Lévy (Sam) & Associés Inc. v. Azco Mining Inc., (2001) 280 N.R. 155 (SCC)

• Judge: McLachlin, C.J.C., L'Heureux-Dubé, Iacobucci, Major, Binnie, Arbour and LeBel, JJ.
• Court: Supreme Court (Canada)
• Case Date: December 20, 2001
• Jurisdiction: Canada (Federal)
• Citations: (2001), 280 N.R. 155 (SCC);2001 SCC 92

Lévy & Assoc. Inc. v. Azco Mining Inc. (2001), 280 N.R. 155 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2001] N.R. TBEd. DE.013

Azco Mining Inc. (appellant) v. Sam Lévy & Associés Inc. (respondent)

(27876; 2001 SCC 92)

Indexed As: Lévy (Sam) & Associés Inc. v. Azco Mining Inc.

Supreme Court of Canada

McLachlin, C.J.C., L'Heureux-Dubé, Iacobucci, Major, Binnie, Arbour and LeBel, JJ.

December 20, 2001.

Summary:

Eagle was adjudged bankrupt in Quebec. The trustee petitioned the Quebec Superior Court, in Bankruptcy, for the "recuperation" of assets allegedly belonging to Eagle but wrongfully withheld by Azco. Azco, who had an office in British Columbia, brought a motion to transfer the petition "to the Supreme Court of British Columbia, Bank­ruptcy Division of Vancouver".

The Quebec Superior Court, in Bank­ruptcy, in a decision reported [1999] R.J.Q. 1497, dismissed Azco's motion. Azco appealed.

The Quebec Court of Appeal, in a decision reported [2000] R.J.Q. 392, dismissed the appeal. Azco appealed again.

The Supreme Court of Canada dismissed the appeal.

Bankruptcy - Topic 6712

Practice - General principles - Venue (incl. transfer of proceedings) - Eagle operated in Quebec - Azco operated in British Colum­bia - Eagle wanted to dev­elop gold mines in Mali - Azco financed the project - The relevant agreements provided that the laws of British Columbia would govern them - Eagle and Azco were to each hold an interest in Sanou, a joint venture holding company - Eagle signed promissory notes in Azco's favour - Eagle was adjudged bankrupt in Quebec - The Mali project continued - The trustee alleged that Azco now controlled Sanou and wrongfully withheld Sanou shares and warrants to which Eagle was entitled - The trustee petitioned the Quebec Superior Court, in Bankruptcy, for the "recuper­ation" of the Sanou shares and warrants - Azco moved to transfer the trustee's peti­tion to British Columbia - Azco also gave notice that it would counterclaim respect­ing the promis­sory notes - The Supreme Court of Canada affirmed the dismissal of Azco's motion where: (1) the bankruptcy petition was properly filed in Quebec; (2) the Bank­ruptcy and Insolvency Act estab­lished one judicial command centre or "single control" for all proceedings related to the bank­ruptcy; (3) the Bankruptcy Court had jurisdiction over the trustee's particular contract claim here because (a) Azco was not a "stranger to the bank­ruptcy", and (b) the trustee's claim was to specific property of the bankrupt; (4) the agreements con­tained choice of law and not choice of forum provisions; and (5) Azco did not demonstrate sufficient cause under s. 187(7) of the Act to justify a transfer to British Columbia.

Bankruptcy - Topic 6745

Practice - Jurisdiction - To determine property of bankrupt - [See Bank­ruptcy - Topic 6712 ].

Bankruptcy - Topic 6746

Practice - Jurisdiction - Contract claims - A bankruptcy trustee petitioned the bank­ruptcy court for the "recuperation" of property allegedly wrongfully withheld from the bankrupt by the bankrupt's co-contracting party Azco - Azco replied that the bankruptcy court had no jurisdiction over the matter because the trustee's claims against it were "exclusively contractual in nature" - The Supreme Court of Canada rejected Azco's argument - The court held that the issue was whether the contractual dispute between Azco and the trustee properly related to the bankruptcy - If so, the fact that a contractual claim by a trustee also had a property and civil rights aspect did not in any way impair the bankruptcy court's jurisdiction - The court went on to hold that the bankruptcy court had jurisdiction over the trustee's particular contract claim here because Azco was not a "stranger to the bank­ruptcy" and the trustee's claim was to specific property of the bankrupt - See paragraphs 30 to 56.

Constitutional Law - Topic 6261

Federal jurisdiction (s. 91) - Bankruptcy and insolvency - General principles - The Supreme Court of Canada held: "It seems to me that the decided cases recognize that the word 'Bankruptcy' in s. 91(21) of the Constitution Act, 1867 must be given a broad scope if it is to accomplish its pur­pose. Anything less would unnecessarily complicate and undermine the economical and expeditious winding up of the bank­rupt's affairs. Creation of a national juris­diction in bankruptcy would be of little utility if its exercise were continually frustrated by a pinched and narrow con­struction of the constitutional head of power. The broad scope of authority con­ferred on Parliament has been passed along to the bankruptcy court in s. 183(1) of the [Bankruptcy and Insolvency] Act, which confers a correspondingly broad jurisdic­tion" - See paragraphs 30 to 40.

Cases Noticed:

Alberta (Attorney General) v. Atlas Lumber Co., [1941] S.C.R. 87, consd. [para. 20].

Boily v. McNulty, [1928] S.C.R. 182, consd. [para. 25].

Mount Royal Lumber & Flooring Co., Re (1926), 8 C.B.R. 240 (Que. C.A.), consd. [para. 25].

Associated Freezers of Canada Inc. (Bank­rupt) v. Retail, Wholesale Canada, Local 1015 (Division of United Steelworkers of America) (1996), 151 N.S.R.(2d) 376; 440 A.P.R. 376; 39 C.B.R.(3d) 311 (C.A.), refd to. [para. 25].

Kansa General International Insurance Co. (Liquidation), Re, [1998] R.J.Q. 1380 (C.A.), refd to. [para. 25].

Stewart v. LePage (1916), 53 S.C.R. 337, consd. [para. 26].

Lofsky, Re (1947), 28 C.B.R. 164 (Ont. C.A.), refd to. [para. 31].

Sigurdson v. Fidelity Insurance Co. (1980), 35 C.B.R.(N.S.) 75 (B.C.C.A.), refd to. [para. 31].

Holley, Re - see Holley v. Gifford Smith Ltd. and Marshall Children's Foundation.

Holley v. Gifford Smith Ltd. and Marshall Children's Foundation (1986), 14 O.A.C. 65; 54 O.R.(2d) 225 (C.A.), refd to. [para. 31].

Ireland, Re (1962), 5 C.B.R.(N.S.) 91 (Que. Sup. Ct.), refd to. [para. 31].

Falvo Enterprises Ltd. v. Price Waterhouse Ltd. (1981), 34 O.R.(2d) 336 (Ont. H.C.), refd to. [para. 31].

Moratorium Act (Sask.), Re, [1956] S.C.R. 31, consd. [para. 33].

Union St. Jacques de Montréal v. Bélisle (1874), L.R. 6 P.C. 31, consd. [para. 34].

Ellis v. Silber (1872), L.R. 8 Ch. App. 83, consd. [para. 35].

Cry-O-Beef Ltd./Cri-O-Boeuf Ltée (Faillie), Re; Caisse Populaire de Black Lake, Fiducie du Québec et un autre v. Thorne, Ridell Inc. et Picard (1987), 15 Q.A.C. 81; 66 C.B.R.(N.S.) 19 (C.A.), refd to. [para. 36].

Martin, Re (1953), 33 C.B.R. 163 (Ont. S.C.), refd to. [para. 36].

Reynolds, Re (1928), 10 C.B.R. 127 (Ont. S.C.), refd to. [para. 36].

Galaxy Interiors Ltd., Re (1971), 15 C.B.R.(N.S.) 143 (Ont. S.C.), refd to. [para. 36].

Mancini (Trustee of) v. Falconi (1987), 65 C.B.R.(N.S.) 246 (Ont. S.C.), refd to. [para. 36].

Geoffrion v. Barnett, [1970] C.A. 273 (Que.), refd to. [para. 37].

Arctic Gardens Inc. (Faillie), Re; Blaiklock Inc. v. Banque Canadienne impériale de commerce et autres, [1990] R.J.Q. 6; 35 Q.A.C. 68 (C.A.), refd to. [para. 37].

Excavations Sanoduc Inc. (Faillie), Re; Compagnie de pavage d'asphalte Beaver Ltée et autres v. Morency, [1991] R.D.J. 423 (C.A.), refd to. [para. 37].

Atlas Lumber Co. v. Grier and Sons Ltd. (1922), 3 C.B.R. 226 (Que. Sup. Ct.), refd to. [para. 37].

Maple Leaf Fruit Co., Re (1949), 30 C.B.R. 23 (N.S.C.A.), refd to. [para. 37].

Westam Development Ltd., Re (1967), 10 C.B.R.(N.S.) 61 (B.C.C.A.), refd to. [para. 37].

Greer (M.B.) & Co., Re (1953), 33 C.B.R. 69 (Ont. S.C.), refd to. [para. 37].

M.P. Industrial Mills Ltd., Re (1972), 17 C.B.R. 226 (Man. Q.B.), refd to. [para. 37].

Holt Cargo Systems Inc. v. ABC Con­tainerline N.V. (Bankrupt) et al. (2001), 280 N.R. 1 (S.C.C.), dist. [para. 46].

Harelkin v. University of Regina, [1979] 2 S.C.R. 561; 26 N.R. 364, refd to. [para. 59].

Lions D'Or Ltée, Re (1965), 8 C.B.R.(N.S.) 171 (Que. Sup. Ct.), refd to. [para. 59].

Pollack (M.) Ltée, Re (1979), 30 C.B.R.(N.S.) 256 (Que. Sup. Ct.), refd to. [para. 59].

Bourque Consumer Electronics Inc. (Faillie), Re, J.E. 91-1040 (Que. Sup. Ct.), refd to. [para. 60].

Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.), [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1, refd to. [para. 60].

Sarabia v. Ship Oceanic Mindoro (1996), 84 B.C.A.C. 8; 137 W.A.C. 8; 26 B.C.L.R.(3d) 143 (C.A.), leave to appeal refused [1997] 2 S.C.R. xiv; 216 N.R. 400; 95 B.C.A.C. 154; 154 W.A.C. 154, refd to. [para. 64].

Auto Haus Frohlich Ltd. and Frohlich v. Volkswagen Canada Inc., [1986] 1 W.W.R. 380; 65 A.R. 271 (C.A.), refd to. [para. 64].

Ash et al. v. Lloyd's Corp. et al. (1991), 6 O.R.(3d) 235 (Gen. Div.), revd. in part (1992), 60 O.A.C. 241; 9 O.R.(3d) 755 (C.A.), leave to appeal refused [1992] 3 S.C.R. v; 144 N.R. 400; 59 O.A.C. 160, refd to. [para. 64].

Maritime Telegraph & Telephone Co. v. Pre Print Inc. (1996), 147 N.S.R.(2d) 148; 426 A.P.R. 148; 131 D.L.R.(4th) 471 (C.A.), refd to. [para. 64].

Industrial Packaging Products Co. v. Fort Pitt Packaging International Inc. et al. (1960), 161 A.2d 19 (Penn. S.C.), refd to. [para. 65].

Treco, Re (1999), 239 B.R. 36 (S.D.N.Y.), affd. (2001), 240 F.3d 148 (2nd Cir.), refd to. [para. 65].

Industrial Acceptance Corp. v. Lalonde, [1952] 2 S.C.R. 109, refd to. [para. 66].

Coastal Steel Corp. v. Tilghman (1983), 709 F.2d 190 (3rd Cir.), refd to. [para. 68].

Diaz Contracting Inc., Re (1987), 817 F.2d 1047 (3rd Cir.), refd to. [para. 68].

Hays and Co v. Merrill Lynch (1989), 885 F.2d 1149 (3rd Cir.), refd to. [para. 68].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 2(1), sect. 30(1)(d), sect. 43(5), sect. 72(1), sect. 183(1)(b), sect. 183(1)(c), sect. 187(7), sect. 188(1), sect. 188(2) [para. 16].

Bankruptcy and Insolvency Act Regula­tions (Can.), Bankruptcy and Insolvency General Rules, C.R.C. 1978, c. 368, sect. 3 [para. 16].

Bankruptcy and Insolvency General Rules - see Bankruptcy and Insolvency Act Regulations (Can.).

Civil Code of Québec, S.Q. 1991, c. 64, art. 3135, art. 3148(5) [para. 16].

Authors and Works Noticed:

Bohémier, Albert, Faillite et Insolvabilité (1992), vol. 1, p. 48 [para. 67].

Castel, Jean-Gabriel, Canadian Conflict of Laws (4th Ed. 1997), pp. 262, 263 [para. 64].

Fletcher, I.F., Insolvency in Private Inter­national Law (1999), p. 47, fn. 73 [para. 68].

Houlden, L.W., and Morawetz, Geoffrey B., Bankruptcy and Insolvency Law of Canada (3rd Ed. 1989) (Looseleaf updated 2001), vol. 2, p. I§4 [para. 39].

Counsel:

Yves Martineau, for the appellant;

Jean-Philippe Gervais, for the respondent.

Solicitors of Record:

Stikeman Elliott, Montréal, Quebec, for the appellant;

Gervais & Gervais, Montréal, Quebec, for the respondent.

This appeal was heard on May 15, 2001, by McLachlin, C.J.C., L'Heureux-Dubé, Iacobucci, Major, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada.

The judgment of the Supreme Court was delivered in both official languages on De­cember 20, 2001, by Binnie, J.