Environmental Metal Works Ltd. Plaintiff - v. -, 2013 ABQB 479

Court of Queen ’ s Bench of Alberta Citation: Environmental Metal Works Ltd. v. Murray, Faber & Associates Inc., 2013 ABQB 479 Date: 20130821 Docket: 0603 13694 Registry: Edmonton Between: Environmental Metal Works Ltd. Plaintiff - and - Murray, Faber & Associates Inc., Faber & Company Inc., Gramugi Business Enterprises Ltd., Cameron Murray and Dan Faber Defendants _ ________________________________________ ______________ Memorandum of Decision of the Honourable Mr. Justice R.P. Marceau _________________________________________ ______________ Table of Contents I. Introduction . 2 II. Facts/Background . 3 III. Issues . 4 IV. The Law .. 4

A.

Summary Judgment 4 B. Limitations period . 5 C. The BIA .. 6 V. Positions of the Parties . 7 (

A) The Applicants . 7 (

B) The Respondent 8 VI. Analysis . 9 (

A) The Test for

Summary Judgment. 9 (

B) Do the Applicant’s Affidavits supporting their application comply with the evidentiary requirements in Rule 7.3(2)? . 10 (

C) Did EMW require leave under s 215 of the BIA ? . 12 (

D) Did s. 215 of the BIA suspend the limitation period in this case? . 13 (

E) When did the limitation period begin to run? . 14 (

F) Have the Applicants met the test for

summary judgement? . 15 VII. Conclusion . 16 I. Introduction [ 1 ] Cameron Murray; Murray, Faber & Associates Inc., Dan Faber, Faber and Company Inc., and Gramugi Business Enterprises Ltd. (“the Applicants”) apply under Alberta Rules of Court , Alta Reg 124/2010 [ Rules of Court ] Rules 7.2 and 7.3 for

summary judgement on the basis that the plaintiff’s, Environmental Metal Works Ltd (“EMW”), claim is statute barred by the Limitations Act , RSA 2000, c L-12. [ 2 ]

Section 215 of the Bankruptcy and Insolvency Act , RSC 1985, c B-3 [ BIA ] requires plaintiffs suing a trustee in bankruptcy for any report made under or action taken pursuant to the BIA to seek leave from the Court before commencing their action. EMW sought leave to sue the trustee within, but filed its Statement of Claim outside, the normal limitation period. The question before me is: did s 215 suspend the limitation period such that EMW filed in time? [ 3 ] As explained below, there are no genuine issues for trial. There are undisputed facts capable of disposing of the case and no triable legal issue arises.

I find that EMW did not require leave to sue the trustee under s 215 of the BIA .

Section 215 did not suspend the limitation period here. EMW filed out of time. Therefore, I allow the application for

summary judgment. II. Facts/Background [ 4 ] In 1996, EMW submitted a proposal to its creditors under the BIA . Murray, Faber & Associates Inc., operated by Cameron Murray and Dan Faber, was made trustee in bankruptcy under the proposal. By January, 2001 the trustee had completely implemented the proposal. The trustee wrote to EMW’s creditors to make final distribution, advise that the proposal was complete and advise that the trustee intended to apply for discharge. [ 5 ] After this, the relationship between the trustee and EMW broke down.

Disputes arose concerning the trustee’s reimbursement, the trustee’s modification of corporate documents to show itself as 22% shareholder, and a failed tax scheme implemented by the trustee. [ 6 ] Faber and Company Inc., operated by Dan Faber, became the replacement trustee in January, 2002 because Murray, Faber & Associates Inc. had lost its license. This did not resolve the problems and by 2004 EMW remained in bankruptcy. [ 7 ] EMW alleges that it suffered damages, a loss of business, and loss of profits from the trustees’ misconduct. The alleged misconduct amounted to the following

a) Failure to seek EMW’s discharge from bankruptcy, which limited EMW’s growth, undermined prospective purchases of EMW, and prevented EMW from obtaining financing;

b) Unauthorized changes in EMW’s corporate documents;

c) The implementation of tax minimization scheme that in fact increased EMW’s tax liability;

d) The use of Gramugi Business Enterprises Inc. in financial transactions designed to reallocate funds away from EMW; and

e) The wrongful factoring of EMW’s accounts receivables by Gramugi Business Enterprises Inc. [ 8 ] Because of these alleged injuries, EMW sought to sue the Applicants for their alleged wrongs.

As a result, the following events occurred, the chronology of which is important to determine the limitation issue: • January 19, 2004, Henry Haag, President of EMW, swore an Affidavit (“the Haag Affidavit”) detailing the Applicant’s alleged wrongdoing; • January 20, 2004, EMW filed a Notice of Motion seeking, inter alia , a declaration that EMW did not require leave, or in the alterative a grant of leave to bring an action against the trustee; • March 18, 2004, Henry Haag was Cross examined on the Haag Affidavit (“the Haag Examination”); • November 30, 2005, Master Wacowich heard EMW’s application; • December 9, 2005 Master Wacowich issued his decision deciding, inter alia , that EMW did not need leave to file its claim; • November 1, 2006, EMW filed its Statement of Claim alleging negligence, breach of contract, breach of fiduciary duty, and unjust enrichment against the Applicants.

III. Issues [ 9 ] The main issue in this application is whether the Applicants have met the test for

summary judgement. In deciding this issue I must resolve the following sub-issues:

(1) Do the Applicant’s Affidavits supporting their application comply with the evidentiary requirements in Rule 7.3(2)?

(2) Did EMW require leave under s 215 of the BIA ?

(3) Did s 215 of the BIA suspend the limitation period in this case?

(4) When did the limitation period begin to run? IV. The Law A.

Summary Judgment [ 10 ] Rules 7.2 and 7.3 of the Rules of Court state: 7.2 On application, the Court may at any time in an action give judgment or an order to which an applicant is entitled when (

a) admissions of fact are made in a pleading or otherwise, or (

b) the only evidence consists of records and an Affidavit is sufficient to prove the authenticity of the records in which the evidence is contained. 7.3

(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded.

(2) The application must be supported by an Affidavit swearing positively that one or more of the grounds described in subRule (1) have been met or by other evidence to the effect that the grounds have been met.

(3) If the application is successful the Court may, with respect to all or part of a claim, and whether or not the claim is for a single and undivided debt, do one or more of the following: (

a) dismiss one or more claims in the action or give judgment for or in respect of all or part of the claim or for a lesser amount; (

b) if the only real issue to be tried is the amount of the award, determine the amount or refer the amount for determination by a referee; (

c) if judgment is given for part of a claim, refer the balance of the claim to trial or for determination by a referee, as the circumstances require. [ 11 ] Under the old Alberta Rules of Court , Alta Reg 390/1968, Rule 159 provided:

(2) A defendant may, after delivering a statement of defence, on the ground that there is no merit to a claim or part of a claim or that the only genuine issue is as to amount, apply to the court for a judgment on an Affidavit sworn by him or some other person who can swear positively to the facts, stating that there is no merit to the whole or part of the claim or that the only genuine issue is as to amount and that the deponent knows of no facts that would substantiate the claim or any part of it. B. Limitations period [ 12 ] The Limitations Act states: 1 In this Act, (e) “injury” means (

i) personal injury, (ii) property damage, (iii) economic loss, (iv) non-performance of an obligation, or (

v) in the absence of any of the above, the breach of a duty; 3(1) Subject to

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. C. The BIA [ 13 ]

Section 69.1 of the BIA states: 69.1

(1) Subject to subsections (2) to (6) and sections 69.4, 69.5 and 69.6, on the filing of a proposal under subsection 62(1) in respect of an insolvent person, (

a) no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy, until the trustee has been discharged or the insolvent person becomes bankrupt; [ 14 ]

Section 215 of the BIA states: 215 Except by leave of the court, no action lies against the Superintendent, an official receiver, an interim receiver or a trustee with respect to any report made under, or any action taken pursuant to, this Act. V. Positions of the Parties (

A) The Applicants [ 15 ] The Applicants first argue that their Affidavits satisfy Rule 7.3(2). Per Terringo v Kretschmer , 2012 ABQB 750 , 2012 CarswellAlta 2283 [ Terringo ] an applicant need only depose “evidence to the effect that the grounds [in Rule 7.3(1)] have been met:” Rule 7.3(2). [ 16 ] The Applicants argue that EMW knew enough by January 19, 2004, the date EMW filed the Haag Affidavit, or at the latest March 18, 2004, the date of the filing of the Haag Cross-Examination, for the limitation period to commence.

By that time EMW knew that the injuries complained of in its Statement of Claim had occurred, that those injuries were attributable to the defendants’ conduct, and that the injuries warranted bringing an action. This met the conditions in s 3(1)(

a) of the Limitations Act and the limitation period began to run from one of those two dates. Therefore, the limitation period expired on either January 19, 2006 or on March 18, 2006. In either case, when EMW filed its Statement of Claim on November 1, 2006 it filed out of time.

[17] The Applicants note the Alberta Court of Appeal’s statement in Gayton v Lacasse, 2010 ABCA 123 [Gayton] at para 20 thatthe court assesses discoverability of a claim under s 3(1)(

a) using an objective/subjective test considering the circumstances of theplaintiff. They argue that although EMW thought it had to apply for leave under s 215 of the BIA, it did not require leave. Further,discoverability relates to facts and not law per Hill v Alberta (Registrar of Land Agents), 1993 ABCA 75, 100 DLR (4th) 331 [Hill].EMW’s ignorance of the law cannot delay the running of the limitation period.

In particular, ignorance of the law does not affect whetherEMW knew its injuries warranted bringing an action. [18] The Applicants further argue that s 215 does not operate to suspend the limitation period. They submit that s 215 containssubstantially different wording to other sections of the BIA providing for stays such as the explicit wording in s 69. Also, the LimitationsAct provides explicit extensions of the limitation period for children or the incapacitated.

They argue that s 215 would have to providemore explicit wording to operate to suspend the limitation period. [19] They argue, relying on Re Sally Creek Environs Corp, 2012 ONSC 2636, 2012 CarswellOnt 5354 [Sally Creek], thelimitation period runs from the date of discoverability of the material facts underlying the claim. This places the obligation on theplaintiff to act expeditiously in applying for leave under s 215.

If the plaintiff applies for leave within the limitation period but the courtgrants it outside the limitation period, the court may grant a nunc pro tunc order permitting the plaintiff to file a Statement of Claim, asdone by the Ontario courts in McKenna Estate v Marshall, 37 RPR (4th) 222, 2005 CarswellOnt 5028 (SC) [McKenna Estate] para 13and Sharma v. Timminco Limited, 2012 ONCA 107 [Timminco]. (

B) The Respondent [20] EMW makes two substantive arguments. First, EMW argues that the Applicants’ application fails outright for failure tocomply with the Affidavit requirements of Rule 7.3. Second, it argues that the issue before me is not sufficiently clear and obvious forme to decide by

summary judgment or that the Applicants have not met the onus of demonstrating that no genuine issue arises. [21] First, that the Applicants’ filed Affidavits which do not swear positively that this case meets one or more grounds set out inRule 7.3(1). Therefore, according to Yellowbird v Samson Cree Nation No 444, 2003 ABQB 535, 2003 CarswellAlta 858 [Yellowbird],the Applicants’ application must fail outright for failure to comply with the Rules of Court. [22] Second, the question of whether s 215 of the BIA acts to suspend the limitation period presents a genuine issue for trial. Toresist

summary judgement, EMW need not show that it filed within the limitation period but must demonstrate that a genuine issue offact or law arises: De Shazo v Nations Energy Company Ltd, 2005 ABCA 241 [De Shazo]; Manson Insulation Products Ltd vCrossroads C & I Distributors, 2011 ABQB 51, 2011 CarswellAlta 108 [Manson Insulation]. The Applicants bear the onus ofdemonstrating that the respondent’s action plainly and obviously cannot succeed: Kwan v Superfly, 2011 ABQB 343, 2011 CarswellAlta863 [Superfly] aff’d 2013 ABCA 82.

The Applicant must satisfy the court beyond a reasonable doubt that EMW’s claim cannot succeed:Gerling Global General Insurance Co v Canadian Occidental Petroleum Ltd, 1998 ABQB 715 , 64 Alta LR (3d) 196, 1998CarswellAlta 744 (QB) [Gerling]. [23] EMW argues that s 215 requires leave from the court before a plaintiff may bring an action against the trustee in bankruptcyand Pawlus v Pope, 2004 ABCA 396 at paras 8-10 makes clear that filing before the court grants leave renders the Statement of Claim anullity. [24]

Section 215 uses essentially the same if not stronger language than s 69.1 of the BIA, stating “no action lies” as opposed to“no creditor has any remedy ... or shall commence or continue any action.”

Section 69.1 acts to suspend the limitation period: Canada(AG) v Fekete, 1999 ABQB 262 [Fekete]. Consistent

interpretation dictates that s 215 should also suspend the limitation period. [25] EMW claims that Silver v IMAX Corp, 2012 ONSC 4881, 2012 CarswellOnt 10391 [Silver v IMAX] supports thisconclusion. [26] In Silver v IMAX the plaintiffs applied for leave to bring a claim for secondary market misrepresentation and argued thatleave before the expiry of the relevant limitation period; however, the court granted leave after the expiry of the limitation period. Theplaintiffs attempted to rely on class proceedings legislation which explicitly provided for a stay of the limitation period once a claim wasasserted.

In deciding to amend the leave order and allow the plaintiff to bring its claim nunc pro tunc, effective before the expiry of thelimitation period, the Court emphasized that the plaintiffs could have done nothing more to advance their claims than what they hadalready done (para 22).

The Court relied on the decision in Timminco to conclude that unless the court can give effect to both the ordergranting leave and the assertion of the claim within the limitation period (i.e. the court can issue a nunc pro tunc order), a plaintiff whofiles out of time will be statute barred. [27] Once EMW applied for leave it could take no further action because the court would strike any claim filed without leave. Thereasons for delay were out of EMW control as they waited for Master Wacowich’s decision.

EMW’s argues that it had to wait for MasterWacowich’s decision or have its claim struck. [28] Further, s 3(1)(a)(iii) of the Limitations Act provides that the limitation period cannot begin to run until the plaintiff knows, orought to know, that the injury “warrants bringing a proceeding.” In determining if the injury warrants bringing a claim the court appliesan objective/subjective test looking at whether a reasonable person in the plaintiffs personal circumstances could have brought a claim:Quadrangle Holdings Ltd v Coady, 2012 ABQB 22, 2012 CarswellAlta 86 [Quadrangle] at para 42 citing Yugraneft Corp v RexxManagement Corp, 2010 SCC 19, [2010] 1 SCR 64 [Yugraneft] at paras 60-61. [29] EMW argued in oral argument that in the circumstances it could not know that the injuries warranted bringing a claim untilafter the date of Master Wacowich’s order, March 21 2006.

Before EMW could know that the case warranted bringing a claim, it had toknow whether Master Wacowich would grant leave. It could not have known that prior to the issuance of his decision. Consideration ofthese personal circumstances delays the running of the limitation period until at least the date of Master Wacowich’s decision.

[30] EMW, finally, argues that s 215 precludes the existence of an action prior to granting leave. Per Sigurdson v Reid, (BC CA), 37 CBR (NS) 146, 1980 CarswellBC 473 (CA) [Sigurdson] at paras 8-12 citing Pelee Motor Inn Ltd (No 2) 1979,30 CBR (NS) 216 (ONSC) at 217-218 [Pelee], the wording “no action lies” means that leave constitutes a condition precedent forbringing an action against the trustee. Salna v Awad, 2011 ABCA 20, 499 AR 264 [Salna] at para 29 establishes that the limitationperiod cannot run until all the elements of the action are in place; therefore, the limitation period cannot run until the court grants leave. VI. Analysis (

A) The Test for

Summary Judgment. [31] The test for

summary judgment proceeds in two steps. First, the applicant must establish that the case presents no genuineissue for trial. Second, once the applicant has passed the first step the evidentiary burden then shifts to the respondent to raise somegenuine issue for trial: Tottrup v Clearwater (Municipal District No 99), 2006 ABCA 380, 401 AR 88 [Tottrupp] at para 11 citingPioneer Exploration Inc. (Trustee of) v. Euro-Am Pacific Enterprises Ltd, 2003 ABCA 298, 339 A.R. 165, 27 Alta.

L.R. (4th) 62 atparas 18-19. [32] A defendant must demonstrate that an action plainly and obviously cannot succeed or that it has no reasonable prospect ofsuccess on the facts: De Shazo. Recently, the Alberta Court of Appeal, in Another Look Ventures Inc. v 642157 Alberta Ltd, 2012ABCA 253, [2012] CarswellAlta 1486 [Another Look], explained at para 9: If there are undisputed facts sufficient to resolve the matter, the respondent cannot resist

summary judgment simply on the basis that thematter is complex or that further evidence is necessary [33] Not only must there be undisputed facts capable of resolving the case, there must be no serious question of law: MansonInsulation. In other words, the action must raise some serious, litigable factual or legal issue. On this point the Court of Appeal inTottrup stated at para 11 that where the case depends on a question of law: ... the test for

summary judgment is not whether the issue of law is “beyond doubt”, but whether the issue of law can fairly be decided onthe record before the court. If the legal issue is unsettled or complex or intertwined with the facts, it is sometimes necessary to have a fulltrial to provide a proper foundation for the decision. In other cases it is possible to decide the question of law summarily... [34] The applicant has the onus of demonstrating that the respondent’s action plainly and obviously cannot succeed: Superfly. Theapplicant bears a heavy onus and must satisfy the court beyond a reasonable doubt: Gerling.

Although the applicant bears the onus toshow the respondent’s case lacks merit, the respondent must still lead sufficient evidence to demonstrate that its case discloses a genuineissue: Murphy Oil Co v Predator Corp, 2006 ABCA 69, 384 AR 251 at para 25. [35] With these principles in mind, I turn to the sub-issues necessary to resolve this application. (

B) Do the Applicant’s Affidavits supporting their application comply with theevidentiary requirements in Rule 7.3(2)? [36] None of the Affidavits filed in support of this application specifically depose one of the grounds set out in Rule 7.3(1).However, they did not have to depose one of those grounds. It is sufficient that they deposed “other evidence to the effect that thegrounds have been met.” [37] The old Rule 159 required the defendant to depose the exact wording of either “there is no merit to the whole or part of theclaim” or “the only genuine issue is as to amount:” Yellowbird.

However, this Court recently decided that the new Rule 7.3(2) does notrequire a defendant to depose the exact wording of a ground in Rule 7.3(1): Terringo at paras 14-19. [38] In Terringo, Jeffery J looked to the grammatical structure of Rule 7.3(2) to find that “other evidence” acts as an alternative to“an Affidavit swearing positively” such that Rule 7.3(2) did not require specific deposition of the grounds in Rule 7.3(1).

On his reading,“other evidence” does not state an alternative to “one or more grounds;” It does not make sense for “other evidence” to act as analternative to “one or more grounds” because “an Affidavit is evidence but a ‘grounds’ ... is not” (para 18). [39] With the implementation of the new rules the wording of the sections dealing with

summary judgment changed substantially.The old Rule 159 read unambiguously that an Affidavit in support of a

summary judgement application must depose: that there is no merit to the whole or part of the claim or that the only genuine issue is as to amount and that the defendant knows of nofacts that would substantiate the claim or any part of it. [Emphasis added] [40] The new Rule 7.3(2) however provides that the applicant must file: an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effectthat the grounds have been met. [Emphasis added] The grammar of the sentence leads to the conclusion that “other evidence” stands as an alternative to “an affidavit.” [41] I have before me other evidence to the effect that the grounds have been met.

I have the Dan Faber’s Affidavit sworn October9, 2012 deposing that Henry Haag swore the Haag Affidavit disclosing Henry Haag’s knowledge of all alleged injuries. [42] The Applicants applied to have the Haag Affidavit and the Haag Examination admitted for consideration in this hearing. The

Applicant’s complied with the notice requirements in Rule 6.11(1) and EMW did not challenge that part of the application in oral orwritten arguments. I allowed that part of the application and will consider those documents in deciding this application. Therefore, I alsohave the Haag Affidavit and the Haag Examination, both of which disclose the extent of Mr.

Haag’s knowledge of the alleged injuries inJanuary, 2004 and March, 2004 respectively. [43] Therefore, I find the Applicants have satisfied the evidentiary requirements of Rule 7.3(2) because they supplied evidence tothe effect that one or more grounds in Rule 7.3(1) has been met. Yellowbird does not stand as good law applicable to Rule 7.3(2). (

C) Did EMW require leave under s 215 of the BIA? [44] The resolution and scope of this decision turns in large part on whether EMW required leave under s 215. Master Wacowichdecided that EMW did not require leave Re 298157 Alberta Ltd, 2005 ABQB 941. He stated at para 35: Mr. Haag’s affidavit alleges a cause of action against the Trustee for conversion, deceit, negligence unjust enrichment and breach offiduciary duty. It can be argued that the facts giving rise to the potential causes of action have nothing to do with the actions taken by theTrustee under the proposal.

Furthermore, this would be an action taken against the Trustee in his personal capacity, but not in its capacityas Trustee, and leave is not required. For this proposition Master Wacowich cites Canada Glacier Beverage Corp v Barens & Kissack Inc., (1999) (BCSC), 6 CBR (4th) 212, 64 BCLR (3d) 360 (SC) [Canada Glacier]at para 28. [45] The issue of the correctness of Master Wacowich’s decision was not raised before me by either party. The Applicants, in oralargument, explicitly declined to raise res judicata; however, regardless of the force of Master Wacowich’s decision I agree with him onthis point.

EMW did not require leave under s 215. [46] The BIA provides a structured and orderly insolvency system to protect interested parties once bankruptcy is declared. Once atrustee in bankruptcy is appointed, anyone seeking to claim against the bankrupt must do so according to the procedure for the resolutionof disputes and the proof of claims set out by the BIA.

Section 69.1 explicitly acts to prevent and stay claims against the bankrupt fromcreditors. Other sections prevent similar claims by other parties. [47] The purpose of s 215 is to protect the trustee from frivolous claims with no basis in fact: Mancini (Trustee of) v Falconi, 61OAC 332, 1993 CarswellOnt 1861 (CA) [Mancini] cited with approval in GMAC Commercial Credit Corp - Canada v TCT LogisticsInc., 2006 SCC 35, [2006] 2 SCR 123 [GMAC]. It acts to prevent a plaintiff from commencing an action against the trustee for actionstaken in his or her role as trustee pursuant to the BIA: St Armaud & Bergevin Ltd v Savage, 35 CBR 212, 1955 CarswellQue 37 (SC) atpara

Section 215 applies to actions taken by the trustee in its representative capacity pursuant to the BIA and the proposal; it does notapply to trustee inaction or to actions not taken pursuant to the BIA or the proposal: Canada Glacier at paras 25-29; Border Drilling &Sanitation Ltd, 1983 CarswellOnt 169, 45 CBR (NS) 252; Mercure v Marquette & Fils Inc., (SCC), [1977] 1 SCR547, 1975 CarswellQue 51 at 551. [48] Had the legislature not enacted s 215, the bankrupt’s creditors would have the right to commence an action and obtain ajudgment against the trustee in its representative capacity for actions taken pursuant to the BIA.

Such creditors would thereby subvert thebankruptcy process by suing the trustee as representative instead of proving their claims in bankruptcy. Therefore, a plaintiff must onlyapply for leave when suing the trustee in its representative capacity not when suing the trustee in its personal capacity. [49] This

interpretation conforms to the purpose of s 215 enunciated in Mancini and confirmed in GMAC, which is to protect thetrustee from frivolous lawsuits.

Section 215 protects those acting under the BIA – trustees, receivers, and the Superintendent – fromspurious suits brought because of the actions they take pursuant to the powers bestowed and obligations imposed on them by the BIA.Providing this protection ensures they can act in the best interests of the creditors and the public in administering bankrupts’ estates. [50]

Section 215 does not affect the action against the trustees in this case because EMW does not make a claim provable in abankruptcy. EMW does not claim against the bankrupt at all. EMW claims outside of the bankruptcy for the misfeasance, negligence,and breach of fiduciary duty of the trustee.

In other words, EMW claims against the trustees, personally, not against the trustees asrepresentative of the bankrupt estate. [51] EMW claims against the trustees for inter alia negligence, breach of fiduciary duty, breach of contract, and unjust enrichmentarising from their failure to discharge EMW from bankruptcy, unauthorized alteration of corporate documents, and wrongful transfers offunds to Gramugi Business Enterprises Ltd. These claims are against the trustee personally not as a representative.

Also, the claims arenot for reports made under or actions taken pursuant to the BIA or the proposal; on the contrary, they are for inaction or acts performedoutside the BIA or proposal. [52] Therefore, EMW did not require leave under s 215 to sue the trustee. (

D) Did s. 215 of the BIA suspend the limitation period in this case? [53] From the fact that EMW did not require leave under s 215 the result follows by necessity:

Section 215 did not act to suspendthe limitation period in this case. If s 215 does not apply to a claim, it cannot affect the limitation period governing that claim. Adiscussion of EMW’s arguments on this point will clarify this finding. [54] As EMW claims, Sigurdson and Pelee may represent the law in Alberta and their interaction with s 215 may lead to theconclusion that the plaintiff has no claim until the Court grants leave. That question certainly represents a genuine issue of law capable ofresisting an application for

summary judgement, but that question does not arise in this case. EMW’s claim did not require leave. It is nota claim covered by s 215; therefore, I need not decide what effect s 215 may have on the limitation period where s 215 does apply.

[55] This same point explains why Pawlus v Pope has no application here. Pawlus v Pope is binding authority for the propositionthat a claim, which requires s 215 leave, filed without leave is a nullity. EMW argues that if it filed its Statement of Claim beforeobtaining leave the court would have struck the Statement of Claim. Again, EMW’s claim did not require leave and Pawlus v Pope couldnot act to render the filing a nullity. [56] EMW also argues that regardless of whether s 215 applies, the limitation period did not start to run until Master Wacowich’sdecision came down.

Given the lack of clarity in the law, EMW could not know that its claim warranted bringing an action until it hadMaster Wacowich’s decision. Gayton, Quadrangle, and Yugraneft Corp v Rexx Management Corp, 2010 SCC 19, [2010] 1 SCR 64[Yugraneft] at paras 60-61, all make it clear that the court should consider a plaintiff’s personal circumstances when assessing whetherthe requirements of s 3(1)(

a) of the Limitations Act have been met. In essence, EMW argues that the uncertainty in the law meant it couldnot know it had a claim until Master Wacowich’s decision clarified the law. [57] This argument fails outright. Appellate courts have repeatedly stated that discoverability under limitations legislation relates todiscovery of facts and not law: Hill; Salna; Central Trust Company v Rafuse et al, (SCC), [1986] 2 SCR 147, 31 DLR(4th) 481 [Central Trust]. Binding authority explicitly states “uncertainty of the law, does not postpone any limitation period:” Hill atpara 28.

Therefore, the fact that EMW did not know its claim fell outside s 215 and did not require leave does not postpone the runningof the limitation period. [58] Finally, EMW’s argues that the limitation period could not commence until all the elements of the action obtained. Accordingto EMW’s reading of s 215, relying on Salna, leave constitutes an essential element the cause of action against the trustee in bankruptcy.Master Wacowich’s decision on the leave application was therefore the final element of the cause of action and the limitation period ranfrom the date of his order. Again, this argument fails.

EMW’s claim did not require leave under s 215; therefore, leave could not form apart of its cause of action. (

E) When did the limitation period begin to run? [59] The conditions in s 3(1)(

a) relate to discoverability of material facts not to issues of law: Hill; Ward v Taubner, 2004 ABQB565 at para 21 citing Central Trust. Our Court of Appeal has explicitly stated that, “[e]rror or ignorance of law, or uncertainty of the law,does not postpone any limitation period:” Hill, para 9 cited on this point with approval in Salna at para 28. [60] A claim becomes discoverable under s 3 when the plaintiff knows, or ought to know, that he or she has suffered an injury, theinjury is attributable to the defendant, and the defendant’s conduct warrants bringing an action: De Shazo.

Discoverability relates todiscoverability of the injury not of the cause of action: Sun Gro Horticulture Canada Ltd v Alberta Metal Building Sales Inc., 2006ABCA 243, 397 AR 282. [61] The Applicants argue in written materials that the limitation period began to run from the swearing of the Haag Affidavit onJanuary 19, 2004 and in oral submissions that, in the alternative the limitation period began to run from the Haag Examination on March18, 2004. [62] The Haag Affidavit deposes substantially the same information as contained in EMW’s Statement of Claim.

The Statement ofClaim contains more details about the extent of the alleged injuries largely due to its creation over two and a half years after the HaagAffidavit. However, the Affidavit discloses the particulars of those injuries that form the basis of EMW’s claim as recited above. [63] EMW knew on January 19, 2004 that the injuries complained of had occurred and that the injuries were attributable to thedefendants.

Damages may have continued to accrue past January, 2004 but the injuries causing those damages had occurred and EMWknew about them. [64] Finally, EMW knew that the injuries warranted bringing an action on January 19, 2004. The Haag Affidavit deposessignificant losses stemming from the injuries complained of ranging at least into the hundreds of thousands of dollars.

Further EMWfiled the affidavit in support of its Notice of Motion seeking, inter alia, a declaration that leave under s 215 was not required or a grant ofleave. [65] Whether an injury warrants bringing an action depends primarily on a cost benefit analysis of potential litigation: Boyd vCook, 2012 ABQB 284.

The Supreme Court of Canada expressed the test as whether “a reasonable person would consider that someonein the plaintiff’s position, acting reasonably in light of his or her own circumstances and interests, could – not necessarily should – bringan action:” Novak v Bond, (SCC), [1999] 1 SCR 808, 172 DLR (4th) 385 at para 81: JN v Kozens, 2004 ABCA 394,361 AR 177. Given the significant sums involved and the nature of the claims against the Applicants, a reasonable person could havebrought an action.

EMW itself clearly thought the Applicant’s conduct warranted suit, because they applied for leave to sue. [66] I find that the limitation period began to run from January 19, 2004. Nothing at law operated to suspend the limitation periodbefore its expiry on January 19, 2006. Therefore, EMW filed its Statement of Claim nearly nine months after the limitation periodexpired by filing on November 1, 2006. (

F) Have the Applicants met the test for

summary judgement? [67] As discussed above, the Applicants bear the primary burden of showing that EMW’s claim plainly and obviously cannotsucceed. If the Applicants meet this onus EMW bears the evidentiary burden of raising a genuine issue for trial: Tottrup. [68] The Applicants have met the onus set out in Tottrup, Superfly, and Gerling of demonstrating that EMW’s claim plainly andobviously cannot succeed because the Limitations Act bars EMW’s action. There are undisputed facts capable of resolving thelimitations issue and no serious issue of law arises from argument.

Section 215 of the BIA clearly does not apply to EMW’s claim anddoes not affect the limitation period in this case. The period began to run on January 19, 2004 at the latest and EMW filed its Statement

of Claim out of time on November 1, 2006. [ 69 ] I agree with EMW’s argument that the law in this area contains a variety of difficult issues: the similarity of s 215 and s 69 and whether consistent

interpretation requires a stay ( Fekete ), how to remedy judicial delay in granting leave that takes a party outside the limitation period ( McKenna Estate ; Silver v IMAX ; and Timminco ), and whether a claim exists before the court grants leave where s 215 applies ( Sigurdson and Sally Creek ). These may represent genuinely triable issues, but they are only genuinely triable in a case where the plaintiff’s claim triggers the leave requirement under s 215. This is not that case. [ 70 ] EMW has failed to raise a genuine issue for trial. [ 71 ] Therefore, EMW’s claim is statute barred under the Limitations Act . VII. Conclusion [ 72 ] The test for

summary judgement is high but I have sufficient facts before me to resolve the matter and the law is clear. Therefore, I grant the application for

summary judgement. EMW’s Statement of Claim against all the Applicants is struck. [ 73 ] The parties may speak to costs, if necessary, by contacting my office within 30 days for an appointment. Heard on the 10 th day of July, 2013. Dated at the City of Edmonton, Alberta this 20 th day of August, 2013. R.P. Marceau J.C.Q.B.A. Appearances: David LeGeyt, Fraser Milner Casgrain LLP for the Plaintiff, Environmental Metal Works Ltd. Gregory W. Jaycock, Parlee McLaws LLP, for Murray, Faber & Associates Inc. and Cameron Murray Ian Hanson, Reynolds Mirth Richards & Farmer LLP, for Gramugi Business Enterprises Ltd. John R. Cusano, Gowling LaFleur Henderson LLP, for Faber & Company Inc. and Dan Faber