Richard B. Jones

The appellant Bank was a secured creditor of a bankrupt corporation.

The trustee in bankruptcy sought to sell the corporation's oil and gas properties.

The respondents held overriding royalties arising from the corporation's working interest and claimed priority over the Bank, arguing their royalties were interests in land.

The Supreme Court of Canada held that the common law prohibition against creating an interest in land from an incorporeal hereditament is inapplicable to the oil and gas industry.

An overriding royalty can be an interest in land if that is the intention of the parties.

On an appeal in a construction lien proceeding, the court considered whether expiry of a perfected lien under s. 46(1) of the Construction Lien Act automatically required dismissal of the entire action, including joined contract claims.

The court held that s. 46(1) mandates dismissal of the action to enforce the lien, but that s. 47(1)(d) preserves discretion to dismiss or allow continuation of non-lien claims within the same action.

Applying that interpretation, the court found the Master had exercised the discretion to dismiss the whole proceeding and that, given four years of inactivity and the absence of responding evidence, there was no arguable basis to interfere.

The appeal was allowed, the Divisional Court order was set aside, and the Master's dismissal order was reinstated.

The appellants sought to overturn an assessment of a law firm's accounts and attempted at the opening of the appeal to introduce fresh evidence from a former solicitor.

The Court of Appeal refused to entertain the request because no proper fresh evidence application material had been filed.

On the merits, the court held there was no basis to interfere with concurrent findings that a retainer existed and that the assessment officer's taxation of the accounts, as varied on appeal, was supported by ample evidence.

The appeal was dismissed with costs.