COURT OF QUEEN S BENCH OF MANITOBA

Transcription

1 Date: Docket: CI CI (Winnipeg Centre) Indexed as: Outland Camps Inc. v. M&L General Contracting Ltd. et al. Cited as: 2018 MBQB 112 COURT OF QUEEN S BENCH OF MANITOBA BETWEEN: ) APPEARANCES: ) OUTLAND CAMPS INC., ) Jason Kendall and Applicant, ) Amanda Verhaeghe - and - ) for Sigfusson Northern Ltd. ) M&L GENERAL CONTRACTING LTD., ) Joseph Pollock ARCWELD INDUSTRIES INC. AND ) for Outland Camps Inc. SIGFUSSON NORTHERN LTD., ) Respondents, ) Thomas Turner ) for Ernst & Young Inc. AND BETWEEN: ) as court appointed Receiver ) of M&L General Contracting SIGFUSSON NORTHERN LTD., ) Ltd. Plaintiff, ) - and - ) ) OUTLAND CAMPS INC., ) Defendant. ) Judgment delivered: ) July 5, 2018 EDMOND J. Introduction [1] There are two motions before the court. The applicant, Outland Camps Inc. ( OCI ), in Queen s Bench file no. CI seeks an order that the balance of funds paid into court pursuant to a previous order of this court made January 31, 2014, together with all accrued interest be paid out to OCI. In a separate proceeding (Queen s

2 Page: 2 Bench File No. CI ) OCI seeks summary judgment dismissing Sigfusson Northern Ltd. s ( SNL ), claim against OCI. SNL s claim alleges that OCI intentionally, wrongfully and maliciously conspired with M&L General Contracting Ltd. ( M&L ), to interfere with the legal relationship between SNL and M&L and to injure SNL. Further, SNL alleges that between October 25, 2013 and November 1, 2013, OCI wrongfully and maliciously induced M&L to breach its subcontract with SNL without notice to SNL. [2] Further, M&L alleges that OCI entered into a Settlement Agreement with M&L dated November 1, 2013 ( Settlement Agreement ) which resulted in a significant shortfall in payment by M&L to SNL and by reason of that conduct, SNL alleges that OCI is liable to it for tortious interference with contractual relations between SNL and M&L. [3] SNL submits that OCI was unjustly enriched through the work and efforts of SNL as a subcontractor on the construction project known as Bipole III Keewatinoow Convertor Station Construction Camp (the Project ), and SNL has suffered a deprivation and there is no juristic reason justifying the benefit to OCI. SNL further submits that it is entitled to aggravated and/or punitive damages and costs on a lawyer and own client basis. [4] Both motions are related and therefore will be addressed in these reasons for decision. [5] Just by way of background, some of the issues relevant to the present motions have already been dealt with in previous applications and motions made before this court. [6] Each of these proceedings relates to work and services performed and materials supplied on the Project. OCI was the general contractor on the Project. SNL was a

3 Page: 3 subcontractor of M&L and it is not disputed that SNL performed work and services and supplied materials pursuant to its subcontract with M&L (the SNL Subcontract ) and was not paid all amounts justly due and owing to it by M&L. SNL served Manitoba Hydro with two notices of claim for lien, one dated December 12, 2013, claiming the amount of $1,368, and one dated December 18, 2013, claiming the sum of $125, Facts [7] OCI entered into a general contract with Manitoba Hydro dated February 22, 2013, (the General Contract ) for performance of certain work for the design, supply and installation required for the Project. [8] M&L was the subcontractor of OCI pursuant to a contract dated March 1, 2013, as amended from time to time (the M&L Subcontract ). [9] It is not disputed that on November 1, 2013, OCI and M&L entered into the Settlement Agreement, in which the parties agreed, among other things, to terminate the M&L Subcontract effective October 25, It was agreed that all work provided by M&L and its subcontractors on the Project would cease as of October 25, It is not disputed that SNL did not receive a copy of the Settlement Agreement until after OCI s application was filed on January 20, [10] On October 17, 2013, SNL received a wire transfer from OCI in the amount of $100,000. Although OCI had no direct contractual relationship with SNL, M&L authorized payments directly from OCI to its subcontractors including SNL. [11] On October 21, 2013, OCI requested from SNL and received a statement of M&L s accounts owing to SNL.

4 Page: 4 [12] By October 23, 2013, M&L s trailer, located directly beside the trailer of SNL at the Project work site was cleared out of material belonging to M&L and the trailer was no longer used on the Project. Two semi-trailers of M&L equipment was loaded up. Almost all of M&L s personnel departed from the work site. The site supervisor employed with SNL assisted M&L in removing equipment from the work site. [13] On October 25, 2013, SNL offered to purchase M&L s office complex or trailer located at the Project work site. [14] The evidence filed by Arcweld Industries Inc. ( Arcweld ) establishes that its contract for work with M&L was terminated no later than October 25, On or about October 25, 2013, Arcweld entered into a subcontract with OCI to provide the same services it had been providing to M&L. [15] M&L, including its personnel and equipment had completely departed from the Project work site by no later than October 25, [16] s were exchanged between OCI and SNL on November 4, The first was from OCI to the principal of SNL at 12:58 p.m., and reads as follows: Dear Warren, Please accept this as a notice of payment of $320, for work done by, for M&L Contracting prior to October 21, Outland received permission from M&L to make this payment directly to you. Payment will be processed in the next few days. M&L's work with sub-contractors on site at Keewatinoow was terminated as of Sunday, October 20, Outland does not accept any responsibility for payment for work done by M&L Subcontractors up to this date. Outland will be responsible for the work done by subcontractors that Outland has engaged under new agreements from Monday, October 21, 2013 onwards. For any outstanding payment issues prior to the 21st, please contact M&L General Contracting directly. Could you please copy your accounting department.

5 Page: 5 Outland looks forward to a positive relationship with your company during the remainder of the Keewatinoow Project. Regards, Kurt [17] On November 4, 2013 at 5:16 p.m. Mr. Sigfusson of SNL responded to OCI: Good Afternoon Kurt I will cc Greg Harris our CFO in this . So help me understand. Outland is assuming M&L's contract with us? [18] OCI responded on the same day although the timing is a bit unusual. It looks to be explainable by virtue of the time change, but in any event, the response is provided to Mr. Sigfusson on that day and the heading subject is Notice of Payment." His response states: Hi Warren No, Outland is not assuming the contractor or any liability from M&L. All works in forward is under direct contract with Outland. We were able to negotiate a Direction of Payment from M&L in order to put funds in your hands rather than pay M&L. If there is any further balance from work contracted with M&L, you should deal with them directly. Outland has done what it could to help clear up any balance for you. Please call cell if you would like to discuss Kurt [19] In accordance with the terms of the Settlement Agreement and the above mentioned s, OCI paid SNL, on behalf of M&L, the sum of $320,

6 Page: 6 [20] On January 31, 2014, Kaufman J. granted an order whereby OCI paid into court the sum of $1,810, (the Fund ), and notices of claim for liens served on Manitoba Hydro by M&L, Arcweld and SNL were vacated. [21] Of the Fund paid into court, $452, represented 7.5% of the total amount owing by OCI to M&L (the Holdback ) pursuant to the M&L Subcontract referenced in paragraph 8 of the Settlement Agreement. [22] $400,000 of the Fund represented the Remediation Holdback (defined in paragraph 14 of the Settlement Agreement), which was agreed to by OCI and M&L to cover work to repair water damage and/or mold remediation in certain dorms installed by M&L pursuant to its subcontract. [23] On August 27, 2014, I granted an order appointing Ernst & Young Inc. as Receiver and manager (the Receiver ) of all the assets, undertakings and properties of M&L. [24] By order granted March 25, 2015, the court, among other things, approved a Trust Claims Process attached to the order and as referred to in the Receiver s first report. [25] On March 24, 2017, this court heard submissions from the parties dealing with two issues: i) The validity of the notices of claim for lien served by SNL; ii) The amount to be paid out of court from the Fund to satisfy valid notices of claim for lien. After reviewing the affidavit evidence, cross-examination transcripts and hearing submissions from the parties, the court granted the following orders:

7 Page: 7 a) The notices of claim for lien of SNL dated December 12, 2013 and December 18, 2013, were declared invalid as not having been prepared, executed and served within the timeframe required pursuant to The Builders Liens Act, C.C.S.M. c. B91 (the Act ); b) The notice of claim for lien served by Arcweld was declared valid and the sum of $207, plus pro rata portion of interest accrued thereon be paid out of the Fund in satisfaction of Arcweld s lien; c) The sum of $245, plus a pro rata portion of interest accrued thereon on account of the Holdback, be paid to counsel for the Receiver; d) The sum of $356, plus a pro rata portion of the interest accrued thereon on account of the Remediation Holdback, be paid out of the Fund to counsel for the Receiver; e) The sum of $43, plus a pro rata portion of the interest accrued thereon be paid out to counsel for OCI; f) The orders sought by SNL relating to the Holdback and the Remediation Holdback were dismissed. [26] A further hearing was held on May 4, 2017, and following that hearing, I issued an endorsement and made the following findings and/or orders: a) OCI entered into the General Contract with Manitoba Hydro dated February 22, 2013, for performance of certain work for the design, supply and installation of the Project;

8 Page: 8 b) M&L was the subcontractor of OCI pursuant to the M&L Subcontract; c) OCI and M&L mutually agreed to terminate the M&L Subcontract effective October 25, 2013, and entered into a Settlement Agreement, dated November 1, 2013 (see Exhibit A to the affidavit of Simon Landy sworn January 16, 2014); d) M&L and OCI agreed that the total amount due and owing to M&L by OCI was $6,035,532.55; e) The Holdback representing 7½% of the total amount owing on the Subcontract is $452,664.95; f) The parties agreed to authorize and direct OCI to pay certain amounts directly to M&L Subcontractors including SNL. M&L and OCI agreed to maintain a further sum of $400,000 ( Remediation Holdback ), which was required to cover work to repair any water damage and/or mold remediation in certain dorms installed by M&L. The parties agreed to a process in which claims would be made to the insurers respecting the remediation work and to maximize any recovery from the insurers. M&L agreed to pay from the Remediation Holdback an amount equal to 50% of the deductible amounts for such insurance; g) On March 24, 2017, this court ordered the sum of $207, together with a pro rata portion of any interest accrued thereon be paid to Arcweld in satisfaction of its notice of claim for lien dated November 14, 2013;

9 Page: 9 h) The balance of the Holdback amount of $245, plus any interest accrued thereon, is payable to M&L and should be paid to the Receiver and held in trust to be paid out on a pro rata basis to valid trust claimants. The Receiver has established a protocol and process for asserting any trust claim to funds of M&L and SNL, like other trust claimants, has an interest in the Holdback and all funds owing to M&L pursuant to the M&L Subcontract; i) The Remediation Holdback was negotiated by OCI and M&L in good faith to address water damage and/or mold remediation that developed in two dorms installed by M&L. The evidence establishes that the claim with the insurer was finalized and the uninsured portion of the claim was $77, Subject to OCI providing an affidavit proving the amounts set forth in paragraph 18 of the motion brief of OCI filed April 24, 2017, I agree with the apportionment submitted by OCI and M&L s Receiver respecting the Remediation Holdback; j) All parties agree that sums received by OCI as general contractor pursuant to the General Contract, constitute a trust fund for the benefit of all persons referenced in s. 4(1) of the Act. Similarly, all sums received by M&L on account of its subcontract with OCI constitute a trust fund for the benefit of those persons referenced in s. 4(2) of the Act; k) OCI does not dispute that the balance of the Holdback are trust funds and must be dealt with in accordance with the duties imposed on OCI by s. 4(3)

10 Page: 10 of the Act. Similarly, M&L must deal with funds it receives in accordance with the duties imposed on M&L pursuant to s. 4(4) of the Act; l) Since OCI does not dispute that the balance of the Holdback of $245, plus any accrued interest thereon, and $356, of the Remediation Holdback plus any accrued interest thereon are trust funds payable by it to M&L, those amounts should be paid to the Receiver and paid out to all parties that have valid trust claims pursuant to a further court order in the M&L receivership proceeding; m) SNL has a valid trust claim, but its claim does not rank in priority of other trust claims; n) I agreed that $43, plus accrued interest thereon was a portion of the Remediation Holdback that is payable to OCI and therefore is not trust funds. Those funds are not owing to M&L and therefore are payable to OCI pursuant to the terms of the Settlement Agreement; o) Submissions were only made regarding the Holdback and the Remediation Holdback. The balance of the funds held in court were ordered to remain to the credit of this action subject to agreement of the parties respecting the payment out of those funds or a further order of this court. Any further motion for payment out was to be returnable before me. [27] On May 4, 2017, I gave oral reasons for decision respecting SNL s claim that s. 12 of the Act applied to the facts of this case. I specifically found that s. 12 of the Act was not intended to deal with the circumstances of this case and dismissed SNL s claim that

11 Page: 11 the Settlement Agreement was a device intended to defeat, defraud and have the effect of impairing SNL s lien rights and/or trust claim under the Act. I held that the Settlement Agreement was negotiated in good faith by the parties to terminate a contractual relationship because it was clear that M&L was suffering financial difficulties and was unable to complete its subcontract. The Settlement Agreement did not act to defeat or impair SNL s lien or trust claim. The lien claim existed subject to SNL perfecting the claims for lien within the timeframe required under the Act. Regrettably, SNL s notices of claim for lien were served out of time as detailed in the reasons delivered on March 24, The trust claim was not defeated or impaired by the terms of the Settlement Agreement. [28] The present OCI motion seeks an order that the balance of the Fund be paid to OCI on the following bases: a) Pursuant to paragraph 17 of the Settlement Agreement, OCI agreed that it would take reasonable steps to obtain additional funds from the owner with respect to the works carried out by M&L in connection with the Project, and that OCI would account to M&L for all additional funds received by OCI from the owner, above the Total Amount (as that term is defined in the Settlement Agreement), and promptly make payment to M&L following receipt of such funds; b) OCI took reasonable steps to obtain additional funds from the owner with respect to the works carried out by M&L, but OCI did not receive from the owner any additional funds above the Total Amount and

12 Page: 12 accordingly, there are no further payments to be made by OCI to M&L/the Receiver; c) The balance of the funds paid into court pursuant to the Kaufman J. order did not form part of the Holdback or Remediation Holdback; d) The balance of the funds paid into court pursuant to the Kaufman J. order are not sums due or to become due to M&L/the Receiver; and e) M&L has been paid all amounts owing to it by OCI. [29] SNL submits that OCI s motion for payment out of the balance of the Fund is premature and there is insufficient evidential record to make a determination at this time. Further, SNL submits that it has a valid trust claim, advances a claim against the Fund and says that until a full and detailed accounting is provided, the Fund should remain in court. [30] In accordance with the Trust Claims Process, the Receiver prepared an interim statement of receipts and disbursements which was approved pursuant to court order dated January 29, The Receiver was authorized and directed to make the distributions to trust claimants as set forth in paragraphs 81 and 82 of the Receiver s second report. [31] The Receiver is not advancing a claim against the balance of the Fund and took no position respecting OCI s motion. Analysis Motion for Payment Out

13 Page: 13 [32] OCI seeks payment out of court of the balance of the Fund on the basis that there is no further amount due and owing to M&L. [33] The trust provisions of the Act provide: Receipts of contractor constitute trust fund 4(1) All sums, including any interest on the holdback, received by a contractor on account of a contract price constitute a trust fund for the benefit of (a) sub-contractors who have sub-contracted with the contractor and other persons who have supplied materials or provided services to the contractor for the purpose of performing the contract; (b) the Workers' Compensation Board; (c) workers who have been employed by the contractor for the purpose of performing the contract; and (d) the owner for any set-off or counterclaim relating to the performance of the contract. Receipts of sub-contractor constitute trust fund 4(2) All sums, including any interest on the holdback, received by a subcontractor on account of a contract price in the sub-contract, constitute a trust fund for the benefit of (a) sub-contractors who have sub-contract with the sub-contractor and other persons who have supplied materials or provided services to the sub-contractor for the purpose of performing the sub-contract; (b) the Workers' Compensation Board; (c) workers who have been employed by the sub-contractor for the purpose of performing the sub-contract; and (d) the contractor or any sub-contractor for any set-off or counterclaim relating to the performance of the sub-contract. Duties of contractor respecting trust fund 4(3) A contractor receiving a sum mentioned in subsection (1) is the trustee of the trust fund and he shall not appropriate or convert any part of the trust fund to or for his own use or to or for any use not authorized by the trust until (a) all sub-contractors who have entered into a sub-contract with him and all persons who have supplied materials or provided services to him for the purpose of performing the contract have been paid all amounts then owing to them out of the sum received; (b) the Workers' Compensation Board has been paid all assessments which the contractor could reasonably anticipate as arising out of work done by workers employed by him in performing the contract to the extent for which the sum was received; (c) all workers who have been employed by him for the purpose of performing the contract have been paid all amounts then owing to them out of the sum received for work done in performing the contract; and (d) provision has been made for the payment of other affected beneficiaries of the trust to whom amounts are then owing out of the sum received.

14 Page: 14 Duties of sub-contractor re trust 4(4) A sub-contractor receiving a sum mentioned in subsection (2) is the trustee of the trust fund and he shall not appropriate or convert any part of the trust fund to or for his own use or to or for any use not authorized by the trust until (a) all sub-contractors who have sub-contracted with him and all persons who have supplied materials or provided services for the purpose of performing the sub-contract have been paid all amounts then owing to them out of the sum received; (b) the Workers' Compensation Board has been paid all assessments which the sub-contractor could reasonably anticipate as arising out of work done by workers employed by him in performing the sub-contract to the extent for which the sum was received; (c) all workers who have been employed by him for the purpose of performing the sub-contract have been paid all amounts then owing to them out of the sum received for work done in performing the sub-contract; and (d) provision has been made for the payment of other affected beneficiaries of the trust to whom amounts are then owing out of the sum received. [34] The issue as to whether OCI has complied with the trust provisions of the Act was addressed by the court in relation to the Holdback and Remediation Holdback. OCI conceded that the balance of the Holdback of $245, plus accrued interest thereon and $356, of the Remediation Holdback plus accrued interest thereon were trust funds and had to be dealt with in accordance with the duties imposed on OCI pursuant to s. 4(3) of the Act. As well, M&L was required to deal with those funds in accordance with the duties imposed on M&L pursuant to s. 4(4) of the Act. Those funds were due and owing by OCI to M&L pursuant to the M&L Subcontract and therefore were trust funds under the Act. [35] The court agreed and made the above-mentioned order accordingly. [36] The remaining portion of the Remediation Holdback of $43, plus accrued interest thereon was not trust funds as defined in the Act. Unlike the balance of the Holdback and the balance of the Remediation Holdback, the remaining portion of the

15 Page: 15 Remediation Holdback was not money due and owing by OCI to M&L, but was money payable to OCI. Accordingly, the $43, plus accrued interest thereon was not paid to the Receiver and was not part of the trust fund which would be distributed to M&L s subcontractors, including SNL. [37] In accordance with the trust provisions of the Act, OCI as the general contractor cannot appropriate or convert any part of the funds received until all subcontractors who have entered into a subcontract, in this case including M&L, have been paid all amounts then owing to them out of the sum received. Since the $43, from the Remediation Holdback was not owing to M&L, the court ordered that OCI was entitled to payment of that portion of the Fund. [38] On the basis of my review of the evidence filed, I see no distinction between the finding made respecting the balance of the Remediation Holdback of $43, plus accrued interest and the balance of the Fund. [39] The evidence satisfies me that the terms of the Settlement Agreement which were negotiated in good faith between OCI and M&L were satisfied by OCI. Reasonable steps were taken to negotiate with Manitoba Hydro and obtain additional funds respecting the work and services performed and materials supplied on the Project and specifically for claims advanced by M&L against OCI. OCI had an obligation to account to M&L for all additional funds received above the Total Amount as defined in the Settlement Agreement. [40] M&L and now the Receiver has a duty to remit any payment received from OCI pursuant to the terms of the M&L Subcontract and the Settlement Agreement. The

16 Page: 16 affidavit of Simon Landy sworn August 30, 2017, details the steps that were taken by OCI to meet with Manitoba Hydro, review the work completed by M&L and negotiate payment for claims for extra work alleged to have been performed by M&L. [41] Manitoba Hydro determined that a total payment of $1,238, would be paid to OCI relating to certain extra claims. OCI provided evidence that the sum of $1,238, was paid to it as full and final settlement of all claims that there pending or could have been submitted by OCI or any of its subcontractors. [42] The evidence also establishes that the amount paid by Manitoba Hydro to OCI in respect of the invoices submitted by M&L to OCI totaled $3,160, [43] Further, the evidence set forth in the Landy affidavit sworn August 30, 2017, establishes that OCI paid M&L $3,555, in respect of the invoices submitted by M&L and no further amounts were due and owing by OCI to M&L. [44] The terms and conditions of the Settlement Agreement authorized OCI to make certain payments to M&L s subcontractors, including SNL. All such amounts were paid by OCI and any additional amount due and owing to SNL are amounts that are properly due and owing by M&L to SNL. [45] I am satisfied that OCI complied with the terms of the Settlement Agreement and the evidence establishes that no additional funds were ever received by OCI from Manitoba Hydro which would have required OCI to account to M&L pursuant to subparagraph 17(c) of the Settlement Agreement. [46] I agree with the submission made by OCI that SNL had a contractual relationship with M&L and to the extent that M&L failed to pay amounts justly due and owing to SNL,

17 Page: 17 SNL s claim is against M&L and SNL has a valid claim in the receivership pursuant to the Trust Claims Process (see Order granted March 25, 2015 approving Trust Claims Process). In addition, SNL had a lien right respecting the value of the work and services performed and materials supplied which would have been perfected and valid if SNL had served its notice of claim for lien within 40 days after the date the SNL Subcontract was terminated or abandoned (which I previously found was no later than October 25, 2013). Regrettably, SNL did not serve its notices of claim for lien within the 40 day timeframe. [47] The Receiver has a duty to collect all amounts justly due and owing to M&L and distribute those funds in accordance with the terms of the Receivership Order. The Receiver has reviewed all material that has been filed in these proceedings and has concluded that it has no claim to the balance of the Fund on behalf of the creditors of M&L, including SNL. [48] In my view, the evidence supports a finding that OCI complied with the terms and conditions of the Settlement Agreement and SNL has no claim to further payment from the Fund. Accordingly, I grant the order that the balance of the Fund plus accrued interest thereon be paid out of court to OCI. Summary Judgment [49] The test applied on summary judgment motions in Manitoba was amended and came into effect in January An excellent summary of the new Queen s Bench Rules applicable to summary judgment are summarized in the decision of Free Enterprise Bus Lines Inc. v. Winnipeg Exclusive Bus Tours Inc., 2018 MBQB 64, [2018] M.J. No. 106 (QL), at paras :

18 Page: Amendments to the Queen's Bench Rules, Man. Reg. 553/88, as amended by Man. Reg. 130/17, which came into effect in January of this year, make significant changes to the summary judgment process. The new rules are designed to promote proportionality to ensure "the just, most expeditious and least expensive determination of every civil proceeding on its merits" (Rule 1.04(1)) and reflect the Supreme Court's direction in Hryniak v. Mauldin, 2014 SCC 7 (para. 2), [2014] 1 S.C.R. 87, that "a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system." 28 Manitoba's new summary judgment rules are similar to the Ontario summary judgment rules interpreted by the Court in Hryniak. In that case, Karakatsanis J. explained (at para. 45) that the Ontario rules "are designed to transform Rule 20 from a means to weed out unmeritorious claims to a significant alternative model of adjudication." To that end, the test on a summary judgment motion is no longer whether there is a "genuine issue for trial" but whether there is a "genuine issue requiring a trial" (Rule 20.07(1)). The traditional trial is no longer the default position but should be pursued only where the judge cannot "achieve a fair and just adjudication of the issues" on the basis of the evidence produced on the summary judgment motion (Rule 20.03(5)). 29 To facilitate the use of the summary judgment motion as an alternative means of adjudication, the rules contemplate more flexibility in the type of evidence tendered and authorize the judge to weigh evidence, evaluate credibility of deponents and draw reasonable inferences (Rule 20.07(2)). Whereas under the former rules issues of credibility usually required a trial, the new rules facilitate the resolution of those issues on summary judgment. A trial is not required unless the judge is not confident making the necessary fact findings on the basis of the evidence presented and tools available on the motion. As explained in Hryniak: [56] While I agree that a motion judge must have an appreciation of the evidence necessary to make dispositive findings, such an appreciation is not only available at trial. Focussing on how much and what kind of evidence could be adduced at a trial, as opposed to whether a trial is "requir[ed]" as the Rule directs, is likely to lead to the bar being set too high. The interest of justice cannot be limited to the advantageous features of a conventional trial, and must account for proportionality, timeliness and affordability. Otherwise, the adjudication permitted with the new powers -- and the purpose of the amendments -- would be frustrated. [57] On a summary judgment motion, the evidence need not be equivalent to that at trial, but must be such that the judge is confident that she can fairly resolve the dispute. A documentary record, particularly when supplemented by the new fact-finding tools, including ordering oral testimony, is often sufficient to resolve material issues fairly and justly. The powers provided in Rules 20.04(2.1) and 20.04(2.2) can provide an equally valid, if less extensive, manner of fact finding. 30 In Hryniak, the Court suggested that the new powers to evaluate the evidence and order oral evidence should only be engaged where the judge cannot decide the issues without resorting to those powers. Karakatsanis J. said:

19 Page: 19 [66] On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole. 31 And in the companion case, Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, she said: [22] Summary judgment may not be granted under Rule 20 where there is a genuine issue requiring a trial. As outlined in the companion Mauldin appeal, the motion judge should ask whether the matter can be resolved in a fair and just manner on a summary judgment motion. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. If there appears to be a genuine issue requiring a trial, based only on the record before her, the judge should then ask if the need for a trial can be avoided by using the new powers provided under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. [50] In her decision, Greenberg J. also references the summary judgment conference as being a significant piece of the new approach to summary judgment motions in Manitoba. In this case, no summary judgment conference was held, as contemplated under the new summary judgment Rules. However, the actions were under case management and submissions were made and directions were given by the court regarding the summary judgment motion. I have no hesitation in finding that the summary judgment process can achieve a fair and just adjudication of the issues (Rule 20.03(5)) in this case.

20 Page: 20 [51] In essence, SNL submits that there is insufficient evidence to permit the court to safely adjudicate on the issues and a trial is required. [52] The amended Queen s Bench Rules provide that the court shall grant summary judgment where satisfied that there is no genuine issue requiring a trial (Rule 20.03(1)). Rule 20.07(2) also provides powers to the judge hearing the summary judgment motion: Powers of judge 20.07(2) When making a determination under subrule (1), the judge must consider the evidence submitted by the parties and he or she may exercise any of the following powers in order to determine if there is a genuine issue requiring a trial: (a) weighing the evidence; (b) evaluating the credibility of a deponent; (c) drawing any reasonable inference from the evidence; unless it is in the interests of justice for these powers to be exercised only at trial. [53] Applying these principles and the applicable Queen s Bench Rules, I will review each of the claims alleged by SNL. Paragraph 5 of the statement of claim provides: 5. The Plaintiff states that it was an express assurance and guarantee by representatives of the Defendant that entering the Project and, in particular, the Subcontract, was safe and that due to the nature of the Project and the parties involved (including the Defendant itself) that the Plaintiff would not face any issues with respect to payment for services rendered at the Project or pursuant to the Subcontract. The Plaintiff further states that it expressly relied on the said assurances and guarantees of the Defendant when it entered into the Subcontract and commenced work at the Project. [54] There is no evidence in the affidavit material filed on behalf of SNL that proves or supports the allegation made in paragraph 5 of the statement of claim. OCI entered into the General Contract before it entered into the M&L Subcontract and there is no evidence supporting that the alleged assurances or guarantees were made by OCI to SNL. At the

21 Page: 21 time OCI entered into the M&L Subcontract, the evidence set forth in paras of the affidavit of Simon Landy, sworn September 22, 2017 states: 21. When the defendant entered into the Subcontract; (i) the SNL Subcontract did not yet exist; (ii) it had no knowledge if the plaintiff would become a subcontractor to M&L at some point in the future; and (iii) no assurances or guarantees were made by the defendant to the plaintiff, as alleged or at all. 22. When the plaintiff entered into the SNL Subcontract, no assurances or guarantees were made by the defendant to the plaintiff, as alleged or at all. 23. The work done on the Project by the plaintiff, pursuant to the SNL Subcontract, was done at the request of and for the benefit of M&L. 24. Performance or non-performance of the SNL Subcontract was a matter between the plaintiff and M&L. 25. All billings with respect to work done by the plaintiff for M&L, and the payment of all of the plaintiff s accounts, were matters to be dealt with as between the plaintiff and M&L. 26. If the plaintiff is owned any further funds in respect of the Project, those funds would be owed to the plaintiff by M&L pursuant to the SNL Subcontract, and not by the defendant. [55] Mr. Landy was cross-examined on his affidavit and nothing in the crossexamination supports the allegations made in paragraph 5 of the statement of claim. [56] Paragraphs 6 and 7 of the statement of claim allege that SNL performed significant work on the Project for which it billed M&L and no issues were raised respecting the work or SNL s billings. Further, SNL alleges that M&L did not pay its bills on time or in some cases at all. This is not disputed by OCI or M&L or the Receiver. SNL s potential remedies were outlined above.

22 Page: 22 [57] In accordance with the terms of the Settlement Agreement, OCI made payments directly to SNL, which payments were authorized by M&L, as OCI had no contractual relationship with SNL. That conduct does not give rise to a cause of action by SNL against OCI. [58] Further allegations are made in paragraphs of the statement of claim regarding the payments that were made by OCI to SNL. In my view, there is no dispute that all amounts paid to SNL were amounts that were due and owing by M&L pursuant to the SNL Subcontract. OCI had no contract with SNL and was required to comply with the trust provisions of the Act. In my view, a review of the evidence does not satisfy me that OCI breached any of the trust provisions of the Act and a trial is not required to determine this issue. [59] In paragraph 12 of the statement of claim, SNL alleges that it had no knowledge of the Settlement Agreement or the effect of termination of the M&L Subcontract and continued to perform work up to November 19, [60] I previously found in my oral reasons for decision delivered March 24, 2017, that on or about October 25, 2013, or perhaps by October 20, 2013, M&L s work with subcontractors on the Project was terminated. SNL received an from OCI dated November 4, 2013, advising that the M&L Subcontract was terminated as of October 20, SNL was advised that OCI would not accept any responsibility for payment for work done by M&L s subcontractors up to this date. As a result of a further exchange of s, OCI made it clear that it was not assuming M&L s obligations under the SNL Subcontract or any liability M&L had to SNL.

23 Page: 23 [61] While I accept that SNL may not have had knowledge of the terms of the Settlement Agreement, it is clear that SNL was aware of the termination of the M&L Subcontract and received some payments from OCI that were authorized by M&L. This allegation does not raise an issue or cause of action that requires a trial. [62] Further allegations made by SNL are set forth in paragraphs 16 and 17 of the statement of claim in which SNL alleges a conspiracy to interfere with the legal relationship between SNL and M&L to injure SNL s business and to induce M&L to breach the SNL Subcontract without notice to SNL. [63] In Free Enterprise Bus Lines Inc., Greenberg J. dealt with a conspiracy claim and stated: 63 Two types of conspiracy are recognized in Canadian tort law -- predominant purpose conspiracy and unlawful means conspiracy. They are explained in Pro- Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, [2013] 3 S.C.R. 477: [74] Predominant purpose conspiracy is made out where the predominant purpose of the defendant's conduct is to cause injury to the plaintiff using either lawful or unlawful means, and the plaintiff does in fact suffer loss caused by the defendant's conduct. Where lawful means are used, if their object is to injure the plaintiff, the lawful acts become unlawful (Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., [1983] 1 S.C.R. 452, at pp ).... [80] The second type of conspiracy, called "unlawful means conspiracy", requires no predominant purpose but requires that the unlawful conduct in question be directed toward the plaintiff, that the defendant should know that injury to the plaintiff is likely to result, and that the injury to the plaintiff does in fact occur (Cement LaFarge, at pp ). [64] In my view, there is no merit to the conspiracy allegations and a trial is not required to determine this issue. The allegations are denied by Mr. Landy and he gave a full explanation of the steps that were taken to terminate the M&L Subcontract, to negotiate

24 Page: 24 with Manitoba Hydro and pay M&L s subcontractors amounts that were payable to M&L. The allegations advanced by SNL are speculative and I am satisfied that there is insufficient factual foundation to support a claim based on predominant purpose conspiracy and/or unlawful means conspiracy. [65] In paragraphs of the statement of claim, the plaintiff alleges that OCI entered into the Settlement Agreement knowing that M&L was not paying the total amount due and owing to SNL and that by reason of those facts, OCI is liable to the plaintiff for tortious interference with contractual relations between SNL and M&L. [66] The facts outlined above do not support such an allegation. The Settlement Agreement was negotiated in good faith by OCI and M&L to terminate the contractual relationship because it was clear that M&L was suffering financial difficulties and was unable to complete the work required pursuant to its subcontract with OCI. I previously made such a finding and I am not satisfied that OCI owed the alleged duty to SNL. OCI had to comply with the trust provisions of the Act and the terms of its subcontract with M&L and as noted above, I have found that OCI complied with the terms of the M&L Subcontract, the Settlement Agreement and the provisions of the Act. No evidence filed satisfies me that a trial is required to determine this issue. [67] Finally, SNL advances a claim on the basis of unjust enrichment. SNL also alleges that OCI acted in a high-handed and callous manner and that SNL is entitled to aggravated and/or punitive damages. [68] There is no basis at law on the facts of this case to support a claim for unjust enrichment or to support a claim on a quantum meriut basis. The general contractor on

25 Page: 25 a construction project is responsible to make payments to its subcontractors in accordance with the terms of the subcontracts. General contractors are also responsible to receive funds from the owner and pay all such funds in accordance with the trust provisions of the Act. The evidence establishes that OCI paid M&L all sums which it was obligated to pay M&L pursuant to the terms of the Subcontract and the Settlement Agreement. M&L s failure to pay SNL does not establish that OCI was unjustly enriched unless there is proof that OCI failed to pay M&L amounts owing such that there is evidence of a corresponding benefit to OCI. The evidence filed proves the opposite. The facts of this case do not support a claim for unjust enrichment and I am not satisfied a trial is required to determine this issue. [69] Further, there is no evidence to support that OCI acted in a high-handed, egregious and callous manner or interfered with the contractual relationship between SNL and M&L. Unfortunately, M&L did not make payment to all of its subcontractors, including SNL and OCI took reasonable steps to terminate the M&L Subcontract and pay remaining amounts due and owing to M&L by making authorized payments directly to M&L s subcontractors including SNL in accordance with the Settlement Agreement. [70] After considering all of the evidence filed, I am satisfied that a trial is not required in order to achieve a fair and just adjudication of the issues raised in the statement of claim. OCI s motion to dismiss SNL s claim is granted with costs to OCI in accordance with the Court of Queen s Bench tariff. J.