Topple (Re)

Topple (Re)

A defaulted Division II consumer proposal does not constitute prior bankruptcy under the BIA definition in s.2(1) because defaulting a proposal does not effect a deemed assignment into bankruptcy; therefore a person who has only defaulted a proposal remains eligible for automatic discharge under s.168.1 if otherwise qualified; s.173(1)(j) does not negate automatic discharge because it governs court hearings, which do not arise where discharge is automatic.

Citation
2001 NSSC 219
Parties
Trustee: Goodman Associates Inc.; Bankrupt: John Edward Topple
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
5 February 2001
Procedural Posture
Bankruptcy Discharge Application / Application for Discharge (objection by Trustee)
Outcome
Discharge granted subject to a short period of suspension; held that a prior defaulted Division II consumer proposal does not preclude automatic discharge under s.168.1
Legal Topics
Automatic Discharge, Consumer Proposal Default, Definition of "bankrupt", Interpretation of BIA S.168.1 and S.173
Source Language
English
Bankruptcy Law Insolvency Consumer Proposal Automatic Discharge Consumer Proposal Default Definition of "bankrupt" Interpretation of BIA S.168.1 and S.173

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Parties

Goodman Associates Inc.

Trustee

John Edward Topple

Bankrupt

Procedural Posture

Bankruptcy Discharge Application / Application for Discharge (objection by Trustee)

Legal Issues

  1. 1 Whether a prior defaulted Division II consumer proposal disqualifies a first-time bankrupt from automatic discharge under s.168.1 of the Bankruptcy and Insolvency Act
  2. 2 Whether a person who made a consumer proposal but defaulted is a "bankrupt" under s.2(1) for purposes of s.168.1

Ratio Decidendi

A defaulted Division II consumer proposal does not constitute prior bankruptcy under the BIA definition in s.2(1) because defaulting a proposal does not effect a deemed assignment into bankruptcy; therefore a person who has only defaulted a proposal remains eligible for automatic discharge under s.168.1 if otherwise qualified; s.173(1)(j) does not negate automatic discharge because it governs court hearings, which do not arise where discharge is automatic.

Court Disposition

Discharge granted subject to a short period of suspension; held that a prior defaulted Division II consumer proposal does not preclude automatic discharge under s.168.1

Orders

  • Discharge granted subject to a short period of suspension