Rackster Hosting Inc. (Re)

Rackster Hosting Inc. (Re)

The court held it had no discretion to extend the three‑month possession period prescribed by s.29(2) of the Commercial Tenancy Act, found the word 'collectively' created an aggregate undivided interest in the lease as between the named parties, denied the applicant's requested extension, and allowed the trustee to proceed with the accepted sale to 0866751 B.C. Ltd.

Citation
2009 BCSC 1842
Parties
Bankrupt: Rackster Hosting Inc.; Co Tenant/applicant: David Tarasenko; Trustee: KPMG Inc.; Landlord: Cromwell Properties Ltd.; Offeror: 7295140 Canada Inc.; Purchaser: 0866751 B.C. Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
23 December 2009
Procedural Posture
Bankruptcy / Application (short Leave, in Chambers)
Outcome
Application to extend the trustee's possession period denied; trustee permitted to proceed with sale to purchaser; no costs awarded.
Legal Topics
Lease Termination, Trustee's Right to Occupy, Statutory Possession Period, Assignment of Lease, Sale of Estate in Bankruptcy
Source Language
English
Bankruptcy and Insolvency Commercial Tenancy Property Law Contract Lease Termination Trustee's Right to Occupy Statutory Possession Period Assignment of Lease +1 more

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Parties

Rackster Hosting Inc.

Bankrupt

David Tarasenko

Co Tenant/applicant

KPMG Inc.

Trustee

Cromwell Properties Ltd.

Landlord

7295140 Canada Inc.

Offeror

0866751 B.C. Ltd.

Purchaser

Procedural Posture

Bankruptcy / Application (short Leave, in Chambers)

Legal Issues

  1. 1 Whether the court has discretion to extend the 3‑month occupancy period under s.29(2) of the Commercial Tenancy Act
  2. 2 Whether the word 'collectively' gives the non‑corporate co‑named party an independent, severable lease interest
  3. 3 Whether the trustee may remain in possession or assign the lease pending sale

Ratio Decidendi

The court held it had no discretion to extend the three‑month possession period prescribed by s.29(2) of the Commercial Tenancy Act, found the word 'collectively' created an aggregate undivided interest in the lease as between the named parties, denied the applicant's requested extension, and allowed the trustee to proceed with the accepted sale to 0866751 B.C. Ltd.

Court Disposition

Application to extend the trustee's possession period denied; trustee permitted to proceed with sale to purchaser; no costs awarded.

Orders

  • Extension of time under s.29(2) Commercial Tenancy Act denied
  • Trustee may proceed with sale to 0866751 B.C. Ltd.; court approval not required for that sale under the circumstances