Court Applies Redwater Principles Outside Formal Bankruptcy Proceedings

In a recent decision, 2023 ABKB 109, Justice D. B. Nixon of the Alberta Court of King's Bench applied the tenets of Canadian environmental law, reiterating that a polluter cannot walk away from its contaminated land and determining that a private landowner has a reasonable likelihood of establishing a super priority to mortgagees for a claim for environmental remediation. The Court's decision is based on its consideration of principles espoused in Redwater and other recent cases in the insolvency context.

Justice Nixon granted QL Towers Inc. (QLT) an attachment order for the proceeds of the sale of the defendant's property for over $2 million.

Background

The parties each own properties in Calgary's Beltline. For the purpose of the application for an attachment order, the defendant, 12-10 Capital Corp. (Capital Corp), conceded that QLT had a reasonable likelihood of establishing its claim on the merits. It was conceded that: