Majority
The judgment of Martland, Ritchie, Spence and Pigeon JJ. was delivered by
PIGEON J.
PIGEON J.—This is an appeal, by special leave of this Court, from a judgment of the Court of Appeal of Saskatchewan varying the order made by a judge of the Court of Queen’s Bench on respondent’s application for discharge under the Bankruptcy Act. This order had suspended the discharge for a period of three months only. In the Court of Appeal, it was directed that respondent be required to consent to judgment being entered against him in the sum of $1,800 payable without interest by monthly payments of $50 starting February 1st, 1970.
Respondent’s debt towards the appellant arises out of an automobile accident. She was a gratuitous passenger in his car when she suffered serious head injuries in a collision with a train at a grade crossing in the City of Regina. Red lights were flashing and a warning bell was ringing and respondent was found fully responsible by reason of “wilful and wanton misconduct”. Damages were assessed by MacPherson J. at $12,909.03 plus costs taxed at $1,194. Respondent’s appeal from this judgment was unanimously dismissed. Thereupon, he made an assignment under the Bankruptcy Act and, in due course, applied for discharge.
The net result of the order appealed from is obviously that the appellant will recover nothing. With respect, I cannot agree that this is in conformity with the proper principles to be applied in the exercise of the discretion vested in the courts by the provisions of the Bankrupt-
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cy Act (R.S.C. c. B-3) respecting discharge. Section 142(2) reads:
(2) The court shall on proof of any of the facts mentioned in section 143
(2) The court shall on proof of any of the facts mentioned in section 143
(a) refuse the discharge,
(b) suspend the discharge for such period as the court thinks proper, or
(c) require the bankrupt, as a condition of his discharge, to perform such acts, pay such moneys, consent to such judgments, or comply with such other terms, as the court may direct.
The first fact mentioned in s.143 is:
(a) the assets of the bankrupt are not of a value equal to fifty cents in the dollar on the amount of his unsecured liabilities, unless he satisfies the court that the fact that the assets are not of a value equal to fifty cents in the dollar on the amount of his unsecured liabilities has arisen from circumstances for which he cannot justly be held responsible:
In the present case, respondent’s bankruptcy was precipitated by his condemnation to pay damages to the appellant. This being due to a finding of “wilful and wanton misconduct” on his part, certainly his financial predicament cannot be said to have arisen “from circumstances for which he cannot justly be held responsible”. The courts below did not ignore this provision. However, the sanction meted out in the first instance was purely nominal. In the Court of Appeal, respondent was in effect ordered to make payments that would hardly cover more than appellant’s costs in the trial court and in the Court of Appeal. Although respondent is a wage earner with a large family in very modest circumstances, I cannot agree that the proper application of the provisions above quoted should result in a plaintiff making no recovery for personal injuries caused by gross negligence. It would mean that motorists in respondent’s situation would be able to tell such a claimant: “There is no use suing me, if you lose you will have to pay the costs, if you win I will make an assignment in bankruptcy and you will get nothing”.
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Counsel for the appellant has referred us to a number of cases dealing with analogous situations on applications for discharge. Among recent cases, the following may be noted: Rice v. Copeland[2] in which the bankruptcy was similarly precipitated by a claim for damages arising out of a car accident which was said to be due to driving in an intoxicated condition. Dickson J. (as he then was) ordered the bankrupts to pay as a condition of their discharge 25% of their unsecured liabilities. He said (at p. 232):
In Re McIntosh, supra, Williams, C.J.Q.B. agreed with the judgment of Smily J. In re Buell (35 C.B.R. 53, [1955] O.W.N. 421), that although the Bankruptcy Act is available to an insolvent not engaged in business, the Act was never intended to enable a judgment debtor to get rid of a judgment for damages and with no other purpose to serve than the convenience and comfort of the debtor.
In Sederoff v. Vigneault (23 C.B.R. 228, [1942] Que K.B. 44), the debtor had gone into bankruptcy to escape payment of a judgment in damages arising out of an automobile collision. The bankruptcy judge, in the exercise of his discretion, suspended the discharge until the debtor had paid 50 cents in the dollar on the amount of his unsecured liabilities. The court of appeal refused to interfere.
In the present case, I would not increase the amount of the monthly payments fixed by the Court of Appeal, but I would increase the sum to be paid to approximate 50 per cent of the total debt to the appellant without interest.
For those reasons, I would allow the appeal with costs and vary the judgment of the Court of Appeal by increasing to $7,200 plus the costs in this Court the amount of the judgment to be satisfied by the respondent as a condition of his discharge.
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Appeal allowed with costs. ABBOTT J. dissenting.
Solicitors for the appellant: Pedersen, Norman, McLeod & Todd, Regina.
Solicitors for the respondent: Bayda, Halvorson, Scheibel & Thompson, Regina.
Footnotes
- [1] [1952] 2 S.C.R. 109.
- [2] (1965), 51 W.W.R. 227.
Cases cited
- McIntosh McIntosh, supra
Statutes and regulations cited
-
Unresolved citations
- Section 142(2)
- section 143