674921 B.C. Ltd. v. Advanced Wing Technologies Corp.

674921 B.C. Ltd. v. Advanced Wing Technologies Corp.

The Amended Loan Agreements, when read in context and resolved against the debtor, created immediate security interests in AWTC's assets including after-acquired property; those agreements met PPSA s.10 writing requirements and were enforceable against New Solutions; the Bank Security was extinguished as part of the purchase price; the GSAs were not perfected earlier than New Solutions' registration and thus do not change the result; the postponement agreements granted only a time-limited priority to New Solutions which expired before enforcement proceedings were taken; BIA s.139 and equitable subordination do not subordinate the doctors' secured claims. Therefore the Doctors' Security...

Citation
2005 BCSC 1113
Parties
Petitioner: 674921 B.C. Ltd.; Respondent: Advanced Wing Technologies Corp.; Respondent: AWT Holdings Ltd.; Respondent: Sheila Hewco; Respondent: Tom Hewko; Respondent: Denyce Burrows; Respondent: Colin Lee; Respondent: Shirley Lee; Respondent: Brent Lee; Respondent: Jennifer Lee; Respondent: Grant Lee; Respondent: Sid Joss; Respondent: Angeline Joss; Respondent: Claudette Marin; Respondent: Don Burrows; Respondent: Joanne Maddams; Respondent: George Laverock; Respondent: Karline Markeng; Respondent: Anthony Bennett; Respondent: Karen Klone; Respondent: Art Sanford; Respondent: Margery Clarke; Respondent: Andrew Guest; Respondent: Cadenza Corp.; Respondent: Kwai Chon Wong; Respondent: New Solutions Financial Corporation; Respondent: Her Majesty The Queen In Right Of British Columbia; Respondent: Peter Wilkinson; Respondent: Joachim Burmeister; Respondent: Annette Burmeister; Respondent: Roland Palmer Estate; Respondent: Marie Murdock
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
27 July 2005
Procedural Posture
Priority Determination in Insolvency/secured Transactions / Reasons for Judgment (final)
Outcome
Petition granted; Doctors' Security (Amended Loan Agreements) has priority over New Solutions Financial Corporation; petitioner entitled to relief and costs
Legal Topics
Priority of Security Interests, Postponement/subordination Agreements, Enforceability of Security Agreements Under PPSA S.10, After Acquired Property, Equitable Subordination, Statutory Interpretation
Source Language
English
Bankruptcy and Insolvency Personal Property Security Commercial Law Secured Transactions Priority of Security Interests Postponement/subordination Agreements Enforceability of Security Agreements Under PPSA S.10 After Acquired Property +2 more

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Parties

674921 B.C. Ltd.

Petitioner

Advanced Wing Technologies Corp.

Respondent

AWT Holdings Ltd.

Respondent

Sheila Hewco

Respondent

Tom Hewko

Respondent

Denyce Burrows

Respondent

Colin Lee

Respondent

Shirley Lee

Respondent

Brent Lee

Respondent

Jennifer Lee

Respondent

Grant Lee

Respondent

Sid Joss

Respondent

Angeline Joss

Respondent

Claudette Marin

Respondent

Don Burrows

Respondent

Joanne Maddams

Respondent

George Laverock

Respondent

Karline Markeng

Respondent

Anthony Bennett

Respondent

Karen Klone

Respondent

Art Sanford

Respondent

Margery Clarke

Respondent

Andrew Guest

Respondent

Cadenza Corp.

Respondent

Kwai Chon Wong

Respondent

New Solutions Financial Corporation

Respondent

Her Majesty The Queen In Right Of British Columbia

Respondent

Peter Wilkinson

Respondent

Joachim Burmeister

Respondent

Annette Burmeister

Respondent

Roland Palmer Estate

Respondent

Marie Murdock

Respondent

Procedural Posture

Priority Determination in Insolvency/secured Transactions / Reasons for Judgment (final)

Legal Issues

  1. 1 Whether the Amended Loan Agreements created a secured interest in AWTC's assets
  2. 2 Whether those agreements covered after-acquired property
  3. 3 Whether the Amended Loan Agreements complied with PPSA s.10 and were enforceable against third parties

Ratio Decidendi

The Amended Loan Agreements, when read in context and resolved against the debtor, created immediate security interests in AWTC's assets including after-acquired property; those agreements met PPSA s.10 writing requirements and were enforceable against New Solutions; the Bank Security was extinguished as part of the purchase price; the GSAs were not perfected earlier than New Solutions' registration and thus do not change the result; the postponement agreements granted only a time-limited priority to New Solutions which expired before enforcement proceedings were taken; BIA s.139 and equitable subordination do not subordinate the doctors' secured claims. Therefore the Doctors' Security...

Court Disposition

Petition granted; Doctors' Security (Amended Loan Agreements) has priority over New Solutions Financial Corporation; petitioner entitled to relief and costs

Orders

  • Declaration that the Amended Loan Agreements/Doctors' Security is a valid and enforceable security interest covering present and after-acquired property and has priority over New Solutions' security
  • Declaration that the Bank Security was extinguished as part of the purchase price