Ontario civil | Bankruptcy and Insolvency
Discharge of bankrupt
Conditional discharge
Condition imposed was not unreasonable
Bankrupt misappropriated over $5 million from clients while employed as investment advisor by creditor. Bankrupt was ordered to pay restitution to creditor but did not do so. Creditor petitioned bankrupt into bankruptcy and filed proof of claim for amount it had reimbursed its clients. During bankruptcy, bankrupt received disability payments of $13,000 to $15,000 per month but paid no surplus income. Master ordered that, as condition of discharge, bankrupt was to pay $284,346 to Trustee as surplus income up to certain date, payable at $5,000 per month. Master also ordered bankrupt to pay additional $5,000 per month to Trustee for further six years, referring to amounts as surplus income payments. Master suspended discharge from bankruptcy for two years, subject to payment of surplus income. Bankrupt appealed, alleging Master erred in ordering him to pay further $5,000 per month of “surplus income” for six years as condition of discharge. Appeal dismissed. When viewed in their entirety, Master’s reasons did not refer to surplus income within meaning in s. 68 of Bankruptcy and Insolvency Act but instead referred to income which is available for payment pursuant to condition of bankrupt’s discharge under s. 172 of Act. Master was clear that further payment was imposed as condition of bankrupt’s discharge without any reference to surplus income under s. 68. Condition imposed was not unreasonable. Duration of payments was not unduly long. Circumstances of case were exceptional, both in terms of breach of trust and fraud that gave rise to creditor’s claim and in terms of amount of claim.
Cole v. RBC Dominion Securities Inc. (2016), 2016 CarswellOnt 19513, 2016 ONSC 7110, H.J. Wilton-Siegel J. (Ont. S.C.J.).
Conditional discharge
Condition imposed was not unreasonable
Bankrupt misappropriated over $5 million from clients while employed as investment advisor by creditor. Bankrupt was ordered to pay restitution to creditor but did not do so. Creditor petitioned bankrupt into bankruptcy and filed proof of claim for amount it had reimbursed its clients. During bankruptcy, bankrupt received disability payments of $13,000 to $15,000 per month but paid no surplus income. Master ordered that, as condition of discharge, bankrupt was to pay $284,346 to Trustee as surplus income up to certain date, payable at $5,000 per month. Master also ordered bankrupt to pay additional $5,000 per month to Trustee for further six years, referring to amounts as surplus income payments. Master suspended discharge from bankruptcy for two years, subject to payment of surplus income. Bankrupt appealed, alleging Master erred in ordering him to pay further $5,000 per month of “surplus income” for six years as condition of discharge. Appeal dismissed. When viewed in their entirety, Master’s reasons did not refer to surplus income within meaning in s. 68 of Bankruptcy and Insolvency Act but instead referred to income which is available for payment pursuant to condition of bankrupt’s discharge under s. 172 of Act. Master was clear that further payment was imposed as condition of bankrupt’s discharge without any reference to surplus income under s. 68. Condition imposed was not unreasonable. Duration of payments was not unduly long. Circumstances of case were exceptional, both in terms of breach of trust and fraud that gave rise to creditor’s claim and in terms of amount of claim.
Cole v. RBC Dominion Securities Inc. (2016), 2016 CarswellOnt 19513, 2016 ONSC 7110, H.J. Wilton-Siegel J. (Ont. S.C.J.).
