LIENS - Priority of lien - Owner’s remedies - Demand for surrender of possession

Law360 Canada (July 11, 2022, 10:07 AM EDT) -- Application by the debtor for a replevin order. The debtor said that the notice-of-intention-filing triggered a stay of proceedings in s. 69(1) of the Bankruptcy and Insolvency Act (“Act”), barred the continued possession of the property, that the “possession for the purpose of recovery” exception did not apply and that as a result, the property must be returned to it. The lien holders argued that their continued possession of the property did not run afoul of the law and that, in any case, s. 69(2) of the Act sheltered them. 915 acknowledged both lien holders as secured creditors. Its argument was premised on the mere possession by the lien holders of the property in question being a “remedy”. On that premise, 915 focused on whether the lien holders qualified for the exception in s. 69(2). In 915’s view, neither lien holder held that property for realization, making the exception unavailable. The net result was that the lien holders must surrender possession of the property to it. In the lien holders view, 915 jumped into a series of arguments missing its linchpin; namely, that the lien holders were pursuing “remedies” or an “action, execution or other proceedings” to recover their debt claims....

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