GreatNorthCollective/greatnorth-canada-federal-laws-text huggingface dataset:
Bankruptcy and Insolvency Act — B-3 25
Trust account 25 (1) When acting under the authority of this Act, a trustee shall, without delay, deposit in a bank all funds received for an estate in a separate trust account for each estate. Other deposit-taking institutions must be insured (1.1) The trustee may deposit the funds in a deposit-taking institution, other than a bank as defined in section 2, only if deposits held by that institution are insured or guaranteed under a provincial or federal enactment that provides depositors with protection against the loss of funds on deposit with that institution. Foreign funds (1.2) If the funds are situated in a country other than Canada, the trustee may, if authorized by the Superintendent, deposit them in a financial institution in that country that is similar to a bank. Permission needed for certain acts (1.3) The trustee shall not withdraw any funds from the trust account of an estate without the permission in writing of the inspectors or, on application, the court, except for the payment of dividends and charges incidental to the administration of the estate. Payment by cheque (2) All payments made by a trustee under subsection (1.3) shall be made by cheque drawn on the estate account or in such manner as is specified in directives of the Superintendent. Not in private account (3) The trustee shall not deposit any funds received by the trustee when acting under the authority of this Act in any banking account kept by the trustee for the trustee’s personal use. R.S., 1985, c. B-3, s. 25; 1992, c. 27, s. 10; 1997, c. 12, s. 19; 2005, c. 47, s. 20; 2017, c. 26, s. 5
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Books to be kept by trustee 26 (1) A trustee shall keep proper books and records of the administration of each estate to which the trustee is appointed, in which shall be entered a record of all moneys received or disbursed by the trustee, a list of all creditors filing claims, the amount and disposition of those claims, a copy of all notices sent out, a signed copy of all minutes, proceedings had, and resolutions passed at any meeting of creditors or inspectors, court orders and all other matters or proceedings as may be necessary to give a complete account of the trustee’s administration of the estate. Trustee’s records to be property of estate (2) The estate books, records and documents relating to the administration of an estate are deemed to be the property of the estate, and, in the event of any change of trustee, shall forthwith be delivered to the substituted trustee. Records may be inspected (3) The trustee shall permit the books, records and documents referred to in subsection (2) to be inspected and copies of them made by the Superintendent, the bankrupt or any creditor or their representative at any reasonable time. R.S., 1985, c. B-3, s. 26; 1997, c. 12, s. 20; 2004, c. 25, s. 21 2019, c. 29, s. 161
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Reports by trustee 27 (1) The trustee shall from time to time report, (a) when required by the inspectors, to every creditor, (b) when required by any specific creditor, to the creditor, and (c) when required by the Superintendent, to the Superintendent or the creditors, showing the condition of the bankrupt’s estate, the moneys on hand, if any, and particulars of any property remaining unsold. Disbursements (2) The trustee is entitled to charge against the estate of the bankrupt, for the preparation and delivery of any report referred to in subsection (1), only his actual disbursements. R.S., c. B-3, s. 13
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Documents to be forwarded to Superintendent 28 (1) The trustee shall, without delay after their receipt or preparation, send to the Superintendent, in the prescribed manner, true copies of the documents referred to in section 155 and a true copy of (a) the notice referred to in section 102, (b) the statement referred to in paragraph 158(d), (c) the trustee’s final statement of receipts and disbursements and the dividend sheet, and (d) every order made by the court on the application for discharge of a bankrupt or annulling any bankruptcy, and file a copy of the documents referred to in paragraphs (b) and (c) in the court. Notices, etc., to be forwarded to Superintendent (2) The trustee shall forward promptly to the Superintendent copies of all notices, reports and statements sent by him to the creditors and, when required, copies of such other documents as the Superintendent may specify. R.S., 1985, c. B-3, s. 28; 1992, c. 1, s. 12, c. 27, s. 11; 2005, c. 47, s. 21
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Duty of trustee on expiration of licence or removal 29 (1) Where (a) the licence of a trustee has been cancelled or suspended, or has ceased to be valid by reason of failure to pay fees, (b) a trustee has been removed from continuing the administration of an estate, or (c) a trustee dies or becomes incapacitated, the trustee or the legal representative of the trustee shall, within such time as is fixed by the Superintendent, prepare and forward to the Superintendent a detailed financial statement of the receipts and disbursements together with a list of and report on the unadministered property of every estate under the trustee’s administration for which the trustee has not been discharged, and shall forward to such other trustee as may be appointed in the trustee’s stead or, pending the appointment of the other trustee, to the official receiver all the remaining property of every estate under the trustee’s administration together with all the books, records and documents relating thereto. (2) [Repealed, 2005, c. 47, s. 22] R.S., 1985, c. B-3, s. 29; 1997, c. 12, s. 21; 2005, c. 47, s. 22
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ere made to sell or otherwise dispose of the property to persons who are not related to the bankrupt; and (f) whether the consideration to be received is superior to the consideration that would be received under any other offer made in accordance with the process leading to the proposed sale or disposition of the property. R.S., 1985, c. B-3, s. 30; 1997, c. 12, s. 22(F); 2004, c. 25, s. 22; 2005, c. 47, s. 23; 2007, c. 36, s. 10
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Borrowing powers with permission of court 31 (1) With the permission of the court, an interim receiver, a receiver within the meaning of subsection 243(2) or a trustee may make necessary or advisable advances, incur obligations, borrow money and give security on the debtor’s property in any amount, on any terms and on any property that may be authorized by the court and those advances, obligations and money borrowed must be repaid out of the debtor’s property in priority to the creditors’ claims. Security under Bank Act (2) For the purpose of giving security under section 427 of the Bank Act , the interim receiver, receiver or trustee, when carrying on the business of the bankrupt, is deemed to be a person engaged in the class of business previously carried on by the bankrupt. Limit of obligations and carrying on of business (3) The creditors or inspectors may by resolution limit the amount of the obligations that may be incurred, the advances that may be made or moneys that may be borrowed by the trustee and may limit the period of time during which the business of the bankrupt may be carried on by the trustee. Debts deemed to be debts of estate (4) All debts incurred and credit received in carrying on the business of a bankrupt are deemed to be debts incurred and credit received by the estate of the bankrupt. R.S., 1985, c. B-3, s. 31; 1991, c. 46, s. 584; 2005, c. 47, s. 24
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Trustee not obliged to carry on business 32 The trustee is not under obligation to carry on the business of the bankrupt where in his opinion the realizable value of the property of the bankrupt is insufficient to protect him fully against possible loss occasioned by so doing and the creditors or inspectors, on demand made by the trustee, neglect or refuse to secure him against such possible loss. R.S., c. B-3, s. 15
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Reimbursement only of trustee’s disbursement advances 33 The court may make an order providing for the sale of any or all of the assets of the estate of the bankrupt, either by tender, private sale or public auction, setting out the terms and conditions of the sale and directing that the proceeds from the sale are to be used for the purpose of reimbursing the trustee in respect of any costs that may be owing to the trustee or of any moneys the trustee may have advanced as disbursements for the benefit of the estate. R.S., 1985, c. B-3, s. 33; 2005, c. 47, s. 25
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Trustee may apply to court for directions 34 (1) A trustee may apply to the court for directions in relation to any matter affecting the administration of the estate of a bankrupt and the court shall give in writing such directions, if any, as to it appear proper in the circumstances. To report to court after three years (2) Where an estate has not been fully administered within three years after the bankruptcy, the trustee shall, if requested to do so by the Superintendent, report that fact to the court as soon as practicable thereafter, and the court shall make such order as it considers fit to expedite the administration. Notice to Superintendent’s division office (3) The trustee must send notice to the Superintendent’s division office of the day and time when any application for directions made under subsection (1) is to be heard and of the day and time when the trustee intends to report to the court as required by the Superintendent under subsection (2). R.S., 1985, c. B-3, s. 34; 1992, c. 27, s. 12; 2005, c. 47, s. 26
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Redirection of mail 35 (1) Subject to subsection (2), the trustee may, by sending to the Canada Post Corporation (a) a notice in the prescribed form, and (b) a copy of the trustee’s certificate of appointment, request that any mail addressed to a bankrupt that is directed to any place referred to in the notice be redirected or sent by the Canada Post Corporation to the trustee or to such other person as the trustee may designate and when Canada Post Corporation receives those documents, it shall so redirect or send that mail. Permission for residence (2) A notice referred to in subsection (1) may refer to a bankrupt’s residence only where the trustee has, on application, obtained permission from the court. Time limitation (3) If a bankrupt is an individual, a notice referred to in subsection (1) is operative only during the three-month period immediately after the date of the bankruptcy unless the court, on application, extends that period on any terms that it considers fit. R.S., 1985, c. B-3, s. 35; 1992, c. 27, s. 13; 1997, c. 12, s. 23; 2005, c. 47, s. 27
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Duty of former trustee on substitution 36 (1) On the appointment of a substituted trustee, the former trustee shall without delay pass his or her accounts before the court and deliver to the substituted trustee all the property of the estate, together with all books, records and documents of the bankrupt and of the administration of the estate, as well as a statement of receipts and disbursements that contains a complete account of all moneys received by the trustee out of the property of the bankrupt or otherwise, the amount of interest received by the trustee, all moneys disbursed and expenses incurred and the remuneration claimed by the trustee, together with full particulars, description and value of all the bankrupt’s property that has not been sold or realized, setting out the reason why the property has not been sold or realized and the disposition made of the property. Duty of substituted trustee (2) A substituted trustee shall (a) [Repealed, 1992, c. 27, s. 14] (b) if appointed by the creditors, file with the court a copy of the minutes of the meeting signed by the chair; (c) notify the Superintendent of his appointment; (d) if required by the inspectors, register a notice of the appointment in the land register of any land titles or registry office where the assignment or bankruptcy order has been registered; and (e) as soon as funds are available, pay to the former trustee his remuneration and disbursements as approved by the court. R.S., 1985, c. B-3, s. 36; 1992, c. 27, s. 14; 1997, c. 12, s. 24; 2004, c. 25, s. 23; 2005, c. 47, ss. 28, 123(E); 2007, c. 36, s. 11(F)
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Appeal to court against trustee 37 Where the bankrupt or any of the creditors or any other person is aggrieved by any act or decision of the trustee, he may apply to the court and the court may confirm, reverse or modify the act or decision complained of and make such order in the premises as it thinks just. R.S., c. B-3, s. 19
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Proceeding by creditor when trustee refuses to act 38 (1) Where a creditor requests the trustee to take any proceeding that in his opinion would be for the benefit of the estate of a bankrupt and the trustee refuses or neglects to take the proceeding, the creditor may obtain from the court an order authorizing him to take the proceeding in his own name and at his own expense and risk, on notice being given the other creditors of the contemplated proceeding, and on such other terms and conditions as the court may direct. Transfer to creditor (2) On an order under subsection (1) being made, the trustee shall assign and transfer to the creditor all his right, title and interest in the chose in action or subject-matter of the proceeding, including any document in support thereof. Benefits belong to creditor (3) Any benefit derived from a proceeding taken pursuant to subsection (1), to the extent of his claim and the costs, belongs exclusively to the creditor instituting the proceeding, and the surplus, if any, belongs to the estate. Trustee may institute proceeding (4) Where, before an order is made under subsection (1), the trustee, with the permission of the inspectors, signifies to the court his readiness to institute the proceeding for the benefit of the creditors, the order shall fix the time within which he shall do so, and in that case the benefit derived from the proceeding, if instituted within the time so fixed, belongs to the estate. R.S., 1985, c. B-3, s. 38; 2004, c. 25, s. 24(F)
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To be voted by creditors 39 (1) The remuneration of the trustee shall be such as is voted to the trustee by ordinary resolution at any meeting of creditors. Not to exceed 7½ per cent (2) Where the remuneration of the trustee has not been fixed under subsection (1), the trustee may insert in his final statement and retain as his remuneration, subject to increase or reduction as hereinafter provided, a sum not exceeding seven and one-half per cent of the amount remaining out of the realization of the property of the debtor after the claims of the secured creditors have been paid or satisfied. For carrying on debtor’s business or in case of a proposal (3) Where the business of the debtor has been carried on by the trustee or under his supervision, he may be allowed such special remuneration for such services as the creditors or the inspectors may by resolution authorize, and, in the case of a proposal, such special remuneration as may be agreed to by the debtor, or in the absence of agreement with the debtor such amount as may be approved by the court. Successive trustees (4) In the case of two or more trustees acting in succession, the remuneration shall be apportioned between the trustees in accordance with the services rendered by each, and in the absence of agreement between the trustees the court shall determine the amount payable to each. Court may increase or reduce (5) On application by the trustee, a creditor or the debtor and on notice to such parties as the court may direct, the court may make an order increasing or reducing the remuneration. R.S., c. B-3, s. 21
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Disposal of unrealizable property 40 (1) Any property of a bankrupt that is listed in the statement of affairs referred to in paragraph 158(d) or otherwise disclosed to the trustee before the bankrupt’s discharge and that is found incapable of realization must be returned to the bankrupt before the trustee’s application for discharge, but if inspectors have been appointed, the trustee may do so only with their permission. Final disposition of property (2) Where a trustee is unable to dispose of any property as provided in this section, the court may make such order as it may consider necessary. R.S., 1985, c. B-3, s. 40; 2005, c. 47, s. 29
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Acts of bankruptcy 42 (1) A debtor commits an act of bankruptcy in each of the following cases: (a) if in Canada or elsewhere he makes an assignment of his property to a trustee for the benefit of his creditors generally, whether it is an assignment authorized by this Act or not; (b) if in Canada or elsewhere the debtor makes a fraudulent gift, delivery or transfer of the debtor’s property or of any part of it; (c) if in Canada or elsewhere the debtor makes any transfer of the debtor’s property or any part of it, or creates any charge on it, that would under this Act be void or, in the Province of Quebec, null as a fraudulent preference; (d) if, with intent to defeat or delay his creditors, he departs out of Canada, or, being out of Canada, remains out of Canada, or departs from his dwelling-house or otherwise absents himself; (e) if the debtor permits any execution or other process issued against the debtor under which any of the debtor’s property is seized, levied on or taken in execution to remain unsatisfied until within five days after the time fixed by the executing officer for the sale of the property or for fifteen days after the seizure, levy or taking in execution, or if any of the debtor’s property has been sold by the executing officer, or if the execution or other process has been held by the executing officer for a period of fifteen days after written demand for payment without seizure, levy or taking in execution or satisfaction by payment, or if it is returned endorsed to the effect that the executing officer can find no property on which to levy or to seize or take, but if interpleader or opposition proceedings have been instituted with respect to the property seized, the time elapsing between the date at which the proceedings were instituted and the date at which the proceedings are finally disposed of, settled or abandoned shall not be taken into account in calculating the period of fifteen days; (f) if he exhibits to any meeting of his creditors any statement of his assets and liabilities that shows that he is insolvent, or presents or causes to be presented to any such meeting a written admission of his inability to pay his debts; (g) if he assigns, removes, secretes or disposes of or attempts or is about to assign, remove, secrete or dispose of any of his property with intent to defraud, defeat or delay his creditors or any of them; (h) if he gives notice to any of his creditors that he has suspended or that he is about to suspend payment of his debts; (i) if he defaults in any proposal made under this Act; and (j) if he ceases to meet his liabilities generally as they become due. Unauthorized assignments are void or null (2) Every assignment of an insolvent debtor’s property other than an assignment authorized by this Act, made by an insolvent debtor for the general benefit of their creditors, is void or, in the Province of Quebec, null. R.S., 1985, c. B-3, s. 42; 1997, c. 12, s. 26; 2004, c. 25, s. 27
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 cause it is considered just, substitute or add as applicant any other creditor to whom the debtor may be indebted in the amount required by this Act and make a bankruptcy order on the application of the other creditor, and shall, immediately after making the order, dismiss on any terms that it may consider just the application in the stayed or non-prosecuted proceedings. Withdrawing application (14) An application shall not be withdrawn without the leave of the court. Application against one partner (15) Any creditor whose claim against a partnership is sufficient to entitle the creditor to present a bankruptcy application may present an application against any one or more partners of the firm without including the others. Court may consolidate proceedings (16) If a bankruptcy order has been made against one member of a partnership, any other application against a member of the same partnership shall be filed in or transferred to the same court, and the court may give any directions for consolidating the proceedings under the applications that it thinks just. Continuance of proceedings on death of debtor (17) If a debtor against whom an application has been filed dies, the proceedings shall, unless the court otherwise orders, be continued as if the debtor were alive. R.S., 1985, c. B-3, s. 43; 1992, c. 27, s. 15; 2004, c. 25, s. 28
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Application against estate or succession 44 (1) Subject to section 43, an application for a bankruptcy order may be filed against the estate or succession of a deceased debtor. Personal liability (2) After service of an application for a bankruptcy order on the executor or administrator of the estate of a deceased debtor, or liquidator of the succession of a deceased debtor, the person on whom the order was served shall not make payment of any moneys or transfer any property of the deceased debtor, except as required for payment of the proper funeral and testamentary expenses, until the application is disposed of; otherwise, in addition to any penalties to which the person may be subject, the person is personally liable for the payment or transfer. Act done in good faith (3) Nothing in this section invalidates any payment or transfer of property made or any act or thing done, in good faith, by the executor, administrator of the estate or liquidator of the succession before the service of an application referred to in subsection (2). R.S., 1985, c. B-3, s. 44; 2004, c. 25, s. 28
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Costs of application 45 (1) If a bankruptcy order is made, the costs of the applicant shall be taxed and be payable out of the estate, unless the court otherwise orders. Insufficient proceeds (2) If the proceeds of the estate are not sufficient for the payment of any costs incurred by the trustee, the court may order the costs to be paid by the applicant. R.S., 1985, c. B-3, s. 45; 1992, c. 1, s. 14; 2004, c. 25, s. 28
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Appointment of interim receiver 46 (1) The court may, if it is shown to be necessary for the protection of the estate of a debtor, at any time after the filing of an application for a bankruptcy order and before a bankruptcy order is made, appoint a licensed trustee as interim receiver of the property or any part of the property of the debtor and direct the interim receiver to take immediate possession of the property or any part of it on an undertaking being given by the applicant that the court may impose with respect to interference with the debtor’s legal rights and with respect to damages in the event of the application being dismissed. Powers of interim receiver (2) The interim receiver appointed under subsection (1) may, under the direction of the court, take conservatory measures and summarily dispose of property that is perishable or likely to depreciate rapidly in value and exercise such control over the business of the debtor as the court deems advisable, but the interim receiver shall not unduly interfere with the debtor in the carrying on of his business except as may be necessary for conservatory purposes or to comply with the order of the court. Place of filing (3) An application under subsection (1) is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor. R.S., 1985, c. B-3, s. 46; 1997, c. 12, s. 27(F); 2004, c. 25, s. 29; 2007, c. 36, s. 13