4.22: Considerations for security for costs order
7.3: Summary Judgment (Application and decision)

Case Summary

The Defendants, except Jamila Premgi and Jamila Premgi Professional Corporation, sought Summary Dismissal of the claims of the CPI Quotavest Investors Steering Committee (“CQSC Plaintiffs”), based on the claims being time barred. Alternatively, the Defendants sought Security for Costs against all of the Plaintiffs. All of the Plaintiffs, including the CQSC Plaintiffs, sought Partial Summary Judgment against the following Defendants: Crown Vista Estates II Ltd., CPI Crown Properties International Corporation, CPI Crown Capital Corporation, and Camrose Crown Care Corporation (“SJ Defendants”).

In relation to the limitations issues, the Court held that:

(a)    It appeared that the CPI Defendants had delayed providing information to the CQSC Plaintiffs;

(b)   Due to the delay, the CQSC Plaintiffs became suspicious; and

(c)    The CQSC Plaintiffs then engaged legal counsel to obtain the information (and were successful in doing so).

The Court held that there was a triable issue as to when the CQSC Plaintiffs knew, or ought to have known, that a claim should be brought.

The Defendants sought Security for Costs based on numerous Plaintiffs residing outside of Alberta, and there being no evidence suggesting that those Plaintiffs had assets in Alberta to satisfy a Costs Order. The Court noted that Rule 4.22, unlike former Rule 593, has no provision indicating Security for Costs may be ordered on the basis that a Plaintiff resides outside of Alberta. Instead, the focus under Rule 4.22 is on whether the Party has assets in Alberta against which costs could be recovered. The Court noted that the Action revolved around Alberta real estate projects in which the Plaintiffs had invested. Since the Defendants already had control of these assets, it was likely that the Defendants could enforce an order or judgment against these assets. The Court held that the Defendants had not met the onus to justify Security for Costs.

The Plaintiffs alleged that the SJ Defendants (that were part of the Limited Partnership Agreement (“LPA”)) breached the LPA by lending funds to non-arm’s length parties (the other SJ Defendants). The SJ Defendants did not enter Affidavit evidence to oppose the Summary Judgment Application. Instead, they argued that the Plaintiffs, as Limited Partners, did not have standing to bring the Summary Judgment Application. The Court held, based on the following section of the LPA, that there was a contractual duty of good faith by the general partner to the limited partners, and that duty had been breached:

Duty of general partner: the general partner shall exercise the powers and discharge the duties of its office hereunder honestly, in good faith and in the best interests of the limited partners.

The Court held that there was a triable issue in relation to the limitations defence regarding the CQSC Plaintiffs, and Summary Judgment could not be entered. However, the Court noted that the triable issue in respect of the CQSC Plaintiffs should not deprive the remaining CVP II Limited Partners from the benefits of the Decision. In order to give effect to the Decision, and yet recognize the limitations issue, Justice Hall ordered that any funds realised as a result of this Judgment that would be distributable to members of the CQSC were to be paid into Court and not distributed until the limitations issue had been determined.

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