By: Paul V. Stocco, Partner, Brownlee LLP and Amy Boyd, Summer Student, Brownlee LLP
Insolvencies occur in the construction industry. When a contractor becomes insolvent, there is often a dispute as to who has priority over the assets of the insolvent contractor. The resolution of this dispute involves the interplay of provincial statutory trusts and the Bankruptcy and Insolvency Act (“BIA”). The recent cases of Iona Contractors Ltd v Guarantee Company of North America (“Iona”) and The Guarantee Company of North America v Royal Bank of Canada (“GCNA”) provide us some clarity.
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