Bartlett (Re)

Bartlett (Re) Court Supreme Court Date 2001-05-09 Citation 2001 NSSC 201 Docket 23281, Estate 51-074529 Judge/Registrar/Adjudicator Hill, Tim (Registrar) Document Type Decision Relations Library Sheet - Bartlett (Re) - 2001 NSSC 201 - 2001-05-09 - Library Sheet Decision Content CANADA PROVINCE OF NOVA SCOTIA COURT NO: 23281 ESTATE NO: 51-074529 IN THE SUPREME COURT OF NOVA SCOTIA IN BANKRUPTCY IN THE MATTER OF THE BANKRUPTCY OF STEPHEN ROSS BARTLETT _____________________________________________________________________ D E C I S I O N _____________________________________________________________________ Cite as Bartlett (Re), 2001 NSSC 201 HEARD BEFORE: Tim Hill, Registrar in Bankruptcy DATE HEARD: May 9, 2001 DECISION: May 9, 2001 WRITTEN REASONS: May 30, 2001 COUNSEL: Mr. Ronald Whiting representing Service Nova Scotia and Municipal Relations Mr. Darrin Ulley representing the Superintendent of Bankruptcy On September 24, 1998, Stephen Ross Bartlett, who I will refer to in this decision as the debtor, filed a consumer proposal and the Province of Nova Scotia was appointed as the Administrator under that Proposal. Because of a default in payments (payments not being received for a period of more than three months) on June 1, 2000, the consumer proposal was deemed annulled as provided for in section 66.31 of the Bankruptcy and Insolvency Act. I am dealing with this application this morning together with 77 other applications made by the Province of Nova Scotia, all involving similar circumstances and in all of which the Province is seeking the same relief. In this application the Province seeks an order from the court which would allow this debtor, and the others in the applications before me, to make another consumer proposal. Section 66.32(1) of the Act states as follows: Effects of annulment – Unless the court otherwise orders, where a consumer proposal is annulled or deemed annulled, the consumer debtor (a) may not make another consumer proposal, and (b) is not entitled to any relief provided by section 69 to 69.2 until all claims for which proofs of claim were filed and accepted are either paid in full or are extinguished by the operation of subsection 178(2). What the Province of Nova Scotia therefore is seeking from the court today is an order in respect to this file and the other files allowing the debtors to make further proposals (section 66.32(1) of the Act). In support of this application an affidavit has been filed and sworn to by Ronald Whiting, an Administrator employed by the Province of Nova Scotia, and that sets out the particular circumstances of the debtor. The germane circumstances here are as follows. Mr. Bartlett had marital problems and he had problems in paying college tuition and in paying expenses for his daughter. Apparently there was a lack of follow-up on the part of the Administrator employed by the Province of Nova Scotia and the debtor himself did not relay information to the Province to explain his difficulties. In any event the result was that the proposal became in excess of three months in arrears and there was a deemed annulment under the Act: section 66.31(1) of the Act. There is nothing in the Act or any of the case law that I can find which would assist me in determining when under section 66.32(1) the court should issue an order allowing a debtor to make a further proposal. It is clear from the provision that the issuance of an order is discretionary. However, as I have indicated there is no case law on point. Having given the matter what I believe to be careful consideration I am of the view that it is incumbent on the debtor on an application such as this, where the debtor seeks to have the court exercise its discretion, to show firstly that there is a reasonable explanation for the default, and secondly to demonstrate that the second proposal contemplated has a reasonable prospect of being accepted by the creditors. I accept in the case of this debtor that a reasonable explanation for the default has been shown. On the second point, the requirement that the debtor demonstrate that the second proposal contemplated has a reasonable prospect of being accepted by creditors, I do not think I need inquire into whether or not the second proposal is likely to be in the best interests of creditors. The creditors make that determination themselves. I simply need to look at it and come to a conclusion as to whether or not there is a reasonable prospect of it being accepted. I have looked at that in this case and I think there is a reasonable prospect of it being accepted. I would therefore grant the order as sought by the Province of Nova Scotia. I would make two other comments. The Province of Nova Scotia also sought an order which would limit the fees of the Administrator. In other words there would be no fresh fees. I do not see the need for me to issue such an order. That is a matter between the Administrator and the debtor and the creditors, not something I need to deal with. I would also point out that I am not making any determination as to whether or not this debtor or indeed any of the other debtors I will deal with today would qualify to make a consumer proposal per se. The Administrator has the obligation as set out in the case Re Ter Mors (1998), 5 C.B.R. (4th) 109, 128 Man. R. (2d) 23 to ensure that when a consumer proposal is made the debtor at the time the proposal is made qualifies. The Province of Nova Scotia should make that inquiry with respect to each of these cases when a new proposal is made, to ensure that the individual at the time the new proposal is made does qualify to make the proposal. The most obvious limitation is the amount of debt, and some of these people may have accumulated more debt, and the Province will need to ensure that they fall within the boundaries. The Order is granted. Dated at Halifax, Nova Scotia this 30th day of May, 2001. __________________ Registrar in Bankruptcy