Bankruptcy of Orion Truck Centre Ltd.

Parties

Procedural Posture

Bankruptcy / Chambers Decision on Appeal Under BIA S.135(4)

Legal Issues

1. 1 Whether perfected security interests registered against Orion Western remained effective against the trustee after Orion's name change and the trustee's bankruptcy absent timely amendment of registrations under PPSA s.51
2. 2 Whether the assignment of the Western Security to CIT Financial and subsequent amalgamations created an enforceable security against Orion Truck and the trustee and whether further perfection steps were required
3. 3 Whether the trustee is estopped from challenging the validity or priority of CIT Financial's security because the same firm acted earlier as receiver-manager and released vehicles and funds

Ratio Decidendi

Applying Re Giffen, the trustee acquires a representative interest on bankruptcy which falls within PPSA s.51(2)(c); CIT Financial failed to amend registrations to reflect the debtor's name change within the statutory period after acquiring knowledge, therefore CIT's registered security interests (Pitney Bowes and Western Security) are subordinate to the trustee's interest and are void and unenforceable against the trustee, although the assignment and amalgamations validly transferred the security to CIT Financial; the trustee is not estopped by prior receiver-manager conduct from asserting this position, subject to reimbursement of realized sale costs incurred by CIT Financial.

Court Disposition

Appeal dismissed; declarations granted to Trustee subject to reimbursement; parties to bear their own costs

Orders

• CIT Financial to be reimbursed approximately 20850 from funds held or realized by CIT Financial/Receiver Manager before remainder paid to Trustee
• Declaration that the Pitney Bowes Security and the Western Security are void and unenforceable against Price-WaterhouseCoopers Inc. in its capacity as Trustee of Orion Truck