Bill C-4

53-54 ELIZABETH II

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CHAPTER 3

An Act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment

[Assented to 24th February, 2005]

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

1. This Act may be cited as the International Interests in Mobile Equipment (aircraft equipment) Act.

INTERPRETATION

2. (1) The following definitions apply in this Act.

“aircraft objects” has the same meaning as in Article I(2)(c) of the Aircraft Protocol.

“Aircraft Protocol” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment set out in Schedule 2.

“Convention” means the Convention on International Interests in Mobile Equipment set out in Schedule 1.

“declaration” means a declaration or designation made by Canada under the Convention or the Aircraft Protocol.

(2) Unless a contrary intention appears, words and expressions used in this Act have the same meaning as in the Convention and the Aircraft Protocol.

(3) In interpreting the Convention and the Aircraft Protocol, recourse may be had to

(a) the Official Commentary on the Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment, as approved for distribution by the Governing Council of the International Institute for the Unification of Private Law (UNIDROIT); and

(b) the Consolidated Text of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment set out in Schedule 3.

PURPOSE

3. The purpose of this Act is to implement the provisions of the Convention and the Aircraft Protocol with respect to aircraft objects.

FORCE OF LAW

4. (1) Subject to subsection (2), to the extent that they apply to Canada as described in declarations, the Convention and the Aircraft Protocol have the force of law with respect to aircraft objects during the period that the Aircraft Protocol is, by its terms, in force in respect of Canada.

(2) Subsection (1) does not apply in respect of Articles 47 to 62 of the Convention and Articles XI and XXVI to XXXII of the Aircraft Protocol.

HER MAJESTY

5. This Act is binding on Her Majesty in right of Canada or a province.

INCONSISTENT LAWS

6. If a provision of this Act, including a provision given force of law by section 4, is inconsistent with any other law, the provision prevails over the other law to the extent of the inconsistency.

COURTS

7. The superior courts of the provinces are courts of competent jurisdiction for the purpose of the enforcement of the provisions of this Act, including provisions given force of law by section 4.

REQUESTS FOR DECLARATIONS

8. (1) Requests from ministers of the Crown in right of Canada for declarations must be directed to the Minister of Foreign Affairs.

(2) The Minister of Justice must forward to the Minister of Foreign Affairs requests received from the provinces for declarations.

REGULATIONS

9. The Governor in Council may make any regulations that are necessary for carrying out any of the provisions of this Act, including the provisions given force of law by section 4.

AMENDMENTS TO CERTAIN ACTS

Bank Act

10. The Bank Act is amended by adding the following after section 436:

436.1 (1) The Governor in Council may make regulations respecting the application of sections 426 to 436 to aircraft objects, including regulations

(a) removing classes of aircraft objects from the application of those sections or reinstating their application to those classes of aircraft objects; and

(b) eliminating rights and powers acquired under those sections in relation to aircraft objects.

(2) In subsection (1), “aircraft objects” has the same meaning as in subsection 2(1) of the International Interests in Mobile Equipment (aircraft equipment) Act.

Bankruptcy and Insolvency Act

11. Subsection 2(1) of the Bankruptcy and Insolvency Act is amended by adding the following in alphabetical order:

“aircraft objects” has the same meaning as in subsection 2(1) of the International Interests in Mobile Equipment (aircraft equipment) Act;

12. Subsection 69(2) of the Act is amended by striking out the word “or” at the end of paragraph (b), by adding the word “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) to prevent a creditor who holds security on aircraft objects — or who is a lessor of aircraft objects or a conditional seller of aircraft objects — under an agreement with the insolvent person from taking possession of the equipment

(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the equipment in accordance with the agreement,

(ii) sixty days after the commencement of proceedings under this Act unless, during that period, the insolvent person

(A) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the insolvent person’s financial condition,

(B) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the insolvent person’s financial condition, until the day on which proceedings under this Act end, and

(C) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end, or

(iii) if, during the period that begins on the expiry of the sixty-day period and ends on the day on which proceedings under this Act end, the insolvent person defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the insolvent person’s financial condition.

13. Subsection 69.1(2) of the Act is amended by striking out the word “or” at the end of paragraph (b), by adding the word “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) to prevent a creditor who holds security on aircraft objects — or who is a lessor of aircraft objects or a conditional seller of aircraft objects — under an agreement with the insolvent person from taking possession of the equipment

(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the equipment in accordance with the agreement,

(ii) sixty days after the commencement of proceedings under this Act unless, during that period, the insolvent person

(A) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the insolvent person’s financial condition,

(B) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the insolvent person’s financial condition, until the day on which proceedings under this Act end, and

(C) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end, or

(iii) if, during the period that begins on the expiry of the sixty-day period and ends on the day on which proceedings under this Act end, the insolvent person defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the insolvent person’s financial condition.

14. (1) Subsection 69.3(1) of the Act is replaced by the following:

69.3 (1) Subject to subsections (2) and (3) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or may commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy, until the trustee has been discharged.

(2) Section 69.3 of the Act is amended by adding the following after subsection (2):

(3) The bankruptcy of a debtor does not prevent a creditor who holds security on aircraft objects — or who is a lessor of aircraft objects or a conditional seller of aircraft objects — under an agreement with the bankrupt from taking possession of the equipment

(a) if, after the commencement of proceedings under this Act, the trustee defaults in protecting or maintaining the equipment in accordance with the agreement;

(b) sixty days after the commencement of proceedings under this Act unless, during that period, the trustee

(i) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the bankrupt’s financial condition,

(ii) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition, until the day on which proceedings under this Act end, and

(iii) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end; or

(c) if, during the period that begins on the expiry of the sixty-day period and ends on the day on which proceedings under this Act end, the trustee defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition.

Companies’ Creditors Arrangement Act

15. Section 2 of the Companies’ Creditors Arrangement Act is amended by adding the following in alphabetical order:

“aircraft objects” has the same meaning as in subsection 2(1) of the International Interests in Mobile Equipment (aircraft equipment) Act;

16. The Act is amended by adding the following after section 11.3:

11.31 No order made under section 11 prevents a creditor who holds security on aircraft objects — or a lessor of aircraft objects or a conditional seller of aircraft objects — under an agreement with a debtor company in respect of which an application is made under this Act from taking possession of the equipment

(a) if, after the commencement of proceedings under this Act, the company defaults in protecting or maintaining the equipment in accordance with the agreement;

(b) sixty days after the commencement of proceedings under this Act unless, during that period, the company

(i) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the company’s financial condition,

(ii) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the company’s financial condition, until proceedings under this Act end, and

(iii) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end; or

(c) if, during the period that begins on the expiry of the sixty-day period and ends on the day on which proceedings under this Act end, the company defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the company’s financial condition.

Winding-up and Restructuring Act

17. Subsection 2(1) of the Winding-up and Restructuring Act is amended by adding the following in alphabetical order:

“aircraft objects” has the same meaning as in subsection 2(1) of the International Interests in Mobile Equipment (aircraft equipment) Act;

18. The Act is amended by adding the following after section 22.1:

22.2 Nothing in this Act prevents a creditor who holds security on aircraft objects — or a lessor of aircraft objects or a conditional seller of aircraft objects — under an agreement with a company in respect of which an application for a winding-up order is made for the reason set out in paragraph 10(c) from taking possession of the equipment

(a) if, after the commencement of proceedings under this Act, the company defaults in protecting or maintaining the equipment in accordance with the agreement;

(b) sixty days after the commencement of proceedings under this Act unless, during that period, the company

(i) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the company’s financial condition,

(ii) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the company’s financial condition, until the day on which proceedings under this Act end, and

(iii) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end; or

(c) if, during the period that begins on the expiry of the sixty-day period and ends on the day on which proceedings under this Act end, the company defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the company’s financial condition.

COMING INTO FORCE

19. The provisions of this Act, and the provisions of any Act as enacted by this Act, come into force on a day or days to be fixed by order of the Governor in Council.