Panamericana de Bienes y Servicios, S.A. v. Northern Badger Oil & Gas Ltd. (Bankrupt), (1991) 117 A.R. 44 (CA)

• Judge: Laycraft, C.J.A., Foisy and Irving, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: June 12, 1991
• Citations: (1991), 117 A.R. 44 (CA);1991 ABCA 181;81 DLR (4th) 280;[1991] 5 WWR 577;117 AR 44;81 Alta LR (2d) 45;7 CELR (2d) 66;8 CBR (3d) 31;[1991] AJ No 575 (QL);2 WAC 44

Panamericana v. Northern Badger Oil (1991), 117 A.R. 44 (CA);

    2 W.A.C. 44

MLB headnote and full text

Panamericana De Bienes Y Servicios, S.A. (respondent/plaintiff) v. Northern Badger Oil & Gas Limited (respondent/defendant)

Energy Resources Conservation Board (appellant/applicant) v. Vennard Johannesen Insolvency Inc., Receiver and Manager of Northern Badger Oil & Gas Limited (respondent) and Attorney General of Alberta (appellant/intervenor)

(Appeal Nos. 11698, 11713)

Indexed As: Panamericana de Bienes y Servicios, S.A. v. Northern Badger Oil & Gas Ltd. (Bankrupt)

Alberta Court of Appeal

Laycraft, C.J.A., Foisy and Irving, JJ.A.

June 12, 1991.

Summary:

The Alberta Energy Resources Conserva­tion Board ordered the receiver/manager of an insolvent and bankrupt company to aban­don and secure certain oil wells. The secured creditor would bear the cost. The Board applied to enforce compliance with the order.

The Alberta Court of Queen's Bench, in a judgment not reported in this series of reports, held that the order was ultra vires the province, because it would upset the scheme of distribution under the Bankruptcy Act. The court directed the receiver/manager not to comply with the order. The Board appealed.

The Alberta Court of Appeal allowed the appeal and directed the receiver/manager to comply with the order.

Bankruptcy - Topic 3603

Creditors - What constitute - [See Bank­ruptcy - Topic 3626 ].

Bankruptcy - Topic 3626

Creditors - Claims - Provable claim - What constitutes - The Alberta Energy Resources Conservation Board ordered the receiver/manager of a bankrupt oil com­pany to abandon certain oil wells - The secured creditor would absorb the cost - The receiver/manager claimed the Board was a "creditor" with a "provable claim" under the Bankruptcy Act and that the order was, accordingly, ultra vires the province as it would subvert the scheme of distribution under the Act - The Alberta Court of Appeal held that the Board was not a "creditor" with a "provable claim" - A public body ordering a corporate citizen to comply with the law did not become a creditor for any amount the company might ultimately be required to spend to comply - See paragraphs 30 to 36.

Bankruptcy - Topic 3642

Creditors - Priorities - Precedence of Bankruptcy Act over provincial legislation - The Alberta Energy Resources Conser­vation Board ordered the receiver/manager of an insolvent and bankrupt oil company to abandon certain wells - The secured creditor, who would bear the cost, claimed that the order was ultra vires the province, because it would subvert the distribution scheme under the Bankruptcy Act - The Alberta Court of Appeal stated that the incidental effects of the order on distribu­tion under the Act did not render the order ultra vires - The receiver/manager, with operating control of the wells, was bound to obey the provincial law which governed the wells.

Receivers - Topic 602

Nature of receivership - Receiver - Status of - The Alberta Court of Appeal stated that a receiver takes full responsibility for the management, operation and care of the debtor's assets, but does not take legal title to them - See paragraph 39.

Receivers - Topic 1729

Appointment - By court - Effect of - The Alberta Court of Appeal referred to the standard required of a court-appointed receiver because of its status as an officer of the court - See paragraph 40.

Receivers - Topic 5807

Duties of receiver - Compliance with statutory orders - [See Bankruptcy - Topic 3642 ].

Cases Noticed:

Bourgault's Estate v. Deputy Minister of Revenue (Que.), [1980] 1 S.C.R. 45; 30 N.R. 24, refd to. [para. 22].

Rainville, Re - see Bourgault's Estate v. Deputy Minister of Revenue (Que.).

British Columbia v. Henfrey, Samson and Belair Ltd., [1989] 2 S.C.R. 24; 97 N.R. 61, refd to. [para. 22].

Jacs Jackets and Crest Ltd., Re; Workers' Compensation Board (Alta.) v. Deloitte, Haskins and Sells Ltd. (1985), 60 N.R. 81; 63 A.R. 321; 19 D.L.R.(4th) 577 (S.C.C.), refd to. [para. 35].

Workers' Compensation Board (Alta.) v. Deloitte, Haskins and Sells Ltd. - see Jacs Jackets and Crest Ltd., Re.

Plisson v. Duncan (1905), 36 S.C.R. 647, refd to. [para. 38].

Parsons et al. v. Sovereign Bank of Canada, [1913] A.C. 160, refd to. [para. 38].

Federal Business Development Bank v. Commission de la santé et de la sécurité du travail et al. (1988), 84 N.R. 308 (S.C.C.), refd to. [para. 39].

Alberta (Treasury Branches) v. Invictus Financial Corp. Ltd. et al. (1986), 68 A.R. 207; 42 Alta. L.R.(2d) 181 (Q.B.), refd to. [para. 40].

Fotti v. 777 Management Inc., [1981] 5 W.W.R. 48; 9 Man.R.(2d) 142 (Q.B.), refd to. [para. 40].

Canadian Commercial Bank v. Simmons Drilling Ltd. (1989), 78 Sask.R. 87; 76 C.B.R. 241 (C.A.), refd to. [para. 41].

Kovacs v. B & W Enterprises (1984), 469 U.S. 649, refd to. [para. 47].

Penn Terra Ltd. v. Department of Envi­ronmental Resources (1984), 733 F. 2d 267, refd to. [para. 48].

Midlantic National Bank v. New Jersey Department of Environmental Protection (1985), 474 U.S. 494, refd to. [para. 49].

United States v. Whizco Inc. (1988), 841 F. 2d 147, refd to. [para. 50].

Canada Trust Co. v. Bulora Corp. (1980), 34 C.B.R. 145, affd. (1981), 39 C.B.R. 153 (Ont. C.A.), refd to. [para. 51].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120, refd to. [para. 58].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 16; 44 N.R. 181, refd to. [para. 59].

Canadian Pacific Railway Company v. Notre Dame de Bonsecours, [1899] A.C. 367, refd to. [para. 60].

Royal Bank of Canada v. Workmen's Compensation Board of Nova Scotia, [1936] S.C.R. 560, refd to. [para. 61].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1985, c. B-3, sect. 2, sect. 121(1) [para. 31].

Business Corporations Act, R.S.A. 1980, c. B-15, sect. 92, sect. 93, sect. 94, sect. 95 [para. 37].

Energy Resources Conservation Act, R.S.A. 1980, c. E-11, sect. 2(c), sect. 2(d), sect. 2(e) [para. 28].

Oil and Gas Conservation Act, R.S.A. 1980, c. O-5, sect. 4 [para. 23]; sect. 7 [para. 24]; sect. 9, sect. 11(b) [para. 25]; sect. 13, sect. 18, sect. 19 [para. 26]; sect. 92(1), sect. 92(2) [para. 27].

Oil and Gas Conservation Act Regulations, sect. 3.030(3) [para. 26].

Authors and Works Noticed:

Morawetz, Bankruptcy Law of Canada, pp. 1-3, 1-4 [para. 64].

Counsel:

Stanley H. Rutwind, for the appel­lant/intervenor, the Attorney General of Alberta;

W.J. Major, Q.C., and M.J. Major (Major Caron & Company), for the appellant, the Energy Resources Conservation Board;

R.C. Wigham (Fenerty Robertson Fraser & Hatch), for the respondent, Panamericana de Bienes Y Servicios, S.A.;

T.L. Czechowskyj (McManus Anderson Miles), for the respondent, Vennard Johannesen Insolvency Inc.;

J.D. McDonald (Bennett Jones Verchere), for Collins Barrow Ltd., trustee in Bank­ruptcy.

This appeal was heard before Laycraft, C.J.A., Foisy and Irving, JJ.A., of the Alberta Court of Appeal.

On June 12, 1991, Laycraft, C.J.A., delivered the following judgment for the Court of Appeal.