Quadrangle Holdings Ltd. v. Coady et al., 2015 NSCA 13

• Judge: Farrar, Bryson and Scanlan, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: September 22, 2014
• Jurisdiction: Nova Scotia
• Citations: 2015 NSCA 13;(2015), 355 N.S.R.(2d) 324 (CA)

Quadrangle Holdings v. Coady (2015), 355 N.S.R.(2d) 324 (CA);

    1123 A.P.R. 324

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. FE.013

Blair Coady (appellant) v. Quadrangle Holdings Limited, James Matheson and Industrielle Alliance Valeurs Mobilières Inc. (respondents)

(CA 423353; 2015 NSCA 13)

Indexed As: Quadrangle Holdings Ltd. v. Coady et al.

Nova Scotia Court of Appeal

Farrar, Bryson and Scanlan, JJ.A.

February 6, 2015.

Summary:

In its action, Quadrangle Holdings Ltd. claimed that Coady used his position in Shannon International Resources Inc. to misappropriate some of Quadrangle's shares in Rally Energy Ltd., of which Coady was also an officer and director. The Rally shares had been pledged by Quadrangle to Shannon as security for Quadrangle's promise to pay for some shares in Shannon. Although some of the companies were incorporated in exotic places, the people and the events were connected with Alberta and the Maritimes. A Nova Scotia Supreme Court judge declined jurisdiction in favour of Alberta. Quadrangle sued in the Alberta Court of Queen's Bench. Coady obtained summary judgment on the basis of the limitation of actions statute in Alberta (see 531 A.R. 48). Quadrangle commenced a new action in Nova Scotia in 2011. Quadrangle sought to revive the Nova Scotia proceedings by setting aside the implied stay of proceedings. At issue was what to do when a court, to which another court had deferred on the basis of forum non conveniens, turned out to be statutorily barred from hearing the case.

The Nova Scotia Supreme Court, in a decision reported at 339 N.S.R.(2d) 85; 1073 A.P.R. 85, ordered that the implied stay of proceedings be terminated and that the 2008 and 2011 actions be consolidated. Coady appealed.

The Nova Scotia Court of Appeal dismissed the appeal.

Conflict of Laws - Topic 7605

Torts - Jurisdiction - Real and substantial connection - In its action, Quadrangle Holdings Ltd. claimed that Coady used his position in Shannon International Resources Inc. to misappropriate some of Quadrangle's shares in Rally Energy Ltd., of which Coady was also an officer and director - The Rally shares had been pledged by Quadrangle to Shannon as security for Quadrangle's promise to pay for some shares in Shannon - Although some of the companies were incorporated in exotic places, the people and the events were connected with Alberta and the Maritimes - A Nova Scotia Supreme Court judge declined jurisdiction in favour of Alberta - Quadrangle sued in the Alberta Court of Queen's Bench - Coady obtained summary judgment on the basis of the limitation of actions statute in Alberta - Quadrangle commenced a new action in Nova Scotia in 2011 - Quadrangle sought to revive the Nova Scotia proceedings by setting aside the implied stay on the ground that newly discovered circumstances made it unjust that the stay continue - The applications judge ordered that the implied stay of proceedings be terminated and that the 2008 and 2011 actions be consolidated - This case concerned a tort committed in Nova Scotia and, therefore, the case had a real and substantial connection with the province - Nova Scotia law applied to the dispute - The claims were not statute-barred - Coady appealed, asserting that the applications judge erred in concluding that the substantive merits of the action were governed by Nova Scotia law - In a further alternative, Coady asserted that if the tort of conversion applied, the normal rule of lex loci delecti (law of the place of the tort), should be replaced by a "closest connection" test - The Nova Scotia Court of Appeal dismissed the appeal - The applications judge properly considered the essential character of the complaint and characterized it as conversion - He characterized the question to be decided, applied the appropriate connecting factor (place of the tort), and applied the appropriate law - There was no error - See paragraphs 57 to 79.

Estoppel - Topic 377

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - When applicable - In its action, Quadrangle Holdings Ltd. claimed that Coady used his position in Shannon International Resources Inc. to misappropriate some of Quadrangle's shares in Rally Energy Ltd., of which Coady was also an officer and director - The Rally shares had been pledged by Quadrangle to Shannon as security for Quadrangle's promise to pay for some shares in Shannon - Although some of the companies were incorporated in exotic places, the people and the events were connected with Alberta and the Maritimes - A Nova Scotia Supreme Court judge declined jurisdiction in favour of Alberta - Quadrangle sued in the Alberta Court of Queen's Bench - Coady obtained summary judgment on the basis of the limitation of actions statute in Alberta - Quadrangle commenced a new action in Nova Scotia in 2011 - Quadrangle sought to revive the Nova Scotia proceedings by setting aside the implied stay on the ground that newly discovered circumstances made it unjust that the stay continue - The applications judge ordered that the implied stay of proceedings be terminated and that the 2008 and 2011 actions be consolidated - This case concerned a tort committed in Nova Scotia and, therefore, the case had a real and substantial connection with the province - Nova Scotia law applied to the dispute - The claims were not statute-barred - Coady appealed, asserting that the applications judge erred in failing to conclude that the 2008 Nova Scotia claim was now res judicata by virtue of the Supreme Court judge's order under the Enforcement of Canadian Judgments and Decrees Act - The Nova Scotia Court of Appeal dismissed the appeal - The res judicata argument was not available to Coady where he had argued the opposite before the applications judge - See paragraphs 34 to 44 - The court considered the argument for completeness and held that registration of the 2008 Nova Scotia order did not bar any action by Quadrangle against Coady everywhere for all purpose and all time - It simply affirmed that Quadrangle could not sue Coady in Alberta - It said nothing about whether it could be done in Nova Scotia - See paragraphs 45 to 56.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See Estoppel - Topic 377 ].

Cases Noticed:

Hartling et al. v. Nova Scotia (Attorney General) et al. (2009), 286 N.S.R.(2d) 219; 909 A.P.R. 219; 2009 NSCA 130, refd to. [para. 9].

Innocente v. Canada (Attorney General) (2012), 315 N.S.R.(2d) 273; 998 A.P.R. 273; 2012 NSCA 36, refd to. [para. 30].

Spiliada Maritime Corp. v. Cansulex Ltd., [1986] 3 All E.R. 843; 71 N.R. 372 (H.L.), refd to. [para. 31].

Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.), [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1, refd to. [para. 31].

R. v. Perka, Nelson, Hines and Johnson, [1984] 2 S.C.R. 232; 55 N.R. 1, refd to. [para. 40].

Nelson et al. v. Little Estate (2005), 269 Sask.R. 231; 357 W.A.C. 231; 2005 SKCA 120, refd to. [para. 41].

Dhillon v. Dhillon (2006), 232 B.C.A.C. 249; 385 W.A.C. 249; 2006 BCCA 524, refd to. [para. 43].

Hoque v. Montreal Trust Co. of Canada et al. (1997), 162 N.S.R.(2d) 321; 485 A.P.R. 321; 1997 NSCA 153, refd to. [para. 46].

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1; 2001 SCC 44, refd to. [para. 48].

Wolfe et al. v. Wyeth et al. (2011), 282 O.A.C. 64; 2011 ONCA 347, refd to. [para. 49].

Vancouver Island Helicopters Ltd. v. Robertshaw Controls Co., et al. (1980), 30 O.R. (2d) 283 (H.C.), refd to. [para. 49].

Pratt et al. v. Johnson et al. (1958), 16 D.L.R.(2d) 385 (S.C.C.), refd to. [para. 52].

Wright v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (2006), 246 N.S.R.(2d) 308; 780 A.P.R. 308; 2006 NSCA 101, refd to. [para. 53].

DaimlerChrysler Canada Inc. v. Associated Bailiffs & Co., [2005] O.T.C. Uned. 644; 2005 CanLII 24234 (S.C.), refd to. [para. 61].

Davies v. Collins (2011), 307 N.S.R.(2d) 288; 975 A.P.R. 288; 2011 NSCA 79, refd to. [para. 63].

Aldo Group Inc. v. Moneris Solutions Corp. et al. (2013), 313 O.A.C. 122; 2013 ONCA 725, refd to. [para. 64].

Banro Corp. v. Editions Ecosociété Inc. et al. (2012), 429 N.R. 293; 2012 SCC 18, refd to. [para. 71].

Authors and Works Noticed:

Black, Vaughan, Conditional Forum Non Conveniens in Canadian Courts (2013), 39 Queens L.J., p. 41 [para. 31].

Bryant, Alan W., Lederman, Sidney N., and Fuerst, Michelle K., Sopinka, Lederman & Bryant: The Law of Evidence in Canada (3rd Ed. 2009), p. 1284 [para. 42].

Fleming, J.G., The Law of Torts (8th Ed. 1992), pp. 64, 65 [para. 61].

Fridman, G.H.L., The Law of Contract in Canada (3rd Ed. 2010), p. 97 [para. 68].

Klar, Lewis N., Tort Law (5th Ed. 2012), p. 104 [para. 67].

Lange, Donald J., The Doctrine of Res Judicata in Canada (3rd Ed. 2010), pp. 12, 13 [para. 42]; 17, 18 [para. 52].

Walker, Janet, Castel & Walker: Canadian Conflict of Laws (6th Ed. 2014), Looseleaf, p. 14-112 [para. 54]; generally [para. 63].

Counsel:

Scott Campbell, on behalf of William L. Ryan, Q.C., and Christopher Madill, for the appellant;

Bruce Outhouse, Q.C., and Justin Adams, for the respondent, Quadrangle Holdings Limited;

Melissa MacAdam, on behalf of Robert Purdy, Q.C., for the respondent, Industrielle Alliance Valeurs Mobilières Inc.

This appeal was heard at Halifax, N.S., on September 22, 2014, by Farrar, Bryson and Scanlan, JJ.A., of the Nova Scotia Court of Appeal. The following judgment of the Court of Appeal was delivered by Bryson, J.A., on February 6, 2015.