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Insolvency - BIA - General. Piekut v. Canada (National Revenue)
In Piekut v. Canada (National Revenue) (SCC, 2025) the Supreme Court of Canada dismissed an insolvency appeal, here involving "when a bankrupt is released from their government student loan debts under the Bankruptcy and Insolvency Act".
Here the court considers basics of BIA insolvency law regarding discharge of debts:[26] The BIA has two main purposes: to equitably distribute a bankrupt’s assets among their creditors and to financially rehabilitate the bankrupt (Aquino v. Bondfield Construction Co., 2024 SCC 31, at para. 36; Poonian v. British Columbia (Securities Commission), 2024 SCC 28, at para. 1). A bankrupt’s financial rehabilitation involves allowing an honest but unfortunate debtor to obtain a discharge of their debts and giving them a “fresh start”, free of debt (Aquino, at para. 36, citing F. Bennett, Bennett on Bankruptcy (26th ed. 2024), at p. 37; Poonian, at para. 1).
[27] The “fresh start” principle is reflected in s. 178(2) of the BIA, which states that, subject to exceptions in s. 178(1), “an order of discharge releases the bankrupt from all claims provable in bankruptcy” (Poonian, at para. 1). The exceptions or non-dischargeable claims in s. 178(1) include debts or liabilities for fines, penalties, and restitution orders imposed by a court in respect of an offence (s. 178(1)(a)); awards for damages for intentional bodily harm or sexual assault (s. 178(1)(a.1)(i)); fraud or misappropriation by a fiduciary (s. 178(1)(d)); obtaining property or services by false pretences or fraudulent misrepresentation (s. 178(1)(e)); certain claims not disclosed to the trustee (s. 178(1)(f)); government student loans (s. 178(1)(g)); and debts for interest on the preceding amounts (s. 178(1)(h)).
[28] The non-dischargeable claims in s. 178(1) “recognize that the fresh start policy of bankruptcy law must yield to certain overriding social policy objectives that require that certain claims be protected against the discharge” (R. J. Wood, Bankruptcy and Insolvency Law (2nd ed. 2015), at pp. 312-13). They are “the kind of claims that society, through Parliament, considers to be of a quality that outweighs any possible benefit in the bankrupt being relieved of them” (Poonian, at para. 25, citing J. Sarra, G. B. Morawetz and L. W. Houlden, The 2024 Annotated Bankruptcy and Insolvency Act (2024), at § 7:185, and Jerrard v. Peacock (1985), 1985 CanLII 1148 (AB KB), 37 Alta. L.R. (2d) 197 (Q.B.)). . Aquino v. Bondfield Construction Co.
In Aquino v. Bondfield Construction Co. (SCC, 2024) the Supreme Court of Canada states the purposes of the BIA:[36] The two main purposes of the BIA are the “equitable distribution of the bankrupt’s assets among his or her creditors and the bankrupt’s financial rehabilitation” (Orphan Well Association v. Grant Thornton Ltd., 2019 SCC 5, [2019] 1 S.C.R. 150, at para. 67, quoting Alberta (Attorney General) v. Moloney, 2015 SCC 51, [2015] 3 S.C.R. 327, at para. 32, citing Husky Oil Operations Ltd. v. Minister of National Revenue, 1995 CanLII 69 (SCC), [1995] 3 S.C.R. 453, at para. 7; see also Poonian v. British Columbia (Securities Commission), 2024 SCC 28, at para. 1). A bankrupt’s financial rehabilitation involves allowing “honest but unfortunate debtors to obtain a discharge of their debts and have a ‘fresh start’, free of debt” (F. Bennett, Bennett on Bankruptcy (26th ed. 2024), at p. 37). Other objectives of the bankruptcy system include preserving and maximizing the value of a debtor’s assets and protecting the public interest (9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, [2020] 1 S.C.R. 521, at para. 40). . Scott v. Golden Oaks Enterprises Inc.
In Scott v. Golden Oaks Enterprises Inc. (SCC, 2024) the Supreme Court of Canada dismissed a civil litigation appeal, here where the main question was "how the common law doctrine of corporate attribution should be applied to a “one-person” corporation controlled by its sole officer, shareholder, and directing mind".
Here the court briefly states the purpose of the BIA:[79] The main purposes of the BIA are the equitable distribution of the bankrupt’s assets among its creditors and the bankrupt’s financial rehabilitation (Orphan Well Association v. Grant Thornton Ltd., 2019 SCC 5, [2019] 1 S.C.R. 150, at para. 67; Alberta (Attorney General) v. Moloney, 2015 SCC 51, [2015] 3 S.C.R. 327, at para. 32; Husky Oil Operations Ltd. v. Minister of National Revenue, 1995 CanLII 69 (SCC), [1995] 3 S.C.R. 453, at para. 7; Poonian v. British Columbia (Securities Commission), 2024 SCC 28, at para. 1; Aquino, at para. 36). Other objectives of the BIA include preserving and maximizing the value of a debtor’s assets and protecting the public interest (9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, [2020] 1 S.C.R. 521, at para. 40; Aquino, at para. 36).
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