General Motors Acceptance Corp. of Canada Ltd. v. Owens, (1993) 140 A.R. 344 (QBM)

• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 09, 1993
• Citations: (1993), 140 A.R. 344 (QBM)

GMAC v. Owens (1993), 140 A.R. 344 (QBM)

MLB headnote and full text

General Motors Acceptance Corporation of Canada Limited (applicant) v. Clayton William Owens (respondent)

(Action No. 9303-03157)

Indexed As: General Motors Acceptance Corp. of Canada Ltd. v. Owens

Alberta Court of Queen's Bench

Judicial District of Edmonton

Funduk, Master in Chambers

July 9, 1993.

Summary:

A G.M. dealer sold a truck and assigned the conditional sales contract to G.M.A.C., who registered a financing statement at the Personal Property Security Act Registry. The purchasers took possession, made the pay­ments and later resold it to the dealer, with­out G.M.A.C.'s knowledge. The dealer resold the truck to Owens, who had no knowledge of G.M.A.C.'s security interest. Someone continued to make the payments until the dealer went into receivership. Owens claimed title free from the security interest, pleading s. 30(2) of the Personal Property Security Act and s. 8(1) of the Factors Act.

A Master of the Alberta Court of Queen's Bench held that G.M.A.C. had priority. Neither s. 30(2) nor s. 8(1) applied on the facts.

Personal Property - Topic 6463

Security interests - Loss of title to third parties - Goods sold in ordinary course of business - A G.M. dealer sold a truck and assigned the conditional sales contract to G.M.A.C., who registered a financing statement at the Personal Property Security Act Registry - The purchasers took pos­session, made the payments and later resold it to the dealer, without G.M.A.C.'s knowledge - The dealer resold the truck to Owens, who had no knowledge of G.M.A.C.'s security interest - Someone continued to make the payments until the dealer went into receivership - Section 30(2) of the Personal Property Security Act provided that a buyer of goods sold in the ordinary course of business took title free from any security interest given by the seller - A Master of the Alberta Court of Queen's Bench held that s. 30(2) did not apply, because the security interest was given by the original purchaser, not the seller (dealer) - See paragraphs 1 to 80.

Sale of Goods - Topic 3126

Transfer or loss of title to third parties - Sale to bona fide purchaser without notice - Possession or continuation of possession by original seller - A G.M. dealer sold a truck and assigned the conditional sales contract to G.M.A.C., who registered a financing statement at the Personal Prop­erty Security Act Registry - The pur­chasers took possession, made the pay­ments and later resold it to the dealer, without G.M.A.C.'s knowledge - The dealer resold the truck to Owens, who had no knowledge of G.M.A.C.'s security interest - Section 8(1) of the Factors Act gave Owens title free from the secured interest if the dealer continued or was in possession of the truck when it sold it to Owens - A Master of the Alberta Court of Queen's Bench held that s. 8(1) did not apply where the dealer gave up possession and later regained possession at the time of the second sale - The critical "continues or is in possession of the goods" in s. 8(1) did not exist - See paragraphs 81 to 144.

Cases Noticed:

National Shawmut Bank v. Jones, 236 A.2d 484 (N.H. Supp. Ct.), refd to. [para. 33].

Willi v. Shearer (Don) Ltd., 3 P.P.S.A.C.(2d) 188 (B.C.S.C.), refd to. [para. 44].

Camco Inc. v. Olson (Frances) Realty (1979) Ltd. et al., [1986] 6 W.W.R. 258; 40 Sask.R. 161 (C.A.), refd to. [para. 62].

Paccar Financial Services Ltd. v. Chubey, [1992] 2 W.W.R. 751; 79 Man.R.(2d) 193 (Q.B.), refd to. [para. 67].

Allis-Chalmers Credit Corp. of Canada Ltd. v. Leon's Manufacturing Co. and Cormack Developments Ltd. (1983), 45 A.R. 175; 147 D.L.R.(3d) 473 (C.A.), refd to. [para. 76].

Johnson v. Credit Lyonnais Co. (1877), 3 C.P.D. 32, refd to. [para. 96].

Pacific Motor Auctions Pty. Ltd. v. Motor Credits (Hire Finance) Ltd., [1965] A.C. 867; [1965] All E.R. 105 (P.C.), refd to. [para. 99].

Staffs Motor Guarantee v. British Wagon Co., [1934] 2 K.B. 305, refd to. [para. 104].

Mitchell v. Jones (1905), 24 N.Z.L.R. 932, refd to. [para. 106].

Eastern Distributors v. Goldring, [1957] 2 Q.B. 600 (C.A.), refd to. [para. 109].

Worchester Works Finance v. Cooden Engineering Co., [1971] 3 All E.R. 708; [1972] 1 Q.B. 210 (C.A.), refd to. [para. 109].

Union Transport v. Ballarie, [1937] 1 K.B. 510, refd to. [para. 114].

Olds Discount Co. v. Krett, [1940] 2 K.B. 117, refd to. [para. 115].

Bender v. National Acceptance Corp. (1928), 63 O.L.R. 215 (C.A.), refd to. [para. 121].

Vowles v. Island Finances Ltd., [1940] 3 W.W.R. 177 (B.C.C.A.), refd to. [para. 125].

General Motors Acceptance Corp. of Canada Ltd. v. Hubbard (1977), 18 N.B.R.(2d) 248; 26 A.P.R. 248 (Q.B.), affd. 21 N.B.R.(2d) 49; 37 A.P.R. 49 (C.A.), refd to. [para. 133].

Statutes Noticed:

Factors Act, R.S.A. 1980, c. F-1, sect. 2 [para. 87]; sect. 8(1) [para. 81]; sect. 9(1) [para. 135]; sect. 9(2) [para. 138].

Personal Property Security Act, S.A. 1988, c. P-4.05, sect. 30(2) [para. 25].

Sale of Goods Act, R.S.A. 1980, c. S-2, sect. 27(1) [para. 133]; sect. 27(2) [para. 134]; sect. 27(2.1) [para. 135]; sect. 27(3) [para. 137].

Authors and Works Noticed:

Cuming and Wood, Alberta Personal Property Security Act Handbook, pp. 174, 175 [para. 32].

Benjamin's Sale of Goods (4th Ed.), gen­erally [para. 98].

Fridman, G.H.L., The Sale of Goods in Canada (2nd Ed. 1979), p. 148 [para. 98].

Greig, D.W., Sale of Goods, generally [para. 95].

Counsel:

L. Dianne Young and P. Frederiksen, for the applicant;

R.T. Keswick, for the respondent.

This application was heard before Funduk, Master in Chambers, of the Alberta Court of Queen's Bench, Judicial District of Edmon­ton, who delivered the following judgment on July 9, 1993.