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The Court of Appeal dismissed appeals from bankruptcy discharge annulments, holding that annulment strips the discharge of legal effect and makes later-acquired property vest in the trustee.
The court annulled the Youngs’ bankruptcies after finding they failed to disclose their beneficial interest in the Victoria property and related sale proceeds.
Registrar did not err: the appellant was not entitled to the PPSA vehicle exemption given the PMSI context and the intervening CSC and wrongful sale; duties in s.158 persisted such that failure to honour CSC obligations and unilateral sale justified annulment under s.180(1); venue issue was not properly raised; telephone hearing did not breach procedural fairness. Appeal dismissed.
Source excerpt
The Registrar annulled the bankrupt's discharge under s.180(1) BIA because the bankrupt failed to perform his statutory duties by ceasing payments on an agreed repurchase of an estate vehicle, removing and selling the vehicle and retaining proceeds; the PPSA exemption s.59(3)(b) did not apply because of a perfected purchase money security interest; the bankrupt must pay $8,662.50 for the vehicle balance plus $500 disbursements (total $9,162.50) before he may apply for discharge; Trustee erred in seeking an absolute discharge but annulment and payment were appropriate remedies.
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The Court of Appeal admitted the psychiatric reports as fresh evidence, concluded the Registrar and appeal judge failed to give proper weight to the appellant's documented mental health impairments which could explain the failure to account for settlement funds, found the Registrar erred in relying on a non‑existent nondisclosure fact and that imposing a $61,000 payment condition was unreasonable and contrary to the rehabilitative purpose of the BIA; accordingly the appellate court set aside the lower orders and granted an absolute discharge.
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A bankrupt artist’s discharge was suspended until March 1, 2018 after the court found blameworthy nondisclosure of dealings with an opposing creditor, but not enough to refuse discharge.
The court fixed Kimberley Hill’s provable bankruptcy claim, appointed her as inspector, and approved the trustee’s and solicitor’s interim fees, while holding her post-bankruptcy costs were not provable.
Annulment was denied because statutory grounds for annulment under s.180 were not established — there was no evidence of fraud or failure to perform duties — and authority confirms an absolute discharge effectively closes the relationship between bankrupt and creditors, precluding annulment for trustee error.
Source excerpt
Because the bankrupt acquired the commuted pension while undischarged and knowingly failed to disclose or deliver it to the trustee in breach of s.158(a) and s.158(n.1), to the prejudice of creditors, the court annulled her discharge under s.180(1).
Source excerpt
Supplemental reasons clarify that an oral reference at the hearing was not treated as an amendment to the filed motion. The court also noted standing and mootness problems.
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