Produits de Caoutchouc Marquis Inc. v. Trottier

Produits de Caoutchouc Marquis Inc. v. Trottier

The statutory scheme of the Bankruptcy Act (notably ss.95 and 105) confines the landlord's preferential claim in bankruptcy to the three months' arrears of rent (and limited accelerated rent as provided), prevents the landlord from being treated as a secured creditor in bankruptcy for the remainder, and renders any balance due under provincial privilege an unsecured claim; therefore only the arrears of rent were entitled to priority and the repairs claim was not.

Citation
[1962] SCR 676
Parties
Appellant (landlord): Produits de Caoutchouc Marquis Inc.; Bankrupt (debtor): Gingras Automobile Ltée; Respondent (trustee): André Trottier
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
11 June 1962
Procedural Posture
Bankruptcy Appeal / Appeal to Supreme Court of Canada From Court of Queen's Bench, Province of Quebec
Outcome
Appeal dismissed with costs.
Legal Topics
Landlord Preference, Priority of Creditors, Federal Vs Provincial Law, Lease Obligations and Repairs
Source Language
English
Bankruptcy and Insolvency Landlord Preference Priority of Creditors Federal Vs Provincial Law Lease Obligations and Repairs

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Parties

Produits de Caoutchouc Marquis Inc.

Appellant (landlord)

Gingras Automobile Ltée

Bankrupt (debtor)

André Trottier

Respondent (trustee)

Procedural Posture

Bankruptcy Appeal / Appeal to Supreme Court of Canada From Court of Queen's Bench, Province of Quebec

Legal Issues

  1. 1 Whether landlord is a secured creditor under the Bankruptcy Act
  2. 2 Whether claim for costs of repairs under the lease is entitled to priority
  3. 3 Extent and scope of landlord's preference under ss.95 and 105 of the Bankruptcy Act

Ratio Decidendi

The statutory scheme of the Bankruptcy Act (notably ss.95 and 105) confines the landlord's preferential claim in bankruptcy to the three months' arrears of rent (and limited accelerated rent as provided), prevents the landlord from being treated as a secured creditor in bankruptcy for the remainder, and renders any balance due under provincial privilege an unsecured claim; therefore only the arrears of rent were entitled to priority and the repairs claim was not.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.
  • Decision of trustee restored