Ontario Superior Court of Justice
In Bankruptcy
Court File No.: 33-164466/7
Date: 2012-02-08
Ontario
SUPERIOR COURT OF JUSTICE
IN BANKRUPTCY
IN THE MATTER OF THE PROPOSAL OF
DARIN SCOTT HURST AND MARIE FAY ROBERTA LYNN HURST
OF THE CITY OF OTTAWA
IN THE PROVINCE OF ONTARIO
JOHN DEMPSTER,
DEPUTY REGISTRAR IN BANKRUPTCY
HEARD: October 11, 2011
APPEARANCES: David H. Brown, Trustee, Collins Barrow Brown Inc.;
REASONS FOR DECISION
[ 1 ] Pursuant to the provisions of Division I of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3 (the “BIA”), Darin Scott Hurst and Marie Fay Roberta Lynn Hurst (the “Debtors”) made a Proposal to their creditors on February 5, 2008 and an Amended Proposal to their creditors on March 27, 2008. The Amended Proposal was accepted by their creditors and was approved by the Court on May 13, 2008 (the “Court Approved Proposal”). Collins Barrow Brown Inc. (the “Trustee”) was appointed Trustee under the Court Approved Proposal. The Trustee brings this motion to obtain a Court Order amending the Court Approved Proposal.
[ 2 ] This motion was heard at the same time as the motion brought by the same Trustee in Re Barrigar Estate No. 33-1248793. In my Reasons for Decision in Re Barrigar, I have set out the law and the practice and procedure to be followed when seeking court approval to an amendment to an existing court approved proposal. The difference in this case from the facts in Re Barrigar is that the amendment sought by the Debtors to the existing Court Approved Proposal involves a material change and it is not clear on the record before me that the creditors are sufficiently aware of the nature and substance of the amendments being sought.
[ 3 ] Essentially the Debtors did not file 3 years worth of post-proposal tax returns and now have approximately $33,000 of post-proposal tax liability that would ordinarily survive the proposal, which they wish to have included in the proposal in consideration of payment of only an additional $1,500 above what they had originally proposed to pay. The result is that the return to the original proposal creditors has gone down from the return that was approved by the court. It seems to the court that the creditors should be made more properly aware of what is transpiring so that if they wish to negotiate a better return they can.
[ 4 ] For these reasons, the motion for court approval of the amendment is dismissed without prejudice to the right of the Debtors, or the Trustee on the Debtors’ behalf, to bring a new motion on proper notice to the creditors and the OSB, once adequate efforts have been made to properly inform the creditors and provide them an informed opportunity to consider their position.
February 8, 2012
John D. Dempster
Deputy Registrar
File No. 33- 164466/7
SUPERIOR COURT OF JUSTICE
IN BANKRUPTCY AND INSOLVENCY
IN THE MATTER OF THE PROPOSAL OF
DARIN SCOTT HURST AND
MARIE FAY ROBERTA LYNN HURST
OF THE CITY OF OTTAWA
IN THE PROVINCE OF ONTARIO
REASONS FOR DECISION
Released: February 8, 2012