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The court held that Mr. Williams’ $6.8 million disgorgement debt arose from fraud and is not discharged in bankruptcy under s. 178(1)(e) BIA.
The Supreme Court held that BC Securities Commission disgorgement orders survive bankruptcy under s. 178(1)(e), but administrative penalties do not.
Because the bankrupt admitted knowingly filing false EI claims and obtaining money thereby, that liability falls within s.178(1)(e) BIA and is not discharged; the admission also constitutes a s.173(1) fact precluding an absolute discharge, therefore the court granted a conditional outcome and declared the EI overpayment not discharged and required clarifying language in the discharge order.
Source excerpt
The court dismissed an application to keep a default judgment alive after bankruptcy, finding the pleadings did not allege fraud with required particularity.
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