Marzetti v. Marzetti (Bankrupt), (1991) 123 A.R. 1 (QB)

• Judge: Wachowich, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: August 16, 1991
• Citations: (1991), 123 A.R. 1 (QB)

Marzetti v. Marzetti (1991), 123 A.R. 1 (QB)

MLB headnote and full text

In the matter of the bankruptcy of Arden Anthony Marzetti

(Action No. 28897)

Jacqueline Jeannine Marzetti (petitioner) v. Arden Anthony Marzetti (respondent)

(Action No. 4803 61498)

Indexed As: Marzetti v. Marzetti (Bankrupt)

Alberta Court of Queen's Bench

In Bankruptcy

Judicial District of Edmonton

Wachowich, J.

August 16, 1991.

Summary:

The Director of Maintenance Enforcement and the trustee in bankruptcy each claimed entitlement to an income tax refund owed to the bankrupt husband.

A Master of the Alberta Court of Queen's Bench, in Bankruptcy, in a decision reported 112 A.R. 70, held that the refund was prop­erty vesting in the trustee. The Director appealed.

The Alberta Court of Queen's Bench reversed the Master's decision and held that the Director was entitled to the refund.

Bankruptcy - Topic 440.2

Property of bankrupt - Post-bankruptcy income tax refunds - A bankrupt husband entitled to a post-bankruptcy income tax refund owed maintenance arrears - Both the Director of Maintenance Enforcement and the trustee in bankruptcy claimed entitlement to the refund - The Alberta Court of Queen's Bench, In Bankruptcy, held that the Director was entitled to the refund - Under ss. 67(c) and (d) of the Bankruptcy Act, the refund was not property of the bankrupt vesting in the trustee - Also the bankrupt could not assign the refund to the trustee - See paragraphs 25 to 38.

Bankruptcy - Topic 440.2

Property of bankrupt - Post-bankruptcy income tax refunds - A bankrupt husband entitled to a post-bankruptcy income tax refund owed maintenance arrears - Both the Director of Maintenance Enforcement and the trustee in bankruptcy claimed entitlement to the refund - The Alberta Court of Queen's Bench, In Bankruptcy, held that the refund was not property exempted from seizure under s. 67(b) of the Bankruptcy Act - See paragraphs 20 to 24.

Bankruptcy - Topic 440.2

Property of bankrupt - Post-bankruptcy income tax refunds - A bankrupt husband entitled to a post-bankruptcy income tax refund owed maintenance arrears - Both the Director of Maintenance Enforcement and the trustee in bankruptcy claimed entitlement to the refund - The Alberta Court of Queen's Bench, In Bankruptcy, affirmed that the refund was not wages under s. 68 of the Bankruptcy Act - See paragraphs 15 to 16 - Under ss. 67(c) and (d) the refund was not property of the bankrupt vesting in the trustee and could not be assigned by the bankrupt to the trustee - See paragraphs 17 to 29.

Family Law - Topic 4054.1

Divorce - Corollary relief - Maintenance - Enforcement - Bankruptcy of payor - Effect of - A bankrupt husband entitled to a post-bankruptcy income tax refund owed maintenance arrears - The Director gar­nished the refund - The bankrupt assigned the refund to the trustee - Both the Direc­tor of Maintenance Enforcement and the trustee in bankruptcy claimed entitlement to the refund - The Alberta Court of Queen's Bench, In Bankruptcy, held that the Director had priority to the refund.

Cases Noticed:

Marzetti v. Marzetti (1990), 112 A.R. 70; 2 C.B.R.(3d) 109, refd to. [para. 5].

Wagner, Re (1980), 35 C.B.R.(N.S.) 309, refd to. [para. 20].

Egilson, Re (Trustee of) (1986), 61 C.B.R. (N.S.) 293, refd to. [para. 21].

Pannell Kerr MacGillivray Inc. and Beer, Re (1988), 69 C.B.R.(N.S.) 203, refd to. [para. 21].

Vachon v. Canada Employment, [1985] 2 S.C.R. 417; 63 N.R. 81, refd to. [para. 21].

Northward Airlines Ltd., Re (1981), 36 A.R. 142; 37 C.B.R.(N.S.) 137 (Q.B.), dist. [para. 31].

Tailby v. Official Receiver (1888), 13 App. Cas. 523 (H.L.), refd to. [para. 33].

Carex Ltd. v. R. (1983), 21 B.L.R. 200 (F.C.A.), refd to. [para. 39].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1985, c. B-3, sect. 67 [para. 18]; sect. 67(a), sect. 67(b) [para. 20]; sect. 67(c) [para. 16]; sect. 67(d) [para. 25]; sect. 68 [para. 15].

Family Orders and Agreements Enforce­ment Assistance Act, R.S.C. 1985 (2nd Supp.), c. 4, preamble [para. 27]; sect. 23, sect. 24 [para. 10]; sect. 45 [para. 28].

Family Orders and Agreements Enforce­ment Assistance Act Regulations, Family Support Orders and Agreements Gar­nishment Regulations, S.O.R. 88-181, sect. 3 [para. 10].

Financial Administration Act, R.S.C. 1985, c. F-11, sect. 66, sect. 67 [para. 20].

Maintenance Enforcement Act, R.S.A. 1980, c. M-0.5, sect. 15 [para. 9].

Tax Rebate Discounting Act, R.S.C. 1985, c. T-3, generally [para. 30].

Western Grain Stabilization Act, R.S.C. 1985, c. W-7, sect. 25 [para. 23].

Counsel:

Robert Moen, for the Department of Jus­tice, Canada;

Michael McCabe, for the Trustee in Bank­ruptcy;

Rick Reeson, for the Superintendent of Bankruptcy;

Stan Rutwind, for the Attorney General of Alberta;

Rita Sumka, for the Director, Maintenance Enforcement Program.

This case was heard before Wachowich, J., of the Alberta Court of Queen's Bench, In Bankruptcy, Judicial District of Edmonton, who delivered the following judgment on August 16, 1991.