Trez Capital Corp. et al. v. UC Investments Inc. et al., 2013 NSSC 381

• Judge: Pickup, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: November 20, 2013
• Jurisdiction: Nova Scotia
• Citations: 2013 NSSC 381;(2013), 337 N.S.R.(2d) 339 (SC)

Trez Capital Corp. v. UC Inv. Inc. (2013), 337 N.S.R.(2d) 339 (SC);

    1067 A.P.R. 339

MLB headnote and full text

Temp. Cite: [2013] N.S.R.(2d) TBEd. DE.001

Trez Capital Corporation, Trez Capital Limited Partnership, TCC Mortgage Holdings Inc., Computershare Trust Company of Canada and WBLI, Inc. (applicants) v. UC Investments Inc., Edge Marketing Inc., 3214113 Nova Scotia Limited and PricewaterhouseCoopers Inc. (respondents)

(Hfx. No. 421567; 2013 NSSC 381)

Indexed As: Trez Capital Corp. et al. v. UC Investments Inc. et al.

Nova Scotia Supreme Court

Pickup, J.

November 29, 2013.

Summary:

Lenders applied for a declaration that their appointment of a receiver was not stayed under s. 69(1) of the Bankruptcy and Insolvency Act, and in the alternative, an order appointing an interim receiver.

The Nova Scotia Supreme Court dismissed the application.

Bankruptcy - Topic 1721

Interim receivers - Appointment - Grounds - The Nova Scotia Supreme Court discussed when an interim receiver would be appointed under s. 47.1 of the Bankruptcy and Insolvency Act - See paragraphs 52 to 76.

Bankruptcy - Topic 6711

Practice - Service - General principles - Rule 124 of the Bankruptcy and Insolvency General Rules provided that a notice of intention to enforce security under s. 244(1) of the Bankruptcy and Insolvency Act (BIA) could be by "electronic transmission" if agreed to by the parties - In this case, borrowers and lenders agreed in commitment letters (para. 42), that "All communications provided for hereunder shall be in writing, personally delivered, or sent by prepaid first class mail or telecommunications" - At issue whether an email sent by the lenders on October 16, 2013, containing a s. 244(1) notice was a form of notice "agreed to by the parties" - The Nova Scotia Supreme Court determined that the parties had not agreed to electronic communication of the s. 244 notice - Paragraph 42 of the commitment letters referred to notice provisions in the commitment letters (i.e., "communications provided for hereunder"), and could not be expanded to cover the BIA notice provisions - Thus, the email sent on October 16, 2013, was not proper service - See paragraphs 1 to 42.

Bankruptcy - Topic 6711

Practice - Service - General principles - Rule 124 of the Bankruptcy and Insolvency General Rules provided that a notice of intention to enforce security under s. 244(1) of the Bankruptcy and Insolvency Act (BIA) could be by "electronic transmission" if agreed to by the parties - In this case, the parties (borrowers and lenders) agreed in commitment letters (para. 42) that "All communications provided for hereunder shall be in writing, personally delivered, or sent by prepaid first class mail or telecommunications" - At issue whether an email sent by the lenders on October 16, 2013, containing a s. 244(1) notice was a "telecommunication" - The Nova Scotia Supreme Court opined that even if para. 42 contemplated email service of the s. 244 notice under the BIA, the term "telecommunication" was not specific enough to refer to email - See paragraphs 42 to 51.

Cases Noticed:

Royal Bank of Canada v. Zutphen Brothers Construction Ltd. (1993), 17 C.B.R.(3d) 314 (N.S.S.C. Bktcy.), refd to. [para. 59].

Atsana Semiconductor Corp., Re, [2005] O.T.C. 663; 2005 CarswellOnt 3304 (Sup. Ct.), refd to. [para. 60].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 47.1 [para. 56]; sect. 69(1) [para. 1]; sect. 244(1) [para. 19].

Bankruptcy and Insolvency Act (Can.) Regulations, Bankruptcy and Insolvency General Rules, rule 124 [para. 22].

Interpretation Act, R.S.C. 1985, c. I-21, sect. 35 [para. 43].

Counsel:

Jeffrey R. Hunt and Joel Henderson, for the applicants;

Robert G. MacKeigan, Q.C., and Sheree L. Conlon, for UC Investments Inc., Edge Marketing Inc., 3214113 Nova Scotia Limited;

Joshua J. Santimaw, for Harbour Edge Mortgage Investment Corporation;

Tim Hill, for Green-Starlight GP Limited;

Josh J.B. McElman and Gavin D.F. MacDonald, for BMO;

D. Bruce Clarke, Q.C., for PricewaterhouseCoopers Inc.;

Adam D. Crane, for First National GP Corporation;

Diane P. Rowe, for Housing Nova Scotia.

This application was heard on November 20, 2013, in Halifax, Nova Scotia, before Pickup, J., of the Nova Scotia Supreme Court, who delivered the following oral decision on November 29, 2013.