Blue Note Mining Inc. v. Merlin Group Securities Ltd. et al.,

• Jurisdiction: New Brunswick
• Judge: Rideout, J.
• Neutral Citation: 2008 NBQB 310
• Date: 28 August 2008
• Court: Court of Queen's Bench of New Brunswick (Canada)

Blue Note v. Merlin Group (2008), 337 N.B.R.(2d) 116 (TD);

    337 R.N.-B.(2e) 116; 864 A.P.R. 116

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Temp. Cite: [2008] N.B.R.(2d) TBEd. OC.001

Renvoi temp.: [2008] N.B.R.(2d) TBEd. OC.001

Blue Note Mining Inc. (plaintiff) v. Merlin Group Securities Ltd., as Trustee of the Fern Trust (defendant/plaintiff by counterclaim) and Blue Note Mining Inc. and Blue Note Caribou Mines Inc. and CanZinco Ltd. and Breakwater Resources Ltd. (defendants by counterclaim)

(M/C/0265/07; 2008 NBQB 310; 2008 NBBR 310)

Indexed As: Blue Note Mining Inc. v. Merlin Group Securities Ltd. et al.

Répertorié: Blue Note Mining Inc. v. Merlin Group Securities Ltd. et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Moncton

Rideout, J.

September 30, 2008.

Summary:

Résumé:

In a summary judgment motion, a defendant/plaintiff by counterclaim (Merlin) sought a declaration that it had a 10% net profits interest (NPI) in a mine and a declaration that the NPI could be registered on title to the mine.

The New Brunswick Court of Queen's Bench, Trial Division, allowed the motion in part, declaring that Merlin had a 10% NPI which ran with the mine.

Mines and Minerals - Topic 1772

Mining claims - Royalty and other agreements - Whether a net profits interest constitutes an interest in land - In a summary judgment motion, a defendant/plaintiff by counterclaim (Merlin) sought a declaration that it had a 10% net profits interest (NPI) in a mine - The NPI stated "... hereby grants to ... a freely assignable 10% net profit interest in the mine ..." - The New Brunswick Court of Queen's Bench, Trial Division, stated that it was clear that a NPI could be an interest in land or a mine - The authorities indicated that there were no special words or incantations which created an interest in a mine - The words "grant" and "in the mine" in the NPI were sufficient to establish an interest in land - The interest over which the NPI was applicable dealt with a net profit arising from the mine itself - Therefore, the NPI was carved out of an interest in land and ran with the mine - The current owner of the mine had actual notice of the NPI prior to closing the purchase of the mine, had a copy of the document creating the NPI and could therefore make a determination as to the effect of the document.

Mines et minéraux - Cote 1772

Claims miniers - Conventions relatives aux rédevances et autres conventions - Si un intérêt dans les bénéfices nets constitue un intérêt dans un biens-fonds - [Voir Mines and Minerals - Topic 1772 ].

Cases Noticed:

Cannon v. Lange et al. (1998), 203 N.B.R.(2d) 121; 518 A.P.R. 121 (C.A.), refd to. [para. 22].

Board of Trustees of the City of Saint John Employee Pension Plan et al. v. Ferguson (2008), 328 N.B.R.(2d) 319; 841 A.P.R. 319 (C.A.), refd to. [para. 22].

Bank of Montreal v. Dynex Petroleum Ltd. - see Bank of Montreal v. Enchant Resources Ltd. et al.

Bank of Montreal v. Enchant Resources Ltd. et al. (1999), 255 A.R. 116; 220 W.A.C. 116; 182 D.L.R.(4th) 640 (C.A.), affd. [2002] 1 S.C.R. 146; 281 N.R. 113; 299 A.R. 1; 266 W.A.C. 1, refd to. [para. 24].

Canco Oil and Gas Ltd. v. Saskatchewan, [1991] 4 W.W.R. 316; 89 Sask.R. 37 (Q.B.), refd to. [para. 28].

Bensette and Campbell v. Reece (1973), 34 D.L.R.(3d) 723 (Sask.C.A.), refd to. [para. 29].

Bensette and Campbell v. Reece, [1969] 70 W.W.R. 705 (Sask. Q.B.), refd to. [para. 30].

Scurry-Rainbow Oil Ltd. et al. v. Galloway Estate et al., [1993] 4 W.W.R. 454; 138 A.R. 321; 1993 CarswellAlta 298 (Q.B.), affd. [1995] 1 W.W.R. 316; 157 A.R. 65; 77 W.A.C. 65 (C.A.), refd to. [para. 31].

Counsel:

Avocats:

George L. Cooper, for Blue Note Mining Inc. and Blue Note Caribou Mines;

Matthew Gottlieb & Thomas G. O'Neil, Q.C., for Merlin Group Securities;

Stephen J. Hutchison, for CanZinco Ltd. and Breakwater Resources.

This motion was heard at Moncton, New Brunswick, on August 28, 2008, before Rideout, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Moncton, who delivered the following decision on September 30, 2008.