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ARTICLE · 18 NOVEMBER 2015

Are CCAA Proceedings A Panacea For Assignment Or Novation Without Consent?

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In Barafield, CEG Energy Options Inc. (CEG) entered into contracts to provide natural gas to apartment buildings owned by the respondents (Barafield).

CanadaCorporate/Commercial Law
Scott Bower
Scott Bower
Russell Kruger
Russell Kruger
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A purported assignment of a contract without consent and an alleged novation were ineffective, the BC Court of Appeal recently held in Barafield Realty Ltd. v. Just Energy (B.C.) Limited Partnership, 2015 BCCA 421 [Barafield] in the context of considering Companies' Creditors Arrangement Act (CCAA) proceedings.

In Barafield, CEG Energy Options Inc. (CEG) entered into contracts to provide natural gas to apartment buildings owned by the respondents (Barafield). The contracts were for a fixed five-year term at a fixed rate. During this period, CEG entered into bankruptcy and CCAA proceedings. The contracts were sold to the appellants (Just Energy) and approved by an Alberta CCAA court (the Vesting Order). Barafield had no notice of these proceedings.

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