Scanwood Canada Ltd. (Re)

Scanwood Canada Ltd. (Re)

Privilege over the RBC counsel letter was not waived to IKEA; IKEA has no set-off against the $533,113.12 that became Scanwood property when wired into its account on April 18, 2011; IKEA does have a valid contractual set-off under the pre-existing Loan Agreement which defeats the Receiver's claim to the $695,942.19 paid directly by IKEA on June 24, 2011 (the Receiver takes subject to that pre-existing set-off); priority charges attach only to amounts to which the Receiver is entitled; interest awarded limited to interest actually earned by the Receiver; costs reserved such that each principal party bears its own costs.

Citation
2011 NSSC 468
Parties
Debtor/company in Receivership: Scanwood Canada Limited (in Receivership); Receiver: Green Hunt Wedlake Inc.; Creditor/applicant Claiming Set Off: IKEA Supply AG; Secured Creditor/bank: Royal Bank of Canada
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
20 December 2011
Procedural Posture
Receivership; Ccaa/bia Proceedings / Decision on Application for Determination of Set Off Rights and Repayment of Funds Held by Receiver
Outcome
Application partly granted and partly dismissed
Legal Topics
Set Off, Priority of Charges, Solicitor Client Privilege Waiver, Contractual Interpretation, PPSA Notice
Source Language
English
Bankruptcy and Insolvency Commercial Contracts Property Security Set Off Priority of Charges Solicitor Client Privilege Waiver Contractual Interpretation PPSA Notice

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Parties

Scanwood Canada Limited (in Receivership)

Debtor/company in Receivership

Green Hunt Wedlake Inc.

Receiver

IKEA Supply AG

Creditor/applicant Claiming Set Off

Royal Bank of Canada

Secured Creditor/bank

Procedural Posture

Receivership; Ccaa/bia Proceedings / Decision on Application for Determination of Set Off Rights and Repayment of Funds Held by Receiver

Legal Issues

  1. 1 Whether solicitor-client privilege over bank counsel letter was waived
  2. 2 Whether IKEA has a valid right of set-off against funds wired into Scanwood's account on April 18, 2011
  3. 3 Whether IKEA has a valid right of set-off against funds paid directly to the Receiver on June 24, 2011

Ratio Decidendi

Privilege over the RBC counsel letter was not waived to IKEA; IKEA has no set-off against the $533,113.12 that became Scanwood property when wired into its account on April 18, 2011; IKEA does have a valid contractual set-off under the pre-existing Loan Agreement which defeats the Receiver's claim to the $695,942.19 paid directly by IKEA on June 24, 2011 (the Receiver takes subject to that pre-existing set-off); priority charges attach only to amounts to which the Receiver is entitled; interest awarded limited to interest actually earned by the Receiver; costs reserved such that each principal party bears its own costs.

Court Disposition

Application partly granted and partly dismissed

Orders

  • Solicitor-client privilege over Thomas O. Boyne Q.C.'s letter to RBC was not waived with respect to IKEA
  • IKEA has no right of set-off against $533,113.12 paid by RBC to the Receiver; those funds are property of Scanwood and subject to priority charges