Federal Savings Credit Union v. Alchorn and Dorey, (1983) 61 N.S.R.(2d) 217 (TD)

• Judge: Hallett, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: November 16, 1983
• Jurisdiction: Nova Scotia
• Citations: (1983), 61 N.S.R.(2d) 217 (TD)

Federal Savings Credit v. Alchorn (1983), 61 N.S.R.(2d) 217 (TD);

    133 A.P.R. 217

MLB headnote and full text

Federal Savings Credit Union v. Alchorn and Dorey

(S.K. No. 1396)

Indexed As: Federal Savings Credit Union v. Alchorn and Dorey

Nova Scotia Supreme Court

Trial Division

Hallett, J.

December 23, 1983.

Summary:

A chattel mortgagee incorrectly described the year and serial number of an encumbered automobile in registering the chattel mortgage. A subsequent purchaser of the automobile, who had no notice of the chattel mortgage, refused to return the car to the chattel mortgagee, when presented with a recovery order obtained after the chattel mortgagor defaulted on payments on the automobile. The automobile was destroyed by fire and the subsequent purchaser received $4,000.00 in insurance proceeds. The chattel mortgagee brought an action for conversion against the subsequent purchaser to recover the $4,000.00. The Nova Scotia Supreme Court, Trial Division, dismissed the action, and held that the chattel mortgage was void as against the subsequent purchaser for noncompliance with the description requirements of s. 4 of the Bills of Sale Act.

Chattel Mortgages and Bills of Sale - Topic 1183

Validity - Essential elements - Essential elements - Description of chattels - Sufficiency of - The Nova Scotia Supreme Court, Trial Division, generally discussed the development of the law relating to the sufficiency of the description of chattels within the meaning of s. 4 of the Bills of Sale Act, R.S.N.S. 1967, c. 23 - See paragraphs 4 to 20.

Chattel Mortgages and Bills of Sale - Topic 1183

Validity - Essential elements - Description of chattels - Sufficiency of - The Nova Scotia Supreme Court, Trial Division, held that whether or not the description of a chattel was sufficient to enable the chattel to be known and distinguished within the meaning of s. 4 of the Bills of Sale Act, R.S.N.S. 1967, c. 23, was a question of fact, not law - The court further held that a description was not sufficient unless a person looking at the chattel mortgage could determine by proper inquiries whether or not the chattel in question was encumbered - See paragraphs 10 to 21.

Chattel Mortgages and Bills of Sale - Topic 1183

Validity - Essential elements - Description of chattels - Sufficiency of - A chattel mortgage incorrectly described a 1979 automobile as a 1977 model, and incorrectly stated two digits of the serial number - In all other respects the description was correct - The Nova Scotia Supreme Court, Trial Division, held that the description was not sufficient to comply with s. 4 of the Bills of Sale Act and therefore the chattel mortgage was void as against subsequent purchasers, because the error in year was so misleading that a searcher could not "readily and easily" know that the automobile was encumbered - See paragraphs 23 to 31.

Chattel Mortgages and Bills of Sale - Topic 1183

Validity - Essential elements - Description of chattels - Sufficiency of - Section 4 of the Bills of Sale Act, R.S.N.S. 1967, c. 23, stated that "Every bill of sale shall contain such sufficient and full description of the chattels comprised therein that the same may be thereby readily and easily known and distinguished" - The Nova Scotia Supreme Court, Trial Division, held that the wording of the section precluded any question as to whether a subsequent purchaser exercised reasonable care in ascertaining whether the chattel was encumbered - See paragraph 24.

Chattel Mortgages and Bills of Sale - Topic 1192

Validity - Essential elements - Description of chattels - Curing of defects - Bills of Sale Act, R.S.N.S. 1967, c. 23, s. 25 - A chattel mortgage incorrectly described a 1979 automobile as a 1977 model, and incorrectly stated two digits of the serial number - The chattel mortgagee submitted that the defects were clerical errors only, curable under s. 25 of the Act - The Nova Scotia Supreme Court, Trial Division, held that the defects were not curable, because a complete failure to describe the automobile as required under s. 4 of the Act was not a clerical error - See paragraphs 28 to 29.

Cases Noticed:

McCall et al. v. Wolff et al. (1885), 13 S.C.R. 330, folld. [paras. 6 to 8].

Hovey et al. v. Whiting et al. (1887), 14 S.C.R. 515, refd to. [paras. 9 to 10].

Gergley v. MacIntosh and Etty, [1945] 3 W.W.R. 600, consd. [paras. 12 to 13].

Re Bentley, [1974] 1 O.R.(2d) 120, refd to. [para. 15].

Niagara Finance Company Limited v. Proctor and Dunlop (1979), 32 N.S.R.(2d) 208; 54 A.P.R. 208, consd. [para. 18].

Bank of Montreal v. Jack Gardiner Used Cars Limited (1977), 24 N.S.R.(2d) 552; 35 A.P.R. 552, consd. [para. 19].

Watson v. Bank of Nova Scotia (1979), 37 N.S.R.(2d) 189; 67 A.P.R. 189, consd. [para. 20].

Chrysler Credit Canada Ltd. v. Commissioner of the Northwest Territories et al. (1981), 25 A.R. 319; 108 D.L.R.(3d) 198, refd to. [para. 27].

Federal Savings Credit Union Ltd. v. Centennial Trailer Sales Ltd. (1975), 11 N.S.R.(2d) 260; 5 A.P.R. 260, refd to. [para. 32].

Statutes Noticed:

Bills of Sale Act, R.S.N.S. 1967, c. 23, sect. 2 [para. 30]; sect. 4 [para. 4]; 25 [para. 28].

Authors and Works Noticed:

Webster's New International Dictionary, [para. 25].

Concise Oxford Dictionary, 1982, [para. 25].

Counsel:

Darrel Pink, for the plaintiff;

Peter Bryson, for the defendants.

This case was heard on November 16, 1983, at Kentville, Nova Scotia, before Hallett, J., of the Nova Scotia Supreme Court, Trial Division, who delivered the following judgment on December 23, 1983.