Porter v Anytime Custom Mechanical Ltd, 2018 ABQB 1058

Court of Queen’s Bench of Alberta Citation: Porter v Anytime Custom Mechanical Ltd, 2018 ABQB 1058 Date: 20181221 Docket: 0703 08158 Registry: Edmonton Between: Dave Porter Plaintiff/Respondent - and - Anytime Custom Mechanical Ltd and Terry McCoy, Wayne Flight and Edgar Sagun Defendants/Applicants _______________________________________________________ Reasons for Decision of L.A.

Smart , Master, Court of Queen's Bench of Alberta _______________________________________________________ Introduction [ 1 ] The Defendants/Applicants Terry McCoy and Wayne Flight apply for dismissal of this action for delay pursuant to Rules 4.31 and 4.33. This action was commenced on June 25, 2007 by the Plaintiff/Respondent Dave Porter (Porter) claiming wrongful dismissal by the Defendant, Anytime Custom Mechanical Ltd (Anytime). A shareholders oppression claim was also made against the

individual Defendants seeking a share valuation and purchase by those Defendants as the other shareholders of Anytime. [ 2 ] Anytime was incorporated by the four individuals in this action with each holding 25% of the shares. This company ran a small mechanical shop where Porter and the Applicants worked. In December 2006, Porter left the shop claiming to be wrongfully dismissed. The Applicants alleged he left to set up a competing business for which a counterclaim was advanced. Sometime in 2008- 2009, Anytime essentially ceased operations.

By February 2010, Anytime had clearly failed and its bank account was closed. [ 3 ] Porter had previously brought action by Originating Notice on January 30, 2007 (Action # 0703 01403) seeking injunctive relief and oppression against him by the other shareholders. An Interim Standstill Order was made on January 31, 2007, directing a Special Application date be set and, inter alia , that Porter receive monthly payments of $4,500 from Anytime, that normal salaries be paid to the Respondents but no dividends, bonuses or similar payments to be made except in the ordinary course, all on a without prejudice basis.

Anytime was to keep proper accounting records particularly of receivables and bank deposits. Rule 4.33 Application [ 4 ] This application was set down on March 24, 2017. The only activity in this action that could conceivably overcome dismissal for long delay arises from an application made by these Applicants first set down on February 24, 2012, for an order allowing McCoy to take carriage of the action on behalf of Anytime. It was ultimately heard on March 13, 2014, and a decision rendered on April 2, 2014.

Justice Graesser declined to grant the Order. [ 5 ] In my view, when applying the prescribed functional analysis, the application whether successful or not would not have significantly advanced the action. This does not appear to be seriously disputed by Porter but he says that this action is inextricably linked to Action #0703 01403 and activities in that action significantly advanced this action.

There is an obvious connection between the two actions and, without deciding, I will proceed on the basis they are inextricably linked. [ 6 ] The issue then is whether #0107 01403 has been significantly advanced within the relevant three year period. The Special Application was heard on May 10, 2007, at which time Justice Marceau ordered Wayne Flight to repay a shareholders loan of approximately $22,260. By his further Order on April 8, 2008, he indicated he was not entirely satisfied that the loan had been repaid as it was dependent on the value of a truck transferred to Anytime as part of the repayment.

Justice Marceau also ordered Porter to repay funds he received as a consequence of the Interim Stay Order ($18000) but stayed enforcement to collect that amount until this action was resolved. He found the evidence fell short of establishing fraud but found Porter had proven oppression and dismissed the balance of the motion with the parties each bearing their own costs.

The Interim Stay Order was to remain in place save as he amended it and he authorized the employee shareholders to draw $5000 per month while employed full time by Anytime. [ 7 ] On December 7, 2011, two applications were heard before Justice Crighton (as she then was). She first dealt with the value of the truck and found that it was sufficient to satisfy Mr. Flight’s shareholder’s loan. Second, she found these Applicants in contempt for failure to keep and produce proper accounting records although this was overturned on appeal in November, 2013.

It did cause the Applicants to provide an affidavit containing accounting records on February 24, 2012. [ 8 ] A second application for contempt was set down in February 2014, and another on June 5, 2015, seeking a finding of further oppression. Questioning took place on the February 2012 affidavits and the matter was ultimately heard by Justice Manderscheid on February 24, 2016. His Reasons for Judgment ( 2016 ABQB 322 ) detail the various allegations of contempt and there is no utility in repeating them here. He reviewed those allegations and refused to make a finding of contempt.

With respect to the oppression remedy sought, he noted that it had already been decided and dismissed the application on the basis he had no jurisdiction to hear the application. [ 9 ] Nonetheless, Porter puts forward the argument that one aspect arising from the conduct of the Applicants significantly advanced the action. The accounting records disclosed in the February 24, 2012, affidavit evidenced payments of $11,585.50 to each of the Applicants and Sagun in June, 2009. The source of these funds was principally from a refund from Revenue Canada.

The explanation from Flight was that the business was failing and the bank account of Anytime was being depleted by monthly service fees. Rather than place the balance with one of them, the decision was that each would receive a third, not to be spent. When the account was actually closed, the then remaining balance of $831.37 was paid to McCoy. Upon their counsel learning of the payments, he explained to them that writing the cheques was improper and they paid the money in to his trust account.

This took place in early 2012 and the funds remained there as respective legal counsel could not agree on which of the two actions it should be paid in to. The funds were paid in to Action #0107 01403 on February 22, 2016, by way of a Consent Order. [ 10 ] Porter argues that it is the preservation of these funds being the only remaining asset of Anytime that significantly advanced the action. But for the preservation of these funds, there would be nothing available for the successful litigant.

I don’t deny the importance of having the ability to recover but the preservation of the funds did nothing to advance the claim for wrongful dismissal or establish the damages for oppression. Furthermore, the funds were identified and secured in 2012 when they were paid in to the lawyers trust account. Conclusion [ 11 ] Nothing has been done in this action to significantly advance it for over three years. The preservation of the funds and an unsuccessful contempt application in the other action, in my view, did nothing to advance that action. Accordingly, this action and the counterclaim must be dismissed.

Having made this determination, I need not consider the applicability of R 4.31 to this matter. The Applicants shall have their costs of the application in accordance with

Schedule C.

Heard on the 25 th day of January, 2018. Dated at the City of Edmonton, Alberta this 21st day of December, 2018 . L.A. Smart M.C.Q.B.A. Appearances: James W. Wachowich Wachowich & Company for the Plaintiff/Respondent Brian Doherty Doherty Schuldhaus LLP for the Defendants/Applicants