THE CONFLICT BETWEEN CANADIAN PROVINCIAL PERSONAL PROPERTY SECURITY ACTS AND THE FEDERAL BANKRUPTCY ACT: THE WAR IS OVER

Authors

  • ANDREW J ROMAN
  • M JASMINE SWEATMAN

Abstract

In this article the authors analyse a quartet of Supreme Court of Canada judgments which consider the constitutional relationships between bankruptcy and a number of branches of law governing property, such as trusts and personal property security legislation. The authors argue that the controversy about the appropriate relationship between bankruptcy and law governing property has been resolved assection 91(21) of the Constitution Act, 1867, gives exclusive legislative authority over bankruptcy and insolvency to the Federal Parliament. The authors maintain that the provinces cannot legislate priorities in bankruptcy, situations, nor change the scheme of distribution established by Parliament under section 136(1) of the Bankruptcy Act. Once bankruptcy has occurred federal legislation prevails. Otherwise, it is contended by the authors - that the provinces could create up to ten different schemes of distribution, leading to complex and costly commercial law regimes. They therefore urge the courts to recognize that certain provisions of provincial Personal Property Security Acts are attempts to do what the Supreme Court of Canada says cannot be done to legislate, for bankruptcy purposes, a different distribution or priority scheme and a different provincial definition of a term already defined in the Bankruptcy Act.

Keywords:

Property Law

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Published

1992-03-01

Issue

Section

Legal Commentary