Neuls (Bankrupts), Re; Touche Ross Ltd. v. First City Trust Co. et al., (1985) 37 Sask.R. 60 (CA)

• Judge: Bayda, C.J.S., Brownridge and Tallis, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: March 01, 1985
• Jurisdiction: Saskatchewan
• Citations: (1985), 37 Sask.R. 60 (CA);1985 CanLII 2367 (BS SC);1985 CanLII 2367 (SK CA);17 DLR (4th) 554;56 CBR (ns) 132;37 Sask R 60

Neuls (Bankrupt), Re (1985), 37 Sask.R. 60 (CA)

MLB headnote and full text

Re Neuls; Touche Ross Limited, Trustee in Bankruptcy of the Neuls' Estates v. First City Trust Company, Great West Life Assurance Company, North West Life Assurance Company, Neuls and Neuls

(File Nos. 8270 and 8274)

Indexed As: Neuls (Bankrupts), Re; Touche Ross Ltd. v. First City Trust Co. et al.

Saskatchewan Court of Appeal

Bayda, C.J.S., Brownridge and Tallis, JJ.A.

March 1, 1985.

Summary:

A couple filed assignments in bankruptcy. Their trustee in bankruptcy applied to determine if their jointly-owned residence and their registered retirement savings plans were property divisible among their creditors.

The Saskatchewan Court of Queen's Bench, in a decision reported in 27 Sask.R. 115, held that their home and all but one of their R.R.S.P's were property divisible among their creditors.

The bankrupts appealed, on the ground that the trial judge erred in not finding the marital home exempt from inclusion as property of the bankrupts or in failing to determine the amount of the exemption. The bankrupts also appealed that all of their R.R.S.P.'s were exempt. The trustee in bankruptcy also appealed on the ground that the trial judge erred in holding that he could not sell the bankrupts' home while they occupied it and in holding that one particular R.R.S.P. was exempt.

The Saskatchewan Court of Appeal dismissed the bankrupts' appeal, but allowed the trustee's appeal in part. The Court of Appeal held that all the R.R.S.P.'s were property divisible among the bankrupts' creditors.

Bankruptcy - Topic 483

Property of bankrupt - Exemptions - Property exempt from seizure under provincial laws - Homestead or residence - Under s. 47(b) of the Bankruptcy Act property exempt from execution or seizure under the law of the province in which it was situated did not constitute property of the bankrupt - The jointly-owned residence of a bankrupt couple was exempt from execution to the value of $16,000 under s. 11 of the Exemptions Act - The Saskatchewan Court of Appeal affirmed that the home's value above an exemption of $16,000 each or $32,000 constituted property of the bankrupts - The court affirmed that the trustee could not sell the home to realize this value while it was occupied by the bankrupts - See paragraphs 9 to 21.

Bankruptcy - Topic 483

Property of bankrupt - Exemptions - Property exempt from seizure under provincial laws - R.R.S.P. - Under s. 47(b) of the Bankruptcy Act, property exempt from execution or seizure under the law of the province in which it was situated did not constitute property of the bankrupt - S. 9(1) of the Saskatchewan Exemptions Act provided an exemption from seizure by court process for persons having an interest in an annuity - The Saskatchewan Court of Appeal affirmed that R.R.S.P.'s constituted property of the bankrupt, because an annuity was only one of the retirement income options available - See paragraphs 22 to 23.

Bankruptcy - Topic 483

Property of bankrupt - Exemptions - Property exempt from seizure under provincial laws - R.R.S.P. - Under s. 47(b) of the Bankruptcy Act, property exempt from execution or seizure under the law of the province in which it was situated did not constitute property of the bankrupt - S. 158(2) of the Saskatchewan Insurance Act exempted from execution the rights and interests of an insured under life insurance contracts - The Saskatchewan Court of Appeal affirmed that R.R.S.P.'s (consisting of annuity contracts with life insurance companies) were not life insurance and so constituted the property of the bankrupt - See paragraphs 24 to 41.

Bankruptcy - Topic 483

Property of bankrupt - Exemptions - Property exempt from seizure under provincial laws - R.R.S.P. - The bankrupts were members of a deferred profit sharing plan of their employer - The employer went bankrupt - The bankrupts chose to transfer the funds into R.R.S.P.'s - A deferred profit sharing plan was exempt from execution under s. 19(1) of the Pension Benefits Act, and so was not property of a bankrupt pursuant to s. 47(b) of the Bankruptcy Act - The Saskatchewan Court of Appeal held that the R.R.S.P. was not exempt, because it represented a voluntary transfer of exempt property into nonexempt property - See paragraphs 42 to 48.

Words and Phrases

Annuitant - The Saskatchewan Court of Appeal affirmed that the word "annuitant" in s. 9(1) of the Exemptions Act, R.S.S. 1978, c. E-14, did not include a person who had an option to obtain an annuity and who may not exercise that option - See paragraphs 22 to 23.

Cases Noticed:

McDougall v. McDougall et al., [1919] 2 W.W.R. 637, appld. [para. 11].

In re Hayes, [1931] 1 W.W.R. 301, folld. [para. 13].

Royal Bank of Canada v. Friesen et al., [1980] 2 W.W.R. 580 (Sask. Q.B.), consd. [para. 17].

Higgins Company Limited v. McNabb, [1980] 2 W.W.R. 385; 2 Sask.R. 119, consd. [para. 19].

Phillips v. Eyre (1870), L.R. 6 Q.B. 1, refd to. [para. 21].

Nadeau v. Cook, [1948] 2 D.L.R. 783, refd to. [para. 21].

Re Lifshen (1978), 25 C.B.R.(N.S.) 12, affd. 25 C.R.R.(N.S.) 232, appld. [para. 22].

Gray v. Kerslake, [1958] S.C.R. 3, appld. [para. 29].

Scott v. Manufacturers Life Insurance Company and Public Trustee, [1974] 1 W.W.R. 112, refd to. [para. 29].

Re Larocque (1983), 38 O.R.(2d) 385, consd. [para. 29].

Re Pearson (1977), 73 D.L.R.(3d) 704, consd. [para. 30].

National Trust Co. Ltd. v. Lorenzetti et al. (1983), 41 O.R.(2d) 772, consd. [para. 31].

McMahon v. Canada Permanent Trust Company (1980), 32 C.B.R.(N.S.) 258 (B.C.C.A.), consd. [para. 32].

Re Berman (1979), 31 C.B.R.(N.S.) 313, refd to. [para. 33].

Regal Distributors Ltd. v. Freele, [1931] 1 W.W.R. 299, refd to. [para. 48].

Slater v. Rodgers (1897), 2 Terr. L.R. 310, refd to. [para. 48].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1970, c. B-3, sect. 47 [para. 8].

Exemptions Act, R.S.S. 1978, c. E-14, sect. 2(1) [para. 10]; sect. 2(1)(10) [para. 12]; sect. 9(1) [para. 22]; sect. 10 [para. 10]; sect. 11 [para. 10]; sect. 12 [para. 10].

Saskatchewan Insurance Act, R.S.S. 1978, c. S-26, sect. 2(kk) [paras. 28, 34]; sect. 133(c), sect. 133(e), sect. 133(j), sect. 133(1) [para. 39]; sect. 158(1) [paras. 26-27]; sect. 158(2) [paras. 24, 30].

Pension Benefits Act, R.S.S. 1978, c. P-6, sect. 2(i) [para. 43]; sect. 19(1) [para. 43].

Counsel:

D.G. MacKay, for the appellants;

W.L. Softley, for the respondents, Touche Ross Limited;

D.C. Hunter, for the respondent, Excelsior Life Insurance Company.

These appeals were heard before Bayda, C.J.S., Brownridge and Tallis, JJ. A., of the Saskatchewan Court of Appeal, whose decision was delivered on March 1, 1985 by Brownridge, J.A.