July 02, 2019
The Ontario Court of Appeal’s June 19 decision in Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., sets a new test for when the court can extinguish interests in land, clearing up confusion between the 10-day appeal period in the Bankruptcy and Insolvency Act and the 30-day period in the Courts of Justice Act.
David believes this statement will provide certainty and comfort for industries relying on land interests, in which royalties are an important tool, like mining and oil and gas.
“When an insolvent company is selling its property and other people have interest in that property, the vesting order extinguishes those other interests. We didn’t know how far you could go with that exercise,” David said.
“This provides us with some significant understanding of where the line is.”
David also said “thanks to the decision, lawyers have better guidance on: the basis of authority for the granting of these orders; the fact that authority is national in scope and comes from federal legislation; the analysis to be considered when deciding whether or not to extinguish interests; and the limitations on the tool.”
“It has significance well beyond insolvency law. For real estate lawyers, it’s of great interest,” he says.
“It’s really important for lenders to understand.”
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