The bankrupt, Raymond Henry Lalonde, sought discharge from bankruptcy.
Jevco Insurance Company, an unsecured creditor, opposed the discharge on two grounds under the Bankruptcy and Insolvency Act: assets not equaling $0.50 on the dollar of unsecured liabilities (s. 173(1)(a)), and putting creditors to unnecessary expense by a frivolous or vexatious defence (s. 173(1)(f)).
The court found the s. 173(1)(a) ground was met, as the bankrupt's assets were significantly less than 50% of liabilities, and he was responsible for signing the indemnity.
The court did not find the s. 173(1)(f) ground met regarding a frivolous defence, as the statement of defence was not in evidence.
However, the court found the bankrupt's conduct in filing false Articles of Dissolution for a corporation, stating no proceedings were pending, to be dishonest.
Balancing the interests of the bankrupt and creditors, and considering the dishonesty, the court granted a conditional discharge, requiring an additional payment of $6,000 to the Trustee for the benefit of creditors, in addition to the $50,000 for equity repurchase.
