CIBC v. AK Constr. Ltd., (1995) 171 A.R. 326 (QB)

• Judge: Veit, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: March 06, 1995
• Jurisdiction: Alberta
• Citations: (1995), 171 A.R. 326 (QB)

CIBC v. AK Constr. Ltd. (1995), 171 A.R. 326 (QB)

MLB headnote and full text

Canadian Imperial Bank of Commerce (plaintiff) v. A.K. Construction (1988) Ltd. and A.K. Construction Ltd. (defendants)

(Action No. 9403 00045)

Indexed As: Canadian Imperial Bank of Commerce v. A.K. Construction (1988) Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

May 1, 1995.

Summary:

CIBC and RoyNat loaned money to the defendants who used it to purchase heavy equipment. Both CIBC and RoyNat took security from the defendants, however, only CIBC registered its security by serial number under the Personal Property Security Act. The defendants went bankrupt. CIBC and RoyNat contested the priority to the pro­ceeds of the sale of the heavy equip­ment.

The Alberta Court of Queen's Bench held that CIBC had priority to the proceeds of the sale.

Personal Property - Topic 6001

Security interests - Purpose of legislation - The Alberta Court of Queen's Bench discussed generally the purpose and scope of the Personal Property Security Act - See paragraphs 30 to 39.

Personal Property - Topic 6014

Security interests - Obligation to act in good faith - CIBC and RoyNat loaned money to the defendants who used it to purchase heavy equipment - Both CIBC and RoyNat took security from the defen­dants, however, only CIBC regis­tered its security by serial number under the Per­sonal Property Se­curity Act - The defend­ants went bank­rupt - CIBC and RoyNat contested priority to the proceeds of the sale of the heavy equipment - Par­ticularly, RoyNat alleged that CIBC acted in bad faith by registering its serial number se­curity, contrary to s. 66 of the Act - The Alberta Court of Queen's Bench held that CIBC's knowledge of Roynat's unperfected security interest did not constitute bad faith - Accordingly, under the priority provi­sions of the Act, CIBC had priority.

Personal Property - Topic 6083

Security interests - Registration - Validity of - Serial numbers - [See Personal Property - Topic 6014 ].

Personal Property - Topic 6220.1

Security interests - Priorities - Registered v. unregistered interest - [See Personal Property - Topic 6014 ].

Words and Phrases

Good faith - The Alberta Court of Queen's Bench discussed the meaning of the words "good faith" as used in s. 66 of the Personal Property Security Act, R.S.A. 1980, c. P-4.05 - See paragraphs 30 to 40.

Cases Noticed:

Kelln (Bankrupt), Re (1992), 100 Sask.R. 164; 18 W.A.C. 164; 89 D.L.R.(4th) 427 (C.A.), refd to. [para. 7].

Alberta Treasury Branches v. Triathlon Vehicle Leasing (1992), 7 Alta. L.R.(3d) 374 (Q.B.), refd to. [para. 7].

Paquette (Bankrupt), Re (1994), 152 A.R. 286; 17 Alta. L.R.(3d) 201 (Q.B.), refd to. [para. 7].

General Motors Acceptance Corp. of Canada Ltd. v. Trans Canada Credit Corp. (1994), 147 A.R. 333; 15 Alta. L.R.(3d) 425 (Q.B. Master), refd to. [para. 7].

Case Power & Equipment v. 366551 Alberta Inc. (Receivership) (1994), 157 A.R. 212; 77 W.A.C. 212; 23 Alta. L.R.(3d) 361 (C.A.), refd to. [para. 7].

Oriole Oil and Gas Ltd. v. American Eagle Petroleums Ltd. (1981), 27 A.R. 411 (C.A.), refd to. [para. 8].

Farm Credit Corp. v. Lacombe Nurseries Ltd. et al. (1992), 125 A.R. 17; 14 W.A.C. 17; 2 Alta. L.R.(3d) 20 (C.A.), refd to. [para. 8].

Carson Restaurants International Ltd. v. A-1 United Restaurant Supply Ltd. (1988), 72 Sask.R. 205; 8 P.P.S.A.C. 276 (Q.B.), refd to. [para. 8].

Thompson v. United States (1969), 408 F.2d 1075, refd to. [para. 8].

Strathcona Brewing Co. et al. v. Eldee Investment Corp. et al. (1994), 153 A.R. 63; 17 Alta. L.R.(3d) 405 (Q.B.), refd to. [para. 8].

Holt, Renfrew & Co. v. Henry Singer Ltd., Pekarsky and Thompson & Dynes Ltd. (1982), 37 A.R. 90; 20 Alta. L.R.(2d) 97 (C.A.), refd to. [para. 9].

Statutes Noticed:

Personal Property Security Act, R.S.A. 1980, c. P-4.05, sect. 66 [para. 7]; sect. 66(2) [para. 31].

Personal Property Security Amendment Act, 1990, Personal Property Security Act Regulations, Reg. 234/90, generally [para. 7].

Authors and Works Noticed:

Anderson, The Uniform Commercial Code, Vol. 1, paras. 1-203:4; Vol. 9, paras. 9-312:26 [para. 9].

Cuming, Ronald C., and Wood, Roderick J., Alberta Personal Property Security Act Handbook; Proper Exercise of Rights Duties and Obligations, Part 6 [para. 8].

Counsel:

J.H.H. Hockin, and D.L. Kennedy, for the Canadian Imperial Bank of Commerce;

R.P. Belzil, for RoyNat Inc.

This case was heard on March 6, 1995, before Veit, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following judgment on May 1, 1995.