Perry (Re)

Perry (Re)

Personal injury awards are not property of the bankrupt's estate except for any component compensating loss of income subject to s.68 of the BIA; irrevocable directions to pay that assign proceeds are enforceable and remain effective despite the bankrupt's assignment in bankruptcy; PPSA perfection issues do not displace these rights where the proceeds are not estate property, and the Trustee's rights under s.68 must be determined upon settlement or award.

Citation
2012 NSSC 446
Parties
Applicant / Secured Creditor: Seahold Investments Inc.; Bankrupt / Plaintiff in Personal Injury Action: Darlene Mary Ann Perry; Trustee: BDO Canada Limited
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
20 December 2012
Procedural Posture
Bankruptcy and Insolvency / Decision on Application for Declaration/annulment and Determination of Priority
Outcome
Application granted in part: declaration issued that awards or settlements for Ms. Perry's personal injury claim are not property of the bankrupt's estate except for any portion attributable to loss of income under s.68 BIA; directions to pay remain unaffected by the assignment in bankruptcy; Trustee's rights under...
Legal Topics
Assignment of Proceeds, PPSA Registration and Perfection, Section 68 BIA (loss of Income / Surplus Income), Direction to Pay, Priority of Claims
Source Language
English
Bankruptcy and Insolvency Personal Injury Personal Property Security Assignment of Proceeds PPSA Registration and Perfection Section 68 BIA (loss of Income / Surplus Income) Direction to Pay Priority of Claims

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Parties

Seahold Investments Inc.

Applicant / Secured Creditor

Darlene Mary Ann Perry

Bankrupt / Plaintiff in Personal Injury Action

BDO Canada Limited

Trustee

Procedural Posture

Bankruptcy and Insolvency / Decision on Application for Declaration/annulment and Determination of Priority

Legal Issues

  1. 1 Whether awards or settlements for personal injury are property of the bankrupt's estate
  2. 2 Whether irrevocable directions to pay (assignments of proceeds) are enforceable against a bankrupt
  3. 3 Whether non‑registration under the PPSA affects Seahold's security in the proceeds

Ratio Decidendi

Personal injury awards are not property of the bankrupt's estate except for any component compensating loss of income subject to s.68 of the BIA; irrevocable directions to pay that assign proceeds are enforceable and remain effective despite the bankrupt's assignment in bankruptcy; PPSA perfection issues do not displace these rights where the proceeds are not estate property, and the Trustee's rights under s.68 must be determined upon settlement or award.

Court Disposition

Application granted in part: declaration issued that awards or settlements for Ms. Perry's personal injury claim are not property of the bankrupt's estate except for any portion attributable to loss of income under s.68 BIA; directions to pay remain unaffected by the assignment in bankruptcy; Trustee's rights under...

Orders

  • Declare that any award, settlement or payment in favour of Darlene Mary Ann Perry in respect of the claim against Bernard F. Lee is not property of the bankrupt's estate except any portion attributable to loss of income subject to Section 68 of the BIA.
  • Declare that the irrevocable directions to pay given by Ms. Perry in respect of Seahold's advances are unaffected by her assignment in bankruptcy and Seahold's right to payment from proceeds remains.