Robinson v. Countrywide Factors Ltd.

Parties

Procedural Posture

Bankruptcy and Insolvency / Appeal to Supreme Court of Canada (leave Granted)

Legal Issues

1. 1 Whether The Fraudulent Preferences Act (Sask.) R.S.S. 1965, c.397 is ultra vires the provincial legislature
2. 2 Whether ss.3 and 4 of the provincial Act conflict with federal Bankruptcy Act (R.S.C. 1970, c. B-3) (ss.50(6),73)
3. 3 Whether the November 19, 1966 transaction and subsequent debenture constituted fraudulent preferences recoverable by the trustee

Ratio Decidendi

Majority held that ss.3 and 4 of the Saskatchewan Fraudulent Preferences Act are intra vires provincial power over property and civil rights and are not in conflict with the federal Bankruptcy Act because s.73 of the Bankruptcy Act should be confined to its three‑month scope and Parliament by s.50(6) intended provincial remedies to operate supplementarily; the trustee produced a prima facie case of insolvency in November 1966 and s.4 avoided the impugned payment and debenture, so the trial judgment restoring recovery was correct. Dissent held that provincial provisions predicated on insolvency directly invade federal power and are ultra vires and repugnant where they extend beyond federal...

Court Disposition

Appeal allowed; judgment of trial court restored

Orders

• Payment of $9,152.31 declared recoverable by the trustee as a fraudulent preference and payable to the trustee
• Debenture granted to respondent declared void (annulled) as a fraudulent preference