The appellant purchased furniture, fixtures, and equipment, including a large racking system, from insolvent tenants under a court-approved Liquidation Process Order in bankruptcy proceedings.
The appellant failed to remove the racking from the landlord's distribution centre/warehouse before the lease disclaimer date and multiple deadlines.
The trial judge dismissed the appellant's conversion claim, finding that the racking was deemed abandoned pursuant to the Sale Guidelines incorporated in the Liquidation Process Order, which provided that any fixtures or personal property left in a store after the sale termination date and lease disclaimer would be deemed abandoned.
The Court of Appeal upheld the trial judge's interpretation, holding that the deemed abandonment provision was irrebuttable when read in the context and purpose of the insolvency proceedings, and that the appellant could have sought a variation of the order through the come-back provision but failed to do so.
The appeal and the respondents' cross-appeal on damages were both dismissed.