HSBC Bank of Canada v. Maple Leaf Loading Ltd.

HSBC Bank of Canada v. Maple Leaf Loading Ltd.

The court held that the Receiver's actions in preserving and realizing mobile assets in urgent circumstances benefited the interested parties, that the lack of initial service did not defeat application of the Receivership Order given prompt subsequent service and engagement by affected creditors, and that some allocation of the Receiver's approved costs against secured creditors was warranted. The court exercised its discretion to adopt the Receiver's Supplement to the 6th Report Appendix G allocation method based on pieces of equipment valued over $10,000 as the fairer correlation to costs rather than a strict pro rata by recoveries.

Citation
2016 BCSC 361
Parties
Petitioner: HSBC Bank of Canada; Respondent: Maple Leaf Loading Ltd.; Respondent: Pro-Trans Ventures Inc.; Respondent: Caterpillar Financial Services Limited; Respondent: Element Fleet Management Inc.; Respondent: GE Canada Equipment Financing G.P.; Respondent: GE Canada Leasing Services Company; Respondent: General Electric Canada Equipment Finance G.P.; Respondent: GE Canada Asset Financing Holding Company; Respondent: GE Techology Finance; Respondent: GE VFS Canada Limited Partnership; Respondent: GE Capital Canada Equipment Financing & Leasing Company; Respondent: Mercedes-Benz Financial Services Canada Corporation; Respondent: Daimler Truck Financial; Respondent: Finning International Inc.; Respondent: National Leasing Group Inc.; Respondent: Coast Capital Savings Credit Union; Respondent: ATCO Structures & Logistics Ltd.; Respondent: Knight Manufacturing Ltd.; Respondent: Dynamic Capital II Corporation; Respondent: Canadian Western Bank Leasing Inc.; Respondent: James Western Star Truck & Trailer Ltd.; Respondent: Zeemac Vehicle Lease Ltd.; Respondent: Inland Kenworth; Respondent: Premium Truck & Trailer Inc.; Receiver: Ernst & Young Inc., in its capacity as Court appointed Receiver
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
2 March 2016
Procedural Posture
Receivership / Insolvency / Allocation Hearing on Receiver's Costs (chambers Reasons)
Outcome
Application to fix allocation of receiver's costs granted in part; allocation method adopted as Receiver's Supplement to the 6th Report Appendix G (pieces valued over $10,000) and outstanding matters set for hearing by Trial Scheduling.
Legal Topics
Allocation of Receiver's Costs, Repairer's Lien Priority, Personal Property Security, Notice and Service for Ex Parte Receivership, Receiver's Charge Priority
Source Language
English
Insolvency Receivership Commercial Law Property Law Allocation of Receiver's Costs Repairer's Lien Priority Personal Property Security Notice and Service for Ex Parte Receivership +1 more

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Parties

HSBC Bank of Canada

Petitioner

Maple Leaf Loading Ltd.

Respondent

Pro-Trans Ventures Inc.

Respondent

Caterpillar Financial Services Limited

Respondent

Element Fleet Management Inc.

Respondent

GE Canada Equipment Financing G.P.

Respondent

GE Canada Leasing Services Company

Respondent

General Electric Canada Equipment Finance G.P.

Respondent

GE Canada Asset Financing Holding Company

Respondent

GE Techology Finance

Respondent

GE VFS Canada Limited Partnership

Respondent

GE Capital Canada Equipment Financing & Leasing Company

Respondent

Mercedes-Benz Financial Services Canada Corporation

Respondent

Daimler Truck Financial

Respondent

Finning International Inc.

Respondent

National Leasing Group Inc.

Respondent

Coast Capital Savings Credit Union

Respondent

ATCO Structures & Logistics Ltd.

Respondent

Knight Manufacturing Ltd.

Respondent

Dynamic Capital II Corporation

Respondent

Canadian Western Bank Leasing Inc.

Respondent

James Western Star Truck & Trailer Ltd.

Respondent

Zeemac Vehicle Lease Ltd.

Respondent

Inland Kenworth

Respondent

Premium Truck & Trailer Inc.

Respondent

Ernst & Young Inc., in its capacity as Court appointed Receiver

Receiver

Procedural Posture

Receivership / Insolvency / Allocation Hearing on Receiver's Costs (chambers Reasons)

Legal Issues

  1. 1 Whether repairers' liens and PPSA priorities prevail over a court-ordered receiver's charge
  2. 2 Whether failure to be served with the ex parte receivership application precludes allocation of receiver's costs against certain creditors
  3. 3 What allocation methodology for receiver's costs is fair and equitable in the circumstances

Ratio Decidendi

The court held that the Receiver's actions in preserving and realizing mobile assets in urgent circumstances benefited the interested parties, that the lack of initial service did not defeat application of the Receivership Order given prompt subsequent service and engagement by affected creditors, and that some allocation of the Receiver's approved costs against secured creditors was warranted. The court exercised its discretion to adopt the Receiver's Supplement to the 6th Report Appendix G allocation method based on pieces of equipment valued over $10,000 as the fairer correlation to costs rather than a strict pro rata by recoveries.

Court Disposition

Application to fix allocation of receiver's costs granted in part; allocation method adopted as Receiver's Supplement to the 6th Report Appendix G (pieces valued over $10,000) and outstanding matters set for hearing by Trial Scheduling.

Orders

  • Adopt allocation set out in Receiver's Supplement to the 6th Report, Appendix G (allocation based on pieces of equipment valued over $10,000)
  • Set outstanding matters in the Receiver's application notice for hearing through Trial Scheduling