Bankruptcy of W.E. Tunney

Bankruptcy of W.E. Tunney

Priority and characterization of the lease are governed by British Columbia law (the law of the situs of the vehicle); under BC law the lease constituted a security interest and Chrysler failed to perfect that interest in British Columbia within the statutory period, so the trustee holds priority over the vehicle.

Citation
2000 BCSC 198
Parties
Bankrupt: Walter Edwin Tunney; Trustee: E. Sands and Associates Inc.; Secured Creditor/assignee: Chrysler Credit Canada Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
2 February 2000
Procedural Posture
Bankruptcy — Priority Dispute Under PPSA / In Chambers Application for Declaration of Priority
Outcome
Trustee declared to have priority over Chrysler Credit Canada Ltd. in respect of the vehicle
Legal Topics
Priority of Security Interests, Registration/perfection of Security Interests, Proper Law of Contract Vs Lex Situs, Characterization of Leases, Ratification/acquiescence
Source Language
English
Bankruptcy Personal Property Security Conflict of Laws Secured Transactions Priority of Security Interests Registration/perfection of Security Interests Proper Law of Contract Vs Lex Situs Characterization of Leases +1 more

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Parties

Walter Edwin Tunney

Bankrupt

E. Sands and Associates Inc.

Trustee

Chrysler Credit Canada Ltd.

Secured Creditor/assignee

Procedural Posture

Bankruptcy — Priority Dispute Under PPSA / In Chambers Application for Declaration of Priority

Legal Issues

  1. 1 Whether the motor vehicle lease constitutes a security interest for purposes of the British Columbia Personal Property Security Act
  2. 2 Whether characterization of the lease/security interest is governed by the proper law of the contract (Ontario) or by the law of the jurisdiction where the goods are situated (British Columbia)
  3. 3 Whether the trustee's acquiescence in possession and the bankrupt's continued payments amounted to ratification affecting priorities

Ratio Decidendi

Priority and characterization of the lease are governed by British Columbia law (the law of the situs of the vehicle); under BC law the lease constituted a security interest and Chrysler failed to perfect that interest in British Columbia within the statutory period, so the trustee holds priority over the vehicle.

Court Disposition

Trustee declared to have priority over Chrysler Credit Canada Ltd. in respect of the vehicle

Orders

  • Declaration that the trustee has priority over Chrysler Credit Canada Ltd. with respect to the Jeep Cherokee
  • Parties may agree on procedural terms to give effect to the decision or make written representations to the court regarding form of order