Miksoo Aviation Ltd. (Bankrupt), Re, (1981) 13 Sask.R. 165 (QB)

JudgeEstey, J.
CourtCourt of Queen's Bench of Saskatchewan (Canada)
Case DateJune 09, 1981
JurisdictionSaskatchewan
Citations(1981), 13 Sask.R. 165 (QB)

Miksoo Aviation Ltd. (Bankrupt), Re (1981), 13 Sask.R. 165 (QB)

MLB headnote and full text

Re Miksoo Aviation Ltd., a Bankrupt

(No. 4506)

Indexed As: Miksoo Aviation Ltd. (Bankrupt), Re

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Estey, J.

June 9, 1981.

Summary:

A debenture holder claimed, pursuant to a floating charge, against certain funds held by a trustee in bankruptcy. The trustee disallowed the claim. The debenture holder appealed to the Saskatchewan Court of Queen's Bench.

The Saskatchewan Court of Queen's Bench allowed the appeal and held that the debenture holder was entitled to the funds in question.

Bankruptcy - Topic 3935

Secured creditors - What constitutes a secured creditor - Floating charge - A holder of a debenture, containing a floating charge, registered the debenture pursuant to the Corporations Security Act - Subsequently the debtor went bankrupt after which the debenture holder demanded payment which crystallized the floating charge - The Saskatchewan Court of Queen's Bench held that in such circumstances the debenture holder was a secured creditor as against creditors who became creditors before registration of the debenture - See paragraphs 9 to 11.

Company Law - Topic 5428

Borrowing - Debentures - Crystallization of charge - The Saskatchewan Court of Queen's Bench held that a demand for payment upon a debtor by a holder of a debenture which contained a floating charge was a step "to enforce his security" and constituted a crystallization of the floating charge - See paragraph 6.

Bankruptcy - Topic 2606

Trustees - Status of trustees respecting debts - The Saskatchewan Court of Queen's Bench referred to the status of a trustee in bankruptcy respecting the debts of a debtor - See paragraph 7.

Personal Property - Topic 6065

Security interests - Floating charge - Registration, effect of - The Saskatchewan Court of Queen's Bench stated that the registration of a floating charge (contained in a debenture) confers upon the debenture holder an equitable interest which becomes a legal interest on crystallization of the charge - See paragraph 5.

Cases Noticed:

Harvey Dodds Limited v. Royal Bank of Canada, 1 Sask.R. 78; [1979] 6 W.W.R. 722, refd to. [para. 5].

Re Dainty Confections Ltd., [1936] O.W.N. 625, refd to. [para. 7].

Re Heathers (1977), 2 C.B.R.(N.S.) 161, folld. [para. 8].

Statutes Noticed:

Corporations Security Act, R.S.S. 1978, c. 39, sect. 2(f), sect. 3 [para. 5].

Authors and Works Noticed:

Gower, Modern Company Law (3rd Ed.), p. 421 [para. 6].

Counsel:

D.G. Linn, for Saskatchewan Economic Development Corporation, applicant;

G.P. Wanhella, for Trustee in Bankruptcy, respondent;

R.G. Kennedy, for Halson's Management Ltd.

This case was heard by ESTEY, J., of the Saskatchewan Court of Queen's Bench.

The judgment of ESTEY, J., was delivered at Saskatoon, Saskatchewan, on June 9, 1981.

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