IN THE SUPREME COURT OF BRITISH COLUMBIA

 

 

Citation:	In the Bankruptcy of Ian Maxwell,
	2005 BCSC 23

Date:  20050110
Docket: 11-228982 VA02
Registry:  Vancouver

 

 

IN BANKRUPTCY

 

 

IN THE MATTER OF THE BANKRUPTCY
OF IAN MAXWELL

 

 

Before: The Honourable Mr. Justice Pitfield

Reasons for Judgment

 

Counsel for the Bankrupt, Ian Maxwell:	John R. Sandrelli
Date and Place of Hearing:	December 23, 2004
	Vancouver, B.C.

[1]                On September 24, 2004, I provided reasons for adjourning Mr. Maxwell's application for discharge from bankruptcy pending examination of Mr. Maxwell and his wife by a creditor with respect to the financial affairs of Maxwell Claims Services Inc: see 2004 BCSC 1245.  The creditor has advised Mr. Maxwell's counsel that it does not propose to proceed with the examination.  As a consequence, the hearing of Mr. Maxwell's application for discharge continued on December 23, 2004.

[2]                The concern I expressed in my earlier reasons was that, in the absence of financial statements of Maxwell Claim Services Inc., it was not appropriate for me to determine that discharge, conditional or absolute, would be consistent with the Court's obligation to protect the integrity of the bankruptcy system.

[3]                At the resumption of the hearing, financial statements to June 30, 2004 were tendered as was affidavit evidence directed at certain components of the financial statements.  The statements disclose two points of interest.  The first is that in the fiscal years ending June 30, 2002, 2003 and 2004, management fees of $52,000, $13,000 and $26,000, respectively, were paid to Mrs. Maxwell.  The total of $91,000 represents compensation from employment over and above total salary of approximately $145,000 paid to Mrs. Maxwell in 2002, 2003 and 2004.  The management fees were not factored into the trustee's calculation of surplus family income available for the benefit of the estate.  Had it been included, the required monthly remittance from the family for the benefit of creditors would undoubtedly have been considerably greater than the $580 remittance required by the trustee.  Given the opportunity that has been afforded the creditor and its decision not to pursue examination, I am satisfied, in the circumstances of this application, that a conditional discharge should not be refused solely because of the seemingly inappropriate calculation of family income.

[4]                The second point of interest appearing in the financial statements is that while retained earnings have fluctuated from year to year, the net accumulation of $55,646 at June 30, 2004 does not appear unreasonable having regard for the nature and variable performance of the company’s business.

[5]                In the result, I am satisfied that a discharge is appropriate on condition that all monthly remittances that the trustee required Mr. Maxwell to make for the benefit of creditors of the estate, including the remittance required for the month of January 2005, shall have been made.  By January, Mr. Maxwell will have been in bankruptcy as a first-time bankrupt for a period moderately in excess of 29 months.  During much of that period he will have made payments to the trustee for the benefit of creditors of the estate.  That remittance period is toward the upper end of the one to three-year range most often regarded as appropriate in the case of first-time bankrupts.

Order Accordingly

“I.H. Pitfield, J.”
The Honourable Mr. Justice I.H. Pitfield