Montague v Pelletier, 2018 ABQB 1047

Court of Queen’s Bench of Alberta Citation: Montague v Pelletier, 2018 ABQB 1047 Date: 20181220 Docket: 1701 02151 Registry: Calgary Between: Alexander Clayton Montague Plaintiff - and - Richard Pelletier and Peter Capkun Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice G.A. Campbell _______________________________________________________ Table of Contents I – Introduction . 2 II – Background . 3 A – PPEC Corporate Governance . 3

B – Procedural History . 6 III –

Summary Dismissal Applications . 7 A – When

Summary Judgment/Summary Dismissal is Appropriate . 7 B – Pelletier’s Status as a Director and Subsection 119(4) 8 Effective Resignation . 8 De facto Director 12 Conclusion on Subsection 119(4) Issue . 14 C – Limitations Act Defence . 14 The Parties’ Positions . 14 Discoverability and Directors’ Liability for Employees’ Wages . 15

Section 119 and the Modern Approach to Statutory

Interpretation . 17

Section 119 Compared to Similar Provisions Across Jurisdictions and Over Time. 19 Other Considerations: No Procedural Prejudice . 23 Conclusion on Limitations Act Defence . 23 IV – Certification as a Class Proceeding . 24 A – Class Action Requirements . 24 Cause of Action . 24 Identifiable Class . 26 Common Issues . 27 Class Proceedings as the Preferable Procedure . 28 Representative Plaintiff 30 B – Conclusion on Certification . 31 V – Disposition . 31 I – Introduction [ 1 ] This proposed class action is about directors’ liability for unpaid wages under

section 119 of the Business Corporations Act , RSA 2000, c B-9 ( ABCA) . [ 2 ] Alexander Clayton Montague (Montague) commenced this action (the Action) against Richard Pelletier (Pelletier) and Peter Capkun (Capkun) (the Defendants), the former directors of Pacer Promec Energy Corporation (PPEC), alleging they are jointly and severally liable to the PPEC employees and contractors for an unsatisfied judgment for unpaid Retention Bonuses, or such other amount as determined by the Court pursuant to

section 119 of the ABCA . [ 3 ] In this proceeding, Montague applies for certification of the Action as a class proceeding under the Class Proceedings Act , SA 2003, c C-16.5 ( CPA ), and seeks to represent a class composed of himself and the other PECC employees and contractors (the Proposed Class) who have not been paid a Retention Bonus allegedly owing to them by PPEC under its Retention Bonus Policy. The Defendants bring applications for

summary dismissal of the Action. [ 4 ] The issues to be decided are: A. Whether the action against Pelletier is barred by subsection 119(4) of the ABCA because he effectively resigned as a director of PPEC more than two years prior to the commencement of this Action; B. Whether this Action was commenced against the Defendants outside of the limitations period contained in clause 3(1) (

a) of the Limitations Act , RSA 2000, c L-12, because Montague waited to sue the Defendants until after he obtained judgment against PPEC; and C. Whether this Action should be certified as a class proceeding under

section 5 of the CPA . [ 5 ] For the reasons below, I find that

summary judgment is not an appropriate procedure for me to decide whether Pelletier

effectively resigned more than two years prior to the commencement of the Action. The prevalence of conflicting evidence necessitates a credibility assessment to decide the issue. [ 6 ] However,

summary judgment is appropriate to decide the limitations period issue. The limitations period for an action against directors under

section 119 of the ABCA does not commence until one of the preconditions in subsection 119(3) is satisfied. In this case, that means when judgment against PPEC was returned unsatisfied in whole or in part. As a result, the action was commenced inside the limitations period. [ 7 ] I also find that the Action is appropriate to certify as a class proceeding under the CPA . II – Background A – PPEC Corporate Governance [ 8 ] Pacer Construction Holdings Corporation (Pacer) was an Alberta civil engineering and construction firm.

Pelletier, now resident in Grand Cayman, Cayman Islands, was President of Pacer and his company Richard Pelletier Holdings Inc (Pelletier Holdings) was a Pacer shareholder. [ 9 ] Pacer acted as the holding corporation for its two operating arms, specifically its two subsidiaries, Pacer Mamisiwin Corporation (Pacer Mamisiwin) and Pacer Foundations Corporation. Pacer had no operations of its own. Pacer and its subsidiaries are referred to collectively as the Pacer Group. [ 10 ] Construction Promec Inc (Promec) was an electromechanical construction company with its head office in Quebec.

Capkun, a resident of Quebec, was Promec’s CEO, President, and main shareholder. [ 11 ] In April 2013, Pacer Mamisiwin and Promec entered into a joint venture (known as the Pacer Promec Joint Venture for the purpose of bidding on construction projects in the oil sands. [ 12 ] In April 2013, Pacer and Promec formed PPEC, an Alberta corporation that was equally owned by the two of them. The Defendants were the only two directors of PPEC. [ 13 ] Pacer Promec Energy Construction Corporation (PPECC) was a wholly owned subsidiary of PPEC. PPECC had no equity or assets.

Pelletier and Capkun were also the only directors of PPECC. [ 14 ] On 17 October 2013, Pacer, Promec and PPEC executed a unanimous shareholders’ agreement (the PPEC USA). The PPEC USA provided, among other matters, that the Board of Directors of PPEC would consist of two directors only, with one to be a nominee of Pacer and the other a nominee of Promec. The first nominees to the PPEC Board of Directors would be Pelletier and Capkun. [ 15 ]

Section 3.1 of the PPEC USA states the requirement (the PPEC USA Director Provision) for two Directors and to fill a vacancy: 3.1 The board of directors of [PPEC] shall consist of two

(2) Directors only. Each of Pacer and Promec shall nominate an individual to the Board and may replace their nominee at any time by prior written notice to the other Shareholder. If any vacancy occurs on the Board, such vacancy shall be filled by a person nominated by the Shareholder, the retirement or death of whose nominee created the vacancy [ 16 ] On 26 June 2014, Pelletier Holdings and the other Pacer shareholders sold all of their interest in Pacer and its affiliates and subsidiaries to MasTec Inc and its indirect wholly owned subsidiary, 1828200 Alberta Ltd (the MasTec Transaction).

The MasTec Transaction included the sale of Pacer’s 50 percent interest in PPEC. [ 17 ] A Share Purchase Agreement dated 26 June 2014 (the SPA) was entered into between MasTec and Pelletier, among others, to document the MasTec Transaction. Pursuant to the SPA, Pelletier was required to resign as a director of both PPEC and PPECC.

Executed resignations by Pelletier as a director of PPEC and PPECC dated 26 June 2014 (the June 2014 Resignations) were in evidence. [ 18 ] The day before the closing of the MasTec Transaction, on 25 June 2014, the first amendment to the PPEC USA was executed by Pelletier and Capkun (the PPEC USA Director Amendment). The PPEC USA Director Amendment amended the PPEC USA Director Provision as follows: 3. Amendment to Directors.

Section 3.1 of the [PPEC USA] is amended by adding after the words “[Pelletier]” a new paragraph that reads as follows: In the event [Pelletier] no longer acts as a director of the [PPEC], Pacer shall appoint an individual who (

a) is the Chief Executive Officer, President or Chief Financial Officer of Pacer or the Chief Executive Officer, President or Chief Financial Officer of MasTec, Inc; … [ 19 ] Pelletier remained President of PPEC. He did not send the June 2014 Resignations to either PPEC, PPECC, or Capkun. No changes were made to the Corporate Registry records. Corporate Registry records state that Pelletier and Capkun were directors of PPEC at the dates of 15 December 2014 (when the retention bonuses were allegedly due to be paid to the employees) and 10 February 2015 (two years before this Action was commenced).

[ 20 ] On 12 February 2015, Capkun resigned as director of PPEC and PPECC. Promec failed to appoint a successor director. [ 21 ] After Capkun’s resignation, Pelletier wrote to the CFO of Promec (Promec’s CFO) on 17 February 2015 (Pelletier’s 2015 Email), stating that PPEC was in a difficult financial position because Capkun had resigned and that the PPEC USA Director Provision required that PPEC have both a Pacer nominated and Promec nominated director.

Pelletier advised Promec’s CFO that if Promec failed to appoint a replacement director to the PPEC Board of Directors, then the Pacer nominee would be required to act in all respects as a validly constituted board of PPEC. [ 22 ] On 18 February 2015, Promec’s CFO responded to Pelletier’s 2015 Email stating that Promec was prepared to have Pelletier “act alone” as the director of PPEC until a new Promec representative had been found. [ 23 ] Pelletier also took the following actions on PPEC’s behalf after the closing of the MasTec Transaction: (

a) On 12 November 2014, Pelletier caused PPEC to enter into a promissory note in favour of Pacer and Pelletier signed the document on behalf of PPEC; (

b) On 13 November 2014, Pelletier and Capkun executed a Resolution of the Directors of PPEC authorizing PPEC to borrow funds from Pacer and issue security for the borrowed funds. The Resolution was signed by Pelletier and Capkun as all of the directors of PPEC and pursuant to s 6.1 of the PPEC USA; (

c) On 12 February 2015, Pelletier caused PPEC to enter into an amended and reinstated promissory note in favour of Pacer, and Pelletier signed this document on behalf of PPEC; (

d) On 12 February 2015, Pelletier and Capkun executed a Resolution of the Directors of PPEC authorizing PPEC to borrow funds from Pacer and issue security for the borrowed funds This Directors’ Resolution was again signed by Pelletier and Capkun as all of the directors of PPEC and pursuant to s 6.1 of the PPEC USA; (

e) On 19 February 2015, Pelletier caused PPEC to enter into a promissory note in favour of Pacer; and (

f) On 19 February 2015, Pelletier caused PPEC to enter into a security agreement with Pacer. [ 24 ] A 10 March 2015 facsimile to Capkun and others from Daphne MacKenzie, legal counsel with Stikeman Elliot, attaches a document entitled “Resignation of Director and Officer” of Pelletier as director and officer of PPECC dated and effective 10 March 2015. The document appears to bear Pelletier’s handwritten signature. [ 25 ] Pelletier swore an affidavit on 6 March 2015 (the Receivership Affidavit) to commence PPEC and PPECC’s receivership proceedings. In the Receivership Affidavit, Pelletier deposed that: (

a) He has been on the Board of Directors of PPEC since 2013 (para 1); (

b) Capkun had resigned as the Promec nominated director of PPEC, but does not state that he too had resigned as a director of PPEC (para 5); (

c) In reference to Pelletier’s 2015 Email, “I, as the Pacer nominated director, would act in all respects as the validly constituted Board of Directors of PPEC” (para 57); and (d) “I, as Pacer’s nominated director, have been forced to assume sole control of PPEC” (para 58). [ 26 ] Pelletier also deposed in the Receivership Affidavit that he has reviewed relevant contracts, correspondence, and financial information with regard to the receivership proceedings, and that he had been party to several of the relevant discussions leading up to the application to appoint the Receiver. [ 27 ] Capkun received an email from Pelletier dated 12 March 2015 stating that Pelletier was retiring but there was no mention of any resignation.

Capkun received written notice of Pelletier’s resignation as a director of PPECC dated 10 March 2015. [ 28 ] On 9 March 2015 MasTec issued an $87 million purchase price adjustment claim against Pelletier and the other sellers of the Pacer Group. Pelletier immediately left the Pacer offices and never returned.

B – Procedural History [ 29 ] On 26 February 2015, Montague commenced a class proceeding in Court of Queen’s Bench Action No. 1501-02243 (the Initial Action) against PPEC and PPECC, seeking the payment of unpaid money (the Retention Bonus) allegedly promised under PPEC’s Retention Bonus Policy (the Retention Bonus Policy) to himself and other PPEC and PPECC employees.. The class was composed of Montague and a group of individuals who were employees or contractors who formed the class named and defined in the Initial Action (the Initial Class).

The Initial Class members worked on two of PPEC’s contracts, namely, the Kearl Lake Expansion Contract (the Kearl Contract) and the Mildred Lake Mine Replacement Contract (the MLMR Contract). [ 30 ] On 27 September 2016, this Court certified the Initial Action as a class proceeding under the CPA . Montague was appointed the Representative Plaintiff for the Initial Class.

Montague worked on the MLMR Contract and the terms of his employment allegedly included the Retention Bonus. [ 31 ] On 10 March 2015, a receiver was appointed (the Receiver) under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 over all of the current and future assets of PPEC and PPECC.

[32] On 27 October 2016, the Receiver filed a Demand for Notice in response to the Statement of Claim filed in the Initial Action. [33] The Receiver also provided the relevant documents of PPEC in an affidavit of records prepared on behalf of PPEC. Noaffidavit of records was provided in respect of the relevant documents of PPECC. [34] On 19 January 2017, Montague obtained an uncontested

summary judgment (the Judgment) in the Initial Action in favour ofthe Initial Class against PPEC only (not PPECC) for the unpaid Retention Bonus money allegedly owing to the Initial Class. [35] On 23 January 2017, a writ of enforcement in the amount of $2,016,266.94 was filed with the Court of Queen’s Bench ofAlberta and registered at the Personal Property Registry for the known portion of the Judgment.

The writ was then served on theReceiver. [36] On 24 January 2017, counsel for PPEC’s Receiver advised counsel for Montague that “the Receiver does not anticipatemaking a distribution to unsecured creditors such as your client, and confirms that it cannot presently make any distribution to unsecuredcreditors, and therefore the Judgment enclosed with your letter cannot be fully satisfied at this time”. [37] On 10 February 2017, Montague commenced this Action against the Defendants. [38] Montague now applies for certification of this Action as a class proceeding under the CPA and the Defendants apply forsummary dismissal of the Action.

III –

Summary Dismissal Applications A – When

Summary Judgment/Summary Dismissal is Appropriate [39] Rule 7.3(1)(

b) of the Alberta Rules of Court provides that a Court shall grant

summary dismissal to a defendant if it issatisfied there is no “merit” to the plaintiff’s clam. [40] The Supreme Court of Canada adopted a new approach to

summary judgment/summary dismissal applications in its seminaldecision in Hryniak v Mauldin, 2014 SCC 7 , [2014] 1 SCR 87.

Summary judgment should be granted whenever there is nogenuine issue requiring trial, because “the judge is able to reach a fair and just determination on the merits on a motion for

summaryjudgment”: Hryniak at para 49. Our Court of Appeal has since strongly embraced this new approach to

summary judgment finding it wellsuited to modern litigation: Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108 at para 13; Stoney Tribe Council vCanadian Pacific Railway, 2017 ABCA 432 at para 8. [41] Our Court Appeal has instructed courts to consider whether the applicant has satisfied both a procedural and substantivecomponent when deciding a

summary judgment application: Condominium Corporation No 0321365 v Cuthburt, 2016 ABCA 46 at paras 25-30. [42] In assessing process, the court should assess whether it can make an adjudication and disposition that is fair and just to allparties on an examination of the existing record: Whitecourt Power Limited Partnership v Elliott Turbomachinery Canada Inc, 2015ABCA 252 at para 9. If there is conflicting evidence on material facts,

summary judgment is not possible because there can beno weighing of evidence or credibility assessments: Cuthburt at para 28. A trial may be preferred over

summary judgment where there isa reasonable expectation that a better evidentiary record will be created by a trial, especially when there are disputed issues of materialfact or issues of credibility that cannot fairly be resolved summarily: Stefanyk v Sobeys Capital Incorporated, 2018 ABCA 125 at para 15; Angus Partnership Inc v Salvation Army (Governing Council), 2018 ABCA 206 at para 44.

A trial will generally berequired where an issue hinges on the credibility of a witness’s evidence: Attila Dogan Construction and Installation Co v AMECAmericas Ltd, 2015 ABCA 406 at para 20. [43] Substantive issues are to be assessed by considering whether there is any issue of merit that requires a trial or converselywhether the claim or defence is so compelling that the likelihood it will succeed is very high: Cuthburt at para 27.

The onus is on theapplicant to show that there is no genuine issue of merit requiring a trial but a responding party is prudent to present its best case or risklosing: Arndt v Banerji, 2018 ABCA 176 at para 36. There is no merit to a claim or defence if the applicant can prove on abalance of probabilities that the facts required to support its claim or defence have been proven: Stefanyk at paras 14-16. [44]

Summary dismissal applications based on pure questions of law will likely be successful because there is no need for a trial tofind facts. This is because even assuming the facts presented are true, the claim or defence advanced has no merit because it can bedecided as a question of law: Windsor at para 16. However, a trial will be necessary where a

summary record cannot fairly be used todecide legal issues that are unsettled, complex, or intertwined with the facts: Templanza v Wolfman, 2016 ABCA 1 at para 20. [45] On review of the record, the court must therefore conclude that sufficient evidence has been presented on all relevant issues toallow the necessary inferences to be drawn to make dispositive findings on a balance of probabilities. In short, whether there is a genuineissue requiring a trial or whether a claim or defence is so compelling that it is highly likely to succeed should be determined byreviewing the factual record and granting

summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute anda

summary disposition would be a timely, affordable and proportionate procedure. B – Pelletier’s Status as a Director and Subsection 119(4) [46] The proper disposition of Pelletier’s application for

summary dismissal requires an examination as to whether a fair and justdetermination can be made on the record as to whether Pelletier effectively resigned as a director of PPEC in June 2014 and, if so,whether he nonetheless remained as a de facto director of PPEC within two years of when the Action was commenced.

Effective Resignation Pelletier’s Position [47] Pelletier argues that the Action was commenced more than 2 years after he resigned as a director of PPEC and is thereforebarred by subsection 119(4) of the ABCA, which provides that:

(4) No action may be brought against a director under this

section more than 2 years after the date on which the director ceased to be adirector. [48] Pelletier points to the factual circumstances surrounding the MasTec Transaction. Pelletier deposed that MasTec required, as acondition of closing the MasTec Transaction, that he resigns as a director of each of Pacer, its subsidiaries and PPEC and PPECC.Pelletier says that he accordingly executed and delivered written resignations as a director of each of Pacer, its subsidiaries, and PPECand PPECC on June 26th, 2014 that he says were received and accepted by MasTec on that date.

He relies on the June 2014Resignations. [49] Pelletier admitted that he never sent written notice that he resigned as a director of PPEC to either PPEC or Capkun. Further,after his June 2014 Resignations Pelletier says he was never reappointed as a director of either company. At the closing of the MasTecTransaction, Pelletier said that he recalled seeing a sheet of paper listing the new directors of PPEC. He said that he recognized two ofthe five or so names.

Pelletier has not located a copy of any document with the names of the new PPEC directors. [50] Pelletier points to the PPEC USA Director Amendment that contemplated that Pelletier may at some point resign as a directorof PPEC as evidence that he did in fact so resign. Pelletier further notes that clause 111(3)(

b) of the ABCA provides:

(1) If the holders of any class or series of shares of a corporation or any other class of persons have an exclusive right to elect one ormore directors and a vacancy occurs among those directors, ... (

b) if there are no such remaining directors, any holder of shares of that class or series or any member of that other class of persons, asthe case may be, may call a meeting of those shareholders or those persons for the purpose of filling the vacancy. [51] Pelletier asserts that the combined effect of clause 111(3)(

b) and the PPEC USA Director Amendment support his positionthat his June 2014 Resignations were effective and remained effective. He says this is because only Pacer (and not Pelletier) had theauthority to nominate one of PPEC’s two directors after Pelletier resigned. Pacer never re-appointed Pelletier as a director of PPEC,which he contends is, uncontroverted evidence. [52] Finally, Pelletier argues that Capkun’s evidence is not credible on the point of Capkun’s lack of knowledge about Pelletier’sresignation.

He suggests that the circumstances surrounding Capkun’s execution of the PPEC USA Director Amendment demonstratethat Capkun knew or ought to have known that he was resigning as director of both PPEC and PPECC. Analysis [53] Under

section 108 of the ABCA, a director’s resignation is not effective until the director submits his or her resignation inwriting to the corporation: Ceasing to hold office 108(1) A director of a corporation ceases to hold office when (

a) the director dies or resigns, ...

(2) A resignation of a director becomes effective at the time a written resignation is sent to the corporation, or at the time specified in theresignation, whichever is later. [54] Pelletier did not submit a written resignation to either PPEC or PPECC. However, courts have applied

section 108 flexibly.The requirement is effective notice to the corporation that the director has resigned: Kasumu v Musah, 2018 ABQB 242 at para23. [55] Effective notice of director resignation to a corporation requires meaningful communication of the resignation in a mannerthat is objectively verifiable.

Resignations may be effective despite non-compliance with the statutory formalities when, for example, adirector resignation is sent to the corporation’s trustee in bankruptcy or when given orally to the corporation’s other directors, itspresident, or the corporation’s solicitor: See Kasumu at paras 24-25. [56] The record before me discloses a potential discrepancy between Pelletier’s evidence that he had resigned in June 2014 andother information that indicates this may not have been the case.

There are gaps in the evidentiary record here. [57] At the time of Pelletier’s alleged resignation, the key players in PPEC’s corporate governance structure were Capkun,MasTec, and Pelletier. Despite the flexible application of

section 108, Pelletier could not resign to himself. The June 2014 Resignationsneeded to be communicated to another key player in PPEC’s corporate governance structure. Pelletier contends that he submitted theJune 2014 Resignations to MasTec on 26 June 2014 in order to complete the MasTec Transaction. However, PPEC corporate registry

records state Pelletier remained a director of PPEC up until at least February 2015. While Pelletier deposes that MasTec neglected to update corporate registry records to reflect his resignation, there is no evidence from MasTec that this was in fact the case or that MasTec had in fact received Pelletier’s resignation. Indeed, the corporate registry records suggest otherwise, although they are not determinative. [ 58 ] Significantly, Capkun provided evidence he was never informed of any resignation by Pelletier of his PPEC directorship.

When Capkun resigned his directorship of PPEC in February 2015, he believed that Pelletier was still the Pacer nominated director of PPEC. [ 59 ] Pelletier’s evidence is that Capkun was aware Pelletier resigned in June 2014. While formal notice may not have been communicated to PPEC or Capkun, Pelletier says that his discussions with Capkun about the MasTec Transaction would have effectively made Capkun aware that Pelletier was resigning as a director of both PPEC and PPECC in June 2014.

He points to the fact that Capkun confirmed that he signed the PPEC USA Director Amendment the day before MasTec Transaction closed and that Capkun understood that signing the PPEC USA Director Amendment was a condition of the closing of the MasTec Transaction. [ 60 ] There is no evidence from MasTec about the circumstances surrounding Pelletier’s alleged June 2014 Resignations or if it received the June 2014 Resignations. [ 61 ] Credibility is a central issue. Capkun, the only other known director of PPEC, claims he was entirely unaware of Pelletier’s resignation as the other PPEC director.

To overcome this evidentiary gap, Pelletier argues that Capkun’s evidence is not credible. That is precisely the kind of evidentiary problem that makes this issue ill-suited for

summary adjudication. Whether Pelletier’s evidence is to be preferred to that of Capkun’s requires weighing evidence and assessing credibility. Whether Pelletier effectively communicated his resignation as a PPEC director to Capkun or MasTec is not clear on the evidentiary record. [ 62 ] Pelletier’s Receivership Affidavit is possibly contradictory to the account given by Pelletier about his resignation.

For example, Pelletier deposed in the Receivership Affidavit that he had “been on the Board of Directors of the respondent, [PPEC], since 2013.” He also made other references to himself as “the Pacer nominated director”. In his evidence in support of this application, Pelletier deposed that his statements in the Receivership Affidavit that referred to himself as a PPEC director were not true because he was not a director of PPEC at the time. He gave a number of explanations as to why he made these untrue representations in the Receivership Affidavit. [ 63 ] Credibility and weight are live issues.

The Receivership Affidavit is a prior sworn statement that is inconsistent with his present evidence. A prior inconsistent statement given under oath is typically fertile ground for cross-examination by opposing counsel seeking to attack a witness’s credibility. [ 64 ] For example, Pelletier says he was pressed to execute the Receivership Affidavit quickly. Pelletier deposed that he read the affidavit on his cell phone on a plane but was unable to read every part of the affidavit.

However, one part he now recants appears in the third sentence of the first paragraph and it unambiguously describes him as continuously holding the office of director of PPEC. How believable is it that he did not read that sentence? What weight am I to assign his present affidavit evidence if his claim is that he swears affidavits he does not read, or swears affidavits that he does read but knows are inaccurate? [ 65 ] To be clear, I am not making a finding that Pelletier is not credible. I am only highlighting that credibility and the weight to give to the evidence are material issues.

These are questions for trial. [ 66 ] Further, the PPEC USA Director Amendment, which contemplates Pelletier’s resignation, is not very probative in terms of determining when Pelletier in fact resigned. The amendment does not state that Pelletier’s resignation had occurred; it merely applies “in the event” that Pelletier resigns. Other potentially contradictory evidence is that Pelletier signed the 2014 and 2015 Directors’ Resolutions as a PPEC director. [ 67 ] There are other facts that conflict with Pelletier’s assertion that he had resigned as a director in June 2014.

Another example was that in February 2015 Pelletier chose not to correct Promec’s CFO’s assumption that Pelletier was still a director of PPEC when the CFO advised Pelletier that Promec was prepared to have Pelletier “act alone” as the director of PPEC until a new Promec representative had been found. [ 68 ] Pelletier relies on Bagrianski v Aero Surveys Inc , [2004] OJ No 1652 (QL), 2004 CarswellOnt 1575 (WL Can) (Ont SCJ) as a factually similar case where a director’s resignation was found to be effective and therefore precluded that director from wage liability under the Ontario Business Corporations Act , RSO 1990 c B.16 ( OBCA ).

In Bagrianski , the director submitted a written resignation to the corporation from which he was resigning. However, his statement of defence filed in the action admitted, apparently erroneously, that he was a director at some point after he had in fact resigned. The admission was subsequently withdrawn. The trial judge accepted the director’s viva voce evidence that the statement of defence had been drafted by his lawyers erroneously and found that the director’s resignation was effective despite the admission in the statement of defence. [ 69 ] Bagrianski is not helpful in deciding this

summary dismissal application. An important distinction is that Bagrianski was decided after trial and the trial judge, after hearing all the evidence, decided that the plaintiff had not discharged its burden to prove his case. Here there is conflicting evidence that cannot be evaluated summarily. [ 70 ] Whether Pelletier effectively resigned his PPEC directorship in June 2014 is a fact-driven determination that requires a credibility assessment on many contradictory material points and a decision made as to what weight to assign to the evidence.

In short, there is an insufficient evidentiary basis to Pelletier’s claim of PPEC director resignation such that the need for a credibility assessment cannot be eliminated. This is not a suitable issue for

summary dismissal. De facto Director Pelletier’s Position

[71] Even if Pelletier effectively resigned from PPEC in 2014, there is still the issue of whether he is liable under

section 119 ofthe ABCA because he acted as a de facto director of PPEC at the relevant time. [72] Pelletier denies being a de facto director. [73] After selling Pacer to MasTec, Pelletier concedes he stayed on with PPEC as President of the corporation.

Pelletier argues hiscontinued involvement in the affairs of PPEC and PPECC were due to his continued employment as an officer of the corporation, not asa director or de facto director. [74] Pelletier relies on his evidence as to the circumstances surrounding the execution of the Receivership Affidavit to explain howhe came to represent in that document that he was a director of PPEC a number of times. [75] Pelletier deposed these were incorrect representations as he had resigned as a director back in June 2014.

Pelletier says thatMasTec insisted that he was the only person who could sign the Receivership Affidavit because of corporate law requirements that theremust be one Canadian director and that he was signing it as an acting director only. Pelletier deposed that he had been rushed so he hadnot fully read the Receivership Affidavit or understood the legal ramifications of signing it. [76] Pelletier further submits that he could not become a director of PPEC by conduct as he was not “an integral part of the mindand management” of PPEC after Pacer (and its 50 percent interest in PPEC) were sold to MasTec.

He says that PPEC was effectivelyunder the management and control of its indirect parent, MasTec. MasTec funded PPEC through the loans of money secured by thepromissory notes and it was MasTec that made the decision to place PPEC into receivership. [77] Pelletier contends he did not act as a director of either PPEC or PPECC and attended no board meetings, although heconcedes, to his knowledge, none were held. Pelletier deposes that he simply signed documents as an acting director and did so asrequired and when requested by his new employer, MasTec.

This is why he signed documents such as the Receivership Affidavit,Promissory Notes, Security Agreement and the 2014 and 2015 Directors’ Resolutions. Analysis [78] Judicial determinations as to when a person will be found to be a de facto director and what obligations flow from that findinghave not been uniform. The criteria required to hold a person as a de facto director varies and there is no established bright-line test.What is universal is that who is or is not a de facto director is highly fact-driven. [79] The ABCA contemplates the possibility of de facto directorships in

section 1(o), which defines a “director” as a “personoccupying the position of director of a corporation by whatever name called”. The concept of de facto directorships has not receivedsignificant judicial consideration in Alberta.

However, the concept has at least been tacitly accepted in prior decisions of this Court: Agbiv Durward, 1998 ABQB 1108 at paras 32-34; Oliver v Elliot (1960), 23 DLR (2d), 1960 CarswellAlta 14 (WL Can) (Alta SC);Clareview Rental Project (Edmonton) Ltd v Dockery (1990), (AB KB), 78 Alta LR (2d) 106, 1990 CarswellAlta 207at para 41 (WL Can) (Alta QB); Conway v Zinkhofer, 2006 ABQB 453 at para 10. [80] An early Manitoba case held that statutory liability for unpaid wages could be imposed on a person found to be a de factodirector: Macdonald v Drake (1906), (MB CA), 4 WLR 434, 1906 CarswellMan 74 (WL Can) (Man CA). [81] De facto directorships have been considered by the federal courts in a number of tax cases.

Persons who act as directors inconformity with the will of the shareholders are not permitted to point to technicalities or a lack of qualifications to escape liabilityimposed on directors under the Income Tax Act, RSC 1985, c 1 (5th Supp): Wheeliker v R, (FCA), [1999] 3 FC 173,1999 CarswellNat 417 at para 19 (WL Can) (Fed CA). Courts should protect against undue expansion of the concept by limiting afinding of de facto directorship to only those persons who hold themselves out as such to third parties: R v MacDonald, 2014 TCC 308 [MacDonald TCC] at para 39.

A de facto director cannot be a person who did not subjectively believe they were a director andnever thought they had any authority to influence or control the company: Perricelli v R, 2002 GTC 244, 2002 CarswellNat 1346 (WLCan) (TCC); Scavuzzo v R, 2005 TCC 772, 2005 CarswellNat 4238 (WL Can). [82] The Alberta Securities Commission (ASC) set out a test for determining whether a person was a de facto director. The keyquestion is whether the alleged director played an integral

part in the mind and management of the company in all the circumstances.The ASC provided a useful non-exhaustive and non-determinative list of factors to use in this determination: World Stock Exchange Re,2000 LNABASC 39, 9 ASCS 658 (WL Can).

However, the definition of director under the Securities Act, RSA 2000, c S-4, is differentfrom the definition of director under the ABCA. [83] What is clear from these authorities is that no individual factors are determinative in assessing whether an individual is a defacto director. [84] Pelletier suggests that the facts and reasoning in MacDonald TCC are applicable to his circumstances. However, inMacDonald TCC, the court’s credibility findings were decisive in the court’s conclusion that the shareholder in that case had not beenacting as a de facto director.

The court found that a shareholder of a corporation who had signed banking documents and certificatesshowing him to be an officer or director of the corporation did not make him a de facto director.

The court, after hearing the testimony ofthe shareholder, determined as follows (at paras 49-51): Notwithstanding all of the above documentation, the Appellant was strong in his evidence to the effect that he was not a director of thecompany, that he did not know he was director of the company at any time, and that he did not consent to be a director at any time.Certain corporate documents publicly identify the Appellant as a director of the corporation, but he did not provide his consent thereto atany time. He appeared to be an individual who was somewhat naïve.

His conduct demonstrates that he was simply trying to protect hisinvestment and those of the other shareholders. With respect to banking and other documents listing him as a director, he relied entirelyupon the preparers of such documents, who were largely company solicitors who provided little or no explanation as to the nature of the

documents or the financial situation the company. I found the Appellant to be a forthright and frank individual, who was clear and concise in his evidence and was unwavering when cross-examined. He made the appropriate admissions when they were called for, as regards the signatures provided and his knowledge of the documents in question. In all of his evidence, he was clear, consistent and explicit in that he never had any intent to act as a director, was never asked to be a director, had no knowledge of being a director and only took steps to protect his investment at all times.

On the whole of the evidence, I conclude that the Appellant was not a de facto director. [ 85 ] Whether Pelletier’s actions made him a de facto director of PPEC after his allegedly formal resignation is a contextual and fact-driven inquiry. The evidence is unclear as to whether Pelletier’s actions are consistent with the activities of either an officer or a director of PPEC. As with the question of Pelletier’s effective resignation, the evidentiary record is riddled with contradictions requiring credibility assessments and the weighing of evidence.

The evidentiary record simply does not permit the court to determine the issue summarily with confidence. There is also the legal question of what individual factors will be used in the assessment of whether Pelletier’s actions are consistent with those of a de facto director. Conclusion on Subsection 119(4) Issue [ 86 ] I am not satisfied that the evidentiary record permits me to make the necessary findings of fact and to apply the law to those facts in a way that achieves a just and fair determination. The evidence is conflicted and credibility is an essential issue to resolve the conflicts.

Summary judgment is not an appropriate procedure to decide whether Pelletier resigned or whether he was not a de facto director. There remains a genuine issue for trial as to whether Pelletier can avail himself of the defence provided in section 119(4). Pelletier’s application for

summary dismissal is dismissed. C – Limitations Act Defence The Parties’ Positions [ 87 ] The Defendants together contend that the Action against them was started out of time and is thus statute barred against them. [ 88 ] Montague’s position is that the Action was commenced within the applicable limitation period. [ 89 ] In the Action, Montague and the Proposed Class Members allege that the Defendants are jointly and severally liable to them as PPEC employees for the unpaid Retention Bonus. The Retention Bonuses are alleged to be wages payable to the employees pursuant to

section 119 of the ABCA . [ 90 ] By 15 December 2014, Montague knew that he and the other Proposed Class Members suffered an injury (the breach of an obligation) as a result of PPEC’s failure to pay them the Retention Bonus money. Further, Montague knew that the PPEC’s failure to pay to him the Retention Bonus warranted bringing a proceeding against PPEC, which was commenced by the Initial Action. [ 91 ] The Defendants contend that by 15 December 2014 (which is more than two years prior to the commencement of the Action) Montague and the Proposed Class also knew or ought to have known that: (

i) the injury for which Montague and Proposed Class now seeks a remedial order had occurred; (ii) the injury was attributable to the conduct of the Defendants who did not pay the Retention Bonus that was allegedly due on 15 December 2014, for which amount it is alleged that they were made jointly and severally liable for as the directors of PPEC under

section 119 of the ABCA ; and (iii) the injury, assuming liability on the part of the Defendants, warranted bringing a proceeding. [ 92 ] The Defendants say that because Montague and the Proposed Class Members knew or ought to have known these three things, then because the Action was commenced more than two years later, in February 2017, the Defendants are immune from liability under clause 3(1) (

a) of the Limitations Act . That is, Montague and the Proposed Class Members knew or ought to have discovered from the moment that the Retention Bonus was not paid when due that they had been injured by the PPEC directors and that the PPEC directors were now liable to them for payment. [ 93 ] The Defendants argue that

section 119 of the ABCA creates a direct statutory obligation on a director to be jointly and severally liable to each employee for wages payable for services performed for the corporation while a director .

They say it follows that when the Defendants did not discharge their direct statutory duty to pay the Retention Bonuses to Montague and the other Proposed Class members when due and payable on 15 December 2014, Montague had a direct statutory cause of action against the Defendants as of 15 December 2014 and it should have been clear to him that legal action should have been commenced within two years of knowing of the injury and resulting cause of action.

The Defendants say that Montague and the other Proposed Class Members knew of their claim against these Defendants within days of 15 December 2014, were able to bring the Action and so there is no basis to extend the limitation period under

section 3 of the Limitations Act . [ 94 ] The Defendants further submit that subsections 119(2) , (3) , and (4) of the ABCA are restrictions, not conditions or conditions precedent to legal action. The Defendants suggest that these restrictions are similar to exclusions in an insurance policy. They suggest that if a claim is made under subsection 119(1) it may be defeated or excluded by any of the restrictions provided in subsections 119(2) , (3) , or (4) . That is, these restrictions are defences provided to directors when faced with a

section 119 claim. In short, the

section 3 limitation period is subject to the discoverability rule but not the

section 119 restrictions that serve a different purpose - whether an employee will be successful in having liability imposed on a director for payment of its corporation’s unpaid wages.

Discoverability and Directors’ Liability for Employees’ Wages [95] The question to be decided is whether the limitations period commenced on 15 December 2014 (when the Retention Bonuswent unpaid) or 24 January 2017 (when the Judgment was returned unsatisfied). The outcome depends on the

interpretation of twoAlberta statutes — the Limitations Act and the ABCA and their application to the facts. There is sufficient undisputed evidence before mesuch that this question can be fairly decided on the basis of

summary disposition.

Summary disposition is a just and proportionateprocedure to determine the Defendants’ limitations defence. [96]

Section 3 is the applicable provision of the Limitations Act. Clause 3(1)(

a) bars a claim for a remedial order sought more than2 years after the date on which the claimant either knows, or, in the circumstances, ought to have known that: (

i) the injury for which theorder is sought has occurred; (ii) the injury was attributable to the conduct of the defendant; and (iii) the injury “warrants bringing aproceeding”. [97] Clause 1(

a) defines a “claim” as a matter giving rise to a civil proceeding in which a claimant seeks a remedial order. Clause1(

i) defines a “remedial order” as a judgment or order made by a court in a civil proceeding requiring a defendant to comply with a dutyor to pay damages for the violation of a right. Clause 1(

e) defines an “injury” as personal injury, property damage, economic loss, non-performance of an obligation, or the breach of a duty. [98]

Section 3 provides for what is referred to as the “discoverability principle”. Discoverability requires either the plaintiff’ssubjective or objective knowledge that their injury occurred because of some blameworthy conduct by the defendant(

s) and their injury issuch that it warrants bringing proceedings. The limitations period commences when the plaintiff in fact knew, or when the plaintiff oughtto have known, the three requirements set out in clause 3(1)(a). [99] Our Court of Appeal has established that

section 3 links immunity with the question of discoverability to the injury and notwith the discoverability of a cause of action for any injury: Sun Gro Horticultural Canada Inc v Alberta Metal Building Sales Inc, 2006ABCA 243 at para 11. There can be separate claims with different limitation periods for different injuries stemming from thesame incident: Sun Gro at para 10. The discoverability period does not start from the time of the incident but from the time of discoveryof the injury: Sousa v Mayo, 2005 ABQB 845 at para 24.

Thus, there can also be separate discoverability periods related to thesame incidents just as there may be separate limitation periods that may apply to the same incidents. [100] The court assesses the three elements of

section 3 from the plaintiff’s perspective and then determines whether a proceeding iswarranted. In so doing, the court considers whether the plaintiff’s (actual or imputed) knowledge of the injury is sufficient to warrantbringing a proceeding: Currie v Craig, 2018 ABQB 46 at para 25. [101] Directors are generally not liable for their corporation’s debts or wages. A corporation enjoys a legal personality separate anddistinct from that of its shareholders, officers, and directors: Salomon v A Salomon & Co Ltd, [1896] UKHL 1, [1897] AC 22.

Further,under the common law doctrine of privity of contract, a contract generally can neither confer rights nor impose obligations on a thirdparty: Fraser River Pile & Dredge Ltd v Can-Dive Services Ltd, (SCC), [1999] 3 SCR 108, [1999] 9 WWR 380. Thus,a corporation is liable for its own debts. However,

section 119 of the ABCA operates as a statutory exception by holding directors liableto employees of the corporation for unpaid wages only if the conditions set out in

section 119 are satisfied. [102] The alleged obligation to pay the Retention Bonuses on 15 December 2014 was a contractual obligation owed by PPEC to itsemployees. The “non-performance” of this contractual obligation was an injury to Montague and the Proposed Class Members that wasattributable to PPEC. The Defendants, as directors of PPEC, had personalities separate and distinct from that of PPEC, and had noobligation to perform on a contractual obligation to which they were not a party. [103] Montague’s injury was not attributable to the Defendants personally until their liability to PPEC’s employees was triggered orcrystallized under

section 119. It may be the case that

section 119 imposes liability on directors immediately once wages go unpaid.However, that question can only be answered through

interpretation of

section 119 of the ABCA. PPEC’s failure to pay the wages (theRetention Bonuses) does not, on its own, give rise to an injury attributable to the Defendants. [104] It is necessary to conduct a statutory

interpretation analysis to determine when the directors’ obligation to pay is triggeredbecause

section 119 operates as a specific statutory exception to the principles of separate legal personalities and privity of contract. It isonly when the obligation or duty is imposed on the directors that they are capable of injuring the employees such that a discoverableinjury attributable to the directors that warrants bringing proceedings can be said to arise.

I would characterized the injury for whichMontague seeks a remedial order against the Defendants as either the “non-performance of an obligation” or “the breach of a duty”, inthe parlance of the Limitations Act. [105] There is no breach or non-performance until the duty or obligation is owed. This is a unique feature of director liability undersection 119. Thus, while the underlying event which gives rise to the Action and the Initial Action are the same, different injuries arisefrom this event with distinct limitations periods.

Section 119 and the Modern Approach to Statutory

Interpretation [106]

Section 119 of the ABCA provides: Directors’ liability for wages 119(1) Directors of a corporation are jointly and severally liable to employees of the corporation for all debts not exceeding 6 monthswages payable to each employee for services performed for the corporation while they are directors. (2) Subsection (1) does not render a director liable for debts for Wages

(

a) if the director believes on reasonable grounds that the corporation can pay the debts as they become due, or (

b) if the debts are payable to employees for services performed while the property of the corporation is under the control of a receiver,receiver-manager or liquidator.

(3) A director is not liable under subsection (1) unless (

a) the corporation has been sued for the debt within 6 months after it has become due and execution has been returned unsatisfied inwhole or in part, (

b) the corporation has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has beenproved within 6 months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date ofdissolution, or (

c) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy and Insolvency Act(Canada) and a claim for the debt has been proved within 6 months after the date of the assignment or receiving order.

(4) No action may be brought against a director under this

section more than 2 years after the date on which the director ceased to be adirector. [107] The Defendants say that subsection 119(1) creates a direct statutory cause of action that is triggered immediately once thewages fall due and go unpaid by the corporation. [108] The flaw in the Defendants’ argument is that their position ignores the remaining provisions of the section. A statutoryprovision is not to be interpreted in isolation. The modern approach to statutory

interpretation is to read the words of the statute, in thiscase

section 119, in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme and object of theABCA, and the intention of the Legislature: Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 SCR 27, . [109]

Section 119 falls under

Part 9 of the ABCA, which provides for the appointment, replacement, duties, and liabilities of directorsand officers.

Section 119 includes seven subsections setting out the framework under which employees can pursue claims for unpaidwages from its corporate employer’s directors. [110] Subsection 119(1) imposes personal joint and several liability on directors for up to six months of unpaid employee wagesearned while they are a director. This is a right of action not granted at common law as it departs from principles applicable to limitedliability corporations by permitting employees to use this provision to sue their corporate employer’s directors personally for unpaidwages.

Absent this special and extraordinary statutory mechanism, as noted above, a corporation’s employees would have no claimagainst the directors. [111] At first glance, it may appear that

section 119 creates a regime of liability whenever a corporation is unable to meet its payroll,because subsection 119(1) simply refers to director liability for unpaid wages.

However, having regard to the whole of the text of section119, it is apparent that this statutory cause of action was intended to apply in the more narrow circumstance of an insolvent or bankruptcorporation whose assets are unable to satisfy the employee wage debt. [112] For example, subsection 119(3) provides that directors are not liable unless the employees first sue the corporation, judgmenthas been granted against it, and execution has been returned unsatisfied, or the corporation is in liquidation and dissolution proceedingsand a claim for the debt has been proved, or an assignment or receiving order has been made under the Bankruptcy and Insolvency Act¸RSC 1985, c B-3 and a claim for the debt has been proved.

These three conditions ensure that the corporation does not have sufficientassets to satisfy the debt to the employees before the employees are entitled to fall back on director liability, a last resort remedy. [113] Further, under subsection 119(2) a director is not liable for wages if the director believed on reasonable grounds that thecorporation could pay the debts as they fell due or if the wages were for services performed while the corporation was under the controlof a receiver, receiver-manager, or liquidator. [114] The scheme of

section 119 indicates that the cause of action is intended to remedy the unfairness that results when directorsrequire employees to continue working when the corporation is in a state of such financial distress that it is unlikely the employees willever be paid by the corporation or have their debts satisfied by corporate assets in bankruptcy. [115] A similar conclusion was reached in Barrette v Crabtree Estate, [1993] 1 SCR 1027, . L’Heureux-Dube J, fora unanimous Supreme Court, held that the purpose of an identically worded provision in the

Canada Business Corporations Act, RSC1985, c C-44 (CBCA) is “to protect employees in the event of bankruptcy or insolvency of the corporation.” [116] Considering the language of

section 119 harmoniously with the surrounding legislative scheme and in light of its purpose ofprotecting employees in the event of bankruptcy or insolvency, the only logical conclusion is that an injury attributable to the directorsthat warrants bringing proceedings is not discoverable until one of the pre-conditions in subsection 119(3) is satisfied. It is only when,for example, judgment against the corporation is returned unsatisfied in whole or in part that the employee can reasonably know ordiscover whether the corporation has assets to satisfy the debt and proceedings are warranted.

It is at this point, an injury to theemployees can be attributed to the directors in their personal capacities such that an action against the directors will be sufficientlyserious to warrant bringing a proceeding: Currie at para 47. [117] The limitation period will not commence until the facts available to the plaintiff are such that the plaintiff was able to bring aclaim and that the claim had a prospect of success: Yugraneft v Rexx Management Corp, 2010 SCC 19 at para 60, [2010] 1SCR 649.

An employee is not able to make a claim against its corporation’s directors and any claim made would not have a prospect ofsuccess unless the employee first satisfied the subsection 119(3) preconditions.

Section 119 Compared to Similar Provisions Across Jurisdictions and Over Time. The

Canada Business Corporations Act [118] Further support for the proposition that one of the pre-requisites in section 119(3) must be satisfied before there is adiscoverable injury and proceedings against a director personally are warranted can be found in the CBCA, which shares many similarprovisions and objectives with the ABCA. [119] Statutes from across different jurisdictions dealing with the same subject matter may be interpreted as carrying the samemeaning and effect if they use similar or identical words: Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed (Toronto:LexisNexis, 2008) at 419. [120]

Section 119 of the CBCA provides for a similar statutory cause action against directors for employees’ unpaid wages.Subsection 119(1) is nearly identical to subsection 119(1) of the ABCA, with only minor differences in language: Liability of directors for wages 119(1) Directors of a corporation are jointly and severally, or solidarily, liable to employees of the corporation for all debts notexceeding six months wages payable to each such employee for services performed for the corporation while they are such directorsrespectively. [121] Subsection 119(2) of the CBCA is identical to subsection 119(3) of the ABCA, save for its heading: Conditions precedent to liability

(2) A director is not liable under subsection (1) unless (

a) the corporation has been sued for the debt within six months after it has become due and execution has been returned unsatisfied inwhole or in part; (

b) the corporation has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has beenproved within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date ofdissolution; or (

c) the corporation has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act anda claim for the debt has been proved within six months after the date of the assignment or bankruptcy order. [122] Headings in federal legislation may serve as aids to

interpretation. The Supreme Court of Canada has made use of sectionheadings when interpreting federal legislation: R v Lohnes, [1992] 1 SCR 167, (SCC); R v Zundel, [1992] 2 SCR 731, (SCC). The heading to section 119(2) of the CBCA indicates that the procedural exceptions to director liability are“conditions precedent”, suggesting that these conditions must be satisfied before the directors incur any liability towards an employee. [123] An action under

section 119 of the CBCA against directors is premature until execution against the corporation for a judgmentfor unpaid wages is returned unsatisfied. In Green v Canada Trust Realty Inc, 2005 MBQB 249 at para 61, Sinclair J grantedsummary dismissal against unpaid employees who commenced an action against their employer’s directors prior to obtaining a judgmentagainst the corporation because: It is clear that the federal legislation does not create liability against the directors unless and until the conditions under eitherthe C.B.C.A. or the Trusts and Loan Companies Act have been met. That is not the case here.

The action against the corporations has yetto be resolved. Therefore, the motion to have the action against the directors dismissed on this ground appears to have merit. I wouldgrant

summary judgment to the directors dismissing the claim for unpaid wages… [124] A similar

interpretation was adopted by Stinson J in Gill v CPNI, 2014 ONSC 6500 , aff’d 2015 ONCA 833 ,leave to appeal to SCC refused, (SCC). In that case, the plaintiffs were unpaid employees seeking

summaryjudgment against its corporate employer’s director pursuant to

section 119 of the CBCA. However, they had not yet obtained judgmentand an unsatisfied execution against the corporation. Stinson J dismissed the employees’ application for

summary judgment, stating: [20] In my respectful view, it is not open to me to ignore the express language contained in s. 119(2) (a). That clause makes it clear that adirector is not liable until an execution has been returned unsatisfied. Given that this is a statutory cause of action against a corporatedirector — and a departure from the well-established concept of limited liability corporations — I see no proper basis to depart from thisrequirement. … [24] A similar conclusion was reached by Sanderson J. in Farrell v. Work Group Designs Inc., [2005] O.J.

No. 310 (S.C.J.) where atpara. 144 she wrote “a director can only be personally liable for wages if execution against the corporation is returned unsatisfied inwhole or in part.” Sanderson J. concluded that the claim for relief in that action against the corporate director was premature; shedismissed it without prejudice to the plaintiffs’ right to bring a new action nunc pro tunc to the date the action before her wascommenced, if an execution against the corporation was returned unsatisfied in whole or in part. [125] Barry J Reiter in Directors’ Duties in Canada, 6th ed (Toronto: LexisNexis, 2016) at 22.11 also concludes that the CBCA doesnot permit a director to be sued before judgment is obtained against the corporation. [126] What can be concluded from this judicial and other commentary is that

section 119 of the CBCA imposes no obligation on the

part of a director to pay their corporation’s employees unpaid wages until a judgment for the unpaid wages has been returned unsatisfiedand therefore there is no discoverable injury to employees caused by the directors and proceedings would not be warranted until that infact happened. [127] Given the almost identical wording in section 119(3) of the ABCA, a similar

interpretation should follow. There is nodiscoverable injury until the subsection 119(3) preconditions are satisfied. The Alberta Companies Act [128] The case law interpreting the equivalent provision of the repealed Companies Act, RSA 1980, c C-20, the predecessor to theABCA, supports the conclusion that one of the pre-requisites in subsection 119(3) must be satisfied before there is a discoverable injuryand proceedings against a director personally are warranted. [129]

Section 91 of the Companies Act provided for a similar cause of action against directors for their corporation’s unpaid employeewages as follows: 91 The directors of a company are jointly and severally liable to the clerks, labourers, servants and apprentices thereof for all debts, notexceeding 6 months’ wages, due for services performed for the company during the period while the directors were acting as such, butno director is liable to an action therefore unless (

a) the company is sued therefore or a judgment is obtained against the company within one year after the debt becomes due, (

b) an execution against the company is returned unsatisfied in whole or in part, and (

c) the director is sued therefore within one year from the time he ceased to be a director, and the amount unsatisfied on the execution isthe amount that may be recovered with costs from the directors. [130] In Feuchter v Smolke (1983), 46 AR 58, 1983 CarswellAlta 387 (WL Can) (Alta QB), McFayden J (as she then was) interpretedsection 91 as follows: By the original action the Plaintiff sues his employer, the company, pursuant to his contract of employment. The directors of thecompany are not parties to this action. It is only after a judgment against the company has been returned unsatisfied that an employee'slimited right to bring an action personally against the directors arises. [131]

Section 119’s predecessor provision did not arise as a cause of action until judgment against the corporation was returnedunsatisfied. The relevant parts of

section 91 of the Corporations Act are substantially similar to the currently enacted provision under theABCA, suggesting they have a similar legal effect. The Ontario Business Corporations Act [132] When statutes across different jurisdictions deal with the same subject matter but use different words or adopt a differentapproach, this suggests that a different meaning was intended for those provisions: Sullivan on the Construction of Statutes at 419;Morguard Properties Ltd v Winnipeg (City), [1983] 2 SCR 493, (SCC). [133]

Section 131 of the OBCA provides a cause of action against directors for unpaid wages. However, subsection 131(2) providesthat: Limitation of liability

(2) A director is liable under subsection (1) only if, (

a) the corporation is sued in the action against the director and execution against the corporation is returned unsatisfied in whole or inpart; or... (emphasis added) [134] This provision expressly contemplates a joint action against the directors and the corporation. [135] The difference between subsection 131(2) of the OBCA and subsection 119(2) of the CBCA was highlighted by Koehnen J inRicci v Chippingham Financial Group Ltd, et al, 2017 ONSC 6958 . The defendant directors appealed a master’s order toproduce certain records in response to questioning in an action launched by unpaid employees. The directors argued the questions askedwere irrelevant to the employees’

section 131 OBCA claim because the employees first had to pursue judgment against the corporationbefore proceeding to question the directors: Ricci at paras 18-23. [136] Koehnen J rejected this argument, noting that clause 131(2)(

a) requires an employee to sue both the corporation and thedirectors in the same proceeding. He then went on to distinguish the OBCA from the CBCA stating that because the CBCA, unlike theOBCA, does not require the corporation and its directors to be sued in the same proceeding, proceedings against a director beforejudgment had been obtained against the corporation would contravene the temporal limitations contained in the CBCA: Ricci at para 25. [137] The OBCA and the ABCA pursue similar objectives but do so using different statutory language.

The different wording in theOBCA sets out a distinct procedure from that provided under the ABCA (and the CBCA). Unlike the OBCA, the ABCA and the CBCA donot require the corporation and its directors to be sued in the same proceeding. This difference suggests that proceedings are notwarranted against a director under

section 119 of the ABCA. Indeed, if commenced it would contravene the temporal limitations insection 119, until the corporation has first been sued for the unpaid wages and execution returned unsatisfied.

Other Considerations: No Procedural Prejudice [138] The Defendants are not precluded from raising any defence that may have been available in the Initial Action.

As McFadyen J,following a decision of the Manitoba Court of Appeal interpreting a substantively similar provision, concluded in Feuchter: The statute does not state that the directors shall be liable for the judgment against the company but to 'laborers, servants ... for all debts... due for services performed for the company.' It seems clear, and the authorities which I shall refer to hold, that the plaintiff must provein the action against the directors, the employment, performance of services and debt.

See Derbach v Shaw, (MB CA), [1933] 2 WWR 605 at 606-607, [1933] 4 DLR 461 (Man CA) [139] Contrary to the Defendants’ contention, I see no prejudice to any director caused by the requirement that a plaintiff employeefirst obtain an unsatisfied judgment against its employer corporation. Montague and the Proposed Class Members, if the Action iscertified, will have to prove their claim against the Defendants in the normal course and the Defendants will not be limited in any way intheir defence of the Action. The Defendants will not be deprived of a fair chance to argue their case.

Conclusion on Limitations Act Defence [140] In the result, I conclude that there is no injury attributable to the directors for which proceedings are warranted in an action forunpaid wages under

section 119 until the employee has satisfied one of the preconditions of subsection 119(3). [141] In this case, Montague and the Proposed Class Members did not have the facts they needed to discover that they had beeninjured by the Defendants and able to bring a claim or to determine whether or not a proceeding was warranted until they had sued PPECfor their unpaid wages, obtained judgment, and that judgment was returned unsatisfied. [142] The Judgment was returned unsatisfied on 24 January 2017. This is when the limitation period began to run for the Action.

TheAction was commenced on 10 February 2017, well within the 2 year limitation period. I conclude that the Action is not time-barred. [143] The Defendants’ application for

summary dismissed is dismissed. IV – Certification as a Class Proceeding A – Class Action Requirements [144] Montague seeks to certify the Action as a class proceeding under the CPA and appoint himself as the Representative Plaintiff. [145] The Defendants, in their written argument, resisted Montague’s application for certification on a number of bases. However, intheir oral submissions, counsel for each of Pelletier and Capkun advised that in the event they were unsuccessful in having the Actionsummarily dismissed against either or both of them, they would take no position on the certification of the Action.

In the result, neitherPelletier nor Capkun presented oral argument on the certification issue. [146] However, to certify the Action as a class proceeding, Montague must satisfy the court that the pleadings disclose a cause ofaction, there is an identifiable class of 2 or more persons, the claims of the Proposed Class Members raise a common issue, a classproceeding is a preferable procedure to bring about a fair and efficient resolution of the common issues, and that Montague is anappropriate representative plaintiff: CPA, section 5(1). [147] These requirements are not formalities.

These are important screening mechanisms designed for use by the courts to filter outclaims that are not appropriate for class action resolution. [148] An application to certify an action as a class proceeding is not a trial on the merits. The prime consideration is not whether theaction will succeed, in whole or in part, but rather “whether the action is appropriately prosecuted as a class action”: Warner v Smith &Nephew Inc, 2016 ABCA 223 at para 10.

The CPA should be applied flexibly and liberally in pursuit of the legislation’sobjective of balancing fairness with efficiency: Starratt v Mamdani, 2017 ABCA 92 at para 9. The certification requirementsneed not be proven on a balance of probabilities and there is to be no weighing of conflicting evidence: Pro-Sys Consultants Ltd vMicrosoft Corporation, 2013 SCC 57 at paras 99-105, [2013] 3 SCR 477. [149] To satisfy clause 5(1(

a) of the CPA, Montague must show that it is “not plain and obvious” that a cause of action under section119 of the ABCA will fail: Pro-Sys Consultants Ltd at para 63. Montague must then establish “some basis in fact” for each of theremaining certification requirements of section 5(1), which require only a minimum evidentiary basis: Hollick v Toronto (City), 2001SCC 68 at paras 24-25, [2001] 3 SCR 158; Warner at para 13. Cause of Action [150] Montague relies on

section 119 of the ABCA as his and the Proposed Class Members’ cause of action against Pelletier andCapkun. He provided affidavit evidence supporting his claim. The details of the Action and the underlying facts have been previouslydiscussed in detail and need not be repeated. [151] Montague pleaded all the requirements for an action under

section 119. Namely: (

a) There is a debt for unpaid wages not exceeding 6 months payable to the employees for services performed while Pelletier andCapkun were directors of PPEC;

(

b) PPEC was sued for the debt within 6 months after the debt became due; (

c) Judgement against PPEC has been returned with execution unsatisfied in whole or in part; (

d) Pelletier and Capkun were sued within 2 years of the date on which they ceased to be directors of PPEC. [152] Montague and the Proposed Class Members have a cause of action that is not obviously bound to fail. [153] Pelletier raised the issue that Montague and the Proposed Class Members do not have a cause of action against him because heresigned more than 2 years before the Action was commenced. As was decided on Pelletier’s

summary dismissal application, thisargument raises contested questions of fact and law that cannot be decided on an application to certify an action as a class proceeding. Acertification judge is not to enter into a weighing of conflicting evidence with respect to the merits of the claim: Warner at para 15.Pelletier’s argument goes to the merits of the Action against him and falls to be decided at trial or some other future proceeding. [154] The Defendants raised other issues such as that the Retention Bonuses were not payable to the Proposed Class Members butonly to PPEC management, the Retention Bonuses were discretionary performance bonuses not recoverable under

section 119 of theABCA, and that most of the Proposed Class Members (approximately 678) were employed by entities other than PPEC. Each of thesearguments is based on contested facts or are questions requiring the application of a legal standard to the facts of this case. Thosequestions are best decided in a full factual matrix not available on an application for certification.

The certification judge takes the factspleaded as true when analyzing whether there is a valid cause of action to certify the class: Pro-Sys Consultants Ltd at para 63.Montague pleaded that the Retention Bonuses were payable to him and the Proposed Class Members. Whether this is true is a mattergoing to the merits of the action, not certification. [155] Montague relies on the common employer doctrine to affix PPEC’s directors with liability for wages (the Retention Bonuses)owed to employees of PPECC, Pacer, or Promec.

Without deciding the merits of Montague’s common employer theory, it is not plainand obvious that the employees’ cause of action against PPEC’s directors is doomed to fail. Further, if I am wrong to consider thisargument under the cause of action criterion, I am satisfied that there is some basis in fact for the argument that PPEC was the commonemployer of the PPECC, Pacer, and Promec employees. The information before me is that PPEC owns 100% of the shares of PPECC.PPECC does not own any assets. PPECC’s role was to provide the labour force to service PPEC’s construction contracts.

PPECC had noindependently generated revenue of its own. PPEC funded PPECC’s entire payroll. PPECC appears to be essentially an asset-lesspaymaster, not dissimilar to the facts of Downtown Eatery

(1993) Ltd v Ontario (2001), 54 OR (3d) 161, (Ont CA).Similar, albeit different, levels of operational and logistical integration also existed between Pacer and PPEC, as well as Promec andPPEC. [156] To be clear, I have not decided the common employer issue in this application. It remains open to the Defendants to argue thatthe test to find PPEC a common employer is not met on the facts. There is at least an arguable case on all these issues.

I leave thedecision on the merits of all of these issues for another day. [157] In short, it is not plain and obvious that Montague and the Proposed Class Members do not have a valid cause of action againstthe Defendants. Montague has satisfied the requirement of clause 5(1)(a). Identifiable Class [158] Montague must establish that there is an identifiable class of 2 or more persons: CPA: clause 5(1)(b). He must provide, withprecision, the definition, existence and scope of the proposed class. [159] The identifiable class requirement is met with a low evidentiary threshold.

That some class members may not have a valid claimis not on its own disqualifying: Warner at para 22. The class definition should be grounded in objective criteria by which members of theclass can be identified and the criteria should bear a rational relationship to the common issues: Western Canadian Shopping Centres Incv Dutton, 2001 SCC 46 at para 38, [2001] 2 SCR 534.

The class is sufficiently defined if the affected parties and the Court canreference clearly defined objective criteria to determine who is and who is not a member of the class. [160] Montague proposes the following class definition: All employees and contractors (including their estates, executors, and personal representatives) whose employment contract or terms ofemployment respecting Pacer Promec Energy Corporation’s Kearl Lake Expansion Contract and Mildred Lake Mine ReplacementContract (the PPEC Contracts) included PPEC’s retention bonus policy payable December 15, 2014, who have not been paid theirretention bonus payout at all or in part. [161] This class definition uses objective criteria.

A class member must have been employed on PPEC’s Kearl Contract or MLMRContract. Their terms of employment must have included the Retention Bonus Policy which allegedly included a bonus that was payableand went unpaid in December 2014. These objectively verifiable criterion will decide whether an individual belongs in the ProposedClass. [162] There is a rational connection between the class

definitions and the common issues. The criteria limit the class members toemployees who could plausibly claim PPEC as an employer either directly or as a common employer. The definition also requires thatthe class members had terms of employment that included the allegedly unpaid bonus at issue in the Action. The proposed classdefinition ensures a close relationship with the common issues. [163] There is some basis in fact supporting the existence of an identifiable class with two or more persons. Montague has had contactwith other former PPEC employees.

PPEC provided contracts for 236 former employees who worked on the Kearl Contract or MLMRContract, the terms of which referenced bonuses. The Initial Action against PPEC included 727 class members. There is ample basis toconclude a class of 2 or more persons exists which fit both class

definitions.

[ 164 ] I am satisfied the class as defined by Montague constitutes an identifiable class of two or more persons. The proposed class definition incorporates objective criterion that limits the class members and is not overly broad. [ 165 ] Montague has satisfied the requirement of clause 5(1)(c). Common Issues [ 166 ] The claims of the Proposed Class Members must raise a common issue or issues, regardless of whether the common issues predominate over other issues affecting only individual prospective class members: CPA , clause 5(1)(c).

A common issue means a common but not necessarily identical issue of fact or a common but not necessarily identical issue of law that arises from a common set of facts: CPA , clause 1(e). [ 167 ] The “commonality question” is addressed purposively. The object of the commonality requirement is to avoid duplication of fact-finding or legal analysis: Western Canadian at paras 39-40. An issue is common where its resolution is necessary, even if not determinative, to the resolution of each class member’s action.

Further, the common issues need not be determinative of liability and need not dispose of the entire action. [ 168 ] The Proposed Class Members need not be identically situated: Western Canadian at para 39. For example, that the PPECC employees may fail to establish that PPEC was their common employer does not, by itself, negate that there are common issues amongst the entire class of employees.

Further, success for one or some class members on the common issues must mean success for all, even if the degree of success varies: Western Canadian at para 40. [ 169 ] Montague proposes the following as common issues for the Proposed Class: (

a) Are the Defendants jointly and severally liable to pay the Proposed Class Members pursuant to

section 119 of the ABCA such that the Proposed Class Members obtain a judgment in respect thereof, based upon the following common issues: (

i) Is PPEC the employer of the Proposed Class M

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