Environmental Metal Works Ltd. v. Murray, Faber & Associates Inc. et al., 2013 ABQB 479

• Judge: Marceau, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 10, 2013
• Citations: 2013 ABQB 479;(2013), 568 A.R. 198 (QB)

Env. Metal v. Murray, Faber & Assoc. (2013), 568 A.R. 198 (QB)

MLB headnote and full text

Temp. Cite: [2013] A.R. TBEd. AU.100

Environmental Metal Works Ltd. (plaintiff) v. Murray, Faber & Associates Inc., Faber & Company Inc., Gramugi Business Enterprises Ltd., Cameron Murray and Dan Faber (defendants)

(0603 13694; 2013 ABQB 479)

Indexed As: Environmental Metal Works Ltd. v. Murray, Faber & Associates Inc. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Marceau, J.

August 20, 2013.

Summary:

On January 19, 2004, a corporate bankrupt's president swore an affidavit detailing alleged wrongs by the trustee in bankruptcy. The bankrupt asserted that it suffered damages, a loss of business and loss of profits from the trustee's misconduct. On January 20, 2004, the bankrupt moved for, inter alia, a declaration that it did not require leave to sue its trustee or, alternatively, a grant of leave to bring the action (Bankruptcy and Insolvency Act, s. 215).

A Registrar of the Alberta Court of Queen's Bench, in a decision reported at [2005] A.R. Uned. 969, held that the bankrupt did not require leave to bring the action. On November 1, 2006, the bankrupt sued the trustee, alleging negligence, breach of contract, breach of fiduciary duty and unjust enrichment. The trustee applied for summary judgment. At issue included whether s. 215 suspended the two year limitation period such that the bankrupt's action was filed in time.

The Alberta Court of Queen's Bench granted the trustee summary judgment, holding that the bankrupt did not require leave under s. 215 and therefore s. 215 did not suspend the limitation period.

Bankruptcy - Topic 2686

Trustees - Liability - General - Action against - Requirement of leave - On January 19, 2004, a corporate bankrupt's president swore an affidavit detailing alleged wrongs by the trustee in bankruptcy - The bankrupt asserted that it suffered damages, a loss of business and loss of profits from the trustee's misconduct - On January 20, 2004, the bankrupt moved for, inter alia, a declaration that it did not require leave to sue its trustee or, alternatively, a grant of leave to bring the action (Bankruptcy and Insolvency Act, s. 215) - A Registrar held that leave was not required - On November 1, 2006, the bankrupt sued the trustee - The Alberta Court of Queen's Bench granted the trustee summary judgment - A plaintiff only had to apply for leave under s. 215 when suing the trustee in its representative capacity, not when suing the trustee in its personal capacity - The bankrupt claimed against the trustee personally - Since s. 215 did not apply to the claim, it did not suspend the running of the two year limitation period - The fact that the bankrupt did not know that its claims fell outside s. 215 and did not require leave did not postpone the running of the limitation period - Discoverability related to discovery of facts not the law - The bankrupt knew on January 19, 2004, that the injuries warranted bringing an action - The limitation period ran from that date - The bankrupt's claim was statute barred - The bankrupt had failed to raise a genuine issue for trial - See paragraphs 44 to 73.

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - [See Bankruptcy - Topic 2686 ].

Limitation of Actions - Topic 9305

Postponement or suspension of statute - General - Discoverability rule - [See Bankruptcy - Topic 2686 ].

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - [See Bankruptcy - Topic 2686 ].

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - The Alberta Court of Queen's Bench stated that "The test for summary judgment proceeds in two steps. First, the applicant must establish that the case presents no genuine issue for trial. Second, once the applicant has passed the first step the evidentiary burden then shifts to the respondent to raise some genuine issue for trial ... A defendant must demonstrate that an action plainly and obviously cannot succeed or that it has no reasonable prospect of success on the facts ... Not only must there be undisputed facts capable of resolving the case, there must be no serious question of law ... In other words, the action must raise some serious, litigable factual or legal issue. ... The applicant has the onus of demonstrating that the respondent's action plainly and obviously cannot succeed ... The applicant bears a heavy onus and must satisfy the court beyond a reasonable doubt ... Although the applicant bears the onus to show the respondent's case lacks merit, the respondent must still lead sufficient evidence to demonstrate that its case discloses a genuine issue ..." - See paragraphs 31 to 34.

Practice - Topic 5710

Judgments and orders - Summary judgments - Evidence - A corporate bankrupt sued its trustee in bankruptcy claiming damages for misconduct - The trustee applied for summary judgment - At issue included whether the trustee's failure to file a supporting affidavit that deposed that one of the grounds set out in rule 7.3(1) of the Rules of Court complied with the evidentiary requirements in rule 7.3(2) - Rule 7.3(2) provided that an applicant had to file "an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effect that the grounds have been met. " - The Alberta Court of Queen's Bench held that the requirements of rule 7.3(2) were met where it had "other evidence" (the trustee had introduced an affidavit by the bankrupt's president deposing the president's knowledge of all of the alleged injuries) to the effect that the grounds had been met - See paragraphs 36 to 43.

Practice - Topic 5715

Judgments and orders - Summary judgments - Burden on applicant - [See Practice - Topic 5708 ].

Practice - Topic 5715.1

Judgments and orders - Summary judgments - Burden on respondent - [See Practice - Topic 5708 ].

Cases Noticed:

Terrigno v. Kretschmer et al., [2012] A.R. Uned. 826; 2012 CarswellAlta 2283; 2012 ABQB 750, refd to. [para. 15].

Gayton v. Lacasse (2010), 482 A.R. 179; 490 W.A.C. 179; 2010 ABCA 123, refd to. [para. 17].

Hill v. Registrar of South Alberta Land Registration District (1993), 135 A.R. 266; 33 W.A.C. 266; 100 D.L.R.(4th) 331; 1993 ABCA 75, refd to. [para. 17].

Sally Creek Environs Corp. (Bankrupt), Re, [2012] O.T.C. Uned. 2636; 2012 CarswellOnt 5354; 2012 ONSC 2636, refd to. [para. 19].

McKenna Estate v. Marshall, [2005] O.T.C. 905; 37 R.P.R.(4th) 222; 2005 CarswellOnt 5028 (Sup. Ct.), refd to. [para. 19].

Sharma v. Timminco Ltd. et al. (2012), 289 O.A.C. 19; 2012 ONCA 107, refd to. [para. 19].

Yellowbird v. Samson Cree Nation No. 444 et al. (2003), 349 A.R. 208; 2003 CarswellAlta 858; 2003 ABQB 535, refd to. [para. 21].

De Shazo v. Nations Energy Co. et al. (2005), 367 A.R. 267; 346 W.A.C. 267; 2005 ABCA 241, refd to. [para. 22].

Manson Insulation Products Ltd. v. Crossroads C & I Distributors et al., [2011] A.R. Uned. 82; 2011 CarswellAlta. 108; 2011 ABQB 51, refd to. [para. 22].

Kwan v. Superfly Inc. et al. (2011), 520 A.R. 234; 2011 CarswellAlta 863; 2011 ABQB 343, affd. (2013), 542 A.R. 398; 566 W.A.C. 398; 2013 ABCA 82, refd to. [para. 22].

Gerling Global General Insurance Co. et al. v. Canadian Occidental Petroleum Ltd. et al. (1998), 230 A.R. 39; 64 Alta. L.R.(3d) 174; 1998 CarswellAlta. 744 (Q.B.), additional reasons (1998), 230 A.R. 39; 64 Alta. L.R.(3d) 196; 1998 CarswellAlta 744 (Q.B.), refd to. [para. 22].

Pawlus v. Pope et al. (2004), 357 A.R. 347; 334 W.A.C. 347; 2004 ABCA 396, refd to. [para. 23].

Canada (Attorney General) v. Fekete (1999), 242 A.R. 193; 1999 ABQB 262, refd to. [para. 24].

Silver et al. v. IMAX Corp. et al., [2012] O.T.C. Uned. 4881; 2012 CarswellOnt 10391; 2012 ONSC 4881, refd to. [para. 25].

Quadrangle Holdings Ltd. v. Coady et al. (2012), 531 A.R. 48; 2012 CarswellAlta 86; 2012 ABQB 22, refd to. [para. 28].

Yugraneft Corp. v. Rexx Management Corp., [2010] 1 S.C.R. 649; 401 N.R. 341; 482 A.R. 1; 490 W.A.C. 1; 2010 SCC 19, refd to. [para. 28].

Sigurdson v. Reid (1980), 37 C.B.R.(N.S.) 146; 1980 CarswellBC 473 (C.A.), refd to. [para. 30].

Pelee Motor Inn Ltd. (No. 2) (1979), 30 C.B.R.(N.S.) 216 (Ont. S.C.), refd to. [para. 30].

Salna v. Awad (2011), 499 A.R. 264; 514 W.A.C. 264; 2011 ABCA 20, refd to. [para. 30].

Tottrup et al. v. Clearwater No. 99 (Municipal District) (2006), 401 A.R. 88; 391 W.A.C. 88; 2006 ABCA 380, refd to. [para. 31].

Pioneer Exploration Inc. Estate (Bankrupt) v. Euro-Am Pacific Enterprises Ltd. (2003), 339 A.R. 165; 312 W.A.C. 165; 27 Alta. L.R.(4th) 62; 2003 ABCA 298, refd to. [para. 31].

Another Look Ventures Inc. et al. v. 642157 Alberta Ltd., [2012] A.R. Uned. 300; 2012 CarswellAlta 1486; 2012 ABCA 253, refd to. [para. 32].

Murphy Oil Co. et al. v. Predator Corp. et al. (2006), 384 A.R. 251; 367 W.A.C. 251; 2006 ABCA 69, refd to. [para. 34].

298157 Alberta Ltd., Re, [2005] A.R. Uned. 969; 2005 ABQB 941 (Bktcy. Reg.), refd to. [para. 44].

Canada Glacier Beverage Corp. v. Barens & Kissack Inc. (1999), 6 C.B.R.(4th) 212; 64 B.C.L.R.(3d) 360 (S.C.), refd to. [para. 44].

Mancini (Bankrupt) et al. v. Falconi et al. (1993), 61 O.A.C. 332; 1993 CarswellOnt 1861 (C.A.), refd to. [para. 47].

GMAC Commercial Credit Corp. - Canada v. T.C.T. Logistics Inc. et al., [2006] 2 S.C.R. 123; 351 N.R. 326; 215 O.A.C. 313; 2006 SCC 35, refd to. [para. 47].

St. Armaud & Bergevin Ltd. v. Savage (1955), 35 C.B.R. 212; 1955 CarswellQue 37 (Que. S.C. in Bktcy.), refd to. [para. 47].

Border Drilling & Sanitation Ltd. (1983), 45 C.B.R.(N.S.) 252; 1983 CarswellOnt 169, refd to. [para. 47].

Marquette (A.) & Fils Inc. v. Mercure, [1977] 1 S.C.R. 547; 10 N.R. 239, refd to. [para. 47].

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109; 31 D.L.R.(4th) 481, refd to. [para. 57].

Ward v. Taubner (2004), 368 A.R. 95; 2004 ABQB 565, refd to. [para. 59].

Sun Gro Horticulture Canada Ltd. v. Abe's Door Service Ltd. et al. (2006), 397 A.R. 282; 384 W.A.C. 282; 2006 ABCA 243, refd to. [para. 60].

Sun Gro Horticulture Canada Ltd. v. Alberta Metal Building Sales Inc. - see Sun Gro Horticulture Canada Ltd. v. Abe's Door Service Ltd. et al.

Boyd et al. v. Cook (2012), 540 A.R. 46; 2012 ABQB 284, refd to. [para. 65].

Novak et al. v. Bond, [1999] 1 S.C.R. 808; 239 N.R. 134; 122 B.C.A.C. 161; 200 W.A.C. 161; 172 D.L.R.(4th) 385, refd to. [para. 65].

J.N. v. G.J.K. et al. (2004), 361 A.R. 177; 339 W.A.C. 177; 2004 ABCA 394, refd to. [para. 65].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 215 [para. 14].

Rules of Court (Alta.), rule 7.3 [para. 10].

Counsel:

David LeGeyt (Fraser Milner Casgrain LLP), for the plaintiff, Environmental Metal Works Ltd.;

Gregory W. Jaycock (Parlee McLaws LLP), for Murray, Faber & Associates Inc. and Cameron Murray;

Ian Hanson (Reynolds Mirth Richards & Farmer LLP), for Gramugi Business Enterprises Ltd.;

John R. Cusano (Gowling LaFleur Henderson LLP), for Faber & Company Inc. and Dan Faber.

This application was heard on July 10, 2013, by Marceau, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on August 20, 2013.