COURT FILE NO.: CV-20-644390-00CL

DATE: 2022-12-16

SUPERIOR COURT OF JUSTICE – ONTARIO

(COMMERCIAL LIST)

RE: TRANSASIA PRIVATE CAPITAL LTD. in its capacity as manager for or on behalf of Asian Trade Finance Fund and Asian Trade Finance Fund 2, sub-funds of TA Asian Multi-Finance Fund and TA PRIVATE CAPITAL SECURITY AGENT LTD., Applicants/Responding Parties/Moving Parties by Cross-Motion

AND

EXPORT DEVELOPMENT CANADA, Respondent

BEFORE: Kimmel J.

COUNSEL: George Pollack and Chenyang Li, for the Applicants/Responding Parties/Moving Parties by Cross-Motion, TransAsia Private Capital Ltd. and TA Private Capital Security Agent Ltd. Michael D. Schafler and Ara Basmadjian, for UD Trading Group Holding PTE. Limited Rahul Shastri and Kristie Stitt, for Rutmet Inc. Jamie Macdonald and Erika Woolgar, for the Respondent, Export Development Canada Harry Mann, for the Non-Parties/Responding Parties by Cross-Motion, Triton Metallix PTE. Limited and AP International FZC

HEARD: October 4, 2022

ENDORSEMENT (Intervention and consolidation motions)

The Application and the Within Motions

[1] Export Development Canada (“EDC”) issued a trade credit and an accounts receivable insurance policy (the “Policy”) in connection with Credit Facilities (the “Credit Facilities”) extended by the applicants TransAsia Private Capital Ltd. (“TransAsia”) and TA Private Capital Security Agent Ltd. (together, “TAP”) to Rutmet Inc. (“Rutmet”). The Policy insures receivables owing to Rutmet by its customers. Rutmet’s customers included: UD Trading Group Holding Pte. Limited (“UD Trading”), UIL Singapore Pte. Limited, UIL Malaysia Limited, UIL Commodities DMCC, and Prateek Gupta. Collectively, these entities form the “UD Group”.

[2] In connection with its initial coverage position under the Policy, EDC identified that there was a dispute about the amount owing (or whether there is any amount owing) by the UD Group to Rutmet (the “Receivables Dispute”). EDC maintains that until the dispute has been settled by negotiation or otherwise, and the loss under the Policy (that insures unpaid trade receivables) has been clearly established, it has no liability (to Rutmet or its assignee, TAP) with respect to claims made under the Policy.

[3] As a former lender of Rutmet and a first-ranking secured creditor, TAP claims to hold an irrevocable power of attorney over Rutmet’s insured receivables. This application has been brought by TAP as the holder of the power of attorney. EDC initially did not challenge TAP’s authority under the power of attorney. However, after Rutmet challenged that authority, EDC raised the validity of the power of attorney as another obstacle to any claim by TAP under the Policy (the “POA Dispute”).

[4] TAP disputes EDC’s denial of coverage under the Policy and seeks a determination of the coverage dispute in this application. Specifically, TAP initiated this proceeding for declaratory relief in connection with its claim for payment under the Policy. The relief sought includes declarations that:

a. TAP’s claims are covered under the Policy;

b. Coverage under the Policy has been triggered; and

c. Pursuant to the Policy, EDC is obliged to immediately pay TAP $60.9 million USD plus interest and 85% of TAP’s enforcement costs.

[5] After this application was commenced, both Rutmet and the UD Group commenced separate actions in Ontario.

[6] The UD Group commenced an action against TAP, Rutmet and EDC (the “UD Group Action”). In that action, the UD Group raised various issues, including issues that form the basis of the Receivables Dispute. Among other things, the UD Group claims that any obligations in respect of the underlying receivables and personal and corporate guarantees have been satisfied.

[7] Rutmet raised similar issues in its action against TAP, the UD Group, EDC and others (the “Rutmet Action”). Rutmet seeks, among other things, a declaration that nothing remains payable under the Credit Facilities and that all security arising from the Credit Facilities (the “Security”) be discharged.

[8] Both the UD Group and Rutmet argue that collateral was pledged as security that TAP seized and, if appropriately applied, TAP is no longer owed anything, and is precluded from claiming repayment from them and/or from enforcing any security granted in respect of amounts no longer outstanding (the “Cross-Collateralization Argument”). Both the Rutmet Action and the UD Group Action also assert claims for damages (outright or in the alternative) for, among other things, the alleged wrongful taking of shares pledged as security for debt that TAP seeks to recover.

[9] Pleadings in the Rutmet Action were amended to raise other grounds for the relief sought, including the POA Dispute.

[10] Both Rutmet and the UD Group bring motions seeking leave to intervene in this application. They argue for the consolidation of this proceeding with their existing actions[^1] and for this application to be converted into an action so that these proceedings can all be tried together or one after the other. EDC consents to the motions by Rutmet and the UD Group to intervene in this proceeding.

[11] TAP opposes these motions. TAP also brings a cross-motion seeking a stay of what it describes as abusive relitigation by Rutmet (including by having also initiated third-party claims in actions commenced by former suppliers, Triton Metals Pte. Limited and AP International FZC (the “Suppliers”), against Rutmet (the “Supplier Actions”)) and a stay of the Rutmet Action. TAP also seeks an order prohibiting Rutmet and the UD Group from further interfering with this application without leave of the Court pursuant to rr. 2.1.02(3) and 37.16 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (these rules deal with what are referred to as vexatious litigants).

Summary of Outcome

[12] For the reasons that follow, Rutmet and the UD Group motions for intervention and consolidation are dismissed. The basis for the requested relief was the need to determine the Substantive Disputes (defined below) in one proceeding with the key players, Rutmet, the UD Group and TAP, all participating. That has already been ordered to happen in the Foreign Guarantee Proceedings. Upon the court’s own motion and initiative, this application, the third-party claims in the Supplier Actions and the Rutmet Action are all stayed pending the determination of the Substantive Disputes in the Foreign Guarantee Proceeding (defined below) in either Singapore or Dubai.

[13] The TAP cross-motion to have Rutmet and the UD Group declared vexatious litigants and for their motions herein to be declared vexatious and an abuse of process is also dismissed.

Procedural History

[14] The procedural history to these motions is important because TAP relies heavily on previous rulings in Ontario, Singapore and Dubai in its opposition to the intervention motions and in support of its cross-motion. The relevant history is as follows:

a. Bankruptcy proceedings involving Rutmet in 2019 triggered a default under Rutmet’s loan facility with TAP.

b. On March 26, 2020 EDC advised TAP that it was denying coverage under the Policy because there is a “dispute” regarding the receivables owed to Rutmet by the UD Group.

c. On July 22, 2020 TAP commenced this application in Ontario against EDC seeking a declaration concerning the interpretation of section 7 of the Policy (the clause that EDC relies upon to deny coverage).

d. In July and August 2020 TAP commenced proceedings in Singapore (the “Singapore Proceeding”) and Dubai (the “Dubai Proceeding”) to enforce corporate and personal guarantees given as part of the Security for amounts claimed to be owing under the Credit Facilities (the “Foreign Guarantee Proceedings”).

e. In August 2020 the UD Group commenced the UD Group Action, in which it seeks, inter alia, to stay this application in reliance upon the Cross-Collateralization Argument.

f. On March 17, 2021 Gilmore J. dismissed the UD Group’s motion for an antisuit injunction in relation to the Foreign Guarantee Proceedings commenced by TAP in Singapore and Dubai. Gilmore J. also granted TAP’s motion for a permanent stay of the entire UD Group Action on jurisdictional grounds. Gilmore J. also held that the Cross-Collateralization Argument should be litigated in Singapore and/or Dubai where TAP and the UD Group and the individual guarantors are based: see TransAsia Private Capital Inc. v. Export Development Canada, 2021 ONSC 4902.

g. On April 28, 2021 Paciocco J. dismissed the UD Group’s request for a stay of Gilmore J.’s March 17, 2021 decision pending appeal at the Court of Appeal for Ontario: see UD Trading Group Holding PTE Ltd. v. TAP Private Capital Ltd., 2021 ONCA 279.

h. On May 11, 2021 a registrar of the High Court of Singapore dismissed UD Trading’s application for a stay of the Singapore Proceeding, rejecting UD Trading’s argument that issues should be litigated in Ontario in conjunction with this application, rather than in Singapore.

i. In June 2021 the third-party supplier actions were commenced.

j. On June 28, 2021, Rutmet amended its statement of claim in the Rutmet Action to assert that the power of attorney is invalid (the POA Dispute, referred to above).

k. On July 13, 2021 Gilmore J. dismissed EDC’s motion for a stay of this application pending the disposition of the Rutmet Action: TransAsia Private Capital Inc. et al v. Export Development Canada, ONSC 2021 4902, at para. 48. She reiterated that: “[i]n my March 17, 2021 ruling in relation to the anti-suit injunction (2021 ONSC 1957), I concluded that the anti-suit injunction was not appropriate as all matters were to be litigated in Singapore and Dubai. This included any defences to claims that receivables were owed to Rutmet”: at para. 40. She repeated that: “[t]his Court has already determined that the Receivables issue raised in Rutmet’s Claim is not to be litigated in Canada.” (the Receivables Dispute referred to above).

l. In that same decision, Gilmore J. ruled that the declaration sought by Rutmet in connection with the validity of the POA could be dealt with in the context of this Application: at para. 42.

m. On August 19, 2021 a registrar of the High Court of Singapore dismissed Rutmet’s application to discontinue the Singapore Proceeding. Rutmet was originally named as a co-plaintiff in the Singapore Proceeding but became a defendant after this ruling.

n. On October 14, 2021 a judge of the High Court of Singapore dismissed UD Trading’s appeal from the court’s decision of May 11, 2021.

o. On October 27, 2021 the Dubai Court of First Instance accepted the court appointed expert’s report dated August 22, 2021 (based on advice from Rutmet and the UD Group) and dismissed the Dubai Proceeding. TransAsia appealed this decision.

p. On December 10, 2021 a registrar of the High Court of Singapore dismissed Rutmet’s application for a stay of the Singapore Proceeding.

q. On January 26, 2022 a judge of the High Court of Singapore dismissed Rutmet’s appeal of the court’s decision of December 10, 2021.

r. On February 3, 2022 the Appellate Division of the High Court of Singapore dismissed UD Trading’s application for leave to appeal the decision of October 14, 2021. The Court of Appeal for Ontario dismissed the UD Group’s appeal of Gilmore J.’s March 17, 2021 decision on the same day.

s. On February 17 and March 2, 2022 the UD Group and Rutmet delivered their notices of motion seeking to intervene in this application (originally returnable March 31, 2022 and adjourned to October 4, 2022).

t. On April 1, 2022 the UD Group delivered a notice of application for leave to appeal from the February 3, 2022 decision of the Court of Appeal for Ontario to the Supreme Court of Canada. The Supreme Court of Canada dismissed that leave application on December 15, 2022 (case 40138).

u. On August 23, 2022 UD Trading obtained a stay pending appeal of the High Court of Singapore’s August 19, 2022 decision.

v. On September 12, 2022 a judge of the High Court of Singapore dismissed UD Trading’s appeal of the court’s August 19, 2022 decision.

w. On September 14, 2022 the Dubai Court of Appeal allowed TAP’s appeal of the decision of the Court of First Instance dated October 27, 2021 and permitted TAP to pursue its claims in Dubai.

[15] The outcome of these proceedings to date in Ontario, Singapore and Dubai is that TAP was permitted to pursue its claims in Singapore and Dubai against Rutmet and the UD Group for the determination of claims arising out of the Credit Facilities and the Security:

a. This court has rejected a request by the UD Group to stay TAP’s Foreign Guarantee Proceedings and has stayed the UD Group Action in Ontario: UD Trading Group Holding PTE Ltd. v. TAP Private Capital Ltd., 2021 ONSC 1957, aff’d 2022 ONCA 100, leave to appeal denied). The court also rejected a request to stay this application pending the determination of the Rutmet Action: 2021 ONSC 4902, at para. 48.

b. The High Court of Singapore has twice rejected requests by both the UD Group and Rutmet to stay the Singapore Action, in decisions dated May 11, 2021 (appeal dismissed October 14, 2021, leave to appeal denied February 3, 2022) and December 10, 2021 (appeal dismissed January 26, 2022), respectively. The High Court of Singapore also reinforced the decision to allow the Singapore Action to proceed by its September 12, 2022 dismissal of Rutmet’s appeal of that court’s August 19, 2022 decision to deny Rutmet’s request for a discontinuance of the Singapore Action.

c. The Dubai Court of Appeal, on September 14, 2022, allowed TAP’s appeal of the decision of the Court of First Instance dated October 27, 2021 and permitted TAP to pursue its claims in Dubai.

[16] The substantive dispute(s) raised that could give rise to an exclusion of coverage under the Policy (the “Substantive Disputes”) are: i) whether anything remains payable under the Credit Facilities; ii) whether there are any outstanding receivables owing from the UD Group to Rutmet and other accounting issues associated with the debt and its repayment; and/or iii) whether recourse to the Security (including the security over the accounts receivable at one time recorded as owing by the UD Group to Rutmet) has been exhausted (the Cross-Collateralization Argument).[^2]

[17] The decisions of Gilmore J. in this court, the Court of Appeal for Ontario and the Foreign Guarantee Proceedings to date have all consistently ruled that these Substantive Disputes should be adjudicated in the Foreign Guarantee Proceedings.

[18] To date, no court has ruled whether this application should proceed before, after or at the same time as the Foreign Guarantee Proceedings, despite the apparent overlap of with certain matters raised in these various proceedings.

The Positions of the Parties

[19] TAP characterizes the motions for intervention as a collateral attack on the previous decisions of this court. TAP argues that these motions are also indirect collateral attacks on the decisions of the Singapore and Dubai courts in the Foreign Guarantee Proceedings. To grant the requested relief would undermine the prior rulings that the Substantive Disputes between TAP and Rutmet and the UD Group about amounts claimed to be owing under the Credit Facilities and enforcement of the Security can and should be litigated in Singapore and Dubai, as opposed to in Ontario.

[20] Even though TAP acknowledges that at least some of the Substantive Disputes must be adjudicated in the context of this coverage application, TAP contends that Rutmet and the UD Group do not have interests in the application that justify intervention, will not stand to be adversely affected by the disposition of the application in a manner that justifies intervention, and do not seek to raise issues that have sufficient commonality in terms of facts and law with the underlying application. TAP also argues that Rutmet and the UD Group waited too long to pursue this request for intervention. Having known about this application since August of 2020 and having taken other, unsuccessful, steps in connection with the pursuit of their claims in Ontario, the Rutmet Action and UD Group Action should not now be permitted to seek to intervene and raise the same arguments in this application.

[21] The existence and need for an eventual determination of the Substantive Disputes and the POA Dispute is the basis for EDC’s denial of coverage under its Policy. As noted earlier in this endorsement, EDC maintains that until the dispute(s) are settled by negotiation or otherwise, and the loss under the Policy has been clearly established, it has no liability with respect to claims made under the Policy. EDC thus has an indirect interest in the determination of at least some of the Substantive Disputes (e.g. whether anything is owing under the Credit Facilities and/or whether any receivables remain owing to Rutmet). EDC’s position on the Substantive Disputes and the POA Dispute is, in theory, aligned with that of Rutmet and the UD Group, and is at odds with TAP’s position. EDC intends to advance the arguments that further its position on this application, irrespective of whether Rutmet and the UD Group are permitted to participate directly.

[22] EDC put the other parties on notice of its intention to make a subrogated claim if this application results in an order to make a payment under the Policy for the insured accounts receivable. However, EDC consents to the intervention request and no doubt would prefer that all parties directly participate in the determination of any Substantive Disputes that impact EDC’s obligations under the Policy.

[23] Rutmet and the UD Group maintain they are at the centre of the Substantive Disputes and the POA Dispute. Insofar as these disputes would need to be determined for this application to be decided (which appears to be the case based on how the application has been framed and EDC’s coverage position), Rutmet and the UD Group argue that they should be permitted to intervene so that the appropriate evidence and arguments are before the court from the parties directly involved in those Substantive Disputes. They contend that they should not be side-lined while their substantive rights are decided based on submissions and litigation strategies adopted by EDC, whose interests may be aligned but who is nonetheless a stranger to the Substantive Disputes and the POA Dispute.

[24] Rutmet and the UD Group argue they should be permitted to participate and to raise all the claims and assertions raised in the existing Ontario Rutmet Action and the UD Group Action. That way, they can ensure a full and complete adjudication of the Substantive Disputes and the POA Dispute on their merits. As a practical matter, they contend that the most efficient and proportionate way to adjudicate these issues is for all three Ontario proceedings to be consolidated.

[25] It was submitted that this is a rare case in which the court should permit Rutmet and the UD Group, as parties at the center of the Substantive Disputes, to participate in the adjudication of those issues in this application by granting them leave to intervene, and should grant the consolidation motions to control the multiplicity of proceedings in Ontario, even if it means that the same Substantive Disputes (or some of them) will be adjudicated in multiple jurisdictions (namely, in Ontario and in the Foreign Guarantee Proceedings).

The Issues to be Decided on The Pending Motions

[26] I have recast and consolidated the issues raised by the two motions for intervention and the cross-motion by TAP as follows:

a. What is the inter-play between the issues to be determined in this application with the issues raised in other proceedings?

i. Must the Substantive Disputes and the POA Dispute be determined in order to decide the within coverage application?

ii. If so, should the within coverage application be permitted to proceed in Ontario while the Singapore and Dubai Actions are pending, in which some of the same issues are raised?

b. Should Rutmet and the UD Group be permitted to intervene in this application?

i. Do they meet the requirements for intervention?

ii. Have they waited too long to bring this intervenor application?

iii. If they are permitted to intervene,

1. Should they be permitted to raise the same arguments that have been raised in the Rutmet Action and the UD Group Action, including the Cross-Collateralization Argument (or should their intervention be restricted)?

2. Should this application be consolidated with the Rutmet Action and the UD Group Action?

c. Conversely,

i. Is it an abuse of the court’s process and/or a collateral attack on prior orders of this court for Rutmet and the UD Group to be permitted to intervene and to request that this application be consolidated with the Rutmet Action and UD Group Action?

ii. Should an order be made under r. 2.1.02 of the Rules prohibiting Rutmet and/or the UD Group from bringing any further motions in this application?

iii. Should any third-party claims by Rutmet in the Supplier Actions against TAP and the Rutmet Action be stayed?

d. Are their evidentiary concerns regarding the affidavit of David Sullivan sworn July 14, 2022 (the “Sullivan Affidavit”) filed by TAP that need to be addressed in the context of these motions and should the Sullivan Affidavit be struck?

Analysis

[27] I will address each of the issues in turn.

a) Overlapping Issues Across Jurisdictions

i. The Relevance of the Substantive Disputes to this Application

[28] TAP may consider the Substantive Disputes to be frivolous and without merit, but it was acknowledged during oral argument that it is not merely the existence of the Substantive Disputes that is relevant to the determination of issues in this coverage application. It is recognized that the court will have to decide the Substantive Disputes and the POA Dispute to determine the coverage questions raised in this application.

[29] EDC itself has no evidence about, and had no involvement in, the underlying Substantive Disputes or the POA Dispute. Some evidence was tendered on this motion going to the merits of the Substantive Disputes. The court is not being asked, nor is it in a position, to decide or make any findings on these motions regarding the merits of the Cross-Collateralization Argument or any of the other Substantive Disputes.[^3] However, the evidence filed on these motions demonstrates that there are factual disagreements that must be resolved and credibility assessments that must be made by whichever court decides these issues.

ii. Multiplicity of Proceedings Across Jurisdictions

[30] The consistent outcome of the prior decisions of the Ontario, Singapore and Dubai courts at first instance and on appeal, is that the Substantive Disputes should be adjudicated in the Foreign Guarantee Proceedings and not in Ontario. The question of whether these Substantive Disputes should be adjudicated in Ontario or in the Foreign Guarantee Proceedings was directly at issue in these previous decisions.

[31] The question of where the Substantive Disputes should be determined cannot be relitigated. The law in this area is well-settled. As the Supreme Court of Canada said in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 20:

The law has developed a number of techniques to prevent abuse of the decision-making process. One of the oldest is the doctrine estoppel per rem judicatem with its roots in Roman law, the idea that a dispute once judged with finality is not subject to relitigation: Farwell v. The Queen (1894), 1894 CanLII 72 (SCC), 22 S.C.R. 553, at p. 558, Angle v. Minister of National Revenue (1974), 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248, at pp. 267-68. The bar extends both to the cause of action thus adjudicated (variously referred to as claim or cause of action or action estoppel), as well as precluding relitigation of the constituent issues or material facts necessarily embraced therein (usually called issue estoppel): G.S. Holmested and G.D. Watson, Ontario Civil Procedure (looseleaf updated 2000, release 3), vol. 3 Supp. (Toronto: Carswell, 1984), at 21§17 et seq. Another aspect of the judicial policy favouring finality is the rule against collateral attack, i.e., that a judicial order pronounced by a court of competent jurisdiction should not be brought into question in subsequent proceedings except those provided by law for the express purpose of attacking it: R. v. Wilson, 1983 CanLII 35 (SCC), [1983] 2 S.C.R. 594, R. v. Litchfield, 1993 CanLII 44 (SCC), [1993]4 S.C.R. 333, R. v. Sarson, 1996 CanLII 200 (SCC), [1996] 2 S.C.R. 223.

[32] EDC took no position at the time the UD Group Action was stayed, and still takes no position on the question of which jurisdiction should have carriage of the determination of the Substantive Disputes. It is certainly not open to TAP and the UD Group to relitigate the question of whether the Substantive Disputes should be determined in the Foreign Guarantee Proceedings or in the Ontario proceedings; that was determined when the UD Group Action was stayed. Rutmet has similarly participated in decisions in the Foreign Guarantee Proceedings that found the Substantive Disputes to be properly before Singapore and Dubai courts.

[33] Issue estoppel applies in circumstances where the same question has been decided, the decision was final, and the parties to the prior judicial decision are the same parties in which the estoppel is raised: See Danyluk, at paras. 25, 62-63; see also The Catalyst Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, 145 O.R. (3d) 759, leave to appeal refused, [2019] S.C.C.A. No. 284, at para. 25. As between the core parties to the Substantive Disputes, this was finally determined more than once.

[34] Further, this is a situation where, to the extent applicable, issue estoppel ought to be applied for the various reasons argued by TAP, having regard to the need for finality and respect for the court’s process and prior orders. A multiplicity of proceedings adjudicating the same or similar issues between the same parties should be avoided where possible. Rule 1.04 of the Rules reinforces the need to secure the just, most expeditious and least expensive determination of every proceeding on its merits.

[35] While TAP relies upon this doctrine as a basis for preventing the UD Group and Rutmet to intervene in this application, the logical extension of that argument is that the Substantive Disputes must be determined first in the Foreign Guarantee Proceedings. Only then, with the benefit of the determination of those disputes, can this application proceed. It is neither just nor efficient to suggest that issue estoppel and abuse of process apply to keep the UD Group and Rutmet out of this application, but that the court should nonetheless proceed to decide in this application the very issues that have been ordered to be decided in the Foreign Guarantee Proceedings to which they are party.

[36] No court has addressed this specific narrow question of whether the Substantive Disputes should be determined in this coverage application. While this court declined to stay this application in favour of the Rutmet Action in Ontario, no prior decision has addressed the specific question of whether this application should proceed ahead of the determination of at least the sub-set of the Substantive Disputes that have been previously ordered to be determined in the Foreign Guarantee Proceedings.

[37] When the Court of Appeal for Ontario in this case decided not to stay Gilmore J.’s March 17, 2021 decision, the same considerations were canvassed and are equally apt here, albeit in a different context: see 2021 ONCA 279, at paras. 34-37:

[34] In my view, this appeal is not frivolous. Sopinka J. made clear in Amchem Products Incorporated v. British Columbia (Workers’ Compensation Board), 1993 CanLII 124 (SCC), [1993] 1 S.C.R. 897, at p. 913, that there is a “fundamental difference” between a domestic court issuing an anti-suit injunction, which in effect determines matters for a foreign court, and a domestic court staying a proceeding before itself. The former raises issues of international comity, but the latter does not. The inquiries into the suitability of forum therefore differ.

[35] Most notably, in determining whether to grant an anti-suit injunction, the inquiry is based on the foreign court’s perspective. The domestic judge considering whether to issue an anti-suit injunction is to ask whether, applying Ontario’s principles of forum non conveniens, the court where the action sought to be restrained was commenced could reasonably have concluded there was no alternative forum that was “clearly more appropriate”. If the answer is yes, the decision of the foreign court to assume jurisdiction should not be interfered with: Amchem, at pp. 931-32.

[36] By contrast, in determining whether a domestic action should be stayed, the domestic court must determine for itself whether there is another forum that is “clearly more appropriate [than the domestic court] for disposing of the litigation and thus ensuring fairness to the parties and a more efficient process for resolving their dispute”. A stay is appropriate only if this is so: Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, at paras. 108-109.

[37] These inquiries can result in an anti-suit injunction being denied without the parallel domestic action being stayed, unlike the outcome arrived at by the motion judge. This will occur, for example, if both the domestic and foreign forums are equally appropriate. In such circumstances, a foreign court could reasonably conclude there is no alternative forum that is “clearly more appropriate”, thereby warranting denial of an anti-suit injunction. But a domestic court would not necessarily stay the parallel domestic action since the domestic court would be equally appropriate; in other words, the foreign forum would not be “clearly more appropriate”.

[38] Picking up on the last point noted from the Amchem decision, it was suggested during oral argument that this may be a rare case in which the court may determine that it is necessary and appropriate to allow parallel proceedings in both the domestic and foreign jurisdictions, because neither is the clearly more appropriate jurisdiction in which to determine the Substantive Disputes. In my view, that ship has sailed, and it has already been determined that the foreign jurisdictions are the more appropriate jurisdictions for these determinations (with the possible exception of TAP’s ability to act under the power of attorney – the POA Dispute - which this court has said can be determined in this application, although it does not have to be).

[39] The multiplicity of proceedings, with the risk of inconsistent findings, can and should be avoided by staying this application pending the determination of the Foreign Guarantee Proceedings. While no party asked for this, the court can on its own order that this application be stayed pending the determination of the Substantive Disputes in the Foreign Guarantee Proceedings in which the main parties, TAP, Rutmet and the UD Group, are all participating. The court’s discretion to do this is found in s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C. 43. Cases such as Hollinger International Inc. v. Hollinger Inc., 2004 CanLII 7352 (Ont. S.C.), at para. 5, and Gowling Lafleur Henderson LLP v. Meredith, 2011 ONSC 2686, direct the court to consider whether:

a. There is substantial overlap of the issues between the proceedings;

b. The cases share the same factual background;

c. Issuing a temporary stay will prevent unnecessary and costly duplication of judicial and legal resources; and

d. The stay if granted will result in an injustice to any party.

[40] In the exercise of my discretion, and upon the court’s own initiative under s. 106 of the Courts of Justice Act, having regard to the clear overlap of issues and factual background, the procedural history including multi-jurisdictional decisions that have already been made that have established that the Substantive Disputes will be adjudicated in the Foreign Guarantee proceedings, and having considered the Hollinger/Gowling principles, I have determined that this application should not proceed and that it should be stayed until the Substantive Disputes have been determined in the Foreign Guarantee Proceedings.[^4]

[41] To the extent that there is a concern about delays, as has been expressed in earlier motions, that concern is alleviated by the fact that TAP is the applicant in the Foreign Guarantee Proceedings and has the ability to control the pace at which they proceed. The appeals processes having now run their course, TAP can proceed with the Foreign Guarantee Proceedings.

[42] As the Court of Appeal for Ontario has already noted in 2021 ONCA 279, at para. 55: “There is no evidence before me to suggest that the moving parties will be unable to raise their position that TAP has already been paid as a defence in [the Foreign Guarantee Proceedings], or that the foreign proceedings will otherwise be unfair. It is therefore difficult to accept that irreparable harm arises from the risk” that those issues may be adjudicated in the Foreign Guarantee Proceedings rather than in a proceeding in Ontario.

[43] While EDC is not a party to the Foreign Guarantee Proceedings, it has not suggested that it has anything to contribute to the determination of the Substantive Disputes. Those determinations can eventually be put before the court in this application, if EDC and TAP are not able to resolve the coverage dispute that is the subject of this application on their own based on the determinations made in those other proceedings.

[44] If the determination of the POA Dispute is necessary for the pursuit of the Foreign Guarantee Proceedings, then some procedural mechanism will need to be established for that to be determined in Ontario if that is the appropriate jurisdiction for its adjudication, with the appropriate and necessary parties participating in it.

b) Intervention and Consolidation

[45] In light of my decision to stay this application, I do not need to decide the remaining issues raised on the intervention motions. I will nonetheless outline what I would have decided had I not stayed this application.

[46] Under r. 13.01(1) of the Rules, a person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

a. an interest in the subject matter of the proceeding;

b. that the person may be adversely affected by a judgment in the proceeding; or

c. that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

[47] The test for intervention under r. 13.01(1) is disjunctive. If any elements are present the court can allow a party to intervene: see Bennett Estate v. Iran (Islamic Republic of), 2013 ONCA 623, 117 O.R. (3d) 716, at para. 15.

[48] Here arguably all three are present, but at the very least the last one is:

a. Unquestionably, Rutmet and the UD Group have an interest in the Substantive Disputes that TAP acknowledges must be decided in the context of this coverage application. This is because they will, in turn, ultimately impact the determination of whether there is an insured loss that TAP is entitled to be indemnified for. TAP argues, however, that the subject matter of this application is the interpretation of the Policy and the coverage to be provided, which neither the UD Group nor Rutmet have a direct interest in since they do not stand to receive any payments under the Policy, one way or the other. TAP argues that where the proposed intervenors only have an interest in the outcome of an application and not its subject matter that is not a sufficient basis to grant intervenor status: see Steeves v. Doyle Salewski Inc., 2016 ONSC 2223, 35 C.B.R. (6th) 144, at paras. 31-34; see also Baffinland Iron Mines v. Tower-EBC, 2021 ONSC 5639, at paras. 21- 27.

b. However, even if the subject matter of this application were to be as narrowly defined as TAP suggests it be, Rutmet and the UD Group undoubtably stand to be adversely affected by the decision. The UD Group will be adversely affected by the decision having been put on notice of subrogated claims by EDC, and also because of the implications that the determination of the Substantive Disputes in this proceeding could have on the Foreign Guarantee Proceedings involving both Rutmet and the UD Group if this dispute proceeds faster and any comity is afforded to their determination by the foreign courts. They need only to show a possibility that it may be adversely affected by a judgment in the proceeding: see The Estate of Henry Goldentuler v. Crosbie, et al., 2016 ONSC 989, at para. 48. This overlap and its potential implications are the reason for my decision to stay this application, above. Conversely, TAP argues that this indirect interest and the mere possibility of an adverse effect is not direct, immediate or sufficient to justify intervenor status: see: Steeves at paras. 31-34 and 64; see also Baffinland, at paras. 32, 38-39.

c. At the very least, there are common questions of law and fact that arise in both this proceeding and the Rutmet and UD Group Actions, all of which require the determination of at least some of the Substantive Disputes, for the reasons outlined earlier in this endorsement. The court in Steeves (variously, and at para. 48) held that this is a fact-specific determination of the extent of overlap, the extent to which the proposed intervenors seek to introduce new issues and/or whether they may slow down the progress of the proceeding. This case is different from the Baffinland and Steeves cases relied upon by TAP. The overlap in the Substantive Disputes is clear. While there may be nuanced arguments, the basic issues raised in the Rutmet and UD Group Actions are all relevant to the determination of whether anything is owing under the Credit Facilities, and if so, how much is owing and how much has been recovered by TAP. These disputes and their determination are at the heart of the coverage dispute under the Policy that must be determined in this application.

[49] If the UD Group and Rutmet were permitted to intervene, the court must consider whether:

a. They should be permitted to raise the same arguments raised in the Rutmet Action and the UD Group Action, including the Cross-Collateralization Argument (or should their intervention be restricted)?

b. This application should be consolidated with the Rutmet Action and the UD Group Action

[50] In my view, having met the criteria, it would be unfair to side-line the primary proponents of the Substantive Disputes from fully participating in the adjudication of those issues. Even if EDC’s interests are aligned with Rutmet’s and the UD Group’s interests on the Substantive Disputes and on the ultimate question of whether TAP has suffered any loss, it is a stranger to the factual and legal disputes that underlie the determination of those issues.

[51] I do not accept the suggestion that the interests of the UD Group and Rutmet can be equally well served by them providing their evidence to EDC and leaving EDC to advance their arguments. Further, EDC has, for its own reasons, made allegations of fraud and collusion against Rutmet and the UD Group. The court cannot assume that EDC will singularly advance their arguments and positions. EDC may have other interests and objectives to legitimately pursue and protect that are not aligned with those of Rutmet and the UD Group.

[52] Gilmore J. allowed for the possibility of affidavits from Rutmet and the UD Group in this application. When Gilmore J. declined to stay this application at EDC’s request, it is not clear that it was squarely before her that this application would require the determination of the Substantive Disputes. Nor is it clear that Gilmore J. was specifically ruling that the UD Group and Rutmet would not be permitted to participate in the adjudication of those disputes. Gilmore J.’s prior rulings assumed they would be participating in that adjudication in the Foreign Guarantee Proceedings. If the coverage issues raised in this application could be determined without deciding the Substantive Disputes, then it might have proceeded without the necessity of any intervention by Rutmet and the UD Group. However, I have determined that is not the case.

[53] Rutmet and the UD Group argue that all that Gilmore J.’s prior order staying the UD Action determined was that the UD Group’s claims for declaratory relief in relation to the guarantees and for damages based on the Cross-Collateralization Argument and realization of other Security did not have a real and substantial connection to Ontario and that the UD Group could not pursue a claim in Ontario based upon that argument. However, they argue, Gilmore J. did not rule that they could not participate in, or defend, the adjudication of these issues if they are to be adjudicated in Ontario at the instance of TAP.

[54] UD Group relies on what it characterizes as admissions by TAP representatives that UD Group and Rutmet should be at the table and permitted to defend themselves in respect of the Substantive Disputes. It was put to the witnesses that the parties who are directly involved and have a stake in the Substantive Disputes should be permitted to participate in this application if those disputes are going to be adjudicated. The witnesses did not disagree with this assertion. While I do not consider this evidence to rise to the level of a concession or admission, the court accepts the logic of the suggestion.

[55] The alternative, that these Substantive Disputes could be adjudicated in this proceeding without the full participation of Rutmet and the UD Group, such that the determination of those disputes would not be binding upon them in the Rutmet and UD Group Actions, is highly inefficient and impractical. Simply put, it is not an outcome that I would have favoured if I had not decided to stay this application. If the Substantive Disputes are to be determined, all parties to those disputes should participate in their adjudication so that they will be bound by the outcome.

[56] This does not necessarily mean that the Rutmet and UD Group Actions must be consolidated into this application. However, it does mean that some process would have to be in place to ensure that all of the Substantive Disputes are determined first in this proceeding and that the determination would be binding on the parties to those other actions. Any further determinations that may be required in those actions could then be predicated on the findings in this application.

[57] Consolidating the Rutmet and UD Group Actions into this application as part of the motions for intervention does create friction with the previous decisions of Gilmore J. and the Court of Appeal. While it may be form over substance at some level, I would have preferred not to consolidate the proceedings, but rather order that this one proceed first, with all parties participating and that they be bound by the outcome for purposes of whatever further must be determined in the Rutmet and UD Group Actions.

[58] TAP complains about the over two year delay (since this application commenced in July 2020) that it took Rutmet and the UD Group to bring these intervention motions, as well as the series of intervening procedural victories that will all be unwound if they are granted leave to intervene in this application and to participate in the adjudication of the Substantive Disputes. However, no specific prejudice to TAP was identified. The concerns are all rolled up into the res judicata, abuse of process and collateral attack arguments, which are addressed in the following sections of this endorsement.[^5]

[59] TAP argues that it is axiomatic that justice delayed is justice denied and that the outcome would have been different had this intervenor application been brought in July 2020, instead of this year. Rutmet and the UD Group say that they only fully appreciated the implications of this application proceeding after EDC invited them to participate and put them on notice that the Substantive Disputes would be raised and adjudicated to determine the coverage issues, with or without them. This occurred in or about November 2021, after which there are explanations for the delays that resulted in this application not being heard until a year later.

[60] TAP argues that they should have foreseen this. I disagree. The need to adjudicate the Substantive Disputes to decide this coverage application may appear obvious now with the benefit of hindsight. However, if it had been so obvious, I would have expected it to have been squarely raised when the first motion to stay this application was argued. It does not appear to have been. Reference was made in passing to the existence of the Foreign Guarantee Proceedings in which the same issues were raised, but at the time there was a concern that standstill orders were in place in those actions.

[61] Accordingly, had I not stayed this application, I would have permitted Rutmet and the UD Group to intervene to participate fully in the adjudication of all of the Substantive Disputes, with the opportunity to lead evidence and make submissions, and with the result that they be bound by the court’s findings on those matters. I would not have consolidated the Rutmet and UD Group Actions into this proceeding, but rather would have ordered that they be stayed (to the extent they were not already) and that they proceed only after this proceeding has concluded, taking into account any findings made in respect of the Substantive Disputes in this proceeding.

c) Issues of Abuse of Process and Collateral Attack Raised by the Cross-Motion

[62] TAP argues that issue estoppel bars Rutmet and the UD Group, but not TAP, from litigating the Substantive Disputes in Ontario. It relies on appellate level decisions in three jurisdictions. I do not need to decide this precise issue given I have decided to stay this application pending the determination of the Substantive Disputes in the Foreign Guarantee Proceedings. However, I do not agree with TAP’s suggestion that any of the Substantive Disputes raised in the Rutmet Action and UD Group Action have been determined; what has been determined is that the Substantive Disputes that are rolled up in the Foreign Guarantee Proceedings should be adjudicated in the Foreign Guarantee Proceedings.

[63] TAP’s issue estoppel and abuse of process arguments might have had more traction if Rutmet and the UD Group were seeking to intervene in this application to raise the Substantive Disputes themselves. However, it is acknowledged that the Substantive Disputes are in play already in this application so their request to intervene in the adjudication is justified for the reasons I indicated earlier in this endorsement.

[64] My decision to stay this application avoids the concern that allowing Rutmet and the UD Group to intervene in this application does an end run around the prior orders that held that the Substantive Disputes can and should be determined in the Foreign Guarantee Proceedings. Staying this application is consistent with those earlier decisions of our court, the Court of Appeal for Ontario and the trial and appeal courts in Singapore and Dubai. The concern is avoided by requiring that the Substantive Disputes be decided first in the Foreign Guarantee Proceedings, as I have done.

[65] In the circumstances of this case, I do not consider Rutmet and the UD Group to be attempting to litigate frivolous or vexatious issues within the meaning of r. 2.1. They have a legitimate interest in the Substantive Disputes and the orders made permit them to participate in the adjudication of the Substantive Disputes and to be bound by the outcome, while respecting the previous orders of this court. Further, I have found that if I had not decided to stay this action, they would have been granted leave to intervene. Thus, their motions cannot be said to be without merit or for an ulterior purpose.

[66] The plaintiffs in the Supplier Actions are not before the court at this time. It would be inappropriate for any order to be made regarding the conduct of those actions. However, it would be inconsistent with the previous orders of this court, the Court of Appeal for Ontario and the trial and appeal courts in Singapore and Dubai for Rutmet and the UD Group to advance the Substantive Disputes by third-party actions against TAP in the Supplier Actions. I agree that those third-party actions should be stayed. If and when the Substantive Disputes are determined, the consequences of those determinations can be brought to bear on claims that may arise out of the Supplier Actions.

d) Evidentiary Considerations

[67] Rutmet asked the court to strike portions of the affidavit of David Sullivan sworn July 14, 2022 on behalf of TAP. The Sullivan Affidavit deals with the past business conduct of one of Rutmet’s affiants (prior to him joining Rutmet). TAP admits that the affidavit was tendered in an effort to undermine the credibility of Rutmet and its principals on the merits of the Substantive Disputes, and in particular the dispute as to whether TAP was responsible for advancing funds directly to the Suppliers.

[68] Rutmet argues that this Sullivan Affidavit is inflammatory, based on third-hand information about an unrelated dispute litigated 16 years ago and is a collateral (unfounded) attack on Rutmet’s credibility. Rutmet argues it should be struck under r. 25.11(b) on the grounds that the impugned paragraphs (18 and 23-29) are scandalous, frivolous and vexatious.

[69] I do not need to decide whether to strike the impugned paragraphs of the Sullivan Affidavit. This affidavit was primarily directed at the consolidation motion and request to convert this application to an action because of the credibility issues on both sides that will need to be addressed in the adjudication of the Substantive Disputes (or some of them). These questions (consolidation and conversion of the application to an action) do not need to be decided. Thus, the Sullivan Affidavit does not need to be considered. The admissibility, relevance and probative value of that evidence is questionable but that will be an issue for another day, should TAP seek to introduce this evidence for any other purpose.

Costs

[70] At the conclusion of the hearing the parties asked for the opportunity to make brief written cost submissions after receiving the court’s decision on these motions. Given the number of motions and potential outcomes, the court agreed. In the meantime, the parties agreed to exchange their respective cost outlines by October 12, 2022 and the court assumes that occurred.

[71] Now that the outcome is known, the parties are encouraged to try to reach an agreement on costs, or at least the quantum for each scale of costs that might be awarded if the scale is not agreed to. If they are able to reach agreement on any aspects of the costs of these motions, they are to advise the court by January 6, 2023 by email to my assistant at: linda.bunoza@ontario.ca.

[72] While there may be matters about which the court is unaware, based strictly on the issues raised and the outcome, the court would at this stage be inclined to order that the parties each bear their own costs of these motions. However, if there are issues that remain to be determined by the court regarding the costs of these motions, any party that is requesting that costs be paid to them shall deliver a brief written costs submission of no more than 4 pages double spaced (also attaching their cost outline(s) previously delivered) by January 16, 2023. Any party against whom costs are requested may deliver a brief written responding cost submission of no more than 5 pages double spaced (also attaching their cost outline(s) previously delivered) by January 23, 2023. Any party who requested costs be paid and received a response may deliver a brief written reply cost submissions of no more than 1.5 pages double spaced by January 27, 2023.

[73] All written cost submissions shall be filed with the court, uploaded onto CaseLines and PDF copies shall be sent to my judicial assistant by email.

Final Disposition

[74] I will review the relief sought at the end of each factum and provide my disposition, based on the above analysis:

a. The UD Group’s request for leave to intervene as an added party to this application, for it to be converted into an action and consolidated with the UD Group and Supplier Actions is denied.

b. Rutmet’s request for leave to intervene as an added party to this application, for it to be converted into an action and consolidated with the Rutmet and Supplier Actions and third-party claims is denied.

c. Rutmet’s motion to strike certain paragraphs of the Sullivan Affidavit is neither granted nor dismissed; it need not be decided at this time.

d. On its own initiative, the court orders that this coverage application be stayed pending the disposition of the Substantive Disputes in the Foreign Guarantee Proceedings.

e. TAP’s cross-motion to have the UD Group’s and Rutmet’s motions declared to be frivolous, vexatious and an abuse of process and for them to be effectively declared vexatious litigants is dismissed. The third-party claims against TAP in the Supplier Actions, insofar as they depend upon the determination of any of the Substantive Disputes, are stayed.

f. If not agreed to by the parties, costs shall be determined following the court’s review and consideration of the parties’ written cost submissions as provided for above.

[75] This endorsement and the orders and directions contained in it shall have the immediate effect of a court order without the necessity of the formal issuance and entry of an order. However, any party may take out a formal court order by following the procedure under r. 59.

Kimmel J.

Date: December 16, 2022

[^1]: Since the UD Group Action was stayed, Rutmet is the primary moving party, although the UD Group seeks to lift the stay of its action and for the same relief on the same grounds if Rutmet is successful.

[^2]: Not every Substantive Disputes issue is raised in each proceeding in each jurisdiction, but each of them is raised in more than one proceeding across jurisdictions.

[^3]: TAP suggests that there has, in the context of the earlier jurisdiction/stay motions, been a determination that the Cross-Collateralization Argument is without merit. I do not read those earlier decisions as having decided the merits of that issue, nor would it have been appropriate for a determination on the merits to have been made: see Young v. Tyco International of Canada Ltd., 2008 ONCA 709, 92 O.R. (3d) 161, at para. 31.

[^4]: As a practical matter, it is the proceeding in Singapore that is most comprehensive and should logically proceed with all parties participating, although this court cannot make an order or direction with respect to the conduct of the Foreign Guarantee Proceedings. It is reasonable to expect that the Substantive Disputes will be determined in one or the other of those proceedings. Then the parties may return to deal with any remaining coverage issues under the Policy in this application, including the POA Dispute if that is not adjudicated in the Foreign Guarantee Proceedings.

[^5]: In any event, the primary relief granted on avoids this concern and respects those prior orders by requiring the Substantive Disputes to be determined in the Foreign Guarantee Proceedings.