FBDB v. Prince Albert Fashion Bin, (1983) 22 Sask.R. 111 (CA)

JudgeBayda, C.J.S., Brownridge and Tallis, JJ.A.
CourtCourt of Appeal (Saskatchewan)
Case DateFebruary 24, 1983
JurisdictionSaskatchewan
Citations(1983), 22 Sask.R. 111 (CA)

FBDB v. Prince Albert Fashion Bin (1983), 22 Sask.R. 111 (CA)

MLB headnote and full text

Federal Business Development Bank v. Prince Albert Fashion Bin Ltd., Prince Albert Credit Union Ltd. and Kawula

(No. 7646)

Indexed As: Federal Business Development Bank v. Prince Albert Fashion Bin Ltd., Prince Albert Credit Union Ltd. and Kawula

Saskatchewan Court of Appeal

Bayda, C.J.S., Brownridge and Tallis, JJ.A.

February 24, 1983.

Summary:

A company mortgaged its assets to a bank and to a credit union. Both the bank and the credit union took a floating charge debenture as security. The bank's debenture was registered before the credit union's debenture. A receiver was appointed under the credit union's debenture. The bank applied for an order to distribute the funds realized from the mortgagor's assets.

The Saskatchewan Court of Queen's Bench ordered that the claim of the bank be paid in priority to the claim of the credit union - see 12 Sask.R. 412. The credit union appealed to the Saskatchewan Court of Appeal.

The Saskatchewan Court of Appeal dismissed the appeal.

Company Law - Topic 5391

Borrowing - Registration of security instruments - Priorities under the Corporation Securities Registration Act - The Saskatchewan Court of Appeal held that priorities between floating charges should be determined by the date of registration of the charges and not by the date of execution of the instruments creating the charges (see paragraph 19).

Personal Property - Topic 6163

Security interests - Floating charge, nature of - The Saskatchewan Court of Appeal stated that a creditor's equitable interest under a floating charge is not converted into a legal interest when the charge crystallizes (see paragraph 12).

Company Law - Topic 5428

Borrowing - Debentures - Crystallization of a floating charge - The Saskatchewan Court of Appeal referred to the circumstances which result in the crystallization of a floating charge (see paragraph 14).

Company Law - Topic 5428

Borrowing - Debentures - Crystallization of a floating charge - Two creditors each held a debenture containing a floating charge on the same assets - One of the creditors appointed a receiver under the debenture who took possession of the debtor's business premises - The Saskatchewan Court of Appeal held that in such circumstances the charges in both debentures were automatically crystallized (see paragraph 15).

Personal Property - Topic 6161

Security interests - Floating charge defined - The Saskatchewan Court of Appeal referred to a definition of a floating charge (see paragraph 11).

Cases Noticed:

Illingworth v. Houldsworth, [1904] A.C. 355, refd to. [para. 11].

Harvey Dodds Limited v. Royal Bank of Canada, 1 Sask.R. 78; [1979] 6 W.W.R. 722, refd to. [paras. 12 and 21].

Evans v. Rival Granite Quarries, Limited, [1910] 2 K.B. 979, refd to. [para. 14].

Security Trust Co. v. The Royal Bank of Canada, [1976] 1 All E.R. 381, refd to. [para. 18].

Ram Narain v. Radha Kishen et al. (1929), L.R. 57, refd to. [para. 18].

Humfrey v. Hickey, [1972] 3 W.W.R. 389, refd to. [para. 19].

Re Heather's House of Fashion Inc. (1977), 75 D.L.R.(3d) 9, refd to. [para. 20].

Re Household Products Co. Ltd. and Federal Business Development Bank (1981), 124 D.L.R.(3d) 325, refd to. [para. 21].

Statutes Noticed:

Business Corporations Act, S.S. 1979, c. B-10, sect. 95 [para. 7].

Corporation Securities Registration Act, R.S.S. 1978, c. C-39, sect. 2, sect. 3, sect. 4(1) [para. 17].

Authors and Works Noticed:

Gower's Company Law (2nd Ed.), p. 389 [para. 14].

Counsel:

R.G. Kennedy and J.R. Cherkewich, for Prince Albert Credit Union Ltd., appellants;

B.E. Salte, for Federal Business Development Bank, respondent.

This appeal was heard by BAYDA, C.J.S., BROWNRIDGE and TALLIS, JJ.A., of the Saskatchewan Court of Appeal.

The judgment of the Court of Appeal was delivered by TALLIS, J.A., at Regina, Saskatchewan, on February 24, 1983.

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1 practice notes
  • Ont. Dev. Corp. v. Bourgault Ind., (1995) 133 Sask.R. 311 (QB)
    • Canada
    • Saskatchewan Court of Queen's Bench for Saskatchewan
    • August 21, 1995
    ...Federal Business Development Bank v. Prince Albert Fashion Bin Ltd., Prince Albert Credit Union Ltd. and Kawula, [1983] 3 W.W.R. 464; 22 Sask.R. 111 (C.A.), consd. [para. Telford v. Holt, [1987] 2 S.C.R. 193; 78 N.R. 321; 81 A.R. 385; [1987] 6 W.W.R. 385; 54 Alta. L.R.(2d) 193; 21 C.P.C.(2d......
1 cases
  • Ont. Dev. Corp. v. Bourgault Ind., (1995) 133 Sask.R. 311 (QB)
    • Canada
    • Saskatchewan Court of Queen's Bench for Saskatchewan
    • August 21, 1995
    ...Federal Business Development Bank v. Prince Albert Fashion Bin Ltd., Prince Albert Credit Union Ltd. and Kawula, [1983] 3 W.W.R. 464; 22 Sask.R. 111 (C.A.), consd. [para. Telford v. Holt, [1987] 2 S.C.R. 193; 78 N.R. 321; 81 A.R. 385; [1987] 6 W.W.R. 385; 54 Alta. L.R.(2d) 193; 21 C.P.C.(2d......