Gill (Re) (In Bankruptcy)

Gill (Re) (In Bankruptcy)

Although the court has inherent jurisdiction in limited circumstances to charge trust assets for remuneration of a trustee whose necessary efforts preserved or enhanced the trust property, the jurisdiction must be exercised sparingly and is constrained by the BIA; on the evidence before the court the trustee was not entitled to a general retrospective or prospective omnibus charge and the application was dismissed, with liberty to reapply on full material.

Citation
2002 BCSC 1401
Parties
Trustee/interim Receiver: Deloitte & Touche Inc.; Creditor/opponent: MCAP Financial Corporation; Creditor/inspector: Toronto Dominion Bank; Creditor/inspector: HSBC Bank Canada; Creditor/inspector: Royal Bank of Canada; Bankrupt: Tarsem Singh Gill; Creditor/inspector: CIBC Mortgages Inc.; Creditor/inspector: Vancouver City Savings Credit Union; Creditor/inspector: Citizens Bank; Creditor/inspector: Bank of Montreal
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
2 October 2002
Procedural Posture
Bankruptcy / Application for Charge Over Assets for Trustee's Fees and Costs
Outcome
Application dismissed; leave to reapply granted on full material
Legal Topics
Equitable Charge Over Trust Assets, Trust Claims and Tracing, Priority of Remuneration, Inherent Jurisdiction
Source Language
English
Bankruptcy Law Equity and Trusts Receivership and Insolvency Civil Procedure Equitable Charge Over Trust Assets Trust Claims and Tracing Priority of Remuneration Inherent Jurisdiction

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Parties

Deloitte & Touche Inc.

Trustee/interim Receiver

MCAP Financial Corporation

Creditor/opponent

Toronto Dominion Bank

Creditor/inspector

HSBC Bank Canada

Creditor/inspector

Royal Bank of Canada

Creditor/inspector

Tarsem Singh Gill

Bankrupt

CIBC Mortgages Inc.

Creditor/inspector

Vancouver City Savings Credit Union

Creditor/inspector

Citizens Bank

Creditor/inspector

Bank of Montreal

Creditor/inspector

Procedural Posture

Bankruptcy / Application for Charge Over Assets for Trustee's Fees and Costs

Legal Issues

  1. 1 Whether the court has inherent/equitable jurisdiction to charge assets subject to third‑party trust claims with a trustee in bankruptcy's fees and expenses
  2. 2 Whether such jurisdiction is ousted or limited by the statutory scheme of the Bankruptcy and Insolvency Act
  3. 3 Whether a retrospective and/or prospective omnibus charge is just and equitable in the circumstances

Ratio Decidendi

Although the court has inherent jurisdiction in limited circumstances to charge trust assets for remuneration of a trustee whose necessary efforts preserved or enhanced the trust property, the jurisdiction must be exercised sparingly and is constrained by the BIA; on the evidence before the court the trustee was not entitled to a general retrospective or prospective omnibus charge and the application was dismissed, with liberty to reapply on full material.

Court Disposition

Application dismissed; leave to reapply granted on full material

Orders

  • Application dismissed
  • No charge granted over assets (retrospective or prospective) at this time