May 25, 1923 (14th Parliament, 2nd Session)

LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

In one province, which I know most, the province of Quebec, the privilege of the landlord in some cases extends to twenty-eight months' rent. In a large city like Montreal, where rents are pretty high, we can conceive of cases where a landlord not only will rank as a privileged creditor and walk away with everything, but will be a creditor to a considerable extent even after the entire estate is wound up. Let me read section 2,005 of the Civil Code:
The privilege of the lessor extends to all rent that is due or to become due under a lease in authentic form.
But in the case of the liquidation of property abandoned by an insolvent trader who has made an abandonment in favour of his creditors, the lessor s privilege is restricted to twelve months' rent due and the rent to become due during the current year if there remain more than four months to complete the year; if there remain less than four months to complete the year, to the twelve months' rent due and to the rent of the current year and the whole of the following year.
That is to say, the landlord would be entitled to sixteen months' accelerated rent and twelve months' past due rent. Where the trader has been paying $1,500 or $2,000 a month rent, this privilege claim will run up to some $40,000 or $50,000 in some cases, whereas the whole estate might not be worth more than $15,000 or $20,000. I think the

Bankruptcy Act
minister ought to consider this amendment carefully before finally putting it through, because there is no reason so far as I can see why the landlord should be placed in this exceptional position. The creditors are all more or less in the same boat. A merchant who has sold goods to a trader expects to get paid, otherwise he would not have given him credit, and when the trader makes an assignment this class of creditor ought reasonably to get something out of the wreck, instead of the landlord being given the preference and perhaps gobbling up the entire estate. To my mind it is a relic of feudalism that the property-owner should have everything and the ordinary creditor nothing. In that respect I am opposed to the bill.
I am in favour of the other amendments. I am glad that the rights which a married woman had before the passing of this act are to be restored. Under the act of 1920 a married woman who has advanced money to her husband has no claim whatever against his estate until all the creditors are paid in full, which means that her claim is wiped out. We can easily conceive of a husband in trade who upon becoming financially embarrassed would naturally look to his wife to lend him whatever means she possessed. She would be the very first to whom he would apply for assistance. Simply because she is a married woman she gets absolutely nothing, whereas if she happened to be unmarried or living in concubinage with the debtor she would be entitled to her full rights as an ordinary creditor. I think it was a mistake on the part of this parliament to enact such legislation, and I am glad to see that under the proposed amendments this injustice is removed.

Topic:   BANKRUPTCY ACT AMENDMENT
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