COURT OF APPEAL FOR ONTARIO
2014 ONCA 247
DATE: 20140401
DOCKET: C57905
Sharpe, LaForme and Tulloch JJ.A.
BETWEEN
Crosslink Bridge Corp.
Applicant (Appellant)
and
Canadian National Railway Company
Respondent (Respondent)
Chris G. Paliare and Alysha Shore, for the appellant
Mark Stewart and Marina Sampson, for the respondent
Heard: March 26, 2014
On appeal from the judgment of Justice John C. Murray of the Superior Court of Justice, dated October 24, 2013.
By the Court:
[1] On December 18, 2006, the District Manager, Niagara District Office, Ontario Ministry of the Environment, made an order (the “Director’s Order”) pursuant to the Environmental Protection Act, R.S.O. 1990, c. E.19 (the “EPA”), s. 18 requiring certain remedial work to be done on a parcel of land owned by the respondent CN. As contemplated by the EPA, s. 197(1), the Director’s Order required CN, before dealing with the property in any way, “to give a copy of the order or decision affecting the property to every person who will acquire an interest in the property as a result of the dealing.” The Director’s Order also required the registration in the land registry of a Certificate of Requirement pursuant to s. 197(2) and (3) to certify that a s.18 order had been made.
[2] In May 2007 the appellant, Crosslink, made an offer to purchase the property. Following further negotiations and another offer, the sale of the property from CN to Crosslink was completed in November 2008.
[3] Some four years later, Crosslink informed CN that it took the position that it had not been given a copy of the Director’s Order and accordingly sought to avoid the transaction pursuant to the EPA, s. 197(4):
A dealing with real property by a person who is subject to a requirement imposed under subsection (1) or (3) is voidable at the instance of a person who was not given the copy of the order or decision in accordance with the requirement.
[4] CN refused to void the transaction and this application followed.
[5] The issue before the application judge was whether CN had given a copy of the Director’s Order to Crosslink in compliance with the terms of the EPA and the terms of the Director’s Order.
[6] The application judge concluded that when all the evidence was considered, an inference could be drawn that Crosslink or its solicitors were provided with a copy of the Director’s Order prior to closing the transaction. The application judge also found that even if the evidence did not establish that fact, the doctrine of promissory estoppel precluded Crosslink from bringing the application.
[7] On appeal, Crosslink essentially relies on three submissions:
the trial judge failed to apply the statutory onus imposed on CN to prove that it had provided Crosslink with a copy of the directors order;
the trial judge erred by failing to draw an adverse inference against CN for having failed to call a witness;
the doctrine of promissory estoppel was not pleaded or argued and in any event cannot be used to overcome a mandatory statutory provision.
1. Onus
[8] At paragraph 57 of his reasons, the application judge listed twelve facts that, when considered as a whole, he found pointed “overwhelmingly” to an inference that CN had given Crosslink a copy of the Director’s Order. In our view, it was open on this record for the application judge to come to that conclusion. We do not agree that he made palpable and overriding errors that would justify appellate intervention.
[9] Crosslink’s submission as to the statutory onus essentially rests on the proposition that CN was required to establish precisely when, where and how it had given Crosslink a copy of the Director’s Order. Crosslink contends that CN’s case rested entirely on what it described as the “attachment theory”, namely that the Director’s Order was attached the Certificate of Requirement that was included in the two boxes of material relating to the property’s environmental issues disclosed to Crosslink in March and August 2007.
[10] Considerable time was spent on the application, and in oral argument before us, as to the state of the evidence on that point. The principals of Crosslink swore that the Director’s Order was not included in the boxes, although it was not apparent how closely they had examined those materials. CN’s evidence was that its representatives believed that the Director’s Order had been attached to the Certificate of Requirement provided to Crosslink..
[11] We note that the boxes contained very detailed information relating to the environmental problems for this property. It would have been apparent to Crosslink from the documents it admits receiving that there were serious environmental problems with the property. It would also have been apparent from the Certificate of Requirement, which was registered on title and specifically referenced in the Director’s Order, that a Director’s Order requiring remedial work had been made.
[12] We do not agree that this case turns solely on the “attachment theory”. Nor do we accept the proposition that it was incumbent upon CN, four years later, to prove specifically when and how it gave Crosslink the Director’s Order. In our view it was open to the trial judge to consider all of the evidence from which it could be inferred that CN had, at some point prior to the transfer of title, given Crosslink a copy of the Director’s Order. We refer to the twelve points listed at para. 57 of the application judge’s reasons and, in particular, to the following facts:
• Crosslink knew that the Director’s Order had been made;
• there was full disclosure of the environmental reports that led to the Director’s Order;
• following a lengthy due diligence period, Crosslink waived all conditions with respect to the environmental condition of the property, acknowledged that CN had delivered all environmental reports in its possession and conclusively waived all requisitions concerning any matters relating to the property; and
• before closing the transaction, Crosslink requisitioned a copy of the Order “[t]o the extent not already provided” and then failed to respond to CN’s reply: “[p]lease advise us if your client has not yet received a copy of this Order”.
[13] In our view, those facts provided a sufficient evidentiary record to support the application judge’s finding that CN had given Crosslink a copy of the Director’s Order.
2. Adverse inference
[14] We do not accept Crosslink’s submission that the trial judge erred by failing to draw an adverse inference against CN for its failure to call Susan Sze, the CN employee who wrote the disclosure letters that accompanied the boxes of environmental reports provided to Crosslink. In answer to an undertaking given on his cross-examination, CN’s real estate solicitor informed Crosslink that while Ms. Sze believed that she gave Crosslink a copy of the Director’s Order together with the Certificate of Requirement, she had no specific recollection with regard to the production of this material that had taken place more than six years earlier. In our view, it was open to the application judge in his discretion to accept that explanation and to refuse to draw a negative inference.
3. Promissory Estoppel
[15] As we see no error in the application judge’s finding that CN gave Crosslink a copy of the Director’s Order, we do not find it necessary to consider whether there was any error with respect to the alternative ground of promissory estoppel.
4. Fresh Evidence
[16] As the issue to which CN’s fresh evidence application responded was not perused, the fresh evidence application is dismissed.
Disposition
[17] Accordingly the appeal is dismissed. The respondent CN is entitled to its costs of the appeal fixed at $35,000 inclusive of disbursements and applicable taxes.
“Robert J. Sharpe J.A.”
“H.S. LaForme J.A.”
“M.H. Tulloch J.A.”
Released: April 1, 20114