Miller (Re)

Miller (Re) Court Supreme Court Date 2007-08-20 Citation 2007 NSSC 244 Docket B 27600 Judge/Registrar/Adjudicator Cregan, Richard (Honourable Justice) Document Type Decision Relations Library Sheet - Miller (Re) - 2007 NSSC 244 - 2007-08-20 - Library Sheet Decision Content IN THE SUPREME COURT OF NOVA SCOTIA IN BANKRUPTCY AND INSOLVENCY Citation: Miller (Re), 2007 NSSC 244 Date: August 20, 2007 Docket: B 27600 Registry: Halifax District of Nova Scotia Division No. 01 - Halifax Court No. 27600 Estate No. 51-769171 In the Matter of the Bankruptcy of John Douglas Miller __________________________________________________________________ D E C I S I O N __________________________________________________________________ Registrar: Richard W. Cregan, Q.C. Heard: July 20, 2007 Present: Edward MacDonald representing the Trustee, Green Hunt Wedlake Inc. Ben Durnford, counsel for Mr. Miller Stephen Dickey representing the Office of the Superintendent of Bankruptcy [1] John Douglas Miller made an assignment in bankruptcy in December 2004. It was his third bankruptcy. He now asks to be discharged. The Trustee recommends that his discharge should be suspended for three months. His counsel agrees with this recommendation. However, the recommendation made by the representative of the Superintendent’s Office is that he be given a substantial suspension, specifically ten years. The sole task for me in disposing of this application is to set the length of his suspension. [2] Mr. Miller is 64 years of age. He is an architect. Little detail regarding his practice was provided. However, the inference I draw is that in recent years he has worked on his own or in ad hoc relationships with other architects on a variety of projects, large and small. [3] He made his first assignment in November 1996, and the second in June 1999. In both assignments accrued indebtedness to the Canada Revenue Agency was very significant. The first followed upon his divorce and the second, a professional liability claim. [4] Five years later in the midst of a major project he had a serious heart attack. The disruption to his work that resulted led to the current bankruptcy. The liabilities listed in his Statement of Affairs show indebtedness for income tax of $6,500, for HST $26,000, and for source deductions $18,000 unsecured and $28,000 secured. The other significant creditor was his wife to whom he owed $75,900. She had advanced him money as working capital for his then current work. [5] The administration of his estate has moved slowly. There were delays in providing the Trustee with information. However, he has otherwise been compliant with the Trustee’s requirements. Early this year both his wife and his mother died. With the inheritance he received from his wife his creditors have been or will be paid in full. [6] He is presently winding down his professional commitments in anticipation of retirement. Later this year he will be entitled to receive the Old Age Pension and Canada Pension. His mother’s will provides him with a monthly payment of $1500 and he says he will eventually be entitled to further payments. He is in deteriorating health. [7] It is quite understandable that the courts have treated third time bankrupts with considerable concern. Discharges have been denied. Discharges have been subject to lengthy suspensions. Discharges have been subject to stringent conditions. [8] I reviewed the law in Pace (Re) (2006), 246 N.S.R. (2d) 236, 24 C.B.R. (5th) 229. In particular I noted Re Hardy (1979), 30 C.B.R. (N.S.) 95 (Ont. Anderson J.), Re Randall (1984), 54 C.B.R. (N.S.) 121 (Ont., Sutherland J.), and Willier, (Re) 14 C.B.R. (5th) 130 (B.C., Registrar Baker). At Paragraph [14] I made this summary: What these authorities mean to me in deciding this case is that there is no rule of law that a third time bankruptcy must result in refusal of discharge, but the court must nevertheless pay very careful attention to the future prospects of a third time bankrupt. The court must be concerned that something has happened to, or something has been learned by the bankrupt that will give some sense of assurance that the cycle of bankruptcy has been broken. Simply giving a lengthy suspension of discharge may not be enough. A suspension may only be a suspension of the ability to start the credit abuse all over again. [9] The usual practice where the application is not being opposed and there are no special circumstances is to impose a suspension of twelve to eighteen months, without conditions. Longer periods, particularly with conditions, are given where the bankrupt has acted very irresponsibly and it is clear further time for reflection and improvement of habits is needed before the bankrupt should be entitled to a discharge. In extreme cases discharge may be denied. [10] The particulars of the first two bankruptcies are not before me. All I know is that each involved substantial indebtedness to CRA and that the first occurred along with his divorce and the second, with a professional liability claim. Whether he would have been in difficulty with CRA without the other causes, I can only speculate. The particulars of the present bankruptcy are before me in more detail, but again I can only speculate whether bankruptcy would have been necessary, if he had not had the heart attack. [11] It is reported that Mr. Miller has been cooperative with the Trustee throughout the administration. This is expected of all bankrupts. [12] It is submitted that the creditors being now paid in full should mitigate the length of the suspension. I think that would be so, if it was the result of his post assignment efforts; rather the funds came from his inheritance. [13] It is submitted that, as all bankruptcies have been significantly driven by failure to pay income tax, HST and payroll withholdings, a lengthy suspension is required to assure his compliance in the future and as well to express disdain for his failure to make such payments in a timely way. Lying behind is the notion of deterrence to both the bankrupt and society in general. [14] Mr Miller has made three assignments in the past eleven years. Each arose from financial problems in his professional practice and each was compounded with an unfortunate personal or professional difficulty. As mention above, I can only speculate as to whether he would have avoided any of the assignments, had it not been accompanied by a misfortune. However, I see no suggestion of overt irresponsibility on his part in managing his affairs, nor any intention to unfairly take advantage of the bankruptcy process to the detriment of his creditors. [15] Mr. Miller is retiring from practice. He has a secured modest income. He will not be in similar circumstances of financial risk in the future. This provides me with the necessary “sense of assurance that the cycle of bankruptcy has been broken”. [16] I am satisfied that in the circumstances there is no need to impose any conditions on him. His successive bankruptcies are not the result of financial irresponsibility as seen in cases where third time bankrupts have been subjected to lengthy suspensions, onerous conditions, or denial of discharge. [17] He should be soon discharged. His assignment was made two and one half years ago. Three months is too short. It is only the normal suspension for a second time bankruptcy. As mentioned above, twelve to eighteen months is the normal suspension period for a third time bankrupt. However, I think it proper to take into account his age, his health, his retirement, and the length of time he has been in bankruptcy and impose a suspension of a shorter period. [18] My decision is that Mr. Miller is entitled to be discharged from bankruptcy on April 30, 2008. R. Halifax, Nova Scotia August 20, 2007