Court File and Parties

Court File No.: 31-2639038

Date: 14/10/2025

Ontario

Superior Court of Justice

In Bankruptcy and Insolvency

In the Matter of the Bankruptcy of

Xianglan Li

Of the City of Richmond Hill

In the Province of Ontario

Ordinary Administration

Before

Associate Justice Ilchenko, Registrar in Bankruptcy

Parties and Counsel

Bankrupt: Xianglan Li, appears

Trustee in Bankruptcy: Kunjar Sharma & Associates Inc. (the "Trustee"), represented by Uwe Manski LIT ("Manski") and Roger Groves, opposing discharge

Opposing Creditor: Arista Homes (Richmond Hill) Inc. ("Arista"), represented by Wei Jiang ("Jiang")

Superintendent of Bankruptcy: Not appearing

Heard

Initial Discharge hearing on June 19, 2025 adjourned, setting initial timetable for exchange of materials and scheduling Discharge hearing for a full day on August 28, 2025

Endorsement

Introduction

[1] The Bankrupt appears on her discharge hearing (the "Discharge Hearing" or the "Discharge").

[2] On April 16th, 2020 the Bankrupt made an assignment into Bankruptcy as an Ordinary Administration Bankruptcy under the Bankruptcy and Insolvency Act, RSC 1985, B-3 (the "BIA").

[3] All underlined and bolded text in these reasons is emphasis added by me for these reasons.

[4] The Court has considered all materials and arguments raised by all of the parties on this Discharge Hearing. Any failure by the Court to refer in these reasons to specific arguments and materials raised does not reflect that the Court has not considered those arguments.

Opposition by Arista

[5] The central conflict in this Bankruptcy Discharge arises from the following set of facts as set out in the Affidavit of Anthony Montanaro (the "Montanaro Affidavit") sworn on behalf of Arista in the Action brought by Arista against the Bankrupt, commencing on December 12, 2018 (the "Arista Action"). The Montanaro Affidavit is attached as Exhibit W to the Affidavit of Vijay Perinparajah sworn on behalf of Arista for their opposition of the Bankrupt's Discharge (the "Arista Discharge Affidavit"). The relevant paragraphs of the Montanaro Affidavit are:

"4. The Bankrupt entered into an agreement of purchase and sale (the "APS") dated July 11, 2017, as purchaser, with the Arista Homes as vendor, whereby Arista Homes agreed to sell certain property legally described as Unit 27R, being Part of Lot 27, Plan 65M-4571, designated as Part 17, Plan 65R-37906, Town of Richmond Hill, and known municipally as 61 Hilts Drive, Richmond Hill, Ontario (the "Property"). Attached hereto as Exhibit "A" is a copy of the APS and amendments.

Pursuant to the APS, the ultimate purchase price of the Property was $1,435,607.67. The ultimate closing date was September 27, 2018, extended at the Bankrupt's request to November 29, 2018. Pursuant to the APS, the Bankrupt paid deposits, including deposits for upgrades, totalling $179,810.67. Attached hereto as Exhibit "B" are copies of cheques of deposit payments.

The Bankrupt failed to close the transaction on November 29, 2018.

On November 29, 2018, I instructed Cindy Austin, a law clerk at Brattys LLP (the real estate solicitors for Arista), to terminate the APS because of the Bankrupt's breach in failing to close, and to further advise the Bankrupt that Arista Homes would hold the Bankrupt liable for any damages suffered. The letter also informed the Bankrupt that all deposit monies and any amounts paid for extras were forfeited to Arista Homes as per the APS. Attached hereto as Exhibit "D" is a copy of Ms. Austin's letter dated November 29, 2018, consistent with the instructions I provided.

The Current Litigation

As per my instructions, on December 12, 2018, Arista Homes' litigation counsel, Stevenson Whelton LLP, commenced legal proceedings against the Bankrupt, seeking damages suffered as a result of the Bankrupt's breach of the APS. Attached hereto as Exhibit "E" is a copy of the issued statement of claim.

The Bankrupt filed a statement of defence on June 27, 2019, but did not serve a counterclaim. The pleadings have closed. To date, there is no evidence supporting any of the allegations in the statement of defence, and in any event, the alleged facts in the statement of defence do not form a viable legal defence. Attached hereto as Exhibit "F" is a true copy of the statement of defence.

On or about April 16, 2020, the Bankrupt made a voluntary assignment into bankruptcy in favour of her sole creditor, Arista Homes.

Arista Homes did everything necessary and followed the advice of outside real estate agents in order to sell the Property for as much as possible and as soon as reasonably possible after the failed closing. Unfortunately, even with the assistance of outside agents and notwithstanding motivated marketing efforts, the Property only sold for $1,049,990.00, which is $385,618.00 less than the purchase price under the APS. Attached hereto as Exhibit "G" is the first page of the agreement of purchase and sale that Arista Homes entered into with the new purchaser dated June 13, 2019 (the "New APS").

Crystallization of Damages

Arista Homes has sustained damages as a result of the Bankrupt's breach of the APS, over and above the $179,810.67 deposits paid by the Bankrupt and forfeited to Arista Homes upon the Bankrupt's breach.

With respect to loss of bargain, Arista Homes has suffered damages in the amount of $205,807.00, which is the difference between the initial purchase price and the purchase price under the New APS, less the $179,810.67 deposits paid by the Bankrupt and forfeited to Arista Homes, as outlined below:

Detail Amount

Purchase price of the original APS $1,435,607.67

Less: Purchase price of the new APS - $1,049,990.00

Less: Deposits paid by bankrupt under original APS - $179,810.67

Total damages for loss of bargain $205,807.00

The bulk sales commissions payable by Arista Homes to its in house real estate agents for the original APS was $4,237.50. $3,390.00 of this amount was paid upon the signing of the APS, and the remaining $847.50 was only invoiced recently and will be paid shortly. The commissions paid under the New APS to the outside real estate brokerage was $26,849.75 (inclusive of HST). The total damages for extra commissions is $26,849.75, as calculated below:

Detail Amount

Total commissions paid and payable by Arista Homes under the Old APS $4,237.50

Total commissions paid by Arista Homes under the New APS $26,849.75

Less: additional commissions Arista Homes would have paid under the original APS had it closed -$4,237.50

Total damages for extra commissions $26,849.75

Detail	Amount
Purchase price of the original APS	$1,435,607.67
Less: Purchase price of the new APS	- $1,049,990.00
Less: Deposits paid by bankrupt under original APS	- $179,810.67
Total damages for loss of bargain	$205,807.00

Detail	Amount
Total commissions paid and payable by Arista Homes under the Old APS	$4,237.50
Total commissions paid by Arista Homes under the New APS	$26,849.75
Less: additional commissions Arista Homes would have paid under the original APS had it closed	-$4,237.50
Total damages for extra commissions	$26,849.75

For consistency I will adopt the meaning of the defined terms "APS" and "Property" for these Reasons.

[6] The Trustee in its s.170 Report dated June 11, 2021 (the "Original Report") advises that it admitted the Proof of Claim filed by Arista (the "Arista Proof of Claim") in the amount of $281,421.39. The Trustee also filed for this Discharge Hearing a Supplementary s.170 Report dated April 8th, 2025 (the "2nd Report"), an Addendum to the Second Report dated June 3rd, 2025 (the "2nd Report Addendum") and a Third Supplementary s.170 Report dated August 6, 2025 (the "3rd Report")(collectively, the "Reports")

[7] Arista is the only proven creditor in this Bankruptcy Estate.

[8] Arista opposed the Bankrupt's discharge by serving and filing its Notice of Opposition dated December 1, 2020 (the "Arista Notice of Opposition") on the grounds of s.173(1)(a),(e),(f),(n), and (o).

[9] The initial Discharge Hearing was adjourned sine die by Dunphy, J. on June 30, 2021 to permit the Trustee and Arista to conduct an examination under s.163 of the BIA. An examination (the "s.163 Examination") was conducted in several parts in January and July 2021. The Transcript of the July 2021 s.163 Examination is at Exhibit S to the Arista Discharge Affidavit. The Bankrupt gave Undertakings that Arista alleges were not fully and completely answered, as one of the grounds of its opposition under s.173(1)(o).

[10] Jiang was an inspector of this Bankruptcy Estate.

[11] At the Discharge hearing the Opposing Creditor Arista was taking the position that in the particular circumstances of this case, that the appropriate conditional Order would be payment as a condition of discharge of between 20% and 30% of the proven unsecured claims, which entirely the proven claim of Arista of $281,421.39, which would be approximately $56,284 and $84,426.

[12] No other Creditor is opposing the Discharge. The Trustee is opposing the discharge for the reasons I will deal with subsequently.

The Bankruptcy Proceedings

[13] The Bankrupt is a first time Bankrupt.

[14] In the First Report the asset values reported by the Trustee to creditors in the 1st Report are:

Asset	Value as per Statement of Affairs	Estimated Net realizable value
Cash on Hand	$0	$0
Furniture (exempt)	$2000.00	$0
2013 Nissan Rogue – 50% ownership	$7000	$300
Total	$900.00	$0

[15] In the 3rd Supplementary Report the Trustee Report reported:

"3. On June 3, 2025, the Bankrupt has provided her Declaration of monthly income and expenses. Her family monthly budget reported $4,178.00 net employment income, $1,630.00, spouse's income and $402.00, child tax benefit for April 2025. A copy of the Bankrupt's Budget is attached."

[16] In the Surplus Income Statement of Income and Expenses at Tab 2.1 to the 3rd Report, monthly family income calculated in accordance with the Surplus income Directive of $6450 for a family of 4 and expenses of $6450, the largest of which being Rent of $2800.

[17] At the time of filing of the Bankruptcy in 2020, her net monthly income was $2084.33 from unemployment insurance. The Trustee concluded that no surplus income was payable by the Bankrupt.

[18] The Bankrupt completed all required counselling sessions.

[19] All income tax returns, pre and post Bankruptcy have been filed and no amounts are owing to CRA.

[20] In the Notices of Assessment for the Bankrupt, the Bankrupt has assessed taxable income of $63,861 for 2024. The Bankrupt is now 51 years old and is employed as a bus driver for Miller Transit.

[21] The Equifax Report at Tab 5.1 to the 2nd Report Addendum shows that the Bankrupt has not obtained post-Bankruptcy credit.

[22] The recoveries in the Estate to date are as set out in the 3rd Report:

"22) As at August 5, 2025, total receipts in the estate are $5,609.06, consisting of $2,000.00 voluntary payments, $124.93 pre-bankruptcy income tax refund, $173.98 TD Bank investment, $1,500.00 from the opposing creditor for costs of examination of Bankrupt, $310.15 interest earned, and $1,500.00 recently paid by the Bankrupt on account of whatever Conditional Discharge payment the Court may assess."

The $2000 "voluntary payments" was to purchase the equity in her vehicle.

[23] The Recommendation of the Trustee at Discharge as set out in the 3rd Report was:

"23)Based upon the facts and circumstances, and the complexities of this file, arising from an examination under oath and three Court attendances, it is the recommendation of the LIT that the Bankrupt's discharge be conditional on the payment of $5,000.00 to the estate, due within a maximum of 25 months on monthly payment terms agreeable to the LIT."

Opposition by Trustee

[24] The Trustee opposes on the following:

(i) The Bankrupt's assets are not of a value equal to fifty cents on the dollar on the amount of the Bankrupt's unsecured liabilities, for reasons the Bankrupt should justly be held responsible: s.173(1)(a);

(ii) the Bankrupt has failed to perform the duties imposed on her under the BIA and/or to comply with the s.68 Order of this Court: s.173(1)(o)

As explained by the Trustee in the 2nd Report:

• While at the time of drafting the LIT's Supplementary Report to Court, dated June 11, 2021, the Bankrupt had not yet been examined by the estate's solicitor, the Bankrupt subsequently attended her examination. The LIT has no other concerns related to BIA 173(1)(o).

[25] To summarize the grounds of opposition under s.173 of the BIA at this Discharge by the Trustee and Arista:

Creditor	Proven Claim	a	b	c	d	e	f	g	h	i	j	k	l	m	n	o
Trustee	N/A	X														X
Arista	$281,421.39	X				X	X								X

Statutory Duties of Bankrupt

[26] Under s.158 of the BIA, the Bankrupt has the following relevant duties:

"(b) deliver to the trustee all books, records, documents, writings and papers including, without restricting the generality of the foregoing, title papers, insurance policies and tax records and returns and copies thereof in any way relating to his property or affairs;

(f) make disclosure to the trustee of all property disposed of within the period beginning on the day that is one year before the date initial bankruptcy event or beginning on such other antecedent date as the court may direct, and ending on the date of the bankruptcy, both dates included, and how and to whom and for what consideration any part thereof was disposed of except such part as had been disposed of in the ordinary manner of trade or used for reasonable personal expenses;

(g) make disclosure to the trustee of all property disposed of by transfer at undervalue within the period beginning on the day that is five years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included;

(j) submit to such other examinations under oath with respect to his property or affairs as required;

(k) aid to the utmost of his power in the realization of his property and the distribution of the proceeds among his creditors;"

[27] As I stated in Re Biskupski 2023 ONSC 1694:

"[148] The statutory wording regarding "all his property" and "the particulars of the Bankrupt's assets" and "aid to the utmost of his power" and "…do all such acts and things in relation to his property…as may be reasonably required by the trustee" all indicate as statutory intent to impose on bankrupts a high standard in proving that they have fulfilled their duties under the BIA, not merely a factual compliance.

[149] As stated in Jefferson, the BIA imposes a duty on the Bankrupt to "…actively aid his Trustee or his creditors in mitigating the damage wrought by his assignment." and not "…remain passive and hope that the financial storm would blow over.""

Testimony of the Bankrupt at s.163 Examination

[28] The Bankrupt was examined by counsel for the Trustee Brandon Jaffe ("Jaffe") at the examination held on July 30, 2021 (the "July 2021 s.163 Exam"). The Bankrupt gave Undertakings that Arista alleges were not fully and completely answered, as alleged by Arista. The Transcript of the July 2021 s.163 Exam is at Exhibit S to the Arista Discharge Affidavit.

[29] Under the provisions of s.163(3) of the BIA the evidence of any person examined under s.163 shall, if transcribed, be filed in the court and may be read in any proceedings before the court under the BIA to which the person examined is a party.

[30] It appears from the Transcript of the July 2021 s.163 Exam, that there was a prior January 8, 2021 Examination (the "Prior s.163 Examination"), the complete transcript of which is not before the Court.

[31] In the Arista Discharge Affidavit Arista alleges that the Bankrupt failed to:

To determine what bank accounts were maintained and held by Li in February and March 2017 and to produce all bank statements for those 2 months.
To produce a summary of all advances made by Ding's family to Ding and Li and to identify the source of advances by family members and any related documentation. And if any advances were made to Li, then evidence of where she held these funds upon receipt.
To provide further details of contributions to the St. Moritz mortgage payments made by Li.
To confirm if the 14 St. Moritz Way property was held jointly and severally by Li and her husband Ding.
To see the receipt of funds that were paid to the lawyer acting on the purchase of 100 Chouinard Way for the Client ledger balance.

[32] The Central basis for the opposition by Arista is based on the Bankrupt's testimony at the s.163 Examination which is summarized as follows in the Arista Discharge Affidavit:

"14. The following is known through examination of the Bankrupt, documents produced by the Bankrupt, and publicly available documents:

(a) On November 22, 2013, the Bankrupt and her husband Yichao Ding purchased a property known municipally as 14 St. Moritz Way, Markham for $430,000 (the "Markham Property"). Title to the property was held by the Bankrupt and her husband Yichao Ding as joint tenants. A copy of the transfer is attached as Exhibit "E".

(b) On February 1, 2017, the Markham Property was sold for $605,000.00. A copy of the transfer is attached at Exhibit "F";

(c) Approximately $250,000 of the sales proceeds were used to pay off the mortgage. Of the balance remaining, the Bankrupt claimed that $157,000 belonged to her. Excerpts of the transcripts of evidence on these issues are attached at Exhibit "G".

(d) On March 9, 2017, the Bankrupt's husband Yichao Ding purchased (in his sole name) the property known municipally as 100 Chouinard Way, Aurora (the "Aurora Property") from the builder Paradise Homes Leslie Inc. for $955,472.87. A copy of the transfer is attached at Exhibit "H";

(e) The Bankrupt's evidence is that her $157,000 from the proceeds of selling the Markham Property was paid towards the purchase of the Aurora Property. The Bankrupt's evidence was that she lived in the Aurora Property. There is no reasonable explanation offered for why the Bankrupt did not hold title to the Property. Excerpts of the transcripts of evidence on these issues are attached at Exhibit "I";

(f) On July 11, 2017, the Bankrupt signed the APS with Arista. The Bankrupt's evidence is that the deposits were funded by a loan from Yichao Ding's family. Excerpts of the transcripts of evidence on this issue is attached at Exhibit "J";

(g) On September 20, 2018, one week before the ultimate closing date, Yichao Ding listed the Aurora Property for sale with a comment saying "'Motivated Seller' .5 Hr Notice for Showings". A copy of this listing is attached at Exhibit "K";

(h) On December 11, 2018, Yichao Ding sold the Aurora Property for $1,165,000.00. A copy of the transfer is attached at Exhibit "L";

(i) The increase in equity for the Aurora Property appears to have been $209,527.13, which does not include the downpayment put into the Aurora Property. Notwithstanding this, the Bankrupt's evidence was that Yichao Ding only received $259,419 from this sale, which evidence is suspect. The Bankrupt asserted that all of the net proceeds from the sale belonged to Yichao Ding, notwithstanding her evidence that she had contributed $157,000 towards the purchase of this property. Excerpts of the transcripts of evidence on these issues are attached at Exhibit "M";

(j) By the time of the closing of Aurora Property, the APS with Arista had already failed to close and Arista had already informed the Bankrupt that it was suing for damages. A copy of the termination letter dated November 29, 2018 is attached at Exhibit "N"; and

(k) The Bankrupt's evidence is that the proceeds from the sale of the Aurora Property were paid back to Yichao Ding's family in China to return loans they previously gave to Yichao Ding. Excerpts of the transcripts of evidence on these issues are "O".

The above history is important for two reasons. First, the fact that the Bankrupt and her husband had been able to carry properties for an extended amount of time (2013-2018) and look towards upgrading to higher value homes (from a property worth $430,000 to $950,000 to $1.4 million) does not align with the evidence that they were reporting family incomes of $20,000 or less per year. Second, there is clearly substantial proceeds from the sale of the Aurora Property that legally belonged to the Bankrupt, for which the Bankrupt allowed a fraudulent preference payment to be made to Yichao Ding's family. Based on the documentation, the increase in equity of the Aurora Property from purchase to sale was over $200,000. In terms of how much downpayment went into the Property, at minimum the Bankrupt put in $157,000 and it is highly likely that Yichao Ding also put in $157,000 or a similar amount (otherwise he would be holding title as a bare trustee for the Bankrupt).

I am advised by Wei Jiang, counsel for Arista, that he reviewed the possibility and costs of chasing the funds transferred to Yichao Ding's family in China and concluded that it lacked viability due to differences in legal systems, the requirement for a Canadian judgment against Yichao Ding, the uncertainty of whether the funds are even still traceable due to them passage of time (Arista didn't find out about this until 2021), and the costs of enforcing an Ontario judgment in China.

Furthermore, in April, 2018, the Bankrupt received a transfer of $84,000 from a friend called Lydia. The Bankrupt's evidence is that the $84,000 was a gift from Lydia for which she had no legal obligation to return. However, notwithstanding there not being a legal responsibility to repay the $84,000, the Bankrupt's evidence is that she felt a "moral obligation" to repay Lydia, and that she has repaid Lydia for a portion of the $84,000 prior to bankruptcy. Transcripts of evidence relating to this issue are attached at Exhibit "P"."

For consistency, I will adopt the defined terms "Markham Property" and "Aurora Property" for these Reasons.

[33] The Trustee did not share the concerns of Arista arising from the Bankrupt's s.163 Examination Testimony. In the 2nd Report the Trustee states:

"6) The LIT has reviewed the Condensed Transcript of the Bankrupt's examination and found no evidence to indicate any serious wrongdoing by the Bankrupt. It appears that the Bankrupt was unable to close a home purchase from Arista, located at 61 Hilts Drive, Richmond Hill, Ontario. This seems to have been due to the Bankrupt's inability to sell her then current home, located at 100 Chouinard Way, Aurora, which was owned by her husband."

[34] Having read the Transcript of the July 2021 s.163 Exam, it was obvious there were translation issues, with the prior Mandarin interpreter (not Ms. Tsai). But there would appear to be inconsistencies between the Bankrupt's testimony before me and the July 2021 s.163 Exam that cannot be attributed solely to translation.

The Discharge Hearing

[35] The Bankrupt was examined by Jiang on behalf of Arista and by myself. The Court would like to acknowledge the superlative Mandarin translation provided by Penny Tsai that was of assistance in this hearing.

[36] The Bankrupt's sworn testimony relating to the circumstances of the purchase of the Property, while already owning the Aurora Property, were that she did not tell her husband Yichao Ding ("Ding") that she was purchasing the Property before she signed the APS. She stated that the construction and noise at the Aurora Property caused her to want to purchase and alternate home.

[37] From her testimony before me, compared to her prior testimony I find that the Bankrupt:

Was inconsistent as to whether "we" (ie. The Bankrupt and her husband Ding) purchased the Property and the Aurora property, and "we" would sell the Aurora Property to use the money to close the Property transaction with Arista, although there could be translation issues;
Was insistent that she was tricked into purchasing the Property by the Arista sales representatives who then refused to allow her to resile from the transaction a few days later;

Law and Analysis

[38] The general principles related to discharge were summarized by Hallett, J. in Crowley, Re, which has been cited with approval or followed almost 100 times, including by many Judges and Registrars in Bankruptcy of the Ontario Superior Court of Justice:

"1 What are the principles that the court should apply in considering an application for discharge by a bankrupt? There are very few Supreme Court of Canada decisions on the subject and the sections of the Bankruptcy Act, R.S.C. 1970, c. B-3, provide little guidance as to how the judge who hears an application for a discharge is to exercise his discretion. The only clear guideline is that if one of the facts mentioned in s. 143 is proven, then the court cannot grant an absolute discharge. Where the difficulty comes in is under what circumstances should a bankrupt who does not qualify for an absolute discharge be ordered to pay money to the trustee or consent to a judgment as a condition of his discharge or merely have the inconvenience of having his discharge suspended for a period of months. There seem to be two basic and conflicting themes that run through the decisions of the courts on this subject. On the one hand, the courts emphasize the purpose of the Bankruptcy Act is not only to provide for an orderly scheme of distribution of the assets of a bankrupt amongst his creditors but to allow a bankrupt to get on with his life unfettered by the burden of debt which he had incurred. Typical of such statements is that contained in Indust. Accept. Corp. v. Lalonde, where Estey J., in a unanimous decision of the court, stated at pp. 356-57:

The purpose and object of the Bankruptcy Act is to equitably distribute the assets of the debtor and to permit of his rehabilitation as a citizen, unfettered by past debts. The discharge, however, is not a matter of right and the provisions of ss. 142 and 143 plainly indicate that in certain cases the debtor should suffer a period of probation. The penalty involved in the absolute refusal of discharge ought to be imposed only in cases where the conduct of the debtor has been particularly reprehensible, or in what have been described as extreme cases. The conduct of the debtor in this case, while not sufficient, with great respect, to justify the absolute refusal, does justify his discharge only subject to the imposition of terms.

It is to be noted that in the Lalonde case the Supreme Court of Canada allowed an appeal and imposed a condition on the bankrupt that he consent to judgment in the amount of $5,000 as the cost of obtaining his discharge.

2 While one of the principal purposes and objects of the Bankruptcy Act is to permit the rehabilitation of a debtor as a citizen, unfettered by his past debts, there are many cases in which a bankrupt in modest circumstances and with dependents is ordered to consent to a judgment in a percentage of his indebtedness. Typical of this class of cases is Kozack v. Richter, [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612. The [C.B.R. (N.S.)] headnote adequately summarizes the fact of that case as follows:

The appellant suffered injuries in a motor vehicle accident which was caused by the wilful and wanton misconduct of the bankrupt. After the appellant recovered judgment for $12,909.03 plus costs of $1,194, the respondent filed an assignment in bankruptcy. The bankrupt was a wage-earner with a large family in modest circumstances. The Judge of the Court of Queen's Bench hearing the application for discharge of the bankrupt suspended the discharge for three months. The Court of Appeal for Saskatchewan varied the order and required the bankrupt to consent to judgment for $1,800 without interest payable at the rate of $50 per month.

Held (ABBOTT J. dissenting), the bankrupt was required to consent to judgment in the amount of $7,200 plus the costs of the hearing in the Supreme Court of Canada as a condition of his discharge. This amount was payable at the rate of $50 per month. The application of the provisions of the Bankruptcy Act should result in a plaintiff receiving recovery for personal injuries caused by the gross negligence of the bankrupt. The Bankruptcy Act was not intended to enable a judgment debtor to get rid of a judgment for damages. Abbott J. would have dismissed the appeal on the ground that the judicial discretion exercised by the Court below was reasonable and should not be interfered with by a second appellate Court. He also found that no distinction exists under the Bankruptcy Act between a bankruptcy arising out of trade debts and one arising out of the commission of a tort.

3 Pigeon J., writing for the majority of the court (there was one dissent), stated at p. 225:

In the present case, respondent's bankruptcy was precipitated by his condemnation to pay damages to the appellant. This being due to a finding of "wilful and wanton misconduct" on his part, certainly his financial predicament cannot be said to have arisen "from circumstances for which he cannot justly be held responsible". The Courts below did not ignore this provision. However, the sanction meted out in the first instance was purely nominal. In the Court of Appeal, respondent was in effect ordered to make payments that would hardly cover more than appellant's costs in the trial Court and in the Court of Appeal. Although respondent is a wage-earner with a large family in very modest circumstances, I cannot agree that the proper application of the provisions above quoted should result in a plaintiff making no recovery for personal injuries caused by gross negligence. It would mean that motorists in respondent's situation would be able to tell such a claimant: "There is no use suing me, if you lose you will have to pay the costs, if you win I will make an assignment in bankruptcy and you will get nothing."

4 The dilemma facing a judge in considering an application for discharge is reflected in the following two quotations from Bankruptcy Law of Canada (1984), vol. 1, by Houlden and Morawetz, at pp. H-18 and H-19, para. H10:

It is incumbent upon the court to guard against laxity in granting discharges so as not to offend against commercial morality. It is nevertheless the duty of the court to administer the Bankruptcy Act in such a way as to assist honest debtors who have been unfortunate: Re Beerman and Sands (1925), 5 C.B.R. 781 (Ont. S.C.) ...

The purpose of the Bankruptcy Act is to enable someone who has had financial misfortune or a series of misfortunes to be purged or relieved of the consequences and to obtain a new start financially. It is not to be considered as a process which can be resorted to on a regular basis with a view to washing out one's debts: Re Lebel (1979), 31 C.B.R. (N.S.) 320 (Ont. S.C.).

5 Despite the inherent difficulty created by these two conflicting themes, the case law does provide some firm footing to assist a judge in the exercise of his discretion when determining how to apply the provisions of s. 142 of the Bankruptcy Act in any particular case. The following are some principles, procedures and evidentiary considerations that a judge might follow on a discharge application in determining whether or not to impose conditions of payment as a cost of the discharge. I take the view that a mere suspension in any case is pointless although authorized. Therefore, in most cases the court will be choosing between granting an absolute discharge or imposing a condition that requires some payment by the bankrupt.

6 First, each case must be decided on its own facts. That statement has been made in countless cases. Re Gigault (1981), 37 C.B.R. (N.S.) 119 (Ont. C.A.), is but one. That is a simplistic statement but nevertheless very true, as is evident from a reading of the cases. This is so because s. 142 of the Bankruptcy Act provides no guidance for the exercise of the judge's discretion except that he must refuse an absolute discharge if a s. 143 fact is proven against the bankrupt. The court must look carefully at the causes of the bankruptcy.

7 Second, in considering the application for discharge, the court must have regard to not only the interests of the bankrupt and his creditors but also to the interest of the public: Re Sceptre Hardware Co., 3 C.B.R. 734, [1923] 1 W.W.R. 966, [1923] 1 D.L.R. 1201 (Sask.). This concept was well stated by Wetmore L.J.S.C., in Re Abbott; Abbott v. Royal Bank of Can. (1983), 50 C.B.R. (N.S.) 182, 48 B.C.L.R. 387 (S.C.), where he said [p. 184], "The court must always balance the public interest in commercial morality with its interest in the re-establishment of the debtor".

8 Third, if, as is usually the case, the assets of the bankrupt are not of a value equal to 50 cents in the dollar of the bankrupt's unsecured liabilities, the onus of proving that this fact arose from circumstances for which the bankrupt cannot justly be held responsible is on the bankrupt: Re Lougheed, 54 B.C.R. 428, 21 C.B.R. 180, [1940] 1 W.W.R. 31.

9 Fourth, the court is not bound by the trustee's report but it is prima facie evidence with respect to the facts contained therein: Re Hoerner, Williamson & Co. (1925), 5 C.B.R. 613 (C.S. Que.). The trustee's report should be carefully considered by the court. The trustee should be in attendance at the discharge hearing so that he can be called by either the bankrupt or a party opposed to the application to explain the basis for his conclusions, be they favourable or unfavourable to the bankrupt. Pursuant to s. 140(5) of the Act the statements in his report to the court are prima facie evidence but often no reasons are given for the opinions expressed. For example, in the case before me the trustee's report simply says the causes of the bankruptcy were "misfortune" and that the conduct of the debtor was not subject to censure. While the trustee was present in court, he was not called. It might have been helpful had he been cross-examined as to the "misfortune" he perceived so that the court could assess the reliability of his opinion.

10 Unless contradicted by the evidence, the court must accept the statements in the trustee's report: Re Barrick (1980), 36 C.B.R. (N.S.) 286 (B.C.C.A.). The onus is on the party opposing the application for discharge to adduce sufficient evidence to justify the court disregarding a trustee's report that is favourable to the bankrupt. By producing a favourable report the bankrupt has met the initial burden of proving that the fact that the assets are not equal to 50 cents in the dollar of his unsecured liabilities arose from circumstances for which he cannot justly be held responsible. It is then up to the creditor opposing to bring before the court evidence upon which the court could come to a contrary conclusion: Dawson Auto Parts Ltd. v. Dorais, [1944] R.L. 405, 26 C.B.R. 52 (C.A.).

11 Fifth, if the application for discharge is opposed, the bankrupt should be available for cross-examination: Re Hood (1975), 21 C.B.R. (N.S.) 128 (Ont.).

12 Sixth, an order for discharge should only be outrightly refused if the debtor's conduct has been "particularly reprehensible, or in ... extreme cases". What is meant by this statement in Indust. Accept. Corp. v. Lalonde [at p. 200] is that only rarely will there be an outright refusal of a discharge but rather the court will consider one of the other alternatives of suspension or attaching conditions to the discharge where an absolute discharge cannot be granted because a s. 143 fact has been proven unless the debtor's conduct has been particularly reprehensible or in extreme cases.

13 Seventh, in considering if an order should be made that involves the payment of money by the bankrupt as a condition of his discharge, the court must bear in mind that he is entitled to have available for the maintenance of himself and his family a reasonable amount out of his after-acquired income: Clarkson v. Tod, [1934] S.C.R. 230, 15 C.B.R. 253, [1934] 2 D.L.R. 316; Re Bayliss and Doerksen (1982), 40 C.B.R. (N.S.) 16 (Ont. H.C.). Accordingly, it is generally necessary for the court to have before it evidence of the bankrupt's income and living expenses so the court's discretion can be rationally exercised.

14 Eighth, the court does not view with favour assignments made to avoid paying a large claim of a single judgment creditor where judgment was obtained as a result of the discreditable conduct of the debtor. Under such circumstances, the courts have generally imposed a condition that the bankrupt consent to judgment in a partial amount of the claim: Kozack v. Richter, supra. This approach has most recently been followed by the Ontario Court of Appeal in Re Gigault, supra, and Re Balson (1982), 46 C.B.R. (N.S.) 319. In the Gigault case, the judge who heard the application in the first instance had required as a condition of discharge that the bankrupt consent to judgment in a very nominal amount and in the Balson case an absolute discharge had been granted. The Ontario Court of Appeal in both cases imposed meaningful payments as a condition of discharge.

15 Ninth, where a bankrupt takes a reasonable risk in embarking on a new adventure which fails because of economic factors over which he has no control, the bankrupt has satisfied the onus under s. 143(1)(a) of proving that the fact that his assets were not of a value equal to 50 cents in the dollar arose from circumstances for which he cannot justly be held responsible: Re Bayliss and Doerksen, supra.

16 Tenth, the Act provides no guidelines for the exercise by the judge of his discretion whether to suspend or impose conditions where a factor mentioned in s. 143 is proven. The discretion of the judge is very broad and should not be interfered with on appeal unless the judge, in arriving at his decision, has omitted the consideration of or misconstrued some facts or violated some principle of law: Indust. Accept. Corp. v. Lalonde, supra.

17 In recent years there has been a trend by this court to impose conditions of payment on the bankrupt as the price for his discharge. This reflects the feeling of the public as stated through the decisions of this court that abuses of the bankruptcy process are perceived. While the vast majority of the public are wrestling with their finances to make ends meet, there is a small percentage, albeit a large number of persons, who are availing themselves of the provisions of the Bankruptcy Act and, in particular, the discharge provisions, to walk away from the debts which they have accumulated. Imposing a condition that a bankrupt consent to judgment in a reasonable percentage of his unsecured liabilities under certain circumstances is not to frustrate the object of the Bankruptcy Act. In fact, not to do so in many cases may offend the integrity of the discharge procedure. Where a debtor owes a substantial number of creditors, it is reasonable that he be freed from their harassment and get on with earning a living under peaceful conditions but subject to a reasonable judgment in favour of the trustee who, based on his knowledge of the debtor's circumstances, can exercise a sensible discretion in collection procedures; it being understood that under no circumstances should a judgment be entered against a bankrupt which he would be unable to pay over a reasonable period of time. Each case must be judged on its own facts as to the causes of the bankruptcy and a decision made as to whether it is appropriate under the circumstances to impose conditions of payment on the bankrupt as a price for his discharge."

[39] As noted by the Court of Appeal in the leading case on the issue of refusal of discharge Bank of Montreal v. Giannotti:

"11 There is no question that a principal purpose of the Bankruptcy and Insolvency Act ("BIA") is the rehabilitation of unfortunate debtors. As expressed by Houlden and Morawetz in their treatise, Bankruptcy Law of Canada (3rd ed., rev., Vol. 1, 1998) at p. 1-5:

The Act permits an honest debtor, who has been unfortunate in business, to secure a discharge so that he or she can make a fresh start and resume his or her place in the business community.

12 However, the rehabilitation of the debtor must be balanced with the interests of creditors who have lost money because of the bankrupt's conduct. This requirement of a balanced approach in discharge hearings was well articulated by Adams J. in Re Goodman (January 19, 1995), Doc. 31-267911 (Ont. Bktcy.), at para. 1:

The rehabilitative purpose of bankruptcy legislation is well understood. See Re Willey (1981), 38 C.B.R. (N.S.) 24 (Ont. S.C.). Individuals and society generally benefit from a process by which the crushing burden of financial debt can be lifted, thereby permitting a bankrupt to resume the life of a useful and productive citizen. See Re Shakell . . . (1988), 70 C.B.R. (N.S.) 270 (Ont. S.C.) Equally important, however, is the integrity of the bankruptcy process itself. While the central purpose of the statute is to enable the honest but unfortunate debtor to make a fresh start, parity of treatment between debtors and fairness to creditors need to be kept in mind.

13 Both Adams J. and Houlden and Morawetz use two adjectives to describe a debtor who should be entitled to the relief of a discharge - "unfortunate" and "honest". I have no doubt that Mr. Giannotti has been unfortunate. The downturn in the real estate market in the late 1980s and early 1990s ruined many developers. Mr. Giannotti, with millions of dollars in personal guarantees behind his companies, was one of them.

14 However, I do not think that the adjective "honest" applies to the manner in which Mr. Giannotti conducted himself in this proceeding. My review of his testimony at the discharge hearing leads to the inevitable and overwhelming conclusion that Mr. Giannotti has not told the truth to his creditors, his trustee in bankruptcy, or the court at the discharge hearing. In Re Gestetner (November 25, 1996), Sharpe J. (Ont. Gen. Div.) said, at para. 7:

An honest but unfortunate debtor is entitled by the law to have a fresh financial start. The applicants may have been unfortunate, but I find that they have not been honest. In my view, they are not entitled to have the fresh start the law allows them unless they are prepared to be honest with their creditors and with the court. The court has an obligation to ensure that the integrity of the bankruptcy law is maintained. The applicants have refused to provide the court with the information required to make an appropriate judgment. In light of the evidence the applicants have offered and the level of disclosure they have made as to the true state of their financial affairs, I find that they are not entitled to discharges on any terms.

15 I agree entirely with the philosophy manifest in this passage - a dishonest debtor, and a debtor unwilling to make full disclosure of his financial affairs, is entitled to no relief under the BIA. For several reasons, I find that every word of the above passage applies to Mr. Giannotti and, therefore, like the bankrupts in Re Gestetner, he was entitled to no relief at his discharge hearing.

16 First, Mr. Giannotti did not co-operate with his trustee in bankruptcy as the trustee sought to administer his estate. Pursuant to s.170 of the BIA, the trustee filed a report on February 19, 1999 in which he criticized Mr. Giannotti in a number of aspects, including his refusal to provide information about a family trust, his inability to explain why he disclosed different years of birth on his statement of affairs and during his examination by the official receiver, and his failure to co-operate in appearing for an examination pursuant to s.163 of the BIA.

17 In a supplementary report dated June 1, 1999, filed three weeks before the discharge hearing, the trustee expanded on his criticism of Mr. Giannotti. According to the trustee, Mr. Giannotti was continuing in his refusal to provide information about a family trust, he had put the trustee to unnecessary expense by frivolous and vexatious actions regarding his s.163 examination, he had refused to comply with undertakings after the s.163 examination, and he refused or was unable to answer questions about how rent and office expenses were being paid for a business in which Mr. Giannotti appeared to be involved after he became bankrupt.

18 In my view, the integrity of the bankruptcy system requires a bankrupt to co-operate with the trustee. See Mancini (Trustees of) v. Mancini (1987), 63 C.B.R. (N.S.) 254 (Ont. S.C.), Re Adelman (1945), 26 C.B.R. 152 (Ont. S.C.), and Re Rahall (1997), 49 C.B.R. (3d) 268 (Alta. Q.B.). The trustee is appointed by order of the court. After a receiving order is made by the court, the trustee administers the bankrupt's estate on behalf of the court. Accordingly, a bankrupt who seeks relief, by way of discharge, from the court must co-operate fully with the trustee before seeking that relief. Mr. Giannotti did not comply with this obligation.

25 The factors and conduct that I have summarized clearly placed Mr. Giannotti within s. 173 of the BIA. The bankruptcy judge could not have granted him an absolute discharge; his options were to grant either a suspended discharge or a conditional discharge, or to refuse to order any kind of discharge. The bankruptcy judge chose a combination of a suspended discharge and a conditional discharge.

26 The case law establishes that a complete refusal of any type of discharge is an unusual order given the BIA's emphasis on rehabilitation of the debtor. In Re Adelman, Urquhart J. said that a refusal of discharge "is a harsh step . . . which should be resorted to only in extraordinary cases" (supra, at p. 153). However, in this case, given Mr. Giannotti's conduct and testimony, a refusal of any kind of discharge was, in my view, required. Mr. Giannotti was simply too unco-operative, evasive and untruthful with both the trustee and the bankruptcy judge.

27 The BIA seeks to provide relief to honest and unfortunate debtors. The word 'honest' introduces a strong element of integrity into the administration of the Act. In my view, a reasonable member of the public would seriously question the integrity of the BIA if Mr. Giannotti was given any form of relief at this juncture. He has not been honest with the trustee or the bankruptcy court. He is free to re-apply for a discharge, but he must co-operate with the trustee and make full disclosure of the relevant facts."

Analysis of Specific s.173 Facts Opposed On

s.173(1)(a) - Assets Not Equal to Fifty Cents on the Dollar

[40] The Trustee and Arista opposed under s.173(1)(a).

[41] In Re Wambera, 1992 CarswellOnt 194, Rutherford stated the following:

"11 While the submission of the trustee has merit to it, I think the paragraph must refer to the realizable value of the assets at the time of liquidation. If Parliament had intended it to mean the value, after deducting administration costs, which would logically include all of the trustee's expenses in administering the estate, it would not have been difficult to express that intent. However, it would not be possible to determine that net cost until all the trustee's expenses are known and the disposition upon discharge taken into account. I think the proper meaning to be attributed to the provision is, therefore, the raw value of the assets as liquidated, and in this case, therefore, the value exceeds 50¢ on the dollar on the amount of unsecured liabilities."

[42] Bankruptcy and Insolvency Law of Canada, Fourth Edition, by The Honourable Mr. Justice Lloyd W. Houlden, Mr. Justice Geoffrey B. Morawetz, and Dr. Janis P. Sarra ("Houlden & Morawetz") states at "§ 7:151. Assets not of a Value Equal to 50 Cents on the Dollar—Appropriate Date for Determining the Value of the Assets":

"Section 173(1)(a) seems to be clear that it is the value of the assets available for payment of the claims of unsecured creditors that is the relevant value. Ordinarily, this value will not be difficult to determine. If, for example, the dividend to ordinary creditors is only 10 cents on the dollar, there can be no doubt that the assets are not of a value equal to 50 cents on the dollar. However, as unsecured creditors include preferred creditors, there could be difficulty in deciding if the assets are equal to 50 cents on the dollar where preferred creditors are paid in full and ordinary creditors receive 45 cents on the dollar. In such a case (which will be rare), it would require an arithmetical calculation to determine if the assets were of a value equal to 50 cents on the dollar when the claims of preferred and ordinary creditors are lumped together."

[43] As stated by Houlden & Morawetz § 7:150. Assets not of a Value Equal to 50 Cents on the Dollar—Onus of Proof:

"If the trustee reports that the assets of the bankrupt are not of a value equal to 50 cents on the dollar, then the onus shifts to the bankrupt to satisfy the court that the failure has arisen from circumstances for which he or she cannot justly be held responsible: s. 173(1)(a) per Samson v. Alliance nationale (1935), 17 C.B.R. 304, 60 Que. K.B. 311 (C.A.); Re Lougheed (1939), 21 C.B.R. 180, 54 B.C.R. 428, [1940] 1 W.W.R. 31 (S.C.); Re Ferguson (1950), 30 C.B.R. 180 (Ont. S.C.); Re Maguire (1984), 54 C.B.R. (N.S.) 9 (B.C. S.C.); Re Ng (1996), 1996 CarswellBC 575, 39 C.B.R. (3d) 59 (B.C. S.C.). If the bankrupt fails to satisfy the onus, the court will find that a fact has been proved under s. 173(1)(a): Re Good (1989), 74 C.B.R. (N.S.) 297, 78 Sask. R. 1 (Q.B.)."

[44] Upon such a finding being made Hallett J. states in Crowley:

"…if, as is usually the case, the assets of the bankrupt are not of a value equal to 50 cents in the dollar of the bankrupt's unsecured liabilities, the onus of proving that this fact arose from circumstances for which the bankrupt cannot justly be held responsible is on the bankrupt: Re Lougheed, 54 B.C.R. 428, 21 C.B.R. 180, [1940] 1 W.W.R. 31."

[45] Neither the Trustee, the Bankrupt or Arista disputed that the proven claim of Arista far exceeds the 50 cent threshold.

[46] Accordingly, on the totality of the evidence before me, and for all of the reasons that I have set out, the first part of the s.173(1)(a) test is proven, that the value of the assets is less than fifty cents on the dollar of the proven unsecured liabilities of the Bankrupt, based on the statements in the Reports and the sworn admissions of asset value made by the Bankrupt in her Statement of Affairs.

"Justly Held Responsible" Analysis

s.173(1)(a) - Doctrine of Using Bankruptcy to Avoid Judgments

[47] The doctrine in Kozack v. Richter (1973) is applicable to this discharge. The classic statement by the Supreme Court of Canada from that case, a motor vehicle case where the passenger in a car was injured when the Bankrupt proceeded through a train crossing ignoring signals, is by Pigeon, J.:

"5 In the present case, respondent's bankruptcy was precipitated by his condemnation to pay damages to the appellant. This being due to a finding of "wilful and wanton misconduct" on his part, certainly his financial predicament cannot be said to have arisen "from circumstances for which he cannot justly be held responsible". The Courts below did not ignore this provision. However, the sanction meted out in the first instance was purely nominal. In the Court of Appeal, respondent was in effect ordered to make payments that would hardly cover more than appellant's costs in the trial Court and in the Court of Appeal. Although respondent is a wage-earner with a large family in very modest circumstances, I cannot agree that the proper application of the provisions above quoted should result in a plaintiff making no recovery for personal injuries caused by gross negligence. It would mean that motorists in respondent's situation would be able to tell such a claimant: "There is no use suing me, if you lose you will have to pay the costs, if you win I will make an assignment in bankruptcy and you will get nothing.""

[48] As stated in Houlden & Morawetz "§ 7:134. Conditional Discharge—Bankruptcy to Avoid Payment of a Judgment", this doctrine is not applicable to every judgment against the Bankrupt:

"Where a judgment has been obtained against a bankrupt arising out of negligent or other wrongful conduct and the bankrupt goes into bankruptcy to avoid payment of the judgment, the court will, if the bankrupt has the capacity to make payments, make a conditional order of discharge. In these cases, the fault of the bankrupt that gave rise to the judgment is an important factor: Re Heinonen (1990), 3 C.B.R. (3d) 1, 51 B.C.L.R. (2d) 195, 75 D.L.R. (4th) 354, 1990 CarswellBC 385 (C.A.); Re Graham (1992), 16 C.B.R. (3d) 58, 1992 CarswellBC 528 (B.C.S.C.).

Even though a creditor has not yet obtained judgment when the bankrupt files an assignment in bankruptcy, but the assignment is filed to avoid paying a claim for damages, the court will apply Kozack v. Richter (1973), [1974] S.C.R. 832, 20 C.B.R. (N.S.) 223, [1973] 5 W.W.R. 470, 36 D.L.R. (3d) 612, and if the bankrupt has surplus income, it will make a conditional order: Re Riley (1989), 76 C.B.R. (N.S.) 298 (Ont. S.C.)."

[49] However:

"A judgment for damages for breach of contract is in a different category from a judgment for damages for negligence, since it does not involve conduct that is reprehensible. However, it is also in a different category from a judgment for a commercial debt. If, therefore, an assignment is filed to avoid payment of such a judgment, the judgment is a factor to be considered in deciding whether or not the court should make a conditional order of discharge: Re Raftis (1984), 53 C.B.R. (N.S.) 19, affirmed (1985), 57 C.B.R. (N.S.) 318 (Ont. C.A.)." ("Raftis")

[50] In Re Raftis, Anderson J. stated:

"14 An examination of the cases which treat of that problem will establish that in many, if not most of them, the judgment which was under consideration was one which stemmed from some reprehensible conduct on the part of the defendant, the subsequent bankrupt. If one were to consider a scale of the various types of judgments with which one might be concerned, that would be at one end of the scale. At the other end of the scale is the simple judgment for a commercial debt. I have expressed previously the view, and I have no recollection now as to whether it is reported, that such a judgment adds little to the considerations which the court must have in mind on the application for discharge. A debt is a debt in that context. One might put that at the other end of the scale. Somewhere in between would appear to be the judgment which is involved in the case before me which is a judgment for damages for breach of a contract. I have concluded that it does not partake of the same nature and quality as those where the conduct of the defendant was reprehensible. I have likewise decided that it is not a factor which can be entirely ignored. To do so would make a mockery of the three-day trial before Mr. Justice Trainor and of the judgment which was the consequence of that trial."

[51] Arista in this case had not yet obtained judgment against the Bankrupt in its action, which the Bankrupt defended before making the assignment into Bankruptcy.

[52] Saunders, J. in Riley, Re 1989 CarswellOnt 188 did not find that the lack of a judgment being obtained in an Action prior to Bankruptcy to be a bar for determining a s.173(1)(a) fact to be proven in the situation where the Bankrupts failed to close a real estate transaction, were sued by the vendor, but before judgment was obtained they made assignments into Bankruptcy:

"9 The applications come down to this. The bankrupts walked away from their contract with the opposing creditor and his wife without explanation or without any attempt to negotiate. As a result, the opposing creditor lost a substantial amount of money for which he claimed against the bankrupts. When the bankrupts were confronted with that claim, they made an assignment in bankruptcy. They had other debts but I do not recall any evidence that they were being pressed by other creditors.

10 It seems to me that this is a case where a discharge ought not to be granted without a significant monetary condition. It is not intended that a person should be able to virtually ignore contractual obligations at the expense of others and then shelter under the bankruptcy system. The bankrupts are not in a position to make any significant payments but there is future earning capacity. In my opinion, they should each be responsible for approximately 50 per cent of the proven claims. Taking into account the other amounts realized to date, that would amount to $13,500 in the case of the husband and $5,250 in the case of the wife. Payment by either one will reduce the conditional amount payable by the other."

[53] However as the Arista proven claim in the estate is $281,421.39, and is the sole proven claim, it is clear to me that the claim made by Arista and the litigation commenced to collect it after the failure of the Bankrupt to close the APS to purchase the Property was clearly the precipitating factor in the Bankrupt making an assignment into Bankruptcy.

[54] However the issue arises whether the Bankrupt's conduct rises to the standard of "reprehensible conduct" for the purposes of the Re Raftis test.

s.173(1)(a) Analysis in Bankruptcies Resulting from Failed Real Estate Transactions

[55] Currently there are a number of discharges and consumer proposal reviews that are appearing before the Bankruptcy Court arising out of the failure of Bankrupt's to close real estate transactions, with the developers being the opposing creditors when the debtors seek protection of the BIA.

[56] Another example in the Consumer Proposal context involving the same facts and Arista as opposing creditor was my decision in Re Santhikumar, 2024 ONSC 7008.

[57] Given interest rates and the state of the real estate market, particularly relating to pre-build purchases of condominiums, I suspect this Court will see more of these fact situations so some guidance for Trustees, Creditors and Bankrupts is needed.

[58] There have been a number of cases in similar circumstances relating to failed transactions that have interpreted the "justly held responsible" test in s.173(1)(a).

[59] In Campbell, Re, the fact situation was summarized by the British Columbia Court of Appeal as follows:

"2 In 1978 Mr. Campbell decided to build his own house. He obtained initial financing for this project; he was optimistic that he could obtain further financing as construction progressed. He also believed that his wife could get a job teaching and in this way further cash would be generated to complete the construction of the house. As it turned out, Mrs. Campbell was unable to obtain employment. Further, Mr. Campbell was unable to obtain secondary financing before the initial lenders became worried and called in the demand loan.

3 On 7th February 1979 Mr. Campbell made an assignment in bankruptcy. He listed his assets at $94,500 and his liabilities, both secured and unsecured, at $154,079.22."

At the discharge hearing the Court refused the Bankrupt's discharge. On Appeal, the Court of Appeal set aside that Order and granted the Bankrupt an absolute discharge, on the basis that there was evidence before the Court that satisfactorily accounted for the causes of the Bankruptcy, being the lack of secondary financing necessary to finish the building project, and shortage of cash flow when the wife did not obtain a regular teaching position as expected.

[60] In Bayliss v. Doerksen 1982 CarswellOnt 145, Henry, J. granted absolute discharges to two dentists that started a practice in Oshawa as unemployment was rising. They had effectively one large creditor, the Bank of Montreal that financed the building and equipping of their dental office. With respect to s.178(1)(a), Henry, J. found:

"7 As to the first ground, I have no hesitation in finding, for the purposes of s. 143(1)(a) of the Bankruptcy Act that the bankrupts ought not to be held accountable for the deficiency of assets. On all the evidence I find that they took a reasonable risk in embarking on their new venture, which venture and its risk the bank was prepared to support. I am unable to find that their conduct and decisions were irresponsible, although no doubt they lacked experience. I am unable to find any neglect or extravagance on their part in getting the clinic under way. What caused them to founder were circumstances both contractual and economic beyond their control. In view of this finding I am not obliged by the Act to refuse the discharge or to make it conditional."

[61] The contrary position was set out by McQuaid, J. in Lawless, Re, 1987 CarswellPEI 25. In that case McQuiad, J. found that the Bankrupt had been engaged in speculation in real estate properties, usually apartments, and got caught, as did so many others, in the sharp increase in interest rates in 1984. Marina Ann Lawless, his wife, was guarantor on certain of his loans.

"24 In my opinion, the bankrupt here has not met that onus. He was engaged, and had been for some time engaged, in the speculative buying and selling of real estate. This was not a "new venture" of the type suggested in the guidelines. My impression was that it was essentially the speculative nature of his investments, as much as the escalating interest rates, that brought about his financial difficulties. Obviously, he had allowed for no margin of error in his assessment of present or future interest rates. It would seem to me that fluctuating interest rates are a risk inherent in the nature of that business, the possibility of which he who engages in such an enterprise must be constantly vigilant.

25 I do not see the present situation falling within the parameters of principle 9."

McQuaid, J. refused the discharge with the ability to reapply.

[62] In Deo, Re, Southin, J. heard the discharge of the husband and wife bankrupts who went bankrupt after entering a series of real estate transactions with borrowed money. Southin, J. found a s.173(1)(a) fact proven stating:

"27 Not one of these properties was purchased as a home for the Deo family. Each and every one of these transaction took place over a nine-month period. The transactions were speculations on the real estate market which, in the case of the West Vancouver transaction, I find was "rash and hazardous" for these reasons:

28 1. It was obviously intended as a "flip", for the Aries mortgage was payable in six months without any payment of principal during the term.

29 2. All the money for the purchase was borrowed from the opposing creditors.

30 3. The rate of interest effectively on the Aries mortgage was 37.5 per cent.

31 I have considered whether subs. (e) requires that there be more than one such speculation. I do not think it should be so construed: see the Interpretation Act, R.S.C. 1970, c. I-23, s. 26(7). I have also considered whether the financial position of the bankrupt is relevant to determining whether something is a "rash and hazardous speculation". Does this mean that the transaction in question is "rash and hazardous" by its nature, whether the person who enters into it be rich or poor, or "rash and hazardous" for someone in the bankrupt's financial situation? My tentative view is the latter; that is to say, subs. (e) refers to the transaction being rash and hazardous for the person who enters into it.

32 However, I need not decide the point for the applicants have not satisfied me that the fact referred to in subs. (a), i.e., that their assets are less than 50 cents on the dollar, arose "from circumstances for which [they] cannot justly be held responsible". I say that because the transaction was as I have described it and because when the applicants entered into it, they in effect undertook mortgage obligations of $2,935.12 per month when they had a gross family income of not more than $3,500 per month.

33 Thus, what we have is this couple who had undertaken liabilities of this kind cannot successfully assert when upon his bankruptcy his assets are less than 50 cents on the dollar that that fact has arisen from circumstances for which he cannot be justly held responsible. Even the amount due on the bank mortgage was more than they could afford."

[63] The Jurisprudence therefore requires the Court to determine where on the spectrum from Campbell and Baylis & Doerksen, where the failure to close the transaction was caused by "contractual and economic [factors] beyond their control" to the more serious cases of Lawless involving "speculative buying and selling of real estate" and the Riley Bankrupts "…virtually ignore contractual obligations at the expense of others" and Deo a Bankrupt that "…undertook mortgage obligations of $2,935.12 per month when they had a gross family income of not more than $3,500 per month".

[64] Even on this Bankrupt's best testimony:

she signed the APS for the Property for $1.4 Million without consulting her husband Ding;
where all of the proceeds she received from the sale of the Markham property she had apparently given to her husband Ding to purchase the Aurora Property, which she was not on title to; and
without considering how the purchase of the Property would be financed, with a purchase price approx. $500,000 higher than the Aurora Property that Ding recently purchased;
She did this while her reported taxable income at the time she signed the APS was $197 and the total family taxable income reported in 2017 was less than $18,000.

[65] In her own statement of defence to the Action by Arista, the Bankrupt plead:

"12. The Plaintiff was reckless and imprudent in signing up a buyer for its million-dollar homes without obtaining proof of funds from the buyer or any other documents showing that the buyer had the financial means to buy the home.

Li did not have the financial means to buy the home. This was a fact that the Plaintiff knew, or could have known had it been diligent and not been eager to sign up unsophisticated consumers such as Li."

[66] It can be inferred from these defences that the Bankrupt was equally "reckless" in signing the APS while she "…did not have the financial means to buy the home", particularly as she appears to have given all of her capital from the sale of the Markham Property to Ding to purchase the Aurora Property.

[67] The Trustee stated in the 3rd Report, which findings are entitled to deference by the Court:

"16) It seems to the LIT that the deposit payments, plus the payment for an extension of closing for two months, show a serious attempt by the Bankrupt and her husband to complete the transaction with Arista. However, the husband apparently was slow to list 100 Chouinard Way for sale (the Bankrupt advised he had tried to sell the home privately, to save on commissions), and he listed the house for sale with a realtor, only shortly before the end of November final closing date for the Arista house. Apparently the house did sell about mid- December 2018, but by then Arista had terminated the transaction. In any event, it appears the net proceeds from the sale of 100 Choinard Way were only $259,419, which would have left the Bankrupt and her husband needing mortgage financing of [1] about $1 million; mortgage financing which had never been applied for, and for which they likely would not have qualified, in view of their low income.

In summary, it seems the Bankrupt was impulsive, naive and irresponsible in committing for a home purchase without any financial planning. As a result, she and her husband lost about $180,000 in forfeited deposits, and the builder incurred a loss of about $280,000, in selling the home to someone else."

[68] In these circumstances I find that the Bankrupt's conduct relating to the entering into of the APS that was the reason that the value of her assets was less than 50 cents on the dollar of her unsecured liabilities was "or other wrongful conduct" per Raftis and very similar to the fact situations in Riley and Deo.

[69] As a result, I find that under s. 173(1)(a), that, on the totality of the evidence, and in exercising my Registrar's discretion, a fact has been proven on the balance of probabilities.

s.173(1)(e) - Rash and Hazardous Speculations

[70] Arista opposes under this fact on the following basis:

"8. Significantly there is a great disparity between the purchase price under the APS, over $1.4 million, and the alleged level of income of the Bankrupt and her husband (Yichao Ding) around the relevant times. A copy of the APS is attached at Exhibit "B".

Specifically, tax returns produced by the Bankrupt discloses the following income for the Bankrupt and her husband between 2016 and 2019:

(a) 2016: Bankrupt, $14,615.85; Yichao Ding, $360.00; (b) 2017: Bankrupt, $197.38; Yichao Ding, $17,333.80; (c) 2018: Bankrupt, $346.90; Yichao Ding, $341.24; and (d) 2019: Bankrupt, $237.00; Yichao Ding, unknown.

It is inconceivable with the level of income reported by the Bankrupt that she and her husband thought that they could realistically complete the purchase and keep up the mortgage payments."

[71] Factually the Bankrupt signed the APS in July of 2017 to purchase the Property for the purchase price of $1,435,607.67, while the Bankrupt's husband Ding had purchased the Aurora Property 4 months earlier for $955,472.87, at the time the Bankrupt and Dings reported taxable income totalled $17,531.18. It appears that she gave all of the $157,000 in proceeds she obtained for the sale by her and her husband of the Markham Property to Ding to purchase the Aurora Property.

[72] When she signed the APS for the Property in 2017, how likely was it that the sales proceeds of the Aurora Property would be sufficient to pay the $1,435,607.67 purchase price of the Property, which was worth $480,135 more than the Aurora Property in 2017 when Ding bought the Aurora Property and the Bankrupt signed the APS for the Property. Given their reported incomes, what lender would provide financing to purchase the Property?

[73] The wording "rash and hazardous speculations" has been given a particular meaning in the jurisprudence. In Deo, Southin, J. stated the following in the context of a similar fact situation:

"31 I have considered whether subs. (e) requires that there be more than one such speculation. I do not think it should be so construed: see the Interpretation Act, R.S.C. 1970, c. I-23, s. 26(7). I have also considered whether the financial position of the bankrupt is relevant to determining whether something is a "rash and hazardous speculation". Does this mean that the transaction in question is "rash and hazardous" by its nature, whether the person who enters into it be rich or poor, or "rash and hazardous" for someone in the bankrupt's financial situation? My tentative view is the latter; that is to say, subs. (e) refers to the transaction being rash and hazardous for the person who enters into it."

[74] As "Rash and Hazardous Speculations" shares s.173(1)(e) with "gambling", "unjustifiable extravagance in living" and "culpable neglect of the bankrupt's business affairs", these factors when read together by the Court indicate that the Legislature has reserved in this s.173 fact extreme forms of business behaviour that are to be proscribed.

[75] In Hillsboro Ventures Inc v Ceana Development Sunridge Inc, 2024 ABKB 658, Nixon C.J. found:

"[108] In Keays, Re (1891), 9 Morr 18 (Eng CA), the English Court of Appeal held that "a speculation that no reasonably careful person would enter into, having regard to all the circumstances, is a rash and hazardous speculation.""

[76] The jurisprudence tends to find that the nature of the conduct in s.173(1)(e) is extreme. As summarized in Houlden and Morawetz, § 7:161. Rash and Hazardous Speculations, Unjustifiable Extravagance of Living, Gambling and Culpable Neglect of Business Affairs—Rash and Hazardous Speculations" the types of transactions found to be "rash and hazardous" have been:

"In Re Mandel (1945), 27 C.B.R. 15 (Ont. S.C.), the debtor purchased stock on the stock exchange and paid for it with worthless cheques. He then sold the stock and used the proceeds to make good the N.S.F. cheques. He continued to operate in this fashion until he absconded. It was held that this conduct constituted rash and hazardous speculations.

Engaging in short sales of stock in the manner known as "bucketing" constitutes rash and hazardous speculations, and even if the bankrupt was not a party to the stock manipulations, if he was a partner of the guilty party, he comes within s. 173(1)(e): Re Isard (1949), 29 C.B.R. 173 (Ont. S.C.).

Purchasing a large block of stock in a company that the bankrupt knows intimately and the market for which collapses soon after the purchase constitutes rash and hazardous speculation: Re Clarke (1998), 1998 CarswellBC 1757, 5 C.B.R. (4th) 170 (B.C.S.C.).

A debtor, a highly qualified and competent dental surgeon, entered into a musical venture of a highly speculative nature with other people's money; it was held that his conduct came within s. 173(1)(e): Canadian Imperial Bank of Commerce v. Shapiro (1985), 54 C.B.R. (N.S.) 134, 49 O.R. (2d) 333, 44 R.F.L. (2d) 47 (H.C.).

Borrowing large sums of money in a short period of time for speculative ventures constitutes rash and hazardous speculations: Stroud v. Harris & Partners Inc., 1995 CarswellOnt 364, 32 C.B.R. (3d) 55 (Ont. Gen. Div.)."

[77] Other examples of "rash and hazardous speculations" were:

Advancing funds from credit card cash advances to a person to invest in diamonds in Ghana, which was a scam: Mensah, Re;
Unlicensed business borrowing at 30-40% and relending at 60% which the Court determined that by their very nature were "rash and hazardous": Friedland (Re), 2011 BCSC 1769;

[78] In Re Young (Re), Registrar Nettie dealt with the case of a Bankrupt that participated in a scheme with a client to purchase a house, renovate it, and re-sell it, where the rogue told the Bankrupt that she was only able to have a certain number of homes in her name, and that she would exceed that number with this purchase. The Rogue asked the Bankrupt to take title to that house, and apply for the mortgage loan required to purchase it. The Rogue would provide the down payment, and make all mortgage payments. In exchange, the Bankrupt was to be paid $5,000.00 for his role in the piece, and would be engaged to perform approximately $10,000.00 in renovations to the home, prior to its re-sale. In finding that a s.173(1)(e) fact was proven, the Court stated:

"Individuals must not only live within their means, but also conduct business within their capabilities. The Bankrupt has little formal education, and lacks the ability, by his own evidence, to comprehend complex documents. He has little or no experience with real property purchases and mortgages. The Bankrupt placed, in my view, inordinate reliance on the presence of a lawyer in the transaction to decide that it must be legitimate. The Bankrupt is naïve. He must be held to task for this, and for the result of reaching too far beyond his business experience, or, "punching above his weight" to put it into pugilistic terms. I find, therefore, s. 173(1) (e) BIA as a fact. To do otherwise would call the integrity of the insolvency system into disrepute. Credit is a privilege, albeit an increasingly common and necessary one in our society. Individuals must be held accountable for the use of this privilege. In the case at bar, the evidence indicated that, but for the Khan transactions, the Bankrupt was not insolvent, and would not have had to make this assignment into bankruptcy."

[79] In this case, the evidence of the Bankrupt was that she signed the APS for the Property for more than $1.4 million, while all of her share of the sale proceeds of the Markham Property had been given to Ding to purchase the Aurora Property for a price of almost $1 Million, without (at best) considering how that Property would be financed.

[80] At worst, on the Arista narrative, the Bankrupt and Ding were speculating that the value of the Aurora Property would sufficiently appreciate in a rising market, and could be sold quickly before the closing date for the Property would be set. The Bankrupt denies this but it is a plausible alternate scenario given the prior purchase and sale of properties by the Bankrupt and Ding.

[81] I find that under s. 173(1)(e), that, on the totality of the evidence, and in exercising my Registrar's discretion, a fact has been proven on the balance of probabilities.

s.173(1)(f) - Frivolous or Vexatious Defence

[82] The position of Arista was that the Bankrupt defending the Claim issued by Arista caused Arista to commence the preparation of the Summary Judgment Motion materials prior to the Bankrupt making an assignment into bankruptcy, which resulted in costs thrown away.

[83] In Woodrow, Re, Registrar Herauf defined "frivolous or vexatious" for the purposes of this section as:

"8 If the plain meaning of frivolous in Section 173(1) (f) of the Bankruptcy and Insolvency Act is one lacking any legal merit than it appears from the bankrupt's own admissions that he had breached this fact. In addition, if the plain meaning of vexatious defense is one put to "annoy" the creditor than this was certainly accomplished in this situation. In essence, the proceeding is an abuse of process Re Paskauskas (1995), 36 C.B.R. (3d) 288 (Ont. Bktcy.)."

[84] Having read the defence filed by the Bankrupt at Exhibit Q to the Arista Discharge Affidavit, I find that the defence filed by counsel for the Bankrupt does not have the characteristics of a "frivolous or vexatious defence" as described in Woodrow. Therefore a fact under s.173(1)(f) has not been proven.

s.173(1)(n) - Choosing Bankruptcy Rather Than a Proposal

[85] The position of Arista is summarized in the following paragraph of the Arista Discharge Affidavit:

"15. The above history is important for two reasons. First, the fact that the Bankrupt and her husband had been able to carry properties for an extended amount of time (2013-2018) and look towards upgrading to higher value homes (from a property worth $430,000 to $950,000 to $1.4 million) does not align with the evidence that they were reporting family incomes of $20,000 or less per year. Second, there is clearly substantial proceeds from the sale of the Aurora Property that legally belonged to the Bankrupt, for which the Bankrupt allowed a fraudulent preference payment to be made to Yichao Ding's family. Based on the documentation, the increase in equity of the Aurora Property from purchase to sale was over $200,000. In terms of how much downpayment went into the Property, at minimum the Bankrupt put in $157,000 and it is highly likely that Yichao Ding also put in $157,000 or similar amount (otherwise he would be holding title as a bare trustee for the Bankrupt)."

[86] As stated in Houlden and Morawetz: § 7:179. Choosing Bankruptcy Rather Than a Proposal:

"To establish this fact, the party opposing the discharge must establish that the making of a proposal was a practical alternative for the bankrupt.

An objective examination of the circumstances is required to ascertain if the choice of bankruptcy has been detrimental to creditors. In making this determination, the court must consider the assets available and the future earning potential of the bankrupt: Re Drummie (2002), 37 C.B.R. (4th) 241, 2002 CarswellNB 342, 2002 NBQB 315 (N.B.Q.B.)."

[87] In reviewing the testimony of the Bankrupt and the available information before me, I cannot conclude with any certainty that the Bankrupt had sufficient revenue or assets in 2020 to make a viable proposal, particularly in the circumstances where there was only one creditor and she was at the time unemployed. Therefore a fact under s.173(1)(n) has not been proven.

s.173(1)(o) - Failure to Perform Duties

[88] Both the Trustee (initially) and Arista opposed under s.173(1)(o).

[89] Under the provisions of s.158 of the BIA are listed the following duties of the Bankrupt relevant to this Discharge:

"A bankrupt shall:

(a) make discovery of and deliver all his property that is under his possession or control to the trustee or to any person authorized by the trustee to take possession of it or any part thereof;

(b) deliver to the trustee all books, records, documents, writings and papers including, without restricting the generality of the foregoing, title papers, insurance policies and tax records and returns and copies thereof in any way relating to his property or affairs;

(e) make or give all the assistance within his power to the trustee in making an inventory of his assets;

(g) make disclosure to the trustee of all property disposed of by transfer at undervalue within the period beginning on the day that is five years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included;

(j) submit to such other examinations under oath with respect to his property or affairs as required;

(k) aid to the utmost of his power in the realization of his property and the distribution of the proceeds among his creditors;

(n.1) inform the trustee of any material change in the bankrupt's financial situation;

(o) generally do all such acts and things in relation to his property and the distribution of the proceeds among his creditors as may be reasonably required by the trustee, or may be prescribed by the General Rules, or may be directed by the court by any special order made with reference to any particular case or made on the occasion of any special application by the trustee, or any creditor or person interested;"

[90] With respect to discharges where a ground of opposition under s.173(1)(o) is proven, (now) Justice Mills in Re: Wolf Rubin, Bankrupt (2018), 2018 ONSC 501 stated:

"[31] There is no question the bankrupt has failed to perform the duties imposed upon him under the BIA. He has failed to deliver all books, records, documents, writings and papers which in any way relate to his property or affairs. He failed to submit a properly sworn Statement of Affairs that discloses full particulars of his assets and liabilities, the names and addresses of his creditors, the cause of his insolvency and the disposition of his assets.

[32] In considering the bankrupt's discharge application, I am guided by the principles set out by Anderson J. in Re Raftis [3] wherein the court must have regard not only to the interest of the bankrupt and his creditors, but also to the interests of the public in ensuring the integrity of the bankruptcy and insolvency system is at all times protected. While the honest but unfortunate debtor is to be provided the opportunity of a new start, the bankruptcy courts are not to be considered clearing-houses or viewed as charitable institutions for relief from debt, however incurred. Certainly, discharge from bankruptcy is not a matter of right.

[33] A dishonest debtor and a debtor unwilling to make full disclosure of his financial affairs, is entitled to no relief under the BIA."

[91] In Re Biskupski 2023 ONSC 1694, I summarized the jurisprudence relating to the fulfilment of duties under the BIA, and in particular the finding of a s.173(1)(o) fact:

"[148] The statutory wording regarding "all his property" and "the particulars of the Bankrupt's assets" and "aid to the utmost of his power" and "...do all such acts and things in relation to his property...as may be reasonably required by the trustee" all indicate as statutory intent to impose on bankrupts a high standard in proving that they have fulfilled their duties under the BIA, not merely a factual compliance.

[149] As stated in Jefferson, the BIA imposes a duty on the Bankrupt to "...actively aid his Trustee or his creditors in mitigating the damage wrought by his assignment." and not "...remain passive and hope that the financial storm would blow over."

[150] Despite the efforts of his able counsel to cast the Bankrupt's behavior as "strongly supporting" his compliance with his duties in aiding the Trustee in taking possession of the Opoka, the evidence I have cited above and in the Chronology does not bear this out, and I cannot find that this Bankrupt's conduct constituted "...actively aid(ing) his Trustee", per Jefferson to locate and secure the Opoka "...to the utmost of his power"."

[92] On the most basic level in appears that there are unfulfilled undertakings by the Bankrupt in her s.163 Examination as set out in paragraph 20 to the Arista Discharge Affidavit. The subject matter of these undertakings is not minor or irrelevant. They involve major issues related to the Bankrupt and Ding dissipating to non-arms-length parties the proceeds of the various property transactions that occurred both before and after the Bankrupt signed the APS and the termination of the APS, including:

To produce Bank statements for all bank accounts maintained by Li for the months of February and March 2017
To produce a summary of all advances made by Ding's family to Ding and Li and to identify the source of advances by family members and any related documentation. And if any advances were made to Li, then evidence of where she held these funds upon receipt.
To provide further details of contributions to the St. Moritz mortgage payments made by Li.
To confirm if the 14 St. Moritz Way property was held jointly and severally by Li and Ding
To see the receipt of funds that were paid to the lawyer acting on the purchase of 100 Chouinard Way for the Client ledger balance.

[93] As stated in Re Colwell (2001), 2001 NSSC 205:

"12 This is a startling notion. Section 158(j) of the Act requires a bankrupt to submit to examinations under oath as may be required. This is a clear duty. In my view, a failure to answer truthfully or in any way else to fully comply with that duty is a breach of the statutory obligation. I would therefor respectfully disagree with the view expressed by the court in Chomicki, preferring the broader view of a bankrupt's duties implicit in the Ontario decision Re Henderson (1997), 45 C.B.R. (3d) 146 (Ont. Gen. Div.) where the court opined that the fact a bankrupt failed to disclose records to a trustee was a provable fact under section 173(1). In short, if a duty exists full compliance is the rule. No records, false records or false testimony should never be considered sufficient to refute a finding of non-compliance. Here no records have been produced and thus the statutory duty to submit to examination has not been fully complied with."

[94] This was an examination conducted by the Trustee's lawyer Jaffe, and all of these issues are both relevant, and the information not provided is crucial to this discharge, particularly given the leakage of the proceeds from the sale of the properties previously owned by Ding and the Bankrupt. The Bankrupt had a duty to provide this information to the Trustee. She did not do so.

[95] Having read the transcripts of those Examinations, it appears that now, almost 6 years later that the Bankrupt has not provided the documentation requested to explain:

Why she apparently gave her share of the proceeds of the Markham Property to Ding to purchase the Aurora Property without taking title;
The disposition of the proceeds of the Aurora Property, and why the