THE PROVINCE OF NEW BRUNSWICK Plaintiff - v. -, 2015 NBQB 95

SJC-254-2014 IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF SAINT JOHN Citation : The Province of New Brunswick v. Grant Thornton LLP, et al. – 2015 NBQB 095 Date : 2015 04 08 BETWEEN: THE PROVINCE OF NEW BRUNSWICK Plaintiff - and - GRANT THORNTON LLP, GRANT THORNTON INTERNATIONAL LTD., KENT M. OSTRIDGE Defendants BEFORE: Justice William T. Grant HEARING HELD: Saint John DATES OF HEARING: April 2 & 8, 2015 DATE OF DECISION: April 8, 2015 COUNSEL: Stephen J. Hutchison and Clarence L. Bennett for the Province of New Brunswick Patrick E. Hurley, Q.C. and Anthony S.

Richardson for Grant Thornton LLP and Kent M. Ostridge J. Charles Foster, Q.C. for Grant Thornton International Ltd. DECISION GRANT, J (Orally) [ 1 ] By Notice of Action with the Statement of Claim attached, the plaintiff, The Province of New Brunswick (“the Province”), has

sued the defendants, Grant Thornton LLP, Grant Thornton International Ltd. and Kent M. Ostridge for what they allege was negligence. [ 2 ] The action arises from the Province’s guarantee of loans made by the Bank of Nova Scotia to the Atcon Group of Companies.

As a condition of extending these guarantees, the Province alleges it relied on the audited financial statements of January 2009 prepared by the defendants as well as an opinion letter dated May 19, 2009 and an unqualified auditor’s report dated June 18, 2009 both of which were also prepared by the defendants. [ 3 ] The Province further alleges that the defendants were negligent in preparing these documents and that it suffered damages in the amount of 50 million dollars as a result when in March 2010 insolvency proceedings were commenced concerning Atcon.

A receiver was appointed and proceedings were commenced under the Companies’ Creditors Arrangements Act, R.S.C. 1985 c. C-36 and the bank collected from the Province on the guarantees. [ 4 ] The Province filed its action in the Judicial District of Saint John on June 23, 2014. On September 29, 2014, all three defendants filed statements of defence.

The pleadings are closed and the parties have had some documentary discovery but no affidavits of documents are yet complete. [ 5 ] By letter dated December 9, 2014, counsel for Grant Thornton LLP and Kent Ostridge requested the plaintiff consent to change the venue for this action to the Judicial District of Fredericton. By letter dated December 30, 2014, counsel for the Province refused to consent. [ 6 ] The defendants, Grant Thornton LLP and Kent Ostridge supported by the defendant, Grant Thornton International now bring this motion in which they request the following relief:

a) pursuant to Rule 45.02(1) of the Rules of Court NB Reg 82-73, the place of trial be changed from the Judicial District of Saint John to the Judicial District of Fredericton;

b) costs be awarded in favour of the Defendants, Grant Thornton LLP and Kent M. Ostridge, CA, against the Plaintiff, the Province of New Brunswick; and

c) such further and other relief as this Honourable Court deems just and reasonable. LAW [ 7 ] Rules 45.01 and 45.02(1) read as follows: 45.01 Place of Trial Subject to any Act, and unless ordered otherwise, a trial shall take place in the judicial district where the proceeding was commenced. 45.02 Change of Place of Trial

(1) Any party may apply to the court at any time to change the place of trial and shall show that (

a) it would be more convenient to have the action tried at the place proposed by him, or

(

b) that, in the interest of justice, the action ought to be tried at that place. [8] In Potash Co. of America v.

Kilborn Ltd. (1985), (NB KB), 60 N.B.R. (2d) 227, Richard, C.J.C.Q.B. stated atparas 11-12: 11 Although the present rule is silent as to what is intended by the words “more convenient” I have reproduced the text of theformer O. 36 as it at least offers some guidance, not being authoritative, to the view that what is implied in the word“convenience” are such criteria as expenses to the parties, time and travelling expenses of the witnesses, Court facilities and theiravailability at the time set for trial.

I might add, without intending to be exhaustive, that hotel facilities, means of commuting,and the area of the source of litigation may also, in certain circumstances, be factors to be considered. As it is stated inMcPhatter v. Thorimbert (1966), (BC SC), 56 W.W.R. 497 at 499 (B.C. S.C.): Each of these applications, it may be wise to add, must be dealt with on its own facts. 12 It is in effect the sum, extent and nature of all these factors that must be weighed in the exercise of the Court’s discretion towarrant a change of the place of trial.

A Court should not do it lightly for the Rule gives a plaintiff the right and privilege tocommence his proceedings in the judicial district of his choice and by implication the right to choose the place of trial. Forexample, in Wall v. Caswell, [1947] O.W.N. 845 (Ont. H.C.), the Court stated: It is well-settled law that except for the specific instances referred to in Rule 245 the plaintiff has the right to name the place oftrial, and that the plaintiff’s choice is not to be lightly abrogated: McDonald v. Dawson (1904), 8 O.L.R. 72; Stewart et al. v.

Doan, [1944] O.W.N. 426; Holmested & Langton, Ontario Judicature Act, 5th ed. 1940, p. 872; that the place of trial will not bechanged unless the applicant shows that some serious injury and injustice to his case will arise by trying it at the place named bythe other party: Stewart et al. v. Doan, supra; and that the preponderance of convenience to change the place of trial must be‘considerable’, ‘great’, ‘very large’, or ‘overwhelming’: Holmested & Langton, op. cit., p. 872: Stewart et al. v. Doan, supra. In McPhatter v. Thorimbert, supra, the Court approved in this sense the test enunciated in Armstrong v.

Revelstoke, (BC CA), [1927] 2 W.W.R. 245 at 246, 38 B.C.R. 253, [1927] 2 D.L.R. 223 (B.C. C.A.): There is a preponderance of convenience in favour of a change of venue, but nothing short of a great or considerablepreponderance of convenience and expense would justify the taking from the respondent the right which the law has given him toselect his own place of trial. [9] In Stelling v. Tantramar Planning District Commission (1992), (NB CA), 122 N.B.R. (2d) 267 (C.A.), theplaintiff sued the planning commission which is located in Sackville New Brunswick, in Fredericton.

The planning commission movedto change the venue to Moncton and the motion was granted based on an Ontario decision which itself was based on a statutory provisionrequiring that an action against a municipality be tried in the county where that municipality is located. In allowing the appeal, the Courtof Appeal stated at paragraph 4: 4 That is not the case in New Brunswick where as a matter of practice, a plaintiff has the right to commence an action in anyjudicial district of choice.

Unless otherwise decreed by statute or as a result of an application to a judge pursuant to Rule 45.02,the trial must take place in the judicial district in which the proceeding is commenced. [10] In Doucett v. Crowther (1993), (NB KB), 135 N.B.R. (2d) 379, the plaintiff sued the defendant and hispublisher for defamation in the Judicial District of Campbellton where he resided. The defendants brought a motion to change the venueto Fredericton where they and the lawyers all resided. The plaintiff, Mr. Doucett, was also an MLA and was often in Fredericton.

Indismissing the motion, Justice Riordon stated, in part, at paragraphs 11 – 14: 11 To allow a change of venue on an application such as this the court must not exercise its discretion lightly and, subject towhat is provided for in the Defamation Act, the plaintiff has the right to choose the place of trial.

12 The right of the plaintiff to select the place of trial should not be interfered with unless compelling evidence is adduced toshow either that it would be more convenient to have the action tried at the place proposed or that in the interest of justice theaction ought not be tried at that place. In the case of McDonald v. Dawson (1904), 8 O.L.R. 72 (Master), at pp. 72 and 73 Boyd C.said: The plaintiff, as dominus litis, has the right to control the course of litigation.

He has the absolute right, unless in cases coveredby the Rule, to choose the place of trial, subject to its being changed by the defendant for sufficient cause. The burden is on thedefendant to make it appear that serious prejudice is likely to arise to him if it is not changed. Usually the question turns on thebalance of convenience, based on number of witnesses, distance from the place of trial, and expenses of attendance.

It thenbecomes a question of degree of less or more, and the test is variously expressed as to whether there is a great, or very great, oran overwhelming preponderance of convenience shewn by the defendant which ousts the right of the plaintiff. The last epithethas been used or sanctioned by the Court of Appeal in the more recent cases, which should control the practice: Peer v. North-West Transportation Co. (1892), 14 P.R. 381; Campbell v.

Doherty (1898), 18 P.R. 243. 13 This has been recognized in many cases … 14 The right of the plaintiff “to select the place of trial is not lightly to be interfered with where it has not been vexatiouslychosen by him.” [11] In Brown v. Pond (1992), (NB KB), 124 N.B.R. (2d) 447, the plaintiffs, all residents of Ontario, sued a SaintJohn doctor and a Saint John hospital in the Judicial District of Moncton. The only connection with Moncton was that the plaintiffs’solicitor lived and worked there. In allowing the change of venue, Justice Paul Creaghan stated: I am aware of the decision of this Court in Potash Co. v.

Kilburn Limited et al. (1985), (NB KB), 60 N.B.R. (2d)227 which holds that a serious onus is on the party moving to convince the Court that a change of place of trial is warranted onthe grounds that it would be more convenient. In the Potash Co. case, however, Chief Justice Richard cites authority for the principle that each application of this nature mustbe dealt with on its own facts. The Court must not exercise its discretion lightly in ordering a change of the place of trial for indeed the Plaintiffs have the initialright to choose the place of trial.

However, I have determined on the facts of this case that there is a considerable preponderance of convenience and expense thatjustifies taking from the Plaintiffs their right to select their own place of trial and can see no injustice to be caused to thePlaintiffs by doing so. [12] In Diadamo v. Moss 2005 NBQB 100, there were six actions arising out of two motor vehicle accidents within a month of eachother in which the plaintiff and one of the defendants were both involved. The accidents occurred in Moncton and Fredericton while theactions were all started in Saint John.

In allowing the motion to consolidate the actions and to change the venue to Fredericton, JusticeGlennie balanced a tenuous connection to Saint John against the inconvenience that holding the trial in Saint John would cause to theeight health professional witnesses, all of whom worked in Fredericton. [13] Finally, in MacCullum v.

Moncton Golf & County Club Ltd. 2005 NBQB 267, the plaintiffs sued the defendant for damages forcutting trees on their right-of-way thereby obliterating the common boundary line between the right-of-way and the defendant’s land andmaking it impossible to determine where the right-of-way was located. The properties were in Riverview, New Brunswick. Theplaintiffs brought the action in Saint John. In allowing the defendant’s motion for a change of venue, Glennie, J stated at paragraphs 25– 28 in part: 25 The Court must not exercise this discretion to change the venue of a trial lightly.

As the plaintiff in an action has the initialright to choose the place of trial. But each application must be dealt with on its own facts. See: Potash Company of America v.

Kilborn Limited et al. (1985), (NB KB), 60 N.B.R. (2d) 227 (N.B.Q.B.). 26 In my opinion, there must be some rational connection between the facts of a case and the place where it is to be tried. 27 As well, the location of potential expert witnesses does not determine venue. 28 In my opinion, one of the factors in this case which favours holding the trial in Moncton is that the trial judge may want totake a view of the property in question, and in particular the right-of-way and the trees. … [14] The dominant themes that arise from these cases are that:

a) a change of venue must not be granted lightly;

b) each case must be determined on its own facts; and

c) in order to abrogate the plaintiff’s choice of venue there must be a considerable preponderance of convenience in support ofthe motion that is apparent from the record. [15] The defendants submit that in this case there is no rational connection to Saint John, that the plaintiff’s witnesses and, in fact, theplaintiff itself is located primarily in Fredericton and that all the counsel for the parties are in Fredericton.

They also point out that thework for which they are being sued has no connection to their Saint John office because it was all done in Moncton and Miramichi. [16] On the issue of a rational connection, I am not persuaded that this case has a significantly greater connection to Fredericton than itdoes to Saint John. I agree with the Province that by its very nature it has an inherent connection with every judicial district in NewBrunswick.

As for the subject matter of the litigation, it appears to have more of a rational connection to Moncton or Miramichi thaneither Saint John or Fredericton. [17] The defendants say that more than half of the plaintiff’s witnesses will be from Fredericton where they work. [18] However, there is nothing in the record disclosing how many witnesses there will be, how long the trial will be or howinconvenient it would be to any or all of them if the trial were held in Saint John. That is understandable because it is early in thislitigation.

Nevertheless, without that evidence the Court is not in a position to conclude that the test for a change of venue has beensatisfied due to the inconvenience it would work on the witnesses. As the Court of Appeal stated in Stelling, supra. at para. 5: 5 … the evidence was that the members of the Tantramar Planning District Commission were volunteers and that some maybe called as witnesses. Few steps have been taken in the proceedings so far. There has been no examination for discovery. Thefact that some members are volunteers has little weight on the issue of venue.

The evidence did not show that they would becalled as witnesses only that they may be called. No satisfactory grounds have been shown to justify a change of venue under therule. [19] It is not enough, therefore, to speculate on who may be called as witnesses. Moreover, it is of no assistance to the court to argueabout the percentage of witnesses from Fredericton without at least knowing the total number of witnesses to be called. [20] Moreover, the location of the plaintiff’s witnesses is a matter of convenience or otherwise to the plaintiff and thus for them todecide.

In my view, using it as a basis for overriding the plaintiff’s choice of venue would be both paternalistic and wrong. [21] As for the pre-trial processes, inspection of documents, which I would expect are voluminous, can be done, as some already have,where they are normally located and if there are issues such as moving documents to put another party to greater expense that can besupervised by the Court by way of a motion if necessary.

Motions can be taken out in accordance with Rule 37.02 either in the judicialdistrict where the action was commenced or where a solicitor of record has an address, i.e. either in Saint John or Fredericton.

[ 22 ] As for the examinations for discovery, Rule 33.01(1) provides that they shall be in the judicial district where the action was commenced unless the parties consent or the Court orders otherwise.

Normally this would only involve one witness per party so I am not persuaded at this time that a change of venue would be justified for this process though I leave it to the parties to either resolve this issue or seek direction from the Court as and when it becomes necessary. [ 23 ] As for the location of the lawyers, it is clear from the record that there will be lawyers, particularly for the plaintiff which has the choice of venue under Rule 46, in both Saint John and Fredericton working on this file. [ 24 ] That being said the primary concern in a motion like this, in my view, is not the convenience of the lawyers, who are chosen by the parties, but rather the convenience of the witnesses as is clear from cases such as Brown v.

Pond , supra and Diadamo v. Moss supra . Other factors such as the practical concerns associated with dealing with a land dispute as in MacCullum v. Moncton Golf Club supra. , can also be important and underline the wisdom of dealing with each case on its own facts. [ 25 ] In

summary, I find that there is not a considerable or overwhelming preponderance of convenience evident from the Record on this motion that would justify an order for a change of venue at this time. I agree with the plaintiff’s submission that this motion is, at best, premature.

While the rule allows a motion to be made at any time, if, as in this case, it is made too early the evidence to support it may not be available. [ 26 ] For the foregoing reasons then I dismiss this motion although I do so subject to the proviso that this dismissal is made without prejudice to the right of the moving parties to bring a subsequent motion for the same relief at a later stage in this litigation. [ 27 ] I also order costs of $1,000 including disbursements payable by the moving parties to the plaintiff. ___________________________________________ William T.

Grant Judge of the Court of Queen’s Bench of New Brunswick