Bijural Terminology Records

Common Law

secured claim

Civil Law

secured claim

Title of the Legislative Text

Bankruptcy and Insolvency Act, R.S.C. (1985), c. B-3

Provision

  136. (1) ... the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

  • ...
  • (e) municipal taxes assessed or levied against the bankrupt, within the two years immediately preceding his bankruptcy, that do not constitute a preferential lien or charge against the real property of the bankrupt, but not exceeding the value of the interest of the bankrupt in the property in respect of which the taxes were imposed as declared by the trustee;
Problem

A problem of obsolete terminology in civil law is caused by the term charge privilégiée. In civil law, the notion of privilege has been abolished. The municipal tax privilege on immovables has been replaced with the notion of a prior claim that constitutes a real right. Furthermore, the term "lien" in the English version has meaning only in common law.

Solution

The appropriate terms would be "prior claim constituting a real right" /priorité constitutive de droit réel for civil law and "lien" /privilège for common law. However, the holders of these rights are included in the definition of "secured creditor" (créancier garanti) in subsection 2(1) of the Bankruptcy and Insolvency Act, as amended by the Federal Law-Civil Law Harmonization Act, No. 1. Therefore, the phrase "preferential lien or charge" / droit ou charge privilégié is replaced by "secured claim" /créance garantie.

Harmonized Provision

  136. (1) ... the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

  • ...
  • (e) municipal taxes assessed or levied against the bankrupt, within the two years immediately preceding the bankruptcy, that do not constitute a secured claim against the real property or immovables of the bankrupt, but not exceeding the value of the interest of the bankrupt in the property in respect of which the taxes were imposed as declared by the trustee;

Federal Law-Civil Law Harmonization Act, No. 1, S.C. 2001, c. 4, s. 31

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