Card (Re)

Card (Re)

The bankrupt retained property rights in the shed at the time of bankruptcy (notably a reinstatement/right of possession) which vested in the trustee; Continental's agreement was a financing lease amounting to a security interest that was unperfected at bankruptcy and thus ineffective against the trustee under the PPSA, so the trustee's disallowance of Continental's secured claim was valid and the appeal is dismissed.

Citation
2024 NSSC 74
Parties
Applicant (lessor/creditor): Continental Shed Rentals Inc.; Respondent (trustee): Rita Anderson & Associates Inc.; Bankrupt/debtor: Brandon Christopher Card; Manufacturer/seller: Old Hickory of Canada
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
15 March 2024
Procedural Posture
Bankruptcy and Insolvency / Registrar Decision on Appeal Under S.135 BIA From Trustee's Disallowance of Secured Claim
Outcome
Appeal dismissed.
Legal Topics
Perfection of Security Interest, Financing Lease Vs True Lease, Property Vesting in Trustee, Section 81 BIA Proof of Claim, PPSA S.21(2) Effect
Source Language
English
Bankruptcy Personal Property Security Commercial Law Perfection of Security Interest Financing Lease Vs True Lease Property Vesting in Trustee Section 81 BIA Proof of Claim PPSA S.21(2) Effect

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Parties

Continental Shed Rentals Inc.

Applicant (lessor/creditor)

Rita Anderson & Associates Inc.

Respondent (trustee)

Brandon Christopher Card

Bankrupt/debtor

Old Hickory of Canada

Manufacturer/seller

Procedural Posture

Bankruptcy and Insolvency / Registrar Decision on Appeal Under S.135 BIA From Trustee's Disallowance of Secured Claim

Legal Issues

  1. 1 Did the bankrupt have property in the shed at the date of bankruptcy such that it vested in the trustee?
  2. 2 Is an unperfected financing lease/security interest effective against the trustee under the PPSA and BIA?
  3. 3 Can a claimant succeed under s.81 BIA to recover collateral despite lack of perfection under the PPSA?

Ratio Decidendi

The bankrupt retained property rights in the shed at the time of bankruptcy (notably a reinstatement/right of possession) which vested in the trustee; Continental's agreement was a financing lease amounting to a security interest that was unperfected at bankruptcy and thus ineffective against the trustee under the PPSA, so the trustee's disallowance of Continental's secured claim was valid and the appeal is dismissed.

Court Disposition

Appeal dismissed.

Orders

  • Continental Shed Rentals Inc.'s appeal is dismissed.
  • Trustee's disallowance of Continental's secured claim is upheld and Continental's claim treated as unsecured.