In what may prove either to be a landmark decision or a mere outliner confined to its unique facts, the Court of Appeal for Ontario (the "Court of Appeal") in Romspen Investment Corporation v. Courtice Auto Wreckers Limited, et al.1 has overturned an earlier decision and lifted the stay of proceedings against a court-appointed receiver to allow a union to proceed with a certification application and an unfair labour practice complaint against the receiver.

INTRODUCTION

The Newfoundland and Labrador Court of Appeal recently confirmed that accounting/auditing firms may take on several mandates in respect of companies that may or do become insolvent inWabush Hotel Limited v Business Development Bank of Canada, 2017 NLCA 35 (“Wabush Hotel”), which was released on May 25, 2017.

This case provides additional comfort to such firms that previous consulting or review engagement work will not prohibit them from acting in a receivership role in later insolvency proceedings.

Background

As a result of their “open” nature, the various Personal Property Registry systems in Canada are occasionally the subject of abuse. For example, in the midst of a litigation proceeding, it may be inappropriately suggested that to prevent an adversary from transferring or dealing with their assets, a financing statement should be registered in order to annoy the other party or to scare off any potential transferees.

Q: What is the difference between a general assignment of rents and leases and a specific assignment of rents and leases, and when should I include them in my term sheet for a commercial real estate financing of an Ontario property?

So, you’re a lender who has a perfected security interest in a large pile of limestone aggregate at a cement plant. Another lender has a perfected security interest in a pile of clay at that same plant. The aggregate and clay are crushed, and then ground and blended with other ingredients, before being heated in a kiln to produce a substance called “clinker”.

Q: We've heard about the expiration of the “grandfather clause” (in French, clause grand-père) in the Cape Town Convention, whereby pre-existing rights and interests or their priorities in a State before the effective date of the Cape Town Convention in that State shall not be affected by the Cape Town Convention. We would like to know more details about:

1. Which article in the Cape Town Convention prescribes this rule?

2. Is this rule applicable in Canada?

In a majority two to one decision released on April 24, 2017, the Alberta Court of Appeal has upheld the lower court ruling in Re Redwater Energy Corporation.

The Alberta Court of Appeal has dismissed the appeal brought by the Alberta Energy Regulator and the Orphan Well Association from the decision of the Court of Queen’s Bench of Alberta in Re Redwater Energy Corporation. A majority of the panel held that the provisions of the provincial legislation governing certain actions of licensees of oil and gas assets do not apply to receivers and trustees in bankruptcy of insolvent companies, given the paramountcy of the Bankruptcy and Insolvency Act over provincial legislation where the governing provisions conflict.

​On April 24, 2017, the Alberta Court of Appeal issued a decision in Orphan Well Association v Grant Thornton Limited, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities.