Honourable Patrick Burns Estate Memorial Trust v P Burns Resources Limited, 2014 ABQB 779

Court of Queen ’ s Bench of Alberta Citation: Honourable Patrick Burns Estate Memorial Trust v P Burns Resources Limited, 2014 ABQB 779 Date: 20141216 Docket: 1201 07264 Registry: Calgary Between: Royal Trust Corporation of Canada in its capacity as the Trustee of the Honourable Patrick Burns Estate Memorial Trust Plaintiffs - and - P.Burns Resources Limited, P. Burns Coal Mines Limited, Patrick D. Burns, Lawrence T. Farell, John L. Horan, Timothy E. McGee and Craig A. Sparrow Defendants _______________________________________________________ Reasons for Judgment of J.T.

Prowse , Master in Chambers _______________________________________________________ [ 1 ] The issue which arises in this application is whether a respondent to a

summary judgment application is entitled as of right to production of documents by and questioning (formerly called examination for discovery) of the applicant prior to the

summary judgment application being heard. The underlying action

[ 2 ] Royal Trust brings this oppression action as a shareholder of the corporate defendants. In the action, Royal Trust does not seek monetary damages, but rather seeks to obtain from the defendants copies of documents pertaining to: (

a) an offer of the defendants to purchase the shares owned by Royal Trust, (

b) a management compensation package, and, (

c) a share transfer protocol. Procedural background [ 3 ] The defendants first moved under Rule 3.68 to strike Royal Trust’s action as it pertained to documents (a). The plaintiff responded by seeking and obtaining leave to amend its statement of claim with respect to documents (a). Ultimately, the defendants’ application to strike was dismissed. [ 4 ] The defendants now move under Rule 7.3 to summarily dismiss the action as it pertains to documents (a). [ 5 ] Royal Trust responds by seeking to cross-examine on the defendants’ affidavit of records and to conduct discoveries.

To accomplish this, Royal Trust served an appointment for cross-examination of the defendants’ deponent of the affidavit of records, and appointments for discovery on the defendants. [ 6 ] The defendants move to set aside those appointments and to set the date for the hearing of the

summary dismissal application. The issue – the right of a respondent to seek production and examinations for discovery [ 7 ] Litigants apply for

summary judgment because, they assert, the evidence in their favor is sufficiently compelling to allow them to move directly to judgment, without going through the usual pre-trial steps of production of documents, and questioning (discoveries), and without the necessity of a trial. [ 8 ] Is a respondent to a

summary judgment application entitled to take the position that the

summary judgment application should only proceed after it has obtained production of documents and/or conducted questioning (discoveries) in the litigation? [ 9 ] It is no exaggeration to state that one might as well remove the

summary judgment provisions of the Rules of Court if a respondent is entitled, as of right, to insist on the usual production of documents and questioning (discoveries) prior to the hearing of a

summary judgment application. [ 10 ] “To not allow the

summary judgment hearing to proceed, and to allow the pre-trial procedures to run their course, defeats the purpose of

summary judgment relief”: Walia v. University of Manitoba , 2005 MBQB 278 , 2005 CarsellMan 486 at para. 16 , cited with approval in Beier v. Proper Cat Construction Ltd. , 2013 ABQB 351 at para. 70 . The reason Royal Trust seeks production and discoveries [ 11 ] Royal Trust seeks production of documents and discoveries because it fears that the defendants will advance their

summary dismissal application based on an affidavit from an under-informed deponent, thus avoiding disclosure to the court of documents in the defendants’/applicants’ possession which are relevant and material to a fair disposition of the

summary dismissal application. [ 12 ] The way for Royal Trust to address its fear is to provide evidence, on the return of the

summary dismissal application, that there are relevant and material documents not before the Court and accordingly, submit that either: • The

summary judgment application should be dismissed on the basis that the defendants have used an under-informed deponent, and have not brought forward relevant and material documents in their possession, and accordingly have not met the onus of proof on them to obtain

summary judgment, and/or, • The

summary judgment application should be adjourned while the defendants’ deponent is directed to answer (presumably refused) requests to undertake to produce documents requested during cross-examination. The case law supports the proposition that the court may order such an undertaking to be answered where the undertaking relates to an important issue in the application, and the provision of such information: (

i) would not be overly onerous, and, (ii) would likely significantly help the court in the determination of the application. See Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd. , 2008 CarswellAlta 1685, 2008 ABQB 671 , [2008] A.W.L.D. 5130, 174 A.C.W.S. (3d) 71, 459 A.R. 68, 97 Alta. L.R. (4th) 182. [ 13 ] As to how Royal Trust, on the return of the

summary dismissal application, will provide evidence of the existence of undisclosed, relevant documents, presumably it will have gathered together such evidence in one or more of the following ways: • Cross-examination of the applicant’s deponent, during which the respondent might ask the deponent about the existence of the documents and/or to undertake to produce such documents. • Evidence from the respondent’s deponent, if the respondent decides to file an affidavit. • Examination of witnesses pursuant to Rule 6.8. [ 14 ] My conclusion is that Royal Trust is not entitled as of right to production of documents and discovery regarding the issue listed under (

a) in paragraph 2 of these reasons [the disclosure of documents pertaining to an offer of the defendants to purchase the

shares owned by Royal Trust] prior to the hearing of the defendants’

summary dismissal application. Accordingly I am setting aside the appointments for cross-examination of the defendants’ deponent under its affidavit of documents and setting aside the appointments for examinations for discovery. [ 15 ] Whether Royal Trust will adduce sufficient evidence on the return of the

summary dismissal application, with respect to non- disclosure of relevant documents, to entitle it to dismissal of the application, or an order directing the defendants to produce further documents prior to a continuation of the

summary dismissal application, is not something upon which I am commenting. Heard on the 21 st day of November, 2014. Dated at the City of Calgary, Alberta this 16 th day of December, 2014. J.T. Prowse M.C.C.Q.B.A. Appearances: Bennett Jones LLP Grant N. Stapon, Q.C. Counsel for the plaintiff Jensen Shawa Solomon Duguid Hawkes LLP Matthew J. Epp Counsel for the defendants