Provalcid Inc. v. Graff et al., 2014 ABQB 453

• Judge: Yamauchi, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 05, 2014
• Citations: 2014 ABQB 453;(2014), 591 A.R. 117 (QB)

Provalcid Inc. v. Graff (2014), 591 A.R. 117 (QB)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. AU.066

Provalcid Inc. (plaintiff/defendant by counterclaim) v. Allan Graff (defendant/plaintiff by counterclaim) and Rowland Seeds Inc. (third party)

(0901 13139; 2014 ABQB 453)

Indexed As: Provalcid Inc. v. Graff et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Yamauchi, J.

July 25, 2014.

Summary:

The defendant/plaintiff by counterclaim (Graff) applied for an order to compel Provalcid Inc. (plaintiff/defendant by counterclaim) to respond to certain written interrogatories. The interrogatories were responses to the undertakings that Provalcid's corporate representative had provided during his questioning. Graff also sought an order that Provalcid, Quebec-based and no longer carrying on business in Alberta, provide security for costs.

The Alberta Court of Queen's Bench held that, generally, the undertakings that Graff sought were fairly narrow, and Provalcid had responded to them. There were no "special circumstances" that would allow Graff to conduct a second round of questioning. The Court ordered that Provalcid provide security for costs, given the paucity of evidence that Provalcid provided concerning its financial position and its business and assets in Alberta. The Court set the quantum at $22,875.

Company Law - Topic 9736

Actions against corporations and directors - Practice - Costs - Security for - The defendant/plaintiff by counterclaim (Graff) sought an order that the corporate plaintiff/defendant by counterclaim (Provalcid) provide security for costs - The Alberta Court of Queen's Bench first dealt with whether rule 4.22 of the Rules of Court or s. 254 of the Business Corporations Act (BCA) applied - "If the respondent is a body corporate, the specific provision, viz, BCA s. 254 applies. In all other cases not subject to other statutory enactments, Rules r. 4.22 applies. ... The onus of proof between the 2 provisions does not change. The onus, in the first instance, is on the applicant, or the party seeking security for costs. If the applicant satisfies this onus, the evidentiary burden shifts to the respondent ... . Thus, in this case, Graff has the onus of establishing on a balance of probabilities that Provalcid will be unable to pay his costs if his defence is successful. If Graff satisfies this onus, the evidentiary burden shifts to Provalcid to show why this Court should not exercise its discretion to make such an order against it. ... " - See paragraphs 83 to 92.

Company Law - Topic 9736

Actions against corporations and directors - Practice - Costs - Security for - The defendant/plaintiff by counterclaim (Graff) sought an order that the corporate plaintiff/defendant by counterclaim provide security for costs - The Alberta Court of Queen's Bench first dealt with rule 4.22 of the Rules of Court and s. 254 of the Business Corporations Act (BCA) - "Under BCA s. 254, the court must determine whether the body corporate is 'unable to pay the costs of a successful defendant.' Under Rules r. 4.22, the court must determine whether it is 'just and reasonable' to require the respondent to provide security for costs. Accordingly, it is appropriate for this Court to consider cases that were decided under Rules r. 4.22, but only to determine whether Graff has met his onus under BCA s. 254." - See paragraphs 92 and 93.

Company Law - Topic 9736

Actions against corporations and directors - Practice - Costs - Security for - The defendant/plaintiff by counterclaim (Graff) sought an order that the corporate plaintiff/defendant by counterclaim (Provalcid Inc.) provide security for costs - Provalcid Inc. was a Quebec-based corporation that was no longer carrying on business in Alberta - The Alberta Court of Queen's Bench applied the factors under rule 4.22 of the Rules of Court - Consideration of rule 4.22's second factor (the ability to pay a costs award) was the ultimate decision that the Court had to make in this case - The Court was satisfied that Provalcid would be unable to pay Graff's costs, if Graff's defence proved to be successful, based primarily on the paucity of evidence that Provalcid had provided concerning its financial position, generally, and its business and assets in Alberta - The Court set the quantum of the security at $22,875 - Graff had "overshot" his estimate as to the costs - Provalcid was not required to post security for costs for steps already taken - Graff delayed in bringing the application, and he should not reap the benefit of his delay - See paragraphs 112 to 119.

Practice - Topic 3709

Evidence - Undertakings respecting - Information compelled by court order - [See both Practice - Topic 4191 ].

Practice - Topic 4191

Discovery - Examination - Re-examination - The defendant (Graff) applied for an order to compel the plaintiff (Provalcid Inc.) to respond to specific written interrogatories, which were responses to the undertakings that Provalcid's representative (Harbec) provided during his questioning - Subject to Graff's counsel receiving the information that Harbec undertook to provide and any questions arising from that information, he had concluded the questioning - The Alberta Court of Queen's Bench held that there were no "special circumstances" that would allow Graff to conduct a second round of questioning of Harbec - "If Graff's counsel neglected or chose not to ask certain questions, this Court will not allow him to bootstrap himself under the guise of questioning on undertakings. Other jurisdictions have held that further questioning following compliance with undertakings does not occur as a matter of right ... [P]arties are only entitled to examine the party opposite once, except in exceptional circumstances. Courts guard that right, even, arguably, when it comes to questioning on undertakings." - See paragraphs 33 to 35.

Practice - Topic 4191

Discovery - Examination - Re-examination - The Alberta Court of Queen's Bench addressed the limits on questioning following compliance with undertakings - "Rule 5.30(2) is clear that the questioning may be done 'on the answer given or record provided.' It does not open the person up to further general questioning. ... [T]he questioning must be focused on the response to the undertaking, and questioning may not become 'part 2' of a bifurcated questioning process. Certainly, a court could allow a party to conduct further questioning that goes beyond the undertakings. For a court to make this allowance, the party seeking the relief must show 'special circumstances' to justify its request ... or where justice so requires it ..." - See paragraphs 29 to 31.

Practice - Topic 4267

Discovery - Examination - Range of - Answers given to interrogatories - [See both Practice - Topic 4191 ].

Practice - Topic 4413

Discovery - Order for further examination - [See both Practice - Topic 4191 ].

Practice - Topic 8107

Costs - Security for costs - General principles - Where plaintiff is corporation or association - [See third Company Law - Topic 9736 ].

Practice - Topic 8120.1

Costs - Security for costs - General principles - Where plaintiff is defendant in counterclaim - [See third Company Law - Topic 9736 ].

Cases Noticed:

Ho et al. v. Computeraid Professional Services Ltd., [2007] A.R. Uned. 463; 2007 ABQB 36 (Master), refd to. [para. 28].

Jetco Heavy Duty Lighting v. Fonteyne et al., [2012] A.R. Uned. 249; 33 C.P.C.(7th) 417; 2012 ABQB 211 (Master), refd to. [para. 28].

Taylor v. Administrator, Motor Vehicle Accident Claims Act (Alta.) et al. (2005), 385 A.R. 161; 2005 ABQB 612, refd to. [para. 31].

Boulianne v. Two Hills No. 21 (1997), 219 A.R. 131; 179 W.A.C. 131 (C.A.), refd to. [para. 31].

Fott v. Fott, [2000] A.R. Uned. 511; 2000 ABQB 767, refd to. [para. 32].

Lawson v. Poirier Estate, 2003 NBQB 205, refd to. [para. 34].

Poirier Estate v. Canadian Imperial Bank of Commerce - see Lawson v. Poirier Estate.

Senechal et al. v. Muskoka (District Municipality) et al., 2005 CarswellOnt 1414 (Sup. Ct. Master), refd to. [para. 36].

Blais v. Toronto Area Transit Operating Authority, [2011] O.T.C. Uned. 1880; 105 O.R.(3d) 575; 2011 ONSC 1880, refd to. [para. 37].

International Minerals & Chemical Corp. (Canada) v. Commonwealth Insurance Co. et al. (1992), 104 Sask.R. 275 (Q.B.), refd to. [para. 38].

Saskatchewan Government Insurance v. Treen, 1988 CarswellAlta 934; 11 A.C.W.S.(3d) 249 (Q.B.), refd to. [para. 39].

Kinch v. Walden et al., [2011] O.T.C. Uned. 2791; 202 A.C.W.S.(3d) 263; 2011 ONSC 2791, refd to. [para. 40].

Desilets Estate v. Daon Development Corp., 1989 CarswellAlta 962; 16 A.C.W.S.(3d) 311 (Q.B. Master), refd to. [para. 41].

Litemor Distributors (Edmonton) Ltd. v. Midwest Furnishings & Supplies Ltd., [2002] A.R. Uned. 373; 2002 ABQB 713 (Master), refd to. [para. 41].

Olson v. Golden Giant Employee's Association, 1999 CarswellOnt 4552 (Sup. Ct.), refd to. [para. 42].

Ennis v. Young, 1986 CarswellOnt 3811; 4 W.D.C.P. 546 (Sup. Ct. Master), refd to. [para. 42].

Xpress Lube & Car Wash Ltd. v. Gill et al., [2011] A.R. Uned. 517; 23 C.P.C.(7th) 193; 2011 ABQB 457, refd to. [para. 85].

Smith v. Insurance Corp. of British Columbia (1981), 30 B.C.L.R. 31; 21 C.P.C. 293 (Co. Ct.), refd to. [para. 86].

Amex Electrical Ltd. v. 726934 Alta. Ltd. (2014), 582 A.R. 304; 2014 ABQB 66, appld. [para. 87].

Toronto-Dominion Bank v. Suitel Canada Executive Suites Corp. et al. (2011), 527 A.R. 97; 2011 ABQB 519, refd to. [para. 88].

Attila Dogan Construction and Installation Co. v. AMEC Americas Ltd. et al., [2011] 49 Alta. L.R.(5th) 211; 504 A.R. 295; 2011 ABQB 175, refd to. [para. 94].

Wall v. 679927 Ontario Ltd. et al. (1999), 176 N.S.R.(2d) 96; 538 A.P.R. 96; 29 C.P.C.(4th) 204 (C.A.), refd to. [para. 97].

Wall v. Horn Abbot Ltd. - see Wall v. 679927 Ontario Ltd. et al.

CTI Group Inc. v Transclear SA, [2007] EWHC 2070 (Comm. Ct.), affd. [2008] EWCA Civ. 856 , refd to. [para. 100].

Mapleson v. Masini (1879), 5 Q.B.D. 144 (Eng. Q.B.), refd to. [para. 110].

Statutes Noticed:

Business Corporations Act, R.S.A. 2000, c. B-9, sect. 254 [para. 84].

Rules of Court (Alta.), 2010, rule 4.22 [para. 83]; rule 5.30 [para. 29].

Authors and Works Noticed:

Sullivan, Ruth, Driedger on the Construction of Statutes (3rd Ed.), pp. 185, 186 [para. 86].

Counsel:

Dana Schindelka and Melissa Tennison (Davis LLP), for the plaintiff/defendant by counterclaim;

Daniel Ramsay (Beaumont Church), for the defendant/plaintiff by counterclaim;

Vanessa Cork (Carle Law Office), for the third party.

This application was heard on June 5, 2014, before Yamauchi, J., of the Alberta Court of Queen's Bench, who delivered the following decision and reasons, dated at Calgary, Alberta, on July 25, 2014.