Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al.,

JurisdictionManitoba
JudgeJoyal
Neutral Citation2009 MBQB 309
Date04 December 2009
CourtCourt of Queen's Bench of Manitoba (Canada)

Arctic Fdn. v. Mueller Can. Ltd. (2009), 248 Man.R.(2d) 123 (QB)

MLB headnote and full text

Temp. Cite: [2010] Man.R.(2d) TBEd. JA.022

Arctic Foundations of Canada Inc. and Encompass Inc. (plaintiffs) v. Mueller Canada Ltd., carrying on business as Mueller Flow Control and the said Mueller Flow Control and Mittal Canada Inc. (defendants)

(CI 04-01-39648; 2009 MBQB 309)

Indexed As: Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Joyal, A.C.J.Q.B.

December 4, 2009.

Summary:

The defendants appealed from a decision of the Master wherein she concluded that although certain proposed amendments by the plaintiffs would create a new cause of action and were outside of the applicable limitation period, they could nonetheless be permitted on the basis that "special circumstances" existed. The defendants further appealed the Master's decision dismissing the defendants' motion for summary judgment.

The Manitoba Court of Queen's Bench determined the issues accordingly. Overall, the defendants were successful. The plaintiffs' proposed amendments sought to include a new cause of action in negligent misrepresentation, the relevant limitation period had expired, and there were no special circumstances to justify permitting the amendments or the new cause of action. On the basis of the evidence and the law, the plaintiffs' claim for economic loss had no realistic chance of success. With no genuine issue for trial, the plaintiff's claim for economic loss need not proceed further.

Courts - Topic 1127

Masters - Appeals from - Standard of review - The defendants appealed from a decision of the Master wherein she concluded that although certain proposed amendments by the plaintiffs would create a new cause of action and were outside of the applicable limitation period, they could nonetheless be permitted on the basis that "special circumstances" existed - The defendants further appealed the Master's decision dismissing the defendants' motion for summary judgment - The Manitoba Court of Queen's Bench conducted its analysis pursuant to the governing proposition that the hearing of an appeal from an order of a Master was a "fresh hearing" and upon such an appeal, the judge exercised a "fresh discretion" - "In other words, the judge on appeal is entitled to exercise his or her discretion independently and as he or she sees fit, notwithstanding that the decision appealed against was itself based on discretion" - See paragraph 2.

Evidence - Topic 2230

Special modes of proof - Judicial notice - Particular matters - General principles - The plaintiffs sought leave to file their proposed re-amended statement of claim - The defendants moved for summary judgment dismissing the plaintiffs' claim for economic loss arising out of the negligent supply of shoddy goods - The motions were argued before a Master, who took judicial notice of the consequences of failure of thermosyphon systems in the Canadian north and that the alleged defects created potential danger - The Manitoba Court of Queen's Bench stated that this was not a case where the threshold for judicial notice had been met - "Prior to taking judicial notice, a judge must exercise great care before displacing the ordinary obligation on a party to adduce proof ... [M]ost Canadians do not reside in the north and as such, might not have general knowledge of permafrost or thermosyphon systems, or of particular importance, the consequences of the failure of thermosyphon systems. Indeed, were the plaintiffs' claim to survive and proceed to trial, evidence on this technical point would have required substantiated expert evidence" - In the end result, given the court's already expressed determination respecting the plaintiffs' otherwise inadequate responding proof, the claim could not survive "a good hard look" - See paragraphs 97 to 101.

Evidence - Topic 7126

Opinion evidence - Nonexpert evidence - Opinion on issue to be decided - The defendants appealed the Master's decision dismissing their motion for summary judgment - In their amended statement of claim, the plaintiffs framed their claim in economic loss arising out of the negligent supply of shoddy goods - The Manitoba Court of Queen's Bench stated that, "if the claim was to survive the motion, the plaintiffs must be able to point to evidence which sets out a sustainable allegation respecting the possibility of substantial danger to health or safety" - The affidavit evidence of the plaintiffs' witness, Jardine, included assertions on that issue - Those assertions amounted to opinion - There was no reasonable basis upon which Jardine's opinion could be seen as opinion evidence coming from a qualified expert - Nor could it be accepted pursuant to the rule governing lay opinion - The absence of any meaningful information explaining Jardine's experience, deprived his affidavit of significant weight and deprived the court of the foundational basis on which it might have concluded that the opinion was within the ambit of Jardine's lay knowledge base - The unsubstantiated lay opinion, while admissible, was insufficient and inadequate - See paragraphs 81 to 89.

Evidence - Topic 7126

Opinion evidence - Nonexpert evidence - Opinion on issue to be decided - The defendants appealed the Master's decision dismissing their motion for summary judgment - In their amended statement of claim, the plaintiffs framed their claim in economic loss arising out of the negligent supply of shoddy goods - The Manitoba Court of Queen's Bench held that the unsubstantiated lay opinion presented in respect of a "critical, contentious and technical issue" by the plaintiff's witness, Jardine, while admissible, was insufficient and inadequate - Even though the defendants did not cross-examine Jardine on his affidavit nor move to expunge, the unsubstantiated basis for the lay opinion was not rectified - "Such inaction by the defendants does not render Jardine's opinion more persuasive, nor is the connected issue automatically transformed into a genuine issue with a real chance of success. A party has the right to exercise its judgment ... to determine whether, with or without cross-examination (or a motion to expunge), an opposing lay opinion as found in an affidavit, has any basis for acceptance ... [P]erfunctory cross-examination should not be required" - See paragraphs 90 and 91.

Limitation of Actions - Topic 2

General principles - Purpose of limitation provisions - The Manitoba Court of Queen's Bench considered the two-fold policy rationale at the root of limitation provisions - "First, a limitation date provides an identifiable moment in an action at which time certainty and closure is attained by a party respecting its knowledge of the precise character of the action that that party will be required to face. Second, a limitation date also provides to a party a practical means for ensuring that any action that is to be brought, will be, within time parameters sufficient to ensure that the opposing party has timely access to the best necessary evidence, including, the best recollection of witnesses" - See paragraph 52.

Practice - Topic 2105

Pleadings - Amendment of pleadings - Prejudice or presumed prejudice - What constitutes - The defendants appealed from a decision of the Master wherein she concluded that although proposed amendments by the plaintiffs would create a new cause of action and were outside of the applicable limitation period, they could nonetheless be permitted on the basis that "special circumstances" existed - She grounded that conclusion in the absence of prejudice and surprise (discoveries had not yet been completed) - The Manitoba Court of Queen's Bench was inclined to a more cautious view - Rule 26.01provided that the court might grant leave to amend a pleading "on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment" - The court suggested that "[a]ny time a limitation period has elapsed and a new cause of action is nonetheless launched, there is an inherent potential prejudice to the opposing party" - In the result, the court concluded that there were no special circumstances to justify permitting the amendments or the new cause of action - See paragraphs 53 to 55.

Practice - Topic 2110

Pleadings - Amendment of pleadings - Adding new cause of action or "claim" - The plaintiffs' claim against the defendants was for the supply of negligently manufactured pipe - A Master granted the plaintiffs' motion to re-amend the statement of claim - The Manitoba Court of Queen's Bench held that the proposed amendments would create a new cause of action in negligent misrepresentation - None of the material facts pled therein were contained in the previously amended statement of claim - Accordingly, the amended statement of claim did not provide the pre-existing factual underpinning necessary to support a cause of action for negligent misrepresentation - The court rejected the plaintiffs' argument that insofar as they asserted descriptions, specifications and/or standards in respect of the pipe purchased, they were stipulating "representations"; they were properly seen as references to the terms of the contract pled - In the result, the court concluded that the relevant limitation period had expired, and there were no special circumstances to justify permitting the amendments or the new cause of action - See paragraphs 34 to 40.

Practice - Topic 2111

Pleadings - Amendment of pleadings - Prohibition against adding new action or "claim" which is statute barred - The plaintiffs' claim against the defendants as pled in the amended statement of claim was for the supply of negligently manufactured pipe - The proposed re-amended statement of claim alleged that on or about March 26, 2001, in reasonable reliance on the defendants' representations, the plaintiffs took delivery of the pipe and proceeded to install it - The Manitoba Court of Queen's Bench held that the proposed amendments, if made, would create a new cause of action in negligent misrepresentation - It then became necessary to determine the limitation date and whether, in light of that limitation period, the new action was statute barred - In the result, irrespective of whether the reference point was March 26, 2001, or when the damage became manifest (July 31, 2001), the relevant limitation period (6 years) had expired - "In cases involving proposed amendments that would create a new cause of action which is otherwise statute barred by a limitation period, 'special circumstances' must be demonstrated by a moving party before the proposed amendments will be permitted" - In the end result, the court concluded that there were no special circumstances to justify permitting the amendments or the new cause of action - See paragraphs 41 to 46.

Practice - Topic 2111

Pleadings - Amendment of pleadings - Prohibition against adding new action or "claim" which is statute barred - The defendant appealed from a decision of the Master wherein she concluded that although certain proposed amendments by the plaintiffs would create a new cause of action (negligent misrepresentation) and were outside of the applicable limitation period, they could nonetheless be permitted on the basis that "special circumstances" existed - She grounded that conclusion both in respect of the absence of prejudice and surprise, and in public policy - The Manitoba Court of Queen's Bench held that there were no special circumstances to justify permitting the amendments or the new cause of action - By conflating the absence of prejudice and surprise with special circumstances, the Master failed to acknowledge the higher threshold involved, where the plaintiffs' proposed amendments would have the effect of launching a new cause of action, some eight years after the alleged negligent representations relied on - See paragraphs 46 to 51.

Practice - Topic 2111

Pleadings - Amendment of pleadings - Prohibition against adding new action or "claim" which is statute barred - The defendant appealed from a decision of the Master wherein she concluded that although certain proposed amendments by the plaintiffs would create a new cause of action (negligent misrepresentation) and were outside of the applicable limitation period, they could nonetheless be permitted on the basis that "special circumstances" existed - As part of her decision, the Master commented briefly respecting "a public policy consideration" - The Manitoba Court of Queen's Bench stated that "such an invocation of 'policy' (even with the absence of prejudice and surprise) cannot constitute special circumstances" - It was not clear how a refusal to permit the proposed amendments would lead to a result that was unjust and inequitable - In the result, the court concluded that the plaintiffs' proposed amendments sought to include a new cause of action in negligent misrepresentation; the relevant limitation period had expired; and there were no special circumstances to justify permitting the amendments or the new cause of action - See paragraphs 57 and 58.

Practice - Topic 2141

Pleadings - Amendment of pleadings - To plead fraud, misrepresentation, malice, intent, etc. - [See Practice - Topic 2110 ].

Practice - Topic 2143

Pleadings - Amendment of pleadings - Circumstances when amendment denied - [See first Practice - Topic 2111 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The defendants appealed the Master's decision dismissing their motion for summary judgment - The Manitoba Court of Queen's Bench began its analysis by setting out the test on a motion for summary judgment, namely, whether there was a genuine issue for trial (rules 20.02(1), with respect to a claim or defence, and 20.02, in respect of a cross-claim or third party claim) - To usefully understand the test, the court considered the Manitoba jurisprudence clarifying the respective burdens and shifting onuses attaching to either a moving or a responding party - It was clear that the parties ought to '"put their best and strongest case forward'; ... inadequate evidence might not survive 'a good hard look' ... [T]he court is making a determination as to whether there is, in the case of a responding party, a position, claim or a defence that has a real chance of success ... [A] court must be both restrained and rigorous" - See paragraphs 60 to 76.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In their amended statement of claim, the plaintiffs framed their claim in economic loss arising out of the negligent supply of shoddy goods - The defendants appealed the Master's decision dismissing their motion for summary judgment - The plaintiffs argued that even if the court found (as it did) that there was no evidence of danger, it was still inappropriate to decide the issue on a summary judgment motion as this was a developing area of the law - The Manitoba Court of Queen's Bench stated that the governing law in Manitoba was clear in regard to the recoverability of economic loss for the negligent supply of shoddy goods or structures - The identified problems in the plaintiffs' case related not to uncertain legal questions in a developing area of substantive law, but rather, to the plaintiffs' inadequate evidentiary foundation on the motion - See paragraphs 93 to 96.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - In their amended statement of claim, the plaintiffs framed their claim in economic loss arising out of the negligent supply of shoddy goods - The defendants appealed the Master's decision dismissing their motion for summary judgment - The Manitoba Court of Queen's Bench held that, with no genuine issue for trial, the plaintiffs' claim for economic loss need not proceed further - The defendants had demonstrated, prima facie, that the claim must fail - The plaintiffs had not alleged that there was any possibility of substantial danger to health or safety - Given the jurisprudence, it was essential for a plaintiff to plead those material facts in order to succeed in an action for pure economic loss - The question of danger (flowing from the suggested defects) was a critical issue - Such evidence came from the unsubstantiated lay opinion advanced by the plaintiffs' witness, Jardine - Jardine's affidavit evidence, while admissible, was insufficient and inadequate - On the basis of the evidence and the law, the claim for economic loss had no realistic chance of success - See paragraphs 77 to 92.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - The defendant Mueller agreed to supply Arctic and Encompass (the plaintiffs) with pipe to be incorporated into thermosphyon systems installed by the plaintiffs - The pipe was manufactured by the added defendant Mittal - In the course of installing the pipe under the foundation of a hospital in the Canadian north, Arctic alleged that leaks were discovered - The plaintiffs sued for the cost of remedial work - The defendants appealed the Master's decision dismissing their motion for summary judgment - Mueller argued for summary judgment based on its contention that Encompass had no contractual claim against it - The Manitoba Court of Queen's Bench dismissed Mueller's motion - When the court examined the evidentiary foundation on the motion, including that which supported a relationship between Arctic and Encompass as well as the conflicting affidavits, there was insufficient evidence to permit it to conclude that as between Encompass and Mueller, there was no genuine issue for trial - See paragraphs 102 to 106.

Cases Noticed:

Olson v. Argus Industrial Supply Ltd., [1981] M.J. No. 150 (C.A.), refd to. [para. 2].

Jacobson Estate v. Freed et al. (1994), 97 Man.R.(2d) 197; 79 W.A.C. 197 (C.A.), refd to. [para. 2].

Miller v. Jaguar Canada Inc. et al. (1997), 123 Man.R.(2d) 161; 159 W.A.C. 161 (C.A.), refd to. [para. 37].

Sentinel Self-Storage Corp. v. Dyregrov et al. (2003), 180 Man.R.(2d) 85; 310 W.A.C. 85; 2003 MBCA 136, refd to. [para. 43].

Heinicke v. Cooper Rankin Ltd. et al. (2006), 210 Man.R.(2d) 125; 2006 MBQB 273, refd to. [para. 43].

Basarsky v. Quinlan, [1972] S.C.R. 380; [1972] 1 W.W.R. 303; 24 D.L.R.(3d) 720, refd to. [para. 46].

Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. et al., [1995] 1 S.C.R. 85; 176 N.R. 321; 100 Man.R.(2d) 241; 91 W.A.C. 241, refd to. [para. 48].

Kozak v. Dauphin (Town) (1993), 86 Man.R.(2d) 1 (Q.B.), refd to. [para. 56].

Baer v. Hofer et al. (1991), 73 Man.R.(2d) 145; 3 W.A.C. 145 (C.A.), refd to. [para. 57].

Homestead Properties (Canada) Ltd. v. Sekhri et al. (2007), 214 Man.R.(2d) 148; 395 W.A.C. 148; 2007 MBCA 61, refd to. [para. 63].

Podkriznik v. Schwede (1990), 64 Man.R.(2d) 199 (C.A.), refd to. [para. 64].

Klassen v. Morden Hospital District No. 21 et al. (1992), 80 Man.R.(2d) 195 (Q.B.), refd to. [para. 65].

Pizza Pizza Ltd. v. Gillespie (1990), 75 O.R.(2d) 225 (Gen. Div.), refd to. [para. 65].

Atlas Acceptance Corp. et al. v. Lakeview Development of Canada Ltd. et al. (1991), 74 Man.R.(2d) 276 (Q.B.), affd. (1992), 78 Man.R.(2d) 161; 16 W.A.C. 161 (C.A.), consd. [para. 65].

Towers Ltd. v. Quinton's Cleaners Ltd. et al. (2009), 245 Man.R.(2d) 70; 466 W.A.C. 70; 2009 MBCA 81, refd to. [para. 66].

Perth Services Ltd. v. Quinton et al. - see Towers Ltd. v. Quinton's Cleaners Ltd. et al.

Fidkalo v. Levin (1992), 76 Man.R.(2d) 267; 10 W.A.C. 267 (C.A.), refd to. [para. 67].

Hydro Electric Board (Man.) v. Inglis (John) Co. et al., [2000] Man.R.(2d) Uned. 183; 101 A.C.W.S.(3d) 1103; 2000 MBQB 218, refd to. [para. 68].

Danylchuk et al. v. Wolinsky et al. (2007), 225 Man.R.(2d) 2; 419 W.A.C. 2; 2007 MBCA 132, refd to. [para. 70].

Dominion Construction Co. v. 4405633 Manitoba Ltd. et al. (2009), 242 Man.R.(2d) 140; 2009 MBQB 170, refd to. [para. 73].

Brett-Young Seeds Ltd. et al. v. Assié Industries Ltd. et al. (2002), 166 Man.R.(2d) 33; 278 W.A.C. 33; 2002 MBCA 74, refd to. [para. 75].

Shell v. Barnsley et al. (2006), 208 Man.R.(2d) 264; 383 W.A.C. 264; 2006 MBCA 133, refd to. [para. 94].

R. v. Find (K.), [2001] 1 S.C.R. 863; 269 N.R. 149; 146 O.A.C. 236; 2001 SCC 32, refd to. [para. 99].

Statutes Noticed:

Queen's Bench Rules (Man.) - see Rules of Court (Man.), Queen's Bench Rules.

Rules of Court (Man.), Queen's Bench Rules, rule 20.03(1) [para. 60]; rule 20.07 [para. 61]; rule 26.01 [para. 36].

Authors and Works Noticed:

Bryant, Alan W., Lederman, Sidney N., and Fuerst, Michelle K., Sopinka, Lederman & Bryant: The Law of Evidence in Canada (3rd Ed. 2009), p. 744 [para. 84].

Counsel:

Kevin T. Williams, for the plaintiffs;

Helga Van Iderstine, for the defendant, Mueller Canada Ltd., carrying on business as Mueller Flow Control and the said Mueller Flow Control;

Peter Halamandaris, for the defendant, Mittal Canada Inc.

This appeal was heard by Joyal, A.C.J.Q.B., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on December 4, 2009.

To continue reading

Request your trial
9 practice notes
  • Table of cases
    • Canada
    • Irwin Books The Law of Evidence. Eighth Edition
    • June 25, 2020
    ...Estate v Interlake Aviation (1997), 124 Man R (2d) 84 (QB) ................... 256 Arctic Foundations of Canada Inc v Mueller Canada Inc, 2009 MBQB 309 ........................................................................................... 235 Ares v Venner, [1970] SCR 608 ...................
  • Opinion and Expert Evidence
    • Canada
    • Irwin Books The Law of Evidence. Eighth Edition
    • June 25, 2020
    ...para 6. 7 Children’s Aid Society of Simcoe County v JD , 2010 ONSC 3542. But see Arctic Foundations of Canada Inc v Mueller Canada Inc , 2009 MBQB 309, where the trial judge improperly used the lay opinion rule to examine the admission of testimony about the failure of a thermosyphon system......
  • Abas Auto Inc. v. Superior General Partner Inc., 2019 MBQB 46
    • Canada
    • Court of Queen's Bench of Manitoba (Canada)
    • March 14, 2019
    ...to Investors Group Inc. v. Dentek Inc. [1994] M.J. No. 270, (QB), Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al., 2009 MBQB 309 and Swiderski v. Broy Engineering Ltd. (1992), 11 O.R. (3d) 594.  As to the position that special circumstances may no longer be the l......
  • Powder Creek Farms Ltd. v. CNH America LLC et al., [2013] A.R. Uned. 651
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • October 22, 2013
    ...given to that opinion on a summary judgment application: Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al ., 2009 MBQB 309, para's. 84 - 86. [14] CNH further argues that the evidence of the principal of Powder Creek should not be considered as he has something to gain f......
  • Request a trial to view additional results
7 cases
  • Abas Auto Inc. v. Superior General Partner Inc., 2019 MBQB 46
    • Canada
    • Court of Queen's Bench of Manitoba (Canada)
    • March 14, 2019
    ...to Investors Group Inc. v. Dentek Inc. [1994] M.J. No. 270, (QB), Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al., 2009 MBQB 309 and Swiderski v. Broy Engineering Ltd. (1992), 11 O.R. (3d) 594.  As to the position that special circumstances may no longer be the l......
  • Powder Creek Farms Ltd. v. CNH America LLC et al., [2013] A.R. Uned. 651
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • October 22, 2013
    ...given to that opinion on a summary judgment application: Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al ., 2009 MBQB 309, para's. 84 - 86. [14] CNH further argues that the evidence of the principal of Powder Creek should not be considered as he has something to gain f......
  • Bodnarchuk v. RBC Life Insurance Co. et al., 2010 MBQB 85
    • Canada
    • Manitoba Court of Queen's Bench of Manitoba (Canada)
    • April 20, 2010
    ...70; 466 W.A.C. 70; 2009 MBCA 81, refd to. [para. 5]. Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al. (2009), 248 Man.R.(2d) 123; 2009 MBQB 309, refd to. [para. Blanco et al. v. Canada Trust Co. et al. (2003), 173 Man.R.(2d) 247; 293 W.A.C. 247; 2003 MBCA 64, refd to. ......
  • Dunn v. Struthers et al., 2013 MBQB 281
    • Canada
    • Manitoba Court of Queen's Bench of Manitoba (Canada)
    • November 19, 2013
    ...307; 548 W.A.C. 307; 2012 MBCA 83, refd to. [para. 9]. Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al. (2009), 248 Man.R.(2d) 123; 2009 MBQB 309, refd to. [para. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [par......
  • Request a trial to view additional results
2 books & journal articles
  • Table of cases
    • Canada
    • Irwin Books The Law of Evidence. Eighth Edition
    • June 25, 2020
    ...Estate v Interlake Aviation (1997), 124 Man R (2d) 84 (QB) ................... 256 Arctic Foundations of Canada Inc v Mueller Canada Inc, 2009 MBQB 309 ........................................................................................... 235 Ares v Venner, [1970] SCR 608 ...................
  • Opinion and Expert Evidence
    • Canada
    • Irwin Books The Law of Evidence. Eighth Edition
    • June 25, 2020
    ...para 6. 7 Children’s Aid Society of Simcoe County v JD , 2010 ONSC 3542. But see Arctic Foundations of Canada Inc v Mueller Canada Inc , 2009 MBQB 309, where the trial judge improperly used the lay opinion rule to examine the admission of testimony about the failure of a thermosyphon system......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT