Kay's Furniture Mart Ltd. (Bankrupt), Re, [1968] N.B. Law News No. 71 (QB)

JudgeBarry, J.
CourtCourt of Queen's Bench of New Brunswick (Canada)
Case DateMay 22, 1963
JurisdictionNew Brunswick
Citations[1968] N.B. Law News No. 71 (QB)

Kay's Furniture (Bankrupt), Re, [1968] N.B. Law News No. 71 (QB)

MLB Law News

In The Matter Of the Bankruptcy of Kay's Furniture Mart Ltd.

And In The Matter Of an Appeal From the Disallowance of the Claim of Hupp Credit Corporation of Canada Limited as a Secured Creditor

Indexed As: Kay's Furniture Mart Ltd. (Bankrupt), Re

New Brunswick Supreme Court

Queen's Bench Division

Barry, J.

May 22, 1963.


Bankruptcy - Claim for Security - Conditional Sales Act, s. 4(1) - Hupp Credit Corporation of Canada Ltd. filed a claim against the trustee of the Bankrupt Company which claim was alleged to be a secured claim pursuant to section 4(1) of Chapter 34 R.S.N.B. 1952, Conditional Sales Act. Creditor (Hupp) appealed the trustee's decision on ground that filing was not required of a manufacturer who comes within section 4(1) of the Act.

Court held trustee was correct in rejecting the claim of the Appellant as a secured claim. The conditional sales contracts concerning the goods in question were not filed in New Brunswick and the Appellant must establish it comes within section 4 of the Conditional Sales Act. Court held this section applies only to a manufacturer who maintains an office in New Brunswick at which office an inquiry may be made. Section 4(1)(b) of the Act must be strictly complied with both for the benefit of the public and the manufacturer. The manufacturer is represented in New Brunswick by an agent who maintains an office in his own home and the name plate on the goods made no reference to this agent. Court held that manufacturer does not "maintain an office in the Province". Court stated,

"To hold otherwise would be to decide that commission agents, operating from their own homes or from even private offices of their own, would be complying with the Act for all manufacturers represented by them, notwithstanding the fact that the general public would have no means of ascertaining the location of the office from ordinary sources. The Appellant argued that the purchaser could ask the dealer for the name and address of the agent but the consumer would then be left in the hands of a person who might, or might not, give the proper information.

"The Conditional Sales Act has been always strictly construed and I cannot find any authority enabling me to extend the protection of the Act to a manufacturer on the facts of the present case. Were I to do so, a manufacturer located outside of the province could appoint a commission agent within the province, and be relieved of the necessity of filing conditional sales agreements. Even as section 4 now reads, it places a very heavy burden on the ultimate purchaser of consumer goods and I will not extend its meaning. Personally, I think that it is an inequitable section in that it protects a manufacturer who elects to take credit risks and gives little or no protection to the general public. Only the Legislature can amend or correct this situation, however. Section 9 protects the consumer in respect to purchases from a dealer but not with respect to transactions between individuals."


Paul S. Creaghan, for the appellant;

Lawrence M. Machum, for the trustee.

This case was heard before Barry, J., of the New Brunswick Supreme Court, Queen's Bench Division, who delivered the following decision on May 22, 1963.

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