KBA Canada Inc. v. 3S Printers Inc. et al., 2014 BCCA 117
| Judge | Low, Neilson and Groberman, JJ.A. |
| Court | Court of Appeal (British Columbia) |
| Case Date | October 01, 2013 |
| Jurisdiction | British Columbia |
| Citations | 2014 BCCA 117;(2014), 353 B.C.A.C. 167 (CA) |
KBA Can. Inc. v. 3S Printers Inc. (2014), 353 B.C.A.C. 167 (CA);
603 W.A.C. 167
MLB headnote and full text
Temp. Cite: [2014] B.C.A.C. TBEd. AP.001
KBA Canada, Inc. (respondent/plaintiff) v. Supreme Graphics Ltd. (appellant/defendant) and 3S Printers Inc., CIT Financial Ltd. and The Attorney General on behalf of Minister of National Revenue (respondents/defendants)
(CA040176; 2014 BCCA 117)
Indexed As: KBA Canada Inc. v. 3S Printers Inc. et al.
British Columbia Court of Appeal
Low, Neilson and Groberman, JJ.A.
March 31, 2014.
Summary:
KBA Canada Inc. had a registered security interest in an offset printing press in the possession of 3S Printers Inc. A third party discharged the registration without authorization, apparently through inadvertence. By the time KBA became aware of the discharge and re-registered its interest, it had lost its priority under the express scheme set out in the Personal Property Security Act (PPSA). After 3S became insolvent, KBA applied to the Supreme Court for equitable relief to restore the priority of its charge. In doing so, it relied on s. 68 of the PPSA, which recognized the continued operation of principles of equity where they were consistent with the provisions of the statute, and on s. 70, which gave the court jurisdiction to deal with priority disputes by way of summary applications. KBA also relied on the doctrine of unjust enrichment, which it contended could be applied to override the statutory priority regime. The claim was opposed by two other secured creditors, Supreme Graphics Ltd. and CIT Financial Ltd. All parties agreed that the matter should be dealt with by way of a summary trial.
The British Columbia Supreme Court, in a decision reported at [2012] B.C.T.C. Uned. 1078, accepted both of KBA's arguments and restored KBA's priority. Supreme Graphics appealed.
The British Columbia Court of Appeal allowed the appeal. The chambers judge erred in finding that the provisions of the PPSA, and in particular, ss. 68 and 70, gave him jurisdiction to override the statutory priority rules on the basis that those rules resulted in unfairness. The overriding statutory goals of certainty and predictability in personal property financing would be undermined by giving those sections the broad interpretation applied to them by the chambers judge. The PPSA's priorities provisions constituted clear juristic reasons for the enrichment in this case. The PPSA comprehensively governed priority among creditors, and the judge erred in finding that the doctrine of unjust enrichment could be used to navigate around the clear statutory provisions. The clear priority scheme set out in the PPSA applied. There was no room for the court below to override that scheme in the interests of "fairness".
Equity - Topic 15
Equity v. statute law - See paragraphs 20 to 32.
Equity - Topic 602
Equitable jurisdiction - General - Exercise of - See paragraphs 20 to 32.
Personal Property - Topic 6001
Security interests - General - Purpose of legislation - See paragraphs 20 to 24 and 32.
Personal Property - Topic 6201
Security interests - Priorities - General - See paragraphs 20 to 42.
Personal Property - Topic 6503
Security interests - Remedies - General - Jurisdiction or discretion of court - See paragraphs 20 to 32.
Restitution - Topic 64
Unjust enrichment - General - Juristic reason for enrichment - See paragraphs 33 to 42.
Restitution - Topic 102
Unjust enrichment - Bars - Statutory code - See paragraphs 33 to 42.
Cases Noticed:
674921 B.C. Ltd. v. Advanced Wing Technologies Corp. et al. (2006), 222 B.C.A.C. 104; 368 W.A.C. 104; 2006 BCCA 49, refd to. [para. 21].
Innovation Credit Union v. Bank of Montreal, [2010] 3 S.C.R. 3; 407 N.R. 294; 362 Sask.R. 1; 500 W.A.C. 1; 2010 SCC 47, refd to. [para. 27].
Estevan Credit Union Ltd. v. Transamerica Commercial Corp. et al. (1989), 78 Sask.R. 285 (Q.B.), refd to. [para. 28].
Canadian Auto Lease Corp. (Bankrupt), Re, [2006] B.C.T.C. 849; 2006 BCSC 849 (Master), refd to. [para. 28].
Canadian Imperial Bank of Commerce v. Melnitzer (Trustee of) (1993), 23 C.B.R.(3d) 161 (Ont. Gen. Div.), refd to. [para. 28].
Rapid Transit Mix Ltd. v. Commcorp Financial Services Inc. (1998), 212 A.R. 199; 168 W.A.C. 199; 1998 ABCA 63, refd to. [para. 30].
Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 34].
Becker v. Pettkus, [1980] 2 S.C.R. 834; 34 N.R. 384, refd to. [para. 34].
Peel (Regional Municipality) v. Ontario, [1992] 3 S.C.R. 762; 144 N.R. 1; 59 O.A.C. 81, refd to. [para. 34].
Central Guarantee Trust Co. v. Dixdale Mortgage Investment Corp. et al. (1994), 77 O.A.C. 253; 24 O.R.(3d) 506 (C.A.), refd to. [para. 36].
Gladstone v. Canada (Attorney General), [2005] 1 S.C.R. 325; 332 N.R. 182; 210 B.C.A.C. 1; 348 W.A.C. 1; 2005 SCC 21, refd to. [para. 39].
Bond Development Corp. v. Esquimalt (Township) (2006), 226 B.C.A.C. 227; 373 W.A.C. 227; 2006 BCCA 248, refd to. [para. 40].
Caterpillar Financial Services Ltd. v. 360networks corp. et al. (2007), 235 B.C.A.C. 95; 388 W.A.C. 95; 2007 BCCA 14, refd to. [para. 41].
Furmanek v. Community Futures Development Corp. of Howe Sound (1998), 110 B.C.A.C. 212; 178 W.A.C. 212; 162 D.L.R.(4th) 501 (C.A.), refd to. [para. 43].
Statutes Noticed:
Personal Property Security Act, R.S.B.C. 1996, c. 359, sect. 35 [para. 22]; sect. 68 [para. 23]; sect. 70 [para. 29].
Authors and Works Noticed:
Cuming, Ronald C.C., Walsh, Catherine, and Wood, Roderick, Personal Property Security Law (2nd Ed. 2012), p. 51 [para. 20].
MacDougall, Bruce, Personal Property Security Law in British Columbia (2009), p. 11 [para. 25].
Counsel:
R.D.W. Dalziel and A. Amos-Stewart, for the appellant;
B.G.N. McLean and R.V. Aldridge, for the respondent, KBA Canada Inc.;
G.G. Plottel, for the respondent, CIT Financial Ltd.
This appeal was heard on October 1, 2013, at Vancouver, B.C., before Low, Neilson and Groberman, JJ.A., of the British Columbia Court of Appeal. The following judgment of the Court of Appeal was delivered by Groberman, J.A., on March 31, 2014.
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