Target Liquidators Inc. (Bankrupt), Re, (2003) 338 A.R. 74 (QB Reg.)

• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: March 18, 2003
• Citations: (2003), 338 A.R. 74 (QB Reg.);2003 ABQB 295

Target Liquidators (Bankrupt), Re (2003), 338 A.R. 74 (QB Reg.)

MLB headnote and full text

Temp. Cite: [2003] A.R. TBEd. AP.067

In The Matter Of The Bankruptcy of Target Liquidators Inc.

(BK03 99700; 2003 ABQB 295)

Indexed As: Target Liquidators Inc. (Bankrupt), Re

Alberta Court of Queen's Bench

Judicial District of Edmonton

Funduk, Registrar in Bankruptcy

April 1, 2003.

Summary:

A landlord had an abandoning tenant's chattels seized by civil enforcement agency. The tenant made an assignment in bankruptcy. The landlord refused to release the chattels to the trustee. Two secured creditors held security over all of the chattels. The landlord filed a proof of claim. The trustee applied for possession. A Registrar in Bankruptcy made an interim order preserving the chattels to permit the landlord to apply to annul the bankruptcy. The landlord did not do so. The trustee obtained an order for the sale of the chattels. Another Registrar approved the sale, with the proceeds to be distributed to the secured creditors (February 14 order). The landlord neither appeared before the Registrar, nor appealed the order. The trustee, now holding the sale proceeds in trust, applied for advice and directions as to whether the landlord had a possessory lien on the chattels.

A Registrar of the Alberta Court of Queen's Bench, In Bankruptcy, held that the landlord had no claim for any distress costs subsequent to the trustee's demand for possession. Any possible claim under s. 73(4) of the Bankruptcy and Insolvency Act was res judicata because of the February 14 order. The Registrar ordered that the sale proceeds be paid out to the secured creditors.

Bankruptcy - Topic 3608

Creditors - General - Rights of landlord - A landlord exercised its right of distress and seized the tenant's chattels, incurring storage costs - The tenant made an assignment in bankruptcy - The landlord refused the trustee's demand for possession - A Registrar approved a sale of the chattels by the trustee and directed payment of the proceeds, after the trustee's costs, to secured creditors - The landlord, although given notice, neither appeared before the Registrar nor appealed the order - A Registrar of the Alberta Court of Queen's Bench, In Bankruptcy, held that the landlord had no claim for any distress costs subsequent to the trustee's demand for possession - Any possible claim under s. 73(4) of the Bankruptcy and Insolvency Act was res judicata because of the Registrar's order - The present claim was an impermissible collateral attack on the order - The landlord should have appealed the order - Further, there was no equitable basis for ordering the trustee to reimburse the landlord for its costs - The costs were incurred not to preserve the chattels or to benefit the bankrupt's estate, but solely because of the landlord's tenacious attempt to force the trustee to pay its claim in priority to secured creditors.

Bankruptcy - Topic 3636

Creditors - General - Claims - General - Equitable claims - [See Bankruptcy - Topic 3608 ].

Estoppel - Topic 387

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Matters or claims available in prior proceedings - [See Bankruptcy - Topic 3608 ].

Landlord and Tenant - Topic 8828

Distress - Priorities - Bankruptcy of tenant - Effect of - [See Bankruptcy - Topic 3608 ].

Cases Noticed:

Work v. Day Estate (1921), 58 D.L.R. 377 (Alta. T.D.), refd to. [para. 24].

Georgio Galleria (Bankrupt), Re (1995), 30 C.B.R.(3d) 302 (B.C.S.C.), refd to. [para. 24].

Mr. Bailiff Inc. v. Carleton (T.) & Co. (1995), 21 O.T.C. 301; 43 C.B.R.(3d) 158 (Sup. Ct. Bktcy.), refd to. [para. 24].

Profoot Enterprises Ltd., Re; Allarco Developments Ltd. v. Profoot Enterprises Ltd., Coopers & Lybrand Ltd. and Touche Ross Ltd. (1981), 31 A.R. 420 (S.C. Bktcy. Registrar), refd to. [para. 27].

Federal Business Development Bank v. Commission de la santé et de la sécurité du travail et al., [1988] 1 S.C.R. 1061; 84 N.R. 308; 14 Q.A.C. 140; 50 D.L.R.(4th) 577, refd to. [para. 27].

Fresh Air Fireplaces of Canada Ltd. (Bankrupt), Re (1986), 73 A.R. 87; 45 Alta. L.R.(2d) 278 (Q.B.), affd. (1987), 77 A.R. 264; 52 Alta. L.R.(2d) 184 (C.A.), refd to. [para. 27].

Radioland Ltd., Re (1957), 36 C.B.R. 158 (Sask. C.A.), refd to. [para. 28].

Burdyny v. Dacar Enterprises Ltd. (Bankrupt), [1989] 2 W.W.R. 44; 55 Man.R.(2d) 270 (C.A.), refd to. [para. 34].

Brampton (City) et al. v. Sun Life Assurance Co. of Canada (1999), 118 O.A.C. 338; 171 D.L.R.(4th) 426 (C.A.), refd to. [para. 34].

Skagos v. Emery Jamieson et al. (1986), 72 A.R. 231 (Q.B. Master), refd to. [para. 42].

Condon, Re: Ex parte James (1874), 9 Ch. App. 609, refd to. [para. 54].

M.C.C. Precision Products Ltd., Re (1972), 17 C.B.R.(N.S.) 28 (Ont. S.C.), refd to. [para. 55].

Goldin (Bankrupt), Re, [2002] O.T.C. 420; 34 C.B.R.(4th) 196 (Sup. Ct.), refd to. [para. 57].

Taylor Estate, Re (1926), 7 C.B.R. 550 (Ont. S.C.), refd to. [para. 59].

Appleby Estates Ltd., Re (1984), 5 O.A.C. 39; 53 C.B.R.(N.S.) 10 (C.A.), refd to. [para. 60].

Authors and Works Noticed:

Houlden, Lloyd W., and Morawetz, Carl H., The 2003 Annotated Bankruptcy and Insolvency Act (2003), pp. 333, 334 [para. 54].

Counsel:

D. Bieganek (Duncan & Craig), for the trustee;

D. Taylor, for the landlord.

This application was heard on March 18, 2003, before Funduk, Registrar, of the Alberta Court of Queen's Bench, In Bankruptcy, Judicial District of Edmonton, who delivered the following judgment on April 1, 2003.