Fines (Re)

Fines (Re)

The Irrevocable Direction, by its language and irrevocable character, effected an absolute assignment of the identified proceeds to AFCU prior to commencement of the consumer proposal; consequently the funds vested in AFCU and are not available to the proposal estate.

Citation
2015 NSSC 322
Parties
Debtor/applicant: Timothy Maxwell Fines; Debtor/applicant: Mona Lisa McDonough; Administrator of Proposal: Allan Marshall Associates Inc.; Creditor/respondent: Airline Financial Credit Union Limited
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
17 November 2015
Procedural Posture
Consumer Proposal Under the Bankruptcy and Insolvency Act / Judicial Decision Resolving Entitlement to Funds During Administration of Proposal
Outcome
Funds held in the solicitors' trust account belong to Airline Financial Credit Union Limited by virtue of an absolute assignment and are not part of the consumer proposal estate.
Legal Topics
Absolute Assignment, Security Interest, Perfection of Security, Priority of Creditors, Consumer Proposal Estate
Source Language
English
Bankruptcy and Insolvency Personal Property Security Contract and Property Law Absolute Assignment Security Interest Perfection of Security Priority of Creditors Consumer Proposal Estate

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Parties

Timothy Maxwell Fines

Debtor/applicant

Mona Lisa McDonough

Debtor/applicant

Allan Marshall Associates Inc.

Administrator of Proposal

Airline Financial Credit Union Limited

Creditor/respondent

Procedural Posture

Consumer Proposal Under the Bankruptcy and Insolvency Act / Judicial Decision Resolving Entitlement to Funds During Administration of Proposal

Legal Issues

  1. 1 Whether the Irrevocable Direction constituted an absolute assignment of proceeds to AFCU or merely a security interest with an equity of redemption
  2. 2 Whether AFCU perfected any security interest under the Personal Property Security Act or complied with BIA requirements such that the funds are excluded from the consumer proposal estate
  3. 3 Whether the funds in the solicitor's trust account belong to AFCU or to the proposal estate

Ratio Decidendi

The Irrevocable Direction, by its language and irrevocable character, effected an absolute assignment of the identified proceeds to AFCU prior to commencement of the consumer proposal; consequently the funds vested in AFCU and are not available to the proposal estate.

Court Disposition

Funds held in the solicitors' trust account belong to Airline Financial Credit Union Limited by virtue of an absolute assignment and are not part of the consumer proposal estate.

Orders

  • An order confirming that the money in question is not available for the consumer proposal and belongs to Airline Financial Credit Union Limited free of claims by Timothy Maxwell Fines, Mona Lisa McDonough or anyone claiming under them