Paragon Capital Corporation Ltd v Worthington Properties Inc, 2017 ABQB 397

Court of Queen’s Bench of Alberta Citation: Paragon Capital Corporation Ltd v Worthington Properties Inc, 2017 ABQB 397 Date: 20170626 Docket: 0801 15127, 0801 15128, 0801 15129, 0801 15130, 0801 15131, 0801 15132 Registry: Calgary Between: Action No. 0801 15127 Paragon Capital Corporation Ltd. Plaintiff - and - Worthington Properties Inc., Empire Acquisitions Inc., Calgary Gateway Corp. formerly known as 1137488 Alberta Ltd., 789055 Alberta Ltd., Daniel A. White, Worthington Business Park Inc., and Empire Deep Disposal Corp. Defendants And Between: Action No. 0801 15128 Paragon Capital Corporation Ltd.

Plaintiff - and - Worthington Properties Inc., Daniel A. White, Worthington Business Park Inc., and Empire Deep Disposal Corp. Defendants

And Between: Action No. 0801 15129 Paragon Capital Corporation Ltd. Plaintiff - and - Worthington Properties Inc., Empire Acquisitions Inc., Daniel A. White, Worthington Business Park Inc., and Empire Deep Disposal Corp. Defendants And Between: Action No. 0801 15130 Paragon Capital Corporation Ltd. Plaintiff - and - Worthington Properties Inc., Daniel A. White, Worthington Business Park Inc., and Empire Deep Disposal Corp. Defendants And Between: Action No. 0801 15131 Paragon Capital Corporation Ltd. Plaintiff - and - Worthington Properties Inc., Daniel A. White, Worthington Business Park Inc., and Empire Deep Disposal Corp.

Defendants And Between: Action No. 0801 15132 Paragon Capital Corporation Ltd. Plaintiff - and - Worthington Properties Inc., Daniel A. White, Worthington Business Park Inc., and Empire Deep Disposal Corp. Defendants _______________________________________________________ Reasons for Judgment of J.T.

Prowse , Q.C., Master in Chambers _______________________________________________________ [ 1 ] This is an application brought by the defendants to dismiss six actions brought by Paragon Capital Corporation Ltd. (“Paragon”). [ 2 ] The dismissal application is made pursuant to Rule 4.33 on the basis that more than 3 years passed with a significant advance in each of the actions. Five out of six actions [ 3 ] In five out of the six actions Paragon provided an affidavit of its records to the defendants within the relevant 3 year time period.

Paragon says that this constituted a significant advance in those five actions. [ 4 ] In the sixth Action, #0801-15132 (the “132 Action”) Paragon provided its affidavit of records approximately 3 years and three months after obtaining a sale order. I will consider the 132 Action later in these reasons. [ 5 ] The defendants deny that the affidavits of records received within the relevant 3 year period were a significant advance.

They note that the affidavits of records were unsolicited, and simply listed documents which had already come into the defendants’ possession. [ 6 ] I will consider whether the provision of the affidavits of records constituted a significant advance using the functional approach. [ 7 ] As stated in Ursa Ventures Ltd. v Edmonton (City) , 2016 ABCA 135 at para 19 : Under the delay Rules the functional approach inquires whether the advance in an action moves the lawsuit forward in an essential way considering its nature, value, importance and quality.

The genuineness and the timing of the advance in the action are also relevant. This analysis is undertaken in the context of the particular lawsuit. The focus is on substance and effect, not form: St. Jean Estate v Edmonton (City) , 2014 ABQB 47 (Alta. Q.B.) at para 19 , (2014), 585 A.R. 81 (Alta. Q.B.). [ 8 ] In my opinion, using the functional approach, the provision of the affidavits of records constituted a significant advance in the five actions because, even though the defendants already had copies of the records listed, the provision of the affidavit of records had

significant consequences, described as follows in Ursa at para 31: Moreover, the filing of the affidavit of records has certain consequences. One essential component of r 5.6(2)(

e) is that a party must certify it has no other documents. Since a major objective of discovery is to avoid surprise, the knowledge that there are no "surprise documents" is important. Further, r 5.15 triggers some important admissions about the validity and authenticity of documents in the affidavit of records. [ 9 ] The cases cited by the defendants, holding that affidavits of records were not a significant advance, deal with supplemental affidavits of records.

Where a supplemental affidavit is provided, the certification that these are all the relevant documents has already been provided by means of the initial affidavit of records. A supplemental affidavit of records would only constitute a significant advance if the newly disclosed documents were functionally significant. [ 10 ] The cases dealing with supplemental affidavits of records are Huerto v Canniff , 2015 ABCA 316 , 2015 CarswellAlta 1900, and Ro-Dar Contracting Ltd. v Verbeek Sand & Gravel Inc. , 2016 ABCA 123 , 2016 CarswellAlta 718.

The 132 Action [ 11 ] As indicated, the provision of an affidavit of records in the 132 Action occurred more than three years after a sale order was obtained in that Action. Did a significant advance occur during the three year period following the obtaining of that sale order on January 14, 2010? [ 12 ] I will quote from Paragon’s supplementary written argument pointing to what Paragon says constituted a significant advance in the 3 years following January 14, 2010. On March 1,2011, [Worthington] filed an application for

summary dismissal of Paragon's claims in all 6 actions, including the 132 Action, and for an order directing the Registrar of Land Titles to discharge [Paragon’s] caveat (the “2011

Summary Judgment Application”)... In the affidavit filed by [Worthington] in support of the 2011Summary Judgment Application, Mr. Farooq deposed that "there is no merit to the whole or any part of the claim pertaining to the Caveat''. As the only ground to support this assertion, Mr.Farooq states that he was not aware of any consideration which was paid by Paragon or any other party to [Worthington] in respect of the registration of the caveat. This narrowed the issues between the parties as [Worthington] was no longer denying that it executed an agreement granting Paragon an interest in the lands.

The [responsive] 2011Steinberg Affidavit attaches a copy of the emails that Paragon relies on in support of its claim on the caveat and interest in the lands. The content of these emails were incorporated into a letter agreement signed by the parties dated September 15, 2008 (the “Letter Agreement”),a copy of which is attached as Exhibit "D" to the Farooq affidavit. In the 2012 Steinberg questioning, Ms. Steinberg confirmed that the Letter Agreement is the entire agreement between the parties with respect to the claim on the caveat.

The 2011Summary Judgment Application was brought pursuant to Rule 7.3. [Worthington] and Paragon each adduced evidence in support of their respective positions. Paragon submits that the Farooq Affidavit, 2011Steinberg Affidavit and 2012 Steinberg Questioning narrowed the issues between the parties such that the only matter to be determined in the action was whether the Letter Agreement granted Paragon a valid and enforceable interest in the lands. [ 13 ]

Summary judgment applications, even where abandoned or unsuccessful, may result in a narrowing of the issues between the parties, and I agree with Paragon that this is what occurred here. Accordingly, in my view, the steps taken by the parties in 2011 and 2012 with respect to Worthington’s later abandoned

summary judgment application fulfilled the function of narrowing the issues between the parties and hence constituted a significant advance in the 132 Action. Conclusion [ 14 ] Worthington’s application to summarily dismiss the six Actions pursuant to Rule 4.33 is dismissed. If the parties cannot agree on costs they may seek a ruling from me in that regard. Heard on the 17 th day of March, 2017. Dated at the City of Calgary, Alberta this 22 nd day of June, 2017. J.T. Prowse, Q.C. M.C.C.Q.B.A.

Appearances: Judy D. Burke, Q.C. DBH Law for the Plaintiff Jonathan Hillson Dentons Canada LLP for the Defendants