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Difference between revisions of "Creditors' Remedies against Debtors (10:III)"
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Creditors' Remedies against Debtors (10:III) (view source)
Revision as of 22:01, 2 October 2022
, 22:01, 2 October 2022→b) Disqualification from “Seize or Sue” and Leases
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==== b) Disqualification from “Seize or Sue” and Leases ==== | ==== b) Disqualification from “Seize or Sue” and Leases ==== | ||
A secured party with a security interest in “consumer goods” may escape the seize or sue provisions where: | '''A secured party with a security interest in “consumer goods” may escape the seize or sue provisions where:''' | ||
*the debtor has engaged in wilful or reckless acts or neglect that has caused substantial damage or more deterioration than would be reasonably expected; a court, on application, may order that subsections (1) to (7) or any one or more of them do not apply so as to limit the rights and remedies of the secured party (ss 67(9)); or | *the debtor has engaged in wilful or reckless acts or neglect that has caused substantial damage or more deterioration than would be reasonably expected; a court, on application, may order that subsections (1) to (7) or any one or more of them do not apply so as to limit the rights and remedies of the secured party (ss 67(9)); or | ||
*the secured party discovers after s 58 seizure or bringing action to recover a judgment that an accession that was collateral has been removed and not replaced by other goods of equivalent value and free from prior security interests, a claim may be advanced notwithstanding ss 67(2), (5) and (6) against the debtor for the value of the accession (s 67(8)). | *the secured party discovers after s 58 seizure or bringing action to recover a judgment that an accession that was collateral has been removed and not replaced by other goods of equivalent value and free from prior security interests, a claim may be advanced notwithstanding ss 67(2), (5) and (6) against the debtor for the value of the accession (s 67(8)). | ||
:'''NOTE:''' The “seize or sue” rule does not apply to “true leases” but ''will'' apply to “security leases” or “conditional sales agreements”. BC courts have been developing tests to distinguish between true leases and security leases. Disputes often arise over car leases. Creditors and debtors should consult with a lawyer who is familiar with this area of law when trying to figure out whether their contract is a true lease or a security lease. If the lease is a true lease the creditor has the option to seize and sue; see ''[https://www.canlii.org/en/bc/bcca/doc/2007/2007bcca144/2007bcca144.html?autocompleteStr=Daimler%20Chrysler%20Services%20Canada%20Inc%20v%20Cameron%2C%202007%20BCCA%20144&autocompletePos=1 Daimler Chrysler Services Canada Inc v Cameron'', 2007 BCCA 144]. | :'''NOTE:''' The “seize or sue” rule does not apply to “true leases” but ''will'' apply to “security leases” or “conditional sales agreements”. BC courts have been developing tests to distinguish between true leases and security leases. Disputes often arise over car leases. Creditors and debtors should consult with a lawyer who is familiar with this area of law when trying to figure out whether their contract is a true lease or a security lease. If the lease is a true lease the creditor has the option to seize and sue; see ''[https://www.canlii.org/en/bc/bcca/doc/2007/2007bcca144/2007bcca144.html?autocompleteStr=Daimler%20Chrysler%20Services%20Canada%20Inc%20v%20Cameron%2C%202007%20BCCA%20144&autocompletePos=1 Daimler Chrysler Services Canada Inc v Cameron'', 2007 BCCA 144]. | ||
=== 13. Consequences of Electing to Proceed Against Collateral === | === 13. Consequences of Electing to Proceed Against Collateral === | ||