Shawn Sanford PLAINTIFF And: Astaldi Canada Inc. First DEFENDANT And: Muskrat Falls CORPORATION Second DEFENDANT And: Nalcor Energy THIRD Defendant, 2021 NLSC 130

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Sanford v. Astaldi Canada Inc. , 2021 NLSC 130 Date : October 12, 2021 Docket : 202001G4972 Between: Shawn Sanford PLAINTIFF And: Astaldi Canada Inc. First DEFENDANT And: Muskrat Falls CORPORATION Second DEFENDANT And: Nalcor Energy THIRD Defendant Before: Justice Carl R. Thompson Edited Transcript of Oral Reasons for Judgment Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: October 6, 2021 Date of Oral Judgment: October 6, 2021

Summary: The absence of Astaldi doing business for three years after its termination at Muskrat Falls leaving business and operating expensesoutstanding and unpaid since then, established reasonable grounds for Plaintiffs believing Astaldi has not dealt with its exigible propertyfor the purpose of meeting those expenses and, so, likely to hinder Plaintiffs’ enforcement of a judgment if obtained, notwithstanding ananticipated decision of an arbitration with Muskrat Falls Corporation, the details of which are unavailable. Appearances: Thomas Johnson, Q.C. Appearing on behalf of the Plaintiff Kevin J. Galway R.

Paul Burgess, Q.C. Appearing on behalf of the First Defendant Anna M. Wadden Appearing on behalf of the Second and Third Defendants Authorities Cited: CASES CONSIDERED: Donovan Homes Limited v. Modern Paving Limited, 2011 NLCA 51; BSB Electrical Services Ltd. v. Collins,2008 NLTD 201; Stanley v. Acan Windows Inc. (1995), (NL CA), 135 Nfld. & P.E.I.R. 29, 58 A.C.W.S. (3d) 1097(Nfld. C.A.); 55668 Newfoundland and Labrador Limited v. Sullivan, 2021 NLSC 38 STATUTES CONSIDERED: Judgment Enforcement Act, S.N.L. 1996, c. J-1.1 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch.

D REASONS FOR JUDGMENT Thompson, J.: INTRODUCTION [1] The Plaintiff/Applicant (“Applicant”) seeks a Pre-Judgment Attachment Order, pursuant to

section 27 of the JudgmentEnforcement Act, S.N.L. 1996, c.

J-1.1 (the “Act”) on the exigible property of the First Defendant, Astaldi Canada Inc. (“Astaldi”), andasks that Astaldi, along with the Second Defendant, Muskrat Falls Corporation (“MFC”), and the Third Defendant, Nalcor Energy(“Nalcor”), be prohibited from dealing with Astaldi’s exigible property in a manner that would be likely to hinder the Applicant in theenforcement of a judgment against Astaldi until termination of said Attachment Order. [2] The within matter was commenced by way of Statement of Claim issued on or about the 20th day of October, 2020, to pursuea claim for damages arising from an employment termination that occurred on November 2, 2018.

Thirty-four additional Statements ofClaim were also issued by separate employees with substantially the same claims. [3] Astaldi filed its Statement of Defence in the within matter on January 14, 2021. Astaldi has filed similar defences in each of

the other thirty-four matters. [ 4 ] MFC and Nalcor filed their Defences on February 12, 2021. [ 5 ] The Applicant and others filed an Interlocutory Application ( Inter Partes ) on or about May, 2021, pursuant to Rule 18.01 of Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D , for the consolidation of their respective claims. [ 6 ] No Lists of Documents have been exchange in the within matter, nor has either Party sought to conduct an Examination for Discovery of any witness in relation to this matter. issue [ 7 ] The issue is whether the 35 Applicants are entitled to a Pre-Judgment Attachment Order pursuant to

section 7 of the Act on or in relation to the exigible property of the First Defendant, Astaldi Canada Inc. Judgment Enforcement Act [ 8 ] The basis for the authority for which relief is sought, sections 27 and 28 of the Act state: 27.

(1) A claimant may apply to the court for an attachment order where (

a) the claimant has commenced or is about to commence proceedings in the province to establish the claimant's claim; or (

b) the claimant has commenced proceedings before a foreign tribunal to establish a claim if (

i) a judgment or award of the foreign tribunal could be enforced in the province by action or by proceedings under an enactment dealing with the reciprocal enforcement of judgments or awards, and (ii) the defendant appears to have exigible property in the province.

(2) On hearing an application made under subsection (1) the court may make an attachment order if it is satisfied that (

a) there is a serious issue to be tried; and (

b) there are reasonable grounds for believing that the defendant is dealing with the defendant's exigible property, or is likely to deal with that property, (

i) otherwise than for the purpose of meeting the defendant's reasonable and ordinary business or living expenses, and (ii) in a manner that would be likely to seriously hinder the claimant in the enforcement of a judgment against the defendant. 28.

(1) The court may in an attachment order (

a) direct that the order applies (

i) to all or specific exigible property of the defendant, or (ii) to exigible property to be subsequently identified in writing by the sheriff;

(

b) prohibit a dealing with exigible property of the defendant; (

c) impose conditions or restrictions on dealings with exigible property of the defendant; (

d) require the defendant or a person who has possession or control of exigible property of the defendant to deliver the property up to a person identified in the order; (

e) authorize the claimant to apply for the issuing of a garnishee order; (

f) appoint a receiver; and (

g) include in the order a term, condition or provision that the court considers necessary or desirable.

(2) Notwithstanding subsection 27(2), the court shall not grant an attachment order unless the claimant undertakes to (

a) prosecute the proceeding to judgment without delay; and (

b) pay damages or indemnity that the court may decide should be paid to the defendant or a third person, and where the court grants an attachment order, the court may require the claimant (

c) to give an additional undertaking that the court considers necessary; and (

d) to provide security in the form of a bond or otherwise in respect of an undertaking.

(3) A bond required by the court under paragraph (2)(

d) shall be (

a) in an amount that the court considers appropriate; (

b) accompanied by 2 sufficient sureties or other sufficient security approved by the court; and (

c) in the required form, and the court may require that bonding be provided by a corporation registered under the Insurance Adjusters, Agents and Brokers Act .

(4) Where an attachment order is granted, it shall be granted in a manner to cause as little inconvenience to the defendant as is consistent with achieving the purpose for which the order is granted.

(5) An attachment order shall not attach property that exceeds an amount or a value that appears to the court to be necessary to meet the claimants claim, including interest and costs, and related notices of judgment and notices of attachment, unless the court is of the view that a limitation of the amount or value would make the operation of the order unworkable or ineffective.

(6) For the purpose of subsection (1), (

a) if the sheriff is authorized to issue a garnishee order,

Part VIII, with the necessary changes, applies to that garnishment; (

b) if a receiver is appointed,

Part IX, with the necessary changes, applies in respect of that receivership; and (

c) if the order is to apply to exigible property to be subsequently identified in writing by the sheriff, the writing shall be considered to be included as a part of the order.

(7) An interested person may apply to the court to vary or terminate an attachment order. background [ 9 ] Astaldi was the principal contractor for the Muskrat Falls Hydroelectricity Project in Muskrat Falls, Newfoundland and Labrador. Astaldi was contracted by the Muskrat Falls Corporation, which is owned by Nalcor Energy. [ 10 ] On November 2, 2018 Astaldi terminated all its employees on a without cause basis. This termination notice was sent to all Astaldi employees via email from Astaldi’s Project Manager, Mr.

Don Delarosbil. [ 11 ] In the Termination Notice, Astaldi recognized the fact that there were outstanding amounts owed to its employee such as vacation, banked time, retention, and pay in lieu and Astaldi promised to forward these outstanding amounts to its employees as soon as payments are made to it. facts and belief grounding application [ 12 ] The affidavit of Connie Hatcher sworn August 23, 2021 and filed August 24, 2021 deposes at paragraphs 14 through 18 as follows: 14.

THAT I am informed by my legal counsel and do verily believe that a combination of money and equipment which Astaldi owns is currently being held in trust by the Second Defendant, Muskrat Falls Corporation, and the Third Defendant, Nalcor Energy. To the best of my knowledge, information and belief, this money has come from the sale of Astaldi’s property. 15.

THAT I understand that arbitration proceedings between Astaldi, Muskrat Falls Corporation, and Nalcor Energy have been ongoing for nearly three (3) years, and I am informed and do verily believe that Astaldi has claimed approximately $200,000,000.00 against Muskrat Falls Corporation and Nalcor Energy. I am informed and do verily believe that these arbitration proceedings have concluded, and that a decision will be rendered on October 29, 2021, which could result in disbursement of significant sums of money from Nalcor Energy and Muskrat Falls Corporation to Astaldi. 16.

THAT given these circumstances, I have a reasonable apprehension and belief that Astaldi has dealt with its property, and that Astaldi, Muskrat Falls Corporation, and Nalcor Energy will deal with Astaldi’s property in a manner that is likely to seriously hinder or render it impossible for the Applicants herein, myself included, to enforce any judgment against Astaldi.

I do verily believe that, because of Astaldi’s conduct, and the circumstances enumerate in this Affidavit, Astaldi may attempt to defeat any judgment of this Honourable Court in the within actions or may attempt to avoid enforcement of any judgment of this Honourable Court. 17.

THAT because Astaldi may soon receive a significant sum of money from Muskrat Falls Corporation and/or Nalcor Energy and because Astaldi has ceased all business operations in Newfoundland and Labrador, and because there is ongoing litigation between the Applicants and Astaldi, and Astaldi disputes the Applicants’ claims, the Applicants are therefore requesting that Astaldi, Muskrat Falls Corporation, and Nalcor Energy be prohibited from dealing with the exigible property of Astaldi, at least in the amount of $1,371,198.99 which is the combined total amount that all of the Applicants herein have claimed in their respective Actions. 18.

THAT I do verily believe that my claim, and the claims of all the Applicants is a serious issue to be tried and that there are reasonable grounds for believing that Astaldi, Muskrat Falls Corporation, and Nalcor Energy are likely to deal with Astaldi’s property in a manner that would be likely to seriously hinder the Applicants in the enforceme nt of a judgment against Astaldi. Accordingly, the Applicants are requesting an Attachment Order be issued pursuant to s. 27 , 28 , and 30 of the Judgment Enforcement Act , against the exigible property of Astaldi. case law [ 13 ] In Donovan Homes Limited v.

Modern Paving Limited , 2011 NLCA 51 the chamber’s judge had refused to order attachment. However, the Court of Appeal found that the defendant was dealing with its exigible property in a manner that was not reasonable for the purpose of meeting its ordinary business expenses. The evidence established that the defendant was selling property that was the subject

of the litigation below market value and in such a way that the defendant would not realize the profits. The Court was satisfied that thedefendant company was being stripped of assets and that this would seriously hinder the plaintiff in enforcing judgment should it besuccessful at trial. [14] In Ledrew Lumber Company Limited v, R. & R. Homes Ltd., 2019 NLSC 177 McGrath, J. noted the statements of Dymond, J.in BSB Electrical Services Ltd. v. Collins, 2008 NLTD 201 adopting the dissent of Marshall, J.A. in Stanley v. Acan Windows Inc.(1995), (NL CA), 135 Nfld. & P.E.I.R. 29, 58 A.C.W.S. (3d) 1097 (Nfld.

C.A.) that a pre-judgment order was anextreme remedy. Marshall, J.A.’s comments were in relation to now repealed Rule 28 of the Rules of the Supreme Court which allowedfor an attachment order ex parte with a bond. McGrath, J. accepted that the comments of Marshall, J.A. were applicable under section27 of the Act establishing a more strenuous threshold for such an order. [15] As noted by Knickle, J., as she then was, in 55668 Newfoundland and Labrador Limited v.

Sullivan, 2021 NLSC 38, a remedywhich intrudes upon the defendant’s property rights prior to a plaintiff being successful in their litigation, is a remedy that is extreme ordrastic. considerations and conclusions [16] To date this Court has strictly applied the requirements for a pre-attachment Order, carefully requiring strict compliance inassessing the reasonable grounds for belief. The application of the test then amounts to an assessment of the reasonableness of the beliefby virtue of the Defendants past and future conduct of its affairs.

It is in this context that the Court reviews the reasonable grounds forbelief. [17] The case law notes that care has to be especially taken in permitting an attachment to issue without judgment on the meritsthereby possibly negatively impacting on the ability to effectively continue one’s business. As I have discussed with counsel today thisremedy, inappropriately given, might be the straw that breaks the camel’s back.

It is a very delicate balance that must be engaged. [18] In its defence filed January 15, 2021, while pleading a general denial, Astaldi admits at paragraph 8 that the Plaintiffs areentitled to payment up to October 18, 2018 or alternatively November 8, 2018. The Plaintiff Shawn Stanford pleads dismissal fromemployment on November 2, 2018 and claims payment of wages after October 20, 2018, the alleged last day of payment for work.

ThePlaintiff Shawn Stanford pleads additionally for vacation pay, turnaround pay bonus pay and payment in lieu of notice. [19] The affidavit of Donald Delarosbil for Astladi sworn September 27, 2021 attests at paragraph 9 that Astaldi intends to pay whatis properly due to its former employees. Notably as well, Mr. Delarosbil’s communication on termination dated November 2, 2018acknowledges obligations to have to pay outstanding amounts for vacation, banked time, retention and pay in lieu. [20] On the basis of the foregoing, there is both conditional admission and general denial.

Counsel for Astaldi advises that pay inlieu of notice is very much in issue. Mr. Delarosbil for Astaldi deposes that numerous other creditors of Astaldi having taken actions inthis Court have had an interim resolution of their claims through Consent Judgments while agreeing to stay enforcement pendingcompletion of the arbitration. [21] The Applicants have commenced actions in this Court so as to meet the requirements of s. 27(1)(

a) of the Act. It is agreed thatthere is a serious issue to be tried so as to meet the requirements of s. 27(2)(

a) of the Act. [22] The next aspect of the test prescribed by s. 27(2)(

b) as noted requires that I assess whether there are reasonable grounds forbelieving the Defendant “is dealing” with its exigible property or “is likely to deal” with its exigible property otherwise than for thepurpose of meeting its reasonable and ordinary business expenses; and, if so, whether the manner of it so dealing would likely seriouslyhinder the claimant in enforcement of a judgment. [23] In my view, the record confirms that the Defendant is not conducting business at Muskrat Falls.

That ability was precluded bythe termination of its contract at Muskrat Falls and apparently recourse is now sought by Astaldi against the Second and ThirdDefendants pursuant to an arbitration process anticipated to answer to the parties’ positions on October 27, 2021. Astaldi has not andcould not deal with any of its property in this jurisdiction since November of 2018. [24] In my view, the complete loss of the ability to control and deal in the Defendant’s exigible property must have been intendedon its face as meeting the reasonable grounds for belief under s. 27(b)(

i) where the Defendant is not now dealing with its exigibleproperty, nor now meeting past expenses. [25] I cannot conclude that s. 27(2)(b)(

i) and (ii) extends to having to establish reasonable grounds for belief in what the Defendantmight have done or might in the future do where the facts demonstrate a present loss of capacity to act. [26] In 55668 Newfoundland and Labrador Limited the Defendant had continued some control, albeit unsatisfactorily to defendagainst the test in s. 27(2)(

b) where effective voluntary liquidation was taking place. [27] In the case before me the Defendant admits on the evidence generally its inability to pay the Plaintiffs and its desire to do so tothe extent obligated. This circumstance has continued for almost three years. The Defendant also admits to having submitted to consentjudgments, having secured deferral of enforcement due to its current inability to pay.

Practically, the Plaintiffs have to be said to havedemonstrated on this record clearly that, while due to outside factors possibly not in the Defendants’ control, the Defendant has not metits reasonable and ordinary business expenses and has not done so for the past three years and, had these Plaintiffs obtained judgments,they would not have been successful in enforcement.

These circumstances of themselves present reasonable grounds to believe theDefendant is not now and likely will not be able to do so in the immediate future. [28] Astaldi has not met its past obligations, it cannot meet Consent Court Orders, deferring payment awaiting outcome fromarbitration by agreement of the holders of judgments against it. In my view, the present prospect of an unknown arbitration outcomecannot diminish the reasonableness of those grounds for belief under s. 27(2)(

b) based upon the record to date.

[ 29 ] Astaldi also notes additional reasons why the attachment should not issue.

It notes that the Plaintiffs have not prosecuted their action since its commencement, that the grant of an attachment here would bring into play priority issues among creditors and that it would be a dangerous precedent to set where Astaldi has not carried on business in this jurisdiction since these Court actions were commenced. [ 30 ] While it appears these actions have not been actively engaged on the record of this Court to date, excepting the filing of an application for consolidation, the record also confirms the apparent inability during this period to satisfy any judgment. [ 31 ] I cannot anticipate how the issue of an Order of attachment would inappropriately engage creditor issues not otherwise resolvable at law. [ 32 ] Finally, I cannot consider the absence of activity of Astaldi in the jurisdiction as impacting on precedent as suggested.

The claims arose from facts arising within the jurisdiction and under contracts of employment performed within the jurisdiction. The facts giving rise to the causes of action are alleged to have occurred in the jurisdiction. [ 33 ] Accordingly, the application for attachment Orders is granted binding the First, Second and Third Defendants to hold the exigible property of Astaldi in their control in the respective amounts set out at Tab 3 of the Originating Application and prohibiting those Defendants from otherwise dealing with that property until further Order.

The amounts of the Attachment Orders are as set out at Tab 3 of the Originating Application as to file number 2020 01G 4972 consecutively through to and including 2020 01G 5009 and file numbers 2020 01G 5044, 5049 and 5257; a total of 35 Attachment Orders. [ 34 ] As agreed, there will be no orders for an accounting. [ 35 ] It is ordered that the Applicants shall each file an undertaking pursuant to s. 28(2) (

a) and (

b) of the Judgment Enforcement Act . This is a condition precedent to the issue of the Attachment Orders. On the undertaking of counsel for each of the Plaintiffs, to file the original, the Registry will accept a signed copy of the undertakings of Plaintiffs signed pursuant to s. 28(2) (

a) and (

b) of the Judgment Enforcement Act . COSTS [ 36 ] Costs will be in the cause. _____________________________ Carl R. Thompson Justice