Sawatsky (Bankrupt), Re, 2001 ABQB 504

• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 13, 2001
• Citations: 2001 ABQB 504;(2001), 295 A.R. 282 (QB Reg.)

Sawatsky (Bankrupt), Re (2001), 295 A.R. 282 (QB Reg.)

MLB headnote and full text

Temp. Cite: [2001] A.R. TBEd. JN.063

In The Matter Of the Bankruptcy of Michelle Nicolette Sawatsky

(Action No. Bk03 79591; 2001 ABQB 504)

Indexed As: Sawatsky (Bankrupt), Re

Alberta Court of Queen's Bench

Judicial District of Edmonton

Funduk, Registrar in Bankruptcy

June 13, 2001.

Summary:

A bankrupt applied for discharge. A judgment creditor alleged that the bankrupt's transfer of her half interest in her principal residence to her cohabiting husband was a fraudulent transfer.

A Registrar of the Alberta Court of Queen's Bench, In Bankruptcy, granted the bankrupt a conditional order of discharge.

Bankruptcy - Topic 410

Property of bankrupt - General - Transfer of exempt assets - Effect - A bankrupt and her husband held title to their principal residence as joint tenants - The bankrupt was sued by Blair Wood - She transferred her half interest in the residence to her husband - Soon after, the lawsuit was settled - At the same time the husband transferred a half interest in the residence back to the bankrupt - Soon after, the bankrupt assigned herself into bankruptcy -She listed the residence as being jointly owned - Under s. 67(1)(b) of the Bankruptcy and Insolvency Act, she was entitled to a $20,000 exemption respecting her principal residence - A Registrar of the Alberta Court of Queen's Bench, In Bankruptcy, rejected Wood's argument that the bankrupt's transfer of her half interest in her principal residence to her husband was a fraudulent conveyance - It was not a fraud on a debtor's creditors for a debtor to gift exempt property to a third party - Only the value of the bankrupt's interest above $20,000 was available to the trustee and creditors - See paragraphs 1 to 29.

Bankruptcy - Topic 485

Property of bankrupt - Exemptions or exclusions - Homestead property - [See Bankruptcy - Topic 410 ].

Bankruptcy - Topic 7302

Setting aside transactions prior to bankruptcy - Fraudulent conveyances - What constitute - [See Bankruptcy - Topic 410 ].

Cases Noticed:

Melnychuk (Bankrupt), Re (1997), 197 A.R. 62 (Q.B. Bktcy. Registrar), refd to. [para. 7].

Abba (Bankrupt), Re (1998), 230 A.R. 185; 66 Alta. L.R.(3d) 277 (Q.B.), refd to. [para. 7].

Royal Bank of Canada v. Laughlin et al. (2001), 277 A.R. 201; 242 W.A.C. 201 (C.A.), refd to. [para. 7].

McAteer, Re (1982), 32 A.R. 248 (Q.B.), refd to. [para. 12].

Wilson (Bankrupt), Re (1996), 178 A.R. 237; 110 W.A.C. 237; 37 Alta. L.R.(3d) 260 (C.A.), refd to. [para. 13].

Alberta Treasury Branches v. Wilson - see Wilson (Bankrupt), Re.

Gervais v. Canadian Imperial Bank of Commerce (1985), 56 C.B.R.(N.S.) 238 (Sask. C.A.), dist. [para. 14].

Camgoz (Bankrupt), Re (1988), 70 Sask.R. 70; 70 C.B.R.(N.S.) 131 (Q.B.), dist. [para. 16].

Ramgotra (Bankrupt), Re, [1996] 1 S.C.R. 325; 193 N.R. 186; 141 Sask.R. 81; 114 W.A.C. 81, refd to. [para. 17].

Royal Bank of Canada v. North American Life Assurance Co. - see Ramgotra (Bankrupt), Re.

Goertz (Bankrupt) v. Goertz et al., [1996] 2 W.W.R. 372; 137 Sask.R. 267; 107 W.A.C. 267 (C.A.), dist. [para. 22].

Old North State Brewing Co. v. McJannett et al., [2001] B.C.T.C. 12; 11 B.L.R.(3d) 143 (S.C.), refd to. [para. 29].

Human Rights Commission (Alta.) v. Alberta Blue Cross Plan (1984), 48 A.R. 192 (C.A.), refd to. [para. 35].

Nova, An Alberta Corp. v. Will Farms Ltd. (1981), 31 A.R. 378 (C.A.), refd to. [para. 37].

Rassell (Bankrupt), Re (1999), 237 A.R. 136; 197 W.A.C. 136; 71 Alta. L.R.(3d) 85 (C.A.), refd to. [para. 38].

Counsel:

G. Smith (Deloitte & Touche Inc.), trustee;

M.J. McCabe (Reynolds Mirth Richards & Farmer), for the bankrupt;

D. Stachnik, Q.C. (Miller Thomson), for Blair Wood.

This matter was heard before Funduk, Registrar in Bankruptcy, of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on June 13, 2001.