Edmonton (City) v. TransAlta Energy Marketing Corp. et al., (2009) 476 A.R. 136 (QB)

• Judge: Verville, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 09, 2009
• Citations: (2009), 476 A.R. 136 (QB);2009 ABQB 709

Edmonton v. TransAlta Energy Marketing (2009), 476 A.R. 136 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. DE.050

The City of Edmonton (plaintiff) v. TransAlta Energy Marketing Corporation, A-C Equipment Services Corp., GKO Design Consultants Inc., Stantec Inc., Stantec Consulting Ltd. (defendants) and Associated Engineering Ltd. (third party)

(0303 11782; 2009 ABQB 709)

Indexed As: Edmonton (City) v. TransAlta Energy Marketing Corp. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Verville, J.

December 2, 2009.

Summary:

TransAlta Energy Marketing Corporation (TransAlta) entered into an agreement ("the original agreement") with GKO Design Consultants Inc., whereby GKO provided certain engineering services with respect to the construction of a composter. Immediately before the City of Edmonton purchased the composter from Transalta, it entered into an agreement with Transalta and GKO, entitled "Assignment and Novation" (the tripartite agreement). The composter developed cracks that required extensive repairs. The City sued GKO, among others, in contract and in negligence. GKO applied for summary judgment on the ground that the tripartite agreement was a novation agreement and that it and the original agreement precluded the City from advancing the claim against it.

A Master of the Alberta Court of Queen's Bench, in a decision not reported in this series of reports, dismissed the application. GKO appealed.

The Alberta Court of Queen's Bench allowed the appeal and granted the application for summary judgment.

Contracts - Topic 7105

Novation - General - What constitutes novation - A defendant applied for summary judgment on the ground that the tripartite agreement at issue, entitled "Assignment and Novation", precluded the claim - The Alberta Court of Queen's Bench considered what was required to properly effect a novation and discussed the three-part test for determining if novation had occurred, as set out in the leading jurisprudence - In the case at bar, the tripartite agreement on its face constituted a novation - Nonetheless, the court stated that it was necessary to consider the wording of the agreement and more particularly whether there was any ambiguity - See paragraphs 23, 34 to 40.

Contracts - Topic 7105

Novation - General - What constitutes novation - [See second Practice - Topic 5719 ].

Contracts - Topic 7426

Interpretation - Ambiguity - What constitutes ambiguity - A defendant applied for summary judgment - The parties' respective positions depended on the proper interpretation of an agreement and whether it was ambiguous - The Alberta Court of Queen's Bench stated that "[a]mbiguity requires a passage which can be read in either of two opposed senses" - In this case, external aids were not available, since the court found that the agreement was unambiguous - It was not appropriate to "stretch" a meaning or parse words in order to create an "ambiguity", which, in the court's view, the plaintiff attempted to do - See paragraphs 42 to 48, 56.

Practice - Topic 5719

Judgments and orders - Summary judgments - To dismiss action - The Alberta Court of Queen's Bench set out the test on an application for summary judgment against a plaintiff, including the burden to be met - The court stated that, where a matter turned on undisputed facts and the interpretation of a written contract and all material required to properly resolve the issue was before the court, as in the present application, summary determination was appropriate - See paragraphs 28 to 33.

Practice - Topic 5719

Judgments and orders - Summary judgments - To dismiss action - GKO entered into an agreement (the original agreement) with TransAlta, in relation to the construction of a composter - GKO was hired by TransAlta to design and manage construction of the composter - The original agreement precluded a claim in negligence by TransAlta against GKO - Immediately before the City of Edmonton purchased the composter from Transalta, it entered into an agreement with Transalta and GKO (the tripartite agreement), which referenced the original agreement - After the sale, the composter developed cracks that required extensive repairs - The City sued GKO, among others, in contract and in negligence - GKO applied for summary judgment on the ground that the tripartite agreement was a novation agreement and precluded the City from advancing the claim against it - A Master of the Alberta Court of Queen's Bench concluded that the tripartite agreement was ambiguous because it was difficult to understand why the City would enter into such an agreement, and dismissed the application - The Alberta Court of Queen's Bench allowed GKO's appeal and granted summary judgment - The City's motivation was irrelevant where the wording of the tripartite agreement was not ambiguous - It was plain and obvious that the tripartite agreement resulted in novation, and the City was foreclosed from its claim in negligence - See paragraphs 57 to 60.

Cases Noticed:

Maple Reinders Inc. v. Eagle Sheet Metal Inc. et al. (2006), 393 A.R. 375; 2006 ABQB 150, refd to. [para. 24].

Hughes Estate v. Hughes et al. (2009), 454 A.R. 190; 455 W.A.C. 190; 2009 ABCA 187, refd to. [para. 25].

Hughes Estate v. Brady - see Hughes Estate v. Hughes et al.

Lameman et al. v. Canada (Attorney General) et al., [2008] 1 S.C.R. 372; 372 N.R. 239; 429 A.R. 26; 421 W.A.C. 26; 2008 SCC 14, refd to. [para. 25].

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, refd to. [para. 29].

Murphy Oil Co. et al. v. Predator Corp. et al. (2004), 365 A.R. 326; 2004 ABQB 688, affd. (2006), 384 A.R. 251; 367 W.A.C. 251; 2006 ABCA 69, consd. [para. 30].

Suncor Inc. v. Canada Wire and Cable Ltd. (1993), 7 Alta. L.R.(3d) 182 (Q.B.), refd to. [para. 32].

Otan Developments Ltd. v. Kuropatwa (1978), 12 A.R. 15; 7 Alta. L.R.(2d) 274 (C.A.), leave to appeal denied leave denied [1978] 2 S.C.R. viii; 25 N.R. 450; 14 A.R. 359, refd to. [para. 33].

852819 Alberta Ltd. v. Louie's Submarine Inc., [2000] A.R. Uned. 501; 2000 ABQB 936 (Q.B. Master), refd to. [para. 33].

National Trust Co. v. Mead, [1990] 2 S.C.R. 410; 112 N.R. 1; 87 Sask.R. 161, consd. [para. 35].

Adelaide Capital Corp. v. Offshore Leasing Inc. (1996), 149 N.S.R.(2d) 281; 432 A.P.R. 281 (C.A.), refd to. [para. 35].

Star v. Aiken, [1955] O.J. No. 165, refd to. [para. 35].

Weyerhaeuser Co. v. Hayes Forest Services Ltd. et al. (2008), 254 B.C.A.C. 11; 426 W.A.C. 11; 2008 BCCA 69, consd. [para. 35].

General Paint Corp. of Canada Ltd. v. Graham (P.W.) and Sons Ltd., [1963] S.J. No. 36 (Q.B.), refd to. [para. 35].

Polson v. Wulffsohn (1890), 2 B.C.R. 39 (S.C.), refd to. [para. 37].

Meyer v. Partec Lavalin Inc. et al. (2001), 281 A.R. 339; 248 W.A.C. 339; 2001 ABCA 145, refd to. [para. 43].

Predator Corp. v. Ricks Nova Scotia Co. (2002), 317 A.R. 322; 284 W.A.C. 322; 2002 ABCA 248, refd to. [para. 44].

Andrews et al. v. General Accident Assurance of Canada (1995), 165 A.R. 65; 89 W.A.C. 65 (C.A.), refd to. [para. 45].

Gainers Inc. v. Pocklington Holdings Inc. (2000), 255 A.R. 373; 220 W.A.C. 373; 2000 ABCA 151, refd to. [para. 46].

Pembina Resources Ltd. et al. v. Saskenergy Inc. (1993), 135 A.R. 246; 33 W.A.C. 246 (C.A.), consd. [para. 52].

Statutes Noticed:

Rules of Court (Alta.), rule 159(2), rule 159(3) [para. 28].

Authors and Works Noticed:

Halsbury's Laws of England (3rd Ed.) (1954 Cumulative Supp.), vol. 8, pp. 262 to 265 [para. 35].

Counsel:

Darrell Lopushinsky and David S. Woo (City of Edmonton Law Branch), for the plaintiff;

Sigurd Delblanc and Deanna Witzaney (Bryan & Company LLP), for the defendants, GKO Design Consultants Inc., Stantec Inc. and Stantec Consulting Ltd.

This appeal was heard on October 9, 2009, by Verville, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following judgment and reasons for judgment, dated December 2, 2009.