Alberta v. Invictus Financial Corp. Ltd. and Fahlman Development Corp. Ltd. et al., (1985) 60 A.R. 105 (QB)

• Judge: McDonald, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 13, 1985
• Citations: (1985), 60 A.R. 105 (QB)

Alta. v. Invictus Financial Corp. (1985), 60 A.R. 105 (QB)

MLB headnote and full text

Alberta Treasury Branches v. Invictus Financial Corporation Ltd., Fahlman Development Corporation Ltd., W.G. Fahlman Enterprises Ltd., Frontier Land Company (Western) Ltd., Fahlman Department Stores Ltd., Frontier Land Company Ltd., Garden Holdings Ltd., Cardinal Construction Ltd., Merit Stores Ltd., 292830 Alberta Ltd., W.G. Fahlman & Associates Ltd., Fisher's Department Stores Ltd., Fisher's Holdings (Lloydminster) Ltd. and Plainsman Motor Inns Ltd.

Indexed As: Alberta v. Invictus Financial Corp. Ltd. and Fahlman Development Corp. Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

McDonald, J.

January 13, 1985.

Summary:

Three companies owning a hotel and a store were put in receivership by the appointment by the court of a receiver-manager under a debenture held by the Province of Alberta Treasury Branches. The receiver sold both the hotel and the store. The receiver then applied for advice and direction concerning two issues arising from the sale, namely (1) a claim by the municipality for a preferential lien respecting arrears for utility charges against the hotel and the store, incurred before the appointment of the receiver and (2) the right of the purchasers of the hotel to require Alberta Government Telephones to continue to service the hotel with its same telephone number and conversely, the right of Alberta Government Telephones to refuse permission to use that number and to require the purchasers to use a different number.

The Alberta Court of Queen's Bench allowed the application. The court held that the municipality had no preferential lien over the province as debenture holder. The court also held that the purchasers of the hotel had no right to the hotel's same telephone number and that the telephone company had the right to refuse them permission to use the number.

Contracts - Topic 7162

Novation - Novation where new party introduced - Elements of - Consent of parties - A receiver-manager, appointed by the court under a debenture, sold the debtor's assets, including a hotel - The Alberta Court of Queen's Bench held that no novation could occur between the telephone company and the hotel's purchaser without the consent of all parties - Thus the debtor could not compel the telephone company to accept the purchaser as a party to a new contract in the same terms as the original contract i.e. including the telephone number - See paragraph 14.

Public Utilities - Topic 1066

Powers - Prohibition - Unjust or unreasonable rules or practices - A telephone company had a practice of requiring payment of arrears for telephone charges before a purchaser of a business would be allowed to use the existing number - The Alberta Court of Queen's Bench held that the practice was not "unjust, unreasonable, unduly preferential, arbitrarily or unjustly discriminatory or otherwise in contravention of law" and therefore was not prohibited by s. 91(1)(c) of the Public Utilities Board Act - See paragraphs 15 to 17.

Public Utilities - Topic 3164

Rates - Liens - Priorities - Before a receiver was appointed by the court under a debenture, the debtor incurred arrears for utility charges - The municipality claimed a preferential lien under s. 309(1) of the Municipal Government Act over the debenture holder - The Alberta Court of Queen's Bench held that to obtain a preference over the debenture holder, the municipality would have had to distrain to collect the arrears before the floating charge secured by the debenture was crystallized by the appointment of the receiver - The debenture having crystallized, the municipality could not now, by distraining assets as yet undisposed of by the receiver, claim preference over the debenture holder - See paragraphs 5, 7.

Public Utilities - Topic 3166

Rates - Liens - Crystallization - S. 309 of the Municipal Government Act gave a municipality a preferential lien for unpaid charges for public utilities such as telephones or for charges under any public utility bylaw - The Alberta Court of Queen's Bench held that where a municipality had no public utility bylaw respecting the collection and enforcement of utility rates and had not proceeded to distrain or collect the outstanding charges, the lien had not crystallized - See paragraph 5.

Telecommunications - Topic 846

Telephones - Powers of telephone company - Re telephone numbers - The Alberta Court of Queen's Bench held that as long as the person supplied with a telephone paid the telephone charges on time, the telephone company had no right to change the telephone number, except on terms expressly agreed to or on terms implied in law, such as those contained in a general tariff that had been "published" - See paragraph 11.

Telecommunications - Topic 846

Telephones - Powers of telephone company - Re telephone numbers - The Alberta Court of Queen's Bench held that if no general tariff had been "published" the telephone company's powers of enforcement were limited to those in s. 25 of the Water, Gas, Electric and Telephone Companies Act; the company could only disconnect the telephone and sue for payment of the arrears but could not change a telephone number as a means of enforcing payment - See paragraphs 11 to 12.

Telecommunications - Topic 871

Telephones - Duty of telephone company - To supply service to assignees - A receiver-manager, appointed by the court under a debenture, sold the debtor's assets, including a hotel - The Alberta Court of Queen's Bench held that the telephone company was under no common law or statutory duty to supply telephone service, including the same telephone number, to the purchaser.

Cases Noticed:

Bates Electric Ltd.; City of Edmonton and City of Calgary v. McMullen (1972), 17 C.B.R. 253 (Alta. Q.B.), appld. [para. 5].

Caroma Enterprises Ltd. v. Workers' Compensation Board et al. (1979), 23 A.R. 541; 108 D.L.R.(3d) 412 (Alta. Q.B.), appld. [para. 5].

Statutes Noticed:

Municipal Government Act, R.S.A. 1980, c. M-26, sect. 309 [para. 3]; sect. 309(2) [paras. 5-6].

Water, Gas, Electric and Telephone Companies Act, R.S.A. 1980, c. W-4, sect. 22 [paras. 3, 8, 11]; sect. 25 [paras. 3, 8, 11-12].

Alberta Government Telephones Act, R.S.A. 1980, c. A-23, sect. 10 [para. 9]; sect. 39 [para. 16]; General Tariff [para. 9].

Public Utilities Board Act, R.S.A. 1980, c. P-37, sect. 1 [para. 16]; sect. 70(1)(c) [para. 6]; sect. 91(1)(c) [paras. 15, 17].

Counsel:

D.N. Tkachuk, for the receiver-manager;

C.C. Ward, for the Town of Valleyview;

F.M. Alber, for Alberta Government Telephones;

U.S. Watkiss, for the purchasers, Gillespie and Drever.

This application was heard before McDonald, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, whose decision was delivered at Edmonton, Alberta, on January 13, 1985.