Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Act current to 2016-02-03 and last amended on 2015-02-26. Previous Versions

Legal Costs

Marginal note:Costs in discretion of court
  •  (1) Subject to this Act and to the General Rules, the costs of and incidental to any proceedings in court under this Act are in the discretion of the court.

  • Marginal note:How costs awarded

    (2) The court in awarding costs may direct that the costs shall be taxed and paid as between party and party or as between solicitor and client, or the court may fix a sum to be paid in lieu of taxation or of taxed costs, but in the absence of any express direction costs shall follow the event and shall be taxed as between party and party.

  • Marginal note:Personal liability of trustee for costs

    (3) Where an action or proceeding is brought by or against a trustee, or where a trustee is made a party to any action or proceeding on his application or on the application of any other party thereto, he is not personally liable for costs unless the court otherwise directs.

  • Marginal note:When costs payable

    (4) No costs shall be paid out of the estate of the bankrupt, excepting the costs of persons whose services have been authorized by the trustee in writing and such costs as have been awarded against the trustee or the estate of the bankrupt by the court.

  • (5) [Repealed, 2005, c. 47, s. 110]

  • Marginal note:Priority of payment of legal costs

    (6) Legal costs shall be payable according to the following priorities:

    • (a) commissions on collections, which are a claim ranking above any other claim on any sums collected;

    • (b) when duly authorized by the court or approved by the creditors or the inspectors, costs incurred by the trustee after the bankruptcy and prior to the first meeting of creditors;

    • (c) the costs on an assignment or costs incurred by an applicant creditor up to the issue of a bankruptcy order;

    • (d) costs awarded against the trustee or the estate of the bankrupt; and

    • (e) costs for legal services otherwise rendered to the trustee or the estate of the bankrupt.

  • Marginal note:Costs of discharge opposed

    (6.1) If a creditor opposes the discharge of a bankrupt, the court may, if it grants the discharge on the condition that the bankrupt pay an amount or consent to a judgment to pay an amount, award costs, including legal costs, to the opposing creditor out of the estate in an amount that is not more than the amount realized by the estate under the conditional order, including any amount brought into the estate under the consent to the judgment.

  • Marginal note:Costs where opposition frivolous or vexatious

    (7) If a creditor opposes the discharge of a bankrupt and the court finds the opposition to be frivolous or vexatious, the court may order the creditor to pay costs, including legal costs, to the estate.

  • (8) [Repealed, 2005, c. 47, s. 110]

  • R.S., 1985, c. B-3, s. 197;
  • 1997, c. 12, s. 106;
  • 2004, c. 25, s. 89;
  • 2005, c. 47, s. 110.

PART VIIIOffences

Marginal note:Bankruptcy offences
  •  (1) Any bankrupt who

    • (a) makes any fraudulent disposition of the bankrupt’s property before or after the date of the initial bankruptcy event,

    • (b) refuses or neglects to answer fully and truthfully all proper questions put to the bankrupt at any examination held pursuant to this Act,

    • (c) makes a false entry or knowingly makes a material omission in a statement or accounting,

    • (d) after or within one year immediately preceding the date of the initial bankruptcy event, conceals, destroys, mutilates, falsifies, makes an omission in or disposes of, or is privy to the concealment, destruction, mutilation, falsification, omission from or disposition of, a book or document affecting or relating to the bankrupt’s property or affairs, unless the bankrupt had no intent to conceal the state of the bankrupt’s affairs,

    • (e) after or within one year immediately preceding the date of the initial bankruptcy event, obtains any credit or any property by false representations made by the bankrupt or made by any other person to the bankrupt’s knowledge,

    • (f) after or within one year immediately preceding the date of the initial bankruptcy event, fraudulently conceals or removes any property of a value of fifty dollars or more or any debt due to or from the bankrupt, or

    • (g) after or within one year immediately preceding the date of the initial bankruptcy event, hypothecates, pawns, pledges or disposes of any property that the bankrupt has obtained on credit and has not paid for, unless in the case of a trader the hypothecation, pawning, pledging or disposing is in the ordinary way of trade and unless the bankrupt had no intent to defraud,

    is guilty of an offence and is liable, on summary conviction, to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year or to both, or on conviction on indictment, to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years, or to both.

  • Marginal note:Failure to comply with duties

    (2) A bankrupt who, without reasonable cause, fails to comply with an order of the court made under section 68 or to do any of the things required of the bankrupt under section 158 is guilty of an offence and is liable

    • (a) on summary conviction, to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or to both; or

    • (b) on conviction on indictment, to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years, or to both.

  • R.S., 1985, c. B-3, s. 198;
  • 1992, c. 27, s. 71;
  • 1997, c. 12, s. 107;
  • 2004, c. 25, s. 90(F).
Marginal note:Failure to disclose fact of being undischarged

 An undischarged bankrupt who

  • (a) engages in any trade or business without disclosing to all persons with whom the undischarged bankrupt enters into any business transaction that the undischarged bankrupt is an undischarged bankrupt, or

  • (b) obtains credit to a total of $1,000 or more from any person or persons without informing them that the undischarged bankrupt is an undischarged bankrupt,

is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or to both.

  • R.S., 1985, c. B-3, s. 199;
  • 1992, c. 27, s. 72;
  • 2005, c. 47, s. 111.
Marginal note:Bankrupt failing to keep proper books of account
  •  (1) Any person becoming bankrupt or making a proposal who has on any previous occasion been bankrupt or made a proposal to the person’s creditors is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or to both, if

    • (a) being engaged in any trade or business, at any time within the period beginning on the day that is two years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, that person has not kept and preserved proper books of account; or

    • (b) within the period mentioned in paragraph (a), that person conceals, destroys, mutilates, falsifies or disposes of, or is privy to the concealment, destruction, mutilation, falsification or disposition of, any book or document affecting or relating to the person’s property or affairs, unless the person had no intent to conceal the state of the person’s affairs.

  • Marginal note:Proper books of account defined

    (2) For the purposes of this section, a debtor shall be deemed not to have kept proper books of account if he has not kept such books or accounts as are necessary to exhibit or explain his transactions and financial position in his trade or business, including a book or books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, also accounts of all goods sold and purchased, and statements of annual and other stock-takings.

  • R.S., 1985, c. B-3, s. 200;
  • 1992, c. 27, s. 73;
  • 1997, c. 12, s. 108;
  • 2004, c. 25, s. 91(F).
Marginal note:False claim, etc.
  •  (1) Where a creditor, or a person claiming to be a creditor, in any proceedings under this Act, wilfully and with intent to defraud makes any false claim or any proof, declaration or statement of account that is untrue in any material particular, the creditor or person is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars, or to imprisonment for a term not exceeding one year, or to both.

  • Marginal note:Inspectors accepting unlawful fee

    (2) Where an inspector accepts from the bankrupt or from any person, firm or corporation acting on behalf of the bankrupt or from the trustee any fee, commission or emolument other than or in addition to the regular fees provided for by this Act, the inspector is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars, or to imprisonment for a term not exceeding one year, or to both.

  • Marginal note:Unlawful transactions

    (3) Where the bankrupt enters into any transaction with any person for the purpose of obtaining a benefit or advantage to which either of them would not be entitled, the bankrupt is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars, or to imprisonment for a term not exceeding one year, or to both.

  • R.S., 1985, c. B-3, s. 201;
  • 1992, c. 27, s. 74.
 
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