A bankrupt applied for a discharge from bankruptcy arising from substantial personal income tax debts exceeding $799,000, representing the entirety of unsecured claims.
The application was opposed by the Canada Revenue Agency, the trustee in bankruptcy, and the Office of the Superintendent of Bankruptcy on grounds including repeated insolvencies, failure to pay surplus income, non‑compliance with bankruptcy obligations, and gambling-related conduct.
The court applied the factors in s. 172.1 of the Bankruptcy and Insolvency Act governing tax‑driven bankruptcies and concluded that the debtor was not an “honest but unfortunate debtor.” Considering the debtor’s substantial post‑bankruptcy income and failure to pay taxes or surplus income, the court imposed a conditional discharge requiring payment of over $108,000 in surplus income and strict behavioural conditions related to gambling and tax compliance.
