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Perhaps I am missing something (I apologize if I am). Could you not say that the security interest was retained to ensure compliance with: 1) the obligation to secure financing; and 2) barring the fulfilment of that condition an obligation to return the truck? Therefore, the conditional sales contract had to be registered to be effective vis-a-vis the trustee in bankruptcy.

If this is correct then the court was wrong to alter the priority regime as the dealer took the contractual credit risk that the buyer would go bankrupt before he could fulfil his promise to return the truck if financing were not available.

In my opinion this is not a case for Unjust Enrichment at all as a juristic reason, i.e. the contract, justifies any loss / deprivation. In fact, the Unjust Enrichment analysis confuses the point as it tempts the courts to consider the Constructive Trust / Proprietary analysis.

Jason Neyers
Assistant Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

Andrew Tettenborn wrote:

I'm still a little sceptical about Lionel's analysis. True, there must be a restitutionary obligation in the buyer to pay for free use, etc. But was ownership of the lorry retained in order to secure it? In respect of that obligation, the seller looks to me like a bog-standard unsecured creditor.

AT