QuestionCaseRe Wright,?017 NBQB 107Lori Anne Wright obtained her medical degree in Europe. In order to become a licensed doctor in Canada, however, Wright would have to finish a three-year residency. In addition, before applying for a residency, she would also have to write exams in Canada, which exams would cost money and, she estimated, three years to complete.Unfortunately, Wright’s financial situation precluded a continuation of her medical studies. Wright worked at a call centre, making $11 per hour, while caring for her two daughters and living with her parents. When Wright defaulted on her student loan, the Royal Bank of Canada initiated an action against her.Wright made a voluntary assignment into bankruptcy. Two years later she filed for a discharge from bankruptcy. The Deputy Registrar in Bankruptcy granted her a discharge, conditional on her paying 5% ($7,000) of her student loan. RBC appealed, asking that Wright be required to pay the student loan debt in full, an amount in excess of $139,000.Should the Court uphold the decision of the Deputy Registrar, given that the circumstances were the result of Wright’s decisions, not unforeseeable misfortunes? If it does, would the public lose confidence in the insolvency system and its integrity?Cases and Discussion QuestionsCaseRe Wright,?017 NBQB 107Pick from one of the options below:?es, the debt should be discharged. Given Wright’s situation, the burden of her debt would place an unfair financial burden on her.?o, Wright should be able to use her education to obtain more lucrative employment, even if she does not practice medicine in Canada.1. ?hartier v. MNP Ltd., 2013 MBCA 41 (CanLII), leave to appeal refused, 2014 CanLII 2423 (SCC)Lucy declared bankruptcy in 2007. MNP was the trustee of her estate. Later in 2007, Chartier purchased a home. He married Lucy in 2009. Under Manitoba law, the home became their “homestead property.” In 2011, Chartier listed the home for sale. Lucy agreed with this decision and did not want to exercise her right to veto the sale. MNP had registered a notice against the title to the home. It argued that Lucy was an undischarged bankrupt when she married and acquired the homestead interest. The veto right was therefore after-acquired property to which the trustee was entitled.Chartier accepted an offer to purchase the property. The prospective purchaser offered the trustee $20 000 for its consent to the sale and a discharge of the homestead notice. The trustee accepted the offer, but Chartier did not. The judge decided that the veto right did not vest in the trustee and that it had no value. The trustee appealed.Is a veto right owned by a bankrupt “property” under the?IA? If it is, then the?IA?ould override the interests of the legislation that is meant to protect the family through the provision of a life estate interest in the homestead. Is this an appropriate result?2. ?ankruptcy of Ramon Presbitero Arnuco, 2015 MBQB 36 (CanLII)A car dealership leased a vehicle to Arnuco. It registered a financing statement showing the name of the debtor as “Ramon Presbitero Arnuco” and the serial number of the vehicle. Arnuco filed an assignment in bankruptcy and defaulted under the terms of the lease. The trustee in bankruptcy disallowed the security interest, on the grounds of an invalid registration because the PPSA Regulations required that the name be shown as “Arnuco, Ramon P.” This was the name on Arnuco’s Canadian citizenship documentation. A registry search under this name did not disclose the registered document, but a search under the serial number did.Is the security interest invalid as against the trustee in bankruptcy because the name on the financing statement is incorrect? Is there a requirement to conduct a “dual search,” using both the name of the debtor and the serial number of a vehicle, in your province? Should there be?3. ?E Commercial Distribution Finance Canada v. R.L. Hillman & Co. Inc., [2016 BCSC 2289 (CanLII)CGI was the secured party in an Inventory and Loan Security Agreement with Hillman Yachts Sales Ltd. CGI claimed priority over the prior registered security interest of R.L. Hillman on the basis of the “super priority” of a purchase money security interest (PMSI). Notice of the registration of the PMSI was not provided to R.L. Hillman, as required by the PPSA legislation. CGI argued that the legislation does not provide a strict code governing the manner in which notice can be given and that equity should be applied with respect to notice that was provided in any manner.Should the Court grant priority to CGI even though it did not provide notice as required by the PPSA legislation? Should the law of equity override the rules set out in the legislation?4. ?oyal Bank of Canada v. Zuk, 2017 BCSC 2069 (CanLII)RBC asked for summary judgment against Zuk, the guarantor of a debt owed by a company owned by her husband. She claimed that her guarantee was not binding because RBC failed in its duty of disclosure to her by not notifying her of material variations in the debt obligation of the company. The Court held that these variations, including changes in the available credit facilities, were indeed material variations. Nevertheless, Zuk had to pay the debt owed to RBC. Why would the Court make such a decision?5. ?anaDream Inc. v. Garmeco Canada, 2016 BCSC 2426IHI owed over $677 000 on account of unremitted payroll source deductions. CanaDream paid $188 586 into Court, representing monthly rent payments to IHI. The Canada Revenue Agency claimed that the funds belonged to the federal government on the basis of the deemed trust and enhanced garnishment provisions of the?ncome Tax Act, giving it a “super priority” over all other creditors, including secured creditors. Garmeco opposed the application, arguing that its general security agreement (GSA) with IHI, along with an assignment of rent payments, gave it priority to the funds.The Court ruled that there was no effective assignment of the rent payments but, even if there was, the funds would be subject to the deemed trust because they were obtained pursuant to the GSA. Garmeco’s interest was therefore subordinate to CRA’s claim.Should the “super priority” of the government take priority over the claims of secured creditors? What will lenders do to ensure they will be repaid? What effect will this have on the availability of credit, especially to small business?6. ?e Wright, 2017 NBQB 107 (CanLII)[Note: Your instructor may assign this case as a Shared Writing activity.]Wright obtained her medical degree in Europe. She had to complete a three-year residency in Canada to become a licensed doctor in Canada. She could not continue her medical studies because of her financial situation. She was working at a call centre, making $11 per hour. She had two daughters and was living with her parents. She defaulted on her student loan and the Royal Bank of Canada started an action against her.Wright made a voluntary assignment into bankruptcy. Two years later she filed for a discharge from bankruptcy. The Registrar in Bankruptcy granted her a discharge, conditional on her paying 5 percent ($7000) of her student loan. The RBC appealed, asking that Wright be required to pay the student loan debt in full.Should the Court uphold the decision of the Registrar, given that the circumstances were the result of Wright’s decisions, not unforeseeable misfortunes? If it does, would the public lose confidence in the insolvency system and its integrity?7. ?lberta (Attorney General) v. Moloney, [2015] 3 S.C.R. 327, 2015 SCC 51 (CanLII)Moloney caused a car accident while he was uninsured. The victim obtained judgment against him for $194 875. Pursuant to the?otor Vehicle Accident Claims Act, the province of Alberta indemnified the victim and was assigned the judgment debt. Moloney made an assignment in bankruptcy. The debt was included in his Statement of Affairs. He received an absolute discharge. The Alberta government then advised him that his operator’s licence and vehicle registration would be suspended, pursuant to s. 102 of the provincial legislation, until the judgment debt was paid. The section states that the suspensions would remain in place “until the judgment is satisfied or discharged, otherwise than by a discharge in bankruptcy.” Moloney sought an order confirming that his discharge from bankruptcy prevented the government from enforcing the judgment debt.Should the discharge from bankruptcy prevent the provincial government from collecting the judgment debt? Why or why not?8. ?n the Vine Meat and Produce BIA Proposal?Re), 2012 NBQB 86 (CanLII)The debtor signed a loan agreement with the Royal Bank of Canada (RBC). The debt was secured by a general security agreement and a security agreement. The debtor filed a notice of intention to make a proposal under the?IA. The debtor obtained an order extending the stay of proceedings for an extra 30 days. RBC applied to have the stay lifted; it had been concerned about questionable activities of the debtor relating to the operation of its account. The judge agreed that the activity was questionable, but that it had never created an overdraft and had only put RBC at risk for a moment in time. There was no material prejudice to RBC.Should the stay be lifted because the debtor had not acted in good faith? When should a stay be lifted by a court?BusinessManagementBusiness LawBUSI 2390
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