Jean (Bankrupt), Re, (2012) 548 A.R. 190 (QB Reg.)

• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 17, 2012
• Citations: (2012), 548 A.R. 190 (QB Reg.);2012 ABQB 666

Jean (Bankrupt), Re (2012), 548 A.R. 190 (QB Reg.)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. NO.101

In The Matter Of the Bankruptcy of Andre Joseph Ernest Jean

(BE01 303722; 2012 ABQB 666)

Indexed As: Jean (Bankrupt), Re

Alberta Court of Queen's Bench

Judicial District of Calgary

Hanebury, Registrar

October 30, 2012.

Summary:

Jean applied for his discharge from bankruptcy. His former wife, Varga, opposed his discharge, arguing that his bankruptcy was yet one more tactic he had undertaken to avoid paying her maintenance and her costs resulting from their divorce and matrimonial property action. He alleged that he had no money and Varga's behaviour had left him virtually unemployable.

A Master of the Alberta Court of Queen's Bench, in a decision reported at 518 A.R. 215, denied the discharge and gave Jean time to prove his rehabilitation was possible. Jean was directed to reapply for his discharge in one year provided that he had satisfied certain conditions. The application for a discharge came before the court again in October 2012.

A Registrar of the Alberta Court of Queen's Bench granted a discharge on the condition that Jean pay $66,531 to the trustee for surplus income at the rate of $1,200 per month, with the total sum to be paid by June 2015. His discharge was also conditional on his maintenance payments and his taxes being filed and paid on time until the date of the discharge. The earliest date by which Jean could be discharged was July 2014 assuming that all conditions had been met. Jean was ordered to pay a further $250 per month to offset the ongoing costs incurred by the trustee.

Editor's Note: for a prior case involving Jean and Varga see 410 A.R. 260 (Q.B.).

Bankruptcy - Topic 8807

Discharge of debtor - General principles - Costs awarded in civil litigation - [See Bankruptcy - Topic 8986 ].

Bankruptcy - Topic 8922

Discharge of debtor - Conditional discharge - Considerations (incl. surplus income) - [See Bankruptcy - Topic 8925 ].

Bankruptcy - Topic 8925

Discharge of debtor - Conditional discharge - Upon payment to trustee - Jean became a bankrupt in 2009 - His primary creditors were the Canada Revenue Agency and his former wife (Varga) to whom he owed past maintenance and solicitor and client costs - His first application for a discharge was denied based on his reprehensible conduct that included flouting the court process, lying under oath, and assigning himself into bankruptcy in order to avoid paying the aforementioned solicitor and client costs - He was directed to reapply in one year provided that he had satisfied certain conditions - The trustee came before the court in July 2012 and indicated that the conditions were generally satisfied - Jean worked in the oil industry, which was cyclical - The company he worked for was owned by his partner - There were allegations of the use of company assets for personal purposes, improper splitting of income, unnecessary payment of subsistence, car and rental allowances, and possible hiding of income - A Registrar of the Alberta Court of Queen's Bench found that the facts and figures presented by the trustee based on his investigation of the above allegations were not so egregious that they were, on their face, incapable of justification - The court granted a discharge on the condition that Jean pay $66,531 to the trustee for surplus income at the rate of $1,200 per month, with the total sum to be paid by June 2015 - Given the seasonal and cyclical nature of Jean's business, an ongoing high monthly payment was not feasible - Jean was bankrupt as a result of his own wrongful or inappropriate actions - Accordingly, the discharge was also conditional on his maintenance payments and taxes being filed and paid on time until the date of the discharge - Regardless of Jean's conduct since bankruptcy, his conduct prior to bankruptcy was subject to censure - The most frequently used forms of censure were a suspension of the date of discharge and an additional payment requirement - Instead of a suspension, the court held that the earliest date by which Jean could be discharged, regardless of how quickly he made his payments, was July 2014, assuming all conditions had been met - Jean was also required to pay a further $250 per month to offset the ongoing costs incurred by the trustee.

Bankruptcy - Topic 8930

Discharge of debtor - Conditional discharge - When available - [See Bankruptcy - Topic 8925 ].

Bankruptcy - Topic 8986

Discharge of debtor - Liabilities not released by discharge - Maintenance or affiliation order - Jean's first application for a discharge from bankruptcy was denied based on his reprehensible conduct that included flouting the court process, lying under oath, and assigning himself into bankruptcy in order to avoid paying solicitor and client costs to his former wife (Varga) - He also owed Varga maintenance payments - Jean re-applied for a discharge - A Registrar of the Alberta Court of Queen's Bench granted the discharge on the condition that Jean pay an amount to the trustee for surplus income - The court could not order the trustee to pay the funds received to Varga to the detriment of another creditor - Any preference had to be a statutory preference - However, the Director of Maintenance Enforcement might have had a preferred claim for part of the arrears owing - Further, a debt for alimony was not released upon a bankrupt's discharge - Varga or the Director could take further action on the arrears upon Jean's discharge - Regarding Varga's claim for the solicitor and client costs that had been awarded to her, the court noted that certain claims tied to fraud could survive a discharge - Varga could pursue such a declaration from the court - See paragraphs 19 to 21.

Bankruptcy - Topic 8987

Discharge of debtor - Liabilities not released by discharge - Act of fraud of debtor - [See Bankruptcy - Topic 8986 ].

Bankruptcy - Topic 8994

Discharge of debtor - Liabilities not released by discharge - Costs - [See Bankruptcy - Topic 8986 ].

Cases Noticed:

Covey (Bankrupt), Re (2012), 547 A.R. 383; 2012 ABQB 565, refd to. [para. 21].

Counsel:

Sandy Lyons (Bromwich & Smith), Trustee;

Peggy Lynn Varga was self-represented;

Andre Joseph Ernest Jean was self-represented.

This application was heard on October 17, 2012, in Calgary, Alberta, by Hanebury, Registrar, of the Alberta Court of Queen's Bench, who delivered the following decision on October 30, 2012.