Bassano Growers Ltd. et al. v. Diamond S Produce Ltd. (Bankrupt), (1998) 216 A.R. 328 (CA)

• Judge: McClung, O'Leary and LoVecchio, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: June 19, 1998
• Citations: (1998), 216 A.R. 328 (CA)

Bassano Growers Ltd. v. Diamond S (1998), 216 A.R. 328 (CA);

   175 W.A.C. 328

MLB headnote and full text

Temp. Cite: [1998] A.R. TBEd. JL.030

Bassano Growers Ltd., Calvin Kanomata, Lukey Farms Ltd., Hutterian Brethren Church of Fairview (Fairview Colony), M. Tsukishima & Sons Farms Ltd., Nakamura Farms Ltd., Sonny Nakashima Farms Ltd., Okuma & Tashiro Farms Ltd., S.L.M. Spud Farms Ltd., S-Scan Farms Ltd., Tri-T Farms Ltd., Setoguchi Farms Ltd., Torsius Tater Farms Ltd. and Potato Growers of Alberta (appellants) v. Price Waterhouse Limited (respondent)

(97-17411)

Indexed As: Bassano Growers Ltd. et al. v. Diamond S Produce Ltd. (Bankrupt)

Alberta Court of Appeal

McClung, O'Leary and

LoVecchio, JJ.A.

June 19, 1998.

Summary:

Diamond S Produce Ltd. purchased pro­duce, largely potatoes, from the applicants, packaged and processed them and sold them to wholesalers. Diamond S went bankrupt. The applicants filed a proof of claim. The trustee disallowed the applicants' claims for payment with respect to produce delivered before the bankruptcy. The applicants appealed the trustee's decision, seeking to have determined whether a "deemed" trust pursuant to s. 31 of the Marketing of Agri­cultural Products Act was a trust for the purposes of s. 67(1)(a) of the Bankruptcy and Insolvency Act which exempted trust property from the divisible and distributable assets of a bankrupt. If not, the applicants alleged a trust at common law or construc­tive trust.

The Alberta Court of Queen's Bench, in a decision reported 214 A.R. 380, dis­missed the appeal. The court held that the statutory trust under s. 31 of the Marketing of Agri­cultural Products Act was not, in this case, a trust for the purposes of s. 67(1)(a) of the Bank­ruptcy and Insolvency Act. The court found no common law or con­structive trust. The applicants appealed.

The Alberta Court of Appeal dismissed the appeal.

Bankruptcy - Topic 488

Property of bankrupt - Exemptions or exclusions - Trust property - Diamond S Produce purchased produce from the ap­plicants but went bankrupt - The bank­ruptcy trustee disallowed the applicants' claims for payment for produce delivered before the bankruptcy - The applicants argued that a "deemed" trust under the Marketing of Agricultural Products Act, s. 31, was a trust for the purposes of s. 67(1)(a) of the Bankruptcy and Insolvency Act which exempted trust property from the divisible property of a bankrupt - If not, the applicants alleged a common law or constructive trust - The trial judge held that a statu­tory or deemed trust was not a trust under s. 67(1)(a) unless it conformed to the essen­tial characteristics of a com­mon law trust - Here there was no cer­tainty of subject matter or evidence of certainty of intention and therefore no common law trust - Further, there was no constructive trust - The Alberta Court of Appeal affirmed the decision.

Cases Noticed:

British Columbia v. Henfrey Samson Belair Ltd., [1989] 2 S.C.R. 94; 97 N.R. 161; 75 C.B.R.(N.S.) 1; 59 D.L.R.(4th) 726, refd to. [para. 9].

Husky Oil Operations v. Minister of Na­tional Revenue et al., [1995] 3 S.C.R. 453; 188 N.R. 1; 137 Sask.R. 81; 107 W.A.C. 81; 35 C.B.R.(3d) 1; 128 D.L.R.(4th) 1, refd to. [para. 9].

Robinson, Little Co. (Bankrupt) v. Saskatchewan (Minister of Labour), [1990] 1 W.W.R. 354; 80 Sask.R. 9; 76 C.B.R.(N.S.) 193 (C.A.), refd to. [para. 9].

British Columbia v. National Bank of Canada et al. (1994), 52 B.C.A.C. 180; 86 W.A.C. 180; 30 C.B.R.(3d) 215; 119 D.L.R.(4th) 669 (C.A.), refd to. [para. 9].

Factory Window & Door Ltd. (Bankrupt), Re, [1995] 9 W.W.R. 498; 135 Sask.R. 235; 34 C.B.R.(3d) 196 (Q.B.), refd to. [para. 9].

Duraco Window Industries (Sask.) Ltd. v. Factory Window & Door Ltd. (Trustee of) - see Factory Window & Door Ltd. (Bankrupt), Re.

Points of Call Holidays Ltd., Re (1991), 54 B.C.L.R.(2d) 384; 5 C.B.R.(3d) 299 (S.C.), affd. 5 C.B.R.(3d) 307 (B.C.C.A.), refd to. [para. 9].

Barnabe v. Touhey (1995), 37 C.B.R.(3d) 73; 26 O.R.(3d) 477 (Ont. C.A.), refd to. [para. 13].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 67(1)(a) [para. 1].

Marketing of Agricultural Products Act, S.A. 1987, c. M-5.1, sect. 31 [para. 1].

Counsel:

L.V. Halyn, for the appellants;

F.R. Dearlove, for the respondents;

D.S. Nishimura, for the intervenant, Alberta Treasury Branches.

This appeal was heard before McClung, O'Leary and LoVecchio, JJ.A., of the Alberta Court of Appeal. The following memoran­dum of judgment was delivered by the court on June 19, 1998.