HARMONIZATION OF FEDERAL LEGISLATION WITH QUEBEC CIVIL LAW: SOME EXAMPLES FROM THE BANKRUPTCY AND INSOLVENCY ACT

Endnotes

  • [1] Respectively, Senior Counsel and Legal Counsel at the Civil Code Section of Justice Canada. We would like to thank Me Annie Paré and Me Michael Keiver, legal counsels at the Civil Code Section, for their valued collaboration and assistance.

  • [2] R.S.C. 1985, c. B-3.

  • [3] An Act for Making More Effectual Provision for the Government of the Province of Quebec in North America, 1774 (U.K.) 14 Geo III, c. 83. Also in R.S.C. 1985, app. II, No. 2.

  • [4] M. Greenwood, "Lower Canada (Quebec): Transformation of Civil Law, from Higher Morality to Autonomous Will, 1774-1866" (1996) 23 Man. L.J. 132. The writer also notes the decision in Hutchinson v. Gillespie, in which a judge stated that no law could be applied to insolvency cases since, firstly, English common law had been prohibited in private law matters since the Quebec Act and, secondly, no orders made under the French régime had been registered by the Sovereign Council of Quebec: Hutchinson v. Gillespie, [1844] 4 Moo. P.C. 378, 13 E.R. 349 (P.C.). The Sovereign Council of Quebec was an administrative legal body with powers similar to those of French legislative assemblies of the time: J.-G. Castel, The Civil Law System of the Province of Quebec (Toronto: Butterworths, 1962) at 15-20. See also H. Neatby, The Administration of Justice under the Quebec Act (Minneapolis: University of Minnesota Press, 1937) at 15‑17 and 155-160; J.-M. Brisson, La formation d'un droit mixte : l'évolution de la procédure civile de 1774 à 1867 (Montreal: Thémis, 1986) at 34-39.

  • [5] The Coutume de la Prévôté et Vicomté de Paris or Coutume de Paris, published in 1580 and recognized by Louis XIV in 1664, included four volumes devoted to commercial law and debt recovery. The Coutume de Paris was applied as far afield as New France, following the 1664 Édit établissant la Compagnie des Indes orientales. In addition to the Coutume de Paris, the Édit de 1543 sur le droit commercial, the Code Marchand, the Ordonnance sur le commerce, the Ordonnance civile de 1667 or Code Louis, and the 1673 Ordonnance sur les hypothèques made up the rules applicable to insolvency. See J.A. Dickinson, "New France: Law, Courts, and Coutume de Paris, 1608-1760" (1996) 23 Man. L.J. 32 at 42-43.

  • [6] Ordinance Concerning Bankrupts and the Administration and Distribution of Their Estates and Effects, S.L.C. 1839, c. 36 (Special Council). Ten years later, the insolvency system, too, was imported from England and enacted as the Act to Abolish Imprisonment for Debts and for the Punishment of Fraudulent Debtors in Lower Canada and for Other Purposes, S.C. 1849, c. 42; the purposes of this statute were to organize the transfer of property and to free debtors physically.

  • [7] An Act to Repeal an Ordinance of Lower Canada Intituled An Ordinance Concerning Bankrupts and the Administration and Distribution of Their Estates and Effects, and to Make Provision for the Same Object Throughout the Province of Canada, S. Prov. C. 1843, c. 10.

  • [8] An Act Respecting Insolvency, S.C. 1864, c. 17, s. 1.

  • [9] S.Q. 1865, c. 41.

  • [10] Ss. 17(23), 749, 750, 803, 1032-1040, 1092, 1118, 1119, 1175, 1497, 1754, 1755(4), 1790, 1844, 1892(4), 1946, 1947, 1953(2), 1998, 2023, 2085, 2090 C.C.L.C.

  • [11] Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3., subs. 91(21).

  • [12] An Act Respecting Insolvency, S.C. 1875, c. 16, s. 149.

  • [13] An Act to Amend the Insolvent Act of 1875 and Amending Acts, S.C. 1881, c. 27.

  • [14] Debates of the House of Commons of the Dominion of Canada, (19 February, 1880) at 76ff. These debates show that in Ontario and in New Brunswick, provincial enactments allowed creditors to seize debtors' property and turn it over to a sheriff in order to protect creditors' rights. No similar legislation existed elsewhere in Canada, with the exception of the C.C.L.C.

  • [15] According to the Privy Council, federal legislation on bankruptcy and insolvency could include ancillary provisions governing matters of provincial jurisdiction; the provincial legislatures would then be unable to contradict these provisions. However, given the absence of federal legislation on bankruptcy and insolvency, the Privy Council concluded that the Ontario enactment that was the subject of the dispute did not encroach on the exclusive federal jurisdiction over bankruptcy and insolvency. Attorney General of Ontario v. Attorney General for the Dominion of Canada, [1894] A.C. 189 (P.C.).

  • [16] While the federal Parliament exercises its competence, there are still provincial statutes in effect on these matters to this day: Fraudulent Conveyances Act, R.S.N. 1990, c. F-24, s. 3; Assignments and Preferences Act, R.S.N.S. 1989, c. 25, s. 4; Assignments and Preferences Act, R.S.N.B. 1973, c. A-16, s. 2; Frauds on Creditors Act, R.S.P.E.I. 1988, c. F-15, s. 2; Assignments and Preferences Act, R.S.O. 1990, c. A.33, subs. 4(1), and Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, s. 2; Fraudulent Conveyances Act, R.S.M. 1987, c. F160, s. 2; The Fraudulent Preferences Act, R.S.S. 1978, c. F-21, s. 3; Fraudulent Preferences Act, R.S.A. 1980, c. F-18, s. 2; Fraudulent Conveyance Act, R.S.B.C. 1979, c. 142, s. 1, and Fraudulent Preference Act, R.S.B.C. 1979, c. 143, s. 3; and Fraudulent Preferences and Conveyances Act, R.S.Y. 1986, c. 72, s. 2. See also s. 1631 C.C.Q. (in the subsection entitled "Paulian action").

  • [17] An Act to amend the Code of Civil Procedure with respect to the garnishment of salaries or wages, S.Q. 1903, c. 57. These enactments were for a long time referred to as the "Lacombe Act", name of the minister who had proposed it. These provisions are found in articles 652ff. of the present C.C.P.

  • [18] Between 1880 and 1919, the federal Parliament did not exercise the jurisdiction on bankruptcy and insolvency it received in 1867, with the exception of a piece of legislation enacted in 1882, still in effect today, which only applied to insolvent corporations. Winding-up and Restructuring Act, R.S.C. 1985, c. W-11. However, when a debtor corporation assigns property or a court of competent jurisdiction issues a receiving order, application of this act is suspended: s. 213 B.I.A.

  • [19] Debates of the House of Commons of Canada (28 March 1919) at 968.

  • [20] An Act Respecting Bankruptcy, S.C. 1919, c. 36.

  • [21] An Act to Consolidate the Law Relating to Bankruptcy (U.K.), 1914-1916, c. 59 [hereinafter English Bankruptcy Act of 1914]. See A. Bohémier, Faillite et insolvabilité, t. 1 (Montreal: Thémis, 1992) at 9-18.

  • [22] An Act to Amend the Bankruptcy Act, S.C. 1966-67, c. 32; An Act to Amend the Bankruptcy Act and the Income Tax Act in Consequence Thereof, S.C. 1992, c. 27; An Act to Amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangements Act, and the Income Tax Act, S.C. 1997, c. 12.

  • [23] S.Q. 1991, c. 64.

  • [24] Robinson v. Countrywide Factors Ltd., [1978] 1 S.C.R. 753 [hereinafter Robinson].

  • [25] R.S.S. 1965, c. 397.

  • [26] Robinson, supra note 24 at 804.

  • [27] Ibid. at 805.

  • [28] Ibid. at 809. Subsection 72(1) of the B.I.A. provides:

    The provisions of this Act shall not be deemed to abrogate or supersede the substantive provisions of any other law or statute relating to property and civil rights that are not in conflict with this Act, and the trustee is entitled to avail himself of all rights and remedies provided by that law or statute as supplementary to and in addition to the rights and remedies provided by this Act.

  • [29] Deputy Minister of Revenue (Quebec) v. Rainville, [1980] 1 S.C.R. 35 [hereinafter Rainville].

  • [30] This rather long excerpt has, nevertheless, often been cited in full. See for example R. P. Simard et A. Leduc, "Affaire Château d'Amos: intégrité du droit canadien de la faillite ou du droit civil québécois, deux intérêts inconciliables dans un régime fédéral"?, in Barreau du Québec, Développements récents en droit administratif, vol. 131 (Cowansville, Que.: Yvon Blais, 2000) 85 at 87 [hereinafter "Deux intérêts inconciliables?"]; D. S. Goldstein et Y. Goldstein, "The Impact of the Civil Law on Bankruptcy and Insolvency Practice in Quebec or Whose Bankruptcy and Insolvency Act Is It Anyway?", in Pertinence renouvelée du droit des obligations : Back to Basics : Conférences commémoratives Meredith 1998-1999 (Cowansville, Que.: Yvon Blais, 2000) 253 at 256.

  • [31] Rainville, supra note 29 at 41.

  • [32] Château d'Amos Ltée (syndic de), [1999] R.J.Q. 2612 at 2633 (C.A.) [hereinafter Château d'Amos].

  • [33] A. Bohémier, "Research in Bijuralism: Bankruptcy and Insolvency Act", in Harmonization of Federal Legislation with Quebec Civil Law and Canadian Bijuralism (Ottawa: Justice Canada, 1997) 841 at 886 [hereinafter "Research in Bijuralism"].

  • [34] J. Auger, A. Bohémier and R. A. Macdonald, "The Treatment of Creditors in the Bankruptcy and Insolvency Act and Security Mechanisms in the Civil Law of Quebec", in Harmonization of Federal Legislation with Quebec Civil Law and Canadian Bijuralism (Ottawa: Justice Canada, 1997) 887 at 892 [hereinafter "The Treatment of Creditors"].

  • [35] On 31 January 2001, the first harmonization bill was tabled in the Senate. It may now be referred to as Bill S-4.

  • [36] J. Deslauriers, "Le projet de loi S-22 et l'harmonisation de la Loi sur la faillite avec le Code civil du Québec" (Conference of the Canadian Bar Association, Quebec, 24 October 2000) at 2 [hereinafter "Conférence sur le projet de loi S-22"].

  • [37] SOR/98-240.

  • [38] The definition reads as follows:

    "secured creditor" means a person holding a mortgage, hypothec, pledge, charge, lien or privilege on or against the property of the debtor or any part thereof as security for a debt due or accruing due to him from the debtor, or a person whose claim is based on, or secured by, a negotiable instrument held as collateral security and on which the debtor is only indirectly or secondarily liable.

  • [39] L.Q. 1992, c. 57.

  • [40] Subject to the hypothecary creditor's right to taking in payment. Québec (Sous-ministre du Revenu) v. Banque nationale du Canada, [1999] R.J.Q. 950 (Que.C.A.). Contra: Château d'Amos, supra note 32.

  • [41] On this point, Professor Louis Payette notes that:

    [Translation] [t]he code does not define prior claims as being real rights, in the way it defines hypothecs. It confers on prior claims only some of the attributes of hypothecs; it does not provide for a right to follow regarding prior claims […]. In this context, it must be concluded that prior claims are rights of preference sui generis that most likely may not be described as real rights.

    L. Payette, "Des priorités et des hypothèques", in Barreau du Québec and the Chambre des notaires du Québec, La réforme du Code civil, vol. 3 (Quebec: Les Presses de l'Université Laval, 1993) at 66.

  • [42] Château d'Amos, supra note 32.

  • [43] An Act to amend various legislative provisions regarding municipal affairs, S.Q. 1999, c. 90, s. 42, 43. These amendments are now provided for in art. 2654.1 C.C.Q.

  • [44] On this point, there seems to be some degree of unanimity in the legal community. See "Deux intérêts inconciliables?", supra note 30 at 133.

  • [45] "Conférence sur le projet de loi S-22", supra note 36 at 6.

  • [46] Art. 1745-1749 C.C.Q.

  • [47] Art. 1742-1743 C.C.Q.

  • [48] Art. 1750-1756 C.C.Q.

  • [49] See "The Treatment of Creditors", supra note 34 at 930.

  • [50] Art. 1263 C.C.Q.

  • [51] "The Treatment of Creditors", supra note 34 at 932.

  • [52] See supra note 35.

  • [53] This would be the meaning to be given to subsection 183(1) of the B.I.A. According to Justice Houlden and Mr. Morawetz, the expression "original, auxiliary and ancillary jurisdiction" would refer to the inherent jurisdiction in common law of the courts in which the B.I.A. vests jurisdiction in bankruptcy and insolvency proceedings: L.W. Houlden and G.B. Morawetz, The 2000 Annotated Bankruptcy and Insolvency Act (Scarborough: Carswell, 1999) at 636 [hereinafter The 2000 Annotated B.I.A.].

  • [54] S. 183 B.I.A.

  • [55] References to equity in the B.I.A. include the following:

    • In subsection 2(1), the definition of "property" covers every description of property, legal or equitable;
    • Under paragraph 4(3)(c), a person who has a right under a contract, "in equity or otherwise", to acquire shares in a corporation shall be deemed to own the shares;
    • Under section 84, all sales of property made by a trustee vest in the purchaser all the "legal and equitable" estate of the bankrupt therein;
    • Under section 213, where a petition for a receiving order or an assignment has been filed in respect of a corporation, any proceedings that are instituted under the Winding-up and Restructuring Act shall abate, subject to such disposition of the costs of those proceedings as the justice (in French "équité") of the case may require;
    • Under subs. 268(5), the court, on the application of a foreign representative, may apply "legal or equitable" rules governing the recognition of foreign insolvency orders.
  • [56] Pogany (syndic de), [1997] R.J.Q. 1693 at 1700 (Sup. Ct.); Janpar Produits de bureau Inc. (syndic de), [1993] R.J.Q. 1907 at 1914 (Sup. Ct.); Maestro Ltée (syndic de) (May 25, 2000), Montreal 500-11-011474-992, J.E. 2000-1323 (Sup. Ct.); Re Bureau (syndic de), [1995] R.J.Q. 1461 at 1465 (Sup. Ct.).

  • [57] Re Alliance Credit Corp.: Gagnon v. Montreal Trust Co. (1973), 17 C.B.R. 136 (Que. Sup. Ct..); Fredericton Co-operative Ltd v. Smith (1921-22), 2 C.B.R. 154 (N.-B.K.B.); Re Stanley & Bunting (1924-25), 5 C.B.R. 18 (Ont. Sup. Ct.); Re Duranceau: Perras v. Cie mutuelle d'immeubles Ltée (1954), 34 C.B.R. 198 (Que. Sup. Ct.).

  • [58] Re 125258 Canada Inc. (formerly Cast North America Ltd.): Bisseger v. Banque Royale du Canada, [1986] R.J.Q. 1666 at 1680 (Sup. Ct..), aff'd [1990] R.J.Q. 1547 (C.A.). Voir aussi Meublerie André Viger Inc. (syndic de), [1992] R.J.Q. 1461 at 1467 (C.A.).

  • [59] Castor Holdings Ltd. (syndic de), (29 October 1999), Montreal 500-11-001584-925, J.E. 99-2246 (Sup. Ct.).

  • [60] Holt v. Telford, [1987] 2 S.C.R. 193 at 206; Structal (1982) Inc. v. Fernand Gilbert Ltée, [1999] R.J.Q. 1686 (Sup. Ct.). This case law is cited in Nolisair International Inc. (syndic de) (22 August 2000) Montreal 500-09-008036-998, J.E. 2000-1665 (C.A.).

  • [61] André Bélanger, A "AL'application en droit civil québécois de l'inapplicable equitable set-off de common law" (1999) 78:3-4 Can. Bar Rev. 486.

  • [62] Subsection 43(1) of the B.I.A. reads as follows:

    [s]ubject to this section, one or more creditors may file in court a petition for a receiving order against a debtor if, and if it is alleged in the petition that,

    • (a) the debt or debts owing to the petitioning creditor or creditors amount to one thousand dollars; and
    • (b) the debtor has committed an act of bankruptcy within six months next preceding the filing of the petition.
  • [63] Canadian Encyclopedic Digest, vol. 2, 3th ed. (Scarborough: Carswell, 1984) at 397.

  • [64] Pacific Mobile Corp. v. Hunter Douglas Canada Ltd., (16 January 1979) 200-09-000205-788 (C.A.Q.) aff'd [1979] 1 S.C.R. 842 at 843.

  • [65] Faillite et insolvabilité, supra note 21 at. 111.

  • [66] Ibid. at 4-8.

  • [67] S. 50ff. B.I.A., introduced in 1919.

  • [68] S. 155 B.I.A., introduced in 1949.

  • [69] S. 217ff. B.I.A., introduced in 1967. This part is not applied in Quebec.

  • [70] S. 66.11ff. B.I.A., introduced in 1992.

  • [71] Introduced in 1997, mediation is aimed at settling disputes over the amount bankrupts must pay their creditors (excess income) and over the conditions under which persons may be discharged from bankruptcy. See the Internet site for the Office of the Superintendent of Bankruptcy: http://strategis.ic.gc.ca/SSGF/br01083f.htmll.

  • [72] Re Dallas/North Group Inc. (1999), 46 O.R. (3rd) 602 at 603 (Gen. Div.); Re 307309 B.C. Ltd. (1991), 11 C.B.R. (3rd) 187 at 191 (B.C.S.C.); Re Whatznu Fashions (1988) Ltd. (1989), 73 C.B.R. (N.S.) 241 (Ont. H.C.J.); Re Saleh (1982), 42 C.B.R. 41 at 43 (Ont. H.C.J.); Re Consoli (1982), 41 C.B.R. (N.S.) 203 at 205 (Ont. H.C.J.); Re Holmes and Sinclair (1975), 20 C.B.R. (N.S.) 111 at 112 (Ont. H.C.J.); Re Elkind (1967), 9 C.B.R. (N.S.) 274 at 278 (Ont. H.C.J.).

  • [73] Re Bookman (1984), 49 C.B.R. (N.S.), 267 at 282 (Ont. H.C.J.).

  • [74] Gilbert c. Gilbert, [1975], C.A. 411.

  • [75] Faillite et insolvabilité, supra note 21 at 112.

  • [76] The Oxford English Dictionary, 2nd ed. (Oxford: Clarendon Press, 1989) at 633. In the late 1800s, "a petition [was] a proper mode of coming before the court for the relief of insolvent debtors".

  • [77] Actions are usually initiated by statements of claim. Courts of Justice Act, R.S.O. 1990, c. C-43, s.1. If there is not enough time to draft a statement of claim, the Ontario Rules of Civil Procedure allow for a notice of action to be filed; it is imperative that the notice of action be followed by a statement of claim. Rules of Civil Procedure, R.R.O. 1990, Reg 194, s. 14.01. Applications are the other judicial procedure used in Ontario civil courts. The court may not hear applications unless there is specific statutory provision for them; if there is such provision, the party making the application may file a notice of application: Rules of Civil Procedure, ibid., s. 38.

  • [78] One example is the Municipalities Act, R.S.N.B. 1973, c. M-22, s. 24-25.

  • [79] Examples of the use of the word "requête" to translate the word "petition" in federal statutes include:

    Companies' Creditors Arrangements Act, R.S.C. 1985, c. C-25, s. 10:

    Applications […] shall be made by petition or by way of originating summons or notice of motion.

    Demandes […] peuvent être formulées par requête ou par voie d'assignation introductive d'instance ou d'avis de motion.

         

    Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 248:

    Application […] in a summary manner by petition.

    Demande […] présentée par voie sommaire sous forme de requête.

       

    Canada Cooperatives Act, S.C. 1998, c. 1, s. 347:

    Application made in any summary manner by petition […].

    Demande […] présentée par requête sommaire […].

    This act was proclaimed in force 31 December 1999, SI 99-69, C. Gaz. 1999.II.1917.

  • [80] Re Ristimaki (2000), 18 C.B.R. (4th) 246 at 249 (Ont. Bktcy).

  • [81] H. Reid, Dictionnaire de droit québécois et canadien, (Montreal: Wilson & Lafleur, 1994) at 425 [hereinafter Dictionnaire de droit québécois].

  • [82] Department of Justice (Quebec), Commentaires du ministre de la Justice du Québec, t.1 (Quebec: Les Publications du Québec, 1993) at 535 [hereinafter Commentaires du Ministre].

  • [83] Art. 626 C.C.Q.

  • [84] Art. 110 C.C.P.

  • [85] Art. 752 C.C.P.

  • [86] Art. 762 C.C.P.

  • [87] Art. 453 C.C.P.

  • [88] Art. 834ff C.C.P.

  • [89] G. Brière, Le nouveau droit des successions, 2nd ed., Bleue coll. (Montreal: Wilson & Lafleur, 1997) at 81ff.

  • [90] This case law includes: Re Bureau (syndic de), supra note 56; 2751-9818 Québec inc. (Restaurant Le Campus) v. 2150-1069 Québec inc. (Carrefour La Pocatière), [1996] R.R.A. 1221 (Que. Sup. Ct.); Chronberg v. 9047-4586 Québec inc. (syndic), [1998] A.Q. No. 1625 (Q.L.); 2782375 Canada inc. (Re), [1999] J.Q. No. 1505 (Q.L.); Pétroles Irving inc. v. Dépanneur Danielle Comeau inc. (syndic), [1997] A.Q. No. 4682 (Q.L.); Parent v. Bouchard, [1988] R.L. 77 (Que. C.A.); Ultramar Canada Inc. v. Québec (sous-ministre du Revenu),[1997] R.D.F.Q. 15 (Que C.A.); Québec (Procureur général) (Re), [1997] A.Q. No. 4582 (Q.L.); Musée des sciences naturelles de Québec Inc. (syndic) v. Banque de Montréal (1998), 2 C.B.R. (4th) 224 (Que. C.A.); Banque nationale du Canada v. Nilus Leclerc inc., [1997] A.Q. No. 4614 (Q.L.); Gagnon v. Desrochers, [1989] A.Q. No. 1664 (Q.L.); Swiss Bank Corp. (Canada) v. 124298 Canada Inc., [1996] R.D.J. 531 (Que. C.A.); Walter Canada Inc. v. Banque nationale du Canada, [1986] C.B.R. (N.S.) 144 (Que. Sup. Ct.); 146236 Canada Inc. (syndic) (Re), [1993] A.Q. No. 1221 (Q.L.); Soeurs du Bon-Pasteur de Québec v. Marché Central Métropolitain inc. (syndic), [1999] R.J.Q. 18 (C.A.); Textainer Equipment Management Ltd v. Compania Argentina de Navigacion Interoceanica S.A., [1999] J.Q. No. 2627 (Q.L.); 2768721 Canada Inc. v. Immeubles 1555 Provencher inc. (syndic), [1993] A.Q. No. 95 (Q.L); Renda v. Banque Canadienne Impériale de Commerce, [2000] J.Q. No. 2723 (Q.L.); Mont Écho Capital inc. v. Eichenberger, [1998] A.Q. No. 3763 (Q.L.); Tenneco Canada Inc. v. 167782 Canada Inc., [1992] A.Q. No. 1091 (Q.L.); Réfrigération Mauvalin Ltée v. Société immobilière Bendwell Inc., [1990] R.J.Q. 2596 (C.A.).

  • [91] Faillite et insolvabilité, supra note 21 at 111ff.; J.-Y. Fortin and B. Boucher, Insolvabilité commerciale et personnelle : Aide-mémoire, 1st ed. (Montreal: Wilson & Lafleur, 1990) at 52ff.

  • [92] According to Professor Albert Bohémier, a petitioning in bankruptcy must take the form of a motion, because Rule 11 of the B.I.G.R. provides that every bankruptcy application to the court must be made by motion: Faillite et insolvabilité, ibid. at 173. Me Bernard Boucher also supports Rule 11 of the B.I.G.R., stating that an application to initiate bankruptcy proceedings should be made by means of a "requête":B. Boucher, "La juridiction de la Cour de faillite : une perspective québécoise" (1994) 24C.B.R.(3rd) 61 at 66. Rule 11 of the B.I.G.R. provides that "[s]ubject to these Rules, every application to the court must be made by motion unless the court orders otherwise". See also art. 762 C.C.P.

  • [93] Art. 763 C.C.P.; subs. 43(3) B.I.A.

  • [94] Art. 764 C.C.P., rule 70(1) B.I.G.R.

  • [95] Art. 110, 762 C.C.P.; subs. 43(1) B.I.A.

  • [96] Art. 159 C.C.P.; rules 74, 75 B.I.G.R. Faillite et insolvabilité, supra note 21 at 199.

  • [97] Art. 165, 168 C.C.P. See Faillite et insolvabilité, ibid. at 204.

  • [98] Rules of Civil Procedure, supra note 77, s. 56; Re Towers Marts & Properties Ltd., [1968] 1 O.R. 605 (Ont. Bktcy.).

  • [99] Rules of Civil Procedure, ibid. s. 43; Re S & S International Transportation Services Ltd., [2000] O.J. No. 4106 (Q.L.).

  • [100] Rules of Civil Procedure, ibid. s. 13; Re Ristimaki, supra note 80 (motion dismissed).

  • [101] Rules of Civil Procedure, ibid. s. 49; Baltman v. Coopers & Lybrand Ltd. (1997), 47 C.B.R. (3rd) 121 (Ont. Bktcy.).

  • [102] Langret Investments S.A. v. McDonnell (1996), 40 C.B.R. (3rd) 44 (B.C.C.A.).

  • [103] Re Dhillon (1997), 49 C.B.R. (3rd) 24 (B.C.S.C.).

  • [104] Re Murray (1995) 35 C.B.R. (3rd) 264 (N.B. Bktcy).

  • [105] Re Big Bud Tractor of Canada, [1980] A.J. No. 93 (Q.L.).

  • [106] Rules of Civil Procedure, supra note 77, s. 1.

  • [107] Ibid. s. 2.

  • [108] Ibid. s. 3.

  • [109] Ibid. s. 4.

  • [110] Ibid. s. 5.

  • [111] Ibid. s. 6.

  • [112] Ibid. s. 7.

  • [113] Ibid. s. 15.

  • [114] Ibid. s. 16.

  • [115] Subs. 169(1) B.I.A.

  • [116] English Banbruptcy Act of 1914, supra note 21, subs. 48(2).See A. Roper, Ringwood's Principles of Bankruptcy, 16th ed. (London: Sweet & Maxwell Ltd., 1930) at 62.

  • [117] English Banbruptcy Act of 1914,ibid., s. 14.

  • [118] Subs. 71(2) B.I.A.

  • [119] Art. 2305 C.C.Q.

  • [120] Courts of Justice Act, supra note 77, s. 103; Rules of Civil Procedure, supra note 77, s. 42.

  • [121] G.D. Watson and C. Perkins, Homested and Watson, Ontario Civil Procedure, vol. 3 (Toronto: Carswell, 1984) at 42-1ff.; P.G. Vogel, Cohen Melnitzer's Civil Procedure in Practice (Toronto: Carswell, 1989) at 6-39.

  • [122] See the remarks by Brossard J. of the Quebec Court of Appeal in Langevin v. Weinberg Bros. Inc., [1971] C.A. 122 at 127.

  • [123] Art. 2966 C.C.Q.

  • [124] J. R. Nolan, Black's Law Dictionary, 6th ed. (St. Paul, Minn.: West Publishing Co., 1990) at 817.

  • [125] Art. 597 C.C.P.

  • [126] Ss. 246, 247 B.I.A.

  • [127] Farm Credit Corporation v. Corriveau (1993) 20 C.B.R. (3rd) 124 (Sask. Q.B.).

  • [128] A. Riendeau, "L'insolvabilité et l'exécution des garanties" (Conference of the Faculty of Law, McGill University, Montreal, March 29‑30, 1996) at 24 [hereinafter "L'exécution des garanties"].

  • [129] "Conférence sur le projet de loi S-22", supra note 36 at 15.

  • [130] S.R.Q. c. P-16, s. 27ff. These sections were amended by An Act Respecting the Implementation of the Reform of the Civil Code, S.Q. c. 57, s. 642ff. Before these amendments, taking possession of defaulting debtors' property had to be expressly authorized in the trust deed: L. Lévesque, L'Acte de fiducie, Coll. Minerve (Cowansville, Que.: Yvon Blais, 1991) at 28ff. Taking possession of property did not transfer ownership rights, which remained with the debtors: Laliberté v. Larue, [1931] S.C.R. 7. An interesting point is that trustees ("fiduciaires") could act directly without appointing receivers: Y. Caron, "De l'action réciproque du droit civil et decommon law dans le droit des compagnies de la province de Québec", in J.S. Ziegel, Studies in Canadian Company Law (Toronto: Butterworths, 1967) at 141. See also P. Ciotola, Droit des sûretés, 3th ed. (Montreal: Thémis, 1999) at 251ff.

  • [131] "L'exécution des garanties", supra note 128.

  • [132] National Bank of Canada v. Atomic Slipper Co., [1991] 1 S.C.R. 1059 at 1081.

  • [133] "L'exécution des garanties", supra note 128 at 28ff.

  • [134] "Conférence sur le projet de loi S-22", supra note 36 at 15.

  • [135] It has been recognized that the 60 days prior notice provided for in art. 2757 and 2758 of the C.C.Q. is equivalent to the advance notice provided for in s. 244 of the B.I.A. Thus, filing this prior notice discharges creditors of the obligation to file an advance notice. Société en fiducie de la Banque de Hongkong v. Développements sociaux du Sud-ouest, [1996] R.D.I. 331 (Que. Sup. Ct.).

  • [136] Art. 2767(1) C.C.Q.

  • [137] Subsection 2(1) of the B.I.A. defines "bankrupt" as follows:

    • [a] person who has made an assignment or against whom a receiving order has been made or the legal status of that person.
    • The same section defines "insolvent person" as follows:
    • [a] person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and
    • (a) who is for any reason unable to meet his obligations as they generally become due,
    • (b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, or
    • (c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due.
  • [138] For the purpose of subsection 2(1) of the B.I.A. "person":

    [i]ncludes a partnership, an unincorporated association, a corporation, a cooperative society or an organization, the successors of a partnership, association, corporation, society or organization, and the heirs, executors, liquidators of the succession, administrators or other legal representative of a person, according to the law of that part of Canada to which the context extends.

  • [139] Art. 2188 C.C.Q.

  • [140] Art. 2188(2) C.C.Q.

  • [141] Art. 298 C.C.Q.

  • [142] Undeclared partnerships do not appear to enjoy juridical personality. According to Professor Yves Lauzon, this is due to the fact that each partner retains ownership over the property constituting his contribution to the partnership. Yves Lauzon, "Du contrat de société et d'association", in Barreau du Québec and Chambre des notaires du Québec, La réforme du Code civil, vol. 2 (Quebec: Les Presses de l'Université Laval, 1993) 955 at 960ff. See C. Bouchard, "Le dynamisme nouveau de la notion de société : l'autonomie patrimoniale hors du cadre de la personnaliti morale", in Les sociétés, les fiducies et les entités hybrides en droit commercial contemporain: Conférences commémoratives Meredith 1997 (Montreal: Faculty of Law, McGill University, 1997) 17 at 24ff [hereinafter "Le dynamisme nouveau de la notion de société"].

  • [143] Art. 2249 C.C.Q.

  • [144] Commentaires du Ministre, supra note 82 at 1378, 1379.

  • [145] Ibid.

  • [146] Huffman v. Ross, [1926] S.C.R. 5; Re Gillepsi (1913), 3 W.W.R. 791 (Man. K.B.); Re Thorne and New Brunswick Workmen's Compensation Board (1961), 48 M.P.R. 56 (N.-B.C.A.).

  • [147] Québec (Ville de) v. Compagnie d'immeubles Allard ltée, [1996] R.J.Q. 1566 (Que. C.A.).

  • [148] Professor Bouchard writes:

    Contrary to recent case law trends, partnerships constitute autonomous patrimonies by appropriation and enjoy juridical attributes. In fact, the external consequences of a legal person are quite similar to those of a patrimony by appropriation: general partnerships and limited partnerships have names, domiciles, may sue and be sued under civil actions and their juridical personality allows them to acquire and sell property under their names regardless of associates change.

    " Le dynamisme nouveau de la notion de société", supra note 142 at 60-61. See art. 2189, 2197, 2225 C.C.Q.; An Act Respecting the Legal Publicity of Sole Proprietorships, Partnerships and Legal Persons, L.R.Q. c. P-45, ss. 10, 13, 18.

  • [149] C. Bouchard, "Le fondement du patrimoine autonome des sociétés de personnes" (1996) 2 C.P. du N. 33. Under the C.C.Q., trusts and foundations may constitute a patrimony by appropriation. See art. 1256ff C.C.Q.

  • [150] Faillite et insolvabilité, supra note 21 at 141. See also Re Noble & Son (1924-25), 5 C.B.R. 147 (Ont. Sup. Ct.); Re Walkeam; Ex Parte Walkeam (1924-25), 5 C.B.R. 821 (Ont. Sup. Ct.); L.-J. de la Durantaye, Traité de la faillite (Montreal: Chez l'auteur, 1934) at 80; L.W. Houlden (1952-53), 33 C.B.R. 200.

  • [151] Argus Adjusters and Appraisers Ltd. v. Assistance Loan and Finance Corporation, [1964] B.R. 375 [hereinafter Argus Adjusters].

  • [152] S. 43(15), 43(16), 85, 142, 153 B.I.A.

  • [153] Rule 109 of the B.I.G.R. provides as follows:

    [w]here a partnership is bankrupt, the creditors of the partnership and of each bankrupt partner shall be convened collectively for the first meeting of creditors. [emphasis added]

  • [154] Art. 2248 C.C.Q. According to Justice minister's comments, this provision applies in cases where limited partnernerships become bankrupt or insolvent. Commentaires du Ministre, supra note 82 at 1417.

  • [155] Faillite et insolvabilité, supra note 21 at 142. See Argus Adjusters, supra note 151.

  • [156] Art. 1260ff C.C.Q.

  • [157] Art. 1261 C.C.Q.

  • [158] Art. 1278 C.C.Q.

  • [159] Paragraph 67(1)(a) of the B.I.A. also provides that the property of bankrupts vested in trustees ("syndics") shall not comprise property held by bankrupts in trust for any other persons. See "Research in Bijuralism", supra note 33 at 859.

  • [160] Art. 1355 C.C.Q.

  • [161] "Research in Bijuralism", supra note 33 at 859. Paragraph 67(1)(d) of the B.I.A. provides as follows:

    The property of a bankrupt divisible among his creditors shall not comprise […]

    (d) such powers in or over or in respect of the property as might have been exercised by the bankrupt for his own benefit.

    However, the words "for his own benefit" appear to limit the application of this provision to a situation that does not apply to Quebec trusts ("fiducies").

  • [162] Re Roy (1963), 4 C.B.R. (N.S.) 275 (Que. Sup. Ct.); Touche Ross Limited v. Weldwood of Canada Sales Ltd. (1983), 48 C.B.R. (N.S.) 83 (Ont. H.C.J.).

  • [163] Faillite et insolvabilité, supra note 21 at 714.

  • [164] M. Cantin Cumyn, L'administration du bien d'autrui (Cowansville, Que.: Yvon Blais, 2000) at 112. Guibault J. of the Quebec superior Court seemed to agree with this view when he stated, in Auger v. Harvey, that bankrupt debtors are not deprived of the exercise of ownership over their property and that transferring property to trustees do not mean transferring ownership as well. Auger v. Harvey, [2000] R.J.Q. 2075 at 2078 (Que. Sup. Ct.).

  • [165] Re Civano Construction Inc., Gingras v. Credit M. G. Inc. (1962), 3 C.B.R. (N.S.) 141 at 146 (Que. Sup. Ct.); Bank of Nova Scotia v. Perras, Fafard, [1985] C.A. 21.

  • [166] J.-M. Deschamps, "Le syndic: un successeur du débiteur? Un cessionnaire? Un représentant des créanciers?", in Les faillites : problèmes actuels et perspectives d'avenir : Conférences commémoratives Meredith 1985 (Toronto: R. De Boo Publishers, 1986) at 245.

  • [167] Faillite et insolvabilité, supra note 21 at 718.

  • [168] L'administration du bien d'autrui, supra note 164 at 111.

  • [169] Ibid. It should be noted that, contrary to Me Deschamps and Professor Bohémier, Professor Cantin-Cumyn adressed this issue in the context of the C.C.Q.

  • [170] Art. 1299 C.C.Q.

  • [171] Art. 1301 C.C.Q.

  • [172] Art. 1302 C.C.Q.

  • [173] Art. 1302 C.C.Q.

  • [174] Art. 1303 C.C.Q.

  • [175] Art. 1306 C.C.Q.

  • [176] Art. 1307 C.C.Q.

  • [177] S. 13 B.I.A.

  • [178] Subs.16(1) B.I.A.

  • [179] Subs. 71(2) B.I.A.

  • [180] S. 30 B.I.A. The list of trustees' powers is quite lengthy. It reads as follows:

    The trustee may, with the permission of the inspectors, do all or any of the following things:

    • (a) sell or otherwise dispose of for such price or other consideration as the inspectors may approve all or any part of the property of the bankrupt, including the goodwill of the business, if any, and the book debts due or growing due to the bankrupt, by tender, public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels;
    • (b) lease any real property;
    • (c) carry on the business of the bankrupt, in so far as may be necessary for the beneficial administration of the estate of the bankrupt;
    • (d) bring, institute or defend any action or other legal proceeding relating to the property of the bankrupt;
    • (e) employ a solicitor or other agent to take any proceedings or do any business that may be sanctioned by the inspectors;
    • (f) accept as the consideration for the sale of any property of the bankrupt a sum of money payable at a future time, subject to such stipulations as to security and otherwise as the inspectors think fit;
    • (g) incur obligations, borrow money and give security on any property of the bankrupt by mortgage, hypothec, charge, assignment, pledge or otherwise, such obligations and money borrowed to be discharged or repaid with interest out of the property of the bankrupt in priority to the claims of the creditors;
    • (h) compromise and settle any debts owing to the bankrupt;
    • (i) compromise any claim made by or against the estate;
    • (j) divide in its existing form among the creditors, according to its estimated value, any property that from its peculiar nature or other special circumstances cannot be readily or advantageously sold;
    • (k) elect to retain for the whole part of its unexpired term, or to assign, surrender or disclaim any lease of, or other temporary interest in, any property of the bankrupt; and
    • (l) appoint the bankrupt to aid in administering the estate of the bankrupt in such manner and on such terms as the inspectors may direct.
  • [181] Subs. 5(4) B.I.A.

  • [182] Subs. 16(4) B.I.A.

  • [183] Subsection 16(4) of the present B.I.A. has its origin in subsection 39(2) of the 1919 Insolvency Act. In drafting this section, the federal Parliament, at the time, was inspired by British legislation: the 1869 Bankruptcy Act (U.K.), 1869, c. 71; Bankruptcy Act, (U.K.), 1883, c. 52, subs. 50(2); English Banbruptcy Act of 1914, supra note 21,subs. 48(2).

  • [184] Art. 2307 C.C.Q. In the French version, this "deposit" is also referred to as "sequestre". Art. 2305 C.C.Q.

  • [185] Art. 742ff C.C.P.

  • [186] André Radio Ltée (syndic de) v. Compagnie de fiducie du Canada Permanent, [1988] R.J.Q. 2327 (C.A.).

  • [187] Gobeil v. Cie H. Fortier, [1982] 1 S.C.R. 988 at 1002-1003.

  • [188] Re J. W. Kilgour and Bros. Ltd.; Corporation municipale de la Ville de Coaticook v. Dionne, [1997] C.S. 1082 at 83.

  • [189] D.W.M. Waters, Law of Trust in Canada, 2nd ed. (Toronto: Carswell, 1984) at 449ff, 574ff.; F.H. Lawson and B. Rudden, The Law of Property, 2nd ed. (Oxford: Clarendon Press, 1982) at. 6ff, 100 ff.

  • [190] Art. 947 C.C.Q.

  • [191] Lefaivre v. Côté, [1975] C.A. 691 at 692.

  • [192] Faillite et insolvabilité, supra note 21 at 715.

  • [193] Lacoursière v. Westmount (Town), [1998] R.J.Q. 1784 (C.A.); at the trial level, see Kostadinova Gantcheff (syndic de) v. Westmount (Ville), [1996] R.J.Q. 3030 at 3032 (Sup. Ct.).

  • [194] See: The Law of Property, supra note 189 at 6ff, 100ff; J. Beaulne, Droit des fiducies, Coll. Bleue (Montreal: Wilson & Lafleur, 1998) at 118.

  • [195] It should nonetheless be noted that titles to property forming a patrimony to be assigned are drawn up in the trustee's name: art. 1278 C.C.Q. See J.E.C. Brierley, "De certains patrimoines d'affectation", in Barreau du Québec and Chambre des notaires du Québec, La réforme du Code civil, vol. 1 (Quebec: Les Presses de l'Université Laval, 1993) 735 at 764ff.

  • [196] Examples of French terminology that became outdated include: in the C.C.L.C., "antichrèse" (art. 1967), "nantissement" (art. 1966), "cession de créance en garantie" (art. 1571), "cession générale de créances comptables" (art. 1966), "nantissement forestier" (art. 1979(a)), "nantissement agricole" (art. 1979(a)), "nantissement commercial" (art. 1979(e)), and "privilège" (art. 1983ff.); in the legislative corpus, "cession de biens en stock" (Act respecting bills of lading, receipts and transfers of property in stock, R.S.Q., c. C‑53), "Acte de fiducie", "charge flottante", "charge spécifique" (Special Corporate Powers Act, R.S.Q., c. P-16), and "transports en garantie de créances" (Forestry Credit Act, R.S.Q., c. C-78; Act to promote forest credit by private institutions, R.S.Q., C-78.1; Act respecting farm financing, R.S.Q., c. F-1.2). We note that the French expressions "charge spécifique" and "charge flottante" did not appear in the legislation itself but was currently used by the legal community. M. Deschamps, "Les sûretés sur les équipements et les stocks" (1987) 1 C.P. du N. 125 at 146-147.

  • [197] See supra note 35.

  • [198] Dictionnaire de droit québécois, supra note 81 at 86; G. Cornu, Vocabulaire juridique, 4th ed. (Paris: Presses universitaires de France, 1987) at 130; M. Filion, Dictionnaire du Code civil du Québec (Saint-Nicolas, Que.: Éditions associations entreprises, 1998) at 79;P.-A. Crépeau., Dictionnaire de droit privé et lexiques bilingues, 2nd ed. (Cowansville, Que.: Yvon Blais, 1991) at 84. In seeking to determine whether the word "charge" in the B.I.A.'s definition of "secured creditor" could include the concept of prior claim, and in dissenting from the substance of the decision in Château d'Amos, Brossard J. of the Quebec Court of Appeal stated that, unlike the well-known common law concept of "charge", the Quebec civil law concept of "charge" was poorly defined: Château d'Amos, supra note 32 at 2635.

  • [199] Art. 2725(2) C.C.Q.

  • [200] Subs. 81.2(1) B.I.A.

  • [201] Subs. 47.2(1) B.I.A.

  • [202] Re N.T.W. Management Ltd., (1994) 29 C.B.R. (3rd) 139 (Ont. Ct. (Gen. Div.)).

  • [203] Subs. 14.06(7) B.I.A. The purpose of this security mechanism is to guarantee payment of Crown claims for the costs of remedying environmental damage, for example when corporations discharge large quantities of pollutants into rivers. In Quebec, when this type of environmental pollution occurs, the ministère de l'Environnement du Québec may clean up the pollution if it considers it necessary to do so, particularly on private immovables. The Ministère may then claim the cleanup costs by presenting the invoice to the property owners. If the owner of a property thus cleaned up by the Ministère becomes bankrupt or makes a proposal, the claim by the Ministère is immediately secured by a immovable security on the immovable of the debtor that is contiguous thereto; this security guarantees payment of the claim by the Ministère, which ranks above any other claim. The claim by the Ministère is enforceable "in the same way as a mortgage, hypothec or other security on real property". Environment Quality Act, R.S.Q. c. Q-2, s. 115.1.

  • [204] Ss. 86, 87 B.I.A.

  • [205] This situation would prevail in common law: under the interest in land, the Crown could proceed to remedy environmental damage: J. Marin and A. Ilchenko, "Amendments to the Bankruptcy and Insolvency Act: Bill C-5, Environmental Liabilities of Trustees and Receivers" (1997) 14:2 Nat. Insol. Review 18 at 42.

  • [206] See Land Titles Act, R.S.O. c. L-5; Registry Act, R.S.O. c. R-20.

  • [207] In Quebec, property belongs either to persons or to the State: art. 915 C.C.Q.

  • [208] Nevertheless, because of a difficulty of a technical nature, one can wonder how the Crown would be able to respect their registration obligation imposed upon them. In effect, according to subsection 87(1) of the B.I.A., in order for the Crown to benefit from the advantage of its security, it should be registered before one of the following listed dates: the deposit of the bankruptcy petition, of the notice of assignment, of the proposal, of the notice of intention to make a proposal. Therefore, it is good to remember that the security attributed to the Crown to guarantee the reimbursement of their compensation fees only takes birth at the moment when a proposal is deposited or at the moment when the debtor declares bankruptcy. In other words, this security only takes birth after one or the other dates listed in subsection 87(1). One can then ask how the Crown would have been able registrered the security previously? How would have it registered a security that is not yet born in order to respect the delays imposed by federal legislator?

  • [209] Art. 2647 C.C.Q.

  • [210] S. 136 B.I.A.

  • [211] Subs. 81.2(1) B.I.A.

  • [212] S. 91ff B.I.A.

  • [213] Re Jules Beaulieu, (1942) 24 C.B.R. 197 at 205 (Que. C.A.); Re Évaporateur Portneuf Inc.: Angers v. Malouin, [1962] B.R. 218 [hereinafter Re Évaporateur Portneuf Inc.]; Jobin v. The Monarch Life Assurance Co., [1986] R.J.Q. 1755 (Que. C.A.), at 1758.

  • [214] A. H. Boulton Co. v. Bozanich (Trustee of), [1942] S.C.R. 130.

  • [215] Art. 1806 C.C.Q.

  • [216] Art. 1631ff. C.C.Q. The French version of the former law referred to "action paulienne" instead of "action en inopposabilité".

  • [217] Art. 2660ff. C.C.Q.

  • [218] Art. 1260ff. C.C.Q. In common law, it seems that the concept of tracing is in the heart of the notion of trust, at least concerning the traditional remedies under the equity regime. See Law of Trust in Canada, supra note 189 at 883ff.

  • [219] Subs. 2(1) B.I.A.

  • [220] See Royal Bank of Canada v. North American Life Assurance Co., [1996] 1 S.C.R. 325.

  • [221] Re Évaporateur Portneuf Inc., supra note 213.; In Re Promoteurs inc. : Danyluk v. Franco, (1982) 42 C.B.R. (N.S.) 2521; Re Jobin : Blais, Fortier, Touché et Ross Ltée v. Monarch Life Assurance Co., [1986] R.J.Q. 1755 (Que. C.A.); Giroux (Syndic de) v. Giroux, [1993] R.J.Q. 1515 (Que. Sup. Ct.). See "Conférence sur le projet de loi S-22", supra note 36 at 13.

  • [222] Insolvency Act (U.K.), 1986, c. 45, s. 339.

  • [223] Commentaires du Ministre, supra note 82 at 936, 937.

  • [224] Art. 1525(3) C.C.Q.

  • [225] P. J. Dalphond, "Entreprise et vente d'entreprise en droit civil québécois" [1994] 54 R. du B. 35 at 43ff.

  • [226] S. 2 B.I.A.

  • [227] Paragraph 30(1)(c) B.I.A.

  • [228] S. 94 B.I.A.

  • [229] Subs. 137(2) B.I.A.

  • [230] L. Poudrier-Lebel, Le cautionnement par compagnie de garantie (Cowansville, Que.: Yvon Blais, 1986) at 189.

  • [231] Ibid., at 195.

  • [232] Ibid.; M. Troplong, Le droit civil, t. 17 (Paris: Charles Hingray, 1846) at 41.

  • [233] Regulation respecting the application of the Act respecting insurance, R.R.Q. 1981, c. A-32, r. 1, s. 13.

  • [234] Entreprises Gamelec inc. v. Laurentienne générale (La), Compagnie d'assurance inc.,[1990] R.R.A. 971 at 972.

  • [235] Droit des sûretés, supra note 130 at 19.

  • [236] Art. 2280 C.C.Q.

  • [237] S.C. 1992, c. 27, s. 9; According to Justice Houlden and Mr. Morawetz: "[a] trustee was formerly required to deposit a general bond with the superintendent for the due and faithful performance of his duties. This is no longer required. A specific bond must, however, be filed under subs. 16(1)": L. W. Houlden and G. B. Morawetz, The 2000 Annotated Bankruptcy and Insolvency Act (Toronto: Carswell, 1999) at 28.

  • [238] Dictionnaire de droit privé et lexiques bilingues, supra note 198 at 78; Dictionnaire de droit québécois, supra note 81 at 78; Vocabulaire juridique, supra note 198 at 121; A. Rey, Le nouveau Petit Robert (Paris: Dictionnaires Le Robert, 1993) at 322.

  • [239] Act respecting insurance, R.S.Q. c. A-32, s. 225; Regulation respecting travel agents, R.R.Q. c. A-10, r. 1, s. 30; Retail Sales Tax Act, R.S.Q. c. I-1, s. 5; Public Officers Act, R.S.Q. c. E-6, s. 20; Education Act for Cree, Inuit and Naskapi native persons, R.S.Q. c. I‑14, s. 306; Highway Safety Code, R.S.Q. c. C-24, s. 152.

  • [240] According to the regulation "[t]he securities mentioned in this Regulation shall be in the form of a pledge or by guarantee policy in accordance with section 15 of the Public Officers Act (R.S.Q. c. E-6)"; Regulation respecting the application of the Act respecting detective or security agencies, R.R.Q. c. A-8, r. 1, s. 11; Public Officers Act, ibid., ss. 20, 29; Act to harmonize public statutes with the Civil Code, S.Q. 1999, c. 40, s. 117.

  • [241] According to Louise Poudrier-Lebel, [translation] "[i]t should also be noted that the word "cautionnement" or "caution" is currently used to designate a cash deposit given as a guarantee. This usage is improper since what is meant is a form of pledge or, more specifically now, a form of movable hypothec": L. Poudrier-Lebel, "Contrat de cautionnement", in Obligations et contrats, vol. 5 (Cowansville, Que.: Yvon Blais, 1998) at 299; according to Michel Filion, [translation] "[t]he word "cautionnement" has had another meaning, that of a "cash deposit as a guarantee of a pledge". In our view, however, this meaning is outdated since the concept referred to is that of a pledge: "Dictionnaire du Code civil du Québec, supra note 198 at 75; according to Pierre Ciotola, [translation] "[t]he word "cautionnement" as personal security must not be confused with the deposit of sums of money as a guarantee. "cautionnement" is personal security; the deposit of sums of money as a guarantee is, instead, a pledge or a movable hypothec with delivery: "Droit des sûretés, supra note 130 at 20.

  • [242] Art. 2333 C.C.Q.; Banque nationale du Canada v. Notre-Dame du Lac (Ville de), [1990] R.L. 339 (Que. C.A.).

  • [243] Droit des sûretés, supra note 130 at 20.

  • [244] Art. 2338 C.C.Q.

  • [245] Art. 65 C.C.P.: "[a] plaintiff who does not reside in Quebec must give security for the costs which may be incurred in consequence of his suit."

  • [246] Art. 525 C.C.P.: the court fixes the amount of the surety, which the opposing party may challenge.

  • [247] D. Ferland and B. Emery, Précis de procédure civile du Québec, vol. 2, 3th ed. (Cowansville, Que.: Yvon Blais,1994) at 83.

  • [248] According to Justice Houlden and Mr. Morawetz, "[a]lthough subs. 16(1) permits the security to be given by the trustee in cash or by bond of a guaranty company, it is the invariable practice for the trustee to post a bond of a guaranty company": The 2000 Annotated B.I.A., supra note 53 at 45. This security is "usually in the form of a state bond, for the benefit of the creditors": Canada, Office of the Superintendent of Bankruptcy, Directive No. 13: Estate Bonding, issued October 23, 1986, reissued January 10, 1991.

  • [249] Art. 2333 C.C.Q. Me Louis Payette distinguishes among purchasing insurance, obtaining "cautionnement" and obtaining bonds: L. Payette, Les sûretés dans le Code civil du Québec (Cowansville, Que.: Yvon Blais, 1994) at 320.

  • [250] Forex Leroy inc. v. Banque Mercantile du Canada, [1989] A.Q. No. 703 (QL).

  • [251] Estate Bonding, supra note 248. The following points are listed:

    • Other forms of creditor protection such as insurance coverage
    • Consideration of risks to creditors
    • Costs of the estate bond
    • Anticipated amount to be realized for distribution to creditors after payment of trustees' administrative costs
    • If a range of estate bond amounts costs a fixed premium, the estate bond amount should be set at the highest amount within the range to avoid the need for later increases
    • The estate bond should not be fixed at an amount in excess of the largest amount to be on hand at any one time
    • If the amount required is less than $3,000, no estate bond amount need be fixed
    • If the amount required is in excess of $25,000, other coverage such as multiple counter-signatures by principals of the corporate trustee must be added
    • Under subsection 120(3) of the B.I.A., the estate bond amount is reviewed by the trustees themselves and by the inspectors
    • If required, official receivers may increase estate bond amounts.
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