Court of Appeal for Ontario

Citation: (CNA Canada), 2018 ONCA 438

Date: 2018-05-10

Docket: C64253

Judges: Doherty and Pepall JJ.A. and Gray J. (ad hoc)

Between

Broadgrain Commodities Inc. Plaintiff (Appellant)

and

Continental Casualty Company carrying on business as CNA Canada Defendant (Respondent)

Counsel

For the Appellant: Rui Fernandes, James Manson, and Sean Lawler

For the Respondent: Marc Isaacs and Hilary Weise

Heard: April 27, 2018

On appeal from: the judgment of Justice Patrick J. Monahan of the Superior Court of Justice, dated August 3, 2017, with reasons reported at 2017 ONSC 4721.

Reasons for Decision

Facts and Background

[1] The appellant, Broadgrain Commodities Inc., sold 26 containers of sesame seeds to Beidahuang Grain Group Co. Ltd. ("Beidahuang"). They were to be shipped CIF ('cost, insurance, freight') from Tin Can Island in Nigeria to Xingang in China.

[2] Under the contract between the appellant and Beidahuang:

• title to the goods passed to Beidahuang on its payment to the appellant;
• the risk of loss or damage to the goods passed to Beidahuang when the goods were stuffed and sealed for transport;
• the appellant was to purchase insurance on behalf of Beidahuang to insure against Beidahuang's risk of loss or damage to the goods during transit; and
• Beidahuang granted the appellant a security interest in the goods.

[3] The goods were loaded on board the transport vessel on October 15, 2014. Beidahuang paid the appellant for the goods on December 12, 2014. The goods arrived in China on December 17, 2014. The goods had been damaged during transit, but the timing of the damage could not be determined. The cargo was unfit for human consumption and was sold for salvage. Beidahuang kept the salvage proceeds.

[4] The goods were insured by the respondent, Continental Casualty Company carrying on business as CNA Canada, under a policy of marine insurance in favour of the appellant. The appellant sought compensation from the respondent under the insurance policy, but the respondent denied coverage. The appellant then sued the respondent, who subsequently brought a motion for summary judgment.

Motion Judge's Decision

[5] The motion judge granted summary judgment dismissing the appellant's action. He reasoned that the appellant had an insurable interest in the shipped goods. However, he concluded that the appellant did not sustain any loss as it was paid in full by Beidahuang. In doing so, he considered the appellant's bald assertion, with no supporting documentation or detail, that the appellant was short-paid on subsequent shipments to Beidahuang, to be inadequate. As such, there was no genuine issue requiring a trial.

[6] The appellant appeals from that dismissal and also seeks to admit fresh evidence. The respondent cross-appeals the motion judge's finding that the appellant had an insurable interest.

Summary Judgment Principles

[7] The motion judge was alive to the principles governing summary judgment motions that were described in Hryniak v. Maudlin, 2014 SCC 7, [2014] 1 S.C.R. 87. On a summary judgment motion the parties are expected to put their best foot forward and the court will assume that all necessary evidence has been tendered. See Chernet v. RBC General Insurance Company, 2017 ONCA 337, 11 M.V.R. (7th) 1, at para. 12; and Airex Inc. v. Ben Air System Inc., 2017 ONCA 390, 48 C.B.R. (6th) 200, at para. 17. A motion judge is entitled to presume that the evidentiary record is complete and there will be nothing further if the issue were to go to trial: Dawson v. Rexcraft Storage & Warehouse Inc., 111 O.A.C. 201, at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at paras. 27, 33-34, aff'd 2014 ONCA 878, leave to appeal to SCC refused, [2015] S.C.C.A. No. 97; and Tim Ludwig Professional Corporation v. BDO Canada LLP, 2017 ONCA 392 at para. 54. A motion judge is not required to resort to the summary judgment enhanced powers to remedy a party's evidentiary shortcomings.

Evidentiary Deficiencies

[8] It is of assistance to put the appellant's lack of evidence of loss in context.

[9] The appellant pleaded that the shipments were damaged by contact with water, resulting in a loss of $550,081.38 USD to the appellant. The appellant's affidavit of documents and examination for discovery were silent on any evidence of loss. The issue of a loss based on subsequent short-payments by Beidahuang was first raised in an affidavit filed in response to the respondent's summary judgment motion. The affidavit was sworn by the appellant's representative, Taimy Cruz. As mentioned, the motion judge found that she baldly asserted that the appellant was short-paid on subsequent shipments to Beidahuang. As stated by the Supreme Court in Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423, at para. 31: "[A] self-serving affidavit is not sufficient in itself to create a triable issue in the absence of detailed facts and supporting evidence" (citations omitted).

[10] Here, no evidence of any kind was filed in support of the purported short-payments: no dates, no amounts, no invoices, no credit statements, nothing. Nor was there any explanation given for the absence of any supporting details or documentation. Despite having the opportunity to provide details and documentation of this alleged loss, including an undertaking given on Ms. Cruz's cross-examination, none was forthcoming. Nor was the respondent advised of these alleged offsetting payments until the litigation was commenced.

[11] The appellant argues that the expert evidence upon which it relies provides that it is common practice for buyers and sellers who frequently transact with one another to agree to offset claim monies against future transactions. However, expert opinion of any practice in the industry to short-pay on subsequent shipments cannot serve to remedy the appellant's failure to provide any evidence of loss, be it that of the appellant or that of Beidahuang.

Court's Analysis

[12] There was no palpable and overriding error, and deference is owed to the motion judge's conclusion that the appellant was paid in full and that there was no credible evidence to the contrary.

[13] For these reasons, we would dismiss the appeal.

Cross-Appeal and Fresh Evidence

[14] Given this disposition, it is unnecessary to address the cross-appeal of the respondent. In oral submissions, the respondent conceded that resolution of the first issue in its favour rendered the subject matter of the cross-appeal moot. Furthermore, the argument before this court was advanced on a different basis than the argument before the motion judge. The motion judge addressed whether the appellant had an insurable interest in the goods notwithstanding the transfer of the risk of loss. Before us, the issue devolved into a question of whether the appellant had standing to pursue a loss incurred by Beidahuang. Quite apart from the fact that the loss is not so characterized in the appellant's statement of claim, it would be inappropriate to decide an issue on a basis raised for the first time before this court.

[15] The motion to admit fresh evidence also must fail. The second McGregor affidavit, which the appellant seeks to admit, was available at the time of the motion but was not filed. More importantly, it would not have affected the outcome.

Disposition

[16] For these reasons, the appeal and the motion to admit fresh evidence are dismissed, and the cross-appeal is dismissed as being moot. The appellant is to pay the respondent $38,000 in costs of the appeal on a partial indemnity scale inclusive of disbursements and applicable taxes.

"Doherty J.A."

"S.E. Pepall J.A."

"D.K. Gray J. (ad hoc)"