ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 26032/12
DATE: 2013-10-15
BETWEEN:
MARIA STRUIK
Applicant
– and –
DIXIE LEE FOOD SYSTEMS LTD., DIXIE LEE OF CANADA INC., DIXIE LEE CAPITAL CORPORATION and JOSEPH MURANO
Respondent
Mr. Reynolds, Counsel for the Applicant
Ms. Dhillon, Counsel for the Respondent
HEARD: August 19, 2013
varpio, j.
ADDENDUM
[1] On October 1, 2013, I received an email from counsel for the plaintiff indicating that I failed to address an argument contained in his factum regarding the applicability of s.25 of the PPSA to this case. Counsel for the defendants does not oppose the release of this Addendum.
S. 25 PPSA
[2] As noted in my previous decision, s. 25 of the PPSA states:
Perfecting as to proceeds
- (1) Where collateral gives rise to proceeds, the security interest therein,
(a) continues as to the collateral, unless the secured party expressly or impliedly authorized the dealing with the collateral free of the security interest; and
(b) extends to the proceeds. R.S.O. 1990, c. P.10, s. 25 (1); 2000, c. 26, Sched. B, s. 16 (3).
Idem
(2) Where the security interest was perfected by registration when the proceeds arose, the security interest in the proceeds remains continuously perfected so long as the registration remains effective or, where the security interest is perfected with respect to the proceeds by any other method permitted under this Act, for so long as the conditions of such perfection are satisfied. R.S.O. 1990, c. P.10, s. 25 (2).
Idem
(3) A security interest in proceeds is a continuously perfected security interest if the interest in the collateral was perfected when the proceeds arose. R.S.O. 1990, c. P.10, s. 25 (3).
[3] Ms. Struik’s counsel suggested in his factum that, when Mr. Murano signed the Minutes (defined in the previous judgment), he effectively consented to any future transfer of franchise agreements under the default provisions contained therein. Given the operation of s. 25 of the PPSA, Mr. Murano’s security interest would thus have no priority over that held by Ms. Struik with respect to any franchise agreements transferred pursuant to the Minutes.
[4] The defendants’ factum suggested that this argument was out of time.
[5] As enunciated in my previous judgment, Mr. Murano’s signature on the Transfer Agreements (previously defined) constitutes personal consent to the transfer of the franchise agreements described therein. The logic described in paragraphs 42 to 47 of my previous judgment also governs my analysis regarding the applicability of s.25 of the PPSA. As such, I accept that Mr. Murano’s signature on the Minutes constitutes personal consent to the transfer of franchise agreements contemplated by the relevant default provisions.
[6] Nevertheless, the record before me only contains evidence of two franchise agreements (outlined in the Transfer Agreements). While I am willing to state that s. 25 of the PPSA demands that that Mr. Murano’s security interest has no priority over Mrs. Stuik’s security interest with respect to the two franchise agreements in evidence, I am unwilling to make a broader finding regarding Ms. Struik’s priority with respect to franchise agreements that are not in evidence.
[7] I am willing to entertain costs submissions as described in my previous judgment 15 days from the release of this Addendum.
Varpio, J.
Released: 2013-10-15
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARIA STRUIK
- and -
DIXIE LEE FOOD SYSTEMS LTD., DIXIE LEE OF CANADA INC., DIXIE LEE CAPITAL CORPORATION and JOSEPH MURANO
ADDENDUM
Varpio, J.
Released: ** 2013-10-15**