6.8: Questioning witness before hearing
7.3: Summary Judgment (Application and decision)

Case Summary

The Plaintiff, SWAT Consulting Inc. (“SWAT”) provided remediation services to Anterra Energy Inc. (“Anterra”) in respect of oil spills. Anterra claimed coverage from its insurance provider, the Defendant, Energy Insurance Group Ltd. (“Energy Insurance”). Anterra received payment from Energy Insurance in accordance with its insurance coverage. SWAT’s invoices were taken into consideration in Energy Insurance’s calculation of payment to Anterra. Anterra deposited the money it received from Energy Insurance into its bank account at the Defendant, Canadian Western Bank (“CWB”). CWB applied these proceeds against loans owing to it.

SWAT never received payment for its remediation services. Anterra then filed for protection under the Companies Creditors Arrangement Act, RSC 1985, c C-36. As such, SWAT claimed payment for its services to Anterra from Energy Insurance, or repayment from CWB, for knowingly assisting in a breach of trust.

Each of Energy Insurance and CWB applied for Summary Dismissal of SWAT’s claims.

Among other things, in the circumstances, Master Prowse considered whether the insurance policy between Anterra and Energy Insurance created a purpose trust. In that context, SWAT argued that one reason for Trial was to uncover evidence of the existence of such a trust. Master Prowse found that it was not necessary to wait until Trial to engage this issue. As such, Master Prowse noted that SWAT could have cross examined Anterra’s principal about the existence of trust terms as between Energy Insurance and Anterra, pursuant to Rule 6.8. Similarly, Master Prowse noted that SWAT could have cross-examined CWB’s deponent pursuant to Rule 6.8. However, no such cross-examinations took place. SWAT maintained that cross-examining Anterra’s principal would not have been fruitful in the absence of documents and the related challenge of accessing Anterra’s documents. Master Prowse rejected this as an excuse, stating that it would actually be preferable to obtain Anterra’s documents for the Summary Dismissal. Master Prowse noted that Rule 6.8 allows cross–examination, whereas if SWAT called Anterra’s principal at Trial it would likely be restricted to examining Anterra’s principal in direct examination.

In the end, Master Prowse held that Trial was not necessary and that Energy Insurance and CWB had met the onus of establishing that SWAT did not have a claim against them. Accordingly, Master Prowse dismissed SWAT’s claims pursuant to Rule 7.3.


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