Traders Finance Corporation Limited v. Levesque

Traders Finance Corporation Limited v. Levesque

The Court held that a creditor proceeding under s.16 is not the assignee of the trustee's preexisting right; s.16 confers a statutory right on the creditor distinct from any trustee right and therefore the trustee could not have assigned a right it never had; accordingly the action was not prescribed and the appeal was dismissed.

Citation
[1961] SCR 83
Parties
Defendant/appellant: Traders Finance Corporation Limited; Plaintiff/respondent: Emilien Levesque
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 November 1960
Procedural Posture
Appeal (bankruptcy) / On Appeal to Supreme Court of Canada From Court of Queen's Bench, Appeal Side, Province of Quebec
Outcome
Appeal dismissed; action maintained.
Legal Topics
Fraudulent Preference, Prescription/limitation, Trustee Rights, Assignment of Rights, Interpretation of Civil Code Art.1040, Bankruptcy Act Ss.16 and 64
Source Language
English
Bankruptcy and Insolvency Civil Procedure Private Law Fraudulent Preference Prescription/limitation Trustee Rights Assignment of Rights Interpretation of Civil Code Art.1040 +1 more

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Parties

Traders Finance Corporation Limited

Defendant/appellant

Emilien Levesque

Plaintiff/respondent

Procedural Posture

Appeal (bankruptcy) / On Appeal to Supreme Court of Canada From Court of Queen's Bench, Appeal Side, Province of Quebec

Legal Issues

  1. 1 Whether a creditor exercising s.16 of the Bankruptcy Act is the assignee of the trustee's rights
  2. 2 Whether the action was prescribed under Civil Code art.1040
  3. 3 Whether s.64 of the Bankruptcy Act gives the right of action only to the trustee and the effect of s.16

Ratio Decidendi

The Court held that a creditor proceeding under s.16 is not the assignee of the trustee's preexisting right; s.16 confers a statutory right on the creditor distinct from any trustee right and therefore the trustee could not have assigned a right it never had; accordingly the action was not prescribed and the appeal was dismissed.

Court Disposition

Appeal dismissed; action maintained.

Orders

  • Appeal dismissed with costs
  • Action for recovery of the payment maintained in favour of the plaintiff