The appellants, various book publishers, appealed a decision determining that they did not have priority over the Bank of Nova Scotia regarding accounts receivable collected by the distributor, General Distribution Services Inc. (GDS).
The publishers argued that because they retained title to the books, they had priority.
The Court of Appeal dismissed the appeal, finding that the arrangement between the publishers and GDS did not require the segregation of funds, allowing GDS to mingle the proceeds with its own money.
Consequently, the relationship was one of debtor and creditor, not trustee and beneficiary, and the publishers did not hold a priority interest.
