Goodfellow Inc. v. Heather Building Supplies Ltd., (1996) 155 N.S.R.(2d) 394 (CA)

• Judge: Roscoe, Pugsley and Flinn, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: November 18, 1996
• Jurisdiction: Nova Scotia
• Citations: (1996), 155 N.S.R.(2d) 394 (CA)

Goodfellow Inc. v. Heather Bldg. (1996), 155 N.S.R.(2d) 394 (CA);

    457 A.P.R. 394

MLB headnote and full text

Goodfellow Inc. (appellant) v. Heather Building Supplies Limited (respondent)

(C.A. No. 129136)

Indexed As: Goodfellow Inc. v. Heather Building Supplies Ltd.

Nova Scotia Court of Appeal

Roscoe, Pugsley and Flinn, JJ.A.

November 18, 1996.

Summary:

The plaintiff alleged that, pursuant to conditional sales contracts, it had a secured creditor's interest in certain lumber that it had previously sold to the defendant.

The Nova Scotia Supreme Court, in a decision reported 150 N.S.R.(2d) 341; 436 A.P.R. 341, dismissed the plaintiff's claim. The plaintiff appealed.

The Nova Scotia Court of Appeal dis­missed the appeal.

Bankruptcy - Topic 2304

Proposals - Effect of proposal - Powers of trustee - [See Conditional Sales - Topic 1101 ].

Bankruptcy - Topic 2755

Trustees - Powers of - Respecting secu­rity - [See Conditional Sales - Topic 1101 ].

Conditional Sales - Topic 8

General - Common law rights of condi­tional seller - The plaintiff sold lumber to the defendant - For approximately six years the invoices forwarded to the de­fendant indicated that the plaintiff retained ownership of the lumber provided that the purchase price remained outstand­ing - At issue was whether the purported reserva­tion of title by the plaintiff in the invoice was effective as a conditional sale - The trial court held that the invoice constituted a conditional sale between the plaintiff and the defendant only - It in no way affected third parties, and in particular creditors of the defendant, who, at the time of becom­ing creditors, had no notice of the pur­ported reservations of title - The Nova Scotia Court of Appeal dismissed the plaintiff's appeal.

Conditional Sales - Topic 8

General - Common law rights of condi­tional seller - The trial court stated that the conditions or terms of sale incorporat­ing a reservation of title in a vendor, until payment in full, were sufficient, at com­mon law, to satisfy the requirements for a conditional sale - However, if the docu­ments were not registered pursuant to the terms of the Conditional Sales Act (N.S.), s. 3, the reservation of title did not apply to "creditors of the buyer, who at the time of becoming creditors have no notice of the provision" - The Nova Scotia Court of Appeal dismissed the vendor's appeal.

Conditional Sales - Topic 22

General - Elements of conditional sale - Conditional sale defined - [See both Con­ditional Sales - Topic 8 ].

Conditional Sales - Topic 345

Statutory requirements - Registration - Effect of failure to register - [See second Conditional Sales - Topic 8 ].

Conditional Sales - Topic 345

Statutory requirements - Registration - Effect of failure to register - The plaintiff sold lumber to the defendant - For approximately six years the invoices for­warded to the defendant indicated that the plaintiff retained ownership of the lumber provided that the purchase price remained outstanding - However, these documents were not registered under the Conditional Sales Act - In 1995, the plaintiff, fearing the defendant's closure, issued an originat­ing notice and obtained a recovery order for any of its lumber on the defendant's premises - Thereafter, the defendant's trustee filed a notice of intention to lodge a proposal (Bankruptcy and Insolvency Act, s. 50.4(1)) - The trustee filed a stay of proceedings of the plaintiff's claim and challenged the plaintiff's ownership of the lumber - The trial court held that the trustee was entitled to maintain his chal­lenge because of the plaintiff's failure to register under the Conditional Sales Act - The court further noted that this defect was not cured simply by the plaintiff retaking possession of the lumber - The Nova Scotia Court of Appeal dismissed the plaintiff's appeal.

Conditional Sales - Topic 1083

Rights of third parties - Creditors - What constitutes a creditor entitled to protection - [See both Conditional Sales - Topic 8 ].

Conditional Sales - Topic 1101

Rights of third parties - Trustees in bank­ruptcy - The defendant's trustee in bank­ruptcy filed a notice of intention to file a proposal on behalf of the defendant (Bankruptcy and Insolvency Act, s. 52.4(1)) - Thereafter, the trustee chal­lenged the plaintiff's ownership of certain lumber on the ground that the plaintiff failed to reg­ister a conditional sales agree­ment - The plaintiff, inter alia, challenged the appro­priateness of a trustee under a proposal to attack the non-registration of a conditional sales agreement - The trial court held that the trustee's actions were appropriate - The Nova Scotia Court of Appeal dis­missed the plaintiff's appeal.

Cases Noticed:

Berringer, Re, [1930] 1 D.L.R. 882 (N.S.S.C.), folld. [para. 3].

Zutphen Brothers Construction Ltd. (Insol­vent), Re (1994), 132 N.S.R.(2d) 337; 376 A.P.R. 337 (C.A.), dist. [para. 3].

Counsel:

Joseph M.J. Cooper, Q.C., for the appel­lant;

Douglas J. Lloy, for the respondent.

This appeal was heard on November 18, 1996, before Roscoe, Pugsley and Flinn, JJ.A., of the Nova Scotia Court of Appeal.

On November 18, 1996, Roscoe, J.A., delivered orally the following judgment for the Court of Appeal, with written reasons released on November 19, 1996.