Giffen (Re)

Giffen (Re)

Section 20(b)(i) of the British Columbia PPSA renders the lessor's unperfected security interest ineffective against the interest acquired by the trustee (who succeeds to the bankrupt's possessory/leasehold rights under BIA s.71(2)); provincial PPSA perfection rules therefore define secured status in bankruptcy and do not conflict with the BIA, so the trustee is entitled to the proceeds of sale.

Citation
[1998] 1 SCR 91
Parties
Appellant (trustee): R. West & Associates Inc.; Appellant (intervening Provincial Authority): Attorney General of British Columbia; Respondent (lessor): Telecom Leasing Canada (TLC) Limited; Bankrupt/lessee: Carol Anne Giffen; Intervener: Attorney General of Canada; Intervener: Attorney General for Ontario; Intervener: Attorney General for Alberta
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
12 February 1998
Procedural Posture
Bankruptcy and Insolvency / Appeal to the Supreme Court of Canada From the British Columbia Court of Appeal
Outcome
Appeal allowed
Legal Topics
Priority of Security Interests, PPSA Perfection and Registration, Trustee Rights and Vesting of Bankrupt's Property, Leases as Security Interests, Federal Provincial Interplay in Bankruptcy
Source Language
English
Bankruptcy and Insolvency Personal Property Security Property Law Constitutional Law Priority of Security Interests PPSA Perfection and Registration Trustee Rights and Vesting of Bankrupt's Property Leases as Security Interests +1 more

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Parties

R. West & Associates Inc.

Appellant (trustee)

Attorney General of British Columbia

Appellant (intervening Provincial Authority)

Telecom Leasing Canada (TLC) Limited

Respondent (lessor)

Carol Anne Giffen

Bankrupt/lessee

Attorney General of Canada

Intervener

Attorney General for Ontario

Intervener

Attorney General for Alberta

Intervener

Procedural Posture

Bankruptcy and Insolvency / Appeal to the Supreme Court of Canada From the British Columbia Court of Appeal

Legal Issues

  1. 1 Whether s.20(b)(i) of the British Columbia PPSA renders a lessor’s unperfected security interest ineffective against a trustee in bankruptcy
  2. 2 Whether the trustee is entitled to proceeds of sale of leased collateral when the lessor failed to perfect its security interest
  3. 3 Whether operation of s.20(b)(i) conflicts with the Bankruptcy and Insolvency Act and federal bankruptcy priorities

Ratio Decidendi

Section 20(b)(i) of the British Columbia PPSA renders the lessor's unperfected security interest ineffective against the interest acquired by the trustee (who succeeds to the bankrupt's possessory/leasehold rights under BIA s.71(2)); provincial PPSA perfection rules therefore define secured status in bankruptcy and do not conflict with the BIA, so the trustee is entitled to the proceeds of sale.

Court Disposition

Appeal allowed

Orders

  • Set aside the judgment of the British Columbia Court of Appeal
  • Restore the trial judge's order that the trustee is entitled to the proceeds from the sale of the vehicle