Ross v. Necker

Ross v. Necker

The sale was null and void because the trustee lacked the specific written permission required by s.43(2) to do the particular sale and the purchaser was an inspector who lacked the prior specific court approval mandated by s.103(6); consequently the purchaser/inspector was entitled to restitution of the value of pledged securities less lawful advances by the trustee, but the trustee is not personally liable for amounts properly advanced in his capacity as trustee.

Citation
[1948] SCR 526
Parties
Appellant; Trustee/defendant: Douglas Lamont Ross; Respondent; Inspector/plaintiff: Marius H. Necker
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
25 June 1948
Procedural Posture
Bankruptcy and Insolvency / Appeal to the Supreme Court of Canada on Appeal and Cross Appeal From the Court of King's Bench, Quebec
Outcome
Appeal in part dismissed and cross-appeal allowed in part; sale declared null and void; plaintiff awarded restitution of net amount after credits; trustee held not personally liable.
Legal Topics
Trustee Powers to Dispose of Assets, Inspector Purchase Prohibition, Statutory Nullity of Prohibited Contracts, Remedies and Restitution, Priority and Application of Collateral Security
Source Language
English
Bankruptcy and Insolvency Trusts and Agency Civil Law Quebec Civil Code Trustee Powers to Dispose of Assets Inspector Purchase Prohibition Statutory Nullity of Prohibited Contracts Remedies and Restitution Priority and Application of Collateral Security

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Parties

Douglas Lamont Ross

Appellant; Trustee/defendant

Marius H. Necker

Respondent; Inspector/plaintiff

Procedural Posture

Bankruptcy and Insolvency / Appeal to the Supreme Court of Canada on Appeal and Cross Appeal From the Court of King's Bench, Quebec

Legal Issues

  1. 1 Whether a trustee could validly sell bankrupt's Jamaica assets to an inspector without a specific written permission from the inspectors as required by s.43(2) of the Bankruptcy Act
  2. 2 Whether an inspector could purchase estate property without prior specific court approval under s.103(6) of the Bankruptcy Act
  3. 3 Whether the general written authorization and court ratification of the inspectors' resolution constituted the 'prior approval of the court' and a sufficiently specific permission

Ratio Decidendi

The sale was null and void because the trustee lacked the specific written permission required by s.43(2) to do the particular sale and the purchaser was an inspector who lacked the prior specific court approval mandated by s.103(6); consequently the purchaser/inspector was entitled to restitution of the value of pledged securities less lawful advances by the trustee, but the trustee is not personally liable for amounts properly advanced in his capacity as trustee.

Court Disposition

Appeal in part dismissed and cross-appeal allowed in part; sale declared null and void; plaintiff awarded restitution of net amount after credits; trustee held not personally liable.

Orders

  • Agreement of sale of Jamaica assets declared null and void.
  • Judgment for plaintiff for $5,959.33 plus interest at 5% from service of action, subject to deduction of any credit for automobile amounts if not already included.