Wright v. Ratcliffe, 2023 NSSC 287

SUPREME COURT OF Nova Scotia Citation: Wright v. Ratcliffe , 2023 NSSC 287 Date: 20230913 Docket: Hfx No. 508338 Registry: Halifax Between: Alex Wright Plaintiff v. James Ratcliffe and Victory Seafood Limited Defendants DECISION ON

SUMMARY JUDGEMENT ON EVIDENCE Judge: The Honourable Justice Scott C. Norton Heard: August 23, 2023, in Halifax, Nova Scotia Decision: September 13, 2023 Counsel: Christopher I. Robinson, for the Plaintiff/ Respondent James Green, for the Defendant/Applicant By the Court: Introduction [ 1 ] The Defendant brings this motion for

summary judgment on evidence under Nova Scotia Civil Procedure Rule 13.04 on the basis that the Plaintiff has no real chance of success as the claims made in the Amended Statement of Claim are statute barred under the Limitation of Actions Act , SNS 2015, c.2 (“ LAA ”). [ 2 ] The Plaintiff, Alex Wright, filed a Notice of Action and Statement of Claim on August 12, 2021, against James Ratcliffe and Victory Seafood Limited. The issue is whether Mr. Wright discovered the claim before August 12, 2019. If so, the claim is statute barred. [ 3 ] The motion was heard on August 23, 2023. Both Mr. Ratcliffe and Mr.

Wright were cross-examined on their affidavits. Background [ 4 ] Mr. Wright and James Ratcliffe were best friends since a young age until 2019. They started a business together. They were officers, directors, and shareholders of Global Seafood Ltd. (“Global”). Global was a Nova Scotia company involved in the export and marketing of seafood to international markets. Global conducted business from August 2015 until the late spring of 2019. It was wound- up on December 31, 2019. [ 5 ] Mr. Wright lived in England when Global was in operation. Mr. Ratcliffe lived in both the United Kingdom and Nova Scotia. Mr.

Wright’s role was the Vice President of Finance. He is a chartered accountant. He managed cashflow, supplier and customer payments, payroll, financing, and debt management. Mr. Wright owned 35% of the shares of Global. Mr. Ratcliffe did business development, purchasing and operations management. He was also the President of Global. Mr. Ratcliffe was the primary contact for Global’s suppliers and customers, and he led the operational aspects of the business. Mr. Ratcliffe owned 45% of the shares. [ 6 ] Between them, Mr. Wright and Mr. Ratcliffe owned 80% of the shares of Global. Mr.

Reginald LeBlanc held the other 20% of the shares. He provided Global with start-up funding. There is a dispute as to whether it was to be repaid or was simply a payment for shares. Mr. LeBlanc attests in an affidavit that he provided Global with start-up financing on terms that he would receive an ownership stake in the company and that he would be repaid in full over time. He conveyed this expectation to both Mr. Ratcliffe and Mr. Wright. Through a personal company he initially advanced $175,000 and by May of 2018, Global owed him $224,980. On May 13, 2019, Global paid him back $75,000.

On May 17, 2019, Global paid him $100,000. The balance of $49,980 was paid to him by the Defendant, Victory Seafood Ltd., in October 2019.

[ 7 ] By early 2019, Global’s supplier and customer list had been narrowed to the point that a substantial part of the company’s business went through two entities: Captain’s Choice Lobster Ltd. (“Captain’s Choice”), the principal supplier, and First Catch Fisheries Ltd. (“First Catch”), the principal customer. Captain’s Choice is based in Lower West Pubnico and First Catch is based in Hunan, China. Mr. Wright and Mr.

Ratcliffe agreed that the business would continue trading with these key customers and suppliers until March 31, 2019 (the end of the fiscal year in the UK) and after that Global would be wound-up. [ 8 ] The parties dispute the reason they agreed to wind up Global. Mr. Wright says that in early 2019 Mr. Ratcliffe informed him that Dennis D’Entremont, the owner of Captain’s Choice, was no longer willing to trade through a broker (i.e. Global), and instead wanted to bring sales in-house...this meant that Captain’s Choice would no longer sell lobster to Global. Mr. Wright says that Mr. Ratcliffe told him that Mr.

D’Entremont wanted to offer the in-house broker position to him, but that Captain’s Choice would hire someone else if Mr. D’Entremont did not get an answer in a reasonable period of time. [ 9 ] Mr. Wright says that Mr. Ratcliffe explained the job offer to him in the following terms. Mr. Ratcliffe would be working directly with Captain’s Choice; he would be required to be on-site at Captain’s Choice’s location in Canada from time to time; and he would be paid a salary/commission capped at $100k per year. Mr.

Ratcliffe told him that as part of the employment offer from Captain’s Choice, any extra profits he earned for Captain’s Choice as their in-house broker would go toward repaying the outstanding accounts payable balance which Global owed Captain’s Choice. [ 10 ] Mr. Ratcliffe says that he and Mr. Wright discussed various possibilities for Mr. Ratcliffe to remain involved in the lobster industry with Captain’s Choice, but he denies having or telling Mr. Wright any of the detailed description of the job offer Mr. Wright describes. [ 11 ] Mr.

Ratcliffe says that the decision to wind up Global stemmed from financial pressures. He says that 2018 was a very difficult year financially for Global. Several Global customers failed to pay their invoices and Global had no means of collecting on the outstanding debts. [ 12 ] Without these funds, Global struggled to pay their suppliers, including Captain’s Choice. Mr.

Ratcliffe understood that in the Atlantic Canadian seafood and lobster industry, failing to pay suppliers is a sure way to undermine the trust that brokerage businesses such as theirs depend upon to secure a reliable supply of lobster. [ 13 ] This was the case with Captain’s Choice, who Global owed $164,639.39 (GBP) as of November 28, 2018. On several occasions throughout 2018, Mr. D’Entremont expressed to Mr. Ratcliffe his concerns about Global’s delay in making payments to Captain’s Choice. [ 14 ] Mr.

Ratcliffe says that while all this was occurring, Global was also experiencing new market pressures from Captain’s Choice relating to their favourable supply arrangement. Demand for live lobster was high in 2018. Other well-financed competitors were looking to secure the same supply as Global. Mr. D’Entremont spoke to Mr. Ratcliffe in 2018 about the pressure he was feeling to increase the margins that Captain’s Choice received on its lobster sales to J.A. Global Ltd. and Global, indicating that he could not continue to turn down additional profits from our competitors indefinitely. [ 15 ] Mr.

Ratcliffe says he and Mr. Wright spoke in late 2018 about the financial condition of the businesses and his ongoing discussions with Mr. D’Entremont. They agreed that there was no path to financial viability for the businesses, and that the best way forward would be to gradually wind-down the businesses while preserving the trade relationships that they could. They began taking steps to wind-up the businesses, in late 2018 and early 2019. This included staff layoffs. [ 16 ] Mr. Ratcliffe says that Captain’s Choice presented him with a take-it-or-leave-it proposal.

If he agreed to strike out on his own and assume responsibility for the trade debt owing to Captain’s Choice, they would continue to supply the businesses while they transitioned. However, they also advised that the favourable supply arrangement was over, and if Mr. Ratcliffe were to strike out on his own, he would have to pay the same prices as others in the market. Mr. Ratcliffe says that he told Mr. Wright in early 2019 about Captain’s Choice’s decision and the proposal presented to him. Mr. Ratcliffe told Mr. Wright that he saw no real option but to take it. He says that Mr.

Wright indicated that he agreed that Mr. Ratcliffe should accept the opportunity. [ 17 ] On February 15, 2019, Mr. Ratcliffe incorporated the Defendant, Victory Seafood Ltd. (“Victory”), under the laws of the United Kingdom. Victory commenced trading as of April 1, 2019, purchasing lobster only from Captain’s Choice. Mr. Ratcliffe says he informed Mr. Wright that he had incorporated Victory to pursue the opportunity with Captain’s Choice. Mr.

Wright denies this and says he learned of the incorporation in June 2019 through his own investigation after uncovering some email exchanges that mentioned Victory. [ 12 ] Before Global was wound-up, Mr. Ratcliffe arranged for $100,000 to be paid to Reginald LeBlanc, the 20% shareholder. Mr. Ratcliffe was the sole signatory on Global’s bank account. Mr. Wright says that he objected to the payment. Mr. Ratcliffe says that Mr. Wright expressly agreed to the payment. [ 18 ] On June 26, 2019, Mr. Wright sent Mr. Ratcliffe a text message in which he threatened legal action.

It read: I was devastated to discover in recent days, the betrayal, lies and deceit by your actions both personally and professionally as director of all of the companies in the global group. I have just uncovered plans dating back to January. I now know about Victory Seafoods being registered mid February. This also [led] to me finding out you are not working for Dennis as an employee or on behalf of the global group, but have indeed replicated the company we have built together since August 2015 and prior planning back to 2014.

Not only that, but you have moved over customer, supplier and freight forwarding accounts to your new company and even Aimee our logistics manager (whom you told me was retiring) and Leanne to replicate the finance system I initially built in Quickbooks. This is a clear breach of your fiduciary duty as a current director of these companies and an action that has been taken to avoid buying me out of the businesses. .... I have been under advisement to pursue legal damages in relation to the above in both the UK and Canada.

My preference would be to break ties and for me [to] take over full ownership of The Snapper Shack, JA Global and Elite Seafoods and I will relinquish my shareholding in Global Seafoods. I am also expecting a substantial financial settlement in addition to this, in relation to these matters.

If this will not be achievable between us, please let me know at the earliest opportunity, so future communication and proceedings can be taken by our individual legal council. [ 19 ] Mr. Ratcliffe and Mr. Wright met at the latter’s home the following day (June 27, 2019) to discuss the message. The meeting lasted several hours and was at times heated.

By the end of this meeting the two agreed to move forward and got along amicably in the months that followed. [ 20 ] Global surrendered its Certificate of Incorporation and was struck from the Registry of Joint Stock Companies on December 31, 2019. [ 21 ] On August 12, 2021, Mr. Wright commenced this proceeding by filing a Notice of Action and Statement of Claim. On February 7, 2022, Mr. Wright filed an Amended Notice of Action and Statement of Claim. The Amended Claim made two primary claims of liability against the Defendants. First, Mr. Wright alleges that Mr. Ratcliffe violated his fiduciary obligations by: (

a) Misrepresenting that Captain’s Choice would no longer sell lobster to Global; (

b) Misrepresenting that Mr. Ratcliffe had been offered and accepted an employment position with Captain’s Choice; and (

c) Misappropriating Global’s corporate opportunities and trade relationships with its suppliers, customers, service providers, and personnel. [ 22 ] The second claim concerns the $100,000 payment made to Mr. LeBlanc over Mr. Wright’s objections. [ 23 ] Mr. Wright alleges that Mr. Ratcliffe, as a director, officer, and shareholder of Global, had a fiduciary duty to Global and to Mr. Wright, as a shareholder and co-director, of Global. Mr. Wright alleges that Mr. Ratcliffe had a duty to spend his time fully for the benefit of Global and its shareholders and not for the benefit of other businesses including his own.

He had a duty to not convert or appropriate Global’s corporate opportunities for his own personal or corporate benefit. He had a duty of good faith and fidelity to Global and its shareholders. Mr. Ratcliffe had a duty to not misuse confidential or proprietary information of Global’s for his own personal or corporate benefit. He had a duty to not solicit Global’s customers or suppliers for his own benefit or that of his company, Victory. Finally, Mr. Wright says that Mr.

Ratcliffe had a duty to not unfairly prejudice or unfairly disregard the interests of any individual shareholder over those of any other individual shareholder. [ 24 ] Mr. Wright says that Mr. Ratcliffe breached those duties. He says that Mr. Ratcliffe either negligently or intentionally misrepresented that Captain’s Choice would no longer trade with Global. He misrepresented that he had been offered and had accepted a job with Captain’s Choice. Mr. Wright alleges that Mr.

Ratcliffe solicited and converted Global’s corporate opportunity, being its business with trading partners, Captain’s Choice and First Catch, and other customers and suppliers. [ 25 ] Mr. Wright also claims oppression under the Third

Schedule of the Companies Act , R.S.N.S. 1989, c.81 , as amended. He says that Mr. Ratcliffe exercised his power as a director and officer of Global in a manner that was oppressive and unfairly prejudiced and unfairly disregarded the interests of Mr. Wright. [ 26 ] Mr. Wright alleges that Mr. Ratcliffe’s misconduct caused him loss by the unnecessary winding-up of Global and the consequent damage to the value of his shares. He says that by misappropriating Global’s corporate opportunities and moving them to Victory, Global lost revenue and profits. And he says that by the oppressive conduct Mr.

Wright suffered loss. [ 27 ] In their Statement of Defence filed September 23, 2022, the Defendants pleaded and relied upon the LAA and stated that Mr. Wright’s claims are statute barred. Law [ 28 ] The parties agree on the applicable legal principles.

Summary judgment on evidence is codified in Nova Scotia Civil Procedure Rule 13.04. The test applicable to a motion brought under Rule 13.04 was articulated by Justice Fichaud in Shannex v. Dora Construction Ltd ., 2016 NSCA 89 . The test was recently affirmed in Risley v. MacDonald , 2022 NSCA 76 . The moving party must demonstrate that there is no genuine issue of material fact requiring trial. [ 29 ] A bald or bare denial of material fact in an affidavit will not be sufficient to establish the existence of a “genuine” issue of material fact absent detailed facts and supporting evidence ( Risley , paras. 69-70 ). Parties to a

summary judgment motion are expected to put their “best foot forward” with evidence and legal submissions on each substantive matter in issue in the

summary judgment motion. ( Shannex , para. 36 ). [ 30 ] When a

summary judgment motion is brought on the basis of an expired limitation period, the Plaintiff will have the burden of proving that the pleading was brought within the limitation period ( Section 9(1) of the LAA ). [ 31 ] The Nova Scotia Court of Appeal in Nova Scotia Home for Coloured Children v. Milbury , 2007 NSCA 52 , (hereinafter “ Milbury ”) described the approach to

summary judgment on the evidence in the context of a limitations defence at paras. 20 and 23-24: [20] Did the defendants establish that there are no genuine issues of fact on the question of whether the plaintiff's action is statute barred because the limitation period has expired? … … [23] When the defendant pleads a limitation period and proves the facts supporting the expiry of the time period, the plaintiff has the burden of proving that the time has not expired as a result, for example, of the discoverability rule … [24] In the context of a

summary judgment application where a limitation defence is pleaded, the defendant applicant must first

establish that there is no genuine issue of fact for trial . In this case the defendants have established that the statutory limitation period has long expired. Unless the discoverability principle applies, the defendants satisfied the first part of the

summary judgment test on the facts alleged by the plaintiff, that is, that the wrongs were committed at the latest in 1947, and that the longest limitation period, six years, expired in 1972, six years after the plaintiff reached the age of majority in 1966.

Since the defendants have met the initial threshold, the plaintiff has to demonstrate that there is a real chance of success by presenting evidence that the limitation period has not expired, because of the discoverability principle . [Emphasis added] [ 32 ] Milbury has been consistently adopted in subsequent cases as properly describing how the Shannex framework should be applied to a limitations defence: Jesty v. Vincent A. Gillis Inc ., 2019 NSSC 320 , paras. 23-24 ; Cochrane v.

HFX Broadcasting, et al. , 2021 NSSC 341 , paras. 33-34 ; Halef v. 3104457 US Investments Inc. , 2023 NSSC 65 , para. 35 . [ 33 ] The motions judge cannot weigh evidence or make determinations of credibility. Hatch Ltd. v. Atlantic Sub-Sea Construction and Consulting Inc ., 2017 NSCA 61 (paras. 23-25 ). [ 34 ] Accordingly, in this motion, the only material facts are those relating to whether the limitation period under the LAA had expired by the time that this action was commenced on August 12, 2021. [ 35 ] Section 8(1) (

a) of the LAA sets a basic limitation period of two years from the date a claim is “discovered”. Subsection 2 defines when a claim is “discovered”:

(2) A claim is discovered on the day on which the claimant first knew or ought reasonably to have known (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage was caused by or contributed to by

an act or omission; (

c) that the act or omission was that of the defendant; and (

d) that the injury, loss or damage is sufficiently serious to warrant a proceeding. [ 36 ] A claim will be “discovered” on the date that the material facts on which it is based have been discovered or ought to have been discovered by the exercise of reasonable diligence ( s. 8(2) of the LAA ). In Grant Thornton LLP v. New Brunswick , 2021 SCC 31 , the Supreme Court of Canada described the requisite degree of knowledge required for a claim to be discovered:

(2) The Requisite Degree of Knowledge 41 As noted, the Court of Appeal disagreed with the motions judge on the extent of knowledge required to discover a claim under s. 5. The motions judge held that a plaintiff needs to know only enough facts to have prima facie grounds to infer the existence of a potential claim. The Court of Appeal, on the other hand, held that discovery of a claim requires actual or constructive knowledge of facts that confer a legally enforceable right to a judicial remedy, which includes knowledge of every constituent element of the cause of action being pled. Thus, on the Court of Appeal’s

interpretation, in addition to knowledge of a loss and causation, a claim in negligence would include knowledge of a duty of care as well as knowledge of a breach of the standard of care. 42 In my respectful view, neither approach accurately describes the degree of knowledge required under s. 5(2) to discover a claim and trigger the limitation period in s. 5(1)(a). I propose the following approach instead: a claim is discovered when a plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s

part can be drawn . This approach, in my view, remains faithful to the common law rule of discoverability set out in Rafuse and accords with s. 5 of the LAA . 43 By way of explanation, the material facts that must be actually or constructively known are generally set out in the limitation statute. … 44 In assessing the plaintiff’s state of knowledge, both direct and circumstantial evidence can be used. Moreover, a plaintiff will have constructive knowledge when the evidence shows that the plaintiff ought to have discovered the material facts by exercising reasonable diligence.

Suspicion may trigger that exercise … 45 Finally, the governing standard requires the plaintiff to be able to draw a plausible inference of liability on the part of the defendant from the material facts that are actually or constructively known.

In this particular context, determining whether a plausible inference of liability can be drawn from the material facts that are known is the same assessment as determining whether a plaintiff “had all of the material facts necessary to determine that [it] had prima facie grounds for inferring [liability on the part of the defendant]” … 46 The plausible inference of liability requirement ensures that the degree of knowledge needed to discover a claim is more than mere suspicion or speculation.

This accords with the principles underlying the discoverability rule, which recognize that it is unfair to deprive a plaintiff from bringing a claim before it can reasonably be expected to know the claim exists.

At the same time, requiring a plausible inference of liability ensures the standard does not rise so high as to require certainty of liability … Indeed, it is well established that a plaintiff does not need to know the exact extent or type of harm it has suffered, or the precise cause of its injury, in order for a limitation period to run … [Emphasis added] Analysis [ 37 ] I find that the following undisputed material facts are sufficient to determine that the claims of misrepresentation and

misappropriation occurred more than two years before the action was commenced: a. Mr. Ratcliffe and Mr. Wright were, since 2015, officers, directors, and shareholders with Global. b. Mr. Ratcliffe and Mr. Wright discussed the decision by Captain’s Choice to cease supplying lobster to Global by no later than February of 2019. c. Mr. Ratcliffe and Mr. Wright discussed Mr. Ratcliffe’s intention to continue working with Captain’s Choice by no later than February of 2019. d. Mr. Ratcliffe and Mr. Wright agreed to wind-down Global by at least the early months of 2019. e. Mr.

Ratcliffe incorporated Victory on February 15, 2019. f. Global ceased trading as of March 31, 2019. g. Victory commenced trading as of April 1, 2019, purchasing lobster from Captain’s Choice. h. Some of the international customers Victory sold to from April 2019 onwards had been customers of Global, including First Catch. i. Victory used the same freight forwarding companies as Global. j. Mr. Ratcliffe was never employed by Captain’s Choice. k. Mr. Wright wrote to Mr. Ratcliffe via text message on June 26, 2019. The message confirms: l. Mr. Wright’s awareness of Victory and its incorporation by Mr.

Ratcliffe in February of 2019. m. Mr. Wright’s awareness that Victory had “replicated” the business he and Mr. Ratcliffe had started, by misappropriating its customers, suppliers, freight forwarding accounts, and personnel. n. Mr. Wright’s awareness that Mr. Ratcliffe was not in an employment relationship with Captain’s Choice (i.e., Dennis D’Entremont), and that Mr. Ratcliffe had misrepresented this to him. o. That Mr. Wright inferred that Mr. Ratcliffe was legally liable for these actions by having breached his fiduciary obligations. p. Mr. Ratcliffe responded to Mr.

Wright’s message at the time and the two discussed the message in-person the following day (June 27, 2019). q. Mr. Wright pleads at paras. 19 and 21 of his Amended Claim that Mr. Ratcliffe made each of his alleged misrepresentations by February of 2019, more than two years prior to the action being filed. r.

Further, the undisputed material facts indicate that Victory started purchasing lobster from Captain’s Choice, selling to some of the same international customers who purchased from Global, and using the same freight forwarding company as Global by April of 2019. [ 38 ] With regard to the determination that the allegation that Mr. Ratcliffe arranged for a $100,000 payment to Mr. LeBlanc despite Mr. Wright’s objections occurred more than two years before the action was commenced, the following are the undisputed material facts: a. Mr. Wright is an accountant by trade. b. Mr.

Wright was Vice President of Finance for Global and JAG, responsible for all matters financial, including cashflow, financing, and debts. c. Mr. Wright was aware that Mr. LeBlanc provided funding to the business in 2015 and received an ownership stake. d. Mr. Wright advised Mr. Ratcliffe on November 28, 2018, of their obligation to pay Mr. LeBlanc the $100,000, stating in his email to Mr. Ratcliffe “we also owe Reg $100k still”. e. In Mr. Wright’s Answer to Demand for Particulars, he pleaded that he expressed to Mr. Ratcliffe his objections to Mr. LeBlanc’s $100,000 payment in April of 2019. f.

On May 2, 2019, Mr. Ratcliffe asked Mr. Wright if they could make payment to Mr. LeBlanc. Mr. Wright responded: Yeah. Can send some today, so can wire him the $100k share repayment and then the other $100k next week once we put the money in? g. On May 7, 2019, Mr. Ratcliffe asked Mr. Wright “The money in [Global’s bank account]. Can I transfer $100k of it to my personal and pay Reg?”. Mr. Wright responded, “Yeah”. h. On May 10, 2019, Mr. Ratcliffe asked Mr. Wright “When can we do the rest of Reg’s money?”. Mr. Wright responded: Once we paid the money into JA and then use Ross I guess to bang it into CAD to GSL.

Guess that would take a few days, but I have the

money ready, so can do Monday and [he] should have next week? i. $75,000 was transferred from Global to Mr. LeBlanc’s company Reg LeBlanc Holdings Ltd. on May 13, 2019. j. Mr. Ratcliffe then wrote to Mr. Wright on May 13, 2019, looking to confirm when the further payment to Mr. LeBlanc could be made, suggesting that the funds could be exchanged to Canadian currency and available by Wednesday, May 15, 2019. Mr. Wright responded in the affirmative with a thumbs-up emoji. k. Mr. Ratcliffe followed-up with Mr. Wright by text on May 14, 2019, to confirm whether Mr. Wright had sent the funds to Global’s account. Mr.

Ratcliffe broke down how the $117,000 was to be allocated, indicating that $100,000 was for Mr. LeBlanc. He asked Mr. Wright whether that was correct. Mr. Wright responded, “Yep correct!”. l. Payment of the $100,000 from Global to Reg LeBlanc Holdings Ltd. was completed on May 17, 2019. m. In Mr. Wright’s Answer to Demand for Particulars he stated that he expressed to Mr. Ratcliffe his objections to Mr. LeBlanc’s $100,000 payment in April of 2019.

This is well outside the two-year limitation period. [ 39 ] I find that the Defendants have established that there are no genuine issues of fact on the question of whether the Plaintiff’s action is statute barred because the limitation period has expired. The alleged misrepresentations that form the basis of the Plaintiff’s claim were made between January and June 2019. The disputed payment of the $100,000 was made in April 2019.

On their face, these claims arose long before August 21, 2019, and therefore the Notice of Action filed August 21, 2019, was time barred, subject to the Plaintiff establishing that the time did not expire based on the argument of discoverability. [ 40 ] Mr. Wright attests in his affidavit, at paras. 42-56: a. In June 2019 Wright began having suspicions about the truth of Ratcliffe’s working relationship with Captain’s Choice when he noticed Mr. Ratcliffe was not working in Canada as he said he would be. b. Mr. Wright then stumbled across some emails of Mr.

Ratcliffe’s which mentioned the name Victory Seafoods and involved previous business relationships of Global’s. c. Mr. Wright then discovered Victory’s incorporation from an online search of the UK database. d. Mr. Wright sent the June 26, 2019, text. e. The parties met on June 27, 2019 to discuss Mr. Wright’s text, and Mr. Ratcliffe explained the situation to Mr. Wright: Mr. Ratcliffe was working directly for Captain’s Choice under the same terms he had outlined for Mr. Wright back in early 2019; Victory was incorporated in the UK for borrowing and tax purposes and as a flow-through for Mr.

Ratcliffe’s commission earnings; Global’s former employee, Aimee, was working part-time helping with Captain’s Choice’s logistics; and Mr. Ratcliffe’s spouse was on Victory’s payroll for income-splitting purposes. [ 41 ] Mr. Wright says that Mr. Ratcliffe’s explanations regarding his relationship with Captain’s Choice mirrored what Mr. Wright had been told months before in early 2019, when Mr. Ratcliffe told him that Captain’s Choice would no longer be selling lobster to Global and that Dennis had made Mr. Ratcliffe an offer he was going to accept. And the role of Victory as a flow-through made sense to Mr.

Wright. In the result, Mr. Wright trusted his best friend, his suspicions were allayed, and he advised that no legal action would be taken. [ 42 ] It was not until some months after Victory filed its publicly available year-end accounts in September 2020 which Mr. Wright viewed, that he realized Victory was a full-fledged broker and not a flow-through vehicle for commission earnings. [ 43 ] Mr. Wright submits that virtually every fact material to the Plaintiff’s claims is in dispute, and that those disputes can only be resolved at trial where credibility can be assessed, and evidence weighed. [ 44 ] Mr.

Wright’s text to Mr. Ratcliffe of June 26, 2019, was mere suspicion and speculation. Mr. Wright had no idea whether the allegations he made had any truth to them, and Mr. Ratcliffe immediately assured his best friend of 25+ years that he was ‘way off- base’…so they met to discuss things. [ 45 ] Mr. Wright’s suspicions, aroused by the emails he found and the incorporation of Victory he discovered, caused him to exercise reasonable diligence: he confronted his best friend with his suspicions and sought answers that would either allay his concerns, or confirm them. [ 46 ] As Mr.

Ratcliffe notes in his affidavit the friends talked for “several hours”, during which Mr. Wright sought answers to a number of pointed questions, each of which Mr. Ratcliffe answered, satisfying Mr. Wright that Mr. Ratcliffe’s relationship with Captain’s Choice was exactly as he had described it back in early 2019 when the friends made the decision to wind-up Global. Mr. Ratcliffe was working directly for Captain’s Choice on commission, and Victory was just a flow-through to help him split his income with his spouse. [ 47 ] As a result of several hours of due diligence, Mr.

Wright’s state of knowledge was such that the speculation he had engaged in resulting from his suspicions, was indeed “well off” as Mr. Ratcliffe had said it was, and therefore Mr. Wright told his friend that his threats of June 26 would not be pursued. [ 48 ] At the conclusion of the parties’ discussion on June 27, 2019, Mr. Wright did not have “knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s

part can be drawn” – Mr. Wright’s best friend of 25+ years had put his suspicions to rest.

[ 49 ] It would not be until the late fall of 2020 – “some months” after Victory had filed its public accounts in the UK – when Mr. Wright reviewed Victory’s accounts that he learned (or believed he had learned) the assurance and explanations Mr. Ratcliffe had given him in June 2019 were in fact false, and that Victory was a full-fledged brokerage trading significant amounts of lobster with Captain’s Choice, just as Global had been. [ 50 ] Mr. Wright only discovered the requisite knowledge from which he could plausibly infer that he had a claim against Mr.

Ratcliffe and Victory some months after September 2020, and he filed his Action on August 12, 2021, well within the two-year limitation period. [ 51 ] Mr. Ratcliffe argues, “Mr. Wright pleads at paras. 19 and 21 of his Amended Claim that Mr. Ratcliffe made each of his alleged misrepresentations by February of 2019, more than two years prior to the action being filed”: Mr. Wright is correct that was when the representations were initially made, further, those same representations were made once more on June 27, 2019, but Mr.

Wright did not discover these representations were false until the fall of 2020. [ 52 ] As to the allegation respecting the payment of $100,000 to Mr. LeBlanc, Mr. Wright says there is no ‘stand-alone’ claim against Mr. Ratcliffe for making the $100k payment to Mr. LeBlanc; the fact that Mr. LeBlanc had his investment returned to him (a fact Mr.

Ratcliffe disputes, as he says it was repayment of a loan) is material to the oppression claim, but that claim (i.e. the misrepresentations, misappropriation, and damages flowing therefrom) was only discovered in the fall of 2020. [ 53 ] In my view, the determination of the issue of whether the claims were discoverable rests on the analysis of the text message sent by Mr. Wright to Mr. Ratcliffe on June 26, 2019. There is no genuine issue of fact in relation to that text message. The plain text of the message discloses that Mr. Wright believes that he has information that Mr.

Ratcliffe has betrayed him, lied to him, and deceived him “both personally and professionally as a director of all the companies in the Global group”. He states he is aware of the registration of Victory and, as a result, knows that Mr. Ratcliffe is not an employee of Captain’s Choice as he claims to have been told by Mr. Ratcliffe (although Mr. Ratcliffe denies having said so). Mr. Wright says he is aware that Mr. Ratcliffe has replicated the company they built together (Global) and moved customer, supplier, and freight forwarding accounts to the new company.

He calls all of this “a clear breach of your fiduciary duty” and an action taken to avoid having to buy Mr. Wright out of the business. He says that he has been “under advisement to pursue legal damages in both the UK and Canada” and puts forward that he will be seeking a transfer to make him sole owner of various businesses in addition to a substantial financial settlement. [ 54 ] Mr. Wright, faced with the evidence of this text, now seeks to characterize it as “mere suspicion and speculation” and asserts that he has no idea whether the allegations had any truth to them. However, his affidavit did not say this.

Rather, it says that he sent the message because of his frustration and doubt regarding the situation. [ 55 ] It is not disputed that Mr. Wright sent the text message to Mr. Ratcliffe on June 26, 2019. That message reveals sufficient knowledge, actual or constructive, of the material facts upon which a plausible inference of liability can be drawn. I conclude the claim was discovered as of that date. Mr. Wright’s degree of knowledge went well beyond suspicion or speculation.

On his own evidence, it was his suspicion that led him to exercise due diligence and investigate the emails he uncovered and then inquire into the incorporation details of Victory. Having made these inquiries, his suspicion translated to sufficient knowledge from which a plausible inference of liability can be drawn. The tone and words of the text message clearly suggest that he received “advisement” and he clearly articulated the basis for legal liability and damages. The law does not require certainty of liability in order to “discover” a claim. [ 56 ] In essence, Mr.

Wright alleges that he was again misled by Mr. Ratcliffe when they met on June 27, 2019. He says that his friend had put his suspicions to rest. He agrees that the original representations were made in February 2019 but were repeated at the June 27, 2019, meeting and accepted by him until he purportedly later “discovered” them to be false in the fall of 2020. [ 57 ] In oral argument, Mr. Wright advanced for the first time the submission that Mr. Ratcliffe was estopped from relying on the limitation defence by his further representations at the June 27, 2019, meeting. Mr.

Wright gave me no authority to support the argument that a repeated misrepresentation, accepted as true a second time, can defer the timing of discovery as defined in the authorities. The time limitation is a creation of statute. There is no provision in the statute that allows for the limitation period to be waived by estoppel.

Section 17 of the LAA is clear that concealment is only relevant with respect to the ultimate limitation period under s. 8(2) (

b) and not the basic limitation period of s.8(2) (a). [ 58 ]

Section 20 of the LAA deals with acknowledgments and provides for the re-commencement of the limitation period at the time of the acknowledgement. However, there is no evidence or allegation that Mr. Ratcliffe made any acknowledgment as defined by the LAA at the June 27, 2019, meeting. [ 59 ] Further, there is no evidence or allegation that Mr. Ratcliffe represented at the June 27, 2019, meeting that he was waiving any limitation period or that both parties were operating with a common, mistaken view as to when the limitation period would expire. See Ryan v. Moore , 2005 SCC 38 . [ 60 ] Mr.

Wright has referred to the decision of Justice Jamie Campbell who heard and dismissed a motion by Mr. Ratcliffe for

summary judgment on pleadings in this matter (reported: 2022 NSSC 128 ). In his decision, Justice Campbell considered Mr. Ratcliffe’s argument that the amended Notice of Action to add a claim for oppression under the Companies Act was statute barred under the LAA . Justice Campbell found that the amended claim, to add the allegation of oppression, was related to the conduct, transaction, or events described in the original pleadings and was therefore permitted by s.22 of the LAA .

It was in this context that he found that the oppression claim was “not out of time”. [ 61 ] Justice Campbell did not consider the issue of limitation argued before me on this motion. Conclusion [ 62 ] In conclusion, I find that Mr. Wright “discovered” the claim for the purposes of s.8 of the LAA no later than June 26, 2019, and as such his claims against the Defendants are statute barred.

[ 63 ] The claims of the Plaintiff against the Defendants are therefore dismissed. [ 64 ] I direct Mr. Green to prepare an Order for consent as to form with costs to be agreed to or taxed. [ 65 ] If the parties cannot agree on costs, I will accept written submissions to be filed within 30 calendar days of this decision. Norton, J.