SemCanada Crude Co. et al., Re, 2012 ABCA 312

• Judge: Hunt, J.A.
• Court: Court of Appeal (Alberta)
• Case Date: October 03, 2012
• Citations: 2012 ABCA 312;(2012), 536 A.R. 343

SemCan. Crude Co., Re (2012), 536 A.R. 343; 559 W.A.C. 343 (CA)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. NO.016

RMP Energy Inc. formerly Orleans Energy Ltd. (applicant/respondent/cross-applicant) v. SemCAMS ULC (respondent/applicant/cross-respondent)

(1201-0220-AC; 2012 ABCA 312)

Indexed As: SemCanada Crude Co. et al., Re

Alberta Court of Appeal

Hunt, J.A.

November 5, 2012.

Summary:

SemCAMS ULC (SemCAMS) operated four jointly owned natural gas processing plants and natural gas gathering systems and pipelines in Alberta, including the facilities at the Kaybob South Amalgamated Plants Nos. 1 and 2 (KA Plant). On July 22, 2008, SemCAMS was granted an initial order under s. 11(1) of the Companies' Creditors Arrangement Act (CCAA). Orleans Energy Ltd. was a gas producer and used the processing facilities at the KA Plant. Orleans claimed that SemCAMS owed it over $1.6 million. SemCAMS applied for an order declaring that: a) any claims that Orleans might have against SemCAMS with respect to contractual equalization adjustments to volumes of natural gas delivered by Orleans to SemCAMS (the Price Adjustment Claim) pursuant to an inlet gas purchase agreement (IGPA) were compromised and released by the SemCAMS Plan of Arrangement (Plan) and the Plan Sanction Order; b) in accordance with the Claims Process Order, Orleans was barred from asserting or enforcing the Price Adjustment Claim, and that such claim was extinguished; and c) the statement of claim filed by Orleans was in breach of the Plan and the Plan Sanction Order and should be struck. Orleans cross-applied for a declaration that the Price Adjustment Claim was not compromised or released by the Plan.

The Alberta Court of Queen's Bench, in a decision reported at 546 A.R. 370, allowed SemCAMS' application and dismissed Orleans' cross-application. Orleans applied for leave to appeal.

The Alberta Court of Appeal, per Hunt, J.A., dismissed the application.

Creditors and Debtors - Topic 8594.2

Debtors' relief legislation - Companies' creditors arrangement legislation - Arrangement - Participation - Provable claims (incl. time for) - SemCAMS ULC (SemCAMS) operated four jointly owned natural gas processing plants and natural gas gathering systems and pipelines in Alberta, including the facilities at the Kaybob South Amalgamated Plants Nos. 1 and 2 (KA Plant) - On July 22, 2008, SemCAMS was granted an initial order under s. 11(1) of the Companies' Creditors Arrangement Act (CCAA) - Orleans Energy Ltd. was a gas producer and used the processing facilities at the KA Plant - Orleans claimed that SemCAMS owed it over $1.6 million - SemCAMS applied for an order declaring that: a) any claims that Orleans might have against SemCAMS with respect to contractual equalization adjustments to volumes of natural gas delivered by Orleans to SemCAMS (the Price Adjustment Claim) pursuant to an inlet gas purchase agreement (IGPA) were compromised and released by the SemCAMS Plan of Arrangement (Plan) and the Plan Sanction Order; b) in accordance with the Claims Process Order, Orleans was barred from asserting or enforcing the Price Adjustment Claim, and that such claim was extinguished; and c) the statement of claim filed by Orleans was in breach of the Plan and the Plan Sanction Order and should be struck - Orleans cross-applied for a declaration that the Price Adjustment Claim was not compromised or released by the Plan and that SemCAMS owed it $1,616,412.28 - The supervising CCAA judge allowed SemCAMS' application and dismissed Orleans' cross-application - Orleans' Price Adjustment claim was a "claim" that could be compromised under the CCAA - It was released and discharged by the Plan and barred and extinguished by the Plan Sanction Order - Orleans' statement of claim relating to the Price Adjustment claim was a breach of the Plan Sanction Order and, accordingly, the court struck it - The Alberta Court of Appeal, per Hunt, J.A., dismissed Orleans' application for leave to appeal - The issues were significant to the parties and an appeal would not unduly hinder the CCAA proceeding - However, the other parts of the test for leave to appeal had not been made out - The appeal had no merit - The appeal was not of significance to the CCAA practice.

Creditors and Debtors - Topic 8594.3

Debtors' relief legislation - Companies' creditors arrangement legislation - Arrangement - Releases - [See Creditors and Debtors - Topic 8594.2 ].

Cases Noticed:

Liberty Oil & Gas Ltd. et al., Re, [2003] A.R. Uned. 179; 2003 ABCA 158, refd to. [para. 4].

Resurgence Asset Management LLC v. Canadian Airlines Corp. - see Canadian Airlines Corp., Re.

Canadian Airlines Corp., Re (2000), 261 A.R. 120; 225 W.A.C. 120; 2000 ABCA 149, refd to. [para. 5].

Confederation Treasury Services Ltd. (Bankrupt), Re (1997), 96 O.A.C. 75; 43 C.B.R.(3d) 4 (C.A.), refd to. [para. 35].

International Institute of Management Inc. v. Edmonton Co-operative Association Ltd. et al. (2000), 263 A.R. 326; 2000 ABQB 181, refd to. [para. 35].

Counsel:

T.A. Batty, for the applicant;

A.R. Anderson, Q.C., and D.L.R. Yaverbaum, for the respondent;

M. Lemmens, for the interested party Ernst & Young Inc.

This application for leave to appeal was heard on October 3, 2012, by Hunt, J.A., of the Alberta Court of Appeal, who delivered the following reasons for decision on November 5, 2012.