Phillippe v Phillippe et al -, 2022 NBKB 198

Citation: Phillippe v Phillippe et al - 2022 NBKB 198 Date: October 18, 2022 Docket: FC-144-21 IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF FREDERICTON BETWEEN: SUSAN GAIL YAKE PHILLIPPE, Plaintiff – and – LARRY KEITH PHILLIPPE, and 3105017 Nova Scotia Limited, Defendants Date of Hearing: June 7, 2022 Date of Decision: October 18, 2022 Subject Matter: Canadian Judgments Act – PPSA Priorities Before: Justice Terrence J. Morrison At: Burton, New Brunswick Appearances: Anthony S. Richardson and Mélanie J. Caissie for the plaintiff Larry Keith Phillippe, per se , and acting on behalf of the company

D E C I S I O N Morrison, J. I. INTRODUCTION [ 1 ] This matter involves two motions: (a)A motion by the defendants Larry Keith Phillippe (“Larry”) and 3105017 Nova Scotia Limited (the “Corporation”) requesting that the Court set aside the judgement that was issued against them, pursuant to s. 5 of the Canada Judgements Act , RSNB 2011, c. 123 (the “ CJA ”). and (b)A motion by the plaintiff, Susan Gail Yake Phillippe (“Susan”) to enforce her security interest against the personal property belonging to judgement the Corporation and/or Larry pursuant to the Personal Property Security Act , SNB 1993, c.

P-17.1 (the “ PPSA ”); II. FACTS [ 2 ] Susan and Larry were married in 1987 and separated in July 1994. At the time of the separation Susan and Larry had two young children. [ 3 ] In the aftermath of the separation litigation ensued which resulted in orders with respect to child support, spousal support (Order dated October 5, 1994, Record pg. 143) and Larry’s matrimonial property obligations (the “1999 Matrimonial Property Judgement”, Record pg. 148). The child and spousal support orders were enforced against Larry through Alberta’s Maintenance Enforcement Program (the “MEP”).

Those payments were made by Larry from October 1994 to May 1997. In May 1997 Larry disappeared from the country with his girlfriend, Shelley Damron, taking with him $268,000.00 in marital property. Larry stopped making his support payments and, together with Ms. Damron, purchased a sailboat and travelled the world’s oceans and was untraceable for many years. Larry was added to the Alberta Justice List of “Most Elusive Child Maintenance Debtors”. In 2004 government investigators located Larry in Nova Scotia, but he once again went missing shortly thereafter. In September 2005, Ms.

Damron incorporated the Corporation and was (and remains) its sole shareholder, director and officer. The Corporation subsequently purchased a restaurant in Nova Scotia. [ 4 ] In 2011 Larry brought an application against Susan in Alberta seeking retroactive variation of his support obligations. The application led to a trial which was conducted on March 12-14, 2013 (the “2013 Proceedings”). At the time of the trial Larry had not taken any steps to resolve the division of matrimonial property or the 1999 Matrimonial Property Judgement.

By order issued on September 20, 2004, the 1999 Matrimonial Property Judgment was confirmed with additional amounts for interest and costs. [ 5 ] In the meantime (sometime in 2013) the Corporation sold its assets in Nova Scotia and it, and Larry, relocated to New Brunswick where it opened a restaurant in Fredericton. [ 6 ] Following the Alberta trial of March 2013, the presiding judge, Justice A. G. Park, issued a decision which found, inter alia , that: (

a) Mr. Phillippe believed that an easy way out was to walk away from the Divorce Proceedings, his law practice, Ms. Phillippe and the Children. In 1997, he purchased around-the-world tickets for himself and his legal assistant (Ms. Damron); (

b) When he left Canada in 1997, Mr. Phillippe took with him $268,000.00 of matrimonial property; (

c) Between 1997 and 2002, Mr. Phillippe and Ms. Damron travelled to Europe, Australia, Hawaii and many other ports of call. They purchased a sailboat in Australia and sailed the Pacific Ocean, the Atlantic Ocean, and other seas; (

d) For five (5) years, Mr. Phillippe and Ms. Damron lived life financed by the monies with which they left Canada; (

e) Mr. Phillippe left Ms. Phillippe and the Children without any funds and/or support; (

f) In 2002, Mr. Phillippe and Ms. Damron landed in Halifax, Nova Scotia with approximately $80,000.00 left in savings; (

g) Mr. Phillippe’s funds were placed into the Corporation controlled by Ms. Damron; (

h) Mr. Phillippe claims to work for the Corporation and that he has no money or ability to pay; however, in reality, Mr. Phillippe is deliberately underemployed and hiding from enforcement behind the corporate veil of the Corporation;

(

i) Upon relocating from Nova Scotia to New Brunswick, Mr. Phillippe took with him $70,000.00, being the net proceeds of a restaurant owned by the Corporation; and (

j) At least eighty-five (85%) percent of the funds placed in the Corporation, including eighty-five (85%) percent of the value of the net sale proceeds of the restaurant owned by the Corporation, is the property of Mr. Phillippe. [ 7 ] The judgement granted by Justice Park following the trial dated March 14, 2013 and formally filed on May 6, 2013 (the “2013 Alberta Judgement”) includes provisions for payment of support arrears and for the division of marital property as follows: 4.

Arrears payable by the Defendant to the Plaintiff for child and spousal support are set at $713,000.00 as at February of 2012, In accordance with Exhibit “BB” of the Plaintiff’s Affidavit filed on February 14, 2012 and attached to this Judgment as

Schedule “A”; … 6.

The Court confirms and renews paragraph two and six of the Matrimonial Property Judgment dated September 20, 2004 related to the payment of matrimonial property in the amount of $86,382.56 plus interest outstanding pursuant to the Judgment Interest Act from May 2, 1997 as set out in paragraph 3 in the original Order and Matrimonial Property Judgment dated September 20, 2004 plus tax costs of $3,400.00 and costs of that Application in the sum of $500.00; [ 8 ] Larry has never made any payments to Susan with respect to the matrimonial property aspect of the 2013 Alberta Judgement. [ 9 ] In June 2017 the Corporation closed its restaurant in Fredericton and about the same time purchased a 2014 Econoline vehicle bearing serial number 1FCLE49L04HB22805 (the “Food Truck”).

At about the same time the Corporation registered the business name “Gastro Gnomes 2 Go” and began operating a food service business utilizing the Food Truck. [ 10 ] On October 20, 2020 Susan filed a writ of enforcement with the Alberta Court of Queen’s Bench (the “Writ of Enforcement”) against both Larry and the Corporation.

The Writ of Enforcement was also registered against both Larry and the Corporation under the Alberta PPSA . [ 11 ] In May 2021 Susan applied to the Court of Queen’s Bench of New Brunswick under the CJA submitting both the 2013 Alberta Judgement and the Writ of Enforcement for the purpose of enforcing the same in New Brunswick. [ 12 ] On June 18, 2021 a judgement was issued by the Clerk of the Court of Queen’s Bench of New Brunswick against Larry and the Corporation, jointly and severally, in the amount of $142,998.65 (the “NB Judgement”).

On July 19, 2021 the NB Judgement was registered pursuant to the NB PPSA against all of the present and after acquired property of the judgement debtors (the “Susan PPRS Registration”). [ 13 ] On July 20, 2021 Susan applied for a judgement debtor examination of Ms. Damron in her capacity as president of the Corporation. The Notice of Examination was served on Ms.

Damron on October 18, 2021 and stipulated that the examination would be conducted on November 16, 2021 at the then offices of the Court of Queen’s Bench of New Brunswick in Fredericton. [ 14 ] On November 1, 2021, after being served with the Notice of Examination, Ms. Damron registered her own security interests against the Food Truck with respect to an alleged shareholder loan made to the Corporation as well as a personal guarantee given by Ms. Damron to BDC in support of a loan from BDC to the Corporation. [ 15 ] At the examination held on November 16, 2021 Ms. Damron provided details of the Food Truck.

The Susan PPSR Registration was subsequently amended to include registration against the Food Truck specifically. [ 16 ] On February 14, 2022 a demand under the NB PPSA was sent to Ms. Damron demanding that she provide information with respect to her security interest in the Food Truck. Ms. Damron has refused to provide the information on the grounds that the 2013 Alberta Judgement was registered in New Brunswick contrary to the provisions of the CJA .

III. ISSUES IV. Defendants’ Motion – Enforceability of the NB Judgment [ 17 ] In the pre-motion brief filed on behalf of the defendants and in oral argument, they raise several issues which were not specifically pleaded or raised in their Notice of Motion. A review of the judgement debtor’s Notice of Motion and submissions reveals the following issues: (a)Whether the NB Judgement should be set aside pursuant to s. 11(2) (

a) of the CJA on the basis that: i.The 2013 Alberta Judgement is not a judgement against the Corporation; or alternatively; ii.The limitation period for enforcement has expired; iii.There is a technical defect in the affidavit in support of the CJA Application; iv.The 2013 Alberta Judgement is being enforced by the Director of Maintenance Enforcement of Alberta and as such, Susan does not have authority to enforce the said Judgement pursuant to s. 11(1) of the Maintenance Enforcement Act , RSA 2000, c. M-1 ; and v.The NB Judgment erroneously states the defendants are jointly and severally liable A.

Plaintiff’s Motion – PPSA [ 18 ] The following are the issues that arise with respect to the motion brought by Susan for enforcement under the NB PPSA : (a)A determination of priority of the security interests registered against the Food Truck, and entitlement to the food truck, pursuant to s. 67(

a) of the NB PPSA ; (b)Whether an order should be granted compelling Ms. Damron to comply with the demand pursuant to s. 18(8) and 18(12) of the NB PPSA . V. ANALYSIS AND DECISION A. Defendants’ Motion

(1) Is the Corporation a party to the 2013 Alberta Judgement? [ 19 ] The defendants submit that the 2013 Alberta Judgement was not made specifically against the Corporation. They point out that, although Justice Park found that the Corporation holds property belonging to Larry, he did not make any order requiring the Corporation to pay over the money. The defendants therefore submit that the NB Judgement is not a judgement against the Corporation and should be set aside pursuant to s. 11(2) (

a) of the CJA . I disagree. [ 20 ] The CJA sets out an administrative framework for the enforcement of a Canadian judgement in New Brunswick. Generally, a Canadian judgement which, or part of which, requires the payment of a fixed sum of money may be registered under the CJA (s. 3).

Upon filing a certified copy of the judgement and any other documents required by the regulation, and upon paying the prescribed fee, the Clerk shall enter judgement (s. 4 and 5). [ 21 ] In the present case, the CJA Application included for registration a certified copy of the 2013 Alberta Judgement and a certified copy of the Writ of Enforcement. Based on this filing, the Clerk issued the NB judgement. The Corporation is named as a debtor in the Writ of Enforcement. [ 22 ] The power to set aside a judgement is set out in ss. 11(2) (

a) of the CJA as follows: 11 (2)The Court may make an order setting aside a judgment entered under

section 5 , subject to any terms the Court considers appropriate, on the grounds that

(

a) the judgment or order on which the judgment is based was not a Canadian judgment or was a Canadian judgment that was registered contrary to this Act or the regulations, or … [ 23 ] The first question to be addressed is whether the 2013 Alberta Judgement/Writ of Execution registered and entered in New Brunswick is a “Canadian judgement”. The term “Canadian judgement” is defined in s. 1 of the CJA as follows: 1 The following

definitions apply in this Act. “Canadian judgment” means (jugement canadien) (

a) a final judgment or order made in a civil proceeding by a court of a province or territory of Canada other than New Brunswick, and (

b) a final order that is made in the exercise of a judicial function by a tribunal of a province or territory of Canada other than New Brunswick and that has been filed in the superior court of unlimited trial jurisdiction of the province or territory where the order was made and is enforceable as a judgment of that court. [ 24 ] I agree with the submission of Susan’s counsel that the terms “judgment” and “order” are given an expansive meaning in New Brunswick.

Rule 1.04 of the Rukes of Court defines “judgement” as a “formal judgment signed and entered by a clerk or Registrar and includes a decree nisi and a decree absolute”. The definition of “judgment” in the Enforcement of Money Judgments Act, SNB 2013, c.23 includes the following: “judgment” means a judgment or order which, or part of which, requires the payment of a fixed sum of money, and which is (judgment) (

a) a judgment of the court, of The Probate Court of New Brunswick, of The Court of Appeal of New Brunswick or of the Supreme Court of Canada, … (

d) an order, determination or certificate that has been issued by any other court, tribunal or competent authority, whether inside or outside the Province, and has, by virtue of another Act, been filed with the court and become enforceable as a judgment of the court [Emphasis added] [ 25 ] Merriam-Webster’s Online Dictionary defines the word “writ” as follows: An order or mandatory process in writing issued in the name of the sovereign or of a court or judicial officer commanding the person to whom it is directed to perform or refrain from performing

an act specified therein [ 26 ] Larry argues that the Writ of Enforcement is not a judgement but an enforcement tool. First, he points to s. 27 of the Civil Enforcement Act , RSA 2000, c-15 which provides that a writ of enforcement is only in force while the judgement supporting it is in force. He argues that this is a strong indication that a writ of enforcement is subsidiary to a judgement and thus cannot itself be a judgement. Similarly, Larry refers to Rule 9.1(2)(

b) of the Alberta Rules of Court which provides that every judgement requires the name of the judge or master who issued it and therefore a writ signed by a Clerk cannot be a judgment. I reject these arguments. [ 27 ] The Writ of Enforcement was issued pursuant to s. 25.1(1) of the Civil Enforcement Act , supra, which defines “writ

proceedings” as “any action, step or measure authorized by this Act to be taken for the purpose of enforcing a money judgement” (s. 1(1)(tt)). The 2013 Alberta Judgement, together with the Writ of Enforcement, formed part of the CJA application package submitted to theClerk and upon which the NB Judgement was issued. The Writ of Enforcement flowed directly from the 2013 Alberta Judgement andwas intended to enforce the matrimonial property aspect of the 2013 Alberta Judgement.

Despite the fact that the Corporation was notnamed in the 2013 Proceedings, it was named in the Writ of Enforcement and the clear intention was to enforce the 2013 AlbertaJudgement. In my view, the Writ of Enforcement meets the definition of “Canadian judgement” as defined by the CJA and theCorporation is a party to that judgement. The Writ of Enforcement forms part of the extra-provincial judgement(

s) upon which the NBJudgement issued. [28] Even if the Writ of Enforcement is not a “judgement” within the meaning of the CJA, the 2013 Alberta Judgement clearly is. Larry argues that the Corporation is not a named party in the 2013 Alberta Judgement and that there was no order made against theCorporation. I disagree. The 2013 Proceedings arose because of Larry’s disappearance for fourteen years and his failure to make anypayments of either spousal or child support or settle the marital property issue. Of course, the Corporation is not a named party to thedivorce proceedings as it is not one of the spouses.

Of necessity (Larry’s disappearance) the 2009 Marital Property Judgment was madeex parte.

Nonetheless, the 2013 Alberta Judgement makes a clear and fresh order with respect to the marital property (Record, p. 173lines 27-32). [29] Furthermore, it is clear from a review of the 2013 Alberta Judgement and the official transcript (Record, pps.162-182) thatJustice Park found that Larry’s funds were placed into the Corporation, that at least 85% of the Corporation’s assets in reality belong toLarry, that Larry is attempting to hide behind the corporate veil of the Corporation and that he is intentionally under-employed andhiding from enforcement.

In my view, the 2013 Alberta Judgement is tantamount to an order/judgement against both Larry and theCorporation. [30] Even if the Writ of Enforcement does not meet the definition of “Canadian judgement” the law permits the enforcement of the2013 Alberta Judgement (and the NB Judgement) against entities which are not named parties. Rule 9.19(

b) of the Alberta Rules ofCourt provides that a judgement may be enforced against a non-party if that person is subject to a judgement or order granted in respectof the action. The Enforcement of Money Judgements Act permits seizure of property from a third party in possession.

Similarly, Rule61.11 of the New Brunswick Rules of Court provides as follows: 61.11(1) Where a judgment is made for the benefit of a person who is not a party, that person may enforce obedience to the judgment bythe same process as if he were a party. 61.11(2) Where a judgment may be enforced against a person who is not a party, that person shall be liable to the same process forenforcing obedience to the judgment as if he were a party. [31] In Black v. Norris, 2013 NBCA 62 one of the grounds of appeal was that the trial judge erred in making an order against anon-party.

In that case the trial judge ordered a land surveyor, who was not a party to the action, to prepare and file a subdivision plan athis own cost in order to rectify the description of a parcel of land. Although the Court concluded that it was not required to determinethe issue, it made the following comments at para. 18 regarding Rule 61.11: 18 As a general rule, it is well-accepted that a judgment or order binds only a person who was a party to the proceeding in which thejudgment or order was given (see Linda S. Abrams & Kevin P.

McGuinness, Canadian Civil Procedure Law, 2nd ed. (Markam, Ont:LexisNexis, 2010) at §19.203). At the same time, Rule 61.11(1) of the Rules of Court provides that a judgment made for the benefitof a non-party may be enforced by that person as if that person were a party. Correlatively, Rule 61.11(2) states that a judgmentmay be enforced against a person who is a non-party in the same manner as if the person were a party. [[Emphasis added] [32] In his written submission Larry argues that the Corporation was never given notice of the 2013 Proceedings in Alberta.

Susan, on the other hand, submits that the Corporation received notice when Larry received notice. In short, service on Larry amountedto service on the Corporation. By way of rejoinder, Larry submits that the Corporation is not his alter ego, and that Susan is attemptingto improperly pierce the corporate veil of the Corporation. [33] In support of his position, Larry referred the Court to Wildman v. Wildman, (ON CA), 2006 CarswellOnt6042.

In that case the Court pierced the corporate veil in a family law context where it was shown that the husband, who had completedominion and control over the Corporation, was using it to shield assets from his support obligations. Larry submits that since the sole

shareholder of the Corporation is Ms. Damron he is not in control of the Corporation and the corporate veil should not be pierced. Ireject this argument for several reasons. [34] First, Wildman does not confine piercing the corporate veil to only cases where the debtor is in absolute control. In the familylaw context, the scope of intervention is much broader. At para. 23 the Court states: 23 The principle of the separate legal personality of a corporation is an important one. However, it is not an absolute principle.

In myview, a particularly clear, concise and useful description of the principle and its limits was articulated by Laskin J.A. in 642947 OntarioLtd. v. Fleischer (2001), (ON CA), 56 O.R. (3d) 417 (Ont. C.A.) at paras. 67-68 ("Fleischer"): To pierce the corporate veil is to disregard the separate legal personality of a corporation, a fundamental principle of corporate lawrecognized in Salomon v. Salomon & Co., [1897] A.C. 22. Only exceptional cases — cases where applying the Salomon principlewould be "flagrantly" unjust — warrant going behind the company and imposing personal liability. Thus, in Clarkson Co.

Ltd. v.Zhelka et al., (ON SC), [1967] 2 O.R. 565 at 578 (H.C.J.), Thompson J. held that instances in which the corporate veilhas been pierced "represent refusals to apply the logic of the Salomon case where it would be flagrantly opposed to justice." Similarly,Wilson J. observed in Kosmopoulos v. Constitution Insurance Co., (SCC), [1987] 1 S.C.R. 2 at 10, that the law onwhen the corporate veil can be pierced "follows no consistent principle.

The best that can be said is that the 'separate entities'principle is not enforced when it would yield a result 'too flagrantly opposed to justice, convenience or the interests of theRevenue': L.C.B. Gower, Modern Company Law (4th ed. 1979) at p. 112." Typically, the corporate veil is pierced when the company is incorporated for an illegal, fraudulent or improper purpose. But it can alsobe pierced if when incorporated "those in control expressly direct a wrongful thing to be done". Clarkson v. Zhelka at 578.

Sharpe J. setout a useful statement of the guiding principle in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1986), (ON SC), 28 O.R. (3d) 423 at 433-34 (Ont. Ct. (Gen. Div.)), aff'd [1997] O.J.

No. 3754 (C.A.): "the courts will disregardthe separate legal personality of a corporate entity where it is completely dominated and controlled and being used as a shield forfraudulent or improper conduct." [Emphasis added] [35] Further, at para. 38 the Court states: 38 It is clear from this passage that a company need not have been created with an improper purpose in mind to justify piercing thecorporate veil; it is sufficient that the corporation is used for an improper purpose.

In a matrimonial context, what this must meanis that the snapshot of the company at the time of incorporation is probably nothing more than a starting point.

The real focusmust be on the relationship between the company and the controlling spouse and how the spouse is using the corporation afterthe parties have separated and before the financial issues are resolved. [Emphasis added] [36] Finally, at para. 49 the Court states: 49 In the end, although a business person is entitled to create corporate structures and relationships for valid business, tax and otherreasons, the law must be vigilant to ensure that permissible corporate arrangements do not work an injustice in the realm offamily law.

In appropriate cases, piercing the corporate veil of one spouse's business enterprises may be an essential mechanismfor ensuring that the other spouse and children of the marriage receive the financial support to which, by law, they are entitled.The trial judge was correct to recognize that this was such a case. [Emphasis added] [37] In Aubin v. Petrone, 2020 ABCA 13 the Alberta Court of Appeal recognized that courts have applied “a somewhat morerelaxed approach” to the corporate veil in family law cases based on principles of fairness.

At para. 50 it states: 50 In all of the family law cases discussed above, the issue was how to enforce a legal entitlement, or more precisely, how to preventit from becoming unenforceable. Where appropriate, the veil was lifted to prevent a loss from being realized. This process is consistentwith the intention of Kosmopoulos, which states at page 12 that corporate separateness can be disregarded "when it would yield" — notwhen it has yielded — a flagrant injustice. The veil can be lifted "to prevent conduct akin to fraud that would otherwise unjustlydeprive claimants of their rights": Gregorio v.

Intrans-Corp. (1994), (ON CA), 18 O.R. (3d) 527 (Ont. C.A.) at

536, (1994), 115 D.L.R. (4th) 200 (Ont. C.A.). [Emphasis added] [ 38 ] Not to pierce the corporate veil in this case would yield a “flagrant injustice” unjustly denying Susan of her matrimonial property rights. Recall, that Justice Park has already determined that Larry is hiding behind the corporate veil of the Corporation.

I therefore conclude that the Food Truck, being an asset of the Corporation which, in reality, is an asset of Larry, is subject to the procedures available for enforcement of the NB Judgement. [ 39 ] Having concluded that the corporate veil is pierced, it follows that the Corporation received notice of 2013 Proceedings when Larry received notice. Accordingly, all of Larry’s arguments with respect to s. 6(1) of the CJA (default proceedings) must fail.

(2) Limitation Period [ 40 ] In his brief and oral submissions Larry argued that Susan failed to take steps to enforce the 1999 Matrimonial Property Judgement (renewed and restated 2004) and the 2013 Alberta Judgement is now unenforceable. In support of his position Larry refers to s. 9 of the CJA which provides that a Canadian judgement shall not be registered later than ten years after the date it became enforceable in the province where it was made.

Larry submits that the original 1999 Matrimonial Property Judgement became enforceable in 1999 and the limitation period has expired. [ 41 ] I have concluded that Justice Park made a fresh matrimonial property order in the 2013 Alberta Judgement. Accordingly, the limitation period expired on May 6, 2023 (10 years after the date the 2013 Alberta Judgement was formally filed). The NB Judgement was issued on June 19, 2021, well within the ten-year limitation period.

(3) Technical Defect [ 42 ] Larry submits that the affidavit in support of the CJA application did not meet the requirements of s. 5 of the CJA and s. 3(1) (1) of the regulation. There is no merit to this argument. The Record clearly discloses that the requirements have been satisfied (Record, pg. 81, paras. 9, 10 and 11; Record, pg. 91; Record, pgs. 98-103).

(4) Not Enforceable Pursuant to the Maintenance Enforcement Program [ 43 ] Larry argues that the 2013 Alberta Judgement cannot be enforced by Susan. He submits that pursuant to s. 11 of the Maintenance Enforcement Act (Alberta) the Alberta Director of Maintenance Enforcement has exclusive jurisdiction to enforce it. I disagree. [ 44 ] First, the Maintenance Enforcement Act deals only with maintenance orders for support or alimony. In the present case, it is clear that what Susan seeks to enforce is only the matrimonial property aspect of the 2013 Alberta Judgement.

The 2013 Alberta Judgement as well as the official transcript make a clear distinction between the support orders and the matrimonial property judgement. Second, the evidence is that Susan never received any monies with respect to the 1999 Matrimonial Property Judgement or the matrimonial property aspect of the 2013 Alberta Judgment. In fact, the MEP confirmed to Susan that that aspect of judgement is not being enforced through MEP nor is Susan entitled to enforce it through the MEP (Record, pgs. 282-283).

(5) Joint and Several [ 45 ] Larry argues that Susan erred in entering the NB Judgement as a joint and several liability of Larry and the Corporation. Larry submits that the 2013 Alberta Judgement states that 85% of the funds placed into the Corporation were his property. Counsel for Susan concedes that the Corporation is liable for only 85% of the judgment. In my view, the NB Judgement should be amended to reflect the reality that the Corporation is only 85% liable for the NB Judgement. I exercise my discretion and the NB Judgement is hereby amended accordingly.

[ 46 ] In the circumstances of the present case the issue is moot. The NB Judgement is in the amount of $142,998.63 and 85% of that is $121,548.85. The Food Truck has an appraised value of $35,000 (Record, pg. 371). [ 47 ] Larry raised other issues not specifically addressed above. I have considered them and reject them as having no merit. B. Plaintiff’s Motion - PPSA [ 48 ] The facts relevant to Susan’s PPSA motion can be summarized as follows: (

a) On July 19, 2021, a Notice of Judgment with respect to the NB Judgment was registered, pursuant to subsection 21(1) of the Enforcement of Money Judgments Act ; (

b) In August 2021, Ms. Damron received notice of the registration; (

c) On October 20, 2021, Ms. Damron was served with a copy of the order to attend, which specifically ordered Ms. Damron to bring to the judgment debtor examination, among other things, details of the Food Truck, including registration and insurance documents; (

d) On November 1, 2021, Ms. Damron registered her own security interest against the Food Truck, with serial number, referencing a shareholder loan made to the Corporation, as well as a personal guarantee to BDC in support of the loan from BDC to the Corporation; (

e) On November 16, 2021, at the examination, Ms. Damron provided copies of the Food Truck’s insurance documents, which included its serial number; (

f) On November 19, 2021, upon learning the Food Truck’s serial number, the PPSA registration of the NB Judgment was amended to include the serial number. [ 49 ] In her motion, Susan seeks an order confirming that she has a priority security interest in the Food Truck and entitlement to it pursuant to s. 67(

a) of the PPSA . Susan also seeks an order that she, or her agents, be permitted to take possession of the Food Truck and dispose of it pursuant to s. 59 of the PPSA . [ 50 ] There is no dispute among the parties that the Food Truck is a “serial numbered good” as defined in s. 2 of the PPSA general regulation, N.B. Reg. 95-57 (the “ PPSA Reg.”). As such, s. 35(4) of the PPSA provides that a security interest is only perfected when a financing statement relating to the security interest is registered with a description of the good by serial number.

Larry submits that Susan did not register the security interest with a description of the Food Truck by serial number until November 19, 2021 while Ms. Damron registered her security interest on November 1, 2021. Larry argues that Ms. Damron’s security interest should therefore take priority. [ 51 ] I have considerable doubt that Ms. Damron has a valid security interest.

She claims her security interest arises in two ways: (1) security for shareholders loans to the Corporation totalling $75,248.46; and (2) security for personal guarantee of a loan from BDC that BDC declined to register pursuant to the PPSA . [ 52 ] Other than entries in the Corporation’s minute book with respect to the shareholders loans, Ms. Damron and the Corporation provided no evidence or documentation (bank accounts, bank transfers, etc.) to demonstrate that Ms. Damron actually advanced funds to the Corporation.

One might consider her claim to a security interest by virtue of the shareholders loans as a bald assertion. Further, I am baffled as to how Ms. Damron can appropriate a security interest belonging to BDC which it chose not to perfect. In any event, it is not necessary to determine the issue. I will explain. [ 53 ] The PPSA imposes different requirements and priorities for judgement creditors who register their judgements pursuant to the Enforcement of Money Judgements Act as is the case here. Section 20(1)(

a) of the PPSA provides as follows:

(1) An unperfected security interest in collateral is subordinate to the interest of (

a) a judgment creditor who has registered a notice of judgment in the Registry pursuant to subsection 21(1) of the Enforcement of

Money Judgments Act if the security interest is unperfected when the notice is registered … [ 54 ] At the time Susan registered her Notice of Judgement under the PPSA pursuant to s. 21(1)(

a) of the Enforcement of Money Judgements Act on July 19, 2021 Ms. Damron had not yet registered her security interest. It does not matter that Susan did not identify the serial number of the Food Truck until her amended PPSA on November 19, 2021. That is because a judgement creditor who registers a notice of judgement authorized by s. 21(1) of the Enforcement of Money Judgements Act is not required to enter a description of equipment by serial number ( PPSA Regulation sections 37, 45(1)(2)). [ 55 ] In CIBC v. CTV Television , 2005 NBQB 429 the Court adopted the following passage of Catherine Walsh’s text to explain the significance of the priority provided by s. 20(1)(

a) of the PPSA : [24] In her text, An Introduction to the New Brunswick Personal Property Security Act, Professor Catherine Walsh writes at pages 110 and 111: “Priority between secured parties and judgment creditors under the PPSA The most significant difference between s. 20 of the New Brunswick Act and its counterparts in other PPSA jurisdictions is the rule governing priority between a security interest taken under the Act and the interest of a judgment creditor.

Under the Ontario and western Acts, an unperfected security interest is subordinate to the interest of a judgment creditor only if the judgment creditor has pursued judgment enforcement proceedings to the point of seizure or its equivalent before the security interest is perfected. However, when New Brunswick adopted its PPSA, reform of judgment enforcement law was in the air, enabling it to take the next logical step in the evolution of the law governing priority between judgment creditors and secured parties. S. 20(1)(

a) abandons the traditional linkage between the priority rights of judgment creditors and the judgment enforcement process. Judgment creditors are not required to even initiate enforcement proceedings, let alone take that process to the point of seizure, in order to assert priority over an unperfected security interest. All they need do is register notice of their judgment in the Personal Property Registry, something which amendments to the Creditors Relief Act, proclaimed in force at the same time as the PPSA, permits them to do as soon as judgment is obtained.

Once notice of the judgment is registered, the debtor’s present and after acquired personal property is bound in the amount of the judgment. Registration binds the property for the amount of the judgment, costs and accrued interest, less any amounts paid to satisfy the judgment. Provided the notice of judgment is registered before the security interest is perfected, s. 20(1)(

a) of the PPSA gives priority to the interest of the judgment creditor. A registered judgment has priority over an unperfected security interest regardless of whether the security interest attaches before or after the judgment is registered. In cases where the security interest attaches before the judgment is registered, but is not yet perfected in the procedural sense of registration or taking possession, the Creditors Relief Act expressly provides that the registered judgment has priority. In cases where the security interest does not attach until after the judgment is registered, the security interest is postponed by PPSA s. 20(1)(

a) even if the security interest was registered before the judgment was registered. This is because, under s. 19, a security interest is perfected only when it has attached and all procedural perfecting steps have been completed. Since s. 20(1)(

a) subordinates an unperfected and not merely an unregistered security interest to a registered judgment, both attachment and registration of the security interest must precede the registration of the judgment in order for the security interest to have priority. This result is justified because it is attachment and not registration that gives the secured party its proprietary interest in the debtor’s property.

In contrast, the judgment creditor has done everything possible to “perfect” his or her interest – sued the debtor to judgment and then registered that judgment”. [Emphasis added] [ 56 ] When Susan’s Notice of Judgement was registered under the PPSA on July 19, 2021 Ms. Damron’s security interest (if any) was unperfected. Accordingly, Susan’s PPSA registration takes priority over Ms.

Damron’s interest in the Food Truck. [ 57 ] Given my conclusion with respect to Susan’s PPSA priority, it is not necessary to address her alternative request for relief concerning compliance with the demand issued pursuant to s. 18(8) and 18(12) of the PPSA . VI. CONCLUSION

[ 58 ] The motion brought by the defendants (Larry and the Corporation) is dismissed. [ 59 ] The motion brought by the plaintiff (Susan) is granted and it is hereby ordered that: (

a) the plaintiff has a priority with respect to the security interest in the personal property of 3105017 Nova Scotia Limited (the “Corporation”), namely: one (1) 2004 Ford Econoline (Utility Vehicle) bearing serial number 1FCLE49L04HB22805 (the “Vehicle”) pursuant to

section 67(

a) of the Personal Property Security Act , SNB 1993, c P-7 (the “ PPSA ”); (

b) the Corporation shall, immediately upon request, inform the plaintiff, or her agents, of the specific location of the Vehicle; (

c) the plaintiff, or her agents, shall be permitted to enter the property of the Corporation, located at 17 Birch Crescent, Fredericton, New Brunswick, or any other location where the Vehicle is believed to be located, to take possession of the Vehicle, in accordance with section 58(2) of the PPSA ; (

d) the Corporation, it’s agents and employees shall be restrained from interfering with or otherwise preventing the plaintiff, or her agents, from taking possession of the Vehicle; and (

e) the plaintiff shall be permitted to dispose of the Vehicle, without notice, in accordance with

section 59, including but not limited to subsections 59(2), 59(3), 59(5) and 59(18)(

f) of the PPSA . [ 60 ] Having been successful with respect to both motions the plaintiff (Susan) is entitled to costs. The defendants (jointly and severally) are hereby ordered to pay costs to the plaintiff in the amount of $2,500. ______________________________ Terrence J. Morrison, J.C.Q.B.