The parties developed a large parcel of land through the corporate Appellant, Rainbow Falls Development Inc. (“Rainbow”), beginning in 2003. Numerous parts of those lands were transferred to non-arms length parties at undervalue. The issues on this Appeal related primarily to the entitlement of the Respondents, minority shareholders of Rainbow, to share in the profits of those sales. They alleged that the Appellants, majority shareholders and related entities of Rainbow, engaged in, among other things, improper transactions. The Appellants applied for the summary dismissal of all or part of the Respondents’ claims, primarily on the basis that the limitation period had expired before the Action was commenced.

The Action was commenced on December 20, 2018. Under Section 3(1)(a) of the Limitations Act, RSA 2000, c. L-12 (the “Act”), the Appellants were entitled to immunity from a claim if it was brought more than two years after the Respondents’ underlying claim should have reasonably been discovered and warranted a proceeding. Thus, any claims that could reasonably have been discovered prior to December 2016 would be barred. In addition, the 10-year ultimate limitation period under the Act would bar any claims arising prior to December 2008. The Appeal was then assessed with respect to each parcel of land involved, with mixed results for the Appellants. 

For the “Brownstone Block 3 and 6”, monthly reports from Rainbow Falls clearly documented the transactions and sale prices in 2007 and 2008. The Court found that the Respondents, given their expertise, should have identified these transactions through reasonable diligence. Therefore, any claim of undervalue was discoverable at that time, and thus, summarily dismissed because it was statute-bared under the Act. A similar conclusion was reached for the “Phase 9 Residential Lots”. The evidence for the “Cascades Project” showed that one of the Respondent’s admitted during Cross-Examination that information about the sales of these lots, and the sale prices, were available to him in 2010, also making the claim time barred. Numerous other claims were not summarily dismissed, with the Court citing insufficient evidence to resolve these issues without a Trial.