COURT OF APPEAL FOR ONTARIO
RE: UNISOURCE CANADA INC., successor to ABITIBI-PRICE
INC., carrying on business under the firm name and
style of BARBER-ELLIS FINE PAPERS/PAPETERIE BARBER-ELLIS
(Appellant) v. HONGKONG BANK OF CANADA, ANDREW CSANADY,
JANNE CSANADY, BRUCE BRAID, THOMAS BULL, LANCE
CRAWFORD, TIMOTHY DECKER, ROBERT DOCKERAY,
BARBARA BRAID, BARBARA BULL, WENDY CRAWFORD,
ROBIN DECKER, ANNE DOCKERAY, and PEAT MARWICK
THORNE INC. (Respondents)
AND RE: UNISOURCE CANADA, INC. (Appellant) v. ANDREW
CSANADY, JANNE CSANADY also known as JANNE D. E.
JANKE, BRUCE BRAID, THOMAS BULL, LANCE
CRAWFORD, TIMOTHY DECKER, ROBERT DOCKERAY,
BARBARA BRAID, BARBARA BULL, WENDY CRAWFORD,
ROBIN DECKER and ANNE DOCKERAY (Respondents)
BEFORE: FINLAYSON, LABROSSE and O'CONNOR JJ.A.
COUNSEL: R. McLaren and C. F. MacKewn,
for the appellant
H. Daley for the respondents Hongkong Bank of
Canada and
Peat Marwick Thorne Inc.
D. Snider for all other respondents
HEARD: March 24, 2000
On appeal from the decisions of Mr. Justice R. D. Reilly dated
November 20, 1998 and July 23, 1999
E N D O R S E M E N T
1We agree essentially with and adopt the extensive and
considered reasons of the trial judge. His findings are based on
the evidence and reflect no error in law.
2More specifically, there was ample evidence to support his
finding that the corporate reorganization of Johanns Graphics
Inc. formed a proper basis for a valid security interest. As to
the appellant's PMSI priority, the trial judge was correct, on
the basis of the agreed facts, in concluding that a portion of
each account receivable equal to the unpaid price of the paper
supplied by the appellant for the product that gave rise to that
receivable constituted the proceeds of the PMSI and ranked first.
If (as is now conceded) the receivable was paid and the sum
received deposited in Johanns Graphics Inc.'s general bank
account, the proceeds of that particular collateral could no
longer be traced and the security interest disappeared. It could
not be carried forward and re-asserted in subsequent transactions
3Except to the extent of the appellant's PMSI priority, the
order of priority was the Bank, the Owners Group and the
appellant.
4There are no sustainable grounds of appeal against the Bank
and Peat Marwick Thorne Inc.
5The appellant recovered approximately $66,000. The money
has been held in an interest-bearing account. To deprive the
appellant of this accrued interest would represent a windfall to
the individual respondents. The appeal is allowed to the extent
of awarding the interest on the amount recovered as both pre-
judgment and post-judgment interest.
6We see no basis to interfere with the exercise of the trial
judge's discretion in dealing with costs.
7The appeal is otherwise dismissed with costs.
(signed) "G. D. Finlayson J.A."
(signed) "J. M. Labrosse J.A."
(signed) "D. O'Connor J.A."