COURT FILE NO.: CV14-1052300CL

DATE: 2023-08-22

ONTARIO

SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST

BETWEEN:

NWG INVESTMENTS INC.

Plaintiff

– and –

FRONTEER GOLD INC., NEWMONT MINING CORPORATION, NEWMONT CANADA HOLDINGS ULC, NEWMONT FH B.V., and MARK O’DEA

Defendants

Ren Bucholz, Dan Rosenbluth, Mannu Chowdhury, for the Plaintiff

Kent E. Thomson, Andrea L. Burke, Connia Chen, for the Defendants

HEARD: July 24 and 25, 2023

JANA STEELE J.

Overview

[1] The defendants bring a motion to dismiss the plaintiff’s action for delay.

[2] The events giving rise to the action occurred in 2007 and 2008. The action, which was commenced in Ontario in 2014, is still at the pleadings stage. There have not been productions, examinations for discovery, or will say statements, and an important witness has died.

[3] For the reasons set out below, I find that the delay in this case has been inordinate and inexcusable. As a result of the inordinate delay, the possibility of a fair trial is at risk.

[4] The plaintiff’s action is dismissed.

Background

[5] The main action arises out of a transaction between the parties that closed on September 24, 2007. In that deal, which was done by way of Court-approved Plan of Arrangement between Fronteer Gold Inc. (“Fronteer”) and New West Gold Corp. (“NewWest”), NWG Investments Inc. (“NWG”) exchanged its interest in NewWest for shares of Fronteer (the “Transaction”).

[6] Due diligence in respect of the Transaction was done in July 2007. The definitive documents in respect of the Transaction were executed on July 27, 2007.

[7] At the time of the Transaction, Fronteer owned 40% of Aurora Energy Resources Inc. (“Aurora”), which was publicly traded. Both Fronteer and NewWest were active in the gold exploration business. Fronteer’s holding of Aurora shares also gave it exposure to uranium exploration. Aurora was engaged in uranium exploration and development in Newfoundland and Labrador, in a region known as Nunatsiavut, which is controlled by a First Nations body called the Nunatsiavut Government Assembly (the “NGA”).

[8] Fronteer was purchased by Newmont Mining Corporation (“Newmont”) in or around April 2011. Newmont is a corporation incorporated in Delaware. The defendant, Newmont Canada Holdings ULC (“NCH”), is a subsidiary of Newmont.

[9] Mark O’Dea is the former President and Chief Executive Officer of Fronteer. Dr. O’Dea was also a shareholder of Fronteer, which was a widely held public company. He is also the former President and Chief Executive Officer of Aurora.

[10] At the time of the Transaction, NewWest was publicly traded. However, Mr. Jacob E. Safra owned 86% of the shares of NewWest through his holding company, NWG.

[11] NWG is a corporation incorporated under the laws of Barbados. Mr. Safra is NWG’s sole shareholder.

[12] Shortly following the closing of the Transaction, the Nunatsiavut government announced that they would be examining uranium mining policies:

• On October 11/12, 2007, the NGA’s Minister of Lands and Resources, Willian Barbour, tabled a motion requiring further study of proposed amendments to the Labrador Inuit Lands Act related to uranium.

• On March 5, 2008, Minister Barbour introduced a Bill to impose a three- year moratorium on uranium mining, which was adopted by the NGA on April 8, 2008.

[13] The plaintiff is suing the defendants for $1.2 billion. The allegations include fraudulent and negligent misrepresentation. The plaintiff’s position is that there were specific representations made by Dr. O’Dea inducing the plaintiff to enter into the Transaction. Among other things, the plaintiff alleges that Dr. O’Dea was aware of the risk that a temporary moratorium might be imposed on uranium mining, and he failed to disclose this. The defendants deny the allegations.

Analysis

[14] The only issue on this motion is whether the Court should exercise its discretion and dismiss the plaintiff’s action for delay.

[15] The Court may dismiss an action for delay under the Rules of Civil Procedure or pursuant to the Court’s inherent jurisdiction.

[16] The defendants ask the Court to exercise its discretion under Rule 24.01 of the Rules of Civil Procedure to dismiss the action. Rule 24.01(1)(c) provides that a defendant may move to have an action dismissed for delay where the plaintiff has failed to set the action down for trial within six months after the close of pleadings.

[17] The jurisprudence confirms that an action should not be dismissed for delay under Rule 24.01 unless the delay is (a) inordinate; (b) inexcusable; and (c) prejudicial to the defendants such that it gives rise to a substantial risk that a fair trial of the issues will not be possible: Ticchiarelli v. Ticchiarelli, 2017 ONCA 1, at para. 12. The test is conjunctive.

[18] As noted by the defendants, the Court of Appeal in recent cases has recognized the important public interest in promoting the timely resolution of disputes: 1196158 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544, 112 O.R. (3d) 67, at para. 39. The Court must strike a balance between the desire to adjudicate matters that do not settle on their merits, and not tolerating unexplained delay.

Was the Delay Inordinate?

[19] Whether a delay is inordinate is based on the length of time between the start of the proceeding and the motion to dismiss: Ticchiarelli, at para. 15, Langenecker v. Sauvé, 2011 ONCA 803, at para. 8.

[20] The motion to dismiss was brought in November 2022.

[21] The Ontario action was commenced in February 2014.

[22] The pleadings closed in April 2015.

[23] The last substantive step taken in the action by Mr. Safra or NWG was the forwarding of a draft discovery plan to the defendants on April 23, 2015.

[24] A complicating factor in the instant case is that the plaintiff first commenced the action in the State of New York. The plaintiff did this in the face of the Transaction documents that clearly specified that the governing law was Ontario, and counsel for the defendants putting the plaintiff on notice that they would seek to dismiss an action in New York on the basis of forum non conveniens, which the defendants successfully did.

[25] The plaintiff commenced the action in New York in or around September 2012, approximately five years after the Transaction. The Supreme Court of the State of New York dismissed the action.

[26] In the New York judgment, Melvin L. Schweitzer J. noted that NWG had argued that Ontario was not an available forum due to the two-year statute of limitations. He stated that “NWG seeks relief from its own procrastination in filing a complaint, causing it to potentially exceed a two year limitation for tort action.” The New York judgment was in 2013. Schweitzer J. further stated that “NWG, through its own inaction, voluntarily allowed the statute of limitations to potentially expire in the most convenient forum (a forum which was previously agreed to be suitable via the Lock-Up Agreement).”

[27] The plaintiff submits that the period of delay should be measured from 2016 around the time of the mediation and when the plaintiff’s former counsel got off the record. The plaintiff submits that prior to that time there was normal litigation activity. However, this is not the test that has been endorsed by the Court of Appeal.

[28] Accordingly, the delay is either from February 2014 or from September 2012 to November 2022 (approximately 8 years or 10 years). In either case, this is a long delay and one that the Court may recognize as inordinate: Mugizi v. Ngo, 2022 ONCA 595, Sterling Waterhouse v. Cohen, 2022 ONSC 3950; Richardson v. Kimberley, 2012 ONSC 1050. I note that the comments made by Schweitzer J. about the plaintiff’s “inaction” and “procrastination” ought to have motivated the plaintiff to move faster, not slower.

[29] The nature of the claim, fraudulent misrepresentation, may also warrant an obligation to move the matter along at a faster rate. As noted by the Alberta Court of Appeal in Humphreys v. Trebilcock, 2017 ABCA 116, at para. 123, the nature of allegations of fraud are different:

[I]t is noteworthy that some allegations made by a nonmoving party may be of such a harmful nature to a moving party that they are qualitatively different from other allegations and merit unique treatment when considering r. 4.31(1). Fraud may be such an allegation. A litigant who alleges fraud may be under an obligation to advance the action with reasonable expedition, that is at a faster pace than that expected of a reasonably litigant pursuing a claim that does not allege fraud or a comparable wrong. This means that any delay may not escape being characterized as inordinate delay if the nonmoving party advances a fraud claim. In other words, a nonmoving party who claims that the moving party has committed fraud or a comparably egregious form of misconduct runs a greater risk that delay attributable to the nonmoving party may be characterized as being inordinate than does a plaintiff in other actions not alleging fraud.

[30] The Alberta Court of Appeal’s reasoning is applicable in this case. The nature of an allegation of fraud is such that it warrants a faster resolution. The defendants state that these are very serious allegations of misconduct made in a public forum, which impugned the conduct and character of Dr. O’Dea in a way that is unfair and improper. Proceedings such as these should move quickly to determine whether the allegations are warranted. Having allegations that go to the root of one’s character outstanding and unresolved for a prolonged period of time is highly stressful and potentially damaging. It is different than having an outstanding contract dispute, for example.

[31] The allegations against the defendants have been outstanding since around 2012 when the New York proceedings were commenced, and there is no end in sight given that this matter is only at the pleadings stage.

[32] In Deutsche Postbank AG v. Kosmayer, 2019 ONSC 6997, aff’d 2020 ONCA 410, the action was dismissed for delay. The delay in that case had been about 8 years. There had not yet been examinations for discovery, but the plaintiffs had produced their documents. In the instant case, there has been nothing done other than pleadings.

[33] Similar to Deutsche Postbank, the plaintiff in the instant case elected to have its case heard on the Commercial List. As noted by Dietrich J., at para. 21: “The Commercial List Practice Direction specifically provides that the very purpose of the Commercial List is to ‘expedite the hearing and determination of matters involving issues of commercial law.’”

[34] The delay in this case has clearly been inordinate.

Was the Delay Inexcusable?

[35] The plaintiff argues that if there was an inordinate delay, it was excusable. The defendants disagree.

[36] As the defendants have established that the delay was inordinate, the burden shifts to the plaintiff to establish a reasonable excuse for the delay: Sterling Waterhouse Inc., at para. 14; Heffernan v. John H. Kieffer Professional Corporation, 2021 ONSC 2786, at para. 52.

[37] I am not satisfied that the delay was excusable.

[38] In Deutsche Postbank, at para. 18, Justice Dietrich set out the principles to be applied on a motion to dismiss a claim for delay, which include:

a. The plaintiff is responsible for moving the action along, not the defendants.

b. Any delay in the prosecution of an action requires an explanation. The onus rests on the plaintiff to show that the delay was not intentional. If the plaintiff does not provide an explanation for the delay, it is to be presumed that the delay was intentional.

d. An inexcusable delay requires a determination of the reasons for the delay and an assessment of whether the reasons afford an adequate explanation for the delay. Explanations that are “reasonable and cogent” or “sensible and persuasive,” will excuse the delay if dismissing the action would be inappropriate. The court will consider the credibility of explanations, the explanations offered for individual parts of the delay and the overall delay and the effect of the explanations considered as a whole. [Emphasis added.]

[39] The plaintiff submits that the combined effects of the circumstances should be considered, including the pandemic, health issues suffered by Mr. Safra, and the fact that the plaintiff’s prior counsel recused themselves for conflict of interest. The plaintiff notes that in Metalli Group Inc. et al v. Altech Environmental Consulting Ltd. et al., 2023 ONSC 1091, at para. 31, the Court determined that the “combined effects” of the plaintiff’s poor health, the pandemic, and the plaintiff’s involvement in another complex transaction were “a sufficiently reasonably and cogent explanation for the plaintiffs’ delay in retaining new counsel and moving the action forward.”

Replacement of Counsel

[40] When the plaintiff commenced the Ontario action it retained McCarthy Tétrault as its counsel. However, it was subsequently determined that McCarthys had a conflict and could not continue to act for the plaintiff.

[41] The issue of McCarthys’ conflict was known in 2015 and they stopped acting in May 2016, following the failed mediation. However, as noted above, nothing happened with the litigation after 2015. The plaintiff’s prior counsel was not formally removed from the record until 2021, when the plaintiff’s current counsel was retained.

[42] Mr. Safra is a very sophisticated and experienced businessperson. The plaintiff’s failure to retain new counsel from 2016 to 2021 is not an explanation that is reasonable and cogent or sensible and persuasive. Mr. Safra and NWG had the resources to retain new counsel and the plaintiff had already been criticized by the Court in New York for “procrastination” and “inaction.” This is $1.2 billion action. If the plaintiff wanted to proceed with the action, it would have retained new counsel when it became clear that McCarthys had a conflict and could not continue to act. Finding new Ontario counsel may reasonably have taken the plaintiff 3 months or 6 months, but not 5 years.

[43] Mr. Safra argues that his New York attorney was unable to retain new counsel in Ontario because of the prominence of the defendants in the Canadian mining industry, and that certain firms he contacted had conflicts and could not act. However, there is no evidence regarding which Ontario firms were contacted, or how many firms were approached, or when. The plaintiff has not particularized its assertion that unsuccessful efforts were made to retain other Ontario firms in the five-year gap after McCarthys advised that they were unable to continue to act. In any event, it is inconceivable that it could take five years to find Ontario counsel willing and able to accept a retainer to represent a plaintiff in a $1.2 billion claim.

[44] In Loiselle v. Violette, 2018 ONSC 2469, the plaintiffs attributed their delay to an inability to retain new counsel and to health issues. In that case the plaintiffs did not have particulars regarding the lawyers that were allegedly contacted, including their identity or dates when the attempts were made. With regard to the lack of information particularizing when the attempts were made to obtain counsel, R.D. Gordon R.S.J. noted, at para. 23, that the dates when the attempts were made “is an important factor. If inquiries were made as soon as previous counsel went off record and continued for a lengthy period of time that may well provide a reasonable explanation of why the matter sat dormant. On the other hand, if those inquiries were only recently made after allowing the matter to lie dormant for a further three years, the explanation is less persuasive.” Similar to Loiselle, the Court has not been provided with particulars regarding when inquiries were made by the plaintiff to find new counsel.

[45] In Loiselle, at para. 24, the Court accepted that it would take a reasonable amount of time to retain new counsel, which the Court assessed at six months.

[46] The plaintiff notes that in Fenton v. Nubury Properties Limited, 2011 ONSC 1005, Master R.A. Muir did not strike a claim despite a lengthy delay. The Court found that the action was moving well originally, that the delay following the setting down the matter for trial was attributable to the relationship breakdown between the plaintiff and counsel, and that once the plaintiff retained new counsel, efforts were being made to move the matter forward. In my view Fenton is distinguishable from the instant case because that case fell off the rails after discoveries were done and the matter was set down for trial. In the instant case, the matter is at the pleadings stage.

[47] While I accept that the termination of the McCarthys retainer may be an excuse for a brief delay of around 6 months, it is not an excuse to allow a matter to languish for years.

Pandemic

[48] The plaintiff also raised the pandemic as an excuse for the delay. However, as conceded by Mr. Safra during cross examination, during the pandemic there was nothing to prevent him from communicating with counsel and others.

[49] The pandemic does not excuse a party failing to take basic steps in the proceeding, such as setting timetables, collecting documents and corresponding with counsel. The pandemic itself is not an acceptable explanation for delay: Beshay v. Labib, 2023 ONSC 2874, at para. 37. As stated by Chown J. in Gordon v. Gordon, 2021 ONSC 273, in holding that the pandemic was not a reasonable explanation for the delay, at para. 32:

Even if [the Court] was fully closed, there is no reason why affidavits of documents could not have been exchanged. There is no reason why a discovery plan could not have been developed. There is no reason why the issues of trial together and venue could not have been reviewed with counsel. Apart from the relatively brief period when only urgent motions [were] being heard by the court, there is no reason why the venue and trial-together issues could not have been addressed with a motion. There is no reason why discoveries could not have proceeded by videoconference.

[50] As noted above, nothing was done in this action after 2015. The pandemic would not have precluded the plaintiff from taking steps to advance the proceedings.

Illness

[51] Mr. Safra suffers from chronic lymphocytic leukemia (“CLL”), which he was diagnosed with in and around 2013. He states that his health challenges were one of the reasons for the plaintiff’s delay.

[52] Mr. Safra’s health challenges were not raised as a potential excuse for the delay until he filed his third affidavit in the motion in mid-June 2023. CLL did not prevent Mr. Safra from retaining counsel in Ontario to commence this action or travelling to Toronto to participate in a mediation in March 2016. Further, Mr. Safra was not incapacitated by the CLL, and was “never debilitatingly ill” during the period from 2017 to 2020.

[53] Mr. Safra’s evidence is that his CLL was kept under supervision and did not cause acute illness from 2013 to 2017. In mid-2017 Mr. Safra began a new treatment, which was followed by various infections and other effects on his health. Mr. Safra received a total of 49 days of treatment related to his CLL between November 2013 and December 2021.

[54] The defendants retained an expert, Dr. Peter James Anglin, to prepare an independent report. Dr. Anglin is the Physician Lead and Staff Hematologist/Medical Oncologist for the Stronach Regional Cancer Centre in Newmarket, Ontario. For the past 15 years of his practice, he has focused on monitoring and treating patients with hematologic and lymphoid malignancies, including CLL patients. He was asked to review and consider Mr. Safra’s evidence, including the medical records attached to his affidavit. Based on his review, Dr. Anglin noted that there were isolated and short-lived episodes of infection. However, other than those episodes, Dr. Anglin’s opinion was that in the period from April 2016 to September 2021, Mr. Safra’s CLL was “most unlikely” to have:

Rendered him incapable of retaining and instructing litigation counsel; or

Rendered him incapable of making decisions with respect to the conduct of the litigation.

[55] Dr. Anglin noted that there was nothing in the medical records to indicate that Mr. Safra’s CLL adversely impacted his ability to reasonably carry on with his life in the ordinary course. Dr. Anglin was not cross examined on his affidavit. The plaintiff did not file a responding affidavit.

[56] As noted above, Mr. Safra had a total of 49 treatment days. Mr. Safra was never hospitalized for CLL.

[57] The plaintiff submits that Dr. Anglin cannot comment on the subjective impact of CLL on Mr. Safra, who is in his late 60s. Mr. Safra states that from 2017 to 2020 he was concerned with his own health. He was focused on managing his medical condition and was required to undergo frequent medical testing and observation.

[58] The combined effect of the various excuses put forward by Mr. Safra may have excused a year to 18 months in total. However, the excuses do not come close to justifying the eight-year delay.

[59] I am not satisfied that the delay was excusable.

Will the defendants suffer prejudice?

[60] An inordinate delay gives rise to a rebuttable presumption of prejudice: Ticchiarelli, at para. 28. The plaintiff may rebut the presumption by adducing satisfactory evidence to confirm that there is no prejudice to the defendants because of the delay: Langenecker, at para. 11.

[61] The defendants may also adduce evidence that they will suffer actual prejudice if the matter proceeds to trial.

[62] The rebuttable presumption of prejudice arises in this case due to the inordinate delay. The plaintiff is required to rebut the presumption of prejudice. The plaintiff must show that: (a) the issues do not rely on the memory of witnesses or that all necessary witnesses are available and recall their testimony in detail; and (b) documentary evidence has been preserved: Deutsche Postbank, at para. 37.

[63] The plaintiff must establish that a fair trial is possible given the inordinate delay.

[64] Where possible, it is preferable that matters be resolved on their merits. However, consideration also must be given to whether there is a substantial risk that a fair trial is no longer possible due to the inordinate delay. As stated in Avdeeva v. Khankaldiyan, 2021 ONSC 2681, at para. 24: “Inordinate delay generates a presumption of prejudice which is inherent in long delays as memories fade, witnesses become unavailable and documents are lost such that the longer the delay the stronger the inference of prejudice.”

[65] I find that the plaintiff has not rebutted the presumption of prejudice caused by the delay. Further, the plaintiff has not adduced sufficient evidence to establish that the defendants have not suffered actual prejudice.

Faded Memories of Witnesses

[66] The plaintiff submits that the two main witnesses, Mr. Safra and Dr. O’Dea, are both alive and able to account what transpired at two key meetings that occurred in May/June 2007 and other discussions between them, as well as what Dr. O’Dea knew about what was happening in the region and when. However, the two meetings are only one piece of the puzzle. Following the meetings there was due diligence in the month of July 2007. Further, there is the plaintiff’s allegation that Minister Barbour tipped off Dr. O’Dea that there would be a moratorium on uranium mining prior to the close of the Transaction, as discussed further below.

[67] The plaintiff’s statement of claim includes the following allegations:

3. In seeking to induce the Plaintiff to commit to a transaction in which the Plaintiff exchanged its gold projects for an interest in a combined gold and uranium company, O’Dea made specific representations about Fronteer’s ability to expeditiously extract uranium from the ground in Labrador. Among other things, he told the Plaintiff that Fronteer was in a position to begin mining by 2013, that this start date was “firm,” and that no obstacles stood in Fronteer’s way. These statements, and others of a similar nature, along with written misrepresentations to the Plaintiff, were made with the specific intent of inducing the Plaintiff to enter into the agreement and complete the transaction.

4. In making these representations, O’Dea and Fronteer knew that, in fact, Fronteer faced grave environmental problems and fierce local opposition to the mining of uranium, making the likelihood of the supposed start date illusory, not “firm.” Indeed, within weeks of the closing of the transaction, the local government in Labrador announced its intention to formalize an existing moratorium on uranium mining, substantially diminishing the value of the uranium rights.

[68] The defendants state that the due diligence process is important and covered issues such as local opposition to mining and environmental problems. I agree that the information that was disclosed to the plaintiff in the due diligence process is relevant to the allegations of fraud.

[69] Mr. Safra has conceded that memories fade with the passage of time.

[70] The defendants point to Deutsche Postbank, which was a fraud case where the matter was dismissed for delay. In that case, the alleged fraud involved representations made at meetings between two of the defendants and the plaintiff about ten years prior. The Court indicated, at para. 38, that the testimony of these witnesses will be “critical” to the determination of the case. The Court further noted that as there had not yet been examinations for discovery, the witnesses were not even able to rely on the discovery transcripts in order to refresh their memories.

[71] The defendants argue that the instant case is similar, as there are allegations of fraud based on discussions that took place about 16 years ago and there have not yet been examinations for discovery, or any sworn evidence until this motion. This case is about alleged fraudulent or negligent misrepresentations. The evidence of what happened in meetings and discussions from 16 years ago is important. Here we have a situation, like in Deutsche Postbank, where there have not been examinations for discovery or will say statements that could be relied upon by the defendants to refresh their memories.

[72] There is no doubt that memories fade with time. This is of great concern in a case where there are allegations of fraud. In Ticchiarelli, the Court of Appeal noted, at para. 36:

[I]t seems obvious, given the appellant’s allegations of conspiracy, misrepresentation, unconscionability and undue influence, that actual prejudice exists. The viva voce evidence that would be essential to the trial is dramatically impacted because of the passage of so much time. Beyond the fact that several important witnesses have died, the passing of time probably would make the testimony of surviving witnesses less reliable.

[73] The plaintiff’s allegations of fraudulent and negligent misrepresentation arise from conversations, and diligence, regarding the Transaction that transpired in 2007. This is a case where viva voce evidence is critical. I am quite certain that anyone would struggle to give reliable testimony from events or discussions from 16 years ago, particularly where there are no notes or discovery transcripts to refresh one’s memory.

Death of Witnesses

[74] The defendants submit that further evidence of actual prejudice is the death of witnesses.

[75] Mr. Safra’s allegations of misconduct against the defendants also involve what transpired during due diligence sessions in July 2007. One of the four persons who worked on the due diligence team for NWG in July 2007 passed away in September 2019.

[76] In addition, Mr. Safra alleged that there was a discussion between Dr. O’Dea and Minister Barbour prior to the October 2007 announcement, which Mr. Safra speculates occurred on September 14, 2007. Paragraphs 63 and 64 of the plaintiff’s statement of claim state:

On September 14, 2007, William Barbour, the Nunatsiavut Government Minister of Lands and Resources, advised O’Dea that the Nunatsiavut Government would table a formal motion for a moratorium on uranium mining at its Assembly session on October 11-12, 2007. This was predictable to O’Dea/Fronteer, as this would simply formalize the status quo moratorium already in place and in effect.

The statement of the Nunatsiavut Government to O’Dea of its plan to formalize the existing moratorium was a material event and circumstance which Fronteer was obliged contractually and in law to disclose to NWG. However, neither O’Dea nor Fronteer disclosed that information to NWG before the NewWest/Fronteer transaction closed on September 24, 2007.

[77] Dr. O’Dea denies that these discussions with Minister Barbour took place. During the motion, the plaintiff conceded that there was no contact between Barbour and Dr. O’Dea on September 14, 2007. However, based on the Parliamentary Report of the First Assembly of Nunatsiavut, dated October 11-12, 2007, Minister Barbour made the following statement:

[F]irst of all while I put a motion forward earlier this afternoon on uranium policy and uranium mining, I’d like to take the time to recognize Mark O’Dea with Aurora Energy. He is the President and CEO along with his team of people here, when we were formally notified by Aurora Energy, I, on August 29th of their intention to register, I responded on September 14th and I am pleased to see that they are here to hear what we have done.

[78] It is unknown who Minister Barbour contacted on September 14, 2007 and what was the nature of his response.

[79] Regrettably, Minister Barbour passed away on November 18, 2020, more than six years after the action was started.

[80] No one knows what Minister Barbour would have said regarding the alleged discussion. There is no will say statement, transcript, or affidavit from Mr. Barbour as to what his testimony may have been regarding the alleged September 14, 2007 discussion.

[81] The death of Minister Barbour is evidence of actual prejudice.

Lack of Documents

[82] The other concern is that documentary evidence has not been preserved.

[83] As noted by the Court in Munyal v. Dhillon, 2017 ONSC 4438, at para. 21, “where prejudice is presumed by reason of the delay, the defendant need not lead actual evidence of prejudice and the onus is on the plaintiff to rebut the presumption.”

[84] The plaintiff has not rebutted the presumption. The plaintiff has not provided evidence that documents have been preserved.

[85] Neither NewWest nor Fronteer exists anymore. Aurora’s assets were sold to an Australian based company, Paladin Energy Limited (“Paladin”) in and around 2011. When Paladin acquired Aurora, it also acquired Aurora’s documents. With regard to the Aurora records, efforts were made to determine whether potentially relevant documents were retained. Dr. O’Dea’s evidence is that:

i. Paladin has closed the three former Aurora local offices in Nunatsiavut/Labrador. The location of any Aurora paper documents that may have resided in those offices at the time of the Paladin acquisition of Aurora’s assets is unknown, other than the documents from the Happy Valley Goose Bay office that went into a storage facility;

ii. Paladin closed the former Aurora office in St. John’s Newfoundland in 2017. The location of any Aurora “corporate” paper records from the relevant timeframe (other than HR and financial records) is unknown; and

iii. Prior to closing the St. John’s Newfoundland office in 2017, Paladin moved the former Aurora server to Perth Australia. Some Aurora emails and potentially relevant documents from the relevant timeframe (2006-2008) appear to be available to Paladin, but it is not known what documents from that timeframe are still available and how complete they are, including whether all records falling within the categories of relevance identified by counsel for NWG in their first draft discovery plan are still available to Paladin.

[86] The fact that the existence of Aurora’s paper records is unknown, and it is not known what documents are available from the former Aurora server now located in Perth, Australia is further evidence of actual prejudice.

[87] The plaintiff submits that the defendants had knowledge of actual or threatened litigation starting in January 2009, when David L. Carden from the Jones Day law firm sent a demand letter on behalf of NWG to Fronteer. The plaintiff states that this letter put the defendants on notice that the plaintiff was of the view that there had been a fraud and was seeking a recission of the transaction and that the defendants should have retained the documents.

[88] However, Aurora was not a party to any of the Transaction agreements. Aurora was a separate public company. Fronteer was a shareholder of Aurora.

[89] Further, the letter from Mr. Carden was in 2009 and there were subsequent settlement discussions. Aurora was sold to the Australian company in 2011. As noted by the defendants, public companies do not preserve all documents of their subsidiaries just because they receive a demand letter.

[90] I understand that dismissal under Rule 24 deprives the plaintiff of the ability to have the matter determined on its merits. I also agree that this is an order of last resort. As noted by the Court of Appeal in Langenecker, at para. 3:

An order dismissing an action for delay is obviously a severe remedy. The plaintiff is denied an adjudication on the merits of his or her claim. Equally obviously, however, an order dismissing an action for delay is sometimes the only order that can adequately protect the integrity of the civil justice process and prevent an adjudication on the merits that is unfair to a defendant.

[91] I am satisfied that a dismissal of the action under Rule 24 is the only order in this case that can be used to prevent an unfair trial on the merits. The Transaction in question was 16 years ago. This matter is currently only at the pleadings stage. There are no will say documents, and discoveries have not been done. The nature of the allegations is such that viva voce evidence will be critical. Memories fade with time, and 16 years is a long time. Further, a key witness has regrettably passed away and there is no record as to what his evidence may have been. Finally, significant corporate changes have occurred, including the sale of Aurora’s assets to an Australian company, and there is no evidence that the relevant documentary evidence has been retained.

[92] The plaintiff’s action is dismissed.

Released: 2023-08-22

J. Steele J.

COURT FILE NO.: CV14-1052300CL

DATE: 2023-08-22

ONTARIO

SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST

BETWEEN:

NWG INVESTMENTS INC.

– and –

FRONTEER GOLD INC., NEWMONT MINING CORPORATION, NEWMONT CANADA HOLDINGS ULC, NEWMONT FH B.V., and MARK O’DEA

REASONS FOR JUDGMENT

JANA STEELE J.

Released: 2023-08-22