Just over a year ago, the Alberta Court of King’s Bench (“ACKB”) decision in Qualex-Landmark Towers v 12-10 Capital Corp (“Qualex”)[1] extended the application of an environmental regulator’s priority entitlements in bankruptcy and insolvency to civ

FOLLOWING OUR PREVIOUS ARTICLES ON THE QUALEX-LANDMARK TOWERS INC V 12-10 CAPITAL CORP CASE BEING HEARD IN THE ALBERTA COURTS, 12-10 CAPITAL CORP HAS NOW BEEN APPEALED SUCCESSFULLY IN THE COURT OF APPEAL OF ALBERTA, WHICH RELEASED IT’S DECISION EARLIER LAST MONTH. BEALE & CO PROVIDES AN UPDATE AND FURTHER COMMENTARY ON THE LATEST DEVELOPMENT OF THIS ENVIRONMENTAL CASE.

Several significant judicial decisions and legislative updates occurred in 2023 that are relevant to commercial lenders, businesses and restructuring professionals. This bulletin summarizes the key developments of 2023 and highlights areas of significance to be aware of in 2024.

1. Priority Scheme

In 2023, several cases and legislative updates raised important questions regarding the priority scheme in insolvency proceedings.

Environmental Priorities

Following are this week’s summaries of the Court of Appeal for Ontario for the week of April 15, 2024.

A recent Alberta case continues the development of a line of cases at the intersection of environmental protection and bankruptcy and insolvency law in Canada.

It is generally accepted that the push towards a greener future requires robust legislation, and in the case of common law jurisdictions ,supportive legal precedent which will assist in framing the landscape for the enforcement of environmental remediation obligations.

The Court of King's Bench for Saskatchewan has rejected another attempt by a rural municipality to gain priority in an oil and gas receivership. This follows the recent Alberta Decision in Orphan Well Association v Trident Exploration Corp, 2022 ABKB 839, where the Alberta Court of King's Bench confirmed that the abandonment and reclamation obligations owed to the Orphan Well Association and the Alberta Energy Regulator rank in priority to claims of municipalities for unpaid property taxes in insolvency proceedings.

The recent decision from the Court of King’s Bench of Alberta (the “Court”) in Qualex-Landmark Towers Inc v 12-1- Capital Corp, 2023 ABKB 109 (“Qualex”) greatly extended the protective umbrella for costs associated with environmental reclamation obligations.

Our last newsletter commented on high inflation, dwindling business confidence and international supply chain issues. Those factors continue to influence the economic outlook, with some businesses unable to survive the strengthening head winds impacting the economy. The consumer price index increased 7.2 percent in the 12 months to December 2022, remaining stubbornly high despite significant movements in the official cash rate to 4.5%, up significantly from the 0.25% it was sitting at in October 2021. ANZ's economic forecast warns that a "policy induced recession is looming".

The Supreme Court of Canada's ("SCC") recent decision in Peace River Hydro Partners v.