Stéphanie Lauriault

The Superintendent of Bankruptcy brought a motion seeking orders to provide flexibility to the administration of Ontario insolvency estates affected by COVID-19.

The relief sought included increasing payment defaults/time for deemed annulment of consumer proposals under s. 66.31(1) BIA, extending timelines for creditor meetings (ss. 51, 66.15, 102 BIA) and mediations (rules 105(4), (10) BIGR), extending time for court referrals (s. 170.1(3) BIA), applying the order to all active and future insolvency filings until June 30, 2020, and dispensing with notice.

The court granted the requested relief, finding jurisdiction under ss. 66.31(1) and 187(11) of the BIA, and its inherent jurisdiction, given the exceptional circumstances of the pandemic.

The bankrupt, a 42-year-old second-time bankrupt, applied for a discharge.

The Canada Revenue Agency opposed the discharge on the grounds that it was a tax-driven bankruptcy, with the bankrupt owing over $660,000 in personal income taxes.

The court found that the bankrupt failed to cooperate with a CRA audit, transferred his business to his sister to avoid paying taxes, and artificially lowered his income to avoid surplus income payments.

The court ordered a conditional discharge requiring the payment of $150,000 and suspended the discharge for 18 months.

Dr. Baldeep Kaur Saran, a dentist, applied for a discharge from bankruptcy, which was opposed by her Trustee and the Canada Revenue Agency (CRA).

The bankruptcy was tax-driven, stemming from her participation in a 'natural person' detaxing scheme and a charitable giving scheme, resulting in over $3.1 million in tax debt (including penalties and interest).

The court found that her assets were less than 50 cents on the dollar of unsecured liabilities and that she contributed to the bankruptcy through unjustifiable extravagance in living.

The court rejected her claims of being duped and imputed income to her based on her past earnings and her husband's control over their combined income.

A conditional discharge was granted, requiring her to pay an additional $200,000 to the Trustee, file accurate tax returns, remain current with CRA obligations, and her discharge was suspended for a minimum of 36 months.

The bankrupt, Charles Rotenberg, applied for a discharge from his third bankruptcy, which was opposed by the trustee and the Attorney General of Canada (Canada Revenue Agency).

The court refused an adjournment request by the bankrupt, noting the long history of the matter and previous adjournments.

The court reviewed the bankrupt's history of multiple bankruptcies, consistent failure to file tax returns and pay income tax, and lack of cooperation with the trustee.

Despite counsel's argument for a conditional discharge, the court found the bankrupt lacked insight and a concrete plan to address his financial situation, and his recent actions were "too little too late." The discharge was refused on grounds including previous bankruptcies, failure to perform duties under the Bankruptcy and Insolvency Act, failure to comply with surplus income requirements, and assets not equaling fifty cents on the dollar of unsecured liabilities.

Leave was granted to re-apply in 48 months, conditional on full tax compliance.

A bankrupt chiropractor applied for discharge from bankruptcy arising primarily from large personal income tax liabilities exceeding $200,000.

The Canada Revenue Agency, the trustee, and the Office of the Superintendent of Bankruptcy opposed discharge, alleging improper asset transfers, inaccurate disclosures, and failure to make reasonable efforts to pay tax debts.

The court found that the bankruptcy was tax-driven under s. 172.1 of the Bankruptcy and Insolvency Act and that the bankrupt had transferred assets to his spouse at artificially low values and failed to disclose significant transactions, including RRSP withdrawals and property transfers.

The court also determined that the bankrupt’s reported income was artificially low and imputed a higher income based on professional capacity.

Balancing the statutory factors and the need to maintain the integrity of the bankruptcy system, the court granted a conditional discharge requiring substantial payments and further financial disclosure.