Pitcher (Bankrupt), Re, 2015 MBQB 57

• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: April 01, 2015
• Jurisdiction: Manitoba
• Citations: 2015 MBQB 57;(2015), 317 Man.R.(2d) 18 (QB Reg.)

Pitcher (Bankrupt), Re (2015), 317 Man.R.(2d) 18 (QB Reg.)

MLB headnote and full text

Temp. Cite: [2015] Man.R.(2d) TBEd. MY.007

In The Matter Of The Bankruptcy Of Twila Joyce Pitcher

(BK 13-01-03101; 2015 MBQB 57)

Indexed As: Pitcher (Bankrupt), Re

Manitoba Court of Queen's Bench

Winnipeg Centre

Sharp, Registrar

April 1, 2015.

Summary:

The first time bankrupt's application for discharge was opposed by the Minister of National Revenue, who asserted that, because this was a tax-driven bankruptcy, the bankrupt should be required to pay $14,450 in installments of $460 per month for 36 months, as well as having the discharge suspended for the same period. The bankrupt's total unsecured liabilities were $597,377, of which $512,376 was income tax debt, which resulted from a reassessment of the bankrupt's 2007 to 2010 income taxes.

A Registrar of the Manitoba Court of Queen's Bench granted the discharge on the condition that the bankrupt pay $12,600 in installments of at least $350 per month for 36 months. There was no period of suspension.

Editor's Note: For a related decision regarding this bankrupt, see (2015), 316 Man.R.(2d) 155.

Bankruptcy - Topic 8805

Discharge of debtor - General principles - Considerations - Income tax liability - The first time bankrupt's application for discharge was opposed by the Minister of National Revenue, who asserted that, because this was a tax-driven bankruptcy, the bankrupt should be required to pay $14,450 in installments of $460 per month for 36 months, as well as having the discharge suspended for the same period - The bankrupt's total unsecured liabilities were $597,377, of which $512,376 was income tax debt, which resulted from a reassessment of the bankrupt's 2007 to 2010 income taxes - A Registrar of the Manitoba Court of Queen's Bench granted the discharge on the condition that the bankrupt pay $12,600 in installments of at least $350 per month for 36 months - Given the manner in which the bankrupt had conducted herself in what was her first bankruptcy, a suspension was not warranted - The specific considerations to be made in certain income tax driven bankruptcies under s. 172.1 of the Bankruptcy and Insolvency Act were intended to elevate income tax debt to a special status - The goal was deterrence - With that objective in mind and on the particular facts here, the Minister's position was not unreasonable - The bankrupt's lifestyle with the benefit of the income that had given rise to the liability was "anything but 'frugal'" - Further, the bankrupt's only response was to file an assignment without recourse to any appeals, payments or other efforts to deal with the issue.

Bankruptcy - Topic 8861

Discharge of debtor - Suspension of discharge - General - [See Bankruptcy - Topic 8805 ].

Bankruptcy - Topic 8927

Discharge of debtor - Conditional discharge - Upon payment of instalments - [See Bankruptcy - Topic 8805 ].

Cases Noticed:

Sheard (Bankrupt), Re (2013), 328 N.S.R.(2d) 375; 1039 A.P.R. 375 (S.C. Reg.), refd to. [para. 25].

Posner, Re (1960), 67 Man.R. 288 (Q.B.), refd to. [para. 30].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 172.1(3), sect. 172.1(4) [para. 18].

Counsel:

Gene Zazelenchuk, for the bankrupt;

M. Beth Tait, for the Department of Justice Canada for Her Majesty The Queen opposing creditor as represented by the Minister of National Revenue;

Leigh C. Taylor and Jillian Taylor-Mancusi, Trustees in Bankruptcy.

This application was heard by Sharp, Registrar, of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on April 1, 2015.