Unisource Canada Inc. v. Hongkong Bank of Canada, et al.
The court held that a portion of each accounts receivable equal to the unpaid price of the paper supplied by the appellant constituted proceeds of the appellant's PMSI and ranked first, but once those receivables were paid and the sums deposited into Johanns Graphics Inc.'s general bank account the proceeds could...
Source-derived case information.
- Citation
- C31233
- Parties
- Appellant: Unisource Canada Inc., successor to Abitibi-Price Inc., carrying on business under the firm name and style of Barber-Ellis Fine Papers/Papeterie Barber-Ellis; Respondent: Hongkong Bank of Canada; Respondent: Peat Marwick Thorne Inc.; Respondent: Andrew Csanady; Respondent: Janne Csanady also known as Janne D. E. Janke; Respondent: Bruce Braid; Respondent: Thomas Bull; Respondent: Lance Crawford; Respondent: Timothy Decker; Respondent: Robert Dockeray; Respondent: Barbara Braid; Respondent: Barbara Bull; Respondent: Wendy Crawford; Respondent: Robin Decker; Respondent: Anne Dockeray
- Court
- Court of Appeal for Ontario
- Jurisdiction
- Canada
- Judgment Date
- 24 March 2000
- Procedural Posture
- Civil / Appeal From Trial Decision
- Outcome
- Appeal allowed in part and dismissed in part
- Legal Topics
- PMSI, Priority of Security Interests, Proceeds Tracing, Corporate Reorganization, Interest, Costs
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Unisource Canada Inc., successor to Abitibi-Price Inc., carrying on business under the firm name and style of Barber-Ellis Fine Papers/Papeterie Barber-Ellis
Appellant
Hongkong Bank of Canada
Respondent
Peat Marwick Thorne Inc.
Respondent
Andrew Csanady
Respondent
Janne Csanady also known as Janne D. E. Janke
Respondent
Bruce Braid
Respondent
Thomas Bull
Respondent
Lance Crawford
Respondent
Timothy Decker
Respondent
Robert Dockeray
Respondent
Barbara Braid
Respondent
Barbara Bull
Respondent
Wendy Crawford
Respondent
Robin Decker
Respondent
Anne Dockeray
Respondent
Procedural Posture
Civil / Appeal From Trial Decision
Legal Issues
- 1 Whether the corporate reorganization of Johanns Graphics Inc. provided a valid basis for a security interest
- 2 Whether the appellant's purchase-money security interest (PMSI) gave priority in accounts receivable and their proceeds
- 3 Whether proceeds paid into the debtor's general bank account could be traced to preserve PMSI priority
Ratio Decidendi
The court held that a portion of each accounts receivable equal to the unpaid price of the paper supplied by the appellant constituted proceeds of the appellant's PMSI and ranked first, but once those receivables were paid and the sums deposited into Johanns Graphics Inc.'s general bank account the proceeds could not be traced and the PMSI priority disappeared; except for the preserved PMSI portion, priority was Bank first, Owners Group second, appellant third, and the appellant was entitled to accrued interest on the approximately $66,000 recovered.
Court Disposition
Appeal allowed in part and dismissed in part
Orders
- Appeal allowed to the extent of awarding pre-judgment and post-judgment interest on the amount recovered as to the appellant (approximately $66,000)
- Appeal dismissed in all other respects
Full Case Text
Judgment text and source record
1 paragraphs
Unisource Canada Inc. v. Hongkong Bank of Canada, et al. Collection Decisions of the Court of Appeal Date 2000-03-24 Docket numbers C31233 Judges Finlayson, George Duncan; Labrosse, Jean-Marc; O’Connor, Dennis Subject Civil Decision Content DATE: 20000324 DOCKET: C31233 COURT OF APPEAL FOR ONTARIO RE: UNISOURCE CANADA INC., successor to ABITIBI-PRICE INC., carrying on business under the firm name and style of BARBER-ELLIS FINE PAPERS/PAPETERIE BARBER-ELLIS (Appellant) v. HONGKONG BANK OF CANADA, ANDREW CSANADY, JANNE CSANADY, BRUCE BRAID, THOMAS BULL, LANCE CRAWFORD, TIMOTHY DECKER, ROBERT DOCKERAY, BARBARA BRAID, BARBARA BULL, WENDY CRAWFORD, ROBIN DECKER, ANNE DOCKERAY, and PEAT MARWICK THORNE INC. (Respondents) AND RE: UNISOURCE CANADA, INC. (Appellant) v. ANDREW CSANADY, JANNE CSANADY also known as JANNE D. E. JANKE, BRUCE BRAID, THOMAS BULL, LANCE CRAWFORD, TIMOTHY DECKER, ROBERT DOCKERAY, BARBARA BRAID, BARBARA BULL, WENDY CRAWFORD, ROBIN DECKER and ANNE DOCKERAY (Respondents) BEFORE: FINLAYSON, LABROSSE and O'CONNOR JJ.A. COUNSEL: R. McLaren and C. F. MacKewn, for the appellant H. Daley for the respondents Hongkong Bank of Canada and Peat Marwick Thorne Inc. D. Snider for all other respondents HEARD: March 24, 2000 On appeal from the decisions of Mr. Justice R. D. Reilly dated November 20, 1998 and July 23, 1999 E N D O R S E M E N T [1] We agree essentially with and adopt the extensive and considered reasons of the trial judge. His findings are based on the evidence and reflect no error in law. [2] More specifically, there was ample evidence to support his finding that the corporate reorganization of Johanns Graphics Inc. formed a proper basis for a valid security interest. As to the appellant's PMSI priority, the trial judge was correct, on the basis of the agreed facts, in concluding that a portion of each account receivable equal to the unpaid price of the paper supplied by the appellant for the product that gave rise to that receivable constituted the proceeds of the PMSI and ranked first. If (as is now conceded) the receivable was paid and the sum received deposited in Johanns Graphics Inc.'s general bank account, the proceeds of that particular collateral could no longer be traced and the security interest disappeared. It could not be carried forward and re-asserted in subsequent transactions [3] Except to the extent of the appellant's PMSI priority, the order of priority was the Bank, the Owners Group and the appellant. [4] There are no sustainable grounds of appeal against the Bank and Peat Marwick Thorne Inc. [5] The appellant recovered approximately $66,000. The money has been held in an interest-bearing account. To deprive the appellant of this accrued interest would represent a windfall to the individual respondents. The appeal is allowed to the extent of awarding the interest on the amount recovered as both pre- judgment and post-judgment interest. [6] We see no basis to interfere with the exercise of the trial judge's discretion in dealing with costs. [7] The appeal is otherwise dismissed with costs. (signed) "G. D. Finlayson J.A." (signed) "J. M. Labrosse J.A." (signed) "D. O'Connor J.A."