Miller (Re)

Miller (Re)

Master Young held that Jacqueline Miller is not a creditor provable in the bankruptcy and did not obtain CRA's security by her voluntary payment; there was no mistake of law that would trigger Ex Parte James; CRA's release of its judgment extinguished its secured status and it is now an unsecured creditor; therefore the funds remain part of the bankrupt estate to be distributed to unsecured creditors.

Citation
2012 BCSC 13
Parties
Bankrupt: Vernon Alexander Miller; Trustee in Bankruptcy: Eddy-Wright & Associates; Creditor: Canada Revenue Agency (Her Majesty the Queen in Right of Canada); Claimant (spouse): Jacqueline Miller
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
9 January 2012
Procedural Posture
In Bankruptcy and Insolvency / Application for Directions by Trustee
Outcome
Funds to remain in bankrupt estate for distribution to unsecured creditors; Jacqueline Miller has no entitlement to repayment and is not a secured or provable creditor; CRA is an unsecured creditor
Legal Topics
Proofs of Claim, Secured Claim Valuation, Release of Judgment, Directors' Liability, Priority of Creditors, Subrogation, Ex Parte James/mistake of Law, Post Bankruptcy Creditors
Source Language
English
Bankruptcy Insolvency Equity Secured Transactions Tax Law Property Law Proofs of Claim Secured Claim Valuation +6 more

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Parties

Vernon Alexander Miller

Bankrupt

Eddy-Wright & Associates

Trustee in Bankruptcy

Canada Revenue Agency (Her Majesty the Queen in Right of Canada)

Creditor

Jacqueline Miller

Claimant (spouse)

Procedural Posture

In Bankruptcy and Insolvency / Application for Directions by Trustee

Legal Issues

  1. 1 Whether $40,326.38 paid to CRA and delivered as release of judgment should be treated as secured or paid into the bankrupt estate
  2. 2 Whether Jacqueline Miller by her payment acquired CRA's security or is entitled to repayment (subrogation/standing in creditor's shoes)
  3. 3 Whether Ex Parte James or equitable relief for mistake applies

Ratio Decidendi

Master Young held that Jacqueline Miller is not a creditor provable in the bankruptcy and did not obtain CRA's security by her voluntary payment; there was no mistake of law that would trigger Ex Parte James; CRA's release of its judgment extinguished its secured status and it is now an unsecured creditor; therefore the funds remain part of the bankrupt estate to be distributed to unsecured creditors.

Court Disposition

Funds to remain in bankrupt estate for distribution to unsecured creditors; Jacqueline Miller has no entitlement to repayment and is not a secured or provable creditor; CRA is an unsecured creditor

Orders

  • Direction that the $40,326.38 and related surplus remain in the bankrupt estate for distribution to unsecured creditors
  • Jacqueline Miller shall not participate in distribution of this estate and shall not be repaid from estate funds in priority to unsecured creditors