Dentons Canada LLP v Rehill Holdings Ltd
Dentons Canada LLP
Rehill Holdings Ltd.
Buta Singh Rehill
2290808 Alberta Ltd.
Poonamjeet Kaur Toor
Neosome Lenders Ltd.
Trilochan Singh Sekhon
2290789 Alberta Ltd.
Jagroop Randhawa
2329716 Alberta Ltd.
  • Parties Involved: Dentons Canada LLP (Plaintiff) vs. Rehill Holdings Ltd. and multiple other defendants.
  • Issue: Dispute over the proper disbursement of escrow funds related to various obligations stemming from a commercial transaction.
  • Carbon Tax:

    • Agreement: $219,189.62 agreed to be released from escrow for the vendor's share of the carbon tax.
    • Dispute: Whether the vendor was also responsible for related interest and penalties.
    • Decision: Vendor not responsible for post-closing interest and penalties as per the share purchase agreement (SPA) and escrow holding agreement (EHA).
  • Legal Fees:

    • Claim: Purchaser claimed legal fees associated with enforcing the EHA.
    • Decision: Legal fees not covered by the escrow arrangements; not addressed within the scope of escrow obligations.
  • Corporate Tax and GST:

    • Dispute: Calculation of GST debt as of closing.
    • Decision: Vendor responsible for $33,573.31 after considering all applicable tax credits and adjustments.
  • West Country Holdback:

    • Settlement: Parties settled a claim for $30,000, with legal costs of $3,371.
    • Decision: Vendor responsible for half the settlement amount ($15,000) but not the legal costs, as these were not covered by the escrow arrangement.
  • Change-of-Control Financial Statements Holdback:

    • Dispute: Responsibility for the cost of certain financial reports.
    • Decision: Vendor liable for $21,585, half the cost of standard financial reports, but not for additional, non-standard reports.
  • Conclusion:

  • The vendor’s obligations anchored by the escrow arrangement totaled $289,374.93.
  • Any disputes over legal fees and penalties not covered by escrow should be resolved outside the escrow provisions, potentially through arbitration.
  • Key Legal Points and Decisions:

Court of King's Bench of Alberta
2301 13237
Corporate & commercial law
$ 289,348
Plaintiff