Federal Law–Civil Law Harmonization Act, No. 2 (S.C. 2004, c. 25)
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Assented to 2004-12-15
PART 1AMENDMENTS TO CERTAIN ACTS
R.S., c. B-3; 1992, c. 27, s. 2Bankruptcy and Insolvency Act
Marginal note:1997, c. 12, s. 71
48. Section 80 of the Act is replaced by the following:
Marginal note:Protection of trustee
80. If the trustee has seized or disposed of property in the possession or on the premises of a bankrupt without notice of any claim in respect of the property and after the seizure or disposal it is made to appear that the property, at the date of the bankruptcy, was not the property of the bankrupt or was subject to an unregistered security or charge, the trustee is not personally liable for any loss or damage arising from the seizure or disposal sustained by any person claiming the property, interest in property or, in the Province of Quebec, a right in property, or for the costs of proceedings taken to establish a claim to that property, interest or right, unless the court is of opinion that the trustee has been negligent with respect to the trustee’s duties in relation to the property.
Marginal note:1992, c. 27, s. 38(1)
49. (1) The portion of subsection 81.2(1) of the French version of the Act before paragraph (a) is replaced by the following:
Marginal note:Cas des agriculteurs, des pêcheurs et des aquiculteurs
81.2 (1) Par dérogation à toute autre loi ou règle de droit fédérale ou provinciale, la réclamation de l’agriculteur, du pêcheur ou de l’aquiculteur qui a vendu et livré à un acheteur des produits agricoles, aquatiques ou aquicoles destinés à être utilisés dans le cadre des affaires de celui-ci est garantie, à compter de la date visée aux sous-alinéas a)(i) ou (ii), par une sûreté portant sur la totalité du stock appartenant à l’acheteur ou détenu par lui à la même date; la sûreté a priorité sur tout autre droit, sûreté, charge ou réclamation — peu importe sa date de naissance — relatif au stock de l’acheteur, sauf sur le droit du fournisseur à la reprise de possession de marchandises aux termes de l’article 81.1; la garantie reconnue par le présent article n’est valable que si, à la fois :
Marginal note:1992, c. 27, s. 38(1)
(2) The portion of subsection 81.2(1) of the Act after paragraph (d) is replaced by the following:
the claim of the farmer, fisherman or aquaculturist for the unpaid amount in respect of the products is secured by security on all the inventory of or held by the purchaser as of the day referred to in subparagraph (b)(i) or (ii), and the security ranks above every other claim, right, charge or security against that inventory, regardless of when that other claim, right, charge or security arose, except a supplier’s right, under section 81.1, to repossess goods, despite any other federal or provincial Act or law; and if the trustee or receiver, as the case may be, takes possession or in any way disposes of inventory covered by the security, the trustee or receiver is liable for the claim of the farmer, fisherman or aquaculturist to the extent of the net amount realized on the disposition of that inventory, after deducting the cost of realization, and is subrogated in and to all rights of the farmer, fisherman or aquaculturist to the extent of the amounts paid to them by the trustee or receiver.
Marginal note:1992, c. 27, s. 38(1); 1997, c. 12, s. 72(F)
(3) The definitions “aquaculturist” and “farmer” in subsection 81.2(2) of the English version of the Act are replaced by the following:
“aquaculturist”
« aquiculteur »
“aquaculturist” includes the owner, occupier, lessor and lessee of an aquaculture operation;
“farmer”
« agriculteur »
“farmer” includes the owner, occupier, lessor and lessee of a farm;
50. (1) Paragraphs 83(1)(a) to (c) of the English version of the Act are replaced by the following:
(a) if the work covered by the copyright has not been published and put on the market at the time of the bankruptcy and no expense has been incurred in connection with that work, revert and be delivered to the author or their heirs, and any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null;
(b) if the work covered by the copyright has in whole or in part been put into type and expenses have been incurred by the bankrupt, revert and be delivered to the author on payment of the expenses so incurred and the product of those expenses shall also be delivered to the author or their heirs and any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null, but if the author does not exercise their rights under this paragraph within six months after the date of the bankruptcy, the trustee may carry out the original contract; or
(c) if the trustee at the end of the six-month period from the date of the bankruptcy decides not to carry out the contract, revert without expense to the author and any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null.
(2) Paragraph 83(2)(b) of the French version of the Act is replaced by the following:
b) le syndic n’a pas le pouvoir, sans le consentement écrit de l’auteur ou de ses héritiers, de céder le droit d’auteur ou de céder ou d’accorder un intérêt dans ce droit d’auteur par licence ou autrement, sauf en des termes qui garantissent à l’auteur ou à ses héritiers des paiements, sous forme de redevances ou de tantièmes sur les profits, à un taux non inférieur à celui que le failli était tenu de payer;
(3) Paragraph 83(2)(c) of the English version of the Act is replaced by the following:
(c) any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null, except with respect to the disposal, under this subsection, of copies of the work published and put on the market before the bankruptcy.
51. Section 84 of the French version of the Act is replaced by the following:
Marginal note:Effets des ventes par syndic
84. Les droits de propriété, en droit et en equity, du failli sur les biens qui font l’objet d’une vente par le syndic sont dévolus à l’acheteur.
52. (1) Subsection 85(1) of the French version of the Act is replaced by the following:
Marginal note:Application aux sociétés de personnes en commandite
85. (1) La présente loi s’applique aux sociétés de personnes en commandite de la même manière que si elles étaient des sociétés en nom collectif; et, lorsque tous les membres d’une telle société deviennent en faillite, les biens de celle-ci sont dévolus au syndic.
(2) Subsection 85(2) of the English version of the Act is replaced by the following:
Marginal note:Actions by trustee and bankrupt’s partner
(2) If a member of a partnership becomes bankrupt, the court may authorize the trustee to commence and prosecute any action in the names of the trustee and of the bankrupt’s partner, and any release by the partner of the debt or demand to which the action relates is void or, in the Province of Quebec, null.
Marginal note:1992, c. 27, s. 39(1)
53. Paragraph 87(1)(a) of the Act is replaced by the following:
(a) the date an application is filed against the debtor,
Marginal note:1997, c. 12, s. 75
54. (1) Subsections 91(1) and (2) of the English version of the Act are replaced by the following:
Marginal note:Certain settlements ineffective
91. (1) Any settlement of property made within the period beginning on the day that is one year before the date of the initial bankruptcy event in respect of the settlor and ending on the date that the settlor became bankrupt, both dates included, is void as against, or in the Province of Quebec, may not be set up against, the trustee.
Marginal note:If bankrupt within five years
(2) Any settlement of property made within the period beginning on the day that is five years before the date of the initial bankruptcy event in respect of the settlor and ending on the date that the settlor became bankrupt, both dates included, is void as against, or in the Province of Quebec, may not be set up against, the trustee if the trustee can prove that the settlor was, at the time of making the settlement, unable to pay all the settlor’s debts without the aid of the property that was the subject of the settlement or that the interest of the settlor in the property did not pass on the execution of the settlement.
Marginal note:2000, c. 12, s. 11
(2) Subsection 91(3) of the Act is replaced by the following:
Marginal note:Non-application of section
(3) This section does not extend to any settlement made in favour of a purchaser, incumbrancer or holder of a charge in good faith and for valuable consideration.
55. (1) Subsection 94(1) of the English version of the Act is replaced by the following:
Marginal note:General assignments of book debts ineffective
94. (1) If a person engaged in any trade or business makes an assignment of their existing or future book debts or any class or part of those debts and subsequently becomes bankrupt, the assignment of book debts is void as against, or in the Province of Quebec, may not be set up against, the trustee with respect to any book debts that have not been paid at the date of the bankruptcy.
(2) Subsection 94(3) of the English version of the Act is replaced by the following:
Marginal note:Other cases
(3) Nothing in this section renders void or, in the Province of Quebec, null any assignment of book debts due at the date of the assignment from specified debtors, or of debts growing due under specified contracts, or any assignment of book debts included in a transfer of a business made in good faith and for adequate valuable consideration.
Marginal note:1997, c. 12, s. 78(1)
56. Subsections 95(1) and (2) of the Act are replaced by the following:
Marginal note:Preferences
95. (1) Every transfer of property, every charge made on property, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any insolvent person in favour of any creditor or of any person in trust for any creditor with a view to giving that creditor a preference over the other creditors is, when it is made, given, incurred, taken or suffered within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date the insolvent person became bankrupt, both dates included, deemed fraudulent and void as against, or in the Province of Quebec, may not be set up against, the trustee in the bankruptcy.
Marginal note:When view to prefer presumed
(2) If any transfer, charge, payment, obligation or judicial proceeding mentioned in subsection (1) has the effect of giving any creditor a preference over other creditors, or over any one or more of them, it shall be presumed, in the absence of evidence to the contrary, to have been made, incurred, taken, paid or suffered with a view to giving the creditor a preference over other creditors, whether or not it was made voluntarily or under pressure and evidence of pressure shall not be admissible to support the transaction.
Marginal note:1997, c. 12, s. 79
57. Section 96 of the Act is replaced by the following:
Marginal note:Extended period
96. If the transfer, charge, payment, obligation or judicial proceeding mentioned in section 95 is in favour of a person related to the insolvent person, the period referred to in subsection 95(1) shall be one year instead of three months.
Marginal note:1997, c. 12, s. 80
58. (1) The portion of subsection 97(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Protected transactions
97. (1) No payment, contract, dealing or transaction to, by or with a bankrupt made between the date of the initial bankruptcy event and the date of the bankruptcy is valid, except the following, which are valid if made in good faith, subject to the foregoing provisions of this Act with respect to the effect of bankruptcy on an execution, attachment or other process against property, and subject to the provisions of this Act respecting settlements, preferences and reviewable transactions:
Marginal note:1997, c. 12, s. 80
(2) Paragraph 97(1)(c) of the Act is replaced by the following:
(c) a transfer by the bankrupt for adequate valuable consideration; and
(3) Subsection 97(2) of the Act is replaced by the following:
Definition of “adequate valuable consideration”
(2) The expression “adequate valuable consideration” in paragraph (1)(c) means a consideration of fair and reasonable money value with relation to that of the property assigned or transferred, and in paragraph (1)(d) means a consideration of fair and reasonable money value with relation to the known or reasonably to be anticipated benefits of the contract, dealing or transaction.
(4) Subsection 97(3) of the English version of the Act is replaced by the following:
Marginal note:Law of set-off or compensation
(3) The law of set-off or compensation applies to all claims made against the estate of the bankrupt and also to all actions instituted by the trustee for the recovery of debts due to the bankrupt in the same manner and to the same extent as if the bankrupt were plaintiff or defendant, as the case may be, except in so far as any claim for set-off or compensation is affected by the provisions of this Act respecting frauds or fraudulent preferences.
59. Subsection 98(1) of the English version of the Act is replaced by the following:
Marginal note:Recovering proceeds if transferred
98. (1) If a person has acquired property of a bankrupt under a transaction that is void or voidable and set aside or, in the Province of Quebec, null or annullable and set aside, and has sold, disposed of, realized or collected the property or any part of it, the money or other proceeds, whether further disposed of or not, shall be deemed the property of the trustee.
60. Subsection 99(1) of the Act is replaced by the following:
Marginal note:Dealings with undischarged bankrupt
99. (1) All transactions by a bankrupt with any person dealing with the bankrupt in good faith and for value in respect of property acquired by the bankrupt after the bankruptcy, if completed before any intervention by the trustee, are valid against the trustee, and any estate, or interest or right, in the property that by virtue of this Act is vested in the trustee shall determine and pass in any manner and to any extent that may be required for giving effect to any such transaction.
Marginal note:1997, c. 12, s. 82(1)
61. The portion of subsection 101(2) of the English version of the Act before paragraph (a) is replaced by the following:
Marginal note:Judgment against directors
(2) If a transaction referred to in subsection (1) has occurred, the court may give judgment to the trustee against the directors of the corporation, jointly and severally, or solidarily, in the amount of the dividend or redemption or purchase price, with interest on the amount, that has not been paid to the corporation if the court finds that
Marginal note:1997, c. 12, s. 83
62. Section 101.2 of the Act is replaced by the following:
Marginal note:Provisions to apply
101.2 Sections 91 to 101 apply as though the debtor became bankrupt on the date of the initial bankruptcy event if the proposal is annulled either by the court under subsection 63(1) or as a result of a bankruptcy order or assignment.
63. (1) Subsection 109(4) of the English version of the Act is replaced by the following:
Marginal note:Debtor may not be proxyholder
(4) A debtor may not be appointed a proxyholder to vote at any meeting of the debtor’s creditors.
(2) Subsection 109(5) of the Act is replaced by the following:
Marginal note:Corporation
(5) A corporation may vote by an authorized proxyholder at meetings of creditors.
64. Subsection 113(2) of the Act is replaced by the following:
Marginal note:Trustee may not vote on remuneration
(2) The vote of the trustee or of their partner, clerk, legal counsel or legal counsel’s clerk, either as creditor or as proxy for a creditor, shall not be reckoned in the majority required for passing any resolution affecting the remuneration or conduct of the trustee.
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