Zinkiew (Re)

2004 BCSC 1831 Zinkiew (Re) IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Zinkiew (Re), 2004 BCSC 1831 Date: 20040217 Docket: 11-227841 VI/02 Registry: Victoria In Bankruptcy and Insolvency In the Matter of the Bankruptcy of Randy Owen Zinkiew Before: Registrar Bouck Reasons for Decision Michael B. Paine Appeared on behalf of the Bankrupt Michael J. Lawless Appeared on behalf of Canada Custom and Revenue Agency ("CRA") I. Kathryn Belton Appeared on behalf of Smythe Ratcliffe, Trustee in Bankruptcy Date and Place of Hearing: February 5, 2004 Victoria, B. C. INTRODUCTION [1] The bankrupt applies for an absolute discharge having made an assignment on June 7th, 2002. This application has been adjourned on several occasions. Mr. Zinkiew has, therefore, been in bankruptcy for about 20 months. [2] The cause of bankruptcy is stated in the trustee's s. 170 report as follows: "The bankrupt advised that he and his spouse did not file income tax returns for several years due to their personal beliefs and that Canada Customs and Revenue Agency arbitrarily assessed them for the unfiled years and issued Third Pary Demands against his wife's income. They were unable to make the minimum required payments to their creditors as they came due." [3] In the report, the trustee objects to Mr. Zinkiew's discharge on the following grounds: 1. Four months of income and expense reports had not been properly completed; and 2. Failure to have assets with a value equal to $.50 on the dollar. His unsecured liability arises from Mr. Zinkiew's failure to file income tax returns as required and to make the necessary remittances on his commissioned income, for which he can justly be held responsible. [4] The objection was withdrawn at this hearing. [5] CCRA is the bankrupt's primary creditor. According to the s. 170 report, the proven claim is $104,524.04. This figure represents unpaid income tax of $89,556.11 for the years 1998 and 1999 (including penalties and interest) and unremitted pre-1998 GST in the sum of $14,967.93. [6] Shortly before this hearing, CCRA provided the trustee with an up-dated claim of $133,720.33. This new figure includes unpaid taxes, penalties and interest since 1999. [7] CCRA's Notice of Objection alleges facts under s. 173(1)(a), (b), (c) and (e) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3 (the "Act"). It seeks a conditional order of discharge requiring Mr. Zinkiew to pay to the trustee $36,000 over three years. The sum of $36,000 represents approximately 25% of the CCRA debt. [8] Mr. Zinkiew gave viva voce evidence and was cross-examined. The bankrupt also relies on his affidavits sworn June 6th, 2003 and February 2nd, 2004 and those of Ms. Belton and Roseanne Sinclair, both sworn February 4th, 2004. [9] The hearing occupied one-half of a day. BACKGROUND [10] Mr. Zinkiew is 41 years old and married to Kristi Dawn Zinkiew, a local pediatrician. The Zinkiews have two children aged 7 and 9. The family moved from Saskatoon to British Columbia in 1998 and currently reside in a rented home in Mill Bay. [11] Dr. Zinkiew also made an assignment into bankruptcy on June 7th, 2002. I have reviewed the contents of her court file, including the s. 170 report and affidavit material filed in support of the discharge application. [12] On June 6th, 2003, Dr. Zinkiew's discharge was granted on the following terms: " upon the registrar being satisfied that the bankrupt has paid to the trustee the post-bankruptcy income tax refund of $3,358.36 and a further sum of $15,818.16 which is to be paid in consecutive monthly instalments of not less than $2,000 per month commencing December 1st, 2003, and continuing on the 1st day of each month thereafter until the full amount of $15,818.16 is paid, the bankrupt shall be entitled to receive an absolute discharge from bankruptcy." [13] This order resulted from negotiations between Dr. Zinkiew's counsel (Mr. Paine), the trustee and CCRA. Dr. Zinkiew was present when the order was spoken to. [14] Mr. Zinkiew is a high school graduate. Historically, he has worked as a self-employed salesman. According to tax returns, Mr. Zinkiew's pre-1998 earnings were as follows: Year Total Income 1997 $ 6,676.43 1996 ($23,955.26) 1995 ($32,389.91) 1994 $13,133.46 1990 $10,507.24 [15] Mr. Zinkiew was unable to locate returns for 1991 to 1993. The GST claim relates to the pre-1998 taxation years. [16] It is worth noting that Mr. Zinkiew was a good salesman, reporting gross earnings in excess of $100,000. Nonetheless, expenses reduced his income to the above net figures. CAUSES OF BANKRUPTCY [17] After the family settled in Mill Bay, Mr. Zinkiew investigated selling insurance and obtained his insurance license. However, he did not pursue that endeavour for long and the license has now lapsed. [18] Dr. Zinkiew was able to secure some on-call duties. By 1999, Dr. Zinkiew was earning $9 to 10,000 per month (gross) in her employment with the Vancouver Island Health Authority ("VIHA"). [19] In addition to Dr. Zinkiew's earnings, the couple had some savings in RRSPs, non-registered investments and the proceeds of sale from their Saskatoon home. The total amount of these savings was not specifically addressed in the evidence. However, Mr.Zinkiew's Statement of Affairs reports that the couple received $70,000 from the sale of their home. The only record on an RRSP withdrawal is found in Mr. Zinkiew's 2000 tax return; the amount withdrawn is $3,530.51. [20] Sometime in 1998 or early 1999, Mr. Zinkiew was introduced to representatives of the Institute of Global Prosperity ("Global Prosperity"). These representatives marketed high return investments. [21] At his own expense, Mr. Zinkiew attended seminars to learn more about the investment scheme. The seminars were held in Nassau and Cancun; the cost of attendance was $6,250 US. Dr. Zinkiew joined her husband for least one of these trips. [22] The Zinkiews decided to invest approximately $295,000 with Global Prosperity, $200,000 of which came from Mr. Zinkiew's parents. The balance came from the RRSPs, non-registered investments and sale proceeds from the family's Saskatoon home. [23] The monies were apparently put in "offshore investments". Share certificates were issued to the Zinkiews. Share certificates issued by "Crown Meridien" promise returns of 120%, due in the summer of 2004. Another investment (Rosewood International) matured on September 20th, 2000. [24] Global Prosperity also counselled its investors not to pay income tax. The Zinkiews were told that payment of income tax violated of the Charter of Rights and Freedoms. [25] The Zinkiews were content to follow this advice. [26] Between 1998 and 2001, neither of the Zinkiews filed income tax returns. Written demands issued by CCRA to Mr. Zinkiew were returned with the following handwritten comment: "Flesh and blood man. All rights reserved. Not a "person" as defined in the Income Tax Act, therefore not subject to the Income Tax Act." [27] Mr. Zinkiew also issued a "constructive notice" to the Minister of National Revenue on January 29th, 2001. In that notice, the bankrupt sets out his refusal to pay income tax and also demands return of taxes paid in previous years. The notice states that Mr. Zinkiew was "fraudulently induced to pay it [tax] and was thus deprived of that monies, the fruits of my labour and skills - my private property, unlawfully". [28] In the absence of the returns, CCRA issued assessments to both of the Zinkiews. These assessments were ignored. CCRA subsequently attached Dr. Zinkiew's pay from the VIHA and her bank account. It was this action which precipitated the bankruptcy assignments. [29] Mr. Zinkiew says that no monies have been received from Global Prosperity. He now sees that the investment scheme was a sham. [30] Various documents regarding Global Prosperity, including testimonials from other investors, are exhibited to Roseanne Sinclair's affidavit. I have given little if any weight to the veracity of these testimonials as they offend the hearsay rule. However, I accept that Global Prosperity has all the hallmarks of a "ponzi" scheme. Mr. Zinkiew has assigned any monies recovered from Global Prosperity to the trustee. FINANCIAL CIRCUMSTANCES BEFORE AND DURING THE BANKRUPCTY [31] Between 1998 and 2002, Dr. Zinkiew worked towards establishing a full-time practice. According the income tax returns subsequently filed by the trustee, Dr. Zinkiew earned the following: Year Gross Income Net Income 1998 $ 48,944.65 $ 36,042.73 1999 $ 92,323.20 $ 74,031.20 2000 $117,425.13 $ 98,603.79 2001 $138,645.09 $115,295.09 [32] During this same period, Mr. Zinkiew became actively involved with Global Prosperity. Between July 1999 and July 2000, Mr. Zinkiew operated a sole proprietorship under the name of Psalm Enterprises. The purpose of the enterprise was to spread the word about Global Prosperity and presumably entice other investors. Mr. Zinkiew recalls working four to five days per week on this endeavour. [33] In cross-examination, Mr. Zinkiew acknowledged earning approximately $8,000 to $9,000; the source of this income is uncertain. He did not report this income to the trustee. [34] Mr. Zinkiew planned to be a keynote speaker at an event labelled "Freedom Fest" which was to take place in Victoria in September 2001. He intended to advocate the non-payment of income tax. The event was cancelled when Global Prosperity withdrew its support. [35] Mr. Zinkiew has paid nothing into the estate and is currently unemployed. He describes himself as a "stay-at-home dad". Both children are at school full-time but he is responsible for transporting the children to their various activities and maintaining the household in general. [36] Mr. Zinkiew also does some painting with the goal of becoming a commercial artist. His training as an artist is limited to three years in a vocational secondary institution. He has not sold any art work. [37] The Zinkiews employed a nanny until November 2002. The nanny was paid $1,500 per month. Mr. Zinkiew claims that the nanny is a friend going through a difficult divorce at the time. The Zinkiews felt some moral obligation to provide employment, despite the bankruptcy assignments. [38] The Zinkiews were in possession of three leased vehicles at the date of bankruptcy. [39] Mr. Zinkiew includes in his list of assets a 2000 VW Jetta valued at $21,985 and a 2000 Porsche Boxter valued at $54,450. [40] In addition to these vehicles, Dr. Zinkiew lists as an asset a 1999 Jeep Cheeroke valued at $29,095. [41] As of May 30th, 2003, the combined monthly lease payments for these vehicles was $2,711.53. [42] Mr. Zinkiew says that his wife was the primary operator of the Boxster. The vehicle was leased in the summer of 2000. It was returned to the lessor in June 2003. [43] The Zinkiews each made a credit application with VW Credit Canada Inc. for the lease of a vehicle and named the other as co-applicant. Both applications were put in evidence. [44] Dr. Zinkiew's application was made on September 21st, 1999. It is not clear which vehicle the application pertains to; for reasons stated below, I conclude that it is the Jetta. [45] In this application, Mr. Zinkiew's employer is named as World Marketing Alliance. His occupation is described as "financial planner". Mr. Zinkiew claims to have been employed for one year and 4 months with a gross monthly income of $8,500 to $9,000. Mr. Zinkiew says that he advised the dealership verbally that this income was anticipated or "pending" from the investments with Global Prosperity. The Zinkiews claimed to have other assets (RRSP's, bonds and shares) valued at $300,000. [46] Mr. Zinkiew's credit application was made on May 30th, 2000. In that application, Mr. Zinkiew's income is shown as $11,000 per month. Again, he reports World Marketing Alliance as his employer. [47] It was suggested that both of these applications relate to the lease of the Boxster and that Dr. Zinkiew was the primary operator of the vehicle. I do not accept this assertion. There is no rational explanation for a credit application being made in September 1999 for a vehicle to be leased almost one year later. Second, there is no reasonable explanation as to why Mr. Zinkiew would apply for credit relating to a lease unless he intended to be the principal operator. [48] Between 1998 and 2000, Dr. Zinkiew tithed to her church an average monthly sum of $1,100. The tithing was reduced to $1,700 (total) in 2002. [49] In December 2003 a Provincial Court judge ordered the Zinkiews to each pay a $1,000 fine for failure to file returns. The Zinkiews were given twelve months to pay these fines. CCRA published an account of this proceeding on its web-site. That report was in turn picked up and published in the Nanaimo Daily News. Mr. Zinkiew says that he and his wife have suffered public humiliation as a result of CCRA's actions. [50] As well, the matter came to the attention of elders of the Zinkiew's church. The elders now question Mr. Zinkiew's ability to provide moral guidance within the church. [51] Mr. Zinkiew has no plans to look for work outside of the home. He agrees that he is physically capable of employment. However, the demands of Dr. Zinkiew's practice are such that he must remain available for the children. The decision to have Mr. Zinkiew remain out of the workforce was made jointly by the Zinkiews shortly after the bankruptcy assignments. [52] The Zinkiew's joint bank account holds about $40. Dr. Zinkiew has set aside $50,000 in her own account, presumably to pay taxes. She is also preparing to open her own practice. [53] Mr. Zinkiew admits that he remains attracted to the tax evasion theories promoted by Global Prosperity. PRINCIPLES OF LAW [54] The parties agree on the basic principles to be considered in this discharge application. [55] A summary of those principles is found in the decision of Westmore v McAfee (1988) 67 C.B.R. 209 (B.C.C.A.) at 216: 1. In considering the question of discharge, the court must have regard not only to the interest of the bankrupt and his creditors, but also to the interests of the public; 2. The Legislature has always recognised the interest that the State has in a debtor being released from the overwhelming pressure of his debts, and that it is undesirable that a citizen should be so weighed down by his debts as to be incapable of performing the ordinary duties of citizenship; 3. One of the objects of the Bankruptcy Act was to enable an honest debtor, who has been unfortunate in business, to secure a discharge so he might make a new start; 4. The bankruptcy courts should not be converted into a sort of clearing house for the liquidation of debts irrespective of the circumstances under which they were created; 5. The success or failure of any bankruptcy system depends upon the administration of the discharge provisions of the Act; 6. The Court is not to be regarded as a sort of charitable institution; 7. 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; 8. The discharge is not a matter of right. [56] To repeat, the attitude and actions of the bankrupt before and after his bankruptcy assignment must be considered. As stated by Master Funduk in Martens (Re) [1994] A.J. No.1265 (Q.B.) (Q.L.): "An assignment into bankruptcy does not create a legal Berlin wall where everything predating its erection does not now exist. The conduct of the bankrupt is always a relevant fact and that conduct includes looking at how the liability arose, what the bankrupt had and what [she] did with what [she] had." (at para 25) [57] Each discharge application is unique; a registrar is not bound to follow the decisions of other registrars. However, in these particular circumstances, I have found considerable guidance in the decisions of Master Funduk, a respected and highly experienced registrar in bankruptcy. [58] CCRA relies on Master Funduk's decision in Re Toal [1995] A.J. No.422 (Q.B.) (Q.L.). That decision affirms the fact that bankruptcy courts do not look kindly on those who deliberately fail to pay income taxes and then look to the bankruptcy system for relief. As Master Funduk succinctly puts it: " Nobody likes paying income tax. But I resile from the position that a taxpayer should not pay income tax when he incurs it and when the liability reaches a large amount go into bankruptcy and piously say the he cannot now pay that large debt and it has caused his bankruptcy. Debts do not cause bankruptcy. In this case, it was the unacceptable conduct of the bankrupt which created this situation."(at para 14). [59] Master Funduk revisited this issue in Emmerton (Re) [1995] A.J. No.4 (Q.B.) (Q.L.): "The failure to pay income tax on income as it is earned is misconduct. The failure to pay income tax on income as it is earned cannot be classed as a misfortune. Self-employed income earners cannot be allowed to evade their legal obligation to pay income tax through resort to the BIA. Tax dodging is not acceptable, especially in these times when the country is facing a crushing debt burden and those who do pay are being asked to pay even more. It is not an answer to say that the bankrupt cannot now pay the income tax. He could have when he incurred that liability. He chose not to do so." (at paras 22 & 24) and further: " The overriding consideration here is deterrence."(at para 24) [60] Similar comments have been made by B.C. courts: Re Steward (1991), 4 C.B.R.(3d) 240 (B.C.C.A.). [61] As the bankrupt recognizes, an absolute discharge is not available if a s.173 fact is proven. If such a fact is proven, the registrar must decide whether in the all of the circumstances the discharge should be conditional, suspended or refused altogether. [62] The income of a spouse is a proper consideration in deciding whether a conditional order of payment should be made: Re Janowsky (1993), 19 C.B.R.(3d) 77 (B.C.C.A.). The court must be satisfied that an order for payment does not deprive the bankrupt's family of basic needs. [63] Finally, a conditional order of payment can be made even if the bankrupt is unemployed. The bankrupt's historical earnings can be sufficient evidence of an ability to make the payments: Re Janowsky, supra. The registrar may also look to whether the bankrupt is deliberately underemployed but physically capable of earning a greater income: Re Martens, supra, and Re Hedges [1992] B.C.J. No. 2936 (Victoria Registry, No.12) (S.C.). DISCUSSION [64] Despite the able submissions of his counsel, I have no hesitation in refusing Mr. Zinkiew an absolute discharge. I am satisfied that facts have been proven under s.173 of the Act. Furthermore, I would not characterize Mr. Zinkiew as an honest but unfortunate debtor. [65] I am satisfied that: 1. Mr. Zinkiew is justly responsible for the failure of his assets to be less than equal to $.50 on the dollar in the amount of unsecured liabilities; and 2. The bankrupt has contributed to the bankruptcy by rash and hazardous speculations. [66] Mr. Zinkiew's credibility and attitude were important factors in reaching my decision. In general, I found Mr. Zinkiew to be a rehearsed but less than truthful witness. His demeanour was that of a person playing a role rather than providing a truthful account of his circumstances. His admission of earning income (even if fairly modest) in 1999 and 2000 comes awfully late. There was a thinly veiled attempt to blame the trustee for this omission as she prepared the income tax returns. Obviously, the trustee relied on information from the bankrupt in the preparation of the returns. How can we know for certain whether other income was received and not reported? [67] When describing his role as the at-home parent, Mr. Zinkiew conveniently omitted any mention of the nanny. It is to Ms. Belton's credit that she raised this fact during the discharge hearing. [68] Mr. Zinkiew is not afraid of hyperbole. That is demonstrated by the credit applications in which he exaggerates his income and employment status. Alternatively, if that information is truthful, there is considerable unreported income. Either Mr. Zinkiew lied in the applications or is lying to the court; he may not have it both ways: see Martens (Re), supra, @ para. 20. [69] Mr. Zinkiew is not a stupid individual. It can be fairly stated that Mr. Zinkiew was looking for the proverbial "get rich quick" scheme. Before 1998, Mr. Zinkiew took the advice of accountants and indeed relied on such advice in preparing income tax returns. I find it incredible that he would not seek the advice of an accountant, or a tax lawyer for that matter, regarding the non-payment of income tax. [70] Investing the family's savings with Global Prosperity was a speculation which no reasonably careful person would enter into, having regard to all of the circumstances including the nature of the offshore investments; the promised return; and the tax evasion advice which went along with the speculation: Re Keays (1891), 9 Morr. 18 (C.A.). [71] As I understood the bankrupt's evidence, his inability to pay the tax debt is caused by the failure of this speculation. [72] Of course, Mr. Zinkiew may not blame Global Prosperity for his neglect to remit GST owing before 1998. [73] Indeed, it is not the loss of monies invested with Global Prosperity that caused the bankruptcy, although that venture contributed to an inability to pay creditors. Rather, the real cause of bankruptcy was Mr. Zinkiew's deliberate failure to file income tax returns, a task within his control. [74] With respect to the CCRA debt, the bankrupt suggests that I should discount these assessments. He would have challenged the GST debt although there is no explanation as to why he did not do so before June 2001. He also submits that the validity of the CCRA debt should be discounted if only because it was an arbitrary assessment. [75] In considering a similar argument in Emmerton (Re), supra, Master Funduk said this: "The Minister assessed the bankrupt, as it was entitled to do, because of the bankrupt's refusal to file tax returns for 1990 to 1992. It was the bankrupt's refusal to do that which the Income Tax requires him to do, file returns, which caused the assessments. It does not lie in the bankrupt's mouth to say that the assessments are wrong. He was self-employed at the time and he is the only one who has knowledge of his income and expenses. The burden does not lie on the Minister to prove the accuracy of the assessment. With the benefit goes the burden. One of the burdens of going into bankruptcy is that the trustee, not the bankrupt, decides if a claim by a creditor will be accepted. Here the trustee has accepted the Minister's claim so that is the end of it." (at paras 12 to 14) [76] The trustee has filed an affidavit at the bankrupt's request. She acknowledges that Mr. Zinkiew challenges the validity of the assessments. However, as there was no dividend to be paid to creditors, it was impractical to dispute the claim. Ms. Belton is satisfied that the CCRA claim is based on the Notices of Assessment issued in respect of the relevant tax years. [77] In any event, based on the content of Mr. Zinkiew's affidavit sworn February 2nd, 2004, I doubt the accuracy of his income reporting. [78] Mr. Zinkiew deposes that he used his parents' monies and the couple's savings to invest a total sum of $295,000 US in Global Prosperity. Yet the foreign exchange records exhibited to the affidavit show that Mr. Zinkiew exchanged at least $310,000 US (or $466,412.60 CDN) before making these purchases. Unaccounted for in the material is $15,000 US (or, at least $20,000 CDN). What did Mr. Zinkiew do with that money? And, where did the money come from? [79] Mr. Zinkiew says that the monies invested with Global Prosperity have been lost. If this is true, then he must have had some concerns when the Rosewood International return was not paid in September 2000. Yet, despite the alleged non-payment, Mr. Zinkiew continued to both promote Global Prosperity for the "Freedom Fest" and evade his taxes. [80] In short, I am unable to accept Mr. Zinkiew's assertion that he has received no income since 1998 (except for the previously unreported income noted above). [81] Finally, I note that Mr. Zinkiew transferred about $59,000 (CDN) to a US bank in September 1999. Dr. Zinkiew deposes that the monies were transferred to Meliorations Management, a Washington based investment. She deposes that the Zinkiews made the investment with the intent of using the monies for eventual payment of Dr. Zinkiew's 2000 and 2001 taxes; this at a time when both Zinkiews were refusing to report their income to CCRA. The source of the $59,000 is not identified in the evidence. There appears to be some connection between Rosewood International and Meliorations Management. However, according to the Zinkiews' evidence, this investment was in addition to the $295,000 invested in Global Prosperity schemes. THE REMEDY [82] As noted, CCRA seeks an order that Mr. Zinkiew pay the sum of $36,000 over thirty-six months. It argues that Mr. Zinkiew is capable of finding employment which would not significantly impact his responsibilities at home. It says that Mr. Zinkiew is deliberately underemployed so as to thwart the claims of CCRA. Indeed, unless the discharge order requires some payment to the trustee, then Mr. Zinkiew will have accomplished what he set out to do as a tax protestor: not pay any taxes. [83] Mr. Paine submits that in the event of a s. 173 finding, the only appropriate order is to suspend Mr. Zinkiew's discharge. Mr. Zinkiew's responsibilities are now in the home. Dr. Zinkiew is already making payments on a conditional order. Imposing a further monetary condition on the family would be in effect modifying Dr. Zinkiew's conditions. [84] I accept that the terms of Dr. Zinkiew's discharge are relevant considerations here. Those terms are noted above. [85] The total of Dr. Zinkiew's secured and unsecured debt at the time of bankruptcy was $172,643.21 of which nearly $90,000 was owed to CCRA. With additional penalties and interest, CCRA eventually claimed a debt of about $135,000. I am told that Dr. Zinkiew paid the trustee approximately $40,000 during the nine month bankruptcy period. That payment averages to be $4,444 per month but Dr. Zinkiew's payments varied, depending on her monthly income. In December 2002 she paid $4,972 to the trustee; in January, $5,103.03. [86] If the conditions of discharge are met, Dr. Zinkiew will have paid about $60,000 to the trustee. This is roughly the amount Dr. Zinkiew says is properly owed to CCRA for the taxation years 1999, 2000 and 2001. It represents about 44% of the $135,000 debt claimed by CCRA. [87] For five of the nine months of bankruptcy, the Zinkiews were able to make these payments, pay a nanny $1,500 per month; and meet their vehicle lease obligations of $2,711.53. With the return of the Boxster in June 2003, the lease payments have been reduced by half. [88] As a result of the conditional order of November 6th, 2003, Dr. Zinkiew's obligations to the trustee have also been reduced by half. [89] According to her affidavit sworn May 30th, 2003, Dr. Zinkiew is earning an average monthly income of $13,411.99. She expected her income would be reduced but there is no evidence that this in fact occurred. Indeed, Dr. Zinkiew apparently has the resources and the patients to open her own practice. [90] I have concluded, therefore, that imposing a monetary condition on Mr. Zinkiew's discharge would not cause the family to "grovel in sack cloth and ashes before the creditors and the public". [91] The decision to invest monies with Global Prosperity and refuse to pay income tax was made jointly by the Zinkiews. So too was the decision that Mr. Zinkiew remain out of the workforce. [92] This is not a situation where Dr. Zinkiew was the innocent bystander to her husband's folly. [93] Furthermore, I agree with CCRA that Mr. Zinkiew has an ability to earn some income and could do so without abdicating his family responsibilities. [94] A conditional order requiring further monetary payment must be imposed. Mr. Zinkiew has a lengthy history as a tax protestor. I do not believe that he is repentant. By his own admission, Mr. Zinkiew would be content not to pay taxes. I am convinced that this behaviour would be continuing but for the attachment of Dr. Zinkiew's wages. Mr. Zinkiew is only sorry that CCRA caught up with him. [95] To paraphrase Master Funduk, the bankrupt wants all of the privileges offered by the laws of Canada without accepting the responsibilities of citizenship. [96] I do not accept that the imposition of a monetary condition is punitive, as suggested by the bankrupt. Even if Mr. Zinkiew decides not to pursue remunerative employment, the Zinkiew family will not suffer if such a monetary condition is imposed. There is no evidence whatsoever that the family suffered financially during the bankruptcy period; the evidence suggests there was no change in their spending or lifestyle. It was reasonable to let the nanny go since Mr. Zinkiew was at home full-time. [97] The reduction of the payments to the trustee together with elimination of the Porsche lease results in an additional $3,000 to $3,500 available to the family each month. [98] The most difficult part of this case is arriving at an appropriate figure for the monetary condition. In Re Toal, supra, the bankrupt was ordered to consent to judgment in favour of the Crown for 65% of the total amount owing. However, Dr. Toal had an ongoing and successful medical practice. [99] Whether by happenstance or design, Mr. Zinkiew's reported net earnings as a self-employed salesman have been modest. Nonetheless, his gross earnings show him to be a good salesman. As Mr. Zinkiew has made no effort to look for work since at least 2002, it is difficult to say with any certainty when or if Mr. Zinkiew will enter the workforce and what his earnings might be. [100] The decision of Re Graham [1997] S.J. No. 35 (Sask. Q.B.) (Q.L.) is somewhat analogous to the case at bar. Both Mr. and Mrs. Graham made assignments after failing to remit GST and/or income tax for several years. Mr. Graham was a businessman and the primary breadwinner in the family. Mrs. Graham carried on a home craft business which was not particularly successful. She was found to owe income tax of $5,799.69 for the years 1989-1995. [101] Mr. Graham did earn a good income from his business. The court found that the "bankrupts have continued to expend a great deal of money since their bankruptcies". I make the same observation of the Zinkiews. Mrs. Graham was ordered to pay the sum of $4,500, or roughly 77% of the CCRA proven debt. [102] Considering all of the circumstances, I accept CCRA's submission that Mr. Zinkiew pay the sum of $36,000 to the trustee as a condition of his discharge. I agree that such a condition is necessary to maintain the integrity of the bankruptcy system; provide deterrence; and promote Mr. Zinkiew's rehabilitation. [103] I also agree with CCRA's proposal regarding a payment schedule. Mr. Zinkiew is ordered to pay $500 per month for 6 months commencing March 1st, 2004 and thereafter $1,000 per month until the debt is paid. Of course, Mr. Zinkiew may pay the monies sooner. I note that the condition can be met in about 25 months if the payment were to replace the Boxster lease in the family budget. [104] The matter of costs was not addressed. CCRA is at liberty to set down a further hearing by praecipe to speak the issue. "C.P. Bouck" D/REGISTRAR C.P. BOUCK