HOOPP Realty Inc. v. Guarantee Co. of North America, (2015) 607 A.R. 377

• Judge: McDonald, Bielby and Wakeling, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: September 03, 2015
• Citations: (2015), 607 A.R. 377;2015 ABCA 336

HOOPP Realty Inc. v. Guarantee Co. (2015), 607 A.R. 377; 653 W.A.C. 377 (CA)

MLB headnote and full text

Temp. Cite: [2015] A.R. TBEd. NO.013

HOOPP Realty Inc. (respondent/plaintiff) v. The Guarantee Company of North America (appellant/defendant)

(1503-0155-AC; 2015 ABCA 336)

Indexed As: HOOPP Realty Inc. v. Guarantee Co. of North America

Alberta Court of Appeal

McDonald, Bielby and Wakeling, JJ.A.

November 3, 2015.

Summary:

Under a 1999 performance bond, Guarantee Company of North America (GCNA) guaranteed Clark Builders' obligations to HOOPP Realty Inc. under an agreement for the construction of a warehouse. There was a dispute in relation to the warehouse floor. In 2002, HOOPP commenced an action against Clark Builders and a separate action against GCNA pursuant to its performance guarantee. All three parties entered into a 2004 bond agreement pursuant to which Clark Builders undertook to replace the floor at its own cost. The 2004 bond agreement contained express provisions preserving HOOPP's ability to claim losses or damages for legal costs, investigation costs and interest (the "fees claim") arising in relation to the replaced floor. In 2012, HOOPP amended its pleading against GCNA to reduce its claim to the fees claim only. Clark Builders obtained an order striking HOOPP's action against it on the basis that HOOPP failed to commence mandatory arbitration within the provided limitation period. That order was upheld on appeal. GCNA applied pursuant to rule 3.68(2)(b) of the Alberta Rules of Court to strike HOOPP's action against it for the fees claim.

The Alberta Court of Queen's Bench, in a decision reported at [2015] A.R. Uned. 309, dismissed the application. GCNA appealed.

The Alberta Court of Appeal dismissed the appeal.

Practice - Topic 2208

Pleadings - Striking out pleadings - Application for - Evidentiary limitations - [See second and third Practice - Topic 2230 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - The Alberta Court of Appeal, per McDonald and Bielby, JJ.A., stated that "Rule 3.68(3) states only that no evidence may be submitted on an application to strike for failure to disclose a reasonable claim. It does not state that when hearing an application to strike, the chambers judge is to examine only specific wording extracted from the statement of claim at the applicant's discretion; he or she must place that wording in the entire context of the pleading. At minimum, the relevant examination must logically extend beyond the specific words or paragraphs said to allege a cause of action. If other portions of the same pleading reveal a complete defence to that cause of action, the action may be struck" - See paragraphs 14 to 15.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - Under a 1999 performance bond, Guarantee Company of North America (GCNA) guaranteed Clark Builders' obligations to HOOPP Realty Inc. under an agreement for the construction of a warehouse - There was a dispute in relation to the warehouse floor - In 2002, HOOPP commenced an action against Clark Builders and a separate action against GCNA pursuant to its performance guarantee - All three parties entered into a 2004 bond agreement pursuant to which Clark Builders undertook to replace the floor at its own cost - The 2004 bond agreement contained express provisions preserving HOOPP's ability to claim losses or damages for legal costs, investigation costs and interest (the "fees claim") arising in relation to the replaced floor - In 2012, HOOPP amended its pleading against GCNA to reduce its claim to the fees claim only - Clark Builders obtained an order striking HOOPP's action against it on the basis that HOOPP failed to commence mandatory arbitration within the provided limitation period - That order was upheld on appeal (see 2014 ABCA 20) - GCNA applied pursuant to rule 3.68(2)(b) of the Alberta Rules of Court to strike HOOPP's action against it for the fees claim - The application was dismissed - GCNA appealed - The Alberta Court of Appeal dismissed the appeal - The chambers judge erred in failing to consider the entire contents of the Amended Statement of Claim in determining that it revealed a "reasonable claim" - However, notwithstanding that error, the chambers judge was correct as well as reasonable in concluding that the 2004 performance bond arguably created obligations between HOOPP and GCNA which survived the discharge of indebtedness owed by the primary debtor, and in considering the decision at 2014 ABCA 20 to that effect - See paragraphs 12 to 23.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - The defendant applied to strike the plaintiff's claim against it pursuant to rule 3.68(2)(b) of the Alberta Rules of Court on the basis that the pleading disclosed no reasonable claim - The application was dismissed - The defendant appealed - The Alberta Court of Appeal, per McDonald and Bielby, JJ.A., stated, inter alia, that "We conclude that the Rule 3.68(3) bar on considering evidence did not preclude the chambers judge from considering factors other than evidence, even when outside the contents of the Amended Statement of Claim. This Court concluded in O'Connor, ... at para. 16 that many factors, short of evidence, must be examined in determining whether a novel claim has a 'reasonable prospect of success'. We interpret this to include consideration of the underlying litigation context of a claim, even one which does not give rise to a novel cause of action. Thus a chambers judge hearing an application to strike a statement of claim must consider earlier reported decisions addressing aspects of the same claim, including the result of companion litigation which produces a complete defence to the action in question on the application to strike" - See paragraphs 19 to 20 - Wakeling, J.A., disagreed, stating, inter alia, that "a motions court hearing an application under r. 3.68(2)(b) must base its decision only on the facts alleged in the commencement document, which must be assumed to be true for the purpose of disposing of the application, and the applicable statutory and common law" - See paragraph 25.

Cases Noticed:

Clark (A.G.) Holdings Ltd. et al. v. HOOPP Realty Inc., [2014] A.R. Uned. 14; 2014 ABCA 20, refd to. [para. 6].

Meridian Developments Ltd. v. Nu-West Group Ltd. (1984), 52 A.R. 248 (C.A.), refd to. [para. 7].

Kniss v. Elliott et al. (2014), 569 A.R. 321; 606 W.A.C. 321; 2014 ABCA 73, refd to. [para. 10].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 10].

Canadian Natural Resources Ltd. v. ShawCor Ltd. et al. (2014), 580 A.R. 265; 620 W.A.C. 265; 376 D.L.R.(4th) 581; 2014 ABCA 289, refd to. [para. 10].

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 11].

Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. et al. (2015), 599 A.R. 363; 643 W.A.C. 363; 2015 ABCA 121, refd to. [para. 11].

Vallieres et al. v. Vozniak (2014), 580 A.R. 326; 620 W.A.C. 326; 2014 ABCA 290, refd to. [para. 11].

O'Connor Associates Environmental Inc. et al. v. MEC OP LLC et al., [2014] 6 W.W.R. 231; 572 A.R. 354; 609 W.A.C. 354; 2014 ABCA 140, refd to. [para. 13].

Tottrup v. Lund et al. (2000), 255 A.R. 204; 220 W.A.C. 204; 2000 ABCA 121, refd to. [para. 13].

British Columbia v. Imperial Tobacco Canada Ltd. et al., [2011] 3 S.C.R. 45; 419 N.R. 1; 308 B.C.A.C. 1; 521 W.A.C. 1; 2011 SCC 42, refd to. [para. 13].

Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 21].

Horseman v. Horse Lake First Nation (2005), 361 A.R. 287; 339 W.A.C. 287; 2005 ABCA 15, refd to. [para. 25, footnote 4].

Gainers Inc. et al. v. Pocklington et al. (1992), 132 A.R. 35 (Q.B.), refd to. [para. 25, footnote 4].

Rolling Mix Management Ltd. v. Elliott et al., [2006] A.R. Uned. 254; 2006 ABQB 216 (Master), refd to. [para. 25, footnote 4].

Western Capital Trust Co. v. R.W.C. Holdings Ltd., Chernick and 281554 Alberta Ltd. (1982), 46 A.R. 237 (Q.B. Master), refd to. [para. 25, footnote 4].

Carmacks Construction Ltd. v. Beaumont (Village) and Pentagon Industries Ltd. (1981), 30 A.R. 328 (Q.B. Master), refd to. [para. 25, footnote 4].

Warowa v. Rosthern Investment Co., [1949] 1 W.W.R. 470 (Sask. K.B.), refd to. [para. 25, footnote 4].

Dawson et al. v. Rexcraft Storage and Warehouse Inc. et al. (1998), 111 O.A.C. 201; 164 D.L.R.(4th) 257 (C.A.), refd to. [para. 25, footnote 4].

Wenlock v. Moloney, [1965] 1 W.L.R. 1238 (C.A.), refd to. [para. 25, footnote 4].

Peru (Republic) v. Peruvian Guano Co. (1887), 36 Ch. D. 489, refd to. [para. 25, footnote 4].

Duchy of Lancaster (Attorney General) v. London and Northern Railway Co., [1892] 3 Ch. D. 274, refd to. [para. 25, footnote 4].

Dinapoli v. Yeung et al., [2003] 3 W.W.R. 714; 323 A.R. 113 (Q.B.), refd to. [para. 25, footnote 5].

Kleiman Enterprises Ltd. v. Unocal Canada Ltd. et al., [1999] 4 W.W.R. 414; 165 Sask.R. 85 (Q.B.), refd to. [para. 25, footnote 5].

Nycholot and Halpape v. Royal Bank of Canada, [1997] 9 W.W.R. 66; 156 Sask.R. 226 (Q.B.), refd to. [para. 25, footnote 5].

Balacko v. Eaton's of Canada Ltd. (1967), 60 W.W.R.(N.S.) 22 (Sask. Q.B.), refd to. [para. 25, footnote 5].

Web Offset Publications Ltd. et al. v. Vickery et al. (1999), 123 O.A.C. 235; 40 O.R.(3d) 802 (C.A.), refd to. [para. 25, footnote 5].

Vaughan v. Ontario (Minister of Health) (1996), 2 O.T.C. 241; 49 C.P.C.(3d) 119 (Gen. Div.), refd to. [para. 25, footnote 5].

Montreal Trust Co. of Canada v. Toronto-Dominion Bank (1992), 40 C.P.C.(3d) 389 (Ont. Gen. Div.), refd to. [para. 25, footnote 5].

Hogan v. Brantford (City) (1909), 1 O.W.N. 226 (H.C.), refd to. [para. 25, footnote 5].

Day v. William Hill (Park Lane) Ltd., [1949] 1 K.B. 632 (C.A.), refd to. [para. 25, footnote 5].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 25, footnote 6].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 25, footnote 6].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Dumont et al. v. Canada (Attorney General) and Manitoba (Attorney General), [1990] 1 S.C.R. 279; 105 N.R. 228; 65 Man.R.(2d) 182, refd to. [para. 25, footnote 6].

Operation Dismantle Inc. et al. v. Canada et al., [1985] 1 S.C.R. 441; 59 N.R. 1, refd to. [para. 25, footnote 6].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304, refd to. [para. 25, footnote 6].

Cerny v. Canadian Industries Ltd. (1972), 30 D.L.R.(3d) 462 (Alta. C.A.), refd to. [para. 25, footnote 6].

Hill Estate v. Chief Constable of West Yorkshire, [1989] 1 A.C. 53; 102 N.R. 241 (H.L.), refd to. [para. 25, footnote 6].

Aponte-Torres v. University of Puerto-Rico (2006), 445 F.3d 50 (1st Cir.), refd to. [para. 25, footnote 6].

First Mortgage Alberta Fund (V) Inc. et al. v. Boychuk et al. (2001), 291 A.R. 371; 96 Alta. L.R.(3d) 306; 2001 ABQB 712, refd to. [para. 25, footnote 7].

B.D. et al. v. Children's Aid Society of Halton Region et al., [2007] 3 S.C.R. 83; 365 N.R. 302; 227 O.A.C. 161; 2007 SCC 38, refd to. [para. 25, footnote 8].

B.D. v. Syl Apps Secure Treatment Centre - see B.D. et al. v. Children's Aid Society of Halton Region et al.

Kent v. Griffiths, [2001] Q.B. 36 (C.A.), refd to. [para. 25, footnote 8].

Hubbock & Sons Ltd. v. Wilkinson, Heywood & Clark Ltd., [1899] 1 Q.B. 86 (C.A.), refd to. [para. 25, footnote 8].

C.H.S. et al. v. Director of Child Welfare (Alta.) (2010), 469 A.R. 359; 470 W.A.C. 359; 2010 ABCA 15, refd to. [para. 25, footnote 8].

Dyson v. Attorney General, [1911] 1 K.B. 410 (C.A.), refd to. [para. 25, footnote 8].

Drummond-Jackson v. British Medical Association, [1970] 1 All E.R. 1094 (C.A.), refd to. [para. 25, footnote 8].

Hughes v. Richards (Colin) & Co., [2004] EWCA Civ. 266, refd to. [para. 25, footnote 8].

Lameman et al. v. Alberta et al. (2013), 553 A.R. 44; 583 W.A.C. 44; 2013 ABCA 148, refd to. [para. 29, footnote 9].

Can v. Calgary Chief of Police et al. (2014), 584 A.R. 147; 623 W.A.C. 147; 315 C.C.C.(3d) 337; 2014 ABCA 322, refd to. [para. 32, footnote 20].

Access Mortgage Corp. (2004) Ltd. v. Arres Capital Inc. (2014), 584 A.R. 68; 623 W.A.C. 68; 2014 ABCA 280, refd to. [para. 37, footnote 23].

Stout v. Track (2015), 599 A.R. 98; 643 W.A.C. 98; 62 C.P.C.(7th) 260; 2015 ABCA 10, refd to. [para. 38, footnote 24].

Fernwood Construction of Canada Ltd. v. Century 21 Birch Realty Ltd. and Brown (1982), 48 A.R. 147 (Q.B. Master), refd to. [para. 38, footnote 25].

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, refd to. [para. 38, footnote 26].

Beier et al. v. Proper Cat Construction Ltd. et al. (2013), 564 A.R. 357; 2013 ABQB 351, refd to. [para. 38, footnote 27].

O'Hanlon Paving Ltd. v. Serengetti Developments Ltd. et al. (2013), 567 A.R. 140; 18 B.L.R.(5th) 73; 2013 ABQB 428, refd to. [para. 38, footnote 27].

Greenbuilt Group of Companies Ltd. v. RMD Engineering Inc., [2013] 11 W.W.R. 156; 563 A.R. 1; 2013 ABQB 297, refd to. [para. 38, footnote 27].

Apsley v. Boeing Co. (2010), 722 F. Supp.2d 1218 (D. Kan.), affd. (2012), 691 F.3d 1184 (10th Cir.), refd to. [para. 38, footnote 27].

Orr v. Fort McKay First Nation (2014), 587 A.R. 16; 2014 ABQB 111, refd to. [para. 40, footnote 28].

Statutes Noticed:

Alberta Rules of Court - see Rules of Court (Alta.).

Rules of Court (Alta.), rule 3.68 [para. 12].

Counsel:

R.D. Bell and K.D. Marlowe, for the respondent;

B. Shaw, A.C. Bochinski, R. Shaban and R. Yehia, for the appellant.

This appeal was heard on September 3, 2015, before McDonald, Bielby and Wakeling, JJ.A., of the Alberta Court of Appeal. The reasons for judgment reserved of the Court of Appeal were filed on November 3, 2015, including the following opinions:

McDonald and Bielby, JJ.A. - see paragraphs 1 to 23;

Wakeling, J.A., concurring in the result - see paragraphs 24 to 41.