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.
