IN THE SUPREME COURT OF NOVA SCOTIA
IN BANKRUPTCY AND INSOLVENCY
Citation: Mullin (Re), 2007 NSSC 295
Date: October 15, 2007
Docket: B 29561
Registry: Halifax
District of Nova Scotia
Division No. 03 - Sydney
Court No. 29561
Estate No. 51-038195
IN THE MATTER OF THE BANKRUPTCY OF
MARY LOUISE MULLIN
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D E C I S I O N
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Registrar: Richard W. Cregan, Q.C.
Heard: September 6, 2007
Present: Andrea Rizzato representing the Bankrupt
Michael Connor representing the Trustee,
BDO Dunwoody Goodman Rosen Inc.
[1] Mary Louise Mullin (Beaton) made an assignment in bankruptcy on August 28, 1991. A substantial portion of her debt was student loans. Her discharge was opposed by the authorities responsible for student loans. She was granted a discharge on September 16, 1992 by Chief Justice Glube conditional upon her paying $3,200 into her estate. This was at the time shortly after student loans, being essential Crown debts, had lost their preferred status and before the special provisions for student loans were enacted in the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (BIA). At that time a body of case law had developed emphasizing a high moral obligation on a bankrupt with student loan debts to make significant payments to one’s estate, particularly where one had benefitted from the education financed by the loans. It was usual for such a bankrupt to be required to make significant payments as the condition of the discharge. Such would appear to be the background for the Chief Justice’s order.
[2] Ms. Beaton subsequently married, and now has two children. She has had various teaching positions. She now has a Teaching Licence at the TC6 level. Her position is now full time. Her present annual salary is approximately $68,700.
[3] She and her husband separated in March 2005. Their children live with her. Their father contributes approximately $500 per month for their support.
[4] She has not made any payments against the $3,200 required in her conditional order.
[5] The purpose of this application is for an order under Section 172(3) or 187(5) of the BIA to relieve her of the need to pay this amount as a condition of her discharge.
[6] My initial assessment of the situation was that, although had she made the application some years ago her circumstances might well have justified this relief, her present circumstances as outlined in the material filed would not.
[7] It was then explained to me by her counsel that the reason for the application was that she intended to make a further assignment arising from substantial matrimonial debts for which she is now wholly responsible, her estranged husband having already made an assignment in bankruptcy. Until she is discharged from the existing bankruptcy she is unable to make a new assignment.
[8] I have since been supplied with information from Michael Connor, her trustee in bankruptcy, who has been advising her regarding her present situation. He advises that her unsecured debts are at least $65,413 and secured debts are $34,053.
[9] If I were to insist that she pay the $3200 to obtain her discharge, it would only be a small addition to her present post bankruptcy debts. None of her original bankruptcy creditors have objected to this application.
[10] Section 172(3) requires that the court be satisfied there is “no reasonable probability” of her being able to pay the money, before she can be relieved of this condition.
[11] With her present debt load, I think it can be concluded that there is no such probability of her being able to pay this sum.
[12] Ms. Beaton is entitled to be discharged.
R.
Halifax, Nova Scotia
October 15, 2007