Skip to main content
The Bulk Sales Act
This is an unofficial archived version of The Bulk Sales Act
as enacted by SM 1987-88, c. 9 on July 17, 1987.
This search displays only the paragraphs with hits.
Match: Search:

You can use wild cards:

'*' allows for 0 or more characters (eg. ceas* will match 'cease', 'ceased', 'ceasing' and 'ceases')

'?' allows for 0 or 1 character (eg. cease? will match 'cease', 'ceases' and 'ceased', but not 'ceasing')

This search is not case sensitive.


R.S.M. 1987, c. B100

The Bulk Sales Act

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

Definitions.

1

In this Act,

"creditor" means a person to whom the vendor of stock is indebted, whether or not the debt is due, and includes a surety and the endorser of a promissory note or bill of exchange who would, upon payment by him of the debt, promissory note or bill of exchange in respect of which the suretyship was entered into or the endorsement was given, become a creditor of such vendor; ("créancier")

"proceeds of the sale" includes the purchase price or consideration payable to the vendor, or passing from the purchaser to the vendor, on a sale in bulk, and the moneys realized by a trustee under a security, or by the sale or other disposition of any property, coming into his hands as the consideration, or part of the consideration, for the sale; ("produit de la vente")

"purchaser" includes a person who gives to a vendor real or personal property in barter or exchange for a stock in bulk; ("acheteur")

"sale", whether used alone or in the expression "sale in bulk", includes a transfer, conveyance, barter or exchange and an agreement to sell, transfer, convey, barter or exchange; ("vente")

"sale in bulk" means a sale of a stock, or part thereof, out of the usual course of business or trade of the vendor or of substantially the entire stock of the vendor, or of an interest in the business of the vendor; ("vente en bloc")

"stock" means

(a) stock of goods, wares, merchandise or chattels ordinarily the subject of trade and commerce;

(b) the goods, wares, merchandise or chattels in which a person trades, or that he produces or that are the output of, or with which he carries on, a business, trade or occupation; ("stock")

"stock in bulk" means any stock or portion thereof that is the subject of a sale in bulk; ("stock en bloc")

"trustee" means an authorized trustee under the Bankruptcy Act (Canada) appointed for the bankruptcy district wherein the stock of the vendor or some part thereof is located, or the vendor's business or trade or some part thereof is carried on at the time of the sale in bulk thereof; or any person named as trustee by the vendor or by the creditors of the vendor in their written consent to a sale in bulk; or any person appointed as trustee under section 13; ("syndic")

"vendor" includes a person who barters or exchanges stock in bulk with another person for other property, real or personal. ("vendeur" )

Persons to whom this Act applies.

2

This Act applies only to sales in bulk by,

(a) persons who, as their ostensible occupation or part thereof, buy and sell goods, wares or merchandise ordinarily the subject of trade and commerce;

(b) commission merchants;

(c) manufacturers;

(d) proprietors of hotels, rooming houses, restaurants, motor vehicle service stations, oil or gasoline stations or machine shops.

Scope of Act

3

Nothing in this Act applies to, or affects, a sale by an executor, administrator, receiver, assignee or trustee for the benefit of creditors, authorized trustee under the Bankruptcy Act (Canada), official receiver or liquidator, a public official acting under judicial process, or a trader or merchant selling exclusively by wholesale, or an assignment by a trader or merchant for the general benefit of his creditors.

Statement of creditors to be furnished.

4(1)

Except as otherwise provided in this Act, a purchaser of stock in bulk, before paying to the vendor any part of the purchase price or giving a promissory note or security for the purchase price or part thereof, or executing a transfer, conveyance or encumbrance of property, shall demand of and receive from the vendor, and a vendor of stock in bulk shall furnish to the purchaser, a written statement verified by the statutory declaration of the vendor or his duly authorized agent or, if the vendor is a corporation, by the statutory declaration of its president, vice-president, secretary-treasurer or manager.

Contents of statement.

4(2)

The statement shall contain the names and addresses of the creditors of the vendor, together with the amount of the indebtedness or liability due, owing, payable or accruing due or to become due and payable by the vendor to each of the creditors.

Form of statement.

4(3)

The statement and declaration may be in the form set forth in Schedule A.

Payment on account of purchase price.

4(4)

A purchaser may, before obtaining the statement, pay to the vendor a sum not exceeding $50. on account of the purchase price.

No preference or priority.

4(5)

From and after the furnishing of the statement and declaration, no preference or priority shall be obtainable by any creditor of the vendor in respect of the stock in bulk or the proceeds of sale thereof by attachment, garnishment proceedings, contract or otherwise.

Payment of creditors in full.

5

Before the completion of a sale in bulk,

(a) the claims of the creditors of the vendor as shown by the written statement shall be paid in full; or

(b) the vendor shall produce and deliver to the purchaser a written waiver of the provisions of this Act, other than the provisions contained in section 4, from creditors of the vendor representing not less than 60% in number and amount of the claims exceeding $50. as shown by the written statement, which waiver may be in the form set forth in Schedule B; or

(c) the vendor shall produce and deliver to the purchaser the written consent thereto of creditors of the vendor, representing not less than 60% in number and amount of the claims exceeding $50. as shown by the written statement.

When proceeds of sale to be paid over to trustee.

6

Where a sale in bulk is made with the written consent of the creditors of the vendor under clause 5(c), the purchaser shall pay, deliver or convey the entire proceeds of the sale to the person named as trustee by the creditors in the written consent, or, if no trustee is named therein, to the trustee named by the vendor or appointed under section 12, to be dealt with as provided by section 7.

Distribution of proceeds of sale.

7(1)

Where the proceeds of the sale are paid, delivered or conveyed to a trustee under section 6, the trustee shall be a trustee for the general benefit of the creditors of the vendor and shall distribute the proceeds of the sale among the creditors of the vendor in proportion to the amounts of their claims as shown by the written statement, and such other creditors of the vendor as file claims with the trustee in accordance with the Bankruptcy Act (Canada).

Method of distribution.

7(2)

The distribution shall be made in like manner as moneys are distributed by a trustee under the Bankruptcy Act (Canada) and in making the distribution all creditors' claims shall be proved in like manner, are subject to like contestation, and entitled to like priorities as in the case of a distribution under that Act.

Rights and liabilities.

7(3)

The creditors, vendor and trustee have in all respects the same rights, liabilities and powers as the creditors, authorized assignor, and authorized trustee respectively have under the Bankruptcy Act (Canada), the vendor being deemed for such purpose to be an authorized assignor under that Act, and the trustee an authorized trustee under that Act, and the priorities of creditors shall be determined as of the date of the completion of the sale.

Publication of notice before distribution.

7(4)

Before making distribution,

(a) the trustee shall cause a notice thereof to be published once in The Manitoba Gazette and in not fewer than two issues of a newspaper published in the province and having a circulation in the locality in which the stock in bulk was situated at the time of the sale; and

(b) a period of 14 days shall elapse after the last of such publications.

No other notice.

7(5)

It is not necessary to publish any advertisement or notice of the distribution other than as provided in subsection (4).

Fees of trustee.

8

The fees or commission of the trustee shall not exceed 3% of the proceeds of the sale that come to his hands; and, in the absence of an agreement by the vendor to the contrary, the fees or commission, together with any disbursements made by the trustee, shall be paid by being deducted out of the moneys to be received by the creditors and shall not be charged to the vendor.

Sale void against creditors unless Act complied with.

9(1)

A sale in bulk in respect of which this Act has not been complied with shall be deemed to be fraudulent and void as against the creditors of the vendor; and every payment made on account of the purchase price, and every delivery of a note or other security therefor, and every transfer, conveyance and encumbrance of property by the purchaser shall be deemed to be fraudulent and void, as between the purchaser and the creditors of the vendor.

Liability of purchaser to account.

9(2)

If, however, the purchaser has received or taken possession of the stock in bulk, or any part thereof, he is personally liable to account to the creditors of the vendor for the value thereof including all moneys, security or property realized or taken by him from, out of, or on account of the sale or other disposition by him of the stock in bulk, or any part thereof.

Estoppel of purchaser.

9(3)

In an action brought, or proceedings had or taken, by a creditor of the vendor within the time limited by section 11 to set aside or have declared void a sale in bulk, or in the event of a seizure of the stock in the possession of the purchaser, or some part thereof, under judicial process issued by or on behalf of a creditor of the vendor within such period, the purchaser shall be estopped from denying that the stock in his possession at the time of the action, proceedings or seizure is the stock purchased or received by him from the vendor.

Rights of creditors of purchaser.

9(4)

If the stock then in the possession of the purchaser, or some part thereof, was in fact purchased by him subsequent to the sale in bulk from a person other than the vendor of the stock in bulk and has not been paid for in full, the creditors of the purchaser, to the extent of the amounts owing to them for the goods so supplied, are entitled to share with the creditors of the vendor in the amount realized on the sale or other disposition of the stock in the possession of the purchaser at the time of the action, proceedings or seizure, in like manner and within the same time as if they were creditors of the vendor.

Burden of proof on purchaser.

10

In a proceeding wherein a sale in bulk is attacked or comes in question, whether directly or collaterally, the burden of proof that this Act has been complied with is upon the person upholding the sale in bulk.

Limitations.

11

No action shall be brought or proceedings had or taken to set aside or have declared void a sale in bulk for failure to comply with this Act, unless the action is brought or proceedings had or taken within six months from the date of the completion of the sale.

Appointment of trustee by judge.

12

Upon the application of a person interested, if the creditors of the vendor in their written consent to a sale in bulk have not named a trustee and the vendor has not named one, a judge of the Court of Queen's Bench, shall appoint a trustee and fix the security, if any, to be given by him.

Uniform construction.

13

This Act shall be so interpreted and construed as to effect its general purpose of making uniform the law of the provinces that enact it.

SCHEDULE A

Statement and Declaration

Statement showing names and addresses of all creditors of:

Name of Creditors Post Office Address Nature of Indebtedness Amount When Due

I, , of in the Province of Manitoba, do solemnly declare that the above is a true and correct statement of the names and addresses of all creditors of , and shows correctly the amount of indebtedness or liability due, owing, payable or accruing due or to become due and payable by to each of said creditors. (If the declaration is made by an agent, add:

I am the duly authorized agent of the vendor and have a personal knowledge of the matters herein declared to).

(Or, if the vendor is a corporation)

I, , of in the Province of Manitoba, do solemnly declare that the above is a true and correct statement of the names and addresses of all the creditors of the (name of corporation) and shows correctly the amount of the indebtedness or liability due, owing, payable or accruing due, or to become due, and payable by the corporation to each of the said creditors, and that I am the of the said corporation, and have a personal knowledge of the matters herein declared to.

And I make this solemn declaration conscientiously believing it to be true, and knowing that it is of the same force and effect as if made under oath, and by virtue of The Canada Evidence Act.

Declared before me at the of , in the Province of Manitoba, this day of , 19 .

A Commissioner, etc.

SCHEDULE B

Waiver

We, the undersigned creditors of of in the Province of Manitoba, do hereby waive the provisions of The Bulk Sales Act, of the Province of Manitoba in so far as that Act would apply to, affect or cause to make fraudulent or void the sale in bulk by the said of his stock of goods, wares, merchandise and fixtures, or part thereof, or an interest in his business (as the case may be) to of in the Province of Manitoba and we do hereby admit having received notice of the intended sale and agree not to disturb, dispute or question the validity of the said sale in any way under the provisions of the said Act.

Dated this day of ,19.

Signed in the presence of