Decker (Bankrupt), Re, 2009 ABCA 287

• Judge: Watson, J.A.
• Court: Court of Appeal (Alberta)
• Case Date: September 01, 2009
• Citations: 2009 ABCA 287;(2009), 464 A.R. 40 (CA)

Decker (Bankrupt), Re (2009), 464 A.R. 40 (CA);

      467 W.A.C. 40

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. SE.053

In The Matter Of the Bankruptcy of Allan John Decker

Cameron Okolita Inc. Trustee in Bankruptcy of the Estate Of Allan John Decker (applicant) v. Superintendent of Bankruptcy, Allan John Decker, Snyder & Associates LLP, Canada (Customs and Revenue Agency) and Alberta (Minister of Health and Wellness)

(respondents)

(0903-0178-AC; 2009 ABCA 287)

Indexed As: Decker (Bankrupt), Re

Alberta Court of Appeal

Watson, J.A.

September 9, 2009.

Summary:

A bankrupt (Decker) made a voluntary assignment in bankruptcy. Four proofs of claim were filed and a distribution was made to the creditors, including the Canada Revenue Agency (CRA). The trustee was discharged. Subsequently, the CRA took action against the bankrupt, including garnishing his wages. The bankrupt sought the assistance of the trustee, who applied and was re-appointed as trustee. Other than the CRA, no other creditor took action against the bankrupt. The trustee realized further funds in the bankrupt's estate and a dividend was available for distribution. The trustee applied for advice as to whom the net proceeds realized in the bankruptcy after the re-appointment of the trustee were to be paid - all creditors, some creditors or the bankrupt. The main issue for which directions were sought was whether or not creditors, whose claims may have become wholly or partly limitation barred between the date of the discharge of the trustee and the date of re-appointment of the trustee, should share in the dividends now to be distributed from the estate.

The Alberta Court of Queen's Bench, per Burrows, J., held that he would follow a decision of Veit, J., in Re Dyrland (2008) on this matter, whether he agreed with it or not. According to Dyrland, once a trustee was discharged, the statutory stay of proceedings against the bankrupt lifted pursuant to s. 69.3 of the Bankruptcy and Insolvency Act. Veit, J., found therefore that claims against the bankrupt could proceed. She went on to conclude that a relevant limitation period under the Limitations Act on such claims would then start to run again. In her view, however, claims by Canada under s. 222 of the Income Tax Act would not be statute barred by the Limitations Act on the basis of vires grounds. Decker's bankruptcy trustee applied for leave to appeal the decision of Burrows, J. The trustee asserted that the Alberta Association of Insolvency and Restructuring Professionals had, in effect, selected this case to seek the Court of Appeal's guidance on this point, notably in light of Veit, J.'s, decision in Dyrland. The applicant expressed concern about the implications of Dyrland and wished to challenge it for several reasons.

The Alberta Court of Appeal, per Watson, J.A., granted leave on the issue of whether or not Burrows, J., was correct to apply the decision in Dyrland, wholly or partly.

Bankruptcy - Topic 6888

Practice - Appeals - Leave to appeal - Section 193(e) of the Bankruptcy and Insolvency Act provided that an appeal to the Court of Appeal was available from any order or decision of a judge of the bankruptcy court with leave of a judge of the Court of Appeal - The Alberta Court of Appeal, per Watson, J.A., reviewed the test for leave under s. 193(e) - See paragraphs 1 and 2.

Bankruptcy - Topic 6888

Practice - Appeals - Leave to appeal - After a bankruptcy trustee was discharged, a creditor (Canada Revenue Agency), took action against the bankrupt (Decker) - The trustee obtained a re-appointment and further funds were realized for distribution - The trustee sought advice as to who should get the further funds, all creditors, some creditors or the bankrupt and whether the claims had become statute barred between the trustee's discharge and reappointment - The Alberta Court of Queen's Bench, per Burrows, J., held that he would follow a decision of Veit, J., in Re Dyrland (2008), on this matter, whether he agreed with it or not - According to Dyrland, once a trustee was discharged, the statutory stay of proceedings against the bankrupt lifted, therefore, claims against the bankrupt could proceed - Further, limitation periods on some claims would then start to run again - Decker's bankruptcy trustee applied for leave to appeal the decision of Burrows, J. - The trustee asserted that this was a test case to seek the Court of Appeal's guidance on this point, notably in light of Veit, J.'s, decision in Dyrland - The Alberta Court of Appeal, per Watson, J.A., granted leave on the issue of whether or not Burrows, J., was correct to apply the decision in Dyrland, wholly or partly.

Cases Noticed:

Fantasy Contstruction Ltd. et al. (Bankrupts), Re (2007), 417 A.R. 255; 410 W.A.C. 255; 2007 ABCA 335, refd to. [para. 2].

West Edmonton Mall Property Inc. v. Duncan & Craig - see Devcor Investment Corp. (Bankrupt), Re.

Devcor Investment Corp. (Bankrupt), Re (2001), 277 A.R. 93; 242 W.A.C. 93; 2001 ABCA 40, refd to. [para. 2].

Dyrland (Bankrupt), Re (2008), 459 A.R. 118; 96 Alta. L.R.(4th) 27; 2008 ABQB 356, refd to. [para. 6].

Kingstreet Investments Ltd. et al. v. New Brunswick (Minister of Finance) et al., [2007] 1 S.C.R. 3; 355 N.R. 336; 309 N.B.R.(2d) 255; 799 A.P.R. 255; 2007 SCC 1, refd to. [para. 8].

Yellowbird v. Samson Cree Nation No. 444 et al. (2008), 433 A.R. 350; 429 W.A.C. 350; 2008 ABCA 270, refd to. [para. 8].

A.B. v. C.D. (2008), 429 A.R. 89; 421 W.A.C. 89; 2008 ABCA 51, refd to. [para. 13].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 193(e) [para. 1].

Counsel:

B.W. Summers, for the applicant, Cameron Okolita Inc., trustee in bankruptcy of the Estate of Allan John Decker;

No one appeared for the respondents.

This application was heard on September 1, 2009, by Watson, J.A., of the Alberta Court of Appeal, who filed the following reasons for judgment at Edmonton, Alberta, on September 9, 2009.