Windsor Energy Inc. et al. v. Northrup et al., (2015) 442 N.B.R.(2d) 59 (TD)

• Judge: Morrison, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: June 08, 2015
• Jurisdiction: New Brunswick
• Citations: (2015), 442 N.B.R.(2d) 59 (TD);2015 NBQB 199

Windsor Energy v. Northrup (2015), 442 N.B.R.(2d) 59 (TD);

    442 R.N.-B.(2e) 59; 1155 A.P.R. 59

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2015] N.B.R.(2d) TBEd. NO.021

Renvoi temp.: [2015] N.B.R.(2d) TBEd. NO.021

Windsor Energy Inc. and Khalid Amin (plaintiffs) v. Bruce Northrup and the Government of the Province of New Brunswick (defendants)

(F/C/204/2014; 2015 NBQB 199; 2015 NBBR 199)

Indexed As: Windsor Energy Inc. et al. v. Northrup et al.

Répertorié: Windsor Energy Inc. et al. v. Northrup et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Fredericton

Morrison, J.

October 8, 2015.

Summary:

Résumé:

Windsor Energy Inc. conducted seismic tests in New Brunswick as part of its gas exploration activities. In 2011, the Minister of Natural Resources made public statements asserting that Windsor did not have permission to conduct the tests and had violated the Oil and Natural Gas Act. As a result, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants), alleging that the statements generated negative publicity which drove potential investors away from the company. The plaintiffs claimed damages of $105 million for anticipated loss of profit and loss of expropriation costs, and special damages of $5 million. The defendants moved for security for costs from the plaintiffs. The plaintiffs moved to amend their pleadings to remove their claim of $100 million for loss of profits to "an amount to be determined".

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported at (2015), 429 N.B.R.(2d) 337; 1119 A.P.R. 337, allowed the defendants' motion and ordered the plaintiffs to post $233,000 as security for costs. The plaintiffs' motion was also allowed. The defendants moved pursuant to rule 23 for a determination that the plaintiffs' claims were statute-barred by s. 5 of the Limitations of Actions Act, and precluded by ss. 4 and 21 of the Proceedings Against the Crown Act. They also moved for a determination that the plaintiffs' claims under the tort of injurious falsehood and the failure to transfer a lease did not disclose reasonable causes of action. Finally, the defendants moved for judgment pursuant to rules 22.04(3) and 37.10.

The New Brunswick Court of Queen's Bench, Trial Division, determined the issues. In the result, the claims of injurious falsehood and misfeasance in public office were permitted to continue against the Minister. The plaintiffs were granted 30 days to file a motion to amend their pleadings with respect to the Province's failure to transfer the lease.

Crown - Topic 1551

Torts by and against Crown - Interference with economic relations - General - [See first Crown - Topic 4427 , Limitation of Actions - Topic 3281 and first Practice - Topic 2230 ].

Crown - Topic 1701

Torts by and against Crown - Actions against Crown for breach of statutory duty - General - [See second Practice - Topic 2230 ].

Crown - Topic 1785

Torts by and against Crown - Practice - Pleadings - [See both Practice - Topic 2230 ].

Crown - Topic 4427

Actions by and against Crown in right of a province - Proceedings against the Crown Acts - Actions to which Act applicable - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants) for the torts of injurious falsehood and defamation - The defendants moved for a determination that the claims were precluded because they did not fit under any of the categories set out in s. 4(1) of the Proceedings Against the Crown Act - The plaintiffs argued that the tort of injurious falsehood adversely affected the goodwill and reputation of Windsor, and goodwill being personal property, the tort fell within the ambit of a tort to "personal property" identified in s. 4(1)(a) - The New Brunswick Court of Queen's Bench, Trial Division, disagreed with the plaintiffs - Section 4(1)(a) contemplated conduct which directly and physically affected personal or real property - The diminution in value of corporate goodwill was simply a measure of damages flowing from the defamation - By that test, any tort for which damages were claimed against the personal or real property of a defendant could conceivably fall within the ambit of s. 4(1)(a) - That was clearly not the intention of the legislation - Tortuous conduct which only indirectly affected tangible, personal or real property (such as claims for pure economic loss) did not fall within s. 4(1)(a) - See paragraph 29.

Crown - Topic 4427

Actions by and against Crown in right of a province - Proceedings against the Crown Acts - Actions to which Act applicable - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants) for defamation - The defendants moved for a determination that the claim was precluded because it did not fit under any of the categories set out in s. 4(1) of the Proceedings Against the Crown Act - The plaintiffs argued that defamation fell under s. 4(1)(d) because it was governed by the Defamation Act - The New Brunswick Court of Queen's Bench, Trial Division, disagreed with the plaintiffs - There was nothing in the Defamation Act which imposed a duty the breach of which resulted in potential tort liability - The Defamation Act was largely procedural except for creating or codifying certain privileged publications - It presumed the common law tort of defamation; it did not create it - The fact that there might be legislation touching in some way on the subject matter of a law suit was not sufficient to bring it within s. 4(1)(d) - See paragraph 30.

Crown - Topic 4427

Actions by and against Crown in right of a province - Proceedings against the Crown Acts - Actions to which Act applicable - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - Windsor and its president (the plaintiffs) sued the Minister of Natural Resources and the Province (the defendants), asserting that the Province had a duty under the Oil and Natural Gas Act to transfer a lease to Windsor - The defendants moved for a determination that the claim was precluded because it did not fit under any of the categories set out in s. 4(1) of the Proceedings Against the Crown Act (PACA) - The New Brunswick Court of Queen's Bench, Trial Division, found that the plaintiffs were alleging that the Province had breached a statutory duty - That clearly fell within the scope of s. 4(1)(d) of the PACA - See paragraphs 31 and 32.

Crown - Topic 5143

Officials and employees - Liability of officials in tort - Limitation of actions - [See Limitation of Actions - Topic 3010 ].

Crown - Topic 5145

Officials and employees - Liability of officials in tort - Misfeasance - [See Limitation of Actions - Topic 3010 ].

Libel and Slander - Topic 22

General - Definitions - Defamation defined - [See Limitation of Actions - Topic 3246 ].

Libel and Slander - Topic 4061

Malice - As a bar to defence of fair comment or qualified privilege - General - [See Limitation of Actions - Topic 3246 ].

Libel and Slander - Topic 6023

Practice - Actions - When available - [See second Crown - Topic 4427 and Limitation of Actions - Topic 3246 ].

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - [See Limitation of Actions - Topic 3010 , Limitation of Actions - Topic 3246 and Limitation of Actions - Topic 3281 ].

Limitation of Actions - Topic 3010

Actions in tort - General principles - When time begins to run - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants) for misfeasance in public office - The defendants moved for a determination that the claim was statute-barred by s. 5 of the Limitations of Actions Act (LAA) because the material facts upon which it was based were known to the plaintiffs by November 2011, and the claim was commenced more than two years after that - The New Brunswick Court of Queen's Bench, Trial Division, held that the claim was not proscribed by the LAA - An essential element of the tort of misfeasance in public office was that the Minister knew his conduct was unlawful and likely to injure - This was a subjective element - The plaintiffs could not issue a pleading in the absence of the subjective element, and they did not obtain that knowledge until November 2013 - See paragraphs 66 to 69.

Limitation of Actions - Topic 3246

Actions in tort - Libel and slander - When time begins to run - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants) for defamation - The defendants moved for a determination that the claim was statute-barred by s. 5 of the Limitations of Actions Act (LAA) because it was commenced more than two years after the material facts upon which it was based were known to the plaintiffs - The New Brunswick Court of Queen's Bench, Trial Division, held that the defamation claim was proscribed by the LAA - The limitation period began to run once the plaintiffs were aware of the defamatory words and their publication - The court rejected the plaintiffs' argument that evidence of malice sufficient to defeat the defence of privilege was an essential element of the cause of action - See paragraphs 49 to 59.

Limitation of Actions - Topic 3281

Actions in tort - Interference with economic relations - General - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants) for the tort of injurious falsehood - The defendants moved for a determination that the claim was statute-barred by s. 5 of the Limitations of Actions Act (LAA) because the material facts upon which it was based were known to the plaintiffs by December 2011, and the claim was commenced more than two years after that - The New Brunswick Court of Queen's Bench, Trial Division, held that the claim was not proscribed by the LAA - Malice was an essential element of the tort of injurious falsehood - Until the plaintiffs became aware of actual malice on the part of the defendants, they could not advance a claim of injurious falsehood - The limitation period did not begin to run until November 2013 - See paragraphs 60 to 65.

Limitation of Actions - Topic 9305

Postponement or suspension of statute - Discoverability rule - [See Limitation of Actions - Topic 3010 , Limitation of Actions - Topic 3246 and Limitation of Actions - Topic 3281 ].

Practice - Topic 2213

Pleadings - Striking out pleadings - With leave to amend - [See second Practice - Topic 2230 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources, Windsor and its president (the plaintiffs) sued the Minister and the Province (the defendants) for the tort of injurious falsehood - The defendants moved to strike the pleadings for failure to disclose a reasonable cause of action - They argued that the pleadings did not link the impugned conduct with slander of the plaintiffs' business, their ability to market, or the quality of their products and services - The New Brunswick Court of Queen's Bench, Trial Division, disagreed - Based on a generous consideration of the pleadings, it could not be said that it was plain and obvious that they failed to disclose the essential elements of the cause of action in injurious falsehood as it related to Windsor - However, the allegations related to the business enterprises of Windsor and no property belonging to the president of Windsor was identified - Accordingly, the pleadings did not disclose the existence of a claim on behalf of the president - See paragraphs 71 to 76.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - Windsor and its president (the plaintiffs) sued the Minister of Natural Resources and the Province (the defendants) for breach of statutory duty, alleging that the Province "unlawfully" refused to transfer a lease to Windsor, thereby causing Windsor to "suffer loss and damage" - The defendants moved to strike the pleadings for failure to disclose a reasonable cause of action - The New Brunswick Court of Queen's Bench, Trial Division, held that the pleading did not meet the level of specificity required - However, a fair and generous reading of the pleadings revealed an allegation that Windsor purchased the lease, sent documentation to the Province necessary to facilitate a transfer, and that the Province failed to transfer the lease in violation of the Oil and Natural Gas Act - Assuming the allegations were true, the pleading would found a cause of action but for its failure to identify the statutory provision which provided an obligation upon the Province to transfer the lease - The plaintiffs were granted 30 days to file a motion to amend their pleadings - See paragraphs 77 to 80.

Practice - Topic 5260

Trials - General - Trial of preliminary issues - General principles (incl. when available or appropriate) - Windsor Energy Inc. conducted seismic tests in N.B. as part of its gas exploration activities - As a result of statements made by the Minister of Natural Resources (Northrup), Windsor and its president (the plaintiffs) sued Northrup and the Province (the defendants) for the torts of injurious falsehood, defamation, and misfeasance in public office - The defendants moved for a determination that the claims against Northrup related to things done in the performance of his duties as a Minister of the Crown and as such were statute-barred by s. 4(8) of the Proceedings Against the Crown Act - The New Brunswick Court of Queen's Bench, Trial Division, held that it was neither possible nor appropriate to determine that the claims against Northrup were barred by s. 4(8) on this motion - Whether bad faith and malice brought Northrup's actions outside his duties as Minister was very much an open question and one which was in part dependent on factual findings - See paragraphs 34 to 43.

Torts - Topic 5106

Interference with economic relations - Injurious falsehood - Malicious intent - [See Limitation of Actions - Topic 3281 ].

Torts - Topic 5118

Interference with economic relations - Injurious falsehood - Pleading - [See first Practice - Topic 2230 ].

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - [See Limitation of Actions - Topic 3010 ].

Cases Noticed:

Boisvert v. LeBlanc (2005), 294 N.B.R.(2d) 325; 765 A.P.R. 325; 2005 NBCA 115, refd to. [para. 12].

Clark v. Naqvi (1989), 99 N.B.R.(2d) 271; 250 A.P.R. 271 (C.A.), refd to. [para. 13].

Phillips et al. v. Communications, Energy and Paperworkers Union, Local 146 et al. (1999), 223 N.B.R.(2d) 104; 572 A.P.R. 104 (T.D.), refd to. [para. 13].

Agnew et al. v. Dow Chemical Co. et al. (1991), 116 N.B.R.(2d) 1; 293 A.P.R. 1 (C.A.), refd to. [para. 13].

Sewell v. Sewell (2007), 314 N.B.R.(2d) 330; 812 A.P.R. 330; 2007 NBCA 42, refd to. [para. 14].

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. 15].

British Columbia v. Imperial Tobacco Canada Ltd. et al. (2011), 419 N.R. 1; 308 B.C.A.C. 1; 521 W.A.C. 1; 2011 SCC 42, refd to. [para. 15].

Portuguese Canadian Credit Union Ltd. v. Cumis General Insurance Co., [2010] O.T.C. Uned. 6107; 2010 ONSC 6107, refd to. [17].

Soteropoulos v. Charles, [2012] O.A.C. Uned. 213; 2012 ONCA 252, refd to. [para. 18].

Levasseur et al. v. New Brunswick Securities Commission, [2012] N.B.R.(2d) Uned. 58; 2012 NBQB 137, refd to. [para. 18].

Doucet et al. v. Spielo Manufacturing Inc. et al. (2011), 372 N.B.R.(2d) 1; 961 A.P.R. 1; 2011 NBCA 44, refd to. [para. 22].

Lévesque v. New Brunswick et al. (2011), 372 N.B.R.(2d) 202; 961 A.P.R. 202; 2011 NBCA 48, refd to. [para. 26].

Long v. Province of N.B. (1959), 19 D.L.R.(2d) 437 (N.B.C.A.), refd to. [para. 29].

Daigle and Rideout v. New Brunswick (1979), 25 N.B.R.(2d) 261; 51 A.P.R. 261 (Q.B.), refd to. [para. 29].

055455 N.B. Inc. et al. v. Atlantic Lottery Corp. et al. (2014), 414 N.B.R.(2d) 139; 1075 A.P.R. 139; 2014 NBQB 15, refd to. [para. 29].

Seniuk et al. v. Saskatchewan (Minister of Justice) et al. - see Saskatchewan Provincial Court Judges' Association et al. v. Saskatchewan (Minister of Justice) et al.

Saskatchewan Provincial Court Judges' Association et al. v. Saskatchewan (Minister of Justice) et al. (1995), 133 Sask.R. 115 (Q.B.), refd to. [para. 39].

Toronto Party for a Better City v. Toronto (City) et al. (2013), 307 O.A.C. 201; 2013 ONCA 327, refd to. [para. 40].

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, refd to. [para. 48].

Johnson et al. v. Studley et al., [2014] O.T.C. Uned. 1732; 2014 ONSC 1732, refd to. [para. 48].

WIC Radio Ltd. v. Simpson - see Simpson v. Mair et al.

Simpson v. Mair et al. (2008), 376 N.R. 80; 256 B.C.A.C. 1; 431 W.A.C. 1; 2008 SCC 40, refd to. [para. 49].

Grant et al. v. Torstar Corp. et al. (2009), 397 N.R. 1; 258 O.A.C. 285; 2009 SCC 61, refd to. [para. 49].

Green v. Tram et al. (2014), 307 Man.R.(2d) 82; 2014 MBQB 118, refd to. [para. 50].

C. v. Mirror Group Newspapers, [1996] 4 All E.R. 511 (C.A.), refd to. [para. 53].

Kuntz v. British Columbia (Workers' Compensation Board) - see Kuntz v. McGraw et al.

Kuntz v. McGraw et al. (No. 2) (1997), 92 B.C.A.C. 40; 150 W.A.C. 40; 1997 CarswellBC 1027 (C.A.), refd to. [para. 54].

Lawless v. Anderson et al. (2011), 276 O.A.C. 75; 2011 ONCA 102, refd to. [para. 55].

Hein v. Can. Fairbanks Morse Co. & Burrows, [1938] 4 D.L.R. 63 (N.B.C.A.), refd to. [para. 60].

Lysko v. Braley et al. (2006), 212 O.A.C. 159; 79 O.R.(3d) 721 (C.A.), refd to. [para. 61].

Blanchard v. Acadie-Presse ltée (2013), 409 N.B.R.(2d) 152; 1062 A.P.R. 152; 2013 NBCA 58, refd to. [para. 79].

LeDrew et al. v. Conception Bay South (Town) (2003), 231 Nfld. & P.E.I.R. 61; 686 A.P.R. 61; 2003 NLCA 56, refd to. [para. 79].

Montreal Trust Co. of Canada v. Hickman et al. (2001), 204 Nfld. & P.E.I.R. 58; 614 A.P.R. 58; 2001 NFCA 42, refd to. [para. 79].

Counsel:

Avocats:

D. Andrew Rouse, for the plaintiffs;

Frederick C. McElman, Q.C., and Josie Marks, for the defendants.

These motions were heard on June 8, 2015, before Morrison, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following decision on October 8, 2015.