Harvey Dodds Ltd. v. Royal Bank of Canada, (1979) 1 Sask.R. 78 (CA)

Judge:Woods, Brownridge and Bayda, JJ.A.
Court:Court of Appeal for Saskatchewan
Case Date:September 13, 1979
Jurisdiction:Saskatchewan
Citations:(1979), 1 Sask.R. 78 (CA)
 
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Dodds Ltd. v. Royal Bk. (1979), 1 Sask.R. 78 (CA)

MLB headnote and full text

Harvey Dodds Ltd. v. Royal Bank of Canada

(No. 7007)

Indexed As: Harvey Dodds Ltd. v. Royal Bank of Canada

Saskatchewan Court of Appeal

Woods, Brownridge and Bayda, JJ.A.

September 13, 1979.

Summary:

This case arose out of competing claims by a bank and a distributor to chattels of a retailer. In 1975 the retailer gave to a bank a chattel mortgage covering inventory and after acquired property. The chattel mortgage was duly registered. In 1977 the retailer gave to a distributor a floating charge also covering inventory and after acquired property. The floating charge was duly registered. Later after a default, the distributor seized chattels from the retailer. Subsequently the distributor commenced an action to determine whether its claim against the goods seized took precedence over the rights of the bank. The trial court held that the interest of the distributor took precedence over the interest of the bank because the distributor's equitable interest crystallized when it seized the chattels in question. The bank appealed to the Saskatchewan Court of Appeal.

The Saskatchewan Court of Appeal allowed the appeal, set aside the trial court judgment and held that by virtue of s. 3 of the Bills of Sale Act that the distributor had notice of the bank's interest and that the bank's claim took precedence over the claim of the distributor.

Chattel Mortgages and Bills of Sale - Topic 3646

Lien or charge - Floating charge - Priorities - In 1975 a retailer gave to a bank a chattel mortgage (which was duly registered) covering inventory and after acquired property - In 1977 the same retailer gave to a distributor a floating charge (which was duly registered) which also covered inventory and after acquired property - Later in 1977 the retailer defaulted and the bank seized and sold one of the retailer's chattels - The distributor commenced an action to determine the priority between the claims of the bank and the distributor to the proceeds from the sale of the chattel - The Saskatchewan Court of Appeal held that by virtue of s. 3 of the Bills of Sale Act and by virtue of the prior registration by the bank of its chattel mortgage, that the distributor had notice of the bank's interest and, consequently, the bank's claim took precedence over the claim of the distributor - See paragraph 8.

Chattel Mortgages and Bills of Sale - Topic 3642

Floating charge - Nature of a floating charge - The Saskatchewan Court of Appeal referred to a floating charge as an equitable charge - See paragraphs 5 and 16.

Cases Noticed:

Kozak v. Ford Motor Credit Company of Canada Limited and J & D's Used Cars Limited, [1971] 3 W.W.R. 1, refd to. [paras. 5, 23].

McAllister v. Forsyth (1887), 12 S.C.R. 1, refd to. [para. 18].

Illingworth v. Houldsworth, [1904] A.C. 355, refd to. [para. 19].

Re Morrison, Jones & Taylor, Limited; Cookes v. Morrison, Jones & Taylor, Limited, [1914] 1 Chancery 50, refd to. [para. 20].

Reporter Publishing Company Limited v. Manton Brothers Limited (1961), 35 W.W.R. 498, refd to. [para. 23].

Statutes Noticed:

Bills of Sale Act, R.S.S. 1965, c. 392, sect. 3 [para. 7].

Counsel:

T.C. Wakeling, Q.C. and R.N. Miller, for the appellant;

W.R. Matheson, Q.C., for the respondent.

This appeal was heard by WOODS, BROWNRIDGE and BAYDA, JJ.A., of the Saskatchewan Court of Appeal.

The judgment of the Saskatchewan Court of Appeal was delivered on September 13, 1979 and the following opinions were filed:

WOODS, J.A. - see paragraphs 1 to 9;

BAYDA, J.A. - see paragraphs 10 to 24.

BROWNRIDGE, J.A., concurred with WOODS, J.A.

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