This blog was originally published on Slaw.
Under most circumstances, an order of discharge releases a
bankrupt person from all debts. There are, however, exemptions that
have been legislated to ensure that a bankrupt party does not
escape a debt arising from certain morally blameworthy actions. For
example, an order of discharge does not release a bankrupt person
from any debt arising from an award of damages by a court in civil
proceedings stemming from "bodily harm intentionally
inflicted, or sexual assault": Bankruptcy and Insolvency Act, RSC 1985, c
B-3 (the "BIA"), section 178(1) a.1)(i).
The case law is clear these exceptions are based on social
policy considerations which prioritize a victim's right to
obtain compensation over a bankrupt's right to be free of debts
following discharge. Parliament has made a policy decision that a
bankrupt should not be allowed to raise the shield of his or her
general discharge against judgment creditors who hold
