Ceapro Inc. v. Saskatchewan et al., 2008 SKQB 76

• Judge: Popescul, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: February 19, 2008
• Jurisdiction: Saskatchewan
• Citations: 2008 SKQB 76;(2008), 313 Sask.R. 52 (QB)

Ceapro Inc. v. Sask. (2008), 313 Sask.R. 52 (QB)

MLB headnote and full text

Temp. Cite: [2008] Sask.R. TBEd. MR.061

Ceapro Inc. (plaintiff) v. Government of Saskatchewan, Saskatchewan Government Growth Fund Management Corporation, Saskatchewan Government Growth Fund Ltd., Gary K. Benson, Janice MacKinnon and Can-Oat Milling Products Inc. (defendants)

(2002 Q.B.G. No. 638; 2008 SKQB 76)

Indexed As: Ceapro Inc. v. Saskatchewan et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Popescul, J.

February 19, 2008.

Summary:

The plaintiff owned Canamino, a corporation that received financial assistance from the Saskatchewan Government Growth Fund (SGGF). This assistance included a loan. Under the applicable agreements, SGGF would receive non-voting, dividend-earning, Class B shares in Canamino. In case of default, SGGF was entitled to convert its non-voting Class B shares into 51% of voting Class A shares and thus take over control of Canamino. Canamino ran into financial difficulty and eventually defaulted. SGGF took it over. The plaintiff also lost, allegedly, a significant investment. The plaintiff sued the following defendants: (1) the Government of Saskatchewan; (2) SGGF; (3) Saskatchewan Government Growth Fund Management Corp. (SGGFMC), which provided management services to SGGF; (4) Benson, the president and chief executive officer of SGGFMC at the relevant time, who had overall responsibility for the management and administration of SGGF; (5) MacKinnon, the Minister of Economic and Co-operative Development at the relevant time, who was responsible for SGGFMC; and (6) Can-Oat, a corporation that had been approached to participate in the restructuring of Canamino. The following causes of action were raised: (1) against the Government of Saskatchewan: (a) civil conspiracy, (b) breach of fiduciary duty, (c) negligence, (d) negligent and/or intentional misrepresentation, (e) vicarious liability for MacKinnon, and (f) breach of contract; (2) against SGGF and SGGFMC: (a) civil conspiracy, (b) breach of the financing agreements, (c) negligent and/or intentional misrepresentation, (d) breach of fiduciary duty, (e) breach of the duty of fairness, (f) breach of the duty of good faith, and (g) negligently breaching the fiduciary duty, the duty of fairness and the duty of good faith; (3) against MacKinnon: (a) civil conspiracy, (b) abuse of public office, (c) negligence, and (d) breach of the duty to act in good faith; (4) against Benson: (a) civil conspiracy, (b) breach of fiduciary duty after assuming position of sole director and in taking control of the board of Canamino, (c) negligence, (d) breach of the duty of good faith, (e) breach of the duty of fairness, and (f) negligent and/or intentional misrepresentation; and (5) against Can-Oat: (a) civil conspiracy, (b) breach of contract, (c) breach of the duty of confidentiality, (d) breach of fiduciary duty, and (f) breach of the duty of good faith. After the plaintiff presented its evidence, the defendants applied for a nonsuit to dismiss all of the causes of action raised by the plaintiff against them. The defendants also argued that the causes of action should be dismissed on the basis that the plaintiff failed to adduce sufficient evidence of damages to meet the test for a nonsuit.

The Saskatchewan Court of Queen's Bench allowed the motion in part, holding as follows: (1) the restriction pertaining to multiple defendants did not apply (see paragraphs 77 to 79); (2) the defendants' request for a nonsuit on the basis that the plaintiff failed to adduce sufficient evidence of damages to meet the test for a nonsuit was rejected (see paragraphs 84 to 91); (3) the nonsuit application was allowed, in respect of the claim of civil conspiracy, against all defendants (see paragraphs 92 to 114); (4) with respect to SGGF and SGGFMC, the nonsuit application was dismissed in respect of all claims except civil conspiracy (see paragraphs 115 to 141); and (5) with respect to MacKinnon, Benson, the Province of Saskatchewan and Can-Oat, the nonsuit application was allowed in respect of all claims (see paragraphs 142 to 205).

Crown - Topic 1527

Torts by and against Crown - Liability of Crown for acts of servants - When Crown liable - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF), a Crown corporation - SGGF took over Canamino when it defaulted - MacKinnon, the Minister of Economic and Co-operative Development at that time, declined to intervene - The plaintiff allegedly lost a "significant" investment - The plaintiff sued the Province of Saskatchewan for breach of fiduciary duty for having failed to supervise SGGF and the Saskatchewan Government Growth Fund Management Corp. (SGGFMC), a Crown corporation that provided management services to SGGF - The Saskatchewan Court of Queen's Bench nonsuited the plaintiff absent sufficient evidence to support its allegations - The Government did not, and had no power to, unilaterally exercise its power to affect the plaintiff's interest and the plaintiff was not peculiarly vulnerable to or at the mercy of Saskatchewan - See paragraphs 181 to 183.

Crown - Topic 1527

Torts by and against Crown - Liability of Crown for acts of servants - When Crown liable - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF), a Crown corporation - SGGF took over Canamino when it defaulted - MacKinnon, the Minister of Economic and Co-operative Development at that time, declined to intervene - The plaintiff allegedly lost a "significant" investment - The plaintiff sued the Province of Saskatchewan for negligence for having failed to supervise SGGF and the Saskatchewan Government Growth Fund Management Corp. (SGGFMC), a Crown corporation that provided management services to SGGF - The Saskatchewan Court of Queen's Bench nonsuited the plaintiff absent sufficient evidence to support its allegations: "As the Government of the Province, Saskatchewan is responsible for reviewing and evaluating the objectives, goals, revenues, expenses, expenditures, investments and operating results of Crown corporations and their subsidiaries. However, the Government is not required to oversee the individual business relationship between SGGF and the plaintiff. In my opinion, these circumstances do not demonstrate either foreseeability or proximity such to satisfy step one of the Anns test. A private law of duty of care does not arise in these circumstances and the plaintiff's claim against Saskatchewan cannot survive on the first branch of the Anns test" - See paragraphs 184 to 188.

Crown - Topic 2803

Crown immunity - Immunity under provincial legislation - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF), a Crown corporation - SGGF took over Canamino when it defaulted - MacKinnon, the Minister of Economic and Co-operative Development at that time, declined to intervene - The plaintiff allegedly lost a "significant" investment - The plaintiff sued the Province of Saskatchewan for negligence for having failed to supervise SGGF and the Saskatchewan Government Growth Fund Management Corp. (SGGFMC), a Crown corporation that provided management services to SGGF - The Saskatchewan Court of Queen's Bench nonsuited the plaintiff absent sufficient evidence to support its allegation - The court held that ss. 3(2) and 5 of the Proceedings against the Crown Act (Sask.) protected Saskatchewan from vicarious liability for corporations which were owned or controlled by it - See paragraphs 195 to 198.

Crown - Topic 4427

Actions by and against Crown in right of a province - Proceedings against the Crown Acts - Actions to which Act applicable - [See Crown - Topic 2803 ].

Crown - Topic 4542.1

Actions by and against Crown in right of a province - Capacity of Crown to be sued - Statutory immunity - [See Crown - Topic 2803 ].

Crown - Topic 5142

Officials and employees - Liability of officials in tort - Negligence - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF) - SGGF took over Canamino when it defaulted - MacKinnon, the Minister of Economic and Co-operative Development at that time, declined to intervene - The plaintiff allegedly lost a "significant" investment - The plaintiff sued MacKinnon for negligence as Minister and as director of the Saskatchewan Government Growth Fund Management Corp. (SGGFMC), which provided management services to SGGF, and for alleged wrongful acts committed by her as Minister of the Crown - The Saskatchewan Court of Queen's Bench after discussing the applicable law, nonsuited the plaintiff absent sufficient evidence to support its allegations - See paragraphs 154 to 167.

Crown - Topic 5145

Officials and employees - Liability of officials in tort - Misfeasance - Abuse of public office - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF) - SGGF took over Canamino when it defaulted - MacKinnon, the Minister of Economic and Co-operative Development at that time, declined to intervene - The plaintiff sued MacKinnon for abuse of public office - The Saskatchewan Court of Queen's Bench nonsuited the plaintiff absent sufficient evidence - MacKinnon trusted the advice and recommendations provided to her - She resisted the opportunity to become politically involved in a business dealing between a Crown corporation subsidiary and another private entity - There was absolutely no evidence of any type of bad faith - In fact, the opposite was true in that the only evidence was that MacKinnon's actions were appropriate and done in good faith - See paragraphs 144 to 153.

Practice - Topic 4952

Admissions - What constitutes - The plaintiff sued multiple defendants raising several causes of action against each of them - At the end of the plaintiff's case, the defendants applied for a nonsuit - In its brief in opposition to the application, the plaintiff made a "concession" to the effect that it had not made a prima facie case against one defendant in respect of some causes of action - The Saskatchewan Court of Queen's Bench held that the "concession" was not an admission - See paragraphs 199 to 201.

Practice - Topic 5388

Dismissal of action - Application or motion for dismissal - Multiple defendants - The plaintiff sued multiple defendants raising several causes of action against each of them - After the close of the plaintiff's case, the defendants applied for a nonsuit - The plaintiff invoked the multiple defendant restriction - The Saskatchewan Court of Queen's Bench held that the multiple defendant restriction did not apply because "it is clear that no evidence led by the remaining defendants could result in liability attaching to any of the defendants seeking the nonsuit" - The defendants did not make claims for contribution or indemnity nor was there any questioning by the plaintiff that could have suggested that a defendant would be "pointing the finger of liability" against another defendant - See paragraphs 77 to 79.

Practice - Topic 5390

Dismissal of action - Application or motion for dismissal - Nonsuit - At close of plaintiff's case - Evidence and proof - The Saskatchewan Court of Queen's Bench held: "... my task at this stage is not to determine whether the elements of the various causes of action have been established by the evidence nor is it my role to determine the credibility of the evidence. Rather it is simply to determine if there is a prima facie case. In other words, it is to determine if there is sufficient evidence on which a reasonable person could conclude that the case has been met on a balance of probabilities. Accordingly, it is important to bear in mind that any of the evidence that I may relate ought to be considered to be 'evidence' adduced in this case and not a 'fact' that I have found from the evidence" - See paragraphs 69 to 73.

Practice - Topic 5390.1

Dismissal of action - Application or motion for dismissal - Nonsuit - At close of plaintiff's case - When available (incl grounds) - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF) - SGGF took over Canamino when it defaulted - The plaintiff allegedly lost a "significant" investment - The plaintiff sued SGGF, raising several causes of action including breach of contract, breach of duty, misrepresentation and negligence - At the end of the plaintiff's case, SGGF applied for a nonsuit, arguing that the plaintiff failed to adduce sufficient evidence of damages to meet the test for a nonsuit - The Saskatchewan Court of Queen's Bench held that a nonsuit could not be granted on the basis of this argument - There was evidence that a "significant" investment by the plaintiff was lost - See paragraphs 84 to 91.

Practice - Topic 5390.1

Dismissal of action - Application or motion for dismissal - Nonsuit - At close of plaintiff's case - When available (incl. grounds) - [See both Crown - Topic 1527 , Crown - Topic 2803 , Crown - Topic 5142 , Crown - Topic 5145 and Torts - Topic 5083 ].

Torts - Topic 5083

Interference with economic relations - Conspiracy - What constitutes a conspiracy - The plaintiff owned Canamino, a corporation that received financial assistance, including a loan, from the Saskatchewan Government Growth Fund (SGGF) - SGGF took over Canamino when it defaulted - The plaintiff sued the following defendants for civil conspiracy: (1) the Government of Saskatchewan; (2) SGGF; (3) Saskatchewan Government Growth Fund Management Corp. (SGGFMC), which provided management services to SGGF; (4) Benson, the president and chief executive officer of SGGFMC at the relevant time, who had overall responsibility for the management and administration of SGGF; (5) MacKinnon, the Minister of Economic and Co-operative Development at the relevant time, who was responsible for SGGFMC; and (6) Can-Oat, a corporation that had been approached to participate in the restructuring of Canamino and, along with SGGF, had signed a Memorandum of Understanding (MOU) to that effect - The Saskatchewan Court of Queen's Bench nonsuited the plaintiff, absent sufficient evidence - Benson was the directing mind of SGGF and SGGFMC and therefore there could be no conspiracy amongst them because they were one and the same - The SGGF-Can-Oat MOU, nor the circumstances surrounding, did not appropriately found the accusation of civil conspiracy - There was insufficient evidence that Saskatchewan or MacKinnon knew or had any part to play in SGGF taking over Canamino - After the takeover, neither the Government nor SGGF did anything that could amount to a civil conspiracy - The Government, who had decided not to intervene, made a well-founded decision, in good faith, in accordance with its policy of the day - See paragraphs 92 to 114.

Cases Noticed:

Kvello et al. v. Miazga et al., [2004] 7 W.W.R. 547; 242 Sask.R. 19; 234 D.L.R.(4th) 578; 2003 SKQB 451, refd to. [para. 69].

Igor v. Yuen (2005), 271 Sask.R. 248; 2005 SKQB 463, refd to. [para. 69].

K.M. v. Canada (Attorney General) (2004), 251 Sask.R. 12; 2004 SKQB 287, refd to. [para. 69].

Reid v. Kraus et al. (2000), 189 Sask.R. 122; 216 W.A.C. 122; 2000 SKCA 32, refd to. [para. 69].

Foss v. Harbottle (1843), 2 Hare 460; 67 E.R. 189 (H.L.), consd. [para. 80].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, consd. [para. 80].

Esso Petroleum Co. v. Mardon, [1976] Q.B. 801 (C.A.), refd to. [para. 88].

Sunshine Vacation Villas Ltd. v. Governor and Co. of Adventurers of England Trading into Hudson's Bay (1984), 13 D.L.R.(4th) 93 (B.C.C.A.), refd to. [para. 88].

Activators Methods Inc. v. Chiropractors Association of Saskatchewan et al. (1992), 107 Sask.R. 90 (Q.B.), refd to. [para. 93].

Canada Cement Lafarge Ltd. et al. v. British Columbia Lightweight Aggregate Ltd. et al., [1983] 1 S.C.R. 452; 47 N.R. 191, consd. [para. 93].

Saskatchewan Farms & Land Co. v. Smith, [1923] 1 W.W.R. 1179 (Sask. K.B.), refd to. [para. 94].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1, additional reasons [1992] 2 S.C.R. 318, consd. [para. 126].

Transamerica Life Canada Inc. et al. v. ING Canada Inc., [2003] A.R. Uned. 565; [2004] I.L.R. 1-4258; 234 D.L.R.(4th) 367; 41 B.L.R.(3d) 1; 2003 CarswellOnt 4834 (C.A.), refd to. [para. 130].

NewsWest Corp. v. Glendar Holdings Ltd. et al., [2001] 9 W.W.R. 312; 209 Sask.R. 56 (Q.B.), refd to. [para. 130].

Roncarelli v. Duplessis, [1959] S.C.R. 121, consd. [para. 146].

Three Rivers District Council et al. v. Bank of England, [2000] 3 All E.R. 1; 257 N.R. 1 (H.L.), consd. [para. 146].

Odhavji Estate et al. v. Woodhouse et al. (2000), 142 O.A.C. 149; 194 D.L.R.(4th) 577 (C.A.), consd. [para. 147].

Decock et al. v. Alberta et al., [2000] 7 W.W.R. 219; 255 A.R. 234; 220 W.A.C. 234 (C.A.), consd. [para. 154].

White (Peter G.) Management Ltd. v. Canada (Minister of Canadian Heritage) et al. (2006), 350 N.R. 113; 271 D.L.R.(4th) 361; 2006 FCA 190, refd to. [para. 157].

P.A.B. v. Children's Foundation et al., [1999] 2 S.C.R. 534; 241 N.R. 266; 124 B.C.A.C. 119; 203 W.A.C. 119; 174 D.L.R.(4th) 45, consd. [para. 158].

Montreal Trust Co. of Canada et al. v. ScotiaMcLeod Inc. et al. (1995), 87 O.A.C. 129; 129 D.L.R.(4th) 711 (C.A.), leave to appeal refused (1996), 205 N.R. 314; 95 O.A.C. 399; 137 D.L.R.(4th) vi (S.C.C.), consd. [para. 159].

ADGA Systems International Ltd. v. Valcom Ltd. et al. (1999), 117 O.A.C. 39; 168 D.L.R.(4th) 351 (C.A.), leave to appeal refused (1999), 254 N.R. 400; 134 O.A.C. 400 (S.C.C.), consd. [para. 161].

Craik et al. v. Aetna Life Insurance Co. of Canada, [1996] O.J. No. 2377 (C.A.), affing. [1995] O.J No. 3286 (Gen. Div.), consd. [para. 161].

Bainbridge v. Postmaster-General, [1906] 1 K.B. 178 (C.A.), refd to. [para. 168].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161; 13 D.L.R.(4th) 321, refd to. [para. 181].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, consd. [para. 184].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, consd. [para. 189].

Air India Flight 182 Disaster Claimants v. Air India et al. (1987), 44 D.L.R.(4th) 317 (Ont. H.C.), refd to. [para. 196].

Swidzinski et al. v. Saskatchewan Power Corp. et al. (1997), 161 Sask.R. 179 (Q.B.), refd to. [para. 197].

Swift Current (City) v. Saskatchewan Power Corp. et al. (2005), 272 Sask.R. 160; 2005 SKQB 505, revd. in part (2007), 293 Sask.R. 6; 397 W.A.C. 6; 2007 SKCA 27, refd to. [para. 197].

Roberts et al. v. Saskatchewan et al. (2007), 294 Sask.R. 266; 2007 SKQB 140, consd. [para. 197].

Statutes Noticed:

Proceedings against the Crown Act, R.S.S. 1978, c. P-27, sect. 3(2)(d), sect. 5 [para. 197].

Authors and Works Noticed:

Hogg, Peter W., Liability of the Crown (2nd Ed. 1989), pp. 141, 142 [paras. 156, 168]; 145 [para. 158].

Irvine, John, Misfeasance in Public Office: Reflections on Some Recent Developments (2002), 9 C.C.L.T.(3d) 26, pp. 26 to 33 [para. 145].

Otis, Ghislain, Personal Liability of Public Officials for Constitutional Wrongdoing: A Neglected Issue of Charter Application (1996), 24 Man.L.J. 23, pp. 26, 27 [para. 154].

Counsel:

Gordon R. McKenzie, Q.C., and Richard J. Cotter, Q.C., for the plaintiff Ceapro Inc.;

Grant J. Scharfstein, Q.C., and Dorinda M. Stahl, for the defendants Government of Saskatchewan and Janice MacKinnon;

Jeffrey M. Lee, Shaunt Parthev and Naheed Bardai, for the defendants Saskatchewan Government Growth Fund Management Corporation, Saskatchewan Government Growth Fund Ltd. and Gary K. Benson;

Peter T. Bergbusch and Jamie S. Patterson, for Can-Oat Milling Products Inc.

This application was heard by Popescul, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on February 19, 2008.