Cite as: Canadian Imperial Bank of Commerce v. Halifax (City), 1990 NSSC 7 1987
S.H.6ll36 IN THE SUPREME COURT OF NOVA SCOTIA
TRIAL DIVISION
BETWEEN: THE CANADIAN IMPERIAL BANK OF COMMERCE,
a body corporate
PLAINTIFF - and CITY OF HALIFAX, a body corporate DEFENDANT - and GERALD CATENACCI INTERVENOR HEARD: At Halifax, Nova Scotia, before the Honourable Mr. Justice David W. Gruchy, in Chambers, on October 10, 1990 DECISION: October 29, 1990 COUNSEL: Robert Carmichael, Solicitor for the Plaintiff and the Intervenor Wylie Spicer, Solicitor for the Defendant
1987 IN THE SUPREME COURT OF NOVA SCOTIA
TRIAL DIVISION
BETWEEN: THE CANADIAN IMPERIAL BANK OF COMMERCE, a body corporate, - and CITY OF HALIFAX, a body corporate,
- and GERALD CATENACCI,
This application priorities to certain funds paid into Court. was originally commenced by Statement of Claim issued by of Commerce against the City of Halifax on June 24th, The facts set out in the Statement reflected in the Agreed Statement all counsel in this matter. In order to give this decision S.H. No. 61136 PLAINTIFF DEFENDANT
INTERVENOR
is for the assignment of This action an Originating Notice and the Canadian Imperial Bank 1987. of Claim are largely of Facts submitted by
- continuity, however, I will set forth transaction. The Canadian Imperial forth in its Statement of assignment of book debts (·Maritime Formless·). The August 30, 1979, at the appropriate Registry in Halifax, pursuant to the Assignment of R.S.N.S.,1989). In June, 1986, Maritime Formless commenced certain construction work pursuant to and, in due course, submitted invoices to the City of Halifax for $86,140.42. On August 15, 1986, of Halifax of the general assignment of .account.s demand pursurant to it. The wri ting, and undertook to pay to the advanced pursuant to the contract between Maritime Formless and the City. 2 the history of the Bank of Commerce sets Claim that it had taken an from Maritime Formless Ltd. Assignment was registered on Book Debts Act (now Ch. 24 two contracts for the City the Bank advised the City and made City acknowledged same, in Bank any sums to be
- The City received the amount owing and did not pay the this action. The Statement sets forth that as at that indebted to the Bank in the interest at the agreed rate of l~% lending rate. At the time of the of Claim, the total sum claimed was $40,140.03 plus interest at the rate of l~% over prime on $38,166.20. On July 22nd, 1987, a Defence to the Statement the City took the position that Maritime completed the work contemplated City and that Maritime Formless had abandoned the contract. As a result, the City of Halifax having received other various claims against the money owed by it to Maritime Formless , it chose to pay the assignment of priorities. On applied for an Order by way 3 other competing claims to Bank. The Bank took of Claim issued by the Bank time, Maritime Formless was amount of $38,166.20 plus over the Bank's prime issue of the Statement the City of Halifax filed of Claim wherein, in effect, Formless had not by its contracts with the money into Court for this June 13th, 1990, the City of interpleader pursuant to
- Civil Procedure Rule 50. Notice given to the plaintiff, Maritime other claimants, as follows: Piercey's Supplies Limited, Materials Limited, W.N. White Enterprises Limited, Halifax Service Limited, Port Paving & Contracting, Ocean Contractors Limited, all of whom were represented by George W. Q.C., at that time and now by Mr. Canada was also given notice Linda Merriam, doing business as (1982)". The application supported by the affidavit of Gerald J. Goneau, for the City of Halifax. Mr. Goneau set forth had done work on a contract basis for the City of Halifax in 1986 but had abondoned the sets forth that the City had been "served with or otherwise became aware of actions Ltd., for its contractual obligations The affidavit sets forth that at that time, obtained completion of the contracts undertaken by Maritime 4 of that application was Formless Ltd., and to Ocean Contractors Limited, L.E. Shaw Limited, Gateway & Company Limtied, G.R. Kelly Equipment Rentals Sales and MacDonald, Stephen Kingston. Revenue of that application, as was "East Coast Truck Brokers for interpleader relief was a solicitor that Maritime Formless contracts. The affidavit involving Maritime Formless with (the City)." the City had
- 5 Formless by obtaining bids paid the substitute contractors, $17,014.00 to the Labour Standards to pay the sum of $49,531.97 by interpleader. By means the amount held by the City of Halifax and to be paid into Court was amended to $71,477.33, plus interest. By Order dated June allowed to pay $71,477.33 into any liability owing by the City to the various claimants. It was further ordered that funds would be determined by the Court. On August 14th, 1990, to be added as an intervenor to Rule 8 of the Civil Procedure in support of that application Catenacci had, on July 31st, of. the rights and interest of Imperial Bank of Commerce, in Book Debts, dated August 13th, 1979, referred to above. for the unfinished work, had had paid the sum of Tribunal and wished into Court for disposition of a supplementary affidavit, 25th, 1990, the City was Court and was relieved of the priorities to the said Gerald Catenacci applied in the proceeding pursuant Rules. The affidavit set forth that Gerald 1986, received an Assignment the plaintiff, the Canadian the general Assignment of
- On August 15, 1990, as an intervenor to these proceedings. the date for the hearing of this matter although subsequently postponed to October 11, 1990. On October 9, 1990, all of the parties concerned in these proceedings signed That Agreement is set forth in full as follows: 1987 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: THE CANADIAN IMPERIAL BANK OF COMMERCE, a body corporate, 6 Gerald Catenacci was added On the same date, was established, an Agreed Statement of Facts. S.R. No. 61136 PLAINTIFF
- - and CITY OF HALIFAX, a body corporate, - and GERALD CATENACCI, AGREED STATEMENT OF FACTS 1. Maritime Formless Ltd. Limited) (the "Company") carried construction contractor. Gerald material times, a principal of the Company. 2. On August 13th, 1979 the assignment of accounts (the 7 DEFENDANT INTERVENOR (formerly Caten Construction on business as a general Catenacci was, at all Company executed a general "Assignment of Book Debts")
- in favour of the Canadian Imperial "Bank"). A true copy of the produced as Exhibit "A". 3. On August 30th, 1979 filed under the Assignment of of the Registrar for the registration district of as document number 804. 4. Between January 29th, 1985 and May 1st, 1985 the Company executed a series of eight "Promissory Notes") to the Bank each in the principal amount of $5,000.00. True copies produced as Exhibits "B". 5. In June of 1986 the Company entered into two contracts whereby the Company was hired upgrade and renew sidewalks in different areas in the City of Halifax (the "Project"). and Conditions of the Construction Contracts are as Exhibits "C", and "D" respectively. value of the contracts was respectively. 6. Ocean Contractors Limited, L.E. Shaw Limited, Gateway & Company Limited, G.R. Kelly Enterprises Limited, Equipment Renatals, Sales Landscaping Limited and Wylie H. as Port Paving & Contractors "Subcontractors") performed work the Project as Subcontractors of the Company. 7. Work on the Project proceeded 1986 until early in August 1986 when the work ceased leaving a number of seasonal deficiencies. deficiencies were completed by the City of Halifax by October $17,728.00. 8. The Company no longer carried Scotia after August of 1986. 9. As of August 15, 1986 there was 8 Bank of Commerce (the Assignment of Book Debts is Assignment of Book Debts was Book Debts Act at the Office Halifax (8) promissory notes (the of the Promissory Notes are and the City of Halifax (the "Construction Contracts") as general contractor to True copies of General Terms produced The original tender $181,110.00 and $90,600.00 Piercey Supplies Limited, Materials Limited, W.N. White Halifax & Service Limited, Lorraine Verge, carrying on business (collectively the or supplied material on through the summer of These seasonal by other contractors hired of 1987 at a cost of on operations in Nova due and owing by the
- Company to the Bank under of $38,166.20. 10. On August 15, 1986 the on the City of Halifax under the Assignment for payment of all monies owing by the City to the Company. A true copy of the demand and is produced as Exhibit "E" . 15, 1986 had the City of Halifax given its written consent to the Assignment of Book Debts. 11. On August 14, 1986 Ocean to be issued an Attachment S.H. No. 57730. A true copy produced as Exhibit "F". subsequently served on the City of Halifax. 12. On March 2nd, 1987 Linda Merriam, carrying on business as "Eastcoast Truck Brokers be entered against the Company for the amount of $2,506.46 in the County Court of District No. C.T. No. 09452. An Execution proceeding on March 2nd, 1987. Order is produced as Exhibit was subsequently served on the City of Halifax. amount of the Execution Order remains unsatisfied. 13.' By a Notice of Assessment dated May 4, Formless was assessed under amount of $13,338.81 consisting of income tax deducted but penalty and the balance on that date additional interest owing and legal costs in the incurred bringing the total outstanding as of September $19,677.37. 14. On May 26th, 1988 the Department of National Revenue, Taxation issued to the City requirement to pay the sum the Company's outstanding tax the Notice is produced as Exhibit indebted to Revenue Canada for the amount $19,677.37. 9 the Promissory Notes the sum Bank made demand in writing of Book Debts acknowledgment by the City At no time prior to August Contractors Limited caused Order in proceedings bearing of the Attachment Order is The Attachment Order was (1982)" caused judgment to 4 in proceedings bearing Order was issued in the A true copy of the Execution "G". The Execution Order The total 1987, Maritime the Income Tax Act for the of $11,259.60 on account not remitted, $1,225.96 for account of interest. Since has accrued on the amount amount of $180.00 have been claim of National Revenue 6, 1990, to the amount of of Halifax a notice of of $14,671.45 on account of liability. A true copy of "H u • The Company remains
- 10 15. On June 28, 1990, the Subcontractors entered judgments against the Company in the bearing S.H. No. 58412 in the following amounts: Ocean Contractors Limited - concrete - contractors Piercey Supplies Limited L.E. Shaw Limited Gateway Materials Limited W.N. White & Company Limited G.R. Kelly Enterprises Limited Halifax Equipment Rentals IMP Group Limited Port Paving & Contractors TOTAL The amounts claimed relate Project with the City of Halifax. however, that all of the amounts on the Project and, if necessary, a determination as to the amounts on the Project will be made at a later date. 16. A true copy of the Order as Exhibit "I". The total remains unsatisfied. 17. As of July 24th, 1990 the Bank in the amount of $38,166.20 together with a further additional amount for interest from the Bank's statement of account, is produced as Exhibit "J". Supreme Court in proceedings $ 57,441.88 $ 17,694.00 $ 2,578.09 $ 3,690.70 $ 19,696.41 $ 5,176.07 $ 21,940.00 $ 2,821.14 $ 2,367.61 $ 4,805.00 .. $142,210.09 in part to work on the The parties do not agree, claimed related to work the parties agree that which relate to work for Judgment is produced amount of the judgment debt the Company was indebted to of $18,930.00 as appears a true copy of which The full amount of that
- 11 indebtedness remains unsatisfied. 18. On July 31st, 1990 the indebtedness owed to it by the Bank's security for the indebtedness by an assignment of indebtedness 31st, 1990. The total amount Catenacci in respect of the to the Bank was $46,496.99. of Indebtedness and Security is produced as Exhibit "K". 19. The sum of $49,531.96 and been paid into Court by the an Order of the Honourable 25, 1990 representing the unpaid price under the Construction of Halifax after payment to other contractors to deficiency work on the Project Scotia Labour Standards Tribunal. DATED at Halifax, Nova Scotia this 9th day of October, 1990. AGREED TO: ( signed )---:-__---==-- _ W. Wylie Spicer, Esq. McInnes, Cooper & Robertson 1601 Lower Water Street HALIFAX, Nova Scotia Solicitor for the Subcontractors (signed) John J. Ashley, Esq. Department of Justice 4th Floor, 5161 George Street HALIFAX, Nova Scotia Solicitor for Revenue Canada Bank assigned the entire Company, together with the to Gerald Catenacci and security dated July paid to the Bank by Mr. obligations of the Company A true copy of the Assignment interest of $21,945.36 has City of Halifax pursuant to Mr. Justice Nunn dated June balance of the contract Contracts held by the City complete and a claim of the Nova
- 12 (signed)
Ronald J. MacDonald, Esq.
Burchell, MacAdam & Hayman
Suite 700, 1646 Barrington Street
HALIFAX, Nova Scotia
Solicitor for Linda Merriam (signed)
Robert W. Carmichael, Esq.
Cox, Downie & Goodfellow
1100 Purdy's Wharf Tower
1959 Upper Water Street
Halifax, Nova Scotia
Solicitor for Gerald Catenacci" I will not set forth the various exhibits but will refer to such portions of them as may be required. At the time of the hearing of this matter, certain further evidence was submitted. That additional evidence consisted of various letters, the first of which wa s dated August 11th, 1986 from the Canadian Imperial Bank of Commerce to the President, Maritime Formless Ltd., in which the Bank demanded payment of the amount of $39,284.40 for various promissory notes set forth in the letter, plus interest. 7wo other letters dated October 31st, 1986 from the Canadian
- 13 Imperial Bank of Commerce to Mr. Ann Catenacci, were also produced in which the upon each of them, pursuant the payment of $39,063.72. hearing, the Department of filed an affidavit whereby Formless Ltd. in the amount of Tax Act, was established. As of the Certificate that debt as prescribed by the Income Tax Act, R.S.N.B. 1-2 S.3l. The Certificate, interest on the amount of $3,988.48 1987, to date of payment. the amount of $9,054.43 together with pursuant to one or more of the Income Tax Act, the Canada Pension Plan Act, Unemployment Insurance Act, rates from time to time prescribed by subsections (11) of Section 161 of the charged on $8,227.32 and $827.11, the 24th day of November, 1987 to the date of payment. As at July 18th, affidavit filed at the time Gerald Catenacci and Mary Bank called to certain guarantees, for As well, at the time of the National Revenue, Taxation, the indebtedness of Maritime $4,931.84 under the Income at the date of the filing was $4,911.84 plus interest 1973 Chapter dated March 3, 1988, claimed from November 24th, A further Certificate claimed additional interest 1971 at the (1) .and Income Tax Act. Interest is compounded daily, from 1990, being the date of the of the hearing, the amount
- 14 claimed by National Revenue as the outstanding indebtedness was $19,254.77. The General Assignment of Accounts Formless Ltd. to the Canadian is apparently in the "standard of this matter, the relevant portions read as follows: "1. Maritime Formless hereby assign(s) all debts, accounts, and choses in action or which may at any be due or owing to or undersigned, to BANK OF COMMERCE, the "Bank") as a general and continuing collateral security all existing and future and liability of to the Bank wheresoever incurred and any balance thereof, and prior claim upon the assigned premises. 5. All moneys collected by the undersigned the assigned premises shall be received as trustee for the be forthwith paid over to the Bank. 9. The provisions hereof shall enure from Maritime Imperial Bank of Commerce form". For the purposes Ltd. and transfer(s) claims, moneys which now are time hereafter owned by the CANADIAN IMPERIAL (herein called for payment of indebtedness the undersigned and howsoever ultimate unpaid as a first and or received in respect of Bank and shall
- 15 enure to the benefit of the successors and assigns of the be binding upon the respective heirs, executors, administrators, and assigns of the undersigned." The two contracts with the City of respectively undated and dated the 26th day of June, They concerned sidewalk renewals contracts consisted of a brief of the tender of Maritime provisions. The only provision significance in this matter is paragraph 6.38 of the general provisions which reads as follows: "6.38 Assignment The Contractor shall Contract or sublet or in part without the written consent of the Owner, nor shall the Contractor assign any monies due to him hereunder, previous written consent of the Owner. Assigning or subletting shall not relieve of (sic) his Surety from any contract obligations." (Presumably, "of" should read "or".) bank and shall successors Halifax are 1986. in the City and the formal contract, a copy Formless Ltd. and general of the documents of not assign the it as a whole due or to become without the the Contract the Contractor
- As indicated above, Commerce gave notice of the General Assignment of Accounts to the City of Halifax. That notice was 1986 and demanded payment City to Maritime Formless to be made directly to the Bank. The City acknowledged the demand as follows: "I/We acknowledge above notice and payment direct to the Canadian Imperial Bank of Commerce." That acknowledgement was dated signed by the "Manager, Treasury and Accounting". The Assignment of from Canadian Imperial Bank of Commerce to Gerald Catenacci is dated July 31, 1990. The Maritime Formless Ltd., was amount of $38,166.20 plus interest from August 20th, In consideration of the sum of $8,000.00, the Bank assigned all of its interest in various securities, General Assignment of Accounts intervenor. The securities 16 Canadian Imperial Bank of dated August 15, of any accounts owing by the receipt of the undertake to make August 15, 1986 and was Indebtedness and Security Assignment sets forth that indebted to the Bank in the 1986. including the above referred to, to the so assigned are specifically
- 17 listed in the Agreement and items. The Assignment was on warranty, except as set forth therein. While I do not consider the date of the various claims to be the decision factors, the time of the earliest of them is as follows. The the City of Halifax is dated and acknowledged as of August 15, 1986. Catenacci stands in this matter. The earliest competing Ocean Contractors Limited. Order was dated August 14, date on which that particular default judgment was entered is not before me as to when the Attachment Order was served upon the City of Halifax. The merely says, "the Attachment on the· City of Halifax". I earliest that the Attachment was August 15, 1986. The following postions the various parties: consist of eighteen different a non-recourse basis, without demand made by the Bank to in the position of the Bank claim is that of In that claim, an Attachment 1986. In fact, that was the action was commenced and on September 15th, 1986. It Agreed Statement of Facts Order was subsequently served can only conclude that the Order could have been served are taken by each of
- 18 1. The Intervenor claims that the Assignment of Book entitled to priority over including the statutory claim of Revenue Canada." 2. Revenue Canada claimed that it "ranks either first pursuant to (5) of the Income Tax Act or Catenacci." At the time of the hearing, Revenue Canada did not take issue with Catenacci's claim for priority, but claimed to be prior Catenacci, pursuant to in preference to other of the Crown and the degree." 3. Ocean Contractors Limited and all other subcontractors claim: (a) the Assignment of Book Debts from Maritime Formless to the plaintiff and the the Bank to Gerald unenforceable against construction contracts "the secured claim under Debts held by Catenacci is all of the other claims in its pre-hearing memorandum s , 27 (4) and second to the claim of to creditors other than "priority accorded the Crown creditors where the claims other creditors are of equal subsequent Assignment from Catenacci are invalid and monies payable under the between the company and the
- City, and (b) the intervenor does is not entitled to invoke jurisdiction. 4. Linda Merriam takes the Contractors Limited et al of success, she is entitled to solicitor costs, this being an interpleader action. Revenue Canada and Catenacci It is necessary to contrast Revenue Canada and the intervenor the bases for the competing claims. Canada arises from 55. 227.4 Act. Virtually the same provisions Unemployment Insurance Act and Act. The subsections read as follows: " (4) Every person or withholds any Act shall be deemed to hold the amount so deducted or withheld for Her Majesty. 19 not have clean hands and the Court's equitable same position as Ocean and adds that irrespective and client the competing claims of by an examination of The claim of Revenue and 227.5 of the Income Tax are contained in the the Canada Pension Plan who deducts amount under this in trust
- 20 (5) Notwithstanding provision of the in the event of assignment, receivership or bankruptcy of or by a person, to any amount (a) deemed by to be held in Majesty, ... shall be deemed to and form no part liquidation, assignment, or bankruptcy, whether amount has in fact been kept separate and apart from the person's own moneys or from the assets of the estate." The relevant provisions of the General Assignment of Accounts are set forth above. Assignment is a fixed and specific accounts, claims, monies, and are or which may at any time " to Maritime Formless. A case of almost . considerations was before Enterprises v. PCL Construction, APR, 109. There Judge Anderson claims of the Canadian Imperial any Bankruptcy Act, any liquidation, an amount equal subsection (4 ) trust for Her be separate from of the estate in receivership or not that It is clear that the charge on the "debts, choses in action which now hereafter be due or owing identical facts and Anderson, C.C.J. , in ADG 59 N.S.R. (2d) and 125 had before him competing Bank of Commerce under
- 21 a General Assignment of Accounts terms as are before me. The Department of National Revenue made a claim pursuant to Insurance Act, S . C. 1970 -71 , subsections are, to all intents to subsections (4) and (5) Act, as set forth above. The question before Judge Anderson was succinctly put by him in the following terms: "The Department of (the Department) provisions of s. the Unemployment s. 24(3) and (4) of the Canada Pension Plan Act authorized its entitlement. The Canadian Imperial Bank of Commerce (the Bank) submits that it is entitled to the fund because (a) The Bank assignment of book held by the cases charge on receivables been h~ld by the Canada that a claim for and unemployment insurance cannot affect the such a charge; (b) In any event, priority sections of the respective in the present situation." in precisely the same s. 71.2 of the Unemployment c. 48 , s . 71 ( 2 ) , (3 ) . Those and purposes, identical of s , 227 of the Income Tax National Revenue submits that the 71(2) and (3) of Insurance Act, and holds a general debts of a kind to be a specific and it has Supreme Court of pension plan deductions realization from acts do not apply
- 22 Judge Anderson reviewed carefully of the Unemployment Insurance Plan Act and the effect of those provisions considered by Pigeon, J. in Limited v , xyloid Industries 301; 3 Man. R. (2 d) 283; 33 c. B. R. lilt should first be observed similar to those on which Avco case, supra, was based, the claim for Pension Plan and unemployment insurance deductions cannot affect the proceeds of subject to a fixed and the moment such charge subject thereto were no the debtor, except subject to that charge. claim for the deductions thus cannot affect this of a statute specifically so providing. the floating charge did to the issue of the writ of the receiver. In the no difference which of the two dates is selected, both are subsequent to the deductions." Judge Anderson, for to be repeated here, found of Accounts in question was I respectfully agree with his conclusion. I have also considered Lettner v. the various provisions Act and the Canada Pension as they were Dauphin Plains Credit Union Ltd. and R. (1980), 31 N.R. 107, at p. 120: that, for reasons the decision in the realization of property specific charge. From was created, the assets longer the property of The arose subsequently and charge in the absence However, not crystallize prior and the appointment present case it makes reasons which do not need that the General Assignment a specific and fixed charge. In this regard, Poineer Truck Equipment
- Ltd. and Bank of Nova Scotia (1952),1 DLR 341; Evans, Coleman Nelson Construction Limited Company v , Gailbraith & Sons VII Company v , Reid & Reinhard of Canada v. General Motors Acceptance Corporation of Canada Limited 64 N.S.R. (2d) 424, and 67 N.S.R. (2d) and 155 APR 306 With respect to particularly herein the reference the Trial Division decision of were) as follows: "Mr. Justice Clarke, under appeal, held: lIn my view ass ignment held did not give charge over these payable . by they carne into existence. they did they to the specific GMAC which took intervened, as defeat the claim of the general assignment.' I do not disagree with 23 47 WWR 343, Boothe v. Simcoe & Evans Limited v , R.A. 16 DLR (2d) 123; O'Neil & WWR 155; Vernon Hardware (1927), 2 WWR 117; Royal Bank 143 APR 424 (Trial Division) (Appeal Division). the latter case, I set forth by MacKeigan, C.J., to Clarke, J., (as they then by his judgment the general by the Bank it a specific two accounts Scotsburn until When were subject charges of priority or it were, to the substance
- 24 of the first sentence of Clarke. I would, to say that the of book debts was a specific charge on 'all book accounts and book debts' all 'which may hereafter owing or accruing to Kiley. That attached to a future soon as that debt came into existence. Thus in law it attached at the moment each vehicle was delivered to Scotsburn whereupon a sale the debt came into existence. Here the assignment on execution effectively existing and future the bank. The debts created thus became by the bank. Like discussed by Mr. Re Trilateral Enterprises (1977), 74 DLR H.C.), this particular was not a floating required any crystalization by default or notice but was fully effective immediately enforceable against notice is given: different floating assignment discussed Imperial Bank of Commerce v. Campbell r [1976], 1 S.C.R. Imperial Bank of Commerce v. Sitarenios et al (1976), 14 OR C.A.)." I therefore find of Accounts given by Maritime Mr. Justice however, prefer general assignment from its execution of Kiley including become due, or growing due' specific charge book debt as was completed and of book debts assigned book debts to as they were owned outright the assignment Justice Henry in Limited (3d) 517 (Ontario assignment charge which a specific charge but not the debtor until cf. the quite charge form of in Canadian 341, and Canadian (2d) 345 (Ontario that the General Assignment Formless to the Canadian
- Imperial Bank of Commerce was and ranks in priority to the National Revenue. Ocean Contractors Limited et a1 and Catenacci The further position of these ordinary creditors is to the effect that the General Assignment was effectively a floating charge and" owing by the City to the actually come into existence." the effect of the words used Full effect must be given to the words and they are clear and unambiguous. that this General Assignment was a fixed and specific charge. The position of the Maritime Formless had promised by Article 6.38 of the General Conditions of the construction or to become due pursuant assigned without the previous written consent of the owner. Their position is that such and accordingly no valid assignment monies due thereunder. 25 a fixed and specific charge claim of the Department of could not attach to any debts Company until those debts had With respect, that is not in the General Assignment. of the Assignment I have found above ordinary creditors is that contract that monies due to the contract would not be consent was never obtained could be made of the
- I cannot sustain the right to enforce the provisions especially Article 6.38. That right of the City was assigned to any other parties, ordinary creditors. In fact, specifically aware of the General Assignment given to it by the Bank it chose clearly not to exercise any rights it may have had arising from any alleged breach of the contract and, indeed, indicated by its acknowledgement of the demand that it would is true that the Bank, as Assignee the Assignment subject to the terms contract, the rights of the City pursuant to Article 6.38 were rights which have never now open to strangers to that contract to exercise The ordinary creditors intervenor, Gerald Catenacci, and therefore cannot come to an assignment of priority in also fails. The ordinary creditors position, in the pre-trial memorandum, 26 this argument. The City had of the contract and never including especially the when the City was made by the demand honour the demand. While it of the Company, takes and conditions of the been exercised and are not also say that the does not have "clean hands" equity to obtain relief by his favour. This argument as set out was to the effect that as
- Mr. Catenacci is the principal to the fact that the Assignment is for the stated consideration therefore, the intervenor will "realize a windfall in excess of $48,000.00 at the expense of the subcontractors". There is no evidence before me which would justify a finding of "unclean hands ". honest reasons why a company might experience financial eventual demise. The fact as flowing from Catenacci to is less than the potential to at hand, is not evidence of to what other and further arrang.ements between the Bank and Catenacci. I therefore conclude and the ordinary creditors, Catenacci claim shall take priority~ 27 of Maritime Formless and from the Bank to Catenacci of $8,000.00 and that, There are many valid and such as Maritime Formless difficulties, leading to its that the consideration shown the Bank on the Assignment be realized from the fund bad faith. We are not privy may have been made that as between Catenacci including Linda Merriam, the
- Revenue Canada v.-ordinary-creditors Having found as I purposes of this decision, as one of the general creditors. Household Realty Corporation et a1 Canada, [1980], 1 S.C.R. 423. Assignment of Priorities in funds arising from a foreclosure Ritchie, J., of the Supreme findings of the Chief Jus~~ce in The Queen v~ Scotia (1885), 11 S.C.R. 1 as follows: " I do not think doubt that the at common law to a case such as rights of the Crown with the right of a subject in respect to the payment degree, the right prevail .... " Mr. Justice Ritchie in dealing with the same question said: 28 have above, then for the further I must treat Revenue Canada Revenue. Canada has cited v , Attorney General of That case dealt with the the distribution of surplus sale. In that case, Court of Canada, quoted the Bank of Nova there can be a Crown is entitIed a preference in this, for when the come in conflict of debts of equal of the Crown must
- 29 u T arn satisfied that I therefore conclude Department of National Revenue creditors, the right of the Crown must prevail. Distribution I do not have sufficient me to make a specific distribution as between the creditors. The priorities, however, are as set forth below and should be sufficient to permit counsel amount due to them from the be questions concerning the specific may wish me to address and if requested, "r will do so. (1) The intervenor is entitled to first priority as to both principal and interest to be calculated in accordance with the the Bank from Maritime Formless where a debt that as between the and the other general information before to assign the specific amount in Court. There may amounts which counsel promissory notes due to and as assigned
- 30 to the intervenor, plus costs as set out below. (2) Revenue Canada is entitled to second priority for its claim. I have evidence of the manner calculated the interest whether that method is had any argument as to of interest claimed is in priority to the claims of the ordinary creditors. to award any additional as a result of what appears be the usurious method employed by the Department. Third Priority: If any distribution of the above, it shall amongst the ordinary creditors, without costs. Re Costs As indicated above, Linda Merriam, took the position that she was entitled to solicitor-client costs. It is true that when restricted to being a means official, such as a Sheriff, awarded on a solicitor-client not had before me any in which Revenue Canada due on the account and acceptable. I have not whether the full amount I do, however, decline costs to the Department on the surface to of calculating interest sum remains after the be prorated through her counsel, interpleader actions were of giving relief to a public costs were almost invariably basis. That rationale no
- 31 longer applies to an action such as the instant case and I can see no reason why it should. In any event, it is clear that costs are in the discretion of the Court and I decline to order costs in that manner. Costs are awarded herein to the intervenor on the basis of the amount involved, being the amount of the claim of the intervenor which as at August 15, 1986 was the sum of $38,166.20 plus interest. Costs will be on the basis of Tariffs of Costs and Fees. Halifax, Nova Scotia October 29, 1990
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.