Appleby Estates Ltd., Re, (1984) 5 O.A.C. 39 (CA)

JudgeLacourcière, Blair and Thorson, JJ.A.
CourtCourt of Appeal (Ontario)
Case DateApril 02, 1984
JurisdictionOntario
Citations(1984), 5 O.A.C. 39 (CA)

Appleby Estates Ltd., Re (1984), 5 O.A.C. 39 (CA)

MLB headnote and full text

Re Appleby Estates Ltd.; Smith, Klymas, Selk Ltd., The Trustee of the Estate of Appleby Estates Ltd., a bankrupt v. McKay

Indexed As: Appleby Estates Ltd., Re

Ontario Court of Appeal

Lacourcière, Blair and Thorson, JJ.A.

September 27, 1984.

Summary:

The shares of a company were owned equally by a husband and wife. The husband ran the company until his death in 1977. After his death, the wife attempted unsuccessfully to operate the business and the company became bankrupt in 1978. After her husband's death and prior to the bankruptcy two company transactions took place which benefited the wife. The trustee applied successfully to have these transactions set aside as fraudulent preferences under ss. 73 and 74 of the Bankruptcy Act. The wife appealed.

The Ontario Court of Appeal allowed the appeal and held that the transactions were not fraudulent and void because the wife was not a creditor against whom ss. 73 and 74 applied.

Bankruptcy - Topic 2601

Trustees - General - The Ontario Court of Appeal discussed the principle that where it would be unfair for a trustee to take full advantage of his legal rights, the court will order him not to do so and will order him to return money which he may have collected (Re Condin; Ex parte James (1874), 9 Ch. App. 609) - See paragraphs 15 to 19.

Bankruptcy - Topic 7213

Setting aside transactions prior to bankruptcy - Fraudulent preferences - Creditor - What constitutes - The Bankruptcy Act, ss. 73 and 74, provided for the setting aside of fraudulent preferences by debtors in favour of creditors close to the time of the debtor's bankruptcy - The Ontario Court of Appeal examined two transactions in favour of a shareholder made by a company prior to its bankruptcy and held that the transactions were not void under ss. 73 and 74, because the shareholder was not a creditor of the company within the meaning of the sections - See paragraphs 1 to 20.

Cases Noticed:

Van der Liek, Re (1970), 14 C.B.R.(N.S.) 229, ref'd to. [para. 9].

Condon, Re; Ex parte James (1874), 9 Ch. App. 609, consd. [para. 15].

Clark (A Bankrupt), Re, Ex parte The Trustee v. Texaco Ltd., [1975] 1 W.L.R. 559, ref'd to. [para. 17].

McDonald, Re (1971), 16 C.B.R.(N.S.) 244, ref'd to. [para. 18].

Kelly, Re (1980), 27 O.R.(2d) 478, ref'd to. [para. 18].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1970, c. B-3, sect. 73, sect. 74 [para. 1]; sect. 295 [para. 13].

Authors and Works Noticed:

Williams on Bankruptcy (18th Ed.), p. 279 [para. 18].

Counsel:

G.J. Smith, Q.C., for McKay;

W.J. Meyer, Q.C., for the trustee.

This appeal was heard on April 2, 1984, before Lacourcière, Blair and Thorson, JJ.A., of the Ontario Court of Appeal. The following decision of the Court of Appeal was delivered by Blair, J.A., and released on September 27, 1984:

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3 practice notes
  • Goertz (Bankrupt) v. Goertz et al., (1994) 122 Sask.R. 93 (QB)
    • Canada
    • Saskatchewan Court of Queen's Bench of Saskatchewan (Canada)
    • June 15, 1994
    ...211 (Q.B.), refd to. [para. 34]. Hansen, Re (1977), 26 C.B.R.(N.S.) 57 (Ont. H.C.), refd to. [para. 35]. Appleby Estates Ltd., Re (1984), 5 O.A.C. 39; 48 O.R.(2d) 1 (C.A.), refd to. [para. Thimianis, Re (1985), 54 C.B.R.(N.S.) 314 (Ont. S.C.), refd to. [para. 36]. Dondee Stock Farms Ltd. (B......
  • Target Liquidators Inc. (Bankrupt), Re, (2003) 338 A.R. 74 (QB Reg.)
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • March 18, 2003
    ...196 (Sup. Ct.), refd to. [para. 57]. Taylor Estate, Re (1926), 7 C.B.R. 550 (Ont. S.C.), refd to. [para. 59]. Appleby Estates Ltd., Re (1984), 5 O.A.C. 39; 53 C.B.R.(N.S.) 10 (C.A.), refd to. [para. Authors and Works Noticed: Houlden, Lloyd W., and Morawetz, Carl H., The 2003 Annotated Bank......
  • Piikani Energy Corp. (Bankrupt), Re, 2012 ABQB 187
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • December 22, 2011
    ...Anne-Nackawic Pulp Co. (Bankrupt), Re (2005), 286 N.B.R.(2d) 95; 748 A.P.R. 95 refd. to. (C.A.), [para. 50]. Appleby Estates Ltd., Re (1984), 5 O.A.C. 39 (C.A.), refd to. [para. Axelrod, Re (1994), 16 O.R.(3d) 649 (Ont. S.C.), refd to. [para. 50]. Wiebe, Re, [1995] O.J. No. 436 (Gen. Div.),......
3 cases
  • Goertz (Bankrupt) v. Goertz et al., (1994) 122 Sask.R. 93 (QB)
    • Canada
    • Saskatchewan Court of Queen's Bench of Saskatchewan (Canada)
    • June 15, 1994
    ...211 (Q.B.), refd to. [para. 34]. Hansen, Re (1977), 26 C.B.R.(N.S.) 57 (Ont. H.C.), refd to. [para. 35]. Appleby Estates Ltd., Re (1984), 5 O.A.C. 39; 48 O.R.(2d) 1 (C.A.), refd to. [para. Thimianis, Re (1985), 54 C.B.R.(N.S.) 314 (Ont. S.C.), refd to. [para. 36]. Dondee Stock Farms Ltd. (B......
  • Target Liquidators Inc. (Bankrupt), Re, (2003) 338 A.R. 74 (QB Reg.)
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • March 18, 2003
    ...196 (Sup. Ct.), refd to. [para. 57]. Taylor Estate, Re (1926), 7 C.B.R. 550 (Ont. S.C.), refd to. [para. 59]. Appleby Estates Ltd., Re (1984), 5 O.A.C. 39; 53 C.B.R.(N.S.) 10 (C.A.), refd to. [para. Authors and Works Noticed: Houlden, Lloyd W., and Morawetz, Carl H., The 2003 Annotated Bank......
  • Piikani Energy Corp. (Bankrupt), Re, 2012 ABQB 187
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • December 22, 2011
    ...Anne-Nackawic Pulp Co. (Bankrupt), Re (2005), 286 N.B.R.(2d) 95; 748 A.P.R. 95 refd. to. (C.A.), [para. 50]. Appleby Estates Ltd., Re (1984), 5 O.A.C. 39 (C.A.), refd to. [para. Axelrod, Re (1994), 16 O.R.(3d) 649 (Ont. S.C.), refd to. [para. 50]. Wiebe, Re, [1995] O.J. No. 436 (Gen. Div.),......

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