplus income under the Bankruptcy and Insolvency Act.

The court held that a right of residence is not “revenue” or income for purposes of surplus income under s. 68 because it merely reduces an expense rather than generating income.

However, the court considered the benefit as a relevant factor when exercising discretion under s. 172.1 governing discharge of tax debtors.

A conditional discharge was ordered requiring monthly payments to creditors.

The appellant appealed an order interpreting the term 'legal custody' in a trust agreement between former common law spouses.

The motion judge had interpreted the phrase in accordance with s. 20 of the Children's Law Reform Act.

The Court of Appeal allowed the appeal, finding that the motion judge erred by failing to construe the words in the context of the whole agreement to give effect to the parties' intent.

The Court held that the self-represented parties intended 'legal custody' to mean custody pursuant to a court order, and ordered the sum of $104,620.80 paid to the appellant.

The appellants appealed the judgment of the Superior Court of Justice regarding the interpretation of the Income Tax Act and the Supreme Court of Canada's decision in First Vancouver Finance v. Canada.

The Court of Appeal for Ontario dismissed the appeal, expressing substantial agreement with the trial judge's reasons.

Costs were awarded to the respondent in the amount of $8,000.

The Canada Customs and Revenue Agency (CCRA) served a tax debtor and its account debtors with Requirements to Pay for unremitted GST prior to the tax debtor's assignment in bankruptcy.

The appellant, a secured creditor of the tax debtor, argued that the bankruptcy stayed the CCRA's right to receive the payments.

The Court of Appeal dismissed the appeal, holding that under s. 317(3) of the Excise Tax Act, the funds became the property of Her Majesty upon receipt of the Requirement to Pay.

Consequently, the tax debtor had no residual right in the funds, and they did not become the property of the trustee in bankruptcy.