Royal Bank of Canada v Wapiti Waste Management Inc, 2016 ABQB 145

Court of Queen ’ s Bench of Alberta Citation: Royal Bank of Canada v Wapiti Waste Management Inc, 2016 ABQB 145 Date: 20160314 Docket: 1403 01324 Registry: Edmonton Between: Royal Bank of Canada Plaintiff - and - Wapiti Waste Management Inc. Defendant _______________________________________________________ Endorsement of the Honourable Madam Justice J.B.

Veit _______________________________________________________ [ 1 ] Invoking a decrease in general market values and the cost of remediation, the Receiver of Wapiti applies for approval of the sale of the company’s last asset at a price far below the price at which the property was originally listed for sale approximately two years ago: $535,000.00 versus $1.7 million. [ 2 ] Because of the opposition of the largest of the remaining unpaid creditors of Wapiti, the application is denied at this time. [ 3 ] The only remaining unpaid class of creditors is that of unsecured creditors.

By far the largest of these claims is filed by Mr. Quigley; the next largest claim to Mr. Quigley’s is approximately $416,000.00 smaller than Mr. Quigley’s claim. The total of unsecured claims is approximately $1.4 million. Except for Energetic Services Inc., the Receiver has been able to serve almost all of the unsecured claimants, and has been able to serve all unsecured claimants whose claim is $50,000.00 or more. Mr. Quigley opposes the sale at this

time: he argues that, because the value of the unsold asset is primarily dependent on the environmental problem it poses, no final sale should be made until the receiver has been able to locate Wapiti’s insurance policy and determine whether a claim could be under that policy.

In the absence of the policy itself, the insurer’s apparent refusal of the receiver’s claim on the grounds that the claim was not made in time cannot be evaluated. [ 4 ] The receiver acknowledges that, despite its efforts, it has not yet been able to obtain a copy of the insurance policy itself. (The policy used in respect of the Gold Creek site fire is a different policy.) [ 5 ] Not approving the proposed sale may turn out to be costly to the unsecured creditors: an adjournment may cause the loss of the offer which is currently on the table, the market may continue to deteriorate, and the policy, when it is able to be assessed, may not provide any answer to the need for remediation.

However, when the largest by far of the unsecured creditors indicates that he is willing to take this risk, and when the policy itself has not yet been able to be studied, the unsecured creditor’s position must be taken seriously. [ 6 ] In those circumstances, the Receiver’s application is denied at this time; the application can, of course, be returned on notice, when the Receiver has an answer to Mr.

Quigley’s queries. [ 7 ] A representative of Charles Miller, to the best of the receiver’s knowledge a minority shareholder and apparently current president of Wapiti, appeared on the last return date of this application. I informed that individual that, in this court, individuals can appear on their own behalf, and that everyone else can only appear through a lawyer.

As I did not know in which capacity Charles Miller wanted to be heard, I informed Charles Miller’s representative that, as Charles Miller was out of Canada, and as the matter was being adjourned at the request of a lawyer for an unsecured creditor, if Charles Miller could personally send a position in writing to the court, I would assess that position at the next hearing. I attempted to make it clear to Charles Miller’s representative that I was not guaranteeing that Charles Miller would have status on the application to approve the sale or that his arguments would be considered on the application.

The court did receive written materials from Charles Miller. [ 8 ] As a shareholder, any claim made by Mr. Miller for a share of the remaining proceeds appears to be weak: not only would all the unsecured creditors have to be paid out first, but so would the Receiver and the Receiver’s lawyer. The last remaining asset would therefore have to be sold for at least $1.5 million before Charles Miller – in his capacity as a shareholder - could hope for any recovery.

In those circumstances, as a minority shareholder, Charles Miller’s opposition to the application has essentially no weight. [ 9 ] Wapiti probably has no status on this application: the Receiver stands in the position of Wapiti with respect to the disposition of Wapiti property. Indeed, it is possible that the original order appointing the Receiver was a consent order. In any event, under the Alberta Rules of Court, if Wapiti wished to make representations on this application, it could only do so through a lawyer agent: Rule 2.22 . In 908077 Alberta Ltd. (c.o.b.

Escape & Relax) v. 1313608 Alberta Ltd. 2015 ABCA 117 ; the Alberta Court of Appeal confirmed the application of this rule: 2 Rule 2.22 provides that an "individual" may be self-represented in the superior courts. The statutory and case law confirms that other types of litigants in civil cases, including corporations, must be represented by a lawyer: Lameman v Alberta, 2012 ABCA 59 at paras. 9 , 35, 522 AR 140; Chapman Estate v Ramjohn, 2015 ABCA 34 at paras. 3-4 ; Legal Profession Act, RSA 2000, c. L-8, s. 106 . 3 It follows that the corporate appellant must retain counsel to represent it in this appeal.

There are several advantages to doing business through a corporation (such as limited liability, and perpetual succession) but also some burdens. Using a lawyer during litigation is one such burden. If the corporate appellant is able, in this appeal, to establish some right to be represented by its non-lawyer directors, then it could continue to pursue the landlord and tenant dispute itself. However, as the law presently stands, the appellant must have counsel for this appeal. [ 10 ] In his written materials, presumably as President of Wapiti, Mr.

Miller asks for an adjournment of the application to May to allow Wapiti to retain a lawyer to represent it in these proceedings. I am not certain of Charles Miller’s status with the company and whether he has, in fact, the necessary authority to retain a lawyer for these proceedings. In any event, however, as indicated above, the application is adjourned, without setting a return date, so that Mr. Quigley’s concerns can be addressed. The Receiver will give Charles Miller notice of the next date on which this matter will be heard.

If Wapiti has retained a lawyer by the next return date, that lawyer can of course appear and Wapiti’s position will be assessed. [ 11 ] In his written materials, Mr. Miller sets out a long series of allegations of wrongdoing by the Receiver. If Wapiti is of the view that the Receiver has committed wrongful acts, then Wapiti will presumably sue the Receiver. However, the issue of the Receiver’s potential wrongdoing is not before the court on this application.

Even if Wapiti made a formal claim of wrongdoing, for example, by filing pleadings to that effect, the initiation of a claim would not have any effect on the discrete issue of whether the sale of this particular property is appropriate in all the circumstances. Heard on the 10 th day of March, 2016. Dated at the City of Edmonton, Alberta this 11 th day of March, 2016.

J.B. Veit J.C.Q.B.A. Appearances: Terrence M. Warner for the Receiver Steven D. Cope for unsecured creditor Courtesy copy to: Charles Miller (via email)