Deere (John) Ltd. v. Firdale Farms Ltd. (Receivership), (1987) 50 Man.R.(2d) 45 (CA)

• Judge: Hall, O'Sullivan, Huband, Philp and Twaddle, JJ.A.
• Court: Court of Appeal (Manitoba)
• Case Date: November 12, 1986
• Jurisdiction: Manitoba
• Citations: (1987), 50 Man.R.(2d) 45 (CA)

Deere Ltd. v. Firdale Farms Ltd. (1987), 50 Man.R.(2d) 45 (CA)

MLB headnote and full text

John Deere Limited (applicant/respondent) v. Clarkson Gordon Inc., as Receiver and Manager of Firdale Farms Ltd. (respondent/appellant)

(Suit No. 148/86)

Indexed As: Deere (John) Ltd. v. Firdale Farms Ltd. (Receivership)

Manitoba Court of Appeal

Hall, O'Sullivan, Huband, Philp and Twaddle, JJ.A.

December 22, 1987.

Summary:

Firdale Farms executed a debenture in favour of Heritage Credit Union on April 28, 1983. A security interest was registered pursuant to the Personal Property Security Act. Three and one-half months later Firdale purchased by conditional sale two used combines from a dealer in farm machinery. The dealer assigned its rights under the contract to John Deere Ltd. A purchase money security interest was registered under the Act. Later, in error, that registration was discharged. Firdale defaulted under both the debenture and the conditional sales contract. Clarkson Gordon was appointed receiver/manager of Firdale and sold the combines while liquidating Firdale's assets. John Deere claimed entitlement to the proceeds from the sale of the combines. John Deere claimed that it had a lien on the combines pursuant to s. 22 of the Farm Machinery and Equipment Act. John Deere further claimed that notwithstanding its loss of priority under the Personal Property Security Act (because of the erroneous discharge of registration of its security interest), its lien prevailed because the Personal Property Security Act was inapplicable (s. 3(1)(a)).

The Manitoba Court of Queen's Bench, in a decision reported in 42 Man.R.(2d) 211, held that the contract between John Deere and Firdale constituted a lien given to John Deere by statute and that consequently the Personal Property Security Act did not apply to John Deere's interest. The court held that John Deere was entitled to the proceeds from the sale of the combines. Clarkson Gordon appealed.

The Manitoba Court of Appeal allowed the appeal and held that Clarkson Gordon was entitled to the proceeds of the sale of the combines.

O'Sullivan and Huband, JJ.A., dissenting, would have dismissed the appeal.

Courts - Topic 78

Stare decisis - Authority of judicial decisions - Prior decisions of same court - "Per incuriam" exception - The Manitoba Court of Appeal stated that, where a court has given its opinion on an issue, that opinion is followed by the court in subsequent cases - The court referred to the "per incuriam" exception, whereby the general rule is inapplicable if the court has inadvertently attributed to the words of a statute a meaning which they cannot possibly bear; it is then the duty of a subsequent court to restore the statutory intent - The court also stated that the "per incuriam" exception to precedent applied where the original court has made a manifest or demonstrable error or overlooked or ignored binding authority or statute - The Court of Appeal held that a 1984 appeal decision was in error and decided "per incuriam" - The court correctly interpreted the subject statute - See paragraphs 30 to 32, 41 to 43, 82 to 85.

Personal Property - Topic 6002

Security interests - Application of legislation - Personal Property Security Act - The Manitoba Court of Appeal held that the Personal Property Security Act applied to a conditional sale of farm machinery - Specifically, the court held that the interest of a conditional seller of farm machinery was not a "lien given by statute" within the meaning of s. 3(1)(a) of the Act, and thus the seller's interest was not excluded from the application of the Act - See paragraphs 29, 33, 58, 71 to 73, 78 to 79.

Personal Property - Topic 6206

Security interests - Priorities - Unpaid seller of farm equipment - [See Personal Property - Topic 6002 above].

Personal Property - Topic 6206

Security interests - Priorities - Unpaid seller of farm equipment - Used goods - The Manitoba Court of Appeal held that an unpaid vendor of used farm machinery under a conditional sales contract did not have priority over the holder of a previously registered general security agreement - See paragraphs 29, 33, 58, 71 to 73, 78 to 79.

Words and Phrases

Lien given by statute - The Manitoba Court of Appeal held that the phrase "lien given by statute" as found in s. 3(1)(a) of the Personal Property Security Act, S.M. 1973, c. 5; C.C.S.M., c. P-35, did not include a lien under the Farm Machinery and Equipment Act, S.M. 1971, c. 83; C.C.S.M., c. F-40 - See paragraph 28.

Cases Noticed:

Royal Bank of Canada v. J.I. Case Canada Inc., [1984] 1 W.W.R. 669; 25 Man.R.(2d) 140, not folld. [paras. 6, 44, 88, 116].

Carroll v. Beard (1896), 27 O.R. 349, refd to. [para. 10].

Marcy v. Pierce (1899), 4 Terr. L.R. 246, refd to. [para. 10].

Gladstone v. Birley (1817), 2 Mer. 401; 35 E.R. 993, refd to. [para. 11].

Re Leith's Estate, Chambers v. Davidson (1866), L.R. 1 P.C. 296 (P.C.), refd to. [para. 11].

In re Wait, [1927] 1 Ch. 606, refd to. [para. 13].

Transport and General Credit Corp. Ltd. v. Morgan, [1939] Ch. 531, refd to. [para. 13].

Chursenoff v. Bailey Bros., [1924] 1 W.W.R. 1105 (Sask. C.A.), refd to. [paras. 20, 51, 106, 117].

Young v. Bristol Aeroplane Co. Ltd., [1944] 2 All E.R. 293; [1944] K.B. 718, refd to. [paras. 30, 109].

Morelle Ltd. v. Wakeling, [1955] 1 All E.R. 708, refd to. [paras. 30, 35, 109, 135].

Re Hardy Trusts, [1955] 5 D.L.R. 10, refd to. [para. 30].

Farrell v. Alexander, [1976] 1 All E.R. 129, refd to. [paras. 31, 140].

Morelle Ltd. v. Waterworth, [1954] 2 All E.R. 673, refd to. [para. 36].

Lucka v. Cirka (1956), 63 Man. R. 308, refd to. [paras. 69, 99].

Heydon's Case (1584), 3 Co. Rep. 7a; 76 E.R. 637, refd to. [para. 70].

Rex v. Thompson, [1931] 1 W.W.R. 26 (Man. C.A.), refd to. [para. 82].

Roynat Inc. v. United Rescue Services Ltd., [1982] 3 W.W.R. 512; 18 Man.R.(2d) 54 (C.A.), refd to. [para. 86].

Parkin v. Thorold (1852), 16 Beav. 59; 51 E.R. 698, refd. to. [para. 98].

General Brake & Clutch Service Ltd. v. W.A. Scott & Sons Ltd. (1975), 59 D.L.R.(3d) 741, refd to. [para. 109].

Davis v. Johnson, [1978] 1 All E.R. 840; [1978] 1 All E.R. 1132 (H.L.), refd to. [para. 109].

Binus v. The Queen, [1967] S.C.R. 594, refd to. [para. 131].

Huddersfield Police Authority v. Watson, [1947] 2 All E.R. 193, refd to. [para. 136].

Statutes Noticed:

Personal Property Security Act, S.M. 1973, c. 5; C.C.S.M., c. P-35, sect. 1(u) [para. 74]; sect. 2 [paras. 26, 28, 74]; sect. 3 [paras. 62, 126]; sect. 3(1)(a) [paras. 4, 33, 48, 58, 68, 73, 75, 78, 81, 92, 108, 119]; sect. 3(1)(b), sect. 3(1)(c) [para. 63]; sect. 3(1)(d) [para. 64]; sect. 3(1)(e) [para. 65]; sect. 3(1)(f) [para. 67]; sect. 68(2) [paras. 79-80, 127].

Farm Machinery and Equipment Act, S.M. 1971, c. 83; C.C.S.M., c. F-40, sect. 3 [para. 7]; sect. 11(1) [para. 56]; sect. 18(4) [para. 56]; sect. 22 [paras. 4, 6, 21, 28, 49, 52, 54, 57, 77, 115, 119, 123]; sect. 23(1) [para. 22]; sect. 31 [para. 7]; sect. 32(h) [para. 56].

Factors Act, 1889 (Eng.), generally [para. 15].

Lien Notes, An Act to Regulate, S.M. 1886, c. 32, sect. 1 [para. 16].

Farm Implement Act, S.M. 1919, c. 33, sect. 18, sect. 19 [para. 18].

Garage Keepers Act, R.S.M. 1970, c. G-10; C.C.S.M., c. G-10, sect. 3 [para. 52].

Warehousemen's Liens Act, R.S.M. 1970, c. W-20; C.C.S.M., c. W-20, sect. 3(1) [para. 52].

United States Uniform Commercial Code, 1972, sect. 9-104 [para. 75].

Authors and Works Noticed:

Black's Law Dictionary (5th Ed.) [para. 55].

McLaren on Secured Transactions in Personal Property in Canada, vol. 1, pp. 1-11 [para. 75]; 1-23 [para. 75]; 1-35, 1-43 [para. 59].

Catzman and Abel, Personal Property Security Law in Ontario (1976), pp. 1-3 [para. 60]; 135 [para. 75].

Whitaker, Treatise of the Law of Lien (1812) [paras. 68, 99].

Hall on Possessory Liens (1917), p. 16 [para. 68].

Driedger on Construction of Statutes (2nd Ed.), p. 74 [para. 70].

Gilmore, Security Interests in Personal Property, pp. 288-289 [para. 103].

Royal Bank of Canada v. J.I. Case Canada Inc., Annotation on, [1983] Man. L.J. 95 [para. 108].

Halsbury's Laws of England (4th Ed. 1983), vol. 44, para. 886 [para. 121].

Counsel:

D.G. Hill and G.B. Taylor, for the appellant;

J.F.R. Taylor, Q.C., for the respondent.

This appeal was heard before Hall, O'Sullivan, Huband, Philp and Twaddle, JJ.A., of the Manitoba Court of Appeal on November 12, 1986. The decision of the Court of Appeal was delivered on December 22, 1987, when the following opinions were filed:

Twaddle, J.A. (Hall, J.A., concuring) - see paragraphs 1 to 43;

Philp, J.A. - see paragraphs 44 to 87;

O'Sullivan, J.A., dissenting - see paragraphs 88 to 114;

Huband, J.A., dissenting - see paragraphs 115 to 142.