Dureault,
J.:—The
bankrupt,
an
independent
distributor
of
Old
Dutch
Foods
Ltd.
products,
made
an
assignment
in
bankruptcy
on
May
3,
1991,
following
a
tax
reassessment.
He
applies
for
an
absolute
discharge.
Revenue
Canada,
as
the
sole
preferred
creditor,
opposes
the
application.
It
is
owed
a
balance
of
approximately
$97,000
in
taxes,
interest
and
penalties.
The
trustee’s
report
indicates
a
realization
of
assets
in
the
amount
of
$1,850
which,
after
payment
of
administration
fees,
will
leave
very
little
for
the
creditor.
The
anticipated
dividend
is
expected
to
be
in
the
range
of
0.5%.
At
some
point
prior
to
the
assignment,
the
bankrupt
had
offered
to
pay
his
tax
liability
at
the
rate
of
$500
per
month.
When
the
offer
was
refused,
the
bankrupt
made
the
assignment.
The
assessment
covered
the
period
1985
to
1989.
In
addition
to
the
tax
reassessment,
the
bankrupt
was
charged
with
tax
evasion.
He
pled
guilty
in
late
February,
1992,
and
was
assessed
a
fine
of
$15,000
to
be
paid
within
two
years.
This
obligation
will
have
to
be
met
out
of
current
income.
If
paid
in
monthly
instalments,
he
would
have
to
remit
$625
each
month.
Under
section
172
of
the
Bankruptcy
Act,
R.S.C.
1985,
c.
B-3
("the
Act"),
the
Court
is
required
to
refuse
the
absolute
discharge
on
proof
of
any
of
the
facts
referred
to
in
section
173.
I
am
satisfied
that
Revenue
Canada
has
established
the
following
facts:
1.
Under
paragraph
173(1)(a)
of
the
Act,
the
assets
of
the
bankrupt
are
of
a
value
far
below
50
cents
in
the
dollar
on
the
amount
of
his
unsecured
liabilities,
due
to
circumstances
for
which
he
can
justly
be
held
responsible
—
tax
reassessment
as
a
result
of
overstating
business
promotional
expenses.
2.
Under
paragraph
173(1)(k)
of
the
Act,
the
bankrupt
has
been
guilty
of
fraud
as
evidenced
by
his
recent
guilty
plea
on
a
charge
of
income
tax
evasion.
Proof
of
these
facts
disentitles
the
bankrupt
to
an
absolute
discharge
and
it
is
accordingly
refused.
That
leaves
open
the
two
remaining
courses
of
judicial
action:
suspension
or
conditional
discharge.
I
agree
with
the
line
of
cases
holding
that
a
suspension
of
discharge
is
not
a
viable
option
and
is
really
counterproductive
in
all
but
exceptional
cases.
A
conditional
discharge
is
the
last
remaining
option.
The
court
is
left
to
consider
the
kind
of
conditions
which
ought
to
be
imposed
in
the
circumstances
of
this
case.
A
condition
generally
imposed
requires
the
bankrupt
to
make
an
appropriate
remittance
for
the
benefit
of
his
creditors
within
a
specified
period.
I
have
received
evidence
in
this
case
which
has
not
been
seriously
challenged
that
the
bankrupt's
1991
income
from
his
distributorship
should
be
approximately
$44,000
after
tax
or
$3,670
net
monthly
after
taxes.
An
assumption
is
made
that
the
1991
expenses
have
remained
constant
with
1990.
These
figures
make
allowances
for
payment
of
a
gross
salary
of
$12,000
to
his
wife.
The
bankrupt
now
has
four
children.
Assuming
that
his
wife
can
support
herself
on
the
salary
she
is
paid,
this
leaves
the
bankrupt
and
his
four
children
dependent
on
his
income.
Nothing
has
been
factored
in
to
allow
for
the
general
downturn
of
the
economy
although
it
only
seems
reasonable
to
expect
that
this
particular
sector
will
not
escape
some
compressions.
The
court
has
been
provided
with
the
Superintendent's
Guidelines
for
payments
required
from
income.
According
to
these
tables,
a
monthly
net
income
of
$3,600
supporting
five
persons
should
permit
the
bankrupt
to
make
a
monthly
payment
of
$445
for
the
benefit
of
his
creditors.
If
the
$15,000
fine
is
paid
in
monthly
instalments,
it
takes
$625
out
of
the
monthly
income.
The
payment
exceeds
the
amount
suggested
in
the
tables.
One
must
not
lose
sight
of
the
fact
that
the
fine
eventually
will
find
its
way
in[to]
the
coffers
of
Revenue
Canada.
The
wife
of
the
bankrupt
is
the
owner
of
a
summer
cottage
and
has
built
up
some
equity.
This
asset
could
be
used
by
her
to
assist
her
husband,
either
with
the
payment
of
the
fine
or
a
payment
for
the
benefit
of
his
creditors.
Furthermore,
the
public
interest
requires
that
the
bankrupt
not
avail
himself
of
the
Bankruptcy
Act
protection
to
wipe
out
a
large
tax
liability
resulting
from
a
fraudulent
tax
evasion.
In
balancing
the
interests
of
the
bankrupt,
that
of
his
creditors,
and
the
public
interest,
I
have
concluded
that
the
following
conditions
attaching
to
his
discharge
would
be
appropriate
in
the
circumstances:
(a)
that
he
make
a
payment
of
$7,000
to
the
trustee
for
the
benefit
of
his
creditors
within
two
years
from
this
date.
This
amount
represents
a
remittance
of
just
slightly
less
than
10
per
cent
of
the
amount
of
tax
owing
after
crediting
payment
of
the
fine.
(b)
that
he
make
payment
of
his
fine
of
$15,000
according
to
the
exigencies
thereof
within
two
years
from
this
date.
Order
accordingly.
Order
accordingly.
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