Foreman (Bankrupt), Re, (2010) 349 Sask.R. 196 (QB)

• Judge: Zarzeczny, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: January 29, 2010
• Jurisdiction: Saskatchewan
• Citations: (2010), 349 Sask.R. 196 (QB);2010 SKQB 34

Foreman (Bankrupt), Re (2010), 349 Sask.R. 196 (QB)

MLB headnote and full text

Temp. Cite: [2010] Sask.R. TBEd. FE.034

Able Automotive Ltd. v. Cameron-Okolita Inc.

In The Matter Of the bankruptcy of Donovan William Foreman and Debra Leanne Foreman

(Estate Nos. 14071, 14875; Bankruptcy Nos. 22-889882, 22-889892; 2010 SKQB 34)

Indexed As: Foreman (Bankrupt), Re

Saskatchewan Court of Queen's Bench

Judicial Centre of Regina

Zarzeczny, J.

January 29, 2010.

Summary:

Foreman left his car with Able Automotive Ltd. for repairs. One month later, Foreman assigned into bankruptcy. Able filed a proof of claim as an unsecured creditor for $6,260, including $310 claimed as preferred status under s. 136 of the Bankruptcy and Insolvency Act (BIA) and a secured claim for $5,500. The trustee disallowed all but $170 of the secured claim (representing the only services that Foreman had authorized). Able appealed under s. 135 of the BIA. Subsequently, the repaired vehicle was sold for $5,000, which was held in trust.

The Registrar of the Saskatchewan Court of Queen's Bench, In Bankruptcy and Insolvency, in a decision reported at (2009), 349 Sask.R.183 allowed the appeal to the extent of a secured claim for $3,890. Able appealed.

The Saskatchewan Court of Queen's Bench dismissed the appeal.

Personal Property - Topic 6528

Security interests - Remedies of secured party - Claim against sale proceeds - Foreman left his car with Able Automotive Ltd. for repairs - One month later, Foreman assigned into bankruptcy - Able filed a proof of claim as an unsecured creditor for $6,260, including $310 claimed as preferred status under s. 136 of the Bankruptcy and Insolvency Act and a secured claim for $5,500 - The trustee disallowed all but $170 of the secured claim (representing the only services that Foreman had authorized) - Able appealed - Subsequently, the repaired vehicle was sold for $5,000, which was held in trust - The Registrar in Bankruptcy allowed the appeal to the extent of a secured claim for $3,890 on the basis that Able had a lien under the Commercial Liens Act and the right, under s. 59(2) of the Personal Property Security Act (PPSA), to sell the collateral after repair with the reasonable costs of the repairs added to the obligation - The sale proceeds of $5,000 were to be paid to the trustee - Able had priority to $3,890 - The Saskatchewan Court of Queen's Bench affirmed the decision as reasonable and correct - The court noted that s. 59(2) of the PPSA allowed recovery of "the reasonable expenses of ... holding ... the collateral" - Able had claimed not its expenses for holding the vehicle, but rather sought to recover a charge for such holding (as storage fees) - The term "expenses" was not wide enough to cover the secured party's unilaterally imposed charges as this could not be classified as an expense in any ordinary understanding or definition of that term.

Words and Phrases

Expenses - The Saskatchewan Court of Queen's Bench discussed the definition of "expenses" as found in s. 59(2) of the Personal Property Security Act, S.S. 1993, c. P-6.2.

Statutes Noticed:

Personal Property Security Act, S.S. 1993, c. P-6.2, sect. 59(2) [para. 5].

Counsel:

Lorraine "Karla" McCoy, for Able Automotive Ltd.;

Joseph Okolita and Brian Williams, for Cameron-Okolita Inc.

This appeal was heard by Zarzeczny, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Regina, who delivered the following appeal judgment on January 29, 2010.