Bossio v. Andreana, 2012 ABQB 492

Court of Queen ’ s Bench of Alberta Citation: Bossio v. Andreana, 2012 ABQB 492 Date: 20120727 Docket: 0903 01017 Registry: Edmonton Between: Rosemary Bossio and Ital-Canadian Meats Ltd. Plaintiffs - and - Domenico Andreana and Carmella Andreana Defendants _______________________________________________________ Memorandum of Decision of L.A. Smart, Master in Chambers _______________________________________________________ Introduction [ 1 ] The Defendants apply for

Summary Dismissal of the Plaintiff"s claims. The Plaintiff Bossio (Bossio) purchased all of the shares of Ital-Canadian Meats Ltd.(Ital) from the Defendants Andreana (Andreanas). An agreement was executed on November 15th, 2006 which contemplated the same date as the closing date. The shares were transferred, and Bossio became the sole director on that date but possession of the business did not occur until January 24th 2007. [ 2 ] The Share Sale Agreement (Agreement) required the Andreanas deliver:

(

i) The shares and an endorsed transfer; (ii) Assignment of shareholders loans; (iii) Resignation of the Vendors as officers and directors; (iv) Release of the Corporation of claims by the Vendors; and (

v) Non-Competition Agreement by Vendors. [ 3 ] The Agreement contained an entire agreement provision. Put in evidence by Andreanas is another agreement entitled "Undertaking to Re-Adjust". In its recitals it references a September 15th, 2006 Share Sale Agreement and an agreement to adjust certain items of income and expense including but not limited to inventory, certain closing costs, cash on hand and utilities.

Based on the evidence it is vaguely apparent there were adjustments made for some items but it is not evident when the adjusted purchase price was paid. [ 4 ] The Amended Statement of Claim complains that the Andreanas converted certain equipment and recipes (sausage) and contravened the non-competition clause. Further it alleges there was an express or implied agreement that the walk-in freezer and roof-top heating unit were in proper working order and that the roof did not leak. In the year following closing the roof leaked and the freezer and heating unit needed repair.

Argument [ 5 ] The Andreanas say this is a simple matter. The Agreement was for the purchase of shares and Bossio got her shares. There was an entire agreement clause so that ends the matter. No claim can be made in relation to equipment and the roof condition. Domenico Andreana swears in his affidavit that the Defendants fully and faithfully complied with all of their obligations under the Agreement which addresses the other claims. Questioning of Bossio shows that she has no direct personal knowledge that Andreanas had competed.

As for the recipes there was only one and Bossio received it. [ 6 ] Bossio says that notwithstanding the entire agreement clause there were a number of collateral agreements which existed which they are seeking to enforce. She goes so far as to argue that there were fiduciary duties arising from some of these agreements though it is not claimed in the pleadings. Portions of questioning transcripts of Domenico Andreana are put in evidence that are said to establish credibility issues.

She says her evidence establishes that there were a number of other types of sausage sold by Ital and that the Andreanas used recipes for those other sausages and sold them in contravention of the non-competition clause. Discussion [ 7 ] There is no dispute between the parties as to the law regarding

summary judgment. For ease the following three paragraphs are a slightly modified extract from Andrianas argument being a good

summary of the relevant law and considerations. [ 8 ] New Rule 7.3 has not amended the test developed in Alberta jurisprudence for

summary judgement under old rule 159. Where there is no factual dispute, there is no purpose to a trial: the respondent/defendant can advance its legal arguments as well in this special chambers hearing as it could at the conclusion of a trial. Manufacturers Life Insurance Co. v. Executive Centre at Manulife Place Inc., 2011 ABQB 189 , at paragraph 11 [Tab 3] [ 9 ] Within the context of a Defendant applying for

summary dismissal, the Defendant mist demonstrate that it is “ plain and

obvious”, or “clear” or “beyond real doubt” that the action should be summarily disposed if, If this burden is met, a Plaintiff must thendemonstrate a “real chance of success” to avoid

summary dismissal. Tottrup v. Clearwater (Municipal District No. 99), 2006 ABCA 380, at paragraph 10 [Tab 4] [10] Within the context of an application for

summary dismissal, the Supreme Court of Canada has stated that: The defendant who seeks

summary dismissal bears the evidentiary burden of showing that there is “no genuine issue of material factrequiring trial”. Guarantee Co. of North America v. Gordon Capital Corp., (SCC), [1999] 3 S.C.R. 423 (S.C.C.), atpara. 27. The defendant must prove this; it cannot rely on mere allegations or the pleadings: 1061590 Ontario Ltd. v. Ontario JockeyClub (1995), (ON CA), 21 O.R. (3d) 547 (Ont. C.A.); Tucson Properties Ltd. v. Sentry Resources Ltd. (1982), 22Alta. L.R. (2d_ 44 (Alta. Master), at pp. 46-47. If the defendant does prove this, the plaintiff must either refute or counter the defendant’sevidence, or risk

summary dismissal: Murphy Oil Co v. Predator Corp. (2004), 365 A.R. 326, 2004 ABQB 688 (Alta. Q.B.), at p. 331, aff’d (2006) 55 Alta. L.R. (4th) 1, 2006 ABCA 69 (Alta. C.A.). Each side must “put its best foot forward” with respect to the existence ornon-existence of material issues to be tried: Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), (ON SC), 28 O.R. (3d) 423 (Ont. Gen. Div.), at p. 434, Goudie v. Ottawa (City), [2003] 1 S.C.R. 141, 2003 SCC 14(S.C.C.), at para.32.

The chambers judge may make inferences of fact based on the undisputed facts before the court, as long as theinferences are strongly supported by the facts: Guarantee Co. of North America, at para. 30. [...] A

summary judgement motion cannot be defeated by vague reference to what may be adduced in the future, if the matter is allowed toproceed. To accept that proposition would be to undermine the rationale of the rule. A motion of

summary judgment must be judged onthe basis of the pleadings and materials actually before the judge, not on suppositions about what might be pleaded or prove int ehfuture. Papaschase Indian Band No. 136 v. Canada (Attorney General), 2008 SCC 14 , 2008 CarswellAlta 398, at paragraph s 11and 19 [Tab 5] [11] The starting point is for Andrianos to show there is no genuine issue of material fact requiring trial. Andrianas firstcontention is that this is a share sale agreement, nothing more and alleged collateral agreements are not available in light of the entireagreement clause.

The difficulty is that the evidence includes the written undertaking to readjust which was not included in thedocuments described in the Agreement. That undertaking requires reference to collateral agreements as to what precisely was to beadjusted and makes reference to a September agreement. More to the point, there is no reference in the Agreement to any adjustmentsand the items to be adjusted are completely foreign to a purchase of shares. Although the agreement contemplated a closing inNovember, 2006 certain aspects notably possession of the business of Ital was delayed until January, 2007.

No reference is made to thisdelay in the Agreement but what in fact transpired by necessary implication supports the conclusion that there existed collateralagreements.

Summary dismissal based on this argument cannot succeed. [12] Andrianas says even so Domenico has sworn an affidavit saying they complied with all of the requirements of the Agreementand Bossio must now refute that evidence. There is no dispute that the items to be provided under the Agreement have been delivered.The contentious aspect of this argument concerns the alleged breach of the non-competition agreement. There is ambiguity flowing fromthe statement in the affidavit. It says that the Agreement was complied with.

It is argued that his statement should be interpreted asmeaning that all of the covenants in the documents provided at closing have been complied with. I appreciate it is difficult to prove anegative with independent evidence and a statement of this nature may be all that is available to a party. Regardless, parties must putthere best foot forward and it is for the applicant to establish its position before it is necessary for the opposite party to refute. A clearand unequivocal statement is required but is absent in this case. [13] There is also the claim for conversion of recipes and equipment.

As argued, the agreements do not address assets. There isnothing said by Andrianas about the equipment or repairs in their evidence. There is considerable evidence surrounding the recipes. Itseems that only one was ever reduced to writing but others had been used, at least historically, by Ital. The one reduced to writing is notin dispute. What is not clear from the evidence is whether or not the other recipes were, or for that matter could form, part of the assets ofItal. Also, it is hardly certain that Andrianas used the recipes to produce product and sold it to previous customers of Ital.

The partieshave used extracts from questioning to support their position. Andrianas complained that some of the transcript evidence was taken outof context and I permitted submissions along with additional extracts from the questioning of Domenico to support the argument. Afterconsidering the Affidavits and the whole of the transcript material before me, I have concluded that the evidence on this issue before meis not clear and obvious.

Decision [ 14 ] Having regard to the foregoing, I have concluded that the Defendant/Applicants have failed to establish that there is no genuine issue of material fact requiring trial. Accordingly, the application for

Summary Dismissal is dismissed. The Plaintiffs shall have their costs of the application payable in any event of the cause. Dated at the City of Edmonton, Alberta this 27 th day of July, 2012. L.A. Smart M.C.C.Q.B.A. Appearances: Gregory Bentz Stillman LLP for the Plaintiffs Matt A. Pruski Ogilvie LLP for the Defendants