2016 ABQB 163, 2016 ABQB 163

Court of Queen ’ s Bench of Alberta Citation: 864503 Alberta Ltd v Genco Place Properties Ltd, 2016 ABQB 163 Date: 20160318 Docket: 1401 00942 Registry: Calgary

Between: 864503 Alberta Inc., Sukhinder Boparai, Sukhwant Boparai, Hardial Boparai and Sampuran Chatha Plaintiffs - and - Genco Place Properties Ltd., GDC (GP) Ltd., GDC (Copperfield) Ltd., GDC (Copperfield 2) Ltd., GDC (MG) Ltd., GDC

(634) Ltd., GDC

(608) Ltd., Genco Development Corporation, Genco Land Holdings Ltd., Pali Beli, Jasbir Hans and Navpreet Bedi, also known as Navpreet Singh Defendants - and – Genco Holdings Ltd., Genco Place Properties Ltd., GDC (Copperfield) Ltd., GDC (MG) Ltd., GDC

(634) Ltd., GDC

(608) Ltd., Genco Development Corporation and Pali Bedi Plaintiffs by Counterclaim - and - 864503 Alberta Inc., Sukhinder Boparai and O.K. General Food Stores Ltd. Defendants by Counterclaim _______________________________________________________ Memorandum of Decision of

A. R. Robertson , Q.C., Master in Chambers _______________________________________________________ Background [ 1 ] This matter involves several separate applications arising out of claims relating to a commercial agreement and the termination of business relationships. [ 2 ] The plaintiffs sued previously relating to an agreement to wind up a business relationship, then closed the transactions contemplated in the agreement, and agreed to the dismissal of their claim. After being paid approximately $4.4 million as part of that resolution, they have sued again.

The defendants say that this is the same claim in disguise, and that it should be dismissed summarily. [ 3 ] Although that is the main issue to be addressed at this time, there are several applications before me: 1. An application to amend the statement of claim, after a discontinuance was filed to reduce the number of parties, so as to restate, in part, the claim; 2. An application (actually, three separate applications) brought by the defendants for

summary judgment dismissing the claim in its entirety, and in the alternative an application for particulars; 3. An application by the plaintiffs to compel undertakings to be answered; 4. An application by the plaintiffs to question a third party (an accountant who advised all parties and who prepared a

schedule setting out adjustments in connection with an agreement that had been reached); and 5. An application for

summary judgment (dismissal) of the counterclaim, by one of the defendants by counterclaim. [ 4 ] For the reasons set out below, I grant an order summarily dismissing this claim. The Procedural History of the Applications [ 5 ] Normally the court would deal with an application to amend the statement of claim before dealing with an application for

summary dismissal (see Hur v 726913 Alberta Ltd , 2013 ABQB 208 ), but in this unusual case although the claim is proposed to be amended to reduce the number of plaintiffs (a partial discontinuance having been filed) and to refocus and restate the claim, the application to dismiss is substantially premised on the argument that the claim cannot proceed regardless of how it is pled.

The defendants argue that the claims set out were the subject of a previous court proceeding which was substantially the same, and which was dismissed by consent order. [ 6 ] It is also argued that many, if not all, of the plaintiffs’ claims are statute barred, and that many of the claims do not have a starting point in law because of the rule in Foss v Harbottle , (1843), 2 Hare 461, 67 E.R. 189 . Some of the claims are by shareholders for claims that could only be brought by the company of which they are shareholders.

Other claims are even more distantly related, such that the plaintiffs simply have no claim in law against the defendants. [ 7 ] A partial discontinuance (which, as “amended”, discontinues as against all but three defendants) and the proposed amendments to the statement of claim (which abandons claims by all but one plaintiff) have eliminated the Foss v. Harbottle concern, but there remains a potential costs award in favour of the parties who were sued and then who were dropped from the claim. [ 8 ] In the circumstances, it is appropriate to address the application for

summary dismissal first. If it is successful, then most of the remaining applications become moot. March 16, 2015 [ 9 ] When the matter first came before me on March 16, 2015, all of these applications were anticipated to be heard in one afternoon. That turned out to be an optimistic expectation. At the end of the afternoon we had not completed argument on the

summary judgment application to dismiss the claim in its entirety. [ 10 ] As the matter did not conclude after the first day, I directed counsel to contact the clerk and attempt to set up two half days back-to-back for further argument. I directed the plaintiffs, on our return, to focus on directing the court to evidence that the plaintiffs had learned something new after agreeing to the consent dismissal of the first action.

December 8, 2015 [ 11 ] When we resumed on December 8, 2015, counsel for the plaintiffs had prepared what he described as a “compendium” assembling some exhibits that appear in the affidavits but also including some correspondence, not previously in the evidence. This “compendium” was put forward to provide a context for the consent dismissal order of the earlier action.

It was presented to both the Court and to the defence counsel during the hearing, shortly after we began. [ 12 ] Counsel for the defendants objected on the grounds that material was being presented both improperly (it was not in evidence) and late. Had it been in an affidavit, the affidavit would have been late, in violation of rule 6.6. He needed at least an opportunity to review the “compendium” and seek instructions. [ 13 ] Accordingly, I adjourned the application once again so that the material could properly be placed in an affidavit, and so that

defence counsel could seek instructions, possibly cross-examine on it, and perhaps file a reply affidavit. [ 14 ] The material related directly to the issue that I had asked plaintiffs’ counsel (some nine months earlier) to address on his return. In particular, I had asked him to address what new information he or his client had learned after the consent order was granted. The “compendium” set out much of the correspondence leading up to and following the consent dismissal order. [ 15 ] The provision of this information at the hearing itself, rather than a reasonable time in advance, was troubling.

Given the nine month adjournment and the express direction as to a topic I wanted addressed, an affidavit provided some weeks in advance might have been considered “reasonable”. New material presented in the course of oral argument was not. [ 16 ] In all of the circumstances, after hearing from counsel, I granted costs of $10,000 payable forthwith to the defendants, and I adjourned the application to February 5, 2016 for an all day hearing starting at 10:00 a.m.

February 5, 2016 [ 17 ] Prior to February 5, 2016, when counsel re-convened to continue argument, the plaintiffs filed and served an affidavit that contained the correspondence included in the “compendium”, with some changes. The affidavit purported to include “all letter and e- mail correspondence between [Burnett Duckworth & Palmer, former counsel for the defendant Genco Group] and [McGuigan Nelson LLP, counsel for the plaintiff 864 Group] from November 8, 2013 to December 18, 2013.” [ 18 ] There was one email left out, which the defendants argue is a significant omission.

The defendants provided the missing document in a reply affidavit. A Pragmatic Approach to Resolution [ 19 ] The applications did not conclude on February 5 either. After spending most of the day dealing with arguments on the defendants’ application for

summary dismissal, at the suggestion of counsel we adjourned so that I could rule on that application. As mentioned,

summary dismissal would make most of the rest of the applications moot. [ 20 ] The primary issue for consideration is whether this action is essentially a re-casting of a previous lawsuit commenced by substantially the same parties as plaintiffs against substantially the same (remaining) defendants. [ 21 ] The discontinuance itself was not without controversy. The plaintiffs say they filed a discontinuance that listed too many parties being removed as defendants (it included Genco Holdings Ltd. in error).

Then they brought an application to correct that error, but before it was heard they filed an “Amended Discontinuance” so as to add a defendant against whom they had accidentally discontinued. After the clerk accepted the “Amended Discontinuance”, they withdrew the application to correct the error. [ 22 ] The defendants argue that a plaintiff cannot “undo” a discontinuance. The fact that the clerk of the court accepted the document does not mean it has legal meaning. [ 23 ] I approach the case, for the purposes of the

summary dismissal application, on the premise that the Amended Discontinuance is valid. I do not rule that it is. That is, with respect to both the proposed amendment and the Amended Discontinuance, I assume that the claim is to be crafted the way the plaintiffs ask that it be crafted. [ 24 ] The style of cause for the plaintiffs’ claim, if the proposed amendments are allowed and the defendant re-added by the Amended Discontinuance is left as a party, is as follows: 864503 Alberta Inc. Plaintiff – and – Genco Development Corporation, Pali Bedi and Genco Holdings Ltd.

Defendants [ 25 ] If this style of cause is accepted, it would necessitate changes to the balance of the style of cause. Many of the plaintiffs by counterclaim will then not be defendants. Normally, someone not already a defendant cannot be a plaintiff by counterclaim. A counterclaim may be advanced by a defendant: rule 3.56.

Res Judicata and Abuse of Process [ 26 ] The starting point, to determine whether this is just a re-cast of the previous action (being Action 1301-07156, between 864503 Alberta Inc., Sukhinder Boparai, Sukhwant Boparai, Hardial Boparai and Sampuran Chatha as plaintiffs and Genco Holdings Ltd., Pali Bedi, Jasbir Hans and Tarlok Tatla as defendants) is to look at the pleadings. [ 27 ] For simplicity, I will refer to the previous action as the “2013 Action” and to this action as the “2014 Action”. [ 28 ] To the extent that the consent dismissal order might have a context that colours how it should be viewed, I must look at the events and correspondence that led to it: Greater Vancouver Water District v SSBV Consultants Inc , 2015 BCSC 1349 at paragraphs 41 to 43 (which I am advised is currently under appeal).

[29] The fact that it was a dismissal order given by consent does not change the approach. “[A] judgment [or, I presume an order]given by consent is intended to put a stop to litigation between the parties just as much as is a judgment which results from the decisionof the Court after the matter has been fought out to the end”: D’Addario v. EnGlobe Corp., 2012 ONSC 1918, 2012 CarswellOnt 3870,at paragraph 268, citing Ontario Sugar Co. (Re), (1911), 24 O.L.R. 332 (C.A.), para. 16; leave to appeal denied , (SCC),44 S.C.R. 659.

This is addressed further, below. [30] If the claim is substantially the same, both issues of res judicata (including issue estoppel and cause of action estoppel) andabuse of process apply. These principles do not apply only where it is exactly the same parties who are involved in the new lawsuit, oronly where it is exactly the same issues that are raised. The rules apply where it is the same parties or their “privies”, and where the issues now raised ought properly to have been raised in the previous action, if they were not.

Otherwise, closelyrelated disputes over the same body of facts, among the same parties, could be litigated in instalments, with the resulting inefficienciesand possibly inconsistent results. Allowing one party to visit that chaos on the other party would be an abuse of the court’s process. Itwould also waste the court’s time. [31] The principles of res judicata and abuse of process were discussed in Maynard v Maynard, (SCC), 1950CarswellOnt 128, [1951] S.C.R. 346, in particular at paragraphs 32 to 34.

As to issue estoppel, the Alberta Court of Appeal said this in574095 Alberta Ltd v Hamilton Brothers Exploration Co, 2003 ABCA 34, 2003 CarswellAlta 120 at paragraphs 41 and 47, quotingfrom Danyliuk v Ainsworth Technologies Inc, 2001 SCC 44, 2001 CarswellOnt 2434: The question out of which the estoppel is said to arise must have been “fundamental to the decision arrived at” in the earlier proceedings.

In other words .... the estoppel extends to the material facts and the conclusions of law or of mixed fact and law (“the questions”) thatwere necessarily (even if not explicitly) determined in the earlier proceedings. [32] Abuse of process was discussed in Reece v Edmonton (City),

(2011) ABCA 238, 2011 ABCA 238 , 2011CarswellAlta 1349 at para. 18: The test for abuse of process has been stated in different ways, as the context requires. For example, in R v Scott, (SCC), [1990] 3 S.C.R. 979 (S.C.C.) the Court stated at p. 1007: ... abuse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamentalprinciples of justice underlying the community’s sense of fair play and decency. The concepts of oppressiveness and vexatiousnessunderline the interest of the accused in a fair trial.

But the doctrine evokes as well the public interest in a fair and just trial process andthe proper administration of justice .... [33] Although the parties to the 2013 Action and the 2014 Action are not identical, 864 is a plaintiff in both, and Pali Bedi andGenco Holdings Ltd. are defendants in both.

The only entity that is “new” in the 2014 action (as it would be re-constituted) is GencoDevelopment Corporation. [34] The history of the dispute that led to the 2013 Action and its dismissal must be reviewed in light of the diametrically opposedarguments about whether the 2014 action is an attempt to re-litigate that which has been resolved. Facts: The Background The Business Relationship History [35] The business history is, in simple terms, that members of two groups were involved in real estate ventures for many years,operated through joint ventures.

The joint ventures were all documented with separate agreements, but the business operations wereultimately carried on by Genco Development Corporation, which was owned by a member or members from both groups. The Separation Agreement [36] The parties decided to part ways. In March 2012 the lawyer who had represented all sides of the investment was asked to beinvolved as a mediator in their negotiations and then, once a tentative agreement had been reached, to document that agreement.

It wasreached, and he documented it. [37] He noted that the agreement, at least as it stood on March 14, 2012 when he prepared the letter setting out its terms, was notbinding.

He disclosed his conflict of interest, and pointed out that if the agreement had not been reached each party would have had toretain independent counsel, and furthermore if the tentative agreement were implemented each side would have to retain independentcounsel. [38] The March 14, 2012 letter agreement, which was signed on behalf of Genco Holdings, Ltd, 864503 Alberta Inc., and by PaliBedi, Jasbir Hans, Tarlok Tatla, Sukhinder Boparai, Sukwhat Boparai, Hardial Boparai and Sampuran Chatha, has been variouslydescribed as the “Non-Binding Agreement”, the “Settlement Agreement”, and the “Separation Agreement”.

I will refer to it as the“Separation Agreement.” [39] Although the people listed above were all signatories to the Separation Agreement, the letter was actually addressed to twogroups of recipients: “GENCO HOLDINGS LTD. Pali Bedi, Jasbir Hans, Tarlok Tatla” and “864503 ALBERTA INC. SukhinderBoparai, Sukhwant Boparai, Hardial Boparai, Sampuran Chatha”.

Within the text of the Separation Agreement they were referred to asthe “Genco Group” and the “864503 Group”. [40] I will refer to Genco Holdings Ltd as “Genco”, to 864503 Alberta Inc. as “864”, and the groups of parties referenced in theSeparation Agreement by its author as “Genco Group” and “864 Group”. [41] The effective date of the separation, or settlement, was to be January 1, 2012 – about 10 weeks prior to the date the

Separation Agreement was dated. Pursuant to it, various “Purchase and Sale of Joint Venture Interest” agreements were drawn up, all of them dated January 1, 2012. To each of these was to be attached a

schedule setting out the reconciliation of interests. The

schedule was to be prepared by, and was ultimately prepared by, Meyers Norris Penny LLP (“MNP”), although that schedule, called “Schedule ‘B’”, was not prepared until February 6, 2013, almost a year after the Separation Agreement was reached. [ 42 ] Accordingly, the various dates of documents are misleading, or at least confusing, because the effective date (January 1, 2012) preceded the actual reconciliation (February 6, 2013) by over a year, with the Separation Agreement being reached in the interim period, and the various transactions that it contemplated were not concluded until much later: in December, 2013.

Genco Development Corporation [ 43 ] Genco Development Corporation was not a party to the Separation Agreement, just as none of the joint venture corporations were parties to the Separation Agreement, because they were the subject of it. They were the things being parceled out in settlement of the potential disputes over who was entitled to what.

The shares of Genco Development Corporation were held by 864 and by Genco Holdings Ltd. equally, but in the Separation Agreement it was agreed that they would all be sold to Pali Bedi (personally) for $1.00. [ 44 ] It is apparent from the corporate records that Pali Bedi and Sukhinder Boparai were the individuals who were in charge of the jointly owned corporation, Genco Development Corporation, and in the Settlement Agreement the author refers to “intensive discussions he had separately with “the Genco Goup” and “with Sukh on behalf of the 864503 Group”. [ 45 ] Accordingly, although there are many parties to this 2014 Action as originally constituted, and there would still be three defendants as it is proposed to be constituted going forward, in reality on a human level this was substantially a Separation Agreement amongst a very small group of people, and the lawsuit as it is proposed to continue is between Mr.

Boparai’s company, 864, and Mr. Bedi and his company, Genco Holdings Ltd. It appears that the claim as against Genco Development Corporation is made to ensure that the corporation would be bound by the outcome. Counsels’ Submissions [ 46 ] Counsel for 864 Group assures me that the claims in the 2013 Action and the 2014 Action are different.

He says that certain things relating to the Separation Agreement were resolved, but they decided not to sign mutual releases and therefore 864 is allowed to sue again, for different causes of action than were raised in the 2013 Action. [ 47 ] He refers to Greater Vancouver Water District v SSBV Consultants Inc , supra , for the proposition that when there is a consent dismissal order granted it almost never sets out the scope of the settlement and therefore it is necessary to determine what the parties intended to settle. [ 48 ] Counsel for Genco points out that Greater Vancouver is currently being appealed and he refers to D’Addario v EnGlobe Corp , supra , which sets out the law more completely and makes the point, at paragraph 268, that “a judgment by consent is intended to put a stop to litigation between the parties just as much as is a judgment which results from the decision of the Court after the matter has been fought out to the end.’ [ 49 ] More importantly, counsel for Genco argues strenuously that the 2014 Action is just the 2013 Action brought again.

He argues that the rule is, “One and done.” A very large sum of money was paid as part of the dealings that led to the consent dismissal of the 2013 Action (about $4,100,000). He argues that the theory of the plaintiffs is that they are entitled to perpetual litigation. The law does not allow that. Facts: The Settlement and the First Lawsuit The 2013 Action: The Statement of Claim [ 50 ] The finalization of the Separation Agreement did not occur without difficulty. Each side retained separate counsel.

On June 10, 2013, the 864 Group commenced the 2013 Action. [ 51 ] The plaintiffs were 864, Sukhinder Boparai, Sukhwant Boparai, Hardial Boparai and Smpuran Chatha. The defendants were Genco Holdings Ltd., Plai Bedi, Jasbir Hans and Tarlok Tatla. These were all of the corporations and individuals who were signatories to the Separation Agreement. [ 52 ] This claim was pending while the Separation Agreement transactions were concluded.

It is appropriate to examine it before reviewing the correspondence discussed below, for this was the claim that was resolved by the consent dismissal order. [ 53 ] The text of the statement of claim described the parties as the “864 Group” and the “Genco Group”. It described the Separation Agreement and asserted that the Genco Group was in breach of it.

It said that the 864 Group sought specific performance of the Separation Agreement, and that that included, but was not limited to, a transfer of a certain parcel and “transfer to the 864 Group and adjustment of the Red Deer commercial property” pursuant to the Separation Agreement.

It specifically asserted that financial encumbrances had been placed on one of the titles by the Genco Group and the parties’ common lawyer (via his corporate vehicle), and the benefit had gone to the Genco Group, not the 864 Group, and that one of the encumbrances was placed on the title for a mortgage for which the 864 Group had not applied and nor did they receive a benefit. [ 54 ] The statement of claim further claimed that Genco Group had failed to perform obligations with respect to the assumption of debt.

It asserted that “none of the Defendants have made payments of the amounts owing under the Separation Agreement, or performed any of the transfers of property or assets contemplated therein. All amounts remain due and owing.” [ 55 ] As to the encumbrances that 864 says were improperly placed, the plaintiffs pled that “If those encumbrances are not discharged, the Plaintiffs put the Defendants upon notice that it [sic] shall have additional damages and may be required to amend

pleadings to particularize this aspect of their damages claim.” A later paragraph re-asserted the potential for pleading amendments when damages were determined. [ 56 ] The “Remedy Sought” provision asserted: 33. As the Defendants are in breach of the terms of Agreement, the Plaintiffs seek specific performance of all the terms of the [Separation] Agreement, as are required by the Genco Group, which include payment of cash, with interest, as properly adjusted, and conveyance of title to properties, properly adjusted. 34.

The Plaintiffs seek an accounting from the Genco Group of all bank accounts, until the date of completion of the [Separation] Agreement, so that funds are properly adjusted. [ 57 ] There is no doubt, from this plea, that the 864 Group was suing for compliance with the Separation Agreement, including the transfer of real estate, payment of money, an accounting, and possibly damages that might be established. [ 58 ] Genco defended the 2014 Action. It has argued that the Separation Agreement was not binding, because that is what it said.

However, the Separation Agreement is clearly what governed the resolution of the dealings in December 2013. Whether binding or not, it was the basis of the settlement of their disputes. Since both parties relied on it for that purpose, it is irrelevant whether or not they were bound to use it to settle their disputes. They did. The Finalization of the Separation Agreement and the Consent Dismissal Order [ 59 ] The transactions contemplated by the Separation Agreement finally closed in December, 2013.

When it did, the 2013 Action was dismissed – not discontinued – by consent order. [ 60 ] Although Greater Vancouver Water District , supra , is under appeal, for the time being it offers some guidance. Accordingly, the next part of the analysis involves trying to determine what was thought to be dealt with in that consent order.

In order to do that, it is necessary to review, in some detail, the correspondence that led up to it, to the extent that the statement of claim might leave doubt as to what was intended to be resolved. [ 61 ] The correspondence in the late-breaking affidavits detailed the extensive discussions – apparently mostly conducted by email – and, in particular, the frustrations expressed by counsel for the 864 Group. [ 62 ] Genco Group had initially insisted, in their counsel’s letter of November 8, 2013, that there be a consent order dismissing the 2013 Action, as well as mutual releases as a condition of resolving all of the various disputes as to how the Separation Agreement should be finalized. [ 63 ] As drafted, the mutual release would have eliminated any later claim for anything whatsoever between the parties relating to the issues described in the statement of claim in the 2013 Action “or arising from, or related to, any asset transferred pursuant to the Agreement; or related to any other cause of action or actions, real or contemplated .” [Emphasis added.] However, ultimately, there was no mutual release signed. [ 64 ] Counsel for 864 Group said in an email dated November 13, 2013: Before we can give you what you want, we require the documents and information to reconcile this completely, so we have clear agreement on terms.

I require that, given the history here. It will involve a few different things. It will necessarily require that we have access to the financials for all the related corporations back to the original adjustment date. So my client can reconcile what has been collected and where it has been “expensed”. I believe my client is going to look at going back further, in these circumstances, because of concerns of where revenues were collected and where they were allocated. [ 65 ] Later the same morning he indicated that the concern was only post-January 1, 2012.

He questioned the payment of property tax obligations collected from commercial tenants and said, So where did that money go previously? It demonstrates clearly that we need to see the reconciled ledgers, and copies of the bank statements and cancelled cheques, for all the corporations related to this settlement, back to January 1, 2012.

That way, my client can vet the adjustments. [ 66 ] However, the requirement for a mutual release was re-stated by Genco Group’s counsel in a letter of November 15, and later that day 864’s counsel wrote that he was confirming that his “continued instruction” was to pursue amending pleadings and he proposed discontinuing the action on a without costs basis if there was to be a delayed completion and resolution. [ 67 ] At 4:14 in the afternoon that day, recognizing that the major dispute seemed to be some transactions involving a mall in Red Deer, counsel for Genco Group said, “I think we agree that the Red Deer accounting matters can be hived off and resolved separately.” He suggested involving a third party accountant to reconcile the revenue and expenditures. [ 68 ] Counsel for 864 responded on his Blackberry about 45 minutes later: We are not hiving things off, as if we have to go to court they would force this full adjustment to get our caveats off.

We can do it now or we can go to court and I will get it there. [ 69 ] Counsel for Genco responded at 9:59 the next morning, Saturday November 16: My instructions are to proceed with an application to discharge the caveats. You could just provide the undertaking. Either way, your

client ends up getting paid. I don’t know how you can get costs for an application that I have to bring to get your client to accept money that we want to pay to it. [ 70 ] Counsel for 864 responded with this email written on his Blackberry: I have never agreed to hive anything out. In fact, I was always clear that we have to resolve it all and that would include money in trust with me for numbers we couldn’t figure out. We never got to discussing conditions. I won’t let you hold the money hostage forever. Do not suggest I’m holding back on something I never promised.

In fact I have always refused to hive things off. We’re not going to give your client something again to get halfway. We were lied to previously. I have the emails. I told you we will settle it all now. Don’t give me partial documents on a Thursday and claim duress because we don’t accept your bad math a day later. I asked to address this months ago. If you think we agreed to hive anything out, you were not listening. And your math is wrong. My client has given you the numbers to be adjusted. You can argue the interest rate but not the math.

Your client doesn’t get free use of $350K for 2 years, and force my clients revenues to service it, while siphoning out the profits for his own use, at no cost. That is ridiculous. Our adjustment reflects the transaction as if your guy needed down to 1.2 million as of January 1, 2012. Then we would have the money for our benefit above 1.2 million. If we cannot agree Monday, bring application as I will get costs and everything we ask for to adjust. ... [Emphasis added.] [ 71 ] This is the email that was not included with the last-minute affidavit from 864 Group.

Counsel for Genco Group argues that it was a deliberate omission, and that it indicates the opposite of what is now being argued by 864 Group. Counsel for 864 Group points out that it was sent from his Blackberry (not his desktop computer), and when his legal assistant was assembling the affidavit she must have missed it. [ 72 ] On Monday, November 18 counsel for 864 Group followed up with another email, in which he referenced his email on the weekend.

In that email as well, he focused on concerns about adjustments relating to the Red Deer mall - but it seems clear that he was pursuing a complete resolution of all issues amongst the parties. [ 73 ] This was reinforced in a later email the same day, at 12:45 p.m., when he suggested that counsel for Genco forward, “a word format sheet that lists each project and the adjustment related to each.” He said, “Lets try to find the areas we agree upon them and confirm that we are not fighting over those numbers.

Then we can ensure all the issues in dispute are clarified, and we can get our relative positions.” [ 74 ] However, on November 19 at 9:31 a.m., he wrote to Genco’s counsel saying, “Please just deal with Red Deer, hive it off and give me your accounting of what is being contributed for what component for it.” [ 75 ] The following day, it seems the Red Deer accounting was resolved.

What was left was an issue about GST and a tenant (Chatters) in Red Deer, so 864 Group’s counsel suggested executing the consent dismissal and mutual release but holding them “pending the resolution of both the GST issue and Chatters.” That was acceptable to Genco’s counsel, or so it seemed, but on November 20 counsel for 864 Group listed three issues, including a new one, being per diem interest which looked not controversial. [ 76 ] But then an issue arose about caveats registered on titles and their discharges, and on November 22, 864 Group’s counsel wrote and listed (as I count them) five issues to be resolved.

He acknowledged that one of them was new. In that email he wrote, “As it stands, we still have the claim outstanding.” [ 77 ] They had a disagreement about trust conditions. 864 Groups’ counsel wrote on December 2, “We are dealing with final releases in this matter, predicated upon completion of the settlement with [Genco’s counsel]. ....

We will deal with all the releases, once we finish with [Genco’s counsel].” [ 78 ] On December 3, Genco’s counsel wrote and re-asserted trust conditions as originally imposed on November 8. 864 Group’s counsel raised concerns about trust conditions, but said, “However, we have agreement that the consent mutual release and dismissal order will be completed by all parties, once we solve the Chatters issue, which then allows the GST issue to be addressed.” [ 79 ] There was further debate about the math.

And on December 5, Genco’s counsel wrote: In the interest of putting this behind us and finalize the releases and discontinuance [sic], my instructions are to propose that out of the 60K that you hold in trust, you can pay out the GST, pay out the adjustment as reflected in the attached, and you can deal with Chatters.

If that is acceptable, Genco does not want any of the 60K returned, and it will not pay anything more. [ 80 ] This is clearly an attempt at getting to a resolution without worrying any more about what were, in the circumstances, small discrepancies. [ 81 ] Counsel for 864 Group recommended this to his client, and hoped he would get the appropriate instructions.

He said in his December 5 email, “Then we can turn to the consent dismissal order and get the action behind us.” [ 82 ] Genco’s counsel sent a letter of December 5 revising trust conditions to reflect this arrangement, but still requiring the mutual release and consent dismissal order. [ 83 ] Then counsel for 864 Group objected to the terms of the trust conditions, and purported to leave open some claims. He said in his December 6 email at 9:13 a.m., On your form of Release, I think it could be read to suggest it goes beyond resolution or completion of the terms of the settlement agreement.

I would ask you to review it, as my client is not resolving any and all claims against the Genco group at this point. He is

agreeing that the Genco group finally lived up to the terms of the Settlement Agreement and he makes no further claims in relation to it. The Genco group is giving up a claim that in suing to enforce the settlement agreement, that they assert they were caused damages. I think we just have to cull your first paragraph back a bit on the mutual release to clarify that all claims raised in the claim and counterclaim in Action No. 1301 – 07156 are being released. If there are other issues of dispute, this release cannot be used as a defence to them.

If you want, and you think your first paragraph is limited as I said above, and perhaps we just add an additional sentence to it clarifies the releases cannot be used as a defense as against any claims arising between the parties that are not related to enforcement of the settlement agreement. [Emphasis added.] [ 84 ] It should be noted that he said the Genco Group was “giving up a claim that in suing to enforce the settlement agreement, that they were caused damages.” In the context, he very likely meant to refer to the 864 Group. [ 85 ] Counsel for Genco responded, “Our intent is to put this matter to rest.

Please confirm that you will comply with the trust conditions as presently drafted.” [ 86 ] Counsel for 864 Group insisted on a new sentence that he proposed be added to the mutual release. He further asserted this on December 6: In fact, this was something he raised with [their common counsel], back when the agreement was crafted. And my client advises that [the common counsel] clarified for him that if he completed the settlement agreement with Mr.

Bedi’s group [Genco Group] that did not limit him from looking at other accounting issues. [Emphasis added.] [ 87 ] They did not agree upon the terms of the revised release. On December 12, counsel for Genco advised that his instructions were to dispense with the trust condition requiring an executed release, and him and revised his trust conditions accordingly. He advised counsel for 864 Group that it was up to his client to settle the Chatters dispute. He said, “As you have the money and the ability to settle the matter, you should continue to engage them.

To the extent that we hear something positive from them we will let you know.” [ 88 ] Counsel for 864 Group responded, “So to be clear, I can deposit the $60K and then I will send you the Consent Dismissal Order. You will file it and send me back a filed copy.” He then confirmed that he would “clean up” the GST issue, and other outstanding CRA issue, and pay the agreed amount to adjust the settlement, using the remainder to deal with Chatters. Counsel for Genco responded, “That’s correct.

Thanks.” [ 89 ] There was some difficulty sending the signed consent dismissal order, but it was sent December 16, signed by counsel for 864 Group, and was presented to a master in chambers on December 17, signed and filed, and forwarded to counsel for 864 Group at 10:12 a.m. on December 18. [ 90 ] From this correspondence (and much more, which I have not quoted or referenced explicitly) it seems very clear that what was being settled was all of the issues raised in the 2013 Action, as described in the pleadings in that action. [ 91 ] That was what counsel for 864 said should be set out expressly in the mutual release.

Although the mutual release was never signed, it was clear that that was the group of issues he thought was being resolved. His correspondence suggests that there might be other disputes between the parties not resolved, but he did not disclose what they might be, except for his references to the fact that “there might be other issues of dispute” in his December 6 email and in his December 6 email at 11:24 that his client had discussed with their former common counsel that he might look at “other accounting issues”.

New Action Threatened [ 92 ] At 3:56 p.m. the same day - that is, less than six hours after receiving the filed consent order, and the trust conditions for the release of funds satisfied - counsel for 864 Group wrote to counsel for Genco and said this: We are currently resolving litigation around the Genco group and the settlement agreement. As you currently represent parties relevant to this demand, I have been instructed to provide this letter to you, on behalf of your clients.

Following the resolution of the settlement agreement, it became apparent to my client that certain unrelated expenses were being charged to his corporation. This has caused my client some considerable concern about how other projects are being administered. My clients had previously been operating under the assumption that all financial transactions are being properly handled.

They now have considerable concern, flowing from the resolution of the settlement agreement. [ 93 ] He demanded financial statements and access to the deposit box and banking statements to corroborate the financial statements. [ 94 ] The first response from counsel for Genco Group was that there was a mutual release, but that was an error.

Later, he responded that the 864 Group could review all of the financial records, at their own expense, at the offices of MNP. [ 95 ] Before documents had actually been produced for review, the 864 Group commenced the 2014 Action (these proceedings) on January 21, 2014, and had a certificate of lis pendens issued the same day, which was then registered against various real estate owned by the defendants.

The haste in commencing the new proceedings was explained before me by saying that there was a concern that a limitation period might run. [ 96 ] Then Genco changed counsel and new counsel (who argued these applications) delayed producing them until he had had them scanned for digital reproduction, because by then he was defending this lawsuit and he needed to have the originals for that purpose.

[ 97 ] When the documents were produced, counsel for 864 complained that there were too many, because all 864 wanted was the documents that had been provided to MNP to prepare

Schedule “B” used in the purchase and sale agreements created under the Separation Agreement. There is a significant debate over the extent of production, what was sought, whether the response was appropriate, and whether 864 and its counsel had ever actually looked at the documents produced before bring an application to compel production. [ 98 ] One of the pending applications is for an order to examine the accountant at MNP who prepared

Schedule “B” to find out if the mortgage loan was accounted for properly and to explore what information he relied upon when he prepared

Schedule “B”. The 2014 Action [ 99 ] The next part of the analysis involves looking that the statement of claim in the 2014 Action, as it is proposed to be re-drawn, with this history in mind to determine whether the claim is either substantially the same, against the same parties or their privies, or a proper new claim. [ 100 ] The submission of counsel for 864 Group is that the new action is for an accounting of historical financial information that was used to prepare

Schedule “B”, which was an accounting and “square up on equity” that formed the basis of the Separation Agreement calculation, as opposed to an action to enforce the Separation Agreement itself. He points out that each of the Purchase and Sale of Joint Venture Interest agreements that were created to carry out the separation set out in the Separation Agreement said that, “This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject-matter hereof and supersedes all prior agreements ...”.

He says that means that they supersede the Separation Agreement - even though they were created for the purposes of carrying out the agreement described in the Separation Agreement. [ 101 ] Therefore, he argues, the 2014 Action is not a duplicitous action on the Separation Agreement but rather an attempt to enforce the Joint Venture Agreements that were previously in place and the Purchase and Sale Agreements that dealt with their assets.

He asserts that in the course of Questioning in the 2014 Action he has learned of one error, being the placement of a mortgage by Genco Holdings without the knowledge of 864 for which the proceeds were received by Genco Holdings and not 864, although MNP appears to have treated the funds as if both had received the credit. [ 102 ] It should be noted that this was learned in the course of the questioning conducted in this 2014 Action, not something he or his client knew at the time of the filing of the statement of claim in January 2014.

At the time of commencement of the action, his client merely had suspicions that not all was right. References to possible claims beyond those specific to the Red Deer mall were vague, and expressed as possibilities. [ 103 ] What does the statement of claim (as proposed to be re-drawn) actually say that it is about? [ 104 ] As mentioned, it is as between only 864 as plaintiff and Genco Development Corporation, Pali Bedi and Genco Holdings Ltd. as defendants. [ 105 ] It recites the previous interest held by 864 in joint ventures with Genco Holdings Ltd.

It asserts that the accounting reconciliations for all business transactions were handled by Mr. Bedi and his wife, Navpreet Bedi (“Navpreet”). [ 106 ] It asserts that 864 sought an accounting of revenue and expenses, that Navpreet did them, and that Pali Bedi (“Pali”) had represented that an accounting would be provided, and 864 would receive its share of the profits. However, the lack of accounting created conflict. [ 107 ] Paragraph 10 of the proposed statement of claim specifically asserts that the Separation Agreement was entered into “to resolve all of their dealings” .

It is asserted that it contained an express term that a financial reconciliation would be completed between Genco Holdings Ltd. and 864, and that it was subsequently completed by MNP. It is asserted that it was done improperly. [ 108 ] The statement of claim alleges that Pali and Navpreet Bedi did not provide MNP with full and complete information, that

Schedule “B” did not provide for any financial reconciliation of the equity within Genco Development Corporation, and that the failure to provide an accurate and complete reconciliation under

Schedule “B” has deprived 864 of more than $7 million it is owed. [ 109 ] It asserts that that the financial reconciliation was prepared independent of “them”. This is defined as the “First Misrepresentation”. [ 110 ] It acknowledges that the transfer of properties and adjustment of them was done under the Settlement Agreement, in or about December 2013. [ 111 ] However, paragraph 22 states that “in or about October and November of 2013, the Plaintiff determined that expenses and revenues were not being properly claimed or applied by Bedi.

This was the Plaintiff’s initial realization that the First Misrepresentation may have been a misrepresentation.” This is an express acknowledgement that the information that led to the letter of December 18 was not learned in the less-than-six-hour time span following receipt of the consent dismal order.

It was known before the December resolution of the Separation Agreement. [ 112 ] Paragraph 23 asserts that, “In late 2013, the Plaintiff discovered that the MNP LLP reconciliation was not performed independent of the Defendants, as was originally represented, but rather the Defendants had directed MNP LLP on the numbers to be used in the financial reconciliation.” In paragraph 24, it is asserted that since MNP was not provided with complete disclosure, its reconciliation is “fundamentally flawed and inaccurate.” [ 113 ] A further allegation of a misrepresentation refers to property in Calgary in respect of which representations are said to have been made in 2008 and that 864 has been waiting for the defendants to provide an accounting of profits on two subsequent sale transactions: in paragraph 28 the plaintiff complains that it was a 50% partner and was expecting its share of profits on the sales transactions in Genco

Place Properties Ltd., and Genco Development Corporation, and that the defendants have not provided an accounting reconciliation foreither corporation and never disgorged profits. [114] In paragraph 29, it is asserted that 864 has sought financial records to identify where the $8 million profit went, since 2008.

Itasserts that misrepresentations were made into 2013 that the accounting would be provided, and (in paragraph 30) were made to induce864 to enter into the Separation Agreement. [115] It asserts that 864 then entered into “joint venture transfer agreements” (which I believe refers to the purchase and saleagreements referenced above) and acted upon them. [116] Paragraph 33 states that 864 “determined that the First Representation [sic] and Subsequent Misrepresentations weremisrepresentations in or about November of 2013”. [117] Once again, this is an express acknowledgement that the information justifying the 2014 Action was known before finalizingthe transactions described in the Separation Agreement. [118] Paragraph 34 discusses another business venture through Copperfield II Ltd. for which no accounting was ever provided. [119] Much of the rest of the proposed statement of claim discusses the Separation Agreement and

Schedule “B” and continues toassert that 864 had concerns about

Schedule “B” since late 2013. In paragraph 49 a complaint is made that there were prematuretransfers of property under the Separation Agreement prior to the reconciliations being made, at improper values. [120] Starting at paragraph 61, allegations are made of breaches of fiduciary duties and oppression, but these are the same complaintsas expressed elsewhere: that 864 is not satisfied with

Schedule “B” and how it was prepared. Unjust enrichment and constructive trustremedies are claimed. [121] As a result of the various wrongs it says occurred, 864 claims interests in lands, being the same lands that it had previouslyclaimed interests in. Thse interests were addressed in the finalization of the Separation Agreement in December 2013. Caveatspreviously registered had been discharged. Claims are now being made against the same lands. [122] The “Remedy sought” passage seeks damages for “the Breach of Contract, the First Misrepresentation and the SubsequentMisrepresentations in the amount of $7,000,000.00”; an accounting for the

Schedule “B” entitlements, “[a]n accounting for the equitydue and owing from Genco Development Corporation”, a disgorgement of profits relating to the joint venture transactions, “damages ...for personal and unauthorized expenses claimed back against corporate bank accounts by the Defendants”, an accounting anddisgorgement of profits relating to the sale involving from Copperfield II “and the sale of the Grande Prairie Property”, and solicitor andhis own client costs. [123] It is clear that part of the claim asserts that many things that were relied on in December 2013 to resolve their businessrelationships are now said to have been false.

In particular, although the Separation Agreement was relied upon “to resolve all theirdealings” it should not have been relied upon at all, because there were misrepresentations and the accounting shown in

Schedule “B”was wrong. [124] Although it relied on

Schedule “B” and the Separation Agreement to split their investments – apparently knowing that it shouldnot have - 864 now wants to assert that the Separation Agreement should not be allowed to stand. [125] The main thrust of the claim is for an accounting relating to the joint venture investments, which were the issues that wereresolved in the Separation Agreement - which was precisely the subject of the 2013 Action. Paragraphs 33 and 34 of the statement ofclaim in the 2013 Action set out what that claim was all about, if there otherwise might be doubt.

That accounting is now sought, again,in the 2014 Action. [126] As mentioned, the proposed statement of claim acknowledges that the information that 864 says justifies its suspicions wasknown to it, at least in part, in October and November of 2013, before the funds were paid in exchange for which (amongst other things)the consent dismissal order was granted. Analysis [127] My conclusion from this sequence of events in late 2013 and a review of the proposed statement of claim in the 2014 Action isthat 864 is advising the Court that, having relied on the Separation Agreement as valid, having known that

Schedule “B” (which wascreated under the Separation Agreement to carry out its terms) was not done properly, having not raised these concerns at the time, itwent ahead and took advantage of the Separation Agreement while planning to seek a further accounting on the basis that the accountingthat the legal counsel were relying on was not correct and that the joint venture purchase and sale agreements that they were relying onwere not valid. [128] Furthermore, having already sued on the Separation Agreement, and having agreed to have the Court confirm that its claimunder the Separation Agreement have all been resolved (because that was the effect of the Consent Dismissal Order dismissing its claims- that there had not been an accounting, and that its equity had not been squared up), it is suing again.

The Test for

Summary Judgment [129] The moving party for

summary judgment must show that its position is “unassailable”. In this context, “unassailable” meansthat it is so compelling that the likelihood of success is very high: Access Mortgage Corporation

(2014) Limited v Arres Capital Inc,2014 ABCA 280 at para 45. [130] The Court of Appeal said, in 776826 Alberta Ltd v Ostrowercha, 2015 ABCA 49 , at paras 9-11:

[9] From the process perspective,

summary judgment can be given if a disposition that is fair and just to both parties can be made on theexisting record by using that alternative method for adjudication. [10] From the substantive perspective,

summary judgment can be granted if, in light of what fair and just process reveals, there is nomerit to the claim or no defence to the claim. [11] Stated another way, in order for the non-moving party’s case to have merit, there must be a genuine issue of a potentially decisivematerial fact in the case which cannot be summarily found against the non-moving party on the record revealed by the “fair and justprocess” .... The key is whether the circumstances require viva voce evidence in order to properly resolve the case.

Papaschase IndianBand No. 136 v Canada (Attorney General), 2008 SCC 14 at paras 10 to 11. [131] The circumstances here are that the primary evidence and pleadings I have for review are these: (

a) the Separation Agreement, including

Schedule “B”, (

b) the statement of claim in the 2013 Action, (

c) the correspondence that led up to the closing of the transaction described in the Separation Agreement, and (

d) the proposed statement of claim in this action. [132] There would appear to be no viva voce evidence of consequence that would colour this information, and counsel for 864 did notargue that there would be. Conclusion [133] Counsel for 864 spent a lot of time and energy trying to explain to me how the 2014 is not in substance the 2013 action simplyre-constituted. Counsel for 864 that it was for a different claim, that it was for an accounting pre-January 1, 2012, and that if I read theproposed statement of claim closely it would be clear that it was a different claim. [134] How is it different?

It does refer to pre-Separation Agreement matters, but the Separation Agreement was intended to end therelationship between 864 and the defendants and the various individuals who were involved in the investments. Counsel for 864 madethat point in his November 16 email, quoted above. It is expressly pled in paragraph 10 of the proposed amended statement of claim. [135] Getting the separation of their interests done required (from 864’s perspective) bringing a lawsuit to get it carried out. It wascarried out. The lawsuit seeking specific performance of it was dismissed.

That leads to the conclusion that the terms of the SeparationAgreement were carried out, as reflected in an order dismissing the claim to have them carried out.

That was clear from thecorrespondence that led up to it, and that is the consequence of the dismissal order. [136] The new action is trying to go behind the Separation Agreement that the parties relied on, while simultaneously trying toenforce it according to its terms with allegations that the reconciliation of accounts and “squaring up” of equity were not done properly. [137] This is precisely the sort of circumstance that the rules of res judicata and abuse of process were designed to prevent.

Inparticular, I take note of the discussion about abuse of process in Reece and Scott, quoted above, to the effect that the legal process isbeing abused where “(1) the proceedings are oppressive or vexatious; and, (2) violate the fundamental principles of justice underlyingthe community’s sense of fair play and decency.” [138] Having relied on the Settlement Agreement and having agreed to a dismissal of an action brought to enforce it, the plaintiffs areestopped from proceeding with the 2014 Action, either as it stands already or as it is proposed to be re-cast in the Amended Statement ofClaim. [139] Accordingly, the action is dismissed. [140] There are remaining issues to be discussed.

The counterclaim remains in existence, and there is an outstanding application forsummary judgment in connection with part of that. As well, I was alerted to the request by the defendants and former defendants forcosts for the proceedings already unilaterally discontinued as well as the plaintiff’s action generally. Counsel may contact the ChambersClerk to set up a time to address those issues. Heard on the 16th day of March and December 8, 2015 and February 5, 2016. Dated at the City of Calgary, Alberta this 18th day of March 2016.

A. R. Robertson, Q.C. M.C.C.Q.B.A. Appearances: Glenn Solomon, Q.C. Jensen Shawa Solomon Duguid Hawkes LLP for the Applicants/Respondents Genco Development Corporation, Pali Bedi and Genco Holdings Ltd. Kevin McGuigan Byron Nelson and Justin Dunphy McGuigan Nelson LLP for the Respondents/Applicants 8564503 Alberta Inc.