Nature of the Motion

[1] The defendant, Atomic Energy of Canada Limited (“AECL”), brings this motion to strike the jury notice served by the plaintiff, Canada Forgings Inc. (“CanForge”).

[2] AECL identifies three main grounds in support of its motion that this matter is not appropriate for a jury trial.

(1) The complexities of this action make it inappropriate for a jury trial:

a. the litigation involves the relationship between a government agency and private parties in the context of “tendering/procurement law and negligence claims”;

b. expert evidence on complex damage issues is expected;

c. the sheer amount of evidence and its complexity would “confound any layperson”; and

d. for CanForge to succeed, it would have to make new law.

(2) AECL is a federal Crown corporation and Crown agent against whom a jury trial is not permitted by operation of law:

a. s. 26 of the Crown Liability and Proceedings Act, R.S.C. 1985 c. C-50 (“CLPA”), prohibits a jury trial in any proceedings against the federal Crown, including a proceeding against a federal Crown agent;

b. provinces cannot bind the federal Crown without its legislative consent. Therefore, a jury trial permitted under the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) or the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) cannot bind AECL; and

c. s. 17 of the Interpretation Act, R.S.C. 1985 c. I-21 provides that no enactment is binding on the Crown except as mentioned or referred to in the enactment. The effect of s. 17 is that provincial statutes and regulations cannot bind the Crown without Parliamentary authorization. While jury trials are authorized by the CJA and under the Rules, there is no federal statutory provision that permits jury trials in proceedings against the federal Crown or its agents.

(3) Section 108(2)(1)(xi) of the CJA provides that an action shall be tried without a jury in respect of a claim in which equitable relief is claimed. S.108(2)(1)(xi) operates to prohibit a jury in this case as CanForge appears to be seeking equitable relief in relation to a Limitations Act defence raised by AECL (i.e. that the limitation period is tolled based on fraudulent concealment).

[3] There is no affidavit evidence before me on this motion. The evidence consists of the pleadings, various orders and judgments, pleadings in a related action, and a letter to counsel from Justice Carpenter-Gunn dated June 30, 2014.

Background

[4] I begin with a chronology of significant events. To do so, I rely, in part, on the Judgment of Matheson J., dated August 16, 2013 (the “Judgment”), a copy of which was included in AECL’s motion materials. The background of this action is as follows:

(a) on September 1, 2004, AECL requested vendors for the refurbishment of the Bruce “A” CANDU 9 nuclear reactor;

(b) three qualified suppliers submitted bids: Invar Manufacturing Limited (“Invar”), an amalgamated subsidiary of Linamar Holdings Inc. (“Linamar”), Donlee Precision (a division of General Donlee), and Precision Nuclear Inc.;

(c) in connection with the Invar bid, CanForge and its competitor, Patriot Forge Co. (“Patriot”), each submitted a quote for the supply of end fitting forgings;

(d) the tender period expired on April 10, 2005, at which point AECL had not entered into a contract with any of the three bidders. The project was not re-tendered;

(e) AECL concluded that because none of the original bids were accepted during the 180-day tender period, it was free to deal with Patriot directly for the supply of end fittings. AECL did not deal with CanForge;

(f) on October 25, 2005, AECL dealt directly with Patriot for the supply of the end fittings forgings. AECL took the position that the alleged “contract” was, in fact, a Letter of Intent (LOI), whereas CanForge asserts that AECL entered into a binding agreement with Patriot;

(g) on December 5, 2005, AECL issued a recommendation and authorization to purchase (“RAP”) by which a contract was awarded to Invar and Patriot was chosen as the supplier for the end fittings;

(h) on February 5, 2006, an internal email was sent between lawyers with Gowling Lafleur Henderson (“Gowling”), then representing CanForge, querying whether AECL’s arrangement to source the supply of end fittings from Patriot was “actionable”;

(i) on March 15, 2006, CanForge issued a statement of claim against AECL and Linamar;

(j) on October 18, 2007, CanForge delivered its jury notice;

(k) on September 11, 2008, Fedak J. struck out all of CanForge’s claims, except for its defamation claim;

(l) on April 27, 2009, CanForge served a motion to amend its claim, by which, in part, CanForge sought an order permitting it to add a claim that AECL breached its duty of fairness to CanForge. The parties agree that the “limitations clock stopped running on the duty of fairness issue”[^1] on April 27, 2009;

(m) on August 7, 2012, CanForge obtained an order, on consent, permitting it to amend its statement of claim, without prejudice to AECL’s entitlement to defend the amended claim on the basis that the new claims, including the allegation of breach of the duty of fairness, were statute barred and/or disclosed no reasonable cause of action;

(n) on February 6, 7, 21 and 22, and March 4 and 5, 2013, Matheson J. heard AECL’s motion for summary judgment, in which AECL sought the dismissal of the action;

(o) on April 18, 2013, on consent, Matheson J. dismissed CanForge’s action as against Linamar;

(p) on August 16, 2013, Matheson J. released the Judgment, which dismissed CanForge’s defamation claim but otherwise dismissed AECL’s motion for summary judgment on the basis that a trial was required to determine the issues;

(q) on October 1, 2013, Arrell J. dismissed AECL’s motion for leave to appeal the Judgment to the Divisional Court;

(r) on February 5, 2014, Matheson J. released his decision on costs of AECL’s summary judgment motion;

(s) on June 30, 2014, the Order of Carpenter-Gunn J. granted CanForge leave to amend its statement of claim (CanForge’s Further Amended “Fresh As Amended” Statement of Claim hereinafter “the Claim”)[^2] and directed the parties to follow a litigation timetable;

(t) July 31, 2014 is the date of AECL’s Amended Statement of Defence (the “Defence”) to the Claim. Among other things, AECL defended the Claim on the basis that CanForge’s claim against AECL for a breach of the duty of fairness was statute-barred. AECL asserted that the material facts upon which CanForge based its breach of the duty of fairness claim were known to, or reasonably discoverable by, CanForge or its counsel (Gowling), and/or had been discovered and complained of by CanForge prior to March 2006; and

(u) on October 10, 2014, CanForge sued Gowling asserting that on Gowling’s recommendations, CanForge sought to amend its claim in 2009 to allege that AECL had breached the duty of fairness it owed to CanForge. CanForge intends to look to Gowling for damages if it is held that CanForge’s claim is statute-barred.

Nature of the Claim

[5] In the Claim, CanForge seeks damages from AECL of $18 million and punitive damages of $500,000. CanForge identifies itself as a corporation that produces custom forgings and AECL as a Crown corporation that specializes in nuclear technology and services.

[6] In broad terms, CanForge is suing AECL for damages allegedly caused by AECL’s conduct in the tender process that occurred in 2004 and 2005 for the refurbishment of AECL’s Bruce “A” CANDU 9 nuclear reactor.

[7] In addition, CanForge alleges that it suffered damages because AECL negligently failed to mention CanForge as a key supplier of CANDU reactor components in a report dated November 2004, commissioned by CANDU Owners Group Inc. (“COG” and the “COG Report”).

[8] The Claim states that COG represents owners of CANDU reactors around the world who sought to identify suppliers that could supply components to those reactors in the event that the Government of Canada either closed or sold AECL. CanForge asserts that AECL breached its duty of care to CanForge by omitting CanForge’s name as a qualified supplier of end fitting forgings. As a result, CanForge lost business opportunities from COG members and suffered reputational harm, for which AECL is liable.

[9] Given the amount claimed and the nature of the damages, both liability and damages will be significant issues at trial. On the issue of quantum of damages, both parties intend to call expert evidence.

[10] A significant issue at trial will be when CanForge’s claim that AECL breached its duty of care is statute-barred. AECL asserts that to determine when CanForge could have discovered that claim will require evidence from Gowling and a close analysis of Gowling’s notes and other evidence, from which to determine whether and when they had the information needed to plead that AECL had breached its duty of care.

The Pleadings

(a) The Claim

[11] The Claim comprises 64 paragraphs. Despite the fact that the defamation claim was dismissed on consent by Matheson J. in April 2013, the Claim still includes allegations relating to the defamation claim. Similarly, in AECL’s 105-paragraph Defence, I identify at least 25 paragraphs that respond to the defamation and injurious falsehood claims.

[12] As currently drafted, and without explanation from the parties, it is unclear which of the paragraphs in the Claim relate to the now-struck defamation claim, and which paragraphs and facts CanForge still intends to prove and rely upon in support of the remainder of the Claim.

[13] As noted above, the events that give rise to the action date back to 2004 and 2005, and relate to the refurbishment of AECL’s CANDU 9 nuclear reactors. Included in the Claim are facts that also appear to relate to allegations against Invar, then a subsidiary of Linamar, despite that the action was dismissed as against Linamar. It is unclear whether or which of the allegations against Invar are still appropriately included in the Claim.

[14] Having had the benefit of submissions from the parties, I understand that, notwithstanding anything else asserted in the Claim, CanForge is pursuing damages under only the following two heads of relief:

(i) breach of a contractual duty of fairness; and

(ii) negligence.

[15] CanForge explains its breach of the duty of fairness claim as arising from “AECL’s conduct in a tender process related to its refurbishment of Bruce Power nuclear station” and that “AECL leapfrogged over the machine shops who had submitted bids to AECL, and contracted directly with one of the potential subcontractors, Patriot, for the supply of end fitting forgings. AECL did so without giving CanForge an opportunity to bid on the supply of end fitting forgings, notwithstanding that CanForge had submitted bids to the machine shops on the same project and notwithstanding that CanForge was the only other possible supplier of the highly specialized part.”[^3]

[16] CanForge explains its negligence claim as stemming from AECL’s inaccurate statements in the “COG Report” in which AECL negligently reported that Patriot was the “sole supplier” of end fitting forgings, which, CanForge alleges, prevented CanForge from obtaining further business opportunities.[^4]

[17] CanForge asserts that the evidence relevant to the two claims it has identified will be presented primarily through the testimony of lay witnesses and documentary evidence; there are no liability experts; and each side intends to call a single damages expert who will speak to the quantification of damages.

[18] The final sentence of paragraph 13 of CanForge’s factum on this motion reads as follows: “[t]he evidence is not technical, and the factual chain of events is straightforward”. This statement conflicts with the position taken by CanForge at paras. 43 and 44 of the factum it filed on the summary judgment motion heard by Matheson J. (the “CanForge SJ Factum”) which reads, in part, that with respect to CanForge’s duty of fairness claim, “the issue is a factually complex one for which a full appreciation of the evidence cannot be obtained on a paper record”.

[19] I find that the CanForge SJ Factum provides insight into the many complex factual issues and, more importantly, the numerous and complex technical issues that will have to be addressed at trial. These include

a) whether AECL, as a federal Crown corporation, has complied with the Financial Administration Act, R.S.C. 1985, c. F-11 (the “FAA”), and with its Code of Ethics and Business Conduct;

b) whether “Contract A” relations were created when AECL received bids from three bidders, which is determined based on various factors, as identified in the Paul Emanuelli text, Government Procurement[^5];

c) an understanding of term-of-art tendering terms, performance terms and standards used in the Amended Tender Document referenced in this action;

d) whether the conduct of AECL demonstrated that the tendering process continued beyond the 180 days set out in the tender document, including the implication of the commencement of a “Contract B”; and

e) an assessment of whether the bids submitted to AECL were “technically” compliant and/or improperly rejected or evaluated.

[20] An excerpt from the CanForge SJ Factum is demonstrative of the technical nature of the issues that will have to be decided at trial:

[86] AECL points in paragraph 47 of its factum to the statement in Section 41 of the Procurement Specification that “nothing in the Contract Documents creates any contractual relations between any Subcontractor and the Purchaser”. However, that prohibition does not apply because Section 41 does not apply to the tender. This is because the original tender document (21 RF-RN-31120-0011) indicates that Section 3.5.1 that “Prices are offered in accordance with Tendering Instructions and General Contract Conditions, Procurement Specification 21 RF 160 (section 12, 13, 14 and 15, which form part of this Tender)” without any reference to Section 41.

[21] Although no affidavit evidence was filed on this motion, based on the materials before me, I have great difficulty accepting CanForge’s assertion that the evidence in this case is not technical and complex, and that the factual chain of events is straightforward.

(b) The Defence

[22] In addition to its limitation-period defence, AECL relies upon several technical defences in the Defence. These include

a) reference to and reliance upon the technical specifications related to the bidding process[^6];

b) that AECL complied with its Code of Ethics and Business Conduct, which, in any event, does not create the “legal duty of fairness or other obligations which may be owed in a Contract A- Contract B tender situation”[^7]; and

c) that s.41(2) of the Financial Administration Act, R.S.C. 1985, c.F-11 (the “FAA”) and Schedule III thereto exempts Crown corporations from certain provisions governing the entering into of contracts generally.

[23] In its factum, AECL identifies four issues to be determined at trial:

(i) whether CanForge’s claim for breach of duty of fairness is statute-barred under the Limitations Act;

(ii) if the claim is not statute-barred, whether AECL owed a duty of fairness under contract law to CanForge and, if so, whether AECL breached that duty;

(iii) whether AECL owed a duty of care to CanForge in the preparation of the COG Report and, if so, whether AECL was negligent in the preparation of the COG Report, and, if so, whether CanForge suffered any damage by reason of that negligence; and

(iv) the amount of damages, if any, suffered by CanForge and payable by AECL.

Complexity of the issues

[24] In support of this motion, AECL asserts, among other things, that the issues to be decided are too complex for a jury. AECL asks this court to note that two judges of this court have made that very observation.

[25] At para. 86 of the Judgment, Matheson J. makes this observation:

In hindsight I should have dismissed the motion for summary judgment at the onset of the motion, for the following reasons:

The sheer volume of the material.
The contradictions of the witnesses in their affidavits and examinations, which will require a judge’s determination after hearing from the various witnesses.
The magnitude of the action.

[26] Insight into the complexity of the issues is also gained by looking at earlier paragraphs of the Judgment. At para. 23, for example, Matheson J. outlined the position taken by CanForge. Among other things, Matheson J. described a Contract “A” relationship becoming a Contract “B” relationship, as more fully described in the Emanuelli text, from which Matheson J. quoted at some length. At para. 39 of the Judgment, Matheson J. also stated that CanForge relied upon the FAA, which prescribes how government entities are to deal with “the letting of contracts”.

[27] After dismissing the defamation claim (Judgment, at paras. 47–64), Matheson J. identified as a triable issue whether the contract between AECL and Patriot was a Letter of Intent (“LOI”) or a binding agreement, and whether the LOI changed the value of the contractual agreement with Patriot (Judgment, at paras 74–76). At para. 77, Matheson J identified a further issue of whether AECL’s recommendation and authorization to purchase failed to “follow the actual deal between Invar and AECL” (Judgment, at para 77).

[28] As an aside, although CanForge made no mention of the limitation period issue, Matheson J. referred to the internal email between the two Gowling lawyers, and identified the limitation issue as requiring a trial (Judgment, at paras. 80–84). I conclude that Matheson J. was of the view that a determination of the limitation period issue will require a credibility assessment, and is likely to require evidence from Gowling.

[29] On this motion, AECL submits that, at trial, the trier of fact will be required to evaluate lawyers’ notes and memos to determine whether, and when, Gowling had the information or “constructive knowledge” of a potential claim sufficient to plead the cause of action.[^8] That determination is relevant to whether the limitation period had expired prior to CanForge’s motion to amend its claim to add a claim for breach of duty of fairness.

[30] In its materials, AECL has included a copy of CanForge’s statement of claim against Gowling. CanForge alleges that, on the advice of Gowling, it sought to amend its claim against AECL in 2009 to allege that AECL breached a duty of fairness owed to CanForge, and that AECL has defended that claim on the basis that it was “time barred”. CanForge claims that if AECL is successful in defending the claim against it on that basis, CanForge will hold Gowling liable for the damages caused by their failure to provide timely advice.

[31] AECL asserts that the determination of the limitations issue would be difficult for individuals without both legal training and the “required insight on legal practice”, and, as such, that the issue requires a “judicial determination”. Based on the material before me, I understand that neither side intends to call expert evidence on that issue.

[32] There is other evidence and information before me that contradicts the position taken by CanForge concerning the complexity of this action. For example, when AECL sought leave to appeal the Judgment to the Divisional Court, Arrell J. agreed with Matheson J. that this action is “a very complex and complicated matter” and refused to grant leave.

[33] AECL echoes the foregoing judicial observations in its factum, in which AECL states that the trial is scheduled to take 6.5 weeks, and will involve approximately 24 witnesses, hundreds of documents, including “technically complex nuclear procurement documents”[^9], and competing experts on the issue of damages. The large number of documents was also the subject of comment by a third judge who has been involved in this matter. In her endorsement on a procedural motion, heard on October 3, 2012, Carpenter-Gunn, J. noted that there had been “at least 5000-plus pages of productions made to date”.[^10]

The Law

General Principles

[34] Section 108(3) of the Courts of Justice Act, R.S.O. 1990, c. C. 43 permits a court on motion to order that “issues of fact to be tried or damages assessed, or both, without a jury.”

[35] Rule 47.02 (2) provides that a motion to strike out a jury notice may be made on “the ground that the action ought to be tried without a jury.”

[36] In my overview of the law applicable to motions to strike the jury as set out below, I have borrowed liberally from my decisions in Belton v. Spencer[^11]and Passero v. Doornkempt[^12].

[37] In Rolley v. MacDonell[^13], Corthorn J. outlined the law on the legal test to be applied on a motion to strike a civil jury. Paragraphs 15 and 17 from that decision are relevant to this motion and are reproduced below:

[15] A decision frequently cited with respect to the test on a motion of this kind is the Ontario Court of Appeal decision in Cowles v. Balac (2006), 2006 34916 (ON CA), 83 O.R. (3d) 660, 216 O.A.C. 268. The principle or test to be taken from paragraph 37 of that decision is:

a) The factors to be considered include the legal and/or factual issues to be resolved, the evidence at trial, and the conduct of the trial; and

b) The overriding test is whether the moving party has shown that justice to the parties will be better served by the discharge of the jury.

[17] In deciding whether to make an order that the jury notice be struck, the trial judge has “considerable discretion” (Kempf v. Nguyen, 2015 ONCA 114, 124 O.R. (3d) 241, at para. 44). In a number of its recent decisions, the Ontario Court of Appeal addressed the manner in which a trial judge is to exercise his or her discretion on a motion to strike the jury notice:

• This discretion must not be exercised arbitrarily or on the basis of improper principles (Kempf, at para. 44); and

• The right to a jury trial is not to be taken away lightly (Hunt (Litigation guardian of) v. Sutton Group Incentive Realty Inc. (2002), 2002 45019 (ON CA), 60 O.R. (3d) 665, 162 O.A.C. 186, at para. 73).

[38] In MacLeod v. Canadian Road Management Company[^14], Myers J. also referred to Cowles v. Balac for the basic principles to be applied by the court on a motion to strike a jury notice. The principles set out below are borrowed from paras. 23-24 of MacLeod:

(a) the court must decide whether the moving party has shown the justice to the parties will be better served by the discharge of the jury;

(b) the object of a civil trial is to provide justice between the parties, nothing more; and

(c) a judge may strike a notice even before the trial has begun if the judge considers that there is no advantage to beginning the trial with the jury because the situation makes it apparent that the case should not be tried with a jury.

[39] As noted by Myers J., “since…the seminal decision of the Supreme Court of Canada in Hryniak[^15], we also know that to be just a civil resolution of a dispute must not either take too long or be too expensive.” (MacLeod, at para. 30)

[40] I repeat and adopt the excerpts from Hyriniak as paraphrased by Myers J. in MacLeod[^16] that

our civil justice system is premised upon the value that the process of adjudication must be fair and just. This cannot be compromised;
undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes; and
prompt judicial resolution of legal disputes allows individuals to get on with their lives. But, when court costs and delays become too great, people look for alternatives or simply give up on justice.

[41] In Girao v. Cunningham[^17], the Court of Appeal confirmed that the principles governing the discharge of the jury remain as set out in Kempf, and that “the question for the trial judge is simply this: will justice to the parties be better served by dismissing or retaining the jury?”

[42] At paragraph 171 of Girao, Lauwers J.A. stated that “[w]hile I recognize that the right to a jury trial in a civil action has been recognized as fundamental, it is not absolute and must sometimes yield to practicality.”

[43] In the recent case of Belton v. Spencer[^18], this court struck the defendant’s jury notice. The defendant sought to appeal the striking of the jury notice and moved for a stay of that decision, pending appeal. The motion to stay was heard on September 29, 2020 by Brown J.A., sitting as a single judge of the Court of Appeal. He rendered his decision on October 1, 2020.[^19]

[44] Brown J.A. did not hear the appeal itself, finding that the appeal was interlocutory in nature and thus would lie to the Divisional Court.[^20] However, he heard and dismissed the motion for a stay. In his 23-page decision, Brown J.A. reviewed the law relating to the proper exercise of the court’s discretion to strike a jury notice or discharge a jury. At paras. 26–27, Brown J.A. stated the following:

[26] The substantive right to a civil jury trial, upon which the appellant relies, is a qualified right. As this court stated in Cowles v. Balac (2006), 2006 34916 (ON CA), 83 O.R. (3d) 660 (C.A.), leave to appeal refused, [2006] S.C.C.A. No. 496, at para. 32, a party’s entitlement to a jury trial is subject to the power of the court to order that the action proceed without a jury: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 108(3). While a court should not interfere with the right to a jury trial in a civil case without just cause or cogent reasons, a judge considering a motion to strike out a jury notice has a “rather broad discretion” to decide “whether the moving party has shown that justice to the parties will be better served by the discharge of the jury”: Cowles, at paras. 36-38. This test recognizes that the “paramount objective of the civil justice system is to provide the means by which a dispute between the parties can be resolved in the most just manner possible”: Cowles, at para. 39.

[27] As more recently stated by this court in Girao v. Cunningham, 2020 ONCA 260, 2 C.C.L.I. (6th) 15, at para. 171, while the right to a jury trial in a civil action is fundamental, “it is not absolute and must sometimes yield to the practicality.”

Issue One: Should the Jury Notice be Struck on the Ground of Complexity?

[45] AECL asks that the jury notice be struck on the ground that the complexity of this case makes it inappropriate for a jury trial.

[46] Complexity is a proper consideration on a motion to strike the jury notice or to discharge the jury.

[47] The Court of Appeal in Kempf, paraphrasing O’Connor A.C.J.O. in Cowles v. Balac[^21], stated the following at para. 43(5):

The complexity of a case is a proper consideration in determining whether a jury notice should be struck. Complexity relates not only to the facts and the evidence, but also to the legal principles that apply to the case. Where one draws the line as to when a particular case would be better heard by a judge sitting alone is far from an exact science (at paras. 48–49).[^22]

Should the motion be granted prior to trial or should the court “wait and see” the evidence?

[48] CanForge submits that the Court of Appeal in Kempf found the “wait and see” approach to be the “prudent “and “preferable approach”, and that “experience has shown that in many instances often the anticipated complexities of a case or other concerns do not materialize.[^23]

[49] The paragraph referred to by CanForge above begins with the words “in some cases, it is preferable to take a “wait and see” approach before deciding whether to discharge the jury [emphasis added].” (Kempf, at para. 43(8))

[50] Brown J.A. in Belton also considered whether it was an error of law for the motion judge not to adopt a “wait and see” approach – i.e. to defer to the trial judge the issue of whether to strike a jury notice. At para. 70, Brown J.A. again referenced Cowles, in which the Court of Appeal observed that the Courts of Justice Act[^24] and the Rules of Civil Procedure[^25] both contemplate that a judge may strike a jury notice even before the trial has begun.

[51] CanForge also submits that the decision in Chandra v. Canadian Broadcasting Corp.[^26] supports it position that even when a trial is expected to be lengthy, with difficult and complex evidence, it is still appropriate to keep the jury and to adopt a wait and see approach.

[52] In Chandra, the defendant moved before the trial judge to strike the jury notice on the grounds of the complexity of the scientific and technical issues involved, the length of trial, the extent of contested expert evidence, and the nature of the legal issues involved.

[53] The trial judge noted that the jury would hear a lot of evidence, much of it from scientists or other experts; the trial would be long, and the documentary exhibits voluminous; and the central legal issue – defamation – is “notoriously complex and difficult” – all of which were factors that mitigated against a trial by jury. Despite those factors, the trial judge dismissed the motion to strike the jury notice.

[54] In determining not to strike the jury notice, the trial judge acknowledged that the parties had different perspectives on what the core issues were. The plaintiff disagreed with the defendant’s view of the nature of the evidence to be given at trial and submitted that the central issue in the case was whether or not the plaintiff had fabricated research studies and misappropriated money. On that basis, the plaintiff argued that the jury would not have to decide whether or not the scientific research was correct, but only whether the research was done at all. In other words, the plaintiff claimed the case was about academic fraud whereas the defendant asserted it was about scientific integrity.

[55] The trial judge noted that if the plaintiff’s perspective was correct, then it would be far more likely that the issues would be within the abilities of a jury to try. However, the trial judge determined that even if the defendant’s view was correct, it would remain to be seen to what extent the jury would have to understand or determine matters of scientific complexity or controversy. The trial judge concluded that it would be presumptive to determine which “vision of the case is more likely to prevail before any evidence has been adduced at trial” (at para. 47) and chose to adopt the “wait and see” approach. The 56-day trial proceeded before a jury.

[56] A similar “wait and see” approach was adopted in McIsaac v. MacKinnon.[^27] In this medical malpractice claim, the trial judge reserved his decision on the motion until after the evidence had been completed. The defendant was entitled to renew his motion to strike the jury if he remained of the view that justice would be better served by having the trial decided by judge alone.

Is this a case in which it is preferable not to take a “wait and see” approach?

[57] In my view, this case can be distinguished from Chandra and McIsaac in which the courts preferred to “wait and see” whether the anticipated complexities did materialize before deciding whether to discharge the jury. While that approach may be prudent in many cases, it is not a rule of law.[^28]

[58] This case is different from those relied on by CanForge. Here, the litigation history leaves little, if any doubt, that the anticipated complexities relating to the facts, the evidence – which will be technical and nuanced – and the applicable legal principles, will, in fact, materialize at trial.

[59] The litigation history offers this court the benefit of decisions from Matheson J. and Arrell J., both of whom agree that the issues in this case are complex and that this is a complicated matter. That view was also expressed by CanForge in its SJ Factum, noting that with respect to the duty of fairness, “the issue is a factually complex one.”

[60] The pleadings themselves are complicated. As demonstrated in the Judgment, and as revealed by the CanForge SJ Factum, the law that must be understood and applied to achieve justice will require an understanding of the tendering process and documents involving a federal Crown agent. The trier of fact will be required to answer such questions as

• were any bids properly disqualified or improperly accepted?

• Did the conduct of AECL extend the 180-day tender?

• Did a “Contract B” arise in the circumstances?

• Which, and in what way, do applicable federal statutes, any applicable code of conduct, the terms of the tender documents and the duty to act in a fair way[^29] bear upon the obligations of AECL as a federal Crown agent, in the tendering process?

• Was a duty of fairness owed by AECL to CanForge in its procurement of services and dealings for the refurbishment of its CANDU Reactor? Or in the preparation of the COG Report?

• Did AECL breach that duty? Did that breach cause any damages to CanForge?

[61] With respect to the limitation period issue, the trier of fact will also have to understand whether CanForge or Gowling had or ought to have had sufficient information or “constructive knowledge” to allow CanForge to know of its potential claim that AECL had breached its duty of fairness. In answering that question, it is foreseeable that the trier of fact may be asked to consider what obligations, if any, CanForge or Gowling had to inform themselves of the facts relevant to CanForge’s claims. Similarly, and as suggested by AECL, the trier of fact may also be asked to determine whether the Gowling evidence establishes whether and when CanForge was able to plead the breach of the duty of fairness claim as against AECL.

[62] With respect to CanForge’s claim that AECL breached a duty when it failed to include CanForge in the list of suppliers for end fittings in the COG Report, the trier of fact will need to understand whether CanForge was, in fact, a qualified supplier – something that AECL denies[^30]. Further questions include

• did AECL owe a duty of care to CanForge in the preparation of the COG Report?

• If so, what is the scope of that duty?

• Did AECL breach that duty?

A determination of those issues will no doubt be complicated by the fact that, as asserted by AECL, this is a novel cause of action.

[63] Finally, the trier of fact will be called upon to determine damages. Again, my understanding of the nature of CanForge’s claim is based on the sparse record before me. Notwithstanding, it appears that CanForge’s claim of $18 million includes a claim for the profits that it might have made had it been entitled to bid on, and succeed in, obtaining a contract for the delivery of end fittings required by AECL. CanForge’s damages with respect to its exclusion from the COG Report would also appear to be based on lost potential income or opportunities lost.

[64] The amounts claimed are significant. Each party has its own damages expert. While it is within the usual scope of the work of a jury to determine damages, given the nature of the alleged damages in this case, the amounts involved, and the positions taken by the parties, the expert evidence will be complicated and disputed.

[65] As noted by the court in Chandra, factors that mitigate against a jury trial include that the trial will be lengthy and will involve voluminous documentation. Those factors exist in this case. Additionally, based on the evidence before me, the trial evidence and the legal issues will be complex and technical. Viewed as a whole, these known factors significantly mitigate against a jury trial.

[66] In consideration of all the foregoing factors, I have a serious concern that even with proper instructions, the jury would not be able to fully appreciate and understand the many technical/legal issues that must be understood to achieve justice between the parties.

Disposition of Issue One: Jury Notice Should be Struck on the basis of complexity

[67] For the reasons outlined above, I find that AECL has met its onus of establishing that justice to the parties will be better served by the striking of the plaintiff’s jury notice.

Issue Two: Is there a statutory prohibition against a jury trial against AECL?

[68] Although my findings above are sufficient to determine AECL’s motion, I conclude that the motion also succeeds on the ground advanced by AECL that a jury trial is prohibited under section 26 of the Crown Liability and Proceedings Act, R.S.C. 1985, c.C-50 (the “CLPA”).

[69] Section 26 of the CLPA states that “[i]n any proceedings against the Crown, trial shall be without a jury.”

[70] It is not in dispute that AECL is a federal Crown corporation. That is acknowledged by CanForge at paras. 3 and 49 of the Claim. AECL submits that, for that reason, the CLPA applies to any proceeding against AECL. In its factum on this motion, CanForge also acknowledges that AECL is a Crown agency.

[71] AECL submits also that, as it was incorporated under section 10(2) of the Atomic Energy Control Act RSC 1970, c. A-19, it is a “company” for the purposes of the Nuclear Energy Act, RSC 1985 c. A-16 (the “NEA”), and that according to section 11(2) of the NEA, “[a] company that is a Crown corporation within the meaning of subsection 83 (1) of the Financial Administration Act (the “FAA”) is for all purposes and agent of Her Majesty in right of Canada.”

[72] AECL further submits that it is a Crown corporation, and also an agent of the Crown, because it is a corporation wholly owned by the Crown in that all of its shares are held in trust for the Crown. Accordingly, AECL submits that the following federal statutes apply:

(a) s.83(1) of the FAA, which defines a Crown corporation to mean “a parent Crown corporation or a wholly-owned subsidiary;

(b) s.83(2), which states that “[f]or purposes of this Part, a corporation is wholly owned directly by the Crown if (a) all of the issued and outstanding shares of the corporation, other than shares necessary to qualify persons as directors, are held, otherwise than by way of security only, by, on behalf of or in trust for the Crown;”

(c) s.11(1) of the NEA, which provides that the capital stock of AECL are required to be held in trust for Her Majesty in right of Canada; and

(d) s.35 (1) of the Interpretation Act, which states that there is no difference between a reference to “Her Majesty” and “the Crown”.

[73] Where the parties differ is in their views as to whether s. 26 of the CLPA applies to this action. CanForge submits that is does not, and that s. 26 refers only to the “Crown” and not to an agent of the Crown. As such, if AECL seeks the protection of s. 26 it must rely on s. 35(1) of the CLPA, which reads as follows:

Proceedings against Crown agencies

35(1) This Act, except section 22, applies in respect of any proceedings against an agency of the Crown taken in accordance with any Act of Parliament that authorizes the proceedings to be taken.

[74] CanForge submits that from the plain language of s. 35(1), the CLPA does not apply to all proceedings against federal Crown agencies, but only to those proceedings brought pursuant to a federal statute, which is not the case here.

[75] CanForge relies on the 1995 Ontario Court of Appeal decision in Brookes v. Darling[^31], decided under the Crown Liability Act, the predecessor the CLPA, as well as the 1993 British Colombia Court of Appeal decision in Pierre v. Pacific Press Ltd.[^32].

[76] The AECL submits that it is clear from the more recent Court of Appeal decision in Lantheus Medical Imaging Inc. v. Atomic Energy of Canada Ltd.[^33] that the CLPA in its entirety applies to AECL.

[77] I have considered the cases put forth by the parties and observe that there appear to be conflicting decisions on whether s.26 of the CLPA operates to prohibit a jury trial in an action against AECL. I conclude that Lantheus is binding upon this court and that Lantheus makes clear that the whole of the CLPA applies to AECL as a Crown corporation.

[78] In Lantheus, the focus of the court was on whether s. 27 of the CLPA was a rule of practice or procedure, or a rule of evidence. In the course of its analysis,[^34] that court agreed with the lower court that the law has always treated the Crown differently from other entities as reflected in section 17 of the Interpretation Act R.S.C. 1985, c.I-21 which states:

No enactment is binding on Her Majesty or affects Her majesty or Her Majesty’s rights or prerogatives in any manner, except as mentioned or referred to in the enactment.

[79] The Court further noted that a province cannot validly enact legislation affecting the federal Crown in a compulsory manner. Only Parliament may do so. And, at para. 14, the court stated the following:

The area of Crown liability has been subject to considerable statutory reform. The CLPA is the most recent of a series of federal statutes establishing and governing the liability of the Crown. Part 1 of the CLPA establishes and finds the liability of the Crown; part 2 sets out jurisdiction for, as well as the procedural rules that apply to, litigation involving the Crown.

[80] Finally, at paragraph 16 of its decision, the Court stated that section 27 of the CLPA binds a federal Crown agency. The court did not distinguish between an action in which the Crown was named as a party and one in which a Crown agency, namely, AECL, was named. I conclude that it is implicit in the Court’s finding that the entirety of the CLPA is binding upon, and applies to AECL, as a Crown agency.

[81] This conclusion is further supported by the wording found in section 23 of the CLPA, which permits proceedings against the Crown “[to] be taken in the name of the Attorney General of Canada or, in the case of an agency of the Crown against which proceedings are by an Act of Parliament authorized to be taken in the name of the agency, in the name of the agency.”

[82] In McCreight v. The Attorney General[^35], the court found that section 23 (1) of the CLPA permitted the Canada Revenue Agency (the “CRA”), as an agency of the Crown, to be sued in its own name. The court also found that both the CRA and the Attorney General of Canada are “The Crown” for the purposes of the CLPA, and that s. 26 applied to the CRA, as an agency of the Crown, as well as to the individually-named defendants who were servants/agents of the Crown and for whom the Crown was vicariously liable by virtue of section 3 of the CLPA.

[83] I accept as accurate, but do not here repeat, the analysis respecting AECL’s statutory authority contained at paragraphs 23–26 of the AECL’s factum. In particular, I accept the concluding statement of paragraph 26 that AECL “is a Crown corporation that is also an agent of the Crown because it is a Corporation wholly owned by the Crown whereby all of its shares are held in trust for the Crown.”

Disposition of Issue Two: Jury Notice Should be Struck by reason of s. 26 of the CLPA and R. 47.02(1)(b)

[84] For the reasons set out above, I conclude that s. 26 of the CLPA applies to this action and requires that this trial proceed without a jury. In addition, Rule 47.02(1) of the Rules operates to permit this court to strike the jury notice on the ground that s. 26 of the CLPA is a statute that requires a trial without a jury.

Issue Three: Has CanForge claimed Equitable Relief?

[85] AECL advanced as a third ground in support of its motion to strike the jury notice that s.108(2)(1)(xi) of the Courts of Justice Act (“CJA”)[^36] provides that an action is to be tried without a jury if it involves a claim for equitable relief.

[86] AECL submits that although it is not specifically pleaded in the Claim, CanForge seeks to rely on the “equitable doctrine of fraudulent concealment” to toll the limitation period. AECL point to the statement found at para. 6 of CanForge’s SJ Factum that it did not have actual or constructive knowledge of a potential claim against AECL for breach of the duty of fairness and that, in any event, the “equitable doctrine of fraudulent concealment tolls any limitation period”.

[87] CanForge disputes this characterization of its claim. In particular, CanForge asserts that it is not seeking any form of equitable relief. Rather, CanForge claims it intends to rely on the discoverability rule codified in sections 4 and 5 of the Limitations Act, 2002.[^37]

[88] CanForge relies on the recent decision of the Ontario Court of Appeal in Zeppa v. Woodbridge Heating & Air Conditioning Ltd.[^38]. In Zeppa, the court noted that it was unnecessary to plead or rely on the equitable doctrine of fraudulent concealment because the elements of the discoverability test set out in ss.5(1)(a) and (b) of the Limitations Act address the situation where a defendant has concealed its wrongdoing; if a defendant conceals that an injury has occurred, it will be difficult for the defendant to argue that the plaintiff had actual knowledge of those facts until the concealed facts are revealed.

Disposition of Issue Three: CanForge has not claimed sought equitable relief.

[89] Notwithstanding the submissions set out in CanForge’s SJ Factum, I accept CanForge’s submissions on this motion that the Claim does not contain equitable relief and that such equitable relief is not required by reason of the operation of ss.5(1)(a) and (b) of the Limitations Act. Accordingly, I conclude that s.108(2)(1)(xi) of the CJA does not apply or offer a ground upon which to strike out the jury notice.

Post-COVID- 19 Motions to Strike Jury Notices:

[90] Following delivery of their facta, counsel for AECL referred me to several recent cases[^39], including two decisions of mine[^40], in which a plaintiff sought to strike a defendant’s jury notice for reason of scheduling delay caused by COVID-19.

[91] I have not considered the impact of COVID-19 on this motion, as AECL’s notice of motion does not raise trial delay and/or the impact of COVID-19 on the scheduling of this jury trial as a ground for striking the plaintiff’s jury notice. While counsel for AECL offered to make submissions or file supporting materials, “should that be helpful” to me on this motion[^41], no formal request was made by AECL to amend its notice of motion.

[92] Had I been asked me to consider the COVID-19-related impact upon the scheduling and conduct of civil jury trials as a ground to strike the jury notice, I would have noted that the COVID-19-related concerns applicable to this region, and as identified by me in Belton and in Passero, remain valid.

[93] However, it is clear from the cases referenced at para. 90, above, and confirmed in the very recent decision of the Divisional Court in Louis v. Poitras[^42], that it is not enough for the moving party to assert that the trial will or is likely to be delayed by the pandemic; there must be evidence of prejudice to the parties or “concerns for the administration of justice”.[^43] That evidence has not been put before me on this motion.

Order Granted

[94] For the reasons set out above, I grant AECL’s motion and order that CanForge’s jury notice be struck. This matter shall be placed on a non-jury trial list and shall be heard by judge alone. As this matter is scheduled for a 6.5-week trial, the scheduling of the trial shall be through the office of the Regional Senior Judge.

Costs

[95] As the successful party on this motion, AECL is presumptively entitled to its costs.

[96] I would urge the parties to agree on costs but if they cannot do so, then costs submissions may be made as follows:

within 21 days of the date of the release of this decision AECL shall serve and file its written costs submissions, not to exceed 3 pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers; and
CanForge shall serve and file its responding submissions of no more than 3 pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers, within 14 days of the service upon it of AECL’s costs submissions.

[97] If no submissions are received within 35 days of the date of the release of this decision, the parties will be deemed to have resolved the issue of the costs and costs will not be determined by me.

Date: November 26, 2020 Justice L. Sheard

COURT FILE NO.: 06-23359

DATE: 20201126

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Canada Forgings Inc.

Plaintiff/Responding Party

and –

Atomic Energy of Canada Limited

Defendant/Moving Party

DECISION ON MOTION

Released: November 26, 2020

[^1]: CanForge factum dated October 25, 2012, delivered in response to AECL’s motion for summary judgment, at para. 6, AECL Motion Record, Tab 5 (the “CanForge SJ Factum”).

[^2]: Amended on October 30, 2015, pursuant to the Order of Carpenter-Gunn J. dated June 30, 2014.

[^3]: Responding Factum of the Plaintiff, Canada Forgings Inc., at paras. 10–11.

[^4]: Ibid, at para. 12.

[^5]: See Paul Emanuelli, Government Procurement, 3rd ed. (Markham: LexisNexis Canada, 2012) at pp. 768–69.

[^6]: For example, at paras. 72–80 of the Defence.

[^7]: CanForge’s allegation of the Contract “A” relationship between the bidders and AECL which becomes a Contract “B” if AECL enters into an agreement with one of the bidders is addressed in the Judgment at paragraphs 23–25.

[^8]: Factum of the Defendant/Moving Party, Atomic Energy of Canada Limited, at para 50; Reply Factum at paras. 15–17.

[^9]: AECL Reply Factum, at para. 17

[^10]: Canada Forgings Inc. v. Atomic Energy of Canada Ltd., 2012 CarswellOnt 17464.

[^11]: See Belton v. Spencer, 2020 ONSC 5327.

[^12]: See Passero v Doornkempt, 2020 ONSC 6384.

[^13]: See Rolley v. MacDonell, 2018 ONSC 508, 22 C.P.C. (8th) 152.

[^14]: See MacLeod v. Canadian Road Management Company, 2018 ONSC 2186, 79 C.C.L.I. (5th) 314 [MacLeod].

[^15]: See Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87.

[^16]: MacLeod, at para. 30.

[^17]: See Girao v. Cunningham, 2020 ONCA 260, 2 C.C.L.I. (6th) 15, at para. 162.

[^18]: Supra, at note 11.

[^19]: Belton v. Spencer, 2020 ONCA 623.

[^20]: Ibid, at paras. 42–49.

[^21]: See Cowles v. Balac (2006), 2006 34916 (ON CA), 83 O.R. (3d) 660 (Ont. C.A.), leave to appeal to S.C.C. refused, (2007), [2006] S.C.C.A. No. 496 (S.C.C.).

[^22]: See Kempf v. Nguyen, 2015 ONCA 114, 124 O.R. (3d) 241, at para. 43(5) [Kempf].

[^23]: CanForge Responding Factum, at para 41.

[^24]: See Courts of Justice Act, R.S.O. 1990. c. C.43.

[^25]: See Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[^26]: See Chandra v. Canadian Broadcasting Corp., 2015 ONSC 2980.

[^27]: See McIsaac v. MacKinnon, 2019 ONSC 2954.

[^28]: See Kempf, at para. 43(9).

[^29]: Judgment, at para. 45.

[^30]: AECL Amended Statement of Defence, at paras. 88-95.

[^31]: See Brookes v. Darling (1995), 1995 1408 (ON CA), 126 D.L.R. (4th) 764 (Ont. C.A.).

[^32]: See Pierre v. Pacific Press Ltd., 1993 577 (BC CA), [1994] 1 W.W.R. 23 (B.C.C.A.).

[^33]: See Lantheus Medical Imaging Inc. v. Atomic Energy of Canada Ltd., 2013 ONCA 264, 115 O.R. (3d) 161.

[^34]: See Ibid, at para 11.

[^35]: See McCreight v. Canada (AG), 2012 ONSC 1983, [2012] W.D.F.L. 5207, at para. 15.

[^36]: Courts of Justice Act, R.S.O. 1990, c. C-43.

[^37]: Limitations Act, S.O. 2002, c. 24, Sched. B.

[^38]: See Zeppa v. Woodbridge Heating & Air Conditioning Ltd., 2019 ONCA 47, 144 O.R. (3d) 385, at paras 71–72.

[^39]: See e.g. Louis v. Poitras, 2020 ONSC 5301; Coban v. Declare, 2020 ONSC 5580.

[^40]: See Belton v. Spencer, 2020 ONSC 5327; Passero v. Doornkempt, 2020 ONSC 6384.

[^41]: Email from Catherine Gleason-Mercier to RSJ Arrell dated October 7, 2020.

[^42]: See Louis v. Poitras, 2020 ONSC 6907 (Div. Ct.).

[^43]: Ibid, at para. 66.

Canada Forgings Inc. v. Atomic Energy of Canada Limited, 2020 ONSC 7310

Case Summary

Nature of the Motion

Background

Nature of the Claim

The Pleadings

(a) The Claim

(b) The Defence

Complexity of the issues

The Law

Issue One: Should the Jury Notice be Struck on the Ground of Complexity?

Should the motion be granted prior to trial or should the court “wait and see” the evidence?

Is this a case in which it is preferable not to take a “wait and see” approach?

Disposition of Issue One: Jury Notice Should be Struck on the basis of complexity

Issue Two: Is there a statutory prohibition against a jury trial against AECL?

Disposition of Issue Two: Jury Notice Should be Struck by reason of s. 26 of the CLPA and R. 47.02(1)(b)

Issue Three: Has CanForge claimed Equitable Relief?

Disposition of Issue Three: CanForge has not claimed sought equitable relief.

Post-COVID- 19 Motions to Strike Jury Notices:

Order Granted

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 1

Legislation 6