Yukon Zinc, owner of the Wolverine Mine in the Yukon, commenced restructuring proceedings in March 2015 under the Companies' Creditors Arrangement Act (CCAA). In addition to the jurisdictional dispute discussed above under the heading "Conflicts and Jurisdiction," (page 33) an issue arose about entitlement to over 14,000 tonnes of zinc concentrate, worth US$8 million.
The dispute was between Transamine Trading S.A., which claimed to have purchased the zinc concentrate from the mine, and Procon Mining and Tunnelling Ltd., which had supplied mining services, equipment and materials to Yukon Zinc at the mine. Procon had filed a miner's lien under the Yukon Miners Lien Act in January 2015, but Transamine said that title to the concentrate had already been transferred to it.
The British Columbia Supreme Court found in favour of Transamine, ordering that the concentrate was held for its benefit and was not encumbered by Procon's lien. In determining the timing of Transamine's interest, the Court considered that the purchase contracts expressly stipulated that title transferred on payment, which in this case occurred before the lien was registered. Further, Transamine had control over the concentrate in transit and in amounts segregated and intact at the mine site (even if Yukon Zinc retained some of the risk) before the lien was registered because the terms of the contracts and the holding certificates made it clear that, upon ascertainment of the concentrate it was at the "irrevocable and unconditional disposal" of Transamine. The Court also concluded that Procon had released its interests created by two previous liens for the very purpose of allowing Yukon Zinc to enter into the purchase contracts with Transamine.
In a subsequent decision, indexed as 2015 BCSC 1991, the Court denied Transamine's application for special costs from Procon, finding that Procon had defended the application in good faith and that ordinary party and party costs were appropriate.
To view the original article please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
