Greenberg Stores Ltd. (Bankrupt) v. Merkur (David) Holdings Inc., (1997) 36 O.T.C. 137 (GD)

• Judge: Pitt, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: May 22, 1997
• Jurisdiction: Ontario
• Citations: (1997), 36 O.T.C. 137 (GD)

Greenberg Stores v. Merkur Holdings (1997), 36 O.T.C. 137 (GD)

MLB headnote and full text

Temp. Cite: [1997] O.T.C. TBEd. JN.121

In The Matter Of The Landlord and Tenant Act, R.S.O. 1990, c. L-7, s. 38(2);

And In The Matter Of a certain lease dated the 8th day of April, 1971, made between A. Merkur & Sons Limited, as Lessor and Metropolitan Stores of Canada Limited, as Lessee, which Lease was assigned to Greenberg Stores Limited, a Bankrupt

Caron Bélanger Ernst & Young Inc., Trustee of the Estate of Greenberg Stores Limited, a bankrupt v. David Merkur Holdings Inc. and A. Merkur & Sons Limited

(File No. 97-CV-123116)

Indexed As: Greenberg Stores Ltd. (Bankrupt) v. Merkur (David) Holdings Inc.

Ontario Court of Justice

General Division

Pitt, J.

June 16, 1997.

Summary:

A trustee in bankruptcy gave a notice of election to the bankrupt's landlord under s. 38(2) of the Landlord and Tenant Act. The notice of election was conditional on court approval of a proposed assignment of the lease. In the notice of election, the trustee also reserved a right, prior to the judgment of the court, to abandon the proceedings. The landlord disputed the appropriateness of a trustee making an election conditional on court approval.

The Ontario Court (General Division) concluded that while an election could be conditional, so long as it was filed within 90 days of the bankruptcy, it could not be discretionary at the instance of the trustee. The trustee's attempt to reserve a right, prior to judgment, to abandon the proceedings was contrary to the Act. Accordingly, the court ordered the deletion of the offending reservation nunc pro tunc and made the election conditional only on court approval.

Bankruptcy - Topic 431

Property of bankrupt - Particular property - Property leased by bankrupt - See paragraphs 6 to 21.

Bankruptcy - Topic 2754

Trustees - Powers of - Respecting leases - See paragraphs 6 to 21.

Landlord and Tenant - Topic 5066

Assignment of lease - By court order - Approval of assignment made by trustee in bankruptcy - See paragraphs 6 to 21.

Cases Noticed:

Limestone Electrical & Supply Co., Re, [1955] O.R. 291 (C.A.), refd to. [para. 13].

Robinson, Little and Co. (Bankrupt) v. Block Brothers Contractors Ltd. (1987), 83 A.R. 254; 56 Alta. L.R.(2d) 319 (C.A.), refd to. [para. 15].

Darrigo Consolidated Holdings Inc. (Trustee of) v. Norfinch Construction (Toronto) Ltd. (1987), 63 C.B.R.(N.S.) 216 (Ont. H.C.), refd to. [para. 16].

Statutes Noticed:

Landlord and Tenant Act, R.S.O. 1990, c. L-7, sect. 38(2) [para. 9].

Counsel:

John Chapman, for the applicant;

Michael Buccioni, for the respondents.

This matter was heard on May 22, 1997, before Pitt, J., of the Ontario Court (General Division), who delivered the following judgment on June 16, 1997.