NovaLIS Technologies Ltd. (Re)

NovaLIS Technologies Ltd. (Re)

The Registrar held that ACOA’s conduct did not constitute an improper use of the BIA and its votes must be counted; the contribution agreements are unambiguous on their face such that, upon an event of default under the General Conditions, ACOA may require repayment of part or all of the contributions, and therefore ACOA’s provable claim is the larger balance claimed ($3,726,177.12) rather than only the royalties accrued to date.

Citation
2008 NSSC 222
Parties
Applicant (debtor): NovaLIS Technologies Limited; Respondent (creditor): Atlantic Canada Opportunities Agency
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
11 July 2008
Procedural Posture
Bankruptcy and Insolvency (proposal Proceedings Under the Bankruptcy and Insolvency Act) / Registrar Decision After Creditors' Meeting Determining Whether Creditor Votes Should Be Counted and the Amount of a Provable Claim
Outcome
Application denied in respect of excluding ACOA votes; ACOA entitled to have its votes counted; ACOA's provable claim held to be the greater amount claimed; court remains seized for follow-up matters; costs reserved.
Legal Topics
Proposal Acceptance, Provable Claim, Improper Purpose Doctrine, Contract Interpretation, Contra Proferentem, Events of Default, Agency of the Crown
Source Language
English
Bankruptcy and Insolvency Contract Law Administrative/public Law Tax Law Proposal Acceptance Provable Claim Improper Purpose Doctrine Contract Interpretation +3 more

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Parties

NovaLIS Technologies Limited

Applicant (debtor)

Atlantic Canada Opportunities Agency

Respondent (creditor)

Procedural Posture

Bankruptcy and Insolvency (proposal Proceedings Under the Bankruptcy and Insolvency Act) / Registrar Decision After Creditors' Meeting Determining Whether Creditor Votes Should Be Counted and the Amount of a Provable Claim

Legal Issues

  1. 1 Whether ACOA's votes should be excluded as an improper use of the Bankruptcy and Insolvency Act
  2. 2 Whether ACOA's provable claim is the full unpaid contributions or only royalties actually accrued to date
  3. 3 Whether the contribution agreements are ambiguous and whether contra proferentem applies

Ratio Decidendi

The Registrar held that ACOA’s conduct did not constitute an improper use of the BIA and its votes must be counted; the contribution agreements are unambiguous on their face such that, upon an event of default under the General Conditions, ACOA may require repayment of part or all of the contributions, and therefore ACOA’s provable claim is the larger balance claimed ($3,726,177.12) rather than only the royalties accrued to date.

Court Disposition

Application denied in respect of excluding ACOA votes; ACOA entitled to have its votes counted; ACOA's provable claim held to be the greater amount claimed; court remains seized for follow-up matters; costs reserved.

Orders

  • ACOA's votes at the creditors' meeting are to be counted
  • ACOA's provable claim is determined to be the unpaid contributions in the amount asserted by ACOA (the greater amount)