Royal Bank of Canada v. Wheaton Pontiac Buick Cadillac GMC Ltd. and Deschner,

• Jurisdiction: Saskatchewan
• Judge: Wedge, J.
• Citation: (1990), 88 Sask.R. 151 (QB)
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Date: 09 November 1990

Royal Bk. v. Wheaton Pontiac Buick (1990), 88 Sask.R. 151 (QB)

MLB headnote and full text

The Royal Bank of Canada (applicant) v. Wheaton Pontiac Buick Cadillac GMC Ltd. and Robert Deschner (respondents)

(No. 4013 A.D. 1990)

Indexed As: Royal Bank of Canada v. Wheaton Pontiac Buick Cadillac GMC Ltd. and Deschner

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Wedge, J.

November 9, 1990.

Summary:

A bank financed an automobile dealer's inventory. Although the bank perfected its security by registration, the legislation did not require it to register the vehicles' serial numbers. The dealer went out of business. After the disposition of its business premises, the dealer disposed of the remaining four vehicles by selling them to Stieben. Stieben repaired and resold cars, but was not a licensed automobile dealer. Stieben resold one to Deschner. Deschner made serial number searches in two provinces but failed to detect the bank's interest. The vehicle was later seized by the bank. The subsequent owners claimed the bank's interest lost its priority under s. 30(1) of the Personal Property Security Act because the vehicle was sold by the dealer in the ordinary course of business.

The Saskatchewan Court of Queen's Bench held the bank's interest retained its priority.

Personal Property - Topic 6211

Security interests - Priorities - Inventory financier - A bank financed an automobile dealer's inventory - The bank registered its security interest - It was not required to register the vehicles' serial numbers - The dealer went out of business - It sold the remnants of its inventory to Stieben, who repaired cars - Stieben resold one to Deschner - Deschner's search failed to disclose the bank's interest - The bank later seized the vehicle - The Saskatchewan Court of Queen's Bench ruled that the bank retained its priority because the dealer had not sold the vehicle in the ordinary course of business - See paragraph 30.

Personal Property - Topic 6463

Security interests - Loss of title to third parties - Goods sold in the ordinary course of business - What constitutes - [See Personal Property - Topic 6211].

Cases Noticed:

Fairline Boats Ltd. v. Leger et al. (1980), 1 P.P.S.A.C. 218, consd. [para. 15].

Royal Bank of Canada v. 216200 Alberta Ltd. et al. (1986), 51 Sask.R. 146; 6 P.P.S.A.C. 277, consd. [para. 16].

Ford Motor Credit Co. of Canada Ltd. v. Centre Motors of Brampton Ltd. (1982), 38 O.R.(2d) 516, refd to. [para. 17].

Camco Inc. v. Frances Olson Realty (1979) Ltd. et al. (1987), 50 Sask.R. 161, consd. [para. 17].

Statutes Noticed:

Personal Property Security Act, S.S. 1979-80, c. P-6.1, sect. 30(1) [para. 10].

Authors and Works Noticed:

Clark, The Law of Secured Transactions under the Uniform Commercial Code, p. 12-6 [para. 11].

Cuming and Wood, Handbook on the Saskatchewan Personal Property Security Act, p. 170 [para. 12].

Counsel:

R.G. Gall, for the applicant, Royal Bank;

W.D. Leis, for Wheaton Pontiac;

A.W. Mathiason, for Robert Deschner.

This matter was heard by Wedge, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on November 9, 1990.