Digital Brain
digital brain
digital brain

Supreme Court of Canada Denies Leave to Appeal in “Virginia Hills” Linear Property Tax Case: Northern Sunrise County, et al. v. Bank of Nova Scotia, et al., 2019 SCC 38587

September 2019 Insolvency and Restructuring, Energy Bulletin 2 minutes read

On August 29, 2019, the Supreme Court of Canada denied the application brought by three municipalities (the “Municipalities”) seeking leave to appeal the decision of the Alberta Court of Appeal in Northern Sunrise County v Virginia Hills Oil Corp, 2019 ABCA 61.  The Supreme Court of Canada has confirmed that the Alberta Municipal Government Act (the “Act”) does not grant a municipality a special lien for unpaid linear property taxes.

At the Alberta Court of Appeal the Municipalities sought a declaration that their claims for linear property tax arrears against two bankrupt companies, Virginia Hills Oil Corp. and Dolomite Energy Corp., granted the Municipalities a special lien against the companies which would make the Municipalities secured creditors under the Bankruptcy and Insolvency Act. The Court of Appeal found that unpaid linear property taxes, which are taxes levied against linear property such as electric power systems, street lighting systems, telecommunications systems and pipelines, could not form a special lien against the assessed party under the Act. This decision is therefore of considerable importance to participants in the Alberta oil and gas industry, including receivers, trustees, municipalities and secured lenders. Administration of a number of bankruptcy cases will likely finally proceed now that the Supreme Court has provided certainty with respect to the treatment of these types of municipal tax claims. All stakeholders will benefit from the clear finding that claims for linear property tax arrears are unsecured in a bankruptcy.

McMillan successfully represented The Bank of Nova Scotia, as agent for the senior lenders to Virginia Hills Oil Corp. which was a respondent in this appeal.

by Kourtney Rylands

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2019

Related Publications (5 Posts)

Featured Insight

Alberta Recognizes Privacy Tort of Public Disclosure of Private Facts

The Alberta Court of Queen’s Bench recognized the tort of public disclosure of private facts for the first time; In deciding the recognize the tort...

Read More
Sep 27, 2021
Featured Insight

Real Estate Litigation: Summer Highlights

Even in the summer months, the legal news does not let up. Here are some recent decisions and legislative developments as we head into the 2021 fall season.

Read More
Sep 21, 2021
Featured Insight

McMillan’s Employment and Labour Webinar

Join McMillan's annual Employment and Labour Seminar on Tuesday, October 5th as we address significant legal developments and provide practical advice on responding to employee issues.

Details
Tuesday, October 5, 2021
Featured Insight

Supreme Court of Canada Confirms: CCAA Super-Priority Charges Rank Ahead of CRA’s Deemed Trusts

Canada v. Canada North Group Inc. provided much needed clarity regarding the order of priority for unremitted source deductions in restructuring proceedings.

Read More
Sep 17, 2021
Featured Insight

McMillan’s ESG Strategy Sessions

The COVID-19 pandemic and increased concerns over environmental and social issues, such as climate change and systemic racism, have prompted conversations throughout global capital markets.

Details
Wednesday, October 6, 2021