Laliberté v. Larue

Laliberté v. Larue

Majority held the trust deed was a security instrument (hypothec/pledge) not an absolute transfer of ownership. The phrase ‘cède, transporte et donne en gage’ must be read in context as creating a charge (‘cède en gage, transporte en gage, donne en gage’), consistent with Quebec Civil Code principles and the statutory scheme; s.13 did not transform Quebec law by importing an English trust or effecting outright alienation. Consequently the property remained part of the bankrupt’s estate and the bankruptcy court had jurisdiction to order sale. (Dissent: Smith J. would have held the words effect an ownership transfer.)

Citation
[1931] SCR 7
Parties
Appellants: J. R. Laliberté and Others; Respondents: Larue, Trudel & Picher; Bankrupt: Les Appartements Lafontaine, Limitée; Trustee (added Party): The Sun Trust Company, Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
31 December 1930
Procedural Posture
Bankruptcy Appeal / Appeal to the Supreme Court of Canada (final Judgment)
Legal Topics
Trust Deed, Hypothec, Pledge, Ownership, Statutory Interpretation, Priority of Security
Source Language
English
Commercial Law Bankruptcy Law Corporate Law Property Law Civil Law Vs. Common Law Interaction Trust Deed Hypothec Pledge +3 more

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Parties

J. R. Laliberté and Others

Appellants

Larue, Trudel & Picher

Respondents

Les Appartements Lafontaine, Limitée

Bankrupt

The Sun Trust Company, Limited

Trustee (added Party)

Procedural Posture

Bankruptcy Appeal / Appeal to the Supreme Court of Canada (final Judgment)

Legal Issues

  1. 1 Whether a trust deed executed pursuant to R.S.Q. statutes transferred ownership of the property to the trustee or merely created a security (hypothec/pledge)
  2. 2 Whether s.13 of the Special Corporate Powers Act (14 Geo. V c.63 s.1) effected an absolute transfer or a transfer in warranty/for security purposes
  3. 3 Whether Quebec civil law concepts preclude importing English common law trust/mortgage concepts

Ratio Decidendi

Majority held the trust deed was a security instrument (hypothec/pledge) not an absolute transfer of ownership. The phrase ‘cède, transporte et donne en gage’ must be read in context as creating a charge (‘cède en gage, transporte en gage, donne en gage’), consistent with Quebec Civil Code principles and the statutory scheme; s.13 did not transform Quebec law by importing an English trust or effecting outright alienation. Consequently the property remained part of the bankrupt’s estate and the bankruptcy court had jurisdiction to order sale. (Dissent: Smith J. would have held the words effect an ownership transfer.)