Morais (Bankrupt), Re, 2015 NBQB 106

Court:Court of Queen's Bench of New Brunswick
Case Date:February 24, 2015
Jurisdiction:New Brunswick
Citations:2015 NBQB 106;(2015), 436 N.B.R.(2d) 381 (QB Reg.)
 
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Morais (Bankrupt), Re (2015), 436 N.B.R.(2d) 381 (QB Reg.);

    436 R.N.-B.(2e) 381; 1139 A.P.R. 381

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Temp. Cite: [2015] N.B.R.(2d) TBEd. JN.003

Renvoi temp.: [2015] N.B.R.(2d) TBEd. JN.003

In The Matter Of the Bankruptcy of Kevin Morais

CBDC Westmorland Albert Inc. (applicant) v. Kevin Morais (respondent)

(NB 20853; 51-1825314; 2015 NBQB 106; 2015 NBBR 106)

Indexed As: Morais (Bankrupt), Re

Répertorié: Morais (Bankrupt), Re

New Brunswick Court of Queen's Bench

In Bankruptcy and Insolvency

LeBlanc, Registrar

May 28, 2015.

Summary:

Résumé:

CBDC Westmorland Albert Inc. loaned funds to Morais. The loan was secured by a first charge on a truck, trailer, tools and equipment which was registered under the Personal Property Security Act. Morais filed a consumer proposal with Grant Thornton Poirier Limited (GTP). A proof of claim filed by CBDC was disallowed by GTP on the basis that the assets were exempt from seizure pursuant to s. 33(1)(e) of the Memorials and Executions Act. CBDC moved to have the GTP's disallowance set aside.

The New Brunswick Court of Queen's Bench, In Bankruptcy and Insolvency, allowed the motion.

Bankruptcy - Topic 483

Property of bankrupt - Exemptions or exclusions - Property exempt from seizure under provincial laws - CBDC loaned funds to Morais - The loan was secured by a first charge on a truck, trailer, tools and equipment which was registered under the Personal Property Security Act (PPSA) - Morais filed a consumer proposal with Grant Thornton Poirier (GTP) - A proof of claim filed by CBDC was disallowed by GTP on the basis that the assets were tools of Morais' trade and therefore exempt from seizure pursuant to s. 33(1)(e) of the Memorials and Executions Act and s. 67(1)(b) of the Bankruptcy and Insolvency Act (BIA) - GTP submitted that CBDC's security was not enforceable because the PPSA did not contain exemptions for tools of the trade - The New Brunswick Court of Queen's Bench, In Bankruptcy and Insolvency, set aside GTP's disallowance - The fact that the PPSA did not contain a specific exemption for tools of the trade was not a sufficient reason to deviate from the generally accepted legal principles which allowed secured creditors to realize on their security - CBDC was not bound by s. 67(1)(b) of the BIA as the chattels in question were not subject to being divisible among creditors.

Bankruptcy - Topic 3802

Secured creditors - General - Right to deal with security - [See Bankruptcy - Topic 483 ].

Personal Property - Topic 6287

Security interests - Seizure - Exemptions - [See Bankruptcy - Topic 483 ].

Biens personnels - Cote 6287

Sûretés - Saisie - Exemptions - [Voir Personal Property - Topic 6287 ].

Faillite - Cote 483

Biens du failli - Exemptions ou exclusions - Biens exempts de saisie en vertu de lois provinciales - [Voir Bankruptcy - Topic 483 ].

Faillite - Cote 3802

Garantis - Généralités - Droit de disposer de sa garantie - [Voir Bankruptcy - Topic 3802 ].

Cases Noticed:

In the Matter of the Bankruptcy of James Allan Norkus - see/voir Direct Rental Centre (West) Ltd. v. Waring (A.C.) & Associates Inc.

Direct Rental Centre (West) Ltd. v. Waring (A.C.) & Associates Inc. (1997), 204 A.R. 18; 50 C.B.R.(3d) 200 (Q.B.), refd to. [para. 6].

Business Development Bank v. Pinder Bueckert & Associates Inc. - see/voir Pyne (Bankrupt), Re.

Pyne (Bankrupt), Re (2010), 354 Sask.R. 1; 2009 SKQB 458 (Bktcy. Reg.), refd to. [para. 11].

Baxland v. Fuller (1990), 2 C.B.R.(3d) 125 (B.C.S.C.), refd to. [para. 12].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 67(1)(b) [para. 5].

Authors and Works Noticed:

Cuming, Ronald C.C., Walsh, Catherine, and Wood, Roderick J., Personal Property Security Law (2005), p. 427 [para. 11].

Counsel:

Avocats:

Lawrence J. Crandall, for Grant Thornton Poirier Limited - Trustee;

Edwin G. Ehrhardt, Bingham Law, for CBDC/Westmorland Albert Inc.

This motion was heard on February 24, 2015, before LeBlanc, Registrar, of the New Brunswick Court of Queen's Bench, In Bankruptcy and Insolvency, who delivered the following decision on May 28, 2015.

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