An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts (S.C. 2005, c. 47)
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Assented to 2005-11-25
AMENDMENTS TO THE BANKRUPTCY AND INSOLVENCY ACT
89. Subsection 137(1) of the Act is replaced by the following:
Marginal note:Postponement of claims — creditor not at arm’s length
137. (1) A creditor who, at any time before the bankruptcy of a debtor, entered into a transaction with the debtor and who was not at arm’s length with the debtor at that time is not entitled to claim a dividend in respect of a claim arising out of that transaction until all claims of the other creditors have been satisfied, unless the transaction was in the opinion of the trustee or of the court a proper transaction.
90. The Act is amended by adding the following after section 140:
Marginal note:Postponement of claims — purchase of shares etc.
140.1 A creditor is not entitled to claim a dividend in respect of a claim arising from the rescission of a purchase or sale of a share or unit of the bankrupt — or in respect of a claim for damages arising from the purchase or sale of a share or unit of the bankrupt — until all claims of the other creditors have been satisfied.
91. Subsection 147(1) of the Act is replaced by the following:
Marginal note:Levy payable out of dividends for supervision
147. (1) For the purpose of defraying the expenses of the supervision by the Superintendent, there shall be payable to the Superintendent for deposit with the Receiver General a levy on all payments, except the costs referred to in subsection 70(2), made by the trustee by way of dividend or otherwise on account of the creditor’s claims, including Her Majesty in right of Canada or of a province claiming in respect of taxes or otherwise.
92. (1) Subsection 149(1) of the Act is replaced by the following:
Marginal note:Notice that final dividend will be made
149. (1) The trustee may, after the first meeting of the creditors, send a notice, in the prescribed manner, to every person with a claim of which the trustee has notice or knowledge but whose claim has not been proved. The notice must inform the person that, if that person does not prove the claim within a period of 30 days after the sending of the notice, the trustee will proceed to declare a dividend or final dividend without regard to that person’s claim.
(2) Subsection 149(4) of the Act is replaced by the following:
Marginal note:Certain federal claims
(4) Despite subsection (2), a claim may be filed for an amount payable under the following provisions within the time limit referred to in subsection (2), or within three months after the time the return of income or other evidence of the facts on which the claim is based is filed or comes to the attention of the Minister of National Revenue or, in the case of an amount payable under a provision referred to in paragraph (c), the minister in that province responsible for the provision:
(a) subsection 224(1.2) of the Income Tax Act;
(b) any provision of the Canada Pension Plan or of the Employment Insurance Act that refers to subsection 224(1.2) of the Income Tax Act and provides for the collection of a contribution, as defined in the Canada Pension Plan, or an employee’s premium, or employer’s premium, as defined in the Employment Insurance Act, and of any related interest, penalties or other amounts;
(c) any provision of provincial legislation that has a purpose similar to subsection 224(1.2) of the Income Tax Act, or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, if the sum
(i) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or
(ii) is of the same nature as a contribution under the Canada Pension Plan if the province is a “province providing a comprehensive pension plan” as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a “provincial pension plan” as defined in that subsection;
(d) subsection 82(1.1) of the Excise Tax Act;
(e) subsection 284(1.1) of the Excise Act, 2001;
(f) subsections 97.22(1) and (5) of the Customs Act; and
(g) subsection 72(1.1) of the Air Travellers Security Charge Act.
Marginal note:No dividend allowed
(5) Unless the trustee retains sufficient funds to provide for payment of any claims that may be filed under a provision referred to in any of paragraphs (4)(a) to (g), no dividend shall be declared until the expiry of three months after the trustee has filed all returns that the trustee is required to file.
93. (1) Subsection 152(1) of the Act is replaced by the following:
Marginal note:Statement of receipts and disbursements
152. (1) The trustee’s final statement of receipts and disbursements shall contain
(a) a complete account of
(i) all moneys received by the trustee out of the bankrupt’s property or otherwise,
(ii) the amount of interest received by the trustee,
(iii) all moneys disbursed and expenses incurred by the trustee,
(iv) all moneys disbursed by the trustee for services provided by persons related to the trustee, and
(v) the remuneration claimed by the trustee; and
(b) full particulars of, and a description and value of, all the bankrupt’s property that has not been sold or realized together with the reason why it has not been sold or realized and the disposition made of that property.
(2) Subsection 152(5) of the Act is replaced by the following:
Marginal note:Notice of final dividend, etc.
(5) After the Superintendent has commented on the taxation of the trustee’s accounts or advised the trustee that the Superintendent has no comments to make and the trustee’s accounts have been taxed, the trustee shall send, in the prescribed manner, to every creditor whose claim has been proved, to the registrar, to the Superintendent and to the bankrupt
(a) a copy of the final statement of receipts and disbursements;
(b) a copy of the dividend sheet; and
(c) a notice, in the prescribed form, of the trustee’s intention to pay a final dividend after the expiry of 15 days from the sending of the notice, statement and dividend sheet and to apply to the court for his or her discharge on a subsequent date that is not less than 30 days after the payment of the dividend.
94. (1) Paragraphs 155(d) and (d.1) of the Act are replaced by the following:
(d) all notices, statements and other documents shall be sent in the prescribed manner;
(d.1) if a first meeting of the creditors is requested by the official receiver or by creditors who have in the aggregate at least 25% in value of the proven claims, the trustee shall call the meeting, in the prescribed form and manner, and it must be held within 21 days after being called;
(2) Section 155 of the Act is amended by striking out the word “and” at the end of paragraph (i), by adding the word “and” at the end of paragraph (j) and by adding the following after paragraph (j):
(k) the court’s authorization referred to in subsection 30(4) for a sale or disposal of any of the bankrupt’s property to a person who is related to the bankrupt is required only if the creditors decide that the authorization is required.
95. The Act is amended by adding the following after section 156:
Marginal note:Agreement to pay fees and disbursements
156.1 An individual bankrupt who has never before been bankrupt under the laws of Canada or of any prescribed jurisdiction and who is not required to make payments under section 68 to the estate of the bankrupt may enter into an agreement with the trustee to pay the trustee’s fees and disbursements if the total amount required to be paid under the agreement is not more than the prescribed amount and that total amount is to be paid before the expiry of the 12-month period after the bankrupt’s discharge. The agreement may be enforced after the bankrupt’s discharge.
96. Subsection 157.1(3) of the Act is replaced by the following:
Marginal note:Effect on automatic discharge
(3) Subsection 168.1(1) does not apply to an individual bankrupt who has refused or neglected to receive counselling under subsection (1).
97. Subsections 161(2) and (2.1) of the Act are replaced by the following:
Marginal note:Record of examination
(2) The official receiver shall make a record of the examination and shall forward a copy of the record to the Superintendent and the trustee.
Marginal note:Record of examination available to creditors on request
(2.1) If the examination is held
(a) before the first meeting of creditors, the record of the examination shall be communicated to the creditors at the meeting; or
(b) after the first meeting of creditors, the record of examination shall be made available to any creditor who requests it.
98. Subsection 162(2) of the Act is repealed.
99. Section 166 of the Act is replaced by the following:
Marginal note:Penalty for failure to attend for examination
166. If the bankrupt fails to present himself or herself for examination before the official receiver as required by paragraph 158(c) or if the bankrupt or any other person is served with an appointment or a summons to attend for examination and is paid or tendered the proper conduct money and witness fees as fixed by the General Rules but refuses or neglects to attend as required by the appointment or summons, the court may, on the application of the trustee or the official receiver, by warrant cause the bankrupt or other person so in default to be apprehended and brought up for examination.
100. Section 168.1 of the Act is replaced by the following:
Marginal note:Automatic discharge
168.1 (1) Subject to subsections (2) and 157.1(3), the following provisions apply in respect of an individual bankrupt other than a bankrupt referred to in subsection 172.1(1):
(a) in the case of a bankrupt who has never before been bankrupt under the laws of Canada or of any prescribed jurisdiction, the bankrupt is automatically discharged
(i) on the expiry of 9 months after the date of bankruptcy unless, in that 9-month period, an opposition to the discharge has been filed or the bankrupt has been required to make payments under section 68 to the estate of the bankrupt, or
(ii) on the expiry of 21 months after the date of bankruptcy unless an opposition to the discharge has been filed before the automatic discharge takes effect; and
(b) in the case of a bankrupt who has been a bankrupt one time before under the laws of Canada or of any prescribed jurisdiction, the bankrupt is automatically discharged
(i) on the expiry of 24 months after the date of bankruptcy unless, in that 24-month period, an opposition to the discharge has been filed or the bankrupt has been required to make payments under section 68 to the estate of the bankrupt, or
(ii) on the expiry of 36 months after the date of bankruptcy unless an opposition to the discharge has been filed before the automatic discharge takes effect.
Marginal note:Application not precluded
(2) Nothing in subsection (1) precludes a bankrupt from applying to the court for a discharge before the bankrupt would otherwise be automatically discharged, and that subsection ceases to apply to a bankrupt who makes such an application.
Marginal note:Application of other provisions
(3) The provisions of this Act concerning the discharge of bankrupts apply in respect of an individual bankrupt who has never before been bankrupt under the laws of Canada or of any prescribed jurisdiction, to the extent that those provisions are not inconsistent with this section, whether or not the bankrupt applies to the court for a discharge referred to in subsection (2).
Marginal note:Notice of impending discharge
(4) The trustee shall, not less than 15 days before the date of a bankrupt’s automatic discharge, give notice of the impending discharge, in the prescribed form, to the Superintendent, the bankrupt and every creditor who has proved a claim, at the creditor’s latest known address.
Marginal note:Effect of automatic discharge
(5) An automatic discharge is deemed, for all purposes, to be an absolute and immediate order of discharge.
Marginal note:Certificate
(6) Without delay after a bankrupt has been automatically discharged, the trustee shall issue a certificate to the discharged bankrupt, in the prescribed form, declaring that the bankrupt is discharged and is released from all debts except those matters referred to in subsection 178(1). The trustee shall send a copy of the certificate to the Superintendent.
Marginal note:Oppositions to automatic discharge
168.2 (1) The following provisions apply in respect of oppositions to the automatic discharge of an individual bankrupt:
(a) if the Superintendent opposes the discharge, the Superintendent must give notice of the opposition, together with the grounds for it, to the trustee and to the bankrupt before the automatic discharge would otherwise take effect;
(b) if a creditor opposes the discharge, the creditor must give notice of the opposition, together with the grounds for it, to the Superintendent, to the trustee and to the bankrupt before the automatic discharge would otherwise take effect; and
(c) if the trustee opposes the discharge, the trustee must give notice of the opposition in the prescribed form and manner, together with the grounds for the opposition, to the bankrupt and the Superintendent before the automatic discharge would otherwise take effect.
Marginal note:Application for hearing
(2) If the Superintendent, a creditor or the trustee opposes the automatic discharge of an individual bankrupt, the trustee shall, unless the matter is to be dealt with by mediation under section 170.1, apply without delay to the court for an appointment for the hearing of the opposition in the manner referred to in sections 169 to 176, and the hearing must be held
(a) within 30 days after the day on which the appointment is made; or
(b) at any later time that may be fixed by the court at the bankrupt’s or trustee’s request.
101. (1) Subsections 169(1) to (3) of the Act are replaced by the following:
Marginal note:Bankruptcy to operate as application for discharge
169. (1) The making of a bankruptcy order against, or an assignment by, a person other than a corporation or an individual in respect of whom subsection 168.1(1) applies operates as an application for discharge.
Marginal note:Appointment to be obtained by trustee
(2) The trustee, before proceeding to his or her discharge and in any case not earlier than three months and not later than one year after the bankruptcy of a person for whom there is an application for discharge by virtue of subsection (1) shall, on five days notice to the bankrupt, apply to the court for an appointment for a hearing of the application for the bankrupt’s discharge, and the hearing must be held within 30 days after the day on which the appointment is made or at any other time that may be fixed by the court at the bankrupt’s or trustee’s request.
(2) Subsection 169(5) of the French version of the Act is replaced by the following:
Marginal note:Honoraires et débours du syndic
(5) Le tribunal peut, avant de délivrer une convocation, si le syndic le requiert, exiger que soit déposée auprès de celui-ci telle somme, ou que lui soit fournie telle garantie que le tribunal estime appropriées, pour le paiement de ses honoraires et débours occasionnés par la demande de libération.
(3) Subsection 169(6) of the Act is replaced by the following:
Marginal note:Notice to creditors
(6) The trustee, on obtaining or being served with an appointment for hearing an application for discharge, shall, not less than 15 days before the day appointed for the hearing of the application, send a notice of the hearing, in the prescribed form and manner, to the Superintendent, the bankrupt and every known creditor, at the creditor’s latest known address.
102. The portion of subsection 170(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Trustee to prepare report
170. (1) The trustee shall, in the prescribed circumstances and at the prescribed times, prepare a report, in the prescribed form, with respect to
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