Insights Header image
Insights Header image
Insights Header image

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 minute 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

Insights (5 Posts)

Featured Insight

Update for Ontario Employers: Proposed Changes Related to Remote Workers

Ontario employer's should note proposed amendments to the province's employment laws that would clarify remote employees' entitlements in mass terminations.

Read More
Mar 24, 2023
Featured Insight

Trademark of Foreign Owner Invalidated on the Basis of Bad Faith

Awareness of a senior rights holder’s trademark and its prior use of such trademark in Canada is relevant to the assessment of bad faith.

Read More
Mar 22, 2023
Featured Insight

Fanning the Flames of Liability: The Ontario Court of Appeal Considers Product Liability Issues in Burr v. Tecumseh Products of Canada Limited

The decision of the Court of Appeal in Burr v. Tecumseh Products of Canada Limited, 2023 ONCA 135 provides a helpful overview of product liability law.

Read More
Mar 20, 2023
Featured Insight

A Look at Some Key Findings by the Alberta Securities Commission in Re Bison Acquisition Corp.

On December 21, 2021, a panel of the Alberta Securities Commission issued its written decision providing its reasons for the oral ruling it made on July 12, 2021 regarding applications brought by Bison Acquisition Corp. and Brookfield Infrastructure Corporation Exchange Limited Partnership, as well as Inter Pipeline Ltd. and Pembina Pipeline Corporation.

Read More
Mar 20, 2023
Featured Insight

Employer’s Disturbing Termination Conduct Results in $15,000 Moral Damages Award

Teljeur v Aurora Hotel Group 2023 ONSC 1324 provides example of post-termination conduct and bad faith damages.

Read More
Mar 16, 2023