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Wednesday, February 12, 2020 @ 9:50 AM  

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Appeal by Levick from the dismissal of his motion to disallow payment of a dividend to Canada Revenue Agency in his bankruptcy proceedings. The appellant owed CRA $161,478 in taxes, penalties and interest. He was deemed to make an assignment in bankruptcy after he filed a proposal that was rejected. CRA, the only creditor, failed to file a proof of claim after receiving notice to do so within 30 days. It filed its claim after the Trustee in Bankruptcy prepared a statement of receipts and disbursements showing a surplus of $108,512 to be remitted to the appellant.

HELD: Appeal dismissed. As CRA was the only creditor, s. 149 of the Bankruptcy and Insolvency Act did not apply because without CRA’s claim, no dividend could be declared as contemplated by s. 149. The prohibition in s. 149(2) of the Act precluding payment of a dividend notified under s. 149(1) could not apply. Section 150 of the Act applied because CRA had not yet filed and no dividend could be declared by the Trustee as contemplated by s. 149(1). The application of s. 150 furthered the objective of equitable treatment of creditors prior to the payment of any surplus to the appellant debtor. The hearing judge did not err in allowing the dividend payment to CRA.

Levick v. Canada Revenue Agency, [2020] N.S.J. No. 1, Nova Scotia Court of Appeal, D.R. Beveridge, M.J. Hamilton and P. Bryson JJ.A., January 7, 2020. Digest No. TLD-February102020007