Bourassa (Bankrupt), Re, 2002 ABCA 205

• Judge: Fraser, C.J.A., McClung and Costigan, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: September 12, 2002
• Citations: 2002 ABCA 205;(2002), 312 A.R. 19 (CA)

Bourassa (Bankrupt), Re (2002), 312 A.R. 19 (CA);

    281 W.A.C. 19

MLB headnote and full text

Temp. Cite: [2002] A.R. TBEd. SE.039

In The Matter Of the Bankruptcy of Cory Shane Bourassa, Estate No. 82100

The Attorney General of Canada for Human Resources Development Canada (appellant/appellant) v. Faber and Company Inc. Trustees in Bankruptcy for Cory Shane Bourassa (respondent/respondent)

(0103-0180-AC; 2002 ABCA 205)

Indexed As: Bourassa (Bankrupt), Re

Alberta Court of Appeal

Fraser, C.J.A., McClung and Costigan, JJ.A.

September 12, 2002.

Summary:

The Employment Insurance Commission determined that Bourassa made a "false and misleading" claim under s. 38 of the Employment Insurance Act. Subsequently, the Registrar of the Alberta Court of Queen's Bench, In Bankruptcy, granted Bourassa an order of discharge. The order included a clause requiring the Crown to make a further application if it wished to treat its debt as a fraudulent debt to be exempted from discharge under s. 178(1)(e) of the Bankruptcy and Insolvency Act. The Crown appealed, arguing that it did not require a court declaration to have its debt survive the bankruptcy under s. 178(1)(e).

The Alberta Court of Queen's Bench dismissed the appeal. The Crown appealed.

The Alberta Court of Appeal dismissed the appeal.

Bankruptcy - Topic 8987

Discharge of debtor - Liabilities not released by discharge - Act of fraud of debtor - The Employment Insurance Commission determined that Bourassa made a "false and misleading" claim under s. 38 of the Employment Insurance Act - The Crown argued that the underlying debt represented fraudulently obtained property and, therefore, survived Bourassa's discharge from bankruptcy pursuant to s. 178(1)(e) of the Bankruptcy and Insolvency Act - The Trustee in Bankruptcy argued that the establishment of fraud, triggering a s. 178(1)(e) exemption, required a court declaration and could not be proven through the Commission's internal procedures - The Alberta Court of Appeal stated that "While it is true that s. 178(1)(e) does not expressly require a court declaration, a creditor, even the Crown, cannot be permitted to make its own determination of fraud and then revert to collection of its debt on that basis. A court order declaring fraud, whether obtained before, during or after a discharge from bankruptcy, is required to free a creditor to pursue its claim against a discharged bankrupt." - See paragraph 5.

Bankruptcy - Topic 8987

Discharge of debtor - Liabilities not released by discharge - Act of fraud of debtor - Section 178(e) of the Bankruptcy and Insolvency Act provided that any debt "for obtaining property by false pretences or fraudulent misrepresentation" was not released by a discharge from bankruptcy - The Alberta Court of Appeal reviewed various procedures for seeking a finding of "false pretences or fraudulent misrepresentation" for the purposes of the s. 178(e) exemption - See paragraph 6.

Cases Noticed:

Berthold v. McLellan (1994), 19 Alta. L.R.(3d) 28 (C.A.), refd to. [paras. 6, 39].

Moose Jaw Credit Union Ltd. v. Kennedy (1981), 13 Sask.R. 252 (Q.B.), refd to. [para. 6].

Canadian Imperial Bank of Commerce v. Aksoy (1989), 75 C.B.R.(N.S.) 248 (Ont. Dist. Ct.), refd to. [para. 6].

Smith (Bankrupt), Re (1985), 43 Sask.R. 27 (Q.B.), affd. (1986), 45 Sask.R. 240 (C.A.), refd to. [paras. 6, 39].

Beneficial Finance Co. of Canada v. Williamson (1971), 16 C.B.R.(N.S.) 30 (Ont. Co. Ct.), refd to. [para. 6].

Demitor (Bankrupt), Re (1993), 137 A.R. 381 (Q.B. Master), refd to. [paras. 6, 39].

Husky Oil Operations Ltd. v. Forest Oil Corp. (1990), 105 A.R. 27; 73 Alta. L.R.(2d) 223 (Q.B.), refd to. [para. 9].

Gerber v. Eagle Star Insurance Co., [1981] I.L.R. 1-1442 (B.C.S.C.), refd to. [para. 9].

McLaughlin v. Colvin, [1941] 4 D.L.R. 568 (Ont. C.A.), affd. [1942] 3 D.L.R. 292 (S.C.C.), refd to. [para. 9].

Wong v. Schienbein et al. (1986), 49 Sask.R. 86 (Q.B.), refd to. [para. 9].

Snider v. New Brunswick Telephone Co. (1986), 69 N.B.R.(2d) 8; 177 A.P.R. 8 (T.D.), affd. (1987), 78 N.B.R.(2d) 266; 198 A.P.R. 266 (C.A.), refd to. [para. 9].

Prevost v. Canada (Employment and Immigration Commission) (1980), 36 C.B.R.(N.S.) 103 (F.C.T.D.), refd to. [para. 30].

Courty v. Commission de l'Emploi et de l'Immigration du Canada (1987), 16 F.T.R. 36 (T.D.), refd to. [para. 34].

Canada (Attorney General) v. Gates, [1995] 3 F.C. 17; 184 N.R. 236 (F.C.A.), refd to. [para. 34].

Canada (Attorney General) v. Antonio (1998), 5 C.C.L.I.(3d) 105 (F.C.A.), refd to. [para. 35].

McDonald v. Canada Employment and Immigration Commission (1991), 131 N.R. 389; 50 Admin. L.R. 258 (F.C.A.), refd to. [para. 35].

Herdman (Bankrupt), Re (1992), 128 A.R. 127 (Q.B.), refd to. [para. 45].

McKee (Bankrupt), Re (1997), 203 A.R. 283 (Q.B.), refd to. [para. 45].

Mariyanayagam, Re (1998), 10 C.B.R.(4th) 105 (Ont. Gen. Div.), refd to. [para. 45].

Morgan v. Demers (1986), 71 A.R. 244 (C.A.), refd to. [para. 45].

Kushnir v. Voshall (1989), 102 A.R. 146 (Q.B.), refd to. [para. 45].

Beneficial Finance Corp. v. Durward (1961), 2 C.B.R.(N.S.) 173 (Ont. S.C. Bktcy.), refd to. [para. 46].

Graves v. Hughes (2001), 194 N.S.R.(2d) 51; 606 A.P.R. 51; 25 C.B.R.(4th) 255 (S.C.), refd to. [para. 46].

Phillips (Bankrupt), Re (1994), 156 A.R. 123 (Q.B.), refd to. [para. 46].

Wilson v. Wilson et al. (2001), 21 C.B.R.(4th) 304 additional reasons [2001] O.T.C. Uned. 43 (Ont. Sup. Ct.), refd to. [para. 46].

Peterson v. Peterson, [1996] 3 W.W.R. 426; 178 A.R. 70; 110 W.A.C. 70 (C.A.), refd to. [para. 47].

Jerrard v. Peacock (1985), 61 A.R. 161 (Q.B.), refd to. [para. 47].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 178(1)(e) [para. 1].

Employment Insurance Act, S.C. 1996, c. 23, sect. 38(1) [para. 26].

Authors and Works Noticed:

Canadian Abridgment (2nd Ed. 1991), vol. R17D, p. 1689 et seq. [para. 9].

Kerr, The Law of Fraud and Mistake, generally [para. 9].

Counsel:

R. Nichwolodoff, for the appellant;

D. Tkachuk, for the respondent.

This appeal was heard by Fraser, C.J.A., McClung and Costigan, JJ.A., of the Alberta Court of Appeal. The judgment of the Court was delivered on September 12, 2002, including the following opinions:

McClung, J.A. (Costigan, J.A., concurring) - see paragraphs 1 to 15;

Fraser, C.J.A. - see paragraphs 16 to 49.