In the Bankruptcy of Ian Gregory Thow

In the Bankruptcy of Ian Gregory Thow

The June 16, 2005 taking/retention of the paintings occurred within three months of the initial bankruptcy event and had the effect of preferring Vickers; Vickers was not a secured creditor because there was no enforceable security agreement or perfection, and any unpaid seller's lien had been lost when Thow took possession on March 4, 2005; accordingly the transfer/charge is void against the trustee under s.95 BIA and the trustee is entitled to immediate delivery and to treat Vickers as an unsecured creditor.

Citation
2006 BCSC 1414
Parties
Bankrupt/debtor: Ian Gregory Thow; Respondent/art Dealer/possessor: Arthur Vickers; Trustee: Mr. Cheevers
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
31 July 2006
Procedural Posture
Bankruptcy Turnover/possession of Property / Application Heard and Decided (oral Reasons)
Outcome
Trustee's application granted; Vickers declared unsecured and transfer void as against trustee
Legal Topics
Voidable Preference, Security Interest, Perfection by Possession, Unpaid Seller's Lien, Insolvency, Priority
Source Language
English
Bankruptcy Law Secured Transactions Sale of Goods Property/possession Voidable Preference Security Interest Perfection by Possession Unpaid Seller's Lien +2 more

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Parties

Ian Gregory Thow

Bankrupt/debtor

Arthur Vickers

Respondent/art Dealer/possessor

Mr. Cheevers

Trustee

Procedural Posture

Bankruptcy Turnover/possession of Property / Application Heard and Decided (oral Reasons)

Legal Issues

  1. 1 Whether transfer of paintings to Vickers within three months of initial bankruptcy event is void under s.95 BIA as a preference
  2. 2 Whether Vickers held a security interest enforceable under the PPSA in the paintings
  3. 3 Whether Vickers retained an unpaid vendor's lien or right of retention under the SGA after Thow obtained possession

Ratio Decidendi

The June 16, 2005 taking/retention of the paintings occurred within three months of the initial bankruptcy event and had the effect of preferring Vickers; Vickers was not a secured creditor because there was no enforceable security agreement or perfection, and any unpaid seller's lien had been lost when Thow took possession on March 4, 2005; accordingly the transfer/charge is void against the trustee under s.95 BIA and the trustee is entitled to immediate delivery and to treat Vickers as an unsecured creditor.

Court Disposition

Trustee's application granted; Vickers declared unsecured and transfer void as against trustee

Orders

  • Declare Arthur Vickers an unsecured creditor in the bankruptcy of Ian Gregory Thow
  • Declare any charge or lien granted by Ian Gregory Thow to Arthur Vickers in the paintings on or about June 16, 2005 fraudulent and void as against the Trustee