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Legal Blog

Bulky at SCC

Posted on April 1, 2004 | Posted in Lawyers' Issues

In our newsletter of February 2002, we discussed the Ontario Court of Appeal decision in National Trust Co. v. H & R Block Canada Inc. That case stood for the proposition that if a purchaser purchased the assets of a business without first obtaining a satisfactory bulk sales affidavit or a court order, the purchaser was liable to pay the debt owed to the creditors up to the full value of the purchase price. This proposition continued to apply even though, in the particular case, the creditors would have received nothing had the purchaser and vendor gone to court to get approval for the sale.

The Supreme Court of Canada reversed the Ontario Court of Appeal at (2003) SCC 66. It held that since the creditor would have received no money from the sale had the purchaser obtained a court order under the Bulk Sales Act, it could not receive damages for the purchaser’s failure to do so.

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