An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts (S.C. 2005, c. 47)
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Assented to 2005-11-25
60. (1) The portion of paragraph 69(2)(d) of the Act before subparagraph (i) is replaced by the following:
(d) to prevent a creditor who holds security on aircraft objects under an agreement with the insolvent person from taking possession of the aircraft objects
(2) Subparagraph 69(2)(d)(i) of the English version of the Act is replaced by the following:
(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the aircraft objects in accordance with the agreement,
61. (1) The portion of paragraph 69.1(2)(d) of the Act before subparagraph (i) is replaced by the following:
(d) to prevent a creditor who holds security on aircraft objects under an agreement with the insolvent person from taking possession of the aircraft objects
(2) Subparagraph 69.1(2)(d)(i) of the English version of the Act is replaced by the following:
(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the aircraft objects in accordance with the agreement,
62. (1) Subsection 69.3(1) of the Act is replaced by the following:
Marginal note:Stays of proceedings — bankruptcies
69.3 (1) Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.
Marginal note:End of stay
(1.1) Subsection (1) ceases to apply in respect of a creditor on the day on which the trustee is discharged.
(2) The portion of subsection 69.3(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Secured creditors
(2) Subject to subsection (3), sections 79 and 127 to 135 and subsection 248(1), the bankruptcy of a debtor does not prevent a secured creditor from realizing or otherwise dealing with his or her security in the same manner as he or she would have been entitled to realize or deal with it if this section had not been passed, unless the court otherwise orders, but in so ordering the court shall not postpone the right of the secured creditor to realize or otherwise deal with his or her security, except as follows:
(3) Subsection 69.3(3) of the Act is replaced by the following:
Marginal note:Secured creditors — aircraft objects
(3) If a secured creditor who holds security on aircraft objects under an agreement with the bankrupt is postponed from realizing or otherwise dealing with that security, the order under which the postponement is made is terminated
(a) if, after the order is made, the trustee defaults in protecting or maintaining the aircraft objects in accordance with the agreement;
(b) 60 days after the day on which the order is made unless, during that period, the trustee
(i) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the bankrupt’s financial condition, and
(ii) agreed to perform the obligations under the agreement, other than the bankrupt’s obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition, until the day on which the secured creditor is able to realize or otherwise deal with his or her security; or
(c) if, during the period that begins 60 days after the day on which the order is made and ends on the day on which the secured creditor is able to realize or otherwise deal with his or her security, the trustee defaults in performing an obligation under the agreement, other than the bankrupt’s obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition.
63. Subsection 70(2) of the English version of the Act is replaced by the following:
Marginal note:Costs
(2) Despite subsection (1), one bill of costs of a barrister or solicitor or, in the Province of Quebec, an advocate, including the executing officer’s fees and land registration fees, shall be payable to the creditor who has first attached by way of garnishment or filed with the executing officer an attachment, execution or other process against the property of the bankrupt.
64. Subsection 74(3) of the English version of the Act is replaced by the following:
Marginal note:Caveat may be filed
(3) If a bankrupt owns any real property or immovable or holds any charge registered in a land registry office or has or is believed to have any interest, estate or right in any of them, and for any reason a copy of the bankruptcy order or assignment has not been registered as provided in subsection (1), a caveat or caution may be filed with the official in charge of the land registry by the trustee, and any registration made after the filing of the caveat or caution in respect of the real property, immovable or charge is subject to the caveat or caution unless it has been removed or cancelled under the provisions of the Act under which the real property, immovable, charge, interest, estate or right is registered.
65. (1) Subsection 81(2) of the Act is replaced by the following:
Marginal note:How claim disposed of
(2) The trustee with whom a proof of claim is filed under subsection (1) shall within 15 days after the filing of the claim or within 15 days after the first meeting of creditors, whichever is the later, either admit the claim and deliver possession of the property to the claimant or send notice in the prescribed manner to the claimant that the claim is disputed, with the trustee’s reasons for disputing it, and, unless the claimant appeals the trustee’ decision to the court within 15 days after the sending of the notice of dispute, the claimant is deemed to have abandoned or relinquished all his or her right to or interest in the property to the trustee who may then sell or dispose of the property free of any right, title or interest of the claimant.
(2) Subsection 81(4) of the Act is replaced by the following:
Marginal note:Require proof of claim
(4) The trustee may send notice in the prescribed manner to any person to prove his or her claim to or in property under this section, and, unless that person files with the trustee a proof of claim, in the prescribed form, within 15 days after the sending of the notice, the trustee may then, with the leave of the court, sell or dispose of the property free of any right, title or interest of that person.
66. (1) The portion of subsection 81.1(1) of the Act before paragraph (c) is replaced by the following:
Marginal note:Right of unpaid supplier to repossess goods
81.1 (1) Subject to this section, if a person (in this section referred to as the “supplier”) has sold to another person (in this section referred to as the “purchaser”) goods for use in relation to the purchaser’s business and delivered the goods to the purchaser or to the purchaser’s agent or mandatary, and the purchaser has not fully paid for the goods, the supplier may have access to and repossess the goods at the supplier’s own expense, and the purchaser, trustee or receiver, or the purchaser’s agent or mandatary, as the case may be, shall release the goods, if
(a) the supplier presents a written demand for repossession to the purchaser, trustee or receiver, in the prescribed form and containing the details of the transaction, within a period of 15 days after the day on which the purchaser became bankrupt or became a person who is subject to a receivership;
(b) the goods were delivered within 30 days before the day on which the purchaser became bankrupt or became a person who is subject to a receivership;
(2) Subsections 81.1(4) and (5) of the Act are replaced by the following:
Marginal note:If notice of intention or proposal was filed
(4) If a notice of intention under section 50.4 or a proposal was filed in respect of the purchaser after the delivery of the goods to the purchaser and before the purchaser became bankrupt or became a person who is subject to a receivership, the 30-day period referred to in paragraph (1)(b) is the 30-day period before the filing of the notice of intention or, if there was no notice of intention, the filing of the proposal.
Marginal note:Expiry of supplier’s right
(5) A supplier’s right to repossess goods under this section expires if not exercised within the 15-day period referred to in paragraph unless the period is extended before its expiry by the trustee or receiver, or by the court.
(3) Section 81.1 of the Act is amended by adding the following after subsection (11):
Marginal note:Definitions
(12) The following definitions apply in this section.
“person who is subject to a receivership”
« mise sous séquestre »
“person who is subject to a receivership” means a person in respect of whom any property is under the possession or control of a receiver.
“receiver”
« séquestre »
“receiver” means a receiver within the meaning of subsection 243(2).
67. The Act is amended by adding the following after section 81.2:
Marginal note:Security for unpaid wages, etc. — bankruptcy
81.3 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a bankrupt for services rendered during the six months immediately before the date of bankruptcy is secured, as of that date, to the extent of $2,000, by security on all the current assets of the bankrupt on that date.
Marginal note:Commissions
(2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for within the six month period referred to in that subsection, are deemed to have been earned in those six months.
Marginal note:Security for disbursements — bankruptcy
(3) The claim of a travelling salesperson who is owed money by a bankrupt for disbursements properly incurred in and about the bankrupt’s business during the six months immediately before the date of bankruptcy is secured, as of that date, to the extent of $1,000, by security on all the bankrupt’s current assets on that date.
Marginal note:Rank of security
(4) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s current assets, regardless of when that other claim, right, charge or security arose, except rights under sections 81.1 and 81.2 and amounts referred to in subsection 67(3) that have been deemed to be held in trust.
Marginal note:Liability of trustee
(5) If the trustee disposes of current assets covered by the security, the trustee is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets, and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker of the amounts paid to that person by the trustee.
Meaning of “compensation”
(6) For the purpose of this section and section 81.4, “compensation” includes vacation pay but does not include termination or severance pay.
Marginal note:Proof by delivery
(7) A claim referred to in this section is proved by delivering to the trustee a proof of claim in the prescribed form.
Marginal note:Security for unpaid wages, etc. — receivership
81.4 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a person who is subject to a receivership for services rendered during the six months immediately before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $2,000, by security on all the person’s current assets that are in the possession or under the control of the receiver.
Marginal note:Commissions
(2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for within the six-month period referred to in that subsection, are deemed to have been earned in those six months.
Marginal note:Security for disbursements — receivership
(3) The claim of a travelling salesperson who is owed money by a person who is subject to a receivership for disbursements properly incurred in and about the person’s business during the six months immediately before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $1,000, by security on all the person’s current assets that are in the possession or under the control of the receiver.
Marginal note:Rank of security
(4) A security under this section ranks above every other claim, right, charge or security against the person’s current assets, regardless of when that other claim, right, charge or security arose, except rights under sections 81.1 and 81.2.
Marginal note:Liability of receiver
(5) If the receiver takes possession or in any way disposes of current assets covered by the security, the receiver is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets, and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker of the amounts paid to that person by the receiver.
Marginal note:Proof by delivery
(6) A claim referred to in this section is proved by delivering to the receiver a proof of claim in the prescribed form.
Marginal note:Definitions
(7) The following definitions apply in this section.
“person who is subject to a receivership”
« personne faisant l’objet d’une mise sous séquestre »
“person who is subject to a receivership” means a person in respect of whom any property is under the possession or control of a receiver.
“receiver”
« séquestre »
“receiver” means a receiver within the meaning of subsection 243(2).
Marginal note:Security for unpaid amounts re prescribed pensions plan — bankruptcy
81.5 (1) If the bankrupt is an employer who participated or participates in a prescribed pension plan for the benefit of the bankrupt’s employees, the following amounts that are unpaid on the date of bankruptcy to the fund established for the purpose of the pension plan are secured by security on all the assets of the bankrupt:
(a) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund;
(b) if the prescribed pension plan is regulated by an Act of Parliament,
(i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and
(ii) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985; and
(c) in the case of any other prescribed pension plan,
(i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament, and
(ii) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament.
Marginal note:Rank of security
(2) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s assets, regardless of when that other claim, right, charge or security arose, except
(a) rights under sections 81.1 and 81.2;
(b) amounts referred to in subsection 67(3) that have been deemed to be held in trust; and
(c) securities under sections 81.3 and 81.4.
Marginal note:Liability of trustee
(3) If the trustee disposes of assets covered by the security, the trustee is liable for the amounts referred to in subsection (1) to the extent of the amount realized on the disposition of the assets, and is subrogated in and to all rights of the fund established for the purpose of the pension plan in respect of those amounts.
Marginal note:Security for unpaid amounts re prescribed pensions plan — receivership
81.6 (1) If a person who is subject to a receivership is an employer who participated or participates in a prescribed pension plan for the benefit of the person’s employees, the following amounts that are unpaid immediately before the first day on which there was a receiver in relation to the person are secured by security on all the person’s assets:
(a) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund;
(b) if the prescribed pension plan is regulated by an Act of Parliament,
(i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and
(ii) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985; and
(c) in the case of any other prescribed pension plan,
(i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament, and
(ii) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament.
Marginal note:Rank of security
(2) A security under this section ranks above every other claim, right, charge or security against the person’s assets, regardless of when that other claim, right, charge or security arose, except rights under sections 81.1 and 81.2 and securities under sections 81.3 and 81.4.
Marginal note:Liability of receiver
(3) If the receiver disposes of assets covered by the security, the receiver is liable for the amounts referred to in subsection (1) to the extent of the amount realized on the disposition of the assets, and is subrogated in and to all rights of the fund established for the purpose of the pension plan in respect of those amounts.
Marginal note:Definitions
(4) The following definitions apply in this section.
“person who is subject to a receivership”
« personne faisant l’objet d’une mise sous séquestre »
“person who is subject to a receivership” means a person in respect of whom any property is under the possession or control of a receiver.
“receiver”
« séquestre »
“receiver” means a receiver within the meaning of subsection 243(2).
- Date modified: