General Trust of Canada v. Roland Chalifoux Ltée et al.

General Trust of Canada v. Roland Chalifoux Ltée et al.

The trust deed was a contract of guarantee (security/hypothec), not an alienation or transfer making ownership conditional; therefore the debtor was owner when the repairs were effected, the builder's privilege was valid and not extinguished by art. 2081, and the trustee's claim was incompatible with art. 1981; the debtor's covenant to keep property clear of liens does not bind third parties.

Citation
[1962] SCR 456
Parties
Appellant (intervenant): General Trust of Canada; Plaintiff Respondent: Roland Chalifoux Ltée; Third Party (mis En Cause): Laval Transport Inc.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
23 January 1962
Procedural Posture
Appeal — Civil (property) / On Appeal to the Supreme Court of Canada From the Court of Queen's Bench, Quebec (appeal Side)
Outcome
Appeal dismissed with costs
Legal Topics
Builder's Lien, Trust Deed, Priority of Creditors, Civil Code Arts. 1981 and 2081, Privilege D'entrepreneur
Source Language
English
Property Law Bankruptcy Law Security Interests Builder's Lien Trust Deed Priority of Creditors Civil Code Arts. 1981 and 2081 Privilege D'entrepreneur

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Parties

General Trust of Canada

Appellant (intervenant)

Roland Chalifoux Ltée

Plaintiff Respondent

Laval Transport Inc.

Third Party (mis En Cause)

Procedural Posture

Appeal — Civil (property) / On Appeal to the Supreme Court of Canada From the Court of Queen's Bench, Quebec (appeal Side)

Legal Issues

  1. 1 Whether a trust deed giving a creditor the right to possession on default prevents a subsequently registered builder's lien from taking effect
  2. 2 Whether the trust deed rendered the debtor's ownership conditional or precarious such that art. 2081 C.C. extinguishes the privilege
  3. 3 Whether the covenant to keep property free of liens binds third‑party creditors or contractors

Ratio Decidendi

The trust deed was a contract of guarantee (security/hypothec), not an alienation or transfer making ownership conditional; therefore the debtor was owner when the repairs were effected, the builder's privilege was valid and not extinguished by art. 2081, and the trustee's claim was incompatible with art. 1981; the debtor's covenant to keep property clear of liens does not bind third parties.

Court Disposition

Appeal dismissed with costs

Orders

  • Appeal dismissed with costs
  • Judgment of the Court of Queen's Bench, Appeal Side, Quebec affirming trial judgment is upheld