Docket: 1696 Donald Blair Neilly v. Neilly's Outdoors Ltd., 2014 SKCA 55

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2014 SKCA 55 Date: 2014-04-14 Between: Docket: 1696 Donald Blair Neilly and Neilly's Outdoors Ltd. Appellants (Defendants) - and - First Choice Outfitters Ltd. Respondent (Plaintiff) Coram: Richards C.J.S., Jackson and Ryan-Froslie JJ.A. Counsel: Jay Watson for the appellants Michael Tochor, Q.C. for the respondent Appeal: From: 2008 SKQB 406 Heard: April 14, 2014 Disposition: Dismissed (orally)

Written Reasons: May 5, 2014 By: The Honourable Madam Justice Ryan-Froslie In Concurrence: The Honourable Chief Justice Richards The Honourable Madam Justice Jackson Ryan-Froslie J.A. [1] Mr. Neilly and Neilly’s Outdoors Ltd. appeal a judgment of the Court of Queen’s Bench which determined ownership of anoutfitter’s licence. At the hearing of the appeal, this Court gave an oral decision refusing to allow the admission of fresh evidence anddismissing the appeal. What follows are our reasons. [2] The factual background is fully set out in the reasons of the trial judge which may be found at 2008 SKQB 406, 322 Sask.

R.200. [3] In the late 1980’s The Outfitter and Guide Regulations, 1988, R.R.S. c. R-19.01 Reg. 2 came into effect in Saskatchewan.Pursuant to those Regulations, non-residents could not hunt wildlife in Saskatchewan except through a licenced outfitter and under thesupervision of a licenced guide. [4] As a result of those Regulations, Mr. Neilly, Grant Preece, Martin Lay and Thomas Morton started a business known as FirstChoice Outfitters. They were equal partners in the business. An outfitter’s licence number C6006 was obtained in the name of “BlairNeilly, First Choice Outfitters”.

In addition, each of the four partners was licenced as a guide. [5] On April 2, 1990 First Choice Outfitters was incorporated. Mr. Neilly, Mr. Preece, Mr. Lay and Mr. Morton were all equalshareholders and directors of the company. Mr. Neilly acted as the company’s president. At the end of each hunting season, the fourshareholders would meet to pay the bills and divide the profits. [6] By the end of the 2000 white-tailed deer season, Mr. Preece, Mr. Lay and Mr. Morton had become aware the outfitter’s licencewas being renewed only in Mr. Neilly’s name. When they inquired of Mr.

Neilly why the licence no longer bore the corporation’s name,Mr. Neilly replied he didn’t know but he “would look into it”. From time to time thereafter the name on the licence was discussed by thefour shareholders. [7] Matters came to a head at the shareholders year-end meeting in the fall of 2004. While Mr. Lay was not present at that meeting,Mr. Morton, Mr. Preece, and Mr. Neilly were all in attendance. Mr. Morton insisted that First Choice Outfitters be put on the licence. Mr.Neilly refused indicating, for the first time, the licence was his alone. [8] In the spring of 2005 Mr.

Neilly renewed the licence in his name only. Shortly thereafter he had it reissued in the name ofNeilly’s Outdoors Ltd. Mr. Neilly and his wife are the sole shareholders of that company. [9] Without an outfitter’s licence, First Choice Outfitters Ltd., could no longer operate. It commenced legal action against Mr. Neillyand his company, Neilly’s Outdoors Ltd. [10] The trial judge found Mr. Neilly and Neilly’s Outdoors Ltd. held the outfitter’s licence in trust for First Choice Outfitters Ltd.which was the beneficial owner of the licence. She ordered Mr.

Neilly and his company to account to First Choice Outfitters Ltd. for theprofits derived from the use of the licence on the basis they had unlawfully interfered with First Choice Outfitters Ltd.’s economicrelations and that Mr. Neilly had breached his fiduciary duty to the company. [11] At the hearing of the appeal Mr. Neilly and Neilly’s Outdoors Ltd. applied to adduce fresh evidence consisting of two affidavitsfrom American hunters who were allegedly present when Mr. Neilly, Mr. Preece and Mr. Lay first discussed obtaining an outfitter’slicence. Mr. Preece and Mr.

Lay testified those American hunters provided money to purchase the initial licence. The fresh evidence wasproffered to refute that claim. [12] The application for leave to adduce fresh evidence was made pursuant to Rule 59 of The Court of Appeal Rules. In the applicationof that Rule and its predecessors, this Court, in a civil context, has consistently applied the test for the admission of fresh evidence on anappeal articulated by the Supreme Court of Canada in R. v. Palmer, (SCC), [1980] 1 S.C.R. 759. See: Wal-Mart CanadaCorp. v. Saskatchewan (Labour Relations Board), 2006 SKCA 142, 289 Sask. R. 20.

The test is as follows: (

i) The evidence will not be admitted if by due diligence it could have been used at trial; (ii) The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the action; (iii) The evidence must be credible in the sense that it is reasonably capable of belief; and, (iv) It must be such that, if believed, it could, when taken with the other evidence adduced at trial, reasonably be expected to have affected the result. [13] In this case, the application to adduce fresh evidence was dismissed on the basis of the first two factors set out by the Supreme

Court of Canada in R. v. Palmer , supra . Mr. Neilly was aware of the evidence sought to be adduced prior to the trial and with due diligence could have presented it. Moreover, it cannot be said the affidavits would have influenced the trial judge’s decision.

While the trial judge referred to the contradictory evidence concerning where the money to purchase the initial licence came from, she made no findings of fact with respect to that issue and instead, cited other evidence upon which she relied to base her finding that First Choice Outfitters Ltd. was the beneficial owner of the licence. [ 14 ] With respect to the appeal proper, Mr.

Neilly and Neilly’s Outdoors Ltd. relied primarily on the argument that the trial judge did not have jurisdiction to determine beneficial ownership of the outfitter’s licence in light of s. 16 of The Outfitters and Guide Regulation, 2004 , R.R.S. c. N-3.1 Reg. 3 . That

section reads as follows: 16 The minister’s decision to amend, suspend, revoke, renew or refuse to renew an outfitter’s licence, or to prohibit a person from applying for an outfitter’s licence, is final and conclusive and no proceedings by or before the minister may be restrained by injunction, prohibition or other proceedings or are removable by certiorari or otherwise by any court. [emphasis added] [ 15 ] The argument with respect to jurisdiction is without merit.

Section 16 is nothing more than a standard privative clause and as such, it is aimed at preventing or limiting the extent to which prerogative writs may be used to review the Minister’s decision with respect to the amendment, suspension, revocation, renewal or refusal to renew an outfitter’s licence. It does not purport to limit the authority of the Court of Queen’s Bench to deal with issues concerning the ownership of such licences which was the issue in this case. [ 16 ] Mr.

Neilly and Neilly’s Outdoors Ltd. also contended that the judge’s findings of credibility were contrary to the evidence and the weight of the evidence. We cannot agree. [ 17 ] The trial judge had ample evidence upon which to base her findings of fact and credibility. She did not believe the evidence of Mr. Neilly, with respect to ownership of the outfitter’s licence. She accepted the evidence of Mr. Preece, Mr. Lay and Mr. Morton on that point.

Of key importance to the trial judge’s decision were the documents prepared at the time of the original application for the licence, including the application itself, the miscellaneous permit (licence) and Mr. Neilly’s guide licence.

How First Choice Outfitters Ltd. conducted its business, paid its expenses, including the renewal fee for the licence, and was viewed by other outfitters and the company’s main booking agent all supported the conclusion that First Choice Outfitters Ltd. owned the licence. [ 18 ] The fact that First Choice Outfitters as a corporate entity did not own the outfitter’s licence in 1989 is of little consequence, as the trial judge found Mr. Neilly, Mr. Preece, Mr. Lay and Mr. Morton were, at that point, partners operating under the name of First Choice Outfitters.

A year later, in 1990, that partnership was incorporated. There is no merit to the argument that the outfitter’s licence needed to be “rolled” into the corporation as the licence was renewed on a yearly basis. [ 19 ] Finally, at the hearing of the appeal, counsel for First Choice Outfitters Ltd. acknowledged that the recent Supreme Court of Canada decision in A.I. Enterprises Ltd. v. Bram Enterprises Ltd. , 2014 SCC 12 , 366 D.L.R. (4 th ) 573 is determinative of the issue of whether the tort of unlawful interference with economic relations was established in this case.

That decision which was rendered after the trial of this matter was not available to the trial judge when she gave her decision. [ 20 ] Cromwell J., writing for the Supreme Court of Canada, in A.I. Enterprises Ltd. v. Bram Enterprises Ltd. , supra , noted that in order to establish liability for the tort of unlawful interference in business relations, a defendant must have used unlawful means with the intent of harming the plaintiff. He went on to note that there was some confusion in the authorities as to what constitutes “unlawful means”.

He clarified the law stating the tort is only available in very narrow circumstances where there is an actionable civil wrong. Most importantly, for the case in issue, he held that the tort is only available in three party situations where the plaintiff has suffered a loss due to an unlawful act by the defendant against a third party. The rationale for restricting the tort to third party situations, is that a new basis of liability is not being created, but rather, the tort merely expands who may be compensated for an actionable wrong.

At para. 45, Cromwell J. stated: This rationale of the tort supports a narrow definition of "unlawful means": the tort does not seek to create new actionable wrongs but simply to expand the range of persons who may sue for harm intentionally caused by existing actionable wrongs to a third party.

Thus, criminal offences and breaches of statute would not be per se actionable under the unlawful means tort, but the tort would be available if, under common law principles, those acts also give rise to a civil action by the third party and interfered with the plaintiff's economic activity . [emphasis added] [ 21 ] As the case in issue does not involve an unlawful act by Mr.

Neilly and Neilly’s Outdoors Ltd. against a third party which resulted in damage to First Choice Outfitters Ltd., the trial judge erred in determining the tort of unlawful interference with economic relations had been established. [ 22 ] The fact the trial judge committed this error does not affect the correctness of the ultimate result at trial, as there was significant evidence upon which the trial judge could properly determine that Mr.

Neilly was in breach of his fiduciary duty to First Choice Outfitters Ltd. when he wrongfully converted the outfitter’s licence to Neilly’s Outdoors Ltd. [ 23 ] The appeal is dismissed with costs pursuant to Column 2, to be paid by Mr. Neilly and Neilly’s Outdoors Ltd. to First Choice Outfitters Ltd., on both the application to admit fresh evidence and on the appeal proper.