Philip Gertler

The bankrupt applied for an absolute discharge from bankruptcy.

The trustee opposed the discharge under s. 173(1)(o) of the Bankruptcy and Insolvency Act, arguing the bankrupt failed to perform his duties by not disclosing and assisting in the realization of a 47-foot yacht.

The court found the bankrupt was evasive, uncooperative, and failed to fulfill his duties to disclose and deliver the yacht to the trustee.

Given the bankrupt's conduct and the need to maintain the integrity of the bankruptcy system, the court refused an absolute discharge and instead granted a conditional discharge requiring the bankrupt to pay $40,000 to the estate over 60 months.

The bankrupt brought a motion to expunge or reduce a proof of claim filed by a creditor in the amount of $5,994,500, which the bankruptcy trustee had compromised and accepted at $2,580,000.

The claim was based on a promissory note related to a share purchase agreement.

The bankrupt argued that a subsequent oral governing agreement superseded the note, making it unenforceable until the bankrupt was repaid his investments, which never occurred.

The court found the creditor's evidence lacked credibility, noting his prior criminal convictions for fraud and his reliance on the governing agreement to obtain a lighter sentence in US criminal proceedings.

The court concluded the claim was not legitimate and reduced it to an $85,000 costs award.

A second‑time bankrupt applied for discharge under the Bankruptcy and Insolvency Act while facing more than $800,000 in tax debt owed to the Canada Revenue Agency, largely arising from the disallowance of a tax shelter.

The opposing creditor sought refusal of discharge or significant financial conditions.

The court considered the statutory factors under s. 172.1 of the Act, including the circumstances in which the tax debt was incurred, efforts made to repay it, competing financial obligations such as family support, and the bankrupt’s future prospects.

While acknowledging the seriousness of unpaid tax obligations, the court also considered systemic delays, enforcement actions affecting the bankrupt’s livelihood, and the rehabilitative objectives of bankruptcy law.

A conditional discharge was granted requiring payment of a small percentage of the principal tax debt and a short suspension period.

The Trustee in bankruptcy moved to strike portions of the respondent's affidavit filed in opposition to an application for partition and sale of a property.

The impugned portions contained allegations of misconduct and fraud by the Trustee in the administration of the estate.

The court held that while issues of admissibility are generally left to the judge hearing the main application, allegations that are clearly irrelevant, scandalous, and vexatious personal attacks on the Trustee must be struck in advance.

The motion was granted and the offending paragraphs were struck.