But Justice Bocock did not consider the effect of s. 67 of the Financial Administration Act. That section says:
"67. Except as provided in this Act or any other Act of Parliament,
(a) a Crown debt is not assignable; and
(b) no transaction purporting to be an assignment of a Crown debt is effective so as to confer on any person any rights or remedies in respect of that debt."
And, s. 66 defines "Crown debt" to mean "any existing or future debt due or becoming due by the Crown, and any other chose in action in respect of which there is a right of recovery enforceable by action against the Crown".
(There are other restrictions on assignments of Crown debts too.)
To reach his conclusion that the secured creditors could appeal for the bankrupt, he had to suppose that the bankrupt had assigned the secured creditors its interest in the ITC refunds. He says:
" In the absence of any directly applicable case law to the contrary, the prior assignment of the Bankrupt’s interest in certain property to the secured creditors, as recognized by the Trustee, removes the property described in this paragraph from the Trustee’s authority: upon assignment it is no longer “property of the bankrupt”. ...
" Legally, the secured creditors would be the parties exclusively entitled to the proceeds arising from any ITCs emanating from a successful appeal. It is legally certain that no other party could be: the Trustee has already confirmed this, as the only other entitled party, by releasing the collateral charged by the GSA to the secured creditors. Since entitlement to such proceeds subsists in the secured creditors through the GSA’s valid assignment, section 29 affords this Court the power to provide the procedural remedy to these validly, subsisting rights in the choses in action which comprise the alleged ITCs exclusively collectible from the Respondent through an appeal before this Court."
So, though Justice Bocock looked generally at the GSA, which does strive to assign a security interest in receivables, he didn't consider the effect of this FAA restriction. Is his decision right then?
See International Hi-Tech Industries Inc. v. The Queen, (2014 TCC Bocock)