The Crestmark Developments Limited Partnership v. Greata Ranch Developments Limited Partnership

The Crestmark Developments Limited Partnership v. Greata Ranch Developments Limited Partnership

The court found an extricable question of law existed: whether the arbitrator erred by failing to consider relevant provisions of the Partnership Act when determining distribution priority under the LPA; because that statutory interpretation could affect the outcome (subordination of Crestmark's loan), leave to appeal was granted on that narrow question.

Citation
2018 BCSC 932
Parties
Petitioner: The Crestmark Developments Limited Partnership; Respondent: Greata Ranch Developments Limited Partnership; Greata Ranch Holdings Corp.; Concord Okanagan Developments Ltd.; Greata Ranch Development Corporation
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
7 June 2018
Procedural Posture
Application for Leave to Appeal Arbitral Award Under Arbitration Act / Leave to Appeal Application (s.31 Arbitration Act)
Outcome
Petition allowed in part; leave to appeal granted on single question of law
Legal Topics
Dissolution of Limited Partnership, Priority of Distribution on Dissolution, Characterization of Loans Vs Capital Contributions, Implied Contractual Terms, Leave to Appeal on Questions of Law
Source Language
English
Arbitration Partnership Law Contract Law Civil Procedure Statutory Interpretation Dissolution of Limited Partnership Priority of Distribution on Dissolution Characterization of Loans Vs Capital Contributions +2 more

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Parties

The Crestmark Developments Limited Partnership

Petitioner

Greata Ranch Developments Limited Partnership; Greata Ranch Holdings Corp.; Concord Okanagan Developments Ltd.; Greata Ranch Development Corporation

Respondent

Procedural Posture

Application for Leave to Appeal Arbitral Award Under Arbitration Act / Leave to Appeal Application (s.31 Arbitration Act)

Legal Issues

  1. 1 Did the arbitrator err by failing to consider relevant provisions of the Partnership Act when determining distribution priority under the LPA?
  2. 2 Whether the $6,000,000 payment constituted a creditor claim payable pari passu with third party creditors or formed part of Crestmark's 'Interest' under the LPA and thus subordinated on dissolution
  3. 3 Whether the loan was a demand loan payable on Crestmark's 2015 demand or was repayable only on dissolution

Ratio Decidendi

The court found an extricable question of law existed: whether the arbitrator erred by failing to consider relevant provisions of the Partnership Act when determining distribution priority under the LPA; because that statutory interpretation could affect the outcome (subordination of Crestmark's loan), leave to appeal was granted on that narrow question.

Court Disposition

Petition allowed in part; leave to appeal granted on single question of law

Orders

  • Leave to appeal granted under s.31 of the Arbitration Act on the following question of law: did the Arbitrator err by failing to consider relevant provisions of the Partnership Act when determining the distribution priority of the $6,000,000 Loan under the LPA?
  • Each party to bear its own costs of this proceeding