Lewer (Bankrupt), Re, 2010 NSSC 98

• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: March 15, 2010
• Jurisdiction: Nova Scotia
• Citations: 2010 NSSC 98;(2010), 289 N.S.R.(2d) 171 (SC Reg.)

Lewer (Bankrupt), Re (2010), 289 N.S.R.(2d) 171 (SC Reg.);

    916 A.P.R. 171

MLB headnote and full text

Temp. Cite: [2010] N.S.R.(2d) TBEd. MR.049

In the Matter of the Bankruptcy of George Lewer

(B 34328; 2010 NSSC 98)

Indexed As: Lewer (Bankrupt), Re

Nova Scotia Supreme Court

In Bankruptcy and Insolvency

Cregan, Registrar

March 15, 2010.

Summary:

A bankrupt applied for a discharge from bankruptcy. At issue was whether the proceeds from a Locked-In Retirement Account should be considered as either exempt or non-exempt property of the bankrupt under s. 67 of the Bankruptcy and Insolvency Act (BIA) or as income under s. 68.

A Registrar of the Nova Scotia Supreme Court, In Bankruptcy and Insolvency, held that the proceeds should be treated as income under s. 68 of the BIA.

Bankruptcy - Topic 423

Property of bankrupt - Particular property - Revenue of bankrupt (incl. wages) - A bankrupt applied for a discharge - At issue was whether the proceeds from a Locked-In Retirement Account (LIRA) should be considered as either exempt or non-exempt property of the bankrupt under s. 67 of the Bankruptcy and Insolvency Act or as income under s. 68 - A Registrar of the Nova Scotia Supreme Court, In Bankruptcy and Insolvency, held that the proceeds should be treated as income under s. 68 - Before his bankruptcy, the bankrupt's employment was terminated, and approximately $11,000 in credit pensions from that employment was transferred to a LIRA - This was done under the laws of Ontario, where he lived at that time - The Ontario legislation under which this LIRA was created provided that LIRA funds were normally "locked in" until one took them as retirement income after age 55 - However, low income was one of the special circumstances which permitted the holder access to the LIRA - The bankrupt qualified under this heading and after having made his assignment withdrew all the funds in his LIRA - They were a small amount in the context of the income that the bankrupt had made and expected to make as he re-established himself - Income was a more appropriate description of these proceeds than capital or property - He used them for his family's living expenses - They were soon exhausted - As well, lump sums which could be broken down as having been earned over a period of time should be treated as income.

Bankruptcy - Topic 486

Property of bankrupt - Exemptions or exclusions - Proceeds from sale of exempt property - [See Bankruptcy - Topic 423 ].

Cases Noticed:

Gruber (Bankrupt), Re (1993), 143 A.R. 301; 22 C.B.R.(3d) 262 (Q.B. Bktcy.), dist. [para. 8].

Neuls (Bankrupts), Re; Touche Ross Ltd. v. First City Trust Co. et al. (1985), 37 Sask.R. 60; 56 C.B.R. 132 (C.A.), refd to. [para. 10].

Poulin v. Morency (Serge) et Associés Inc., [1999] 3 S.C.R. 351; 245 N.R. 312; 177 D.L.R.(4th) 283, refd to. [para. 11].

Ford (Bankrupt), Re (2009), 277 N.S.R.(2d) 1; 882 A.P.R. 1; 2009 NSSC 124 (Bktcy. Reg.), refd to. [para. 17].

Marzetti v. Marzetti (Bankrupt), [1994] 2 S.C.R. 765; 169 N.R. 161; 155 A.R. 340; 73 W.A.C. 340; 26 C.B.R.(3d) 161, refd to. [para. 18].

Landry (Bankrupt), Re (2000), 135 O.A.C. 381; 21 C.B.R.(4th) 58 (C.A.), refd to. [para. 20].

Ruelland (Bankrupt), Re (2005), 235 N.S.R.(2d) 287; 747 A.P.R. 287; 2005 NSSC 207 (Bktcy. Reg.), refd to. [para. 22].

Counsel:

Ian George Lewer, the bankrupt, representing himself;

Joseph Wilkie, representing the Trustee, WBLI Inc;

Mike Chisholm, representing the Office of the Superintendent of Bankruptcy.

This application was heard by Cregan, Registrar, of the Nova Scotia Supreme Court, In Bankruptcy and Insolvency, who delivered the following decision on March 15, 2010.