On a bankrupt’s opposed discharge arising almost entirely from family-law costs awards owed to the opposing parent, the court held that the bankruptcy had been used to avoid those judgment debts and that the bankrupt had failed to comply with core disclosure and co-operation duties under the Bankruptcy and Insolvency Act.
The court found facts proven under ss. 173(1)(a) and (o), relying on extensive prior family-law findings, contradictions in the bankrupt’s later affidavit evidence, nondisclosure of crowdfunding, gifts, and post-bankruptcy debts, and breaches of the statutory duty of good faith under s. 4.2.
Although the record could have supported outright refusal of discharge, the court concluded that a conditional discharge better balanced rehabilitation, creditor fairness, and the integrity of the insolvency system.
The bankrupt was ordered to pay 50% of proven claims through staged monthly payments and to satisfy additional tax, credit-card, reporting, and record-correction conditions before discharge.