Robinson, Little and Co. (Bankrupt) v. Block Bros. Contractors Ltd., (1987) 83 A.R. 254 (CA)

• Court: Court of Appeal (Alberta)
• Case Date: December 23, 1987
• Citations: (1987), 83 A.R. 254 (CA)

Robinson, Little & Co. v. Block Bros. (1987), 83 A.R. 254 (CA)

MLB headnote and full text

Clarkson Company Limited, Trustee in Bankruptcy of Robinson, Little and Company, A Bankrupt v. Block Bros. Contractors Limited

(Appeal No. 18491)

Indexed As: Robinson, Little and Co. (Bankrupt) v. Block Bros. Contractors Ltd.

Alberta Court of Appeal

Belzil and Hetherington, JJ.A., and Virtue, J. (ad hoc)

December 23, 1987.

Summary:

A trustee in bankruptcy agreed pursuant to a purchase and sale agreement to sell the bankrupt's leasehold rights to mall premises to Woolworth's. The agreement between the trustee and Woolworth's provided that it was subject to the mall owner consenting to the assignment of leasehold rights and to compliance with the Landlord's Rights on Bankruptcy Act. The mall owner would not consent to the assignment. The trustee applied under s. 8(2)(b)(iii) of the Act for court approval of the assignment.

The Alberta Court of Queen's Bench, in a judgment reported 71 A.R. 59, dismissed the trustee's application for approval of the assignment, where the trustee had not complied with the terms of the Landlord's Rights on Bankruptcy Act and the mall owner was not unreasonably withholding its consent to the assignment. The trustee appealed.

The Alberta Court of Appeal allowed the appeal and approved the assignment.

Bankruptcy - Topic 2754

Trustee - Powers - Respecting leases - Assignments - The Alberta Court of Appeal discussed the procedure required to be followed by a trustee to obtain court approval of an assignment of a bankrupt's lease under ss. 8(2)(a) and 8(2)(b) of the Landlord's Rights on Bankruptcy Act, R.S.A. 1980, c. L-7.

Landlord and Tenant - Topic 5007

Assignment of lease - Landlord's consent - Whether reasonably withheld - A trustee in bankruptcy applied under s. 8(2)(b) of the Landlord's Rights on Bankruptcy Act for court approval of an assignment of a bankrupt's shopping mall lease - The landlord had refused to consent to the assignment, submitting that its consent was not unreasonably withheld where the assignment would breach the landlord's lease with the anchor tenant - The Alberta Court of Appeal approved the assignment - The court held that (1) s. 8(2) overrode any lease restriction on assignment, therefore consent was not required; (2) the assignee was a fit and proper person as required by s. 8(2); (3) a court-approved assignment did not constitute a breach of the anchor lease by the landlord and (4) apart from s. 8(2) the general law was that restrictions on assignment contained in a lease did not affect assignments by operation of law or pursuant to statutory authority granted to a trustee.

Landlord and Tenant - Topic 5066

Assignment of lease - By court order - Approval of assignment made by trustee in bankruptcy - [See Landlord and Tenant - Topic 5007 above].

Landlord and Tenant - Topic 5066

Assignment of lease - By court order - Approval of assignment made by trustee in bankruptcy - The Alberta Landlord's Rights on Bankruptcy Act, s. 8(2)(a), provided that a bankruptcy trustee in occupation of leased premises "may" elect to retain the lease for the unexpired term and pursuant to s. 8(2)(b) with court approval assign the lease - The Alberta Court of Queen's Bench held that s. 8 (2)(a) meant that a trustee "must" elect in writing to retain the lease before the trustee could assign under s. 8(2)(b) - The Alberta Court of Appeal held that ss. 8(2)(a) and (b) conferred alternate powers on the trustee, and the exercise of the power under s. 8(2)(b) was not dependent upon prior notice under s. 8(2)(a).

Statutes - Topic 4988

Operation and effect - Enabling acts - Power coupled with duty - Imperative power - "May" construed as imperative - The Alberta Landlord's Rights on Bankruptcy Act, R.S.A. 1980, c. L-7, s. 8(2)(a), provided that a trustee in bankruptcy while in occupation of leased premises "may" elect to retain the leased premises for the unexpired term - The Alberta Court of Queen's Bench held that the word "may" in s. 8(2)(a) should be read as "must" such that before the trustee can assign the lease under s. 8(2)(b) of the Act, the trustee "must" first elect to retain the lease - The Alberta Court of Appeal held that ss. 8(2)(a) and (b) conferred alternate powers on the trustee, and the exercise of the power under s. 8(2)(b) was not dependent upon prior notice under s. 8(2)(a).

Words and Phrases

May - The Alberta Court of Appeal referred to the meaning of the word "may", as found in s. 8(2)(a) of the Landlord's Rights on Bankruptcy Act, R.S.A. 1980, c. L-7.

Cases Noticed:

In re Bowman (1927), 8 C.B.R. 562, disagreed with, [para. 4].

Surplus Merchandisers Limited, Re (1950), 31 C.B.R. 26, disagreed with [para. 4].

Surplus Merchandisers Limited and Howard, Re (1950), 31 C.B.R. 30, disagreed with [para. 4].

Limestone Electrical & Supply Co. Ltd. Re, [1955] 3 D.L.R. 104, disagreed with [para. 5].

Darrigo Consolidated Holdings Inc. et al., Re (1987), 63 C.B.R.(N.S.) 216, refd to. [para. 7].

Sundance Investment Corporation Ltd. v. Richfield Properties Limited and Beaver Lumber Company Limited, [1983] 2 W.W.R. 493; 41 A.R. 231 (C.A.), refd to. [para. 14].

Somerset Management Services and Yolles Furniture Co. (Ontario) Ltd., Re (1978), 26 C.B.R.(N.S.) 205, appld. [para. 16].

Great Expectations Restaurants Ltd. v. Cafe La Ronde Ltd. et al. (1984), 55 A.R. 95, refd to. [para. 19].

Karelia Ltd., Re (1980), 36 C.B.R.(N.S.) 58, refd to. [para. 19].

Doe on the Demise of Goodbehere v. Bevan (1815), 3 M.N.S. 353; 105 E.R. 644, refd to. [para. 21].

Doe on the Demise of Mitchinson v. Carter (1798), 8 T.R. 56; 101 E.R. 1264, refd to. [para. 23].

Statutes Noticed:

Landlord's Rights on Bankruptcy Act, R.S.A. 1980, c. L-7, sect. 8 [para. 1].

Counsel:

E.D.D. Tavender, Q.C., and J.S. Shortt, for the appellant;

S.L. Shavers, for the respondent.

This appeal was heard before Belzil and Hetherington, JJ.A., and Virtue, J. (ad hoc), of the Alberta Court of Appeal.

On December 23, 1987, Belzil, J.A., delivered the following judgment for the Court of Appeal.