Barthe v. National Bank Financial Ltd., (2013) 336 N.S.R.(2d) 290 (CA)

• Judge: Fichaud, J.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: November 08, 2013
• Jurisdiction: Nova Scotia
• Citations: (2013), 336 N.S.R.(2d) 290 (CA);2013 NSCA 127

Barthe v. Nat. Bk. (2013), 336 N.S.R.(2d) 290 (CA);

    1063 A.P.R. 290

MLB headnote and full text

Temp. Cite: [2013] N.S.R.(2d) TBEd. NO.025

National Bank Financial Ltd. (appellant) v. The Estate of the Late Michael Barthe, as represented by his Executrix Barbara Barthe (respondent)

(CA 420715; 2013 NSCA 127)

Indexed As: Barthe v. National Bank Financial Ltd.

Nova Scotia Court of Appeal

Fichaud, J.A.

November 8, 2013.

Summary:

A complex series of multi-party actions arose out of the collapse of a publicly-traded technology company, Knowledge House Inc. (KHI). National Bank Financial Ltd. (NBFL) started a number of actions against clients and former clients for unpaid margin debt arising from the collapse. Some NBFL clients defended those claims by alleging that they had been the victims of a conspiracy by NBFL's employee, Clarke, and others to manipulate KHI share prices. NBFL issued a statement of claim, in what became the main action, against Potter (a lawyer), Clarke, and others, alleging that they conspired to manipulate the price of KHI shares and that the conspiracy resulted in a fraud being committed against NBFL. Several of the parties in the main action started their own actions, including Barthe (i.e., the Barthe Action - S.H. No. 208293). Barthe passed away in 2007. His widow, who was his executrix, resided in Germany.

The Nova Scotia Supreme Court, in a decision reported 333 N.S.R.(2d) 60; 1055 A.P.R. 60, in addition to dealing with the claims of the other parties, allowed Barthe's claim in part (i.e., for the time up to when he became aware of the stock manipulation scheme). Thereafter, by order, the court quantified the judgment as $1,675,000 plus prejudgment interest (i.e., $2,360,799 before costs). NBFL appealed the judge's ruling in the Barthe action. Barthe's Estate cross-appealed. NBFL moved for a stay of execution of the monetary judgment pending appeal, claiming that if the judgment was paid and its appeal succeeded there was a risk that the payment could not be recovered.

The Nova Scotia Court of Appeal, per Fichaud, J.A., granted the stay pending the appeal.

Practice - Topic 5854

Judgments and orders - Enforcement of judgments - Stay of - [See Practice - Topic 8950 and Practice - Topic 8954 ].

Practice - Topic 8950

Appeals - Stay of proceedings pending appeal - General principles - The Nova Scotia Court of Appeal, per Fichaud, J.A., stated that the test for staying execution of a judgment pending appeal was that "the stay applicant must show that either (1) there is an arguable appeal, and denial of the stay would cause him irreparable harm and the balance of convenience favours a stay, or (2) there are exceptional circumstances making it just that a stay be granted" - See paragraph 12.

Practice - Topic 8952

Appeals - Stay of proceedings pending appeal - When appellant entitled to stay - [See Practice - Topic 8950 and Practice - Topic 8954 ].

Practice - Topic 8954

Appeals - Stay of proceedings pending appeal - What constitutes "irreparable harm" - Barthe, as represented by his estate, obtained judgment against National Bank Financial Ltd. (NBFL) for $1,675,000 plus prejudgment interest - NBFL appealed and moved for a stay of execution pending appeal, alleging a risk of non-recovery if the judgment was paid and the appeal successful - The Nova Scotia Court of Appeal, per Fichaud, J.A., granted the stay - There was an arguable appeal - There were a number of factors posing a risk of non-recovery, which collectively established irreparable harm - The executrix resided in Germany (not a reciprocating state under the Reciprocal Enforcement of Judgments Act) - The estate had few Nova Scotia assets - The estate had been distributed - If the NBFL judgment was paid to the estate and then distributed, the estate would have insufficient assets to respond to a judgment for recovery - There was also an unresolved issue surrounding Barthe's wills - The balance of convenience favoured NBFL.

Cases Noticed:

Fulton Insurance Agencies Ltd. v. Purdy (1990), 100 N.S.R.(2d) 341; 272 A.P.R. 341 (C.A.), refd to. [para. 12].

Molloy v. Molloy, [2012] N.S.R.(2d) Uned. 68; 2012 NSCA 28, refd to. [para. 12].

Fleet et al. v. Federated Life Insurance Co. of Canada (2008), 269 N.S.R.(2d) 138; 860 A.P.R. 138; 2008 NSCA 90, refd to. [para. 14].

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1994] 1 S.C.R. 311; 164 N.R. 1; 60 Q.A.C. 241, refd to. [para. 16].

Wright v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (2006), 240 N.S.R.(2d) 166; 763 A.P.R. 166; 2006 NSCA 6, refd to. [para. 17].

Hiltz and Seamone Co. v. Nova Scotia (Attorney General) (1998), 167 N.S.R.(2d) 353; 502 A.P.R. 353 (C.A.), refd to. [para. 18].

Dutkewych v. Riske, [2006] N.S.R.(2d) Uned. 102; 2006 NSCA 105, refd to. [para. 19].

Vogler v. Szendroi (2011), 302 N.S.R.(2d) 323; 955 A.P.R. 323; 2011 NSCA 37, refd to. [para. 20].

E.B.F. Manufacturing Ltd. et al. v. White et al., [2005] N.S.R.(2d) Uned. 71; 2005 NSCA 103, refd to. [para. 26].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 90.41(1), rule 90.41(2) [para. 11].

Rules of Civil Procedure (N.S.) - see Civil Procedure Rules (N.S.).

Rules of Court (N.S.) - see Civil Procedure Rules (N.S.).

Counsel:

David G. Coles, Q.C., and Ashlea Richard (Articled Clerk), for the appellant;

W. Dale Dunlop and Sean MacDonald, for the respondent.

This motion was heard in Chambers, in Halifax, N.S., before Fichaud, J.A., of the Nova Scotia Court of Appeal, who delivered the following decision on November 8, 2013.