Category Archives: Property

Dower Consent Teasers

Case considered: Karafiat v Webb, 2012 ABCA 115 and Webb (Re), 2011 ABQB 89.

This case shows that the Dower Act, RSA 2000, c D-15 can still throw up intellectual teasers 55 years after this version of the statute was first enacted (Dower Act, 1948 (Alta), c 7). The case highlights the distinction between the consent required by section 4 of the Act (the normal case), and the consent required under section 25(2). Section 25(2) deals with the situation where the homestead property is co-owned by the spouses. The issue is whether a request by both spouses to the holder of a charge to postpone that charge is a consent to a disposition (i.e. the charge) for the purposes of section 4 or section 25(2). The majority responds in the negative.

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More Grist for the Mill, Another Case of Gross Negligence under CAPL 1990

PDF version: More grist for the mill, another case of gross negligence under CAPL 1990

Case commented on: Trident Exploration Corp. (Re), 2012 ABQB 242

An operator under a pooling agreement who agrees to take charge of responding to a Crown offset notice and who fails to do so and fails to inform tract owners that it is no longer intending to respond, is grossly negligent within the meaning of Article 4 of the 1990 CAPL Operating Procedure.

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Who Bears the Loss for Converted Security Deposits?

PDF version: Who Bears the Loss for Converted Security Deposits?

Case considered: Equitable Trust Company v Lougheed Block Inc., 2012 ABCA 87

This judgment is one of several arising as a result of foreclosure proceedings taken with respect to the historic Lougheed Building at 604 – 1 Street S.W. in Calgary. In this March 2012 decision by the Court of Appeal the focus is on the security deposits that the former owner of the building had converted to its own use. Because neither the foreclosing mortgage company – Equitable Trust Company – nor the court-approved purchaser of the building – the aptly named 604 – 1 Street S.W. Inc. – received the tenants’ security deposits from the former owner/landlord, the issue was a classic in commercial law, a “battle of innocents.” Who would be out the more than $340,000 in security deposits, the mortgagee or the purchaser? The Chambers judge, R.G. Stevens, had let the loss lie where it fell, on the purchaser who would become the landlord to whom the tenants would look for their security deposits. A unanimous Court of Appeal – Madam Justice Marina Paperny, Mr. Justice J.D. Bruce McDonald and Mr. Justice Brian O’Ferrall – allowed the purchaser’s appeal and shifted the loss to the foreclosing mortgagee. While many of the grounds for allowing the appeal were based on the particular terms of the specific contract of purchase and sale between these individual parties, some of the grounds are more generalizable and therefore of broader interest.

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The Proper Person to Renew an Assigned Lease

PDF version: The Proper Person to Renew an Assigned Lease

Case considered: C & H Properties Inc. v Amos (Discount Thrift Store), 2012 ABQB 106

Carelessness with respect to assignments and subleases can easily jeopardize commercial tenants’ rights to renew their leases. Many tenants assign or sublet their rented commercial premises without seeking their landlord’s consent, which is usually required by the terms of their lease. Many commercial tenants do not seem to know the difference between assignments and subleases. Neither do they appear to realize that when they assign their lease, they lose the right to renew the lease and only their assignee has that right, whereas if they sublet then they retain the right to renew the lease. Perhaps that is why commercial lease negotiation consulting appears to be a growing business in North America. However, despite some assistance from a consultant in this case, the tenant was never able to overcome a lack of attention to details in the lease or their confusion about the difference between an assignment and a sublease.

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The severance of a water right from a purchase and sale of land

PDF version: The severance of a water right from a purchase and sale of land

Case commented on: Royal Bank of Canada v Hirsche Herefords, 2012 ABQB 32

This decision concludes that a provincial water licence can be contingently severed from the land or undertaking to which it is appurtenant by way of an agreement of sale and the subsequent registered transfer. The contingency is the Director’s approval of the transfer of the water licence to another party under the terms of sections 81 – 82 of the Water Act, RSA 2000, c W-5. The decision also confirms the emergence of a water rights market in southern Alberta.

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