SUPREME COURT OF PRINCE EDWARD ISLAND  
Citation: CMT et al. v. Government of PEI et al., 2019 PESC 40  
Date: 20190925  
Docket: S1-GS-27636  
Registry: Charlottetown  
Between:  
And:  
Capital Market Technologies Inc. and 7645686 Canada Inc.  
Plaintiffs  
Government of Prince Edward Island, Wes Sheridan,  
Steve MacLean, Allan Campbell, Chris LeClair, Brad Mix,  
Cheryl Paynter, Steven Dowling, William Dow, Melissa MacEachern,  
Robert Ghiz, Gary Scales, Tracey Cutcliffe, Neil Stewart,  
Paul Jenkins and 7628382 Canada Corporation  
Defendants  
Before: The Honourable Justice Gordon L. Campbell  
Appearances:  
John W. McDonald, Solicitor for the Plaintiffs  
Jonathan Coady, Solicitor for the Defendants, Government of Prince Edward Island,  
Wes Sheridan, Steve MacLean, Allan Campbell, Chris LeClair, Brad Mix, Cheryl Paynter, Melissa MacEachern,  
Neil Stewart and Robert Ghiz  
Greg Temelini, Solicitor for Steven Dowling  
Gavin J. Tighe and Alexander Melfi, Solicitors for William Dow and Tracey Cutcliffe  
R. Leigh Youd, Solicitor for Gary Scales  
Place and date of hearing  
Charlottetown, Prince Edward Island  
April 23, 24, 25 and 26, 2019  
Place and date of judgment  
Charlottetown, Prince Edward Island  
September 25, 2019  
SUMMARY JUDGMENT - best foot forward - specific facts required - failure to provide relevant evidence -  
adverse inference - documentary production - no evidence of damages - no genuine issue requiring a trial  
MEMORANDUM OF UNDERSTANDING - contract - breach of contract - agreement to agree - agreement to  
negotiate - uncertain terms - no intention to be bound - bargaining in good faith  
MISFEASANCE IN PUBLIC OFFICE - public officer - performing public function - requires deliberate unlawful  
conduct - must be cause of damages  
SPOLIATION OF EVIDENCE - requires intentional destruction of evidence relevant to ongoing or contemplated  
litigation - evidentiary rule - rebuttable presumption  
AUDITOR GENERAL’S REPORT - status - Auditor General’s office is neither designed nor equipped to conduct an  
inquiry to assess civil liability  
SECURITIES ACT INVESTIGATION - illegal sale of securities - agreed statement of facts - settlement agreement  
ISSUE ESTOPPEL AND ABUSE OF PROCESS - collateral attack - attempted relitigation  
STRIKING STATEMENT OF CLAIM - multiple breaches of Rules of Court related to pleadings  
COSTS - substantial indemnity  
The plaintiffs commenced actions seeking a minimum of $150 million dollars against various defendants in relation to i) a  
Memorandum of Understanding (MOU), ii) an investigation under the Securities Act, R.S.P.E.I. 1988, Cap. S-3.1, and iii) alleged  
spoliation of evidence. They alleged breach of contract against the Government and misfeasance in public office on the part of  
public servants and others not in the public service.  
The plaintiffs’ principal allegations against the Government and related defendants are that they breached clauses of the MOU  
granting the plaintiffs a period of time during which they could deal exclusively with the Government in hopes of establishing a  
“financial services centre” on Prince Edward Island, and that various defendants improperly disclosed confidential information to  
others.  
The action also raised claims against various defendants in connection with a Securities Act investigation into alleged illegal sales by  
3  
the plaintiff(s) of hundreds of thousands of dollars of securities on Prince Edward Island. The plaintiffs contend the securities  
investigation was undertaken on the basis of a false rumour, and was without merit. Notwithstanding that, the plaintiffs signed a  
Settlement Agreement acknowledging certain contraventions of the Securities Act and other provisions.  
The plaintiffs also seek to hold the Government and other defendants responsible for the loss of evidence, alleging they  
intentionally destroyed evidence which could impact the outcome of the litigation.  
Shortly after filing their statements of defence in which all allegations were denied, all defendants filed motions seeking summary  
judgment against the plaintiffs. The defendants submit the plaintiffs have raised no genuine issue requiring a trial. Upon hearing the  
motions and reviewing all submissions, the court found there were no genuine issues requiring a trial and granted summary  
judgment to all defendants. The plaintiffs’ action was dismissed in its entirety.  
STATUTES CONSIDERED: Securities Act, R.S.P.E.I. 1988, Cap. S-3.1; Archives and Records Act, R.S.P.E.I. 1988, c.  
A-19.1; Canada Business Corporations Act (CBCA) R.S., 1985, c. C-44, , s.2(2)  
TEXTS CONSIDERED: Sentinels of the Hryniak Culture Shift: Four Years On, Annual Review of Civil Litigation, 2018  
(Archibald 2018 Thomson Reuters); Canadian Contractual Interpretation Law, 3rd ed. (Markham, Ont.: LexisNexis. 2016);  
Misfeasance in a Public Office, (Toronto: Thomson Reuters, 2016); Government Liability: Law and Practice, Looseleaf (Toronto:  
Thompson Reuters, 2017);  
RULES CONSIDERED: Prince Edward Island Rules of Civil Procedure, Rules 1.10, 4.06, 20 and 39.01  
CASES CONSIDERED: CMT et al v. Gov’t of PEI et al. 2016 PESC 4; CMT et al v. Gov’t of PEI et al., 2018 PESC 9;  
Hryniak v. Mauldin, 2014 SCC 7; York River Properties Inc. v. Creed’s Petroleum et ors., 2015 PESC 35; MacPherson  
v. Ellis, 2005 PESCAD 10; National Bank v. S. Taha and K. Taha, 2019 PESC 14; Mallett v. Richard et. ors., 2018 PESC 50; Royal  
Bank of Canada v. Trainor, 2017 PESC 13; McQuaid v. Government of P.E.I. et al, 2017 PECA 21; Trotter v. Trotter, 2014  
ONCA 841; Dovbush v. Mouzitchka, 2016 ONCA 381; Weir-Jones Technical Services Incorporated v. Purolator Courier Ltd.,  
2019 ABCA 49; Canada (A.G.) v. Lameman, 2008 SCC 14; Boland v. Lyle, 2016 ONSC 7418; Danos v. BMS Group Financial  
Services Canada, 2014 ONCA 887; MacDonald v. Robichaud and Lenentine, 1996 3677 (PESCAD), [1995] 2 P.E.I.R. 294;  
Mazza v. Ornge Corporate Services Inc., 2015 ONSC 7785; Summerside Seafood v. Prince Edward Island, 2012 PESC 3; Sweda  
Farms v. Egg Farmers of Ontario, 2014 ONSC 1200 (), aff’d 2014 ONCA 878 (); Bank of Montreal v. Abdel-Messih,  
2006 16475, (Ont. C.A.); Court v. Debaie, 2012 ABQB 640; Murphy Oil Company Ltd. v. Predator Corporation Ltd.,  
2006 ABCA 69; Kolosov v. Lowe’s Companies Inc., 2018 ONSC 7541; Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753;  
Murphy v. Mullen, 2018 ONSC 4292; Smith v. Waterloo Taxi Limited, 2013 ONSC 1466; Smith v. Waterloo Taxi Limited, 2014  
ONCA 37; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONCA 878; Drummond v. The Cadillac Fairview Corp. Ltd., 2018  
ONSC 4509 (); Pro-C Ltd. v. Computer City Inc. [2000] O.J. No. 2823, 2000 CarswellOnt 2696, 7 C.P.R. (4th) 193; Pro-C  
4  
Ltd. v. Computer City, Inc. 2001 7375 (ONCA); Canada (A.G.) v. Canada (Krever Commission) 1997 323  
(SCC); [1997] 3 S.C.R. 440; Mulroney v. Schreiber, 2009 QCCA 116; Foss v. Harbottle (1843), 2 Hare 461, 67 E.R. 189; Hercules  
Managements Ltd. v. Ernst and Young, 1997 345, [1997] 2 S.C.R. 165; Meditrust Healthcare Inc. v. Shoppers Drug Mart,  
2002 41710 (ONCA); McGowan v. Bank of Nova Scotia 2011 PECA 20; Bawitko Investments Ltd. v. Kernels Popcorn  
Ltd., 1991 2734; Georgian Windpower Corp. v. Stelco Inc., 2012 ONSC 3759; Bhasin v. Hyrnew 2014 SCC 71; Odhavji  
Estate v. Woodhouse, 2003 SCC 69, 2003 CarswellOnt 4851; Powder Mountain Resorts Ltd. v. British Columbia, 2001 BCCA 619,  
94B.C.L.R. (3d) 14; Grand River Enterprises Six Nations v. A.G. (Canada), 2017 ONCA 526; Capital Solar Power Corporation  
v.The Ontario Power Authority, 2019 ONSC 1137; St. Elizabeth Home Society v. City of Hamilton, 2010 ONCA 280;  
Pikangikum First Nation v. Nault, 2012 ONCA 705; Martineau v. Ontario (Alcohol and Gaming Commission of Ontario), 2007  
ONCA 204; Stenner v. British Columbia (Securities Commission) (1996), 141 D.L.R. (4th) 122 (BCCA); Toronto v. C.U.P.E.,  
Local 79, 2003 SCC 63; Schwartz v. Ontario, 2013 ONSC 7244; Behn v. Moulton Contracting Ltd., 2013 SCC 26; Danyluk v.  
Ainsworth Technologies Inc., 2001 SCC 44; McDougall v. Black & Decker Canada Inc., 2008 ABCA 353; St. Louis v. R., (1896),  
25 S.C.R. 649; 1896 CarswellNat 23; Catalyst Capital Group Inc., v. Moyse, 2016 ONSC 5271; The Catalyst Capital Group Inc., v.  
Moyse, 2018 ONCA 283; Nova Growth Corp. et al. v. Andrzej Roman Kepinski et al., 2014 ONSC 2763; Endean v. Canadian  
Red Cross Society et al., 1998 6489 (BCCA); Leon v. Toronto Transit Commission, 2014 ONSC 1600, (aff’d at, 2016  
ONSC 3394 (Divisional Court); Bucknol v. 2280882 Ontario Inc., 2018 ONSC 5455; CMT et al. v. Government of PEI et al.,  
2018 PECA 28  
INDEX  
Page  
Introduction.................................................................................................................................................................................................9  
1. Nature of claims  
9
2. Procedural history .............................................................................................................................................................10  
3. The motions before the court............................................................................................................................................... 11  
Overview.................................................................................................................................................................................................... 11  
1. The e-gaming project............................................................................................................................................................ 11  
2. The MOU between Innovation PEI and 764.......................................................................................................................12  
5  
3. The Securities Act investigation  
13  
4. Cancellation of email accounts of departing employees...................................................................................................... 13  
Issue ........................................................................................................................................................................................................... 14  
Law of Summary Judgment....................................................................................................................................................................... 14  
1. Culture shift...................................................................................................................................................................... 14  
2. Two-part test ........................................................................................................................................................................ 18  
3. Best foot forward  
............................................................................................................................................ 20  
4. “Specific facts” required .................................................................................................................................................. 22  
5. Summary judgment is not restricted to any category,  
type or size of cases...................................................................................................................................................................23  
General evidentiary issues raised by the parties ........................................................................................................................................24  
1. Rules of Court on summary judgment motions - potential for adverse inference .............................................................24  
2. No explanation for failure to provide direct evidence .........................................................................................................32  
3. Ample time was available to provide all affidavits ...............................................................................................................33  
4. Strategic choices have strategic consequences - Failure to  
produce affidavits and present witnesses for cross-examination.............................................................................................34  
5. Adverse inference .................................................................................................................................................................35  
6. Compelling documentary production .................................................................................................................................35  
7. Documentary disclosure by defendants versus documents received  
through FOIPP ........................................................................................................................................................................38  
8. Pro-C case.............................................................................................................................................................................40  
Auditor General’s Report .......................................................................................................................................................................... 41  
Law of corporate personality .....................................................................................................................................................................45  
1. Corporate information on CMT and 764 (and other names used  
by the plaintiffs) .......................................................................................................................................................................46  
2. Paul Maines......................................................................................................................................................................48  
Page  
Categorizing and addressing the plaintiffs’ claims....................................................................................................................................48  
The MOU between Innovation PEI and 7645686 Canada Inc. (The “contract”) ....................................................................................49  
6  
General Allegations regarding breach of contract.....................................................................................................................................53  
1. Individuals named in breach of contract claim ................................................................................................................53  
2. Specific claims of breach of contract................................................................................................................................54  
General statement of the parties’ positions regarding breach of contract allegations ..............................................................................56  
The law of breach of contract - overview...................................................................................................................................................57  
1. Agreement to agree, uncertain terms, no intention to be bound.........................................................................................57  
2. Bargaining in good faith ......................................................................................................................................................61  
Specific allegations of misfeasance in public office ...................................................................................................................................61  
The law of misfeasance in public office - Identifying the essential elements ............................................................................................64  
Evidence and allegations with respect to the MOU as it pertains to both breach of contract and misfeasance in public office..............69  
1. Allegations against Sheridan and LeClair re: MOU ..........................................................................................................69  
i) Emails of August 1 and 2, 2012.......................................................................................................................69  
ii) Meetings in August and letter from Laslop on September 6, 2012 .............................................................73  
Public statement by Sheridan ....................................................................................................................................................................79  
Carta Worldwide .......................................................................................................................................................................................80  
Conclusions concerning allegations against Sheridan re: MOU .............................................................................................................. 81  
Conclusions concerning allegations against LeClair re: MOU ................................................................................................................ 81  
Allegations against Mix - Attendance by Mix at SIBOS conference, and related  
similar activities .........................................................................................................................................................................................82  
Conclusions concerning allegations against Mix......................................................................................................................................86  
Allegations against Paynter .......................................................................................................................................................................87  
1. Re: Breach of contract by Paynter ........................................................................................................................................87  
2. The “ask”..............................................................................................................................................................................88  
7  
Page  
Conclusions concerning allegations of breach of contract against Paynter..............................................................................................93  
Allegations of misfeasance in public office against Paynter ......................................................................................................................94  
Conclusions concerning allegations of misfeasance against Paynter........................................................................................................95  
Allegations against LeClair, MacLean, Campbell, and MacEachern regarding the securities investigation and its impact on the MOU95  
1. LeClair and MacLean ...........................................................................................................................................................95  
2. Campbell..............................................................................................................................................................................97  
3. MacEachern..........................................................................................................................................................................97  
Conclusions re: allegations against LeClair, MacLean, Campbell, and MacEachern regarding the securities investigation and its  
impact on the MOU ..................................................................................................................................................................................98  
Loyalty card program.................................................................................................................................................................................99  
Allegations of misfeasance against Dow and Cutcliffe............................................................................................................................ 103  
1. Issues on the Dow and Cutcliffe motions ................................................................................................................... 104  
a) Are Dow and Cutcliffe public officers? ............................................................................................................ 104  
b) Dow’s interactions with Dowling.................................................................................................................... 107  
c) Drafting the MOU ...........................................................................................................................................108  
d) The extension of the MOU.............................................................................................................................. 110  
e) Was Dow involved in developing a loyalty card program?.............................................................................. 112  
f) Cutcliffe’s interactions with Dowling........................................................................................................... 112  
g) Failure of plaintiffs to put their best foot forward............................................................................................ 113  
Conclusions concerning allegations against Dow and Cutcliffe ............................................................................................................ 116  
Allegations against Scales ........................................................................................................................................................................ 117  
1. Simplex’s invoices regarding e-gaming............................................................................................................................120  
Conclusions concerning allegations against Scales.................................................................................................................................122  
The Securities Act investigation - the defendant Dowling.....................................................................................................................122  
8  
Securities investigation Settlement Agreement.......................................................................................................................................127  
1. Securities Act prohibits disclosure of information .........................................................................................................129  
2. The “lady with cancer” rumour.......................................................................................................................................132  
Page  
Allegations of misfeasance against Dowling ........................................................................................................................................... 135  
1. Negligence action barred by statute................................................................................................................................. 136  
2. Issue estoppel and abuse of process................................................................................................................................. 137  
Conclusions regarding allegations of misfeasance against Dowling, including as  
was alleged to have involved other defendants........................................................................................................................................ 145  
Misfeasance or negligence ....................................................................................................................................................................... 147  
Status of MOU......................................................................................................................................................................................... 148  
1. An agreement to agree................................................................................................................................................. 149  
2. Good faith obligation.................................................................................................................................................. 149  
3. Articles imposing binding obligations ........................................................................................................................ 150  
The law of spoliation - overview.............................................................................................................................................................. 150  
Allegations of spoliation against Government, Ghiz, and Stewart......................................................................................................... 156  
1. LeClair’s emails ........................................................................................................................................................... 156  
2. Beck’s emails ............................................................................................................................................................... 157  
3. MacEachern’s emails................................................................................................................................................... 157  
4. Standard practice......................................................................................................................................................... 158  
5. Archives and Records Act ..........................................................................................................................................160  
Conclusions regarding spoliation allegations against Government,  
Ghiz and Stewart ..................................................................................................................................................................................... 161  
Request to submit further documentation .............................................................................................................................................. 161  
1. Plaintiffs’ counsel failed to respect Rule 1.10 .....................................................................................................................162  
2. Nature of additional documentation ................................................................................................................................. 163  
3. Where does the gap in Mix’s sent email take us? ............................................................................................................. 163  
9  
No evidence of damages .......................................................................................................................................................................... 164  
Quality of evidence and presentation of plaintiffs’ materials and submissions ...................................................................................... 167  
Summary judgment is appropriate.......................................................................................................................................................... 168  
Request to strike amended statement of claim ........................................................................................................................................ 170  
Costs ........................................................................................................................................................................................................ 171  
Disposition...............................................................................................................................................................................................172  
Campbell J.:  
Introduction  
1. Nature of claims  
[1]  
Cases coming before the court are resolved on the basis of evidence presented to the  
court. If a plaintiff presents sufficient admissible evidence to substantiate their claim, and  
the defendant does not present sufficient admissible evidence to refute that claim, the claim  
will be proven and the plaintiff will succeed. If a plaintiff fails to present sufficient  
admissible evidence which overcomes evidence to the contrary from the defendant, the  
plaintiff’s claim will fail. Allegations made in a statement of claim are simply that,  
allegations, or statements setting out the plaintiff’s claim. Denials in a statement of  
defence are of the same nature. Such statements do not constitute evidence. These  
fundamental facts and principles are what govern decisions on matters presented to the  
court.  
[2]  
The plaintiffs, whose counsel is John W. McDonald (McDonald), are suing various  
defendants for breach of contract, misfeasance in public office, and spoliation of evidence.  
A brief description of the main thrust of their allegations is sufficient at this point of the  
decision.  
[3]  
The breach of contract claims relate to a Memorandum of Understanding (MOU)  
which contained articles relating to maintaining confidentiality and dealing exclusively  
with the plaintiffs during the course of the MOU. The plaintiffs claim the defendants  
breached the terms of the MOU by approaching competitors, recruiting them for the same  
services, and otherwise dealing with them in ways contrary to the confidentiality and  
exclusivity articles.  
10  
[4]  
The claims of misfeasance in public office against various individuals relate to their  
alleged improper conduct in failing to respect the existence of an MOU, initiating a  
securities investigation against the plaintiffs for ulterior motives, and disclosing or  
misusing confidential information.  
[5]  
The claims of spoliation relate to the cancellation of email accounts of three  
former government personnel.  
[6]  
The plaintiffs claim the sums of $50,000,000 in relation to breach of contract, an  
additional $50,000,000 in relation to misfeasance in public office, and an additional  
$50,000,000 in damages for spoliation of evidence. The statements made by the plaintiffs  
in their statement of claim remain as mere allegations until they are proven by the plaintiffs.  
The burden on the plaintiffs, which they must discharge, is to provide admissible evidence  
which establishes their claims on the balance of probabilities.  
[7]  
The defendants in this matter can be divided into four groups, each of whom are  
represented by different counsel:  
a) The Government of PEI and nine current or former government personnel  
including the defendants Wes Sheridan, Steve MacLean, Allan Campbell, Chris  
LeClair, Brad Mix, Cheryl Paynter, Melissa MacEachern, Robert Ghiz and  
Neil Stewart. Their counsel is Jonathan M. Coady (Coady). The plaintiffs’ claims  
against these defendants are as follows;  
(i) The Government faces a claim of breach of contract;  
(ii) The Government and seven of the nine other related defendants,  
namely, Sheridan, MacLean, Campbell, LeClair, Mix, Paynter, and  
MacEachern (not including Ghiz and Stewart), face claims of  
misfeasance in public office;  
(iii) The Government, Ghiz, and Stewart face claims of spoliation.  
b) William Dow and Tracey Cutcliffe. Dow is a lawyer in private practice who  
represented a PEI Crown Corporation called Innovation PEI (Innovation).  
Cutcliffe is a lawyer and consultant who was retained as a consultant by the  
plaintiff 7645686 (764) in connection with an MOU between Innovation and 764.  
Their counsel is Gavin J. Tighe (Tighe) and Alexander Melfi (Melfi). Dow and  
Cutcliffe face claims of misfeasance in public office;  
c) Gary Scales is a lawyer in private practice with McInnes Cooper (MC) who was  
retained by the Mi’kmaq Confederacy of Prince Edward Island (MCPEI). His  
counsel is R. Leigh Youd (Youd). Scales faces a claim of misfeasance in public  
office; and  
11  
d) Steven Dowling was General Counsel for the Consumer, Labour and Financial  
Services Division of the Prince Edward Island Department of Environment, Labour  
and Justice, and acted as counsel to the Superintendent of Securities on a securities  
investigation with respect to Paul Maines (Maines), Capital Markets Technologies,  
Inc. (CMT) and 7645686 Canada Inc. (764). His counsel is Greg Temelini  
(Temelini). Dowling faces a claim of misfeasance in public office.  
2. Procedural history  
[8] In April 2015, the plaintiffs, Capital Markets Technologies, Inc. (CMT) and  
7645686 Canada Inc. (764) initiated an action against the Government of Prince Edward  
Island (Government), various government employees, and others not directly  
associated with government. That statement of claim was struck out in its entirety on  
February 3, 2016. (See CMT et al v. Gov’t of PEI et al. 2016 PESC 4).  
[9]  
On March 29, 2017, the plaintiffs filed a second statement of claim. Eight months  
later on November 29, 2017, they filed a motion to amend their second statement of claim  
to add further parties to the action. Several were added on consent. Three of the proposed  
new defendants opposed the motion and asked, if they were added as parties, that they be  
provided with security for costs similar to that granted to other defendants. Three new  
defendants were added and they were granted security for costs on March 29, 2018. (See  
CMT et al v. Gov’t of PEI et al. 2018 PESC 9). The amended statement of claim was  
filed on June 14, 2018.  
[10] On January 23, 2019, a Consent Dismissal Order and Notice of Discontinuance  
were filed in relation to the plaintiffs’ action against the defendants Paul Jenkins and  
7628382 Canada Corporation.  
3. The motions before the court  
[11] After filing their statements of defence, each of the defendant groups, through their  
respective counsel, filed a notice of motion seeking summary judgment. Those motions  
ask that the actions against them be dismissed, on the grounds there is no genuine issue  
requiring a trial with respect to claims alleged in the plaintiffs’ amended statement of claim.  
Alternatively, counsel on behalf of the Government and related defendants seeks an order  
to strike out various portions of the statement of claim.  
Overview  
[12] The statement of claim makes broad reference to several time periods, events or  
projects involving one or more of the defendants between 2010 and 2014:  
12  
1. The e-gaming project  
[13] In late 2009, the Mi’kmaq Confederacy of Prince Edward Island (MCPEI)  
approached the then Provincial Treasurer (Minister of Finance), Wes Sheridan (Sheridan),  
to propose an economic development initiative by the First Nations in Prince Edward Island  
to license and regulate online gaming. In February 2010, MCPEI engaged the law firm of  
McInnes Cooper (MC) as its legal counsel. MC retained other experts, professionals and  
consultants on behalf of its client MCPEI. A working group was formed to examine the  
legal and technical issues involved in mounting a regulatory scheme for online gaming.  
The working group included MCPEI’s in-house counsel Don MacKenzie (MacKenzie),  
Sheridan, and professional advisors associated with MC including a senior accountant,  
Mike O’Brien (O’Brien), and lawyers Gary Scales (Scales) and Kevin Kiley (Kiley).  
[14] In June, 2011, in furtherance of the working group’s efforts, MC engaged a UK  
company called Simplex Consulting Ltd., (Simplex), to carry out the first stages of design  
to establish an electronic payments platform on PEI for the online gaming industry.  
Simplex completed its report in October, 2011 and delivered it to MC. Following further  
study and assessment, the working group made a presentation to the Government regarding  
the initiative on February 10, 2012. The meeting was also attended by the Chiefs from the  
First Nations in PEI, the Deputy Attorney General for PEI (Shauna Sullivan Curley), the  
Clerk of Executive Council and Secretary to the Cabinet (Steve MacLean), and the CEO of  
Simplex (Philip Walsh). It is worthy of note that Simplex is not a party to this action.  
[15] Following the presentation, the Government assessed its legal position on the  
proposed regulation of online gaming by the First Nations on PEI. On February 24, 2012,  
Curley and MacLean met with Mackenzie, Kiley and O’Brien to inform the members of the  
working group of the Government’s conclusions with respect to the project. Based on  
Curley’s own opinion on legal impediments with respect to the scheme, and on advice  
received from Tom Isaac, a well respected expert in Aboriginal Law, the Government had  
decided to withdraw its support for the proposal by the Mi’kmaq Confederacy to license  
and regulate internet gaming on PEI. The concerns focused on whether the proposed  
scheme would be in contravention of the Criminal Code of Canada.  
[16] Notwithstanding the Government’s withdrawal of support, MCPEI and MC  
continued to pursue the project on their own for a few months before concluding the project  
was not feasible in the absence of government support.  
[17] Neither CMT nor 764 were ever involved in any way with the so-called  
e-gaming project. However, some of the statements in the amended statement of claim  
referred to events during that time period.  
2. The MOU between Innovation PEI and 764  
13  
[18] In a separate development, on July 6, 2012, Innovation PEI (Innovation) and 764,  
operating as Trinity Bay Technologies (TBT), entered into an MOU to explore the  
possibility of TBT/764 establishing a financial services centre on Prince Edward Island.  
The MOU first expired on September 4, 2012 and was renewed on September 10, 2012 for  
a further 30 days, expiring for good on October 10, 2012.  
[19] Specific articles in the MOU contained terms relating to confidentiality and  
exclusivity during the term of the MOU. The MOU also stated that neither of the parties  
shall be liable to the other for any consequential or economic loss suffered by the other as a  
result of a breach of the MOU. With the exception of certain itemized articles, the MOU  
was not intended to have legal effect or constitute a binding agreement between the parties.  
Each party agreed to act in good faith in their further discussions and negotiations, but  
neither was obliged to enter into any further agreements.  
3. The Securities Act investigation  
[20] In early September, 2012, Steven Dowling (Dowling), in his role as counsel for the  
Prince Edward Island Superintendent of Securities, was contacted by Edward Curran, a  
registered representative and branch manager of the Charlottetown office of ScotiaMcLeod  
regarding what Curran perceived to be suspicious trading activity being undertaken by Paul  
Maines (Maines), who was alleged to be illegally soliciting investment in Financial  
Markets Technologies (FMT). Financial Markets Technologies and FMT were  
unregistered “trade names” used interchangeably at times by both the plaintiffs, CMT and  
764. At all material times, CMT owned 100% of the shares of 764. The use of Financial  
Markets Technologies and FMT was eventually dropped in favour of the name Trinity Bay  
Technologies, or TBT, which was used as a trade name for 764.  
[21] Dowling undertook an investigation of the activities of Maines, CMT, and 764.  
Dowling concluded that in excess of $700,000 had been raised for CMT from some 36  
investors on Prince Edward Island in contravention of the Securities Act, R.S.P.E.I. 1988,  
Cap. S-3.1, and in contravention of National Instrument 45-106. Each of CMT, 764 and  
Maines, who at all material times was an officer of CMT, signed a Settlement Agreement  
acknowledging the facts surrounding the illegal distribution of securities and confirming  
they had each received full and proper independent legal advice prior to executing the  
Settlement Agreement. The Order issued by the Superintendent of Securities imposed  
restrictions on CMT’s ability to market its securities for a period of five years and required  
CMT to pay a fine (administrative penalty) in the sum of $10,000, together with a further  
sum of $5000 to cover the costs of the investigation.  
4. Cancellation of email accounts of departing employees  
[22] The plaintiffs claim against the defendants Ghiz, Stewart and the Government for  
spoliation by way of the “destruction of emails” of Beck (a non-party), and of the  
14  
defendants LeClair and MacEachern.  
[23] Additional allegations were alluded to in the plaintiffs’ factum notwithstanding they  
were not pleaded in the amended statement of claim filed on June 14, 2018.  
Issue  
[24] The issue on each of the four motions for summary judgment is whether the  
defendants have satisfied the court there is “no genuine issue requiring a trial”. The law  
relating to summary judgment motions and the specific facts relating to the claims against  
each defendant will be assessed to determine the outcome on each motion.  
Law of Summary Judgment  
1. Culture shift  
[25] In 2015, this court reviewed the modernization of principles and procedures  
applicable to summary judgment motions as a result of a recent decision from the Supreme  
Court of Canada, in Hryniak v. Mauldin, 2014 SCC 7. Counsel for Dowling cited York  
River Properties Inc. v. Creed’s Petroleum et ors., 2015 PESC 35, in which the Hryniak  
decision was outlined and applied. The court in York River stated, starting at para.10:  
[10] The law relating to summary judgment motions has undergone some  
recent changes following the Supreme Court of Canada decision in January,  
2014 in Hryniak v. Mauldin, 2014 SCC 7 (). Rule 20 of the Prince  
Edward Island Rules of Civil Procedure was amended as of September 1, 2015,  
to reflect the Hryniak decision. That decision addressed changes that had been  
made to the Ontario Rules of Civil Procedure in 2010. Speaking for the court,  
Karakatsanis J. explained at para. 36:  
Rule 20 was amended in 2010, following the recommendations of the  
Osborne Report, to improve access to justice. These reforms embody  
the evolution of summary judgment rules from highly restricted tools  
used to weed out clearly unmeritorious claims or defences to their  
current status as a legitimate alternative means for adjudicating and  
resolving legal disputes.  
[11] In introducing her decision, Karakatsanis J. expressed at para. 2:  
Increasingly, there is recognition that a culture shift is required in order  
to create an environment promoting timely and affordable access to the  
civil justice system. This shift entails simplifying pre-trial procedures  
and moving the emphasis away from the conventional trial in favor of  
proportional procedures tailored to the needs of the particular case. The  
balance between procedure and access struck by our justice system  
15  
must come to reflect modern reality and recognize that new models of  
adjudication can be fair and just.  
[26] That “culture shift” is now embodied in Rule 20 of the  
Prince Edward Island Rules of Civil Procedure, particularly at  
Rule 20.04. The relevant portions of that Rule 20 read:  
WHERE AVAILABLE  
To Plaintiff  
20.01  
(1)  
A plaintiff may, after the defendant has delivered a statement of defence or served a notice  
of motion, move with supporting affidavit material or other evidence for summary  
judgment on all or part of the claim in the statement of claim.  
(2)  
The plaintiff may move, without notice, for leave to serve a notice of motion for  
summary judgment together with the statement of claim, and leave may be given  
where special urgency is shown, subject to such directions as are just.  
To Defendant  
(3)  
A defendant may, after delivering a statement of defence, move with supporting affidavit  
material or other evidence for summary judgment dismissing all or part of the claim in the  
statement of claim.  
EVIDENCE ON MOTION  
20.02  
(1)  
An affidavit for use on a motion for summary judgment may be made on information and  
belief as provided in subrule 39.01(4), but, on the hearing of the motion, the court may, if  
appropriate, draw an adverse inference from the failure of a party to provide the evidence of  
any person having personal knowledge of contested facts.  
(2)  
In response to affidavit material or other evidence supporting a motion for summary  
judgment, a responding party may not rest solely on the allegations or denials in the party’s  
pleadings, but must set out, in affidavit material or other evidence, specific facts showing  
that there is a genuine issue requiring a trial.  
...  
DISPOSITION OF MOTION  
General  
20.04  
(1)  
The court shall grant summary judgment if,  
16  
(a)  
(b)  
...  
the court is satisfied there is no genuine issue requiring a trial with  
respect to a claim or defence; or  
the parties agree to have all or part of the claim determined by a  
summary judgment and the court is satisfied that it is appropriate to  
grant summary judgment.  
(5)  
In determining under clause 20.04(1) whether there is a genuine issue requiring a trial, the  
court shall consider the evidence submitted by the parties and, if the determination is being  
made by a judge, the judge may exercise any of the following powers for the purpose, unless  
it is in the interest of justice for such powers to be exercised only at a trial:  
(a)  
(b)  
(c)  
weighing the evidence;  
evaluating the credibility of a deponent;  
drawing any reasonable inference from the evidence.  
Oral Evidence  
(6)  
A judge may, for the purposes of exercising any of the powers set out in subrule (5), order  
that oral evidence be presented by one or more parties, with or without time limits on its  
presentation.  
[27] The analysis in York River, supra, continued at paras  
13-16:  
[13] Rule 20.04(1) had been amended in 2014 to require the court to grant summary judgment “if the court was  
satisfied there was no genuine issue requiring a trial”, as opposed to the court being “satisfied there [sic] no genuine  
issue for trial”. Referring to that amendment and the additional amendments allowing motions judges to weigh  
evidence, evaluate credibility and drawn reasonable inferences, Karakatsanis J. reiterated at para. 45 of the Hryniak  
decision, “the amendments are designed to transform Rule 20 from a means to weed out unmeritorious claims to a  
significant alternate model of adjudication. At paras. 49-50, she stated:  
49. There will be no genuine issue requiring a trial when the judge is able to reach a fair and just  
determination on the merits on a motion for summary judgment. This will be the case when the process  
(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the  
facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.  
50. These principles are interconnected and all speak to whether summary judgment will provide a fair  
and just adjudication. When a summary judgment motion allows the judge to find the necessary facts  
and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective.  
Similarly, a process that does not give a judge confidence in her conclusions can never be the  
proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether  
the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the  
necessary facts and apply the relevant legal principles so as to resolve the dispute.  
17  
[28] At paragraphs 66-68, of Hryniak, Karakatsanis J. outlined a  
two-part procedure under Ontario’s amended Rule 20.04. Prince  
Edward Island has similarly changed its Rules to identify that  
process.  
[29] Coady, counsel for the defendant Government et al,  
accurately summarized the principles to be extracted from Hryniak  
as follows:  
(a) A judge shall grant summary judgment if the judge is satisfied based on the  
evidence that the claim discloses no genuine issue requiring a trial. (Hryniak,  
para. 66);  
(b) A genuine issue requiring a trial will not exist when a judge is able to reach  
a fair and just determination of the claim on the merits. This will occur when  
the hearing process (i) allows the judge to make the necessary findings of fact;  
(ii) allows the judge to apply the law to the facts; and (iii) is a proportionate,  
more expeditious, and less expensive means to achieve a just result. (Hryniak,  
para. 49);  
(c) When summary judgment allows a judge to find the necessary facts and  
determine the dispute, requiring a trial will generally not be proportionate,  
timely, or cost-effective. (Hryniak, para. 50);  
(d) On a summary judgment motion, the evidence need not be equivalent to  
that available at trial. Instead, the evidence must be such that the judge is  
confident that the claim can be resolved fairly. (Hryniak, para. 57);  
(e) The applicable standard for fairness is not whether the hearing process is  
as exhaustive as a trial. Rather, the standard is whether the process gives the  
judge confidence to find the necessary facts, and apply the relevant legal  
principles, to decide the claim on a motion for summary judgment. (Hryniak,  
para. 50);  
(f) When presented with a motion, the judge should first determine if there is  
“a genuine issue requiring trial” based on the evidence filed. If there appears to  
be a genuine issue requiring a trial, the judge should then determine whether the  
need for a trial can be avoided by using the fact-finding powers under Rules  
20.04(5) and 20.04(6). Those additional powers may be exercised if their use is  
not against the interest of justice. (Hryniak, para. 66);  
(g) When a judge is able to fairly and justly adjudicate the claim through the  
use of the fact-finding powers, it will generally not be against the interest of  
justice for the judge to do so. (Hryniak, para. 59);  
(h) The decision whether to use the expanded fact-finding powers is  
discretionary. (Hryniak, para. 68).  
18  
2. Two-part test  
[30] All counsel referred to cases reiterating the two-part test  
applicable to motions for summary judgment. Those references  
include MacPherson v. Ellis, 2005 PESCAD 10, at paras. 18-19,  
National Bank v. S. Taha and K. Taha, 2019 PESC 14, at para 16,  
Mallett v. Richard et. ors., 2018 PESC 50, at para. 45, Royal Bank  
of Canada v. Trainor, 2017 PESC 13, at paras. 16-18, and  
McQuaid v. Government of P.E.I. et al, 2017 PECA 21 at para.  
12. In McQuaid, the Court of Appeal of Prince Edward Island  
stated:  
[12] The test on a motion for summary judgment is set out in MacPherson v.  
Ellis, 2005 PESCAD 10 (), at paras.18-19:  
The motions judge correctly applied and interpreted Rule 20 in relation  
to this part of the motion. He cited the test as set out by the Supreme  
Court of Canada in Guarantee Co. of North America v. Gordon  
Capital Corp., 1999 664 SCC, [1999] 3 S.C.R. 423. This is a  
two-part test. The first part requires the moving party to show  
there is no material fact in issue which would create a genuine issue  
for trial. The second part of the test provides that when the moving  
party discharges this onus, the responding party must adduce  
evidence to establish that the position taken in his pleading has a  
real chance of success.  
It is important in applying this two-part test to remember the onus  
is always on the moving party to establish there is no genuine issue  
for trial raised by the pleading they are attacking, whether it be the  
statement of claim or the statement of defence. See: Rule 20.04(2).  
Once the moving party establishes its right to summary judgment by  
meeting this onus the responding party assumes the evidentiary burden  
of showing there is a real chance the position taken in the pleading  
under attack will succeed thereby negativing the moving party's right to  
summary judgment. See: Rule 20.04(1). (Emphasis added.)  
[31] As I have stated, the onus to prove the allegations in the  
statement of claim rests squarely on the plaintiffs. However, once  
the defendants filed their motions for summary judgment, the onus  
shifted to the defendants to prove there is “no genuine issue  
requiring a trial.” If they succeed in showing that, then the onus is  
once again on the plaintiffs, as respondents to the motion, to  
refute that finding and show their case has a real chance of success.  
[32] In Trotter v. Trotter, 2014 ONCA 841, Benotto J.  
19  
addressed the need for the judge on a summary judgment motion to  
ensure the evidence of the parties is properly assessed and  
weighed:  
[78] When conflicting evidence is presented on factual matters, a motion  
judge is required to articulate the specific findings that support a  
conclusion that a trial is not required. The dangers of not doing so were  
highlighted by this court in Baywood Homes Partnership v. Haditaghi, 2014  
ONCA 450 (), 120 O.R. (3d) 438, where Lauwers J.A. stated, at para 44:  
Evidence by affidavit, prepared by a party’s legal counsel, which may  
include voluminous exhibits, can obscure the affiant’s authentic voice.  
This makes the motion judge’s task of assessing credibility and  
reliability especially difficult in a summary judgment and mini-trial  
context. Great care must be taken by the motion judge to ensure that  
decontextualized affidavit and transcript evidence does not become the  
means by which substantive unfairness enters, in a way that would not  
likely occur in a full trial where the trial judge sees and hears it all.  
[79] The evidence in this case was extensive and conflicting. The allegations  
were not bald and the motion could not be resolved on the basis that there was  
no genuine issue requiring trial on the face of the evidence alone. Rather,  
credibility assessments, a weighing of the evidence and possibly oral evidence  
were required. The motion judge’s conclusory findings do not provide the  
analysis or reasoning necessary to support her ultimate conclusion that there  
was no undue influence. (Emphasis added)  
[33] Dovbush v. Mouzitchka, 2016 ONCA 381 also expressed  
that a sufficient explanation is required on a motion in which  
credibility is being assessed:  
[29] Generic boiler-plate findings of credibility of that nature are not  
helpful. A trial judge owes the losing party an explanation for rejecting the  
evidence of a key witness or witnesses (particularly when the key witnesses  
are, themselves, the losing parties), and, while the absence of such an  
explanation is not necessarily dispositive, it may go a long way toward putting  
the reasons beyond the reach of meaningful appellate review: R. v. J.J.R.D.  
(2006), 2006 40088 (ON CA), 218 O.A.C. 37 (C.A.), at para. 36, citing  
R. v. Maharaj (2004), 2004 39045 (ON CA), 186 C.C.C. (3d) 247, at  
paras. 26-29 (Ont. C.A.), leave to appeal to S.C.C. refused, [2004] S.C.C.A. No.  
340. (Emphasis added)  
[34] The Alberta Court of Appeal recently referred to the  
shifting evidentiary burden on a summary judgment motion, and to  
the standard of proof required to conclude there is “no merit” or  
“no defence” in respect of an action. In Weir-Jones Technical  
Services Incorporated v. Purolator Courier Ltd., 2019 ABCA 49,  
Slatter J. stated:  
20  
[31]  
In Alberta, Hryniak v Mauldin must be applied having regard to the  
specific wording of the Alberta Rules of Court. Rule 7.3 uses the expressions “no  
merit”, “no defence” and “the only real issue is the amount”. The word “no”  
can in some contexts be taken to mean “a complete absence”, but if that  
standard of proof was required for summary judgment, summary judgment  
would never be possible. That standard would appear to be even higher than  
“incontrovertible” or “unassailable”, and would amount to proof to a certainty, a  
standard that is rejected even in the criminal law as “unrealistically high”: R. v  
Lifchus, 1997 319 (SCC), [1997] 3 SCR 320 at para. 31. The search for  
a shift in culture would become illusory. The word “no” cannot be severed  
from the phrases “no merit” or “no defence”, and should be viewed not in  
absolute terms but in the context of there being “no real issue”.  
[32] A notable aspect of summary judgment applications is that there is  
no symmetry of burdens. The party moving for summary judgment must, at the  
threshold stage, prove the factual elements of its case on a balance of  
probabilities, and that there is no genuine issue requiring a trial. If the plaintiff is  
the moving party, it must prove “no defence”. If the defendant is the moving  
party, it must prove “no merit”. ...  
[33] The threshold burden on the moving party with respect to the factual  
basis of a summary judgment application is therefore proof on a balance of  
probabilities. ...  
[34] The suggestion that there is some intermediate standard of proof that  
applies to summary dispositions is inconsistent with Hryniak v Mauldin,  
McDougall and Fairmont Hotels. However, as a part of the overall assessment  
of whether summary disposition is a suitable “means to achieve a just result”, the  
presiding judge can consider whether the quality of the evidence is such  
that it is fair to conclusively adjudicate the action summarily. Proof of the  
factual basis of the claim or defence by the moving party at the stage of the  
Hryniak v Mauldin test during which the “judge makes the necessary findings of  
fact”, does not displace issues of fairness. The chambers judge’s ultimate  
determination on whether summary resolution is appropriate, or whether there is  
a genuine issue requiring a trial, must still have regard to the summary nature of  
the proceedings. (Emphasis added)  
3. Best foot forward  
[35] Similarly, all counsel referred to the obligation of both  
parties to a summary judgment motion to “put their best foot  
forward”. Some courts referred to it as an obligation of counsel to  
“lead trump or risk losing”. Regardless of the language used, it is  
clear that it is unacceptable for a party to indicate they intend to  
rely on “further or better evidence at trial” to prove their case. Each  
party must present “specific facts” to refute allegations or evidence  
going against their interests. Failure to provide affidavit or other  
evidence doing so will be fatal to their case on a summary  
21  
judgment motion whether they are the moving party or the  
respondent.  
[36] The Supreme Court of Canada was clear in Canada (A.G.)  
v. Lameman, 2008 SCC 14 when it stated, at para. 19:  
[19] We add this. In the Court of Appeal and here, the case for the plaintiffs  
was put forward, not only on the basis of evidence actually adduced on the  
summary judgment motion, but on suggestions of evidence that might be  
adduced, or amendments that might be made, if the matter were to go to trial. A  
summary judgment motion cannot be defeated by vague references to what  
may be adduced in the future, if the matter is allowed to proceed. To  
accept that proposition would be to undermine the rationale of the rule. A  
motion for summary judgment must be judged on the basis of the pleadings  
and materials actually before the judge, not on suppositions about what  
might be pleaded or proved in the future. .... (Emphasis added)  
[37] In Royal Bank of Canada v. Trainor, supra, at para. 18,  
Clements C.J. stated:  
[18] As has been stated by numerous decisions in this jurisdiction (including  
for example Connick v. Ramsay et ors., 2008 PESCTD 42 ()  
(“Connick”), the obligation on the responding party facing a matter for summary  
judgment is to put his or her “best foot forward”. The comments of Cheverie,  
J., in Connick bear repeating:  
[22] There is no arbitrary or fixed criterion that the motions judge must  
apply. Each case must be decided on the law and the facts as found on  
the evidence submitted. It is not sufficient for the responding party to  
say that more and better evidence will, or may be, available at trial. The  
onus is on the respondent to set out specific facts and coherent  
evidence to show there is a genuine issue for trial... [additional  
emphasis added]  
[38] In Boland v. Lyle, 2016 ONSC 7418, at para. 13, the court  
stated:  
[13] The expectation that parties “put their best food (sic) forward” or  
“lead trump or risk losing” in motions for summary judgment applies with  
even more fervor after Hryniak. There are numerous cases confirming that  
judges will generally assume that parties have played their best cards in bringing  
or responding to motions for summary judgment. Based on this expectation,  
judges will infer that no better evidence will be available at trial. In Danos v  
BMS Group, 2014 ONSC 2060 (), Goldstein J. stated as follows:  
A party on a summary judgment motion cannot just sit back and  
wait for more favorable evidence to develop at trial. I am entitled  
to assume that the evidence filed by the Danos’s is as good as it  
gets. I can and do draw an adverse inference from Peter Danos’s  
failure to put forward any evidence whatsoever in relation to the  
22  
critical issues in this case. Assuming there is no better evidence  
available, as I am entitled to do, it would be unjust to force the  
Defendant to carry on with this litigation to trial.” (Emphasis added).  
[39] The decision in Danos, supra, was affirmed by the Ontario  
Court of Appeal in Danos v. BMS Group Financial Services  
Canada, 2014 ONCA 887.  
4. “Specific facts” required  
[40] The Appeal Division of the Prince Edward Island Supreme  
Court further defined what type of evidence is required in response  
to evidence presented on a summary judgment motion. In  
MacDonald v. Robichaud and Lenentine, 1996 3677  
(PESCAD), [1995] 2 P.E.I.R. 294 Mitchell J.A. stated:  
These statements indicate the motion judge had taken the wrong approach. The  
question he should have asked himself was whether the respondent had set forth  
evidence of “specific facts” to show the appellant caused or contributed to the  
collision. If he had done so, he would have found there was no hard evidence  
put before him to show the appellant’s snowblowing operation had in fact caused  
the white out which led to the accident. Thus, the judge should have allowed  
the motion because, without such evidence, there was no genuine issue for trial.  
Specific relevant facts, not speculations or theories, were the trumps the  
respondent had to lead to avoid summary judgment. (Emphasis added)  
[41] Regarding the obligation to put one’s best foot forward, in  
Mazza v. Ornge Corporate Services Inc., 2015 ONSC 7785, aff’d  
2016 ONCA 753, S.F. Dunphy, J. stated at para. 48(d):  
In weighing a motion for summary judgment, the court is entitled to assume,  
with some limited exceptions, that both parties have placed before it all of  
the evidence that they would intend to lead at trial in relation to the issue or  
issues raised: phrases such as “best foot forward”, “leading trump”, “not an  
occasion to keep powder dry” and “not holding anything back” are commonly  
employed to emphasize this point and have been approved by our Court of  
Appeal (c.f. Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200  
(); aff’d 2014 ONCA 878 (); Danos v. BMW Group Financial  
Services Canada et al, 2014 ONSC 2060 (); aff’d 2014 ONCA 887  
(); (emphasis added).  
[42] Tighe, counsel for Dow and Cutcliffe, stated it succinctly  
when summing up a party’s obligation on a summary judgment  
motion. His submission was, “It’s Game Day!”.  
[43] As I stated in an earlier decision on a summary judgment  
motion, in the case of Summerside Seafood v. Prince Edward  
Island, 2012 PESC 3, at para. 8:  
23  
8. The motion will be decided on the basis of the pleadings and the affidavit  
evidence before the Court. As stated above, more or better evidence promised  
for the trial is of no benefit to the parties on this motion. ...  
5. Summary judgment is not restricted to any category, type  
or size of cases  
[44] Access to summary judgment motions is not restricted to  
any special type or size of case.  
[45] McDonald, counsel for the plaintiffs, made reference to an  
article by David Alderson entitled Sentinels of the Hryniak  
Culture Shift: Four Years On, which was published in the  
Annual Review of Civil Litigation, 2018 (Archibald 2018  
Thomson Reuters). Between pages 170 and 176, Alderson  
discusses some circumstances which may require proceeding to a  
trial rather than granting summary judgment. Those circumstances  
may include cases involving such issues as unexplored or unsettled  
areas of the law, complicated or complex factual and legal issues,  
and questions of credibility.  
[46] However, Hryniak itself addressed the question of  
delineating categories for which summary judgment is appropriate.  
At page 169 of the Annual Review , 2018, Alderson states:  
The Court of Appeal for Ontario in Combined Air Mechanical Services Inc. v.  
Flesch suggested that summary judgment would most often be appropriate when  
cases were document driven, with few witnesses and limited contentious factual  
issues, or when the record could be supplemented by oral evidence on discrete  
points. Karakatsanis J. responded in Hryniak, [at para. 48] “These are helpful  
observations but, as the court itself recognized, should not be taken as  
delineating firm categories of cases where summary judgment is and is not  
appropriate. For example, while this case is complex, with a voluminous  
record, the Court of Appeal ultimately agreed that there was no genuine  
issue requiring a trial.” (Emphasis added)  
[47] In Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC  
1200 (), aff’d 2014 ONCA 878 (), Corbett J. stated,  
at para 32:  
[32] Summary judgment motions come in all shapes and sizes, and this is  
recognized in the Supreme Court of Canada’s emphasis on  
“proportionality” as a controlling principle for summary judgment  
motions. This principle does not mean that large, complicated cases must  
24  
go to trial, while small, single-issue cases should not. Nor does it mean that  
the “best foot forward” principle has been displaced; quite the reverse. If  
anything, this principle is even more important after Hryniak, because on an  
unsuccessful motion for summary judgment, the court will now rely on the  
record before it to decide what further steps will be necessary to bring the matter  
to a conclusion. To do this properly, the court will need to have the parties’  
cases before it. (Emphasis added)  
General evidentiary issues raised by the parties  
[48] This is a legal proceeding undertaken in the normal  
adversarial process in accordance with the Rules of Court. The  
“evidence” tendered by the parties is subject to the rules of  
evidence to determine its admissibility. Witnesses presenting  
evidence are subjected to cross-examination so their evidence can  
be challenged, probed, contradicted and scrutinized in light of the  
tested evidence of other parties.  
[49] The evidence presented on these motions has been by way  
of affidavits, with exhibits, on which the deponents have been  
cross-examined. A transcript of those cross-examinations was filed  
with the court.  
[50] The onus is on the defendants, who have brought these  
motions, to show there is no genuine issue requiring a trial. One of  
the first issues raised by the defendants relates to the nature and  
quality of the evidence presented on behalf of the plaintiffs. The  
defendants claim the plaintiffs have failed to provide “direct” or  
“personal” evidence to support their allegations, notwithstanding  
the plaintiffs claim they will produce such evidence at trial.  
[51] The plaintiffs have relied on two affidavits of Paul Maines  
to set out their evidence. The first was filed on November 29,  
2017 (the “November” affidavit) and was initially used in relation  
to earlier proceedings between several of the same parties. That  
affidavit is 46 pages long and includes 100 exhibits. The second  
affidavit from Maines, filed on January 4, 2019, (the “January”  
affidavit), is 100 pages long and includes 125 exhibits.  
1. Rules of Court on summary judgment motions - potential  
for adverse inference  
25  
[52] The defendants argue Maines has no “personal” knowledge  
of the facts he deposes to in his affidavits. In connection with that  
argument, they make reference to various Rules, including  
specifically those applying to summary judgment motions. They  
refer to Rule 20.02(1), which states:  
20.02 (1)  
An affidavit for use on a motion for summary judgment may  
be made on information and belief as provided in subrule  
39.01(4), but, on the hearing of the motion, the court may, if  
appropriate, draw an adverse inference from the failure of  
a party to provide the evidence of any person having  
personal knowledge of contested facts. (Emphasis added)  
[53] Rule 39.01(4) states:  
39.01 (4)  
An affidavit for use on a motion may contain statements of the  
deponent’s information and belief, if the source of the  
information and the fact of the belief are specified in the  
affidavit.  
[54] Rule 39.01(4) provides a limited and narrowly construed  
exception to the ordinary rule governing the content of affidavits,  
which is set out in Rule 4.06(2):  
4.06  
(2)  
An affidavit shall be confined to the statement of facts within  
the personal knowledge of the deponent or to other evidence  
that the deponent could give if testifying as a witness in court,  
except where these rules provide otherwise.  
[55] Affidavits are sworn statements. It is fundamental that the  
deponent must have either direct personal knowledge of the facts  
stated or, if the deponent is relying on information received from  
another person, the deponent must, in their affidavit, name the  
individual who provided that information and state that they  
believe such information to be true. By naming the individual  
from whom the information was received, opposing parties are able  
to assess the knowledge and credibility of the informant, and if  
they wish, pursue that informant directly to verify or challenge that  
information. Without knowing who provided information to the  
person swearing the affidavit, the evidence becomes equivalent to  
the deponent stating, “Somebody told me X, Y, or Z”. Such  
evidence is without value. As is referenced in Rule 20.02(1),  
when facts are in dispute, the failure of a party to provide evidence  
from individuals who have personal knowledge of the events  
spoken of authorizes the court to draw an adverse inference. That  
26  
adverse inference applies with respect to both the evidence  
presented, and the evidence not presented.  
[56] Therefore, while evidence based on information from a  
named informant, which information is stated to be believed, is  
permissible, its use is not without risk of being discounted if it is  
used as a substitute for direct personal evidence from the  
informant.  
[57] The defendants claim there is another serious deficiency in  
the affidavits from Maines. Numerous times in the affidavit of  
January, 2019, Maines commenced statements with the phrase,  
“Based on information and belief”, followed by a purported fact of  
which Maines has no personal knowledge, and for which no source  
of information is identified. As an example, in commenting on  
the securities investigation against Maines, CMT, and 764, Maines  
stated at para. 160 of his January affidavit:  
Based on information and belief, Dowling was instructed to use the securities  
investigation to destroy the Financial Services Platform and the Loyalty Card  
Program to advance the Newcourt/Laslop program.  
[58] Absolutely no basis for that statement has been provided.  
No source for such information was specified, as is required, and  
there is no appropriate statement that Maines believed even the  
unspecified informant. Whether he is endeavouring to say he was  
“told” something by someone, or that he “concludes” something,  
neither, in this fashion, is an acceptable presentation of evidence on  
the motion before the court. A witness testifying in court would  
be prohibited from making such a statement as Maines made in  
para. 160 of his affidavit. As was stated in Bank of Montreal v.  
Abdel-Messih, 2006 16475, (Ont. C.A.), at para 2:  
Bald assertions without supporting evidence in a self-serving affidavit do not  
create a triable issue.  
[59] At other times, in his affidavit Maines inserts a surname in  
brackets such as, “Based on information and belief (Jessop), ...”  
followed by a statement. One such statement is in the middle of  
para. 191 of Maines’ affidavit of January, 2019. It states, “Based  
on information and belief (Jessop), Jessop will testify that ....”, and  
is followed by what Maines says Jessop will testify to at trial.  
Why should the court or opposing parties accept such evidence?  
It is subject to an adverse inference, in part, because the “future”  
27  
witness, in this case Jessop, is shielded from cross-examination on  
these summary judgment motions. Similarly, the evidence of  
Maines is shielded from effective cross-examination by his lack of  
direct personal knowledge of events to which he attests. The  
evidence provided is diminished as a result. The evidence not  
provided is not only of no value, but its absence leads the court to  
conclude it would not be favourable to the plaintiffs’ case.  
[60] The plaintiffs cited Court v. Debaie, 2012 ABQB 640, for  
the proposition that respondents to an application may rely on  
hearsay. In making that statement, the Alberta Court of Queen’s  
Bench decision relies on Murphy Oil Company Ltd. v. Predator  
Corporation Ltd., 2006 ABCA 69, a decision of the Alberta Court  
of Appeal. However, on reading Murphy Oil, it becomes clear that  
such an exception, if it was to be entertained, would be entertained  
only where the respondent provided a valid explanation as to why  
it was unable to provide the evidence directly. A full and proper  
explanation was held to be even more relevant when those  
unavailable witnesses are corporate personnel or, if they were  
non-parties and the respondent failed to use the available Rules to  
obtain evidence from them. To that I would add that a proper  
explanation is equally or even more essential when the absent  
witness is promised as a “future witness” at a trial should one be  
ordered. The appeal court in Murphy Oil stated, starting at para.  
38:  
[38] At the second stage of the test for summary judgment, the appellants relied  
on several hearsay statements to establish arguable merit to their conspiracy  
claim. As noted by the chambers judge, this hearsay would be inadmissible  
at trial. While in some instances hearsay may satisfy the evidentiary burden on  
the responding party on a summary judgment application (see Scandinavian  
Bank v. Shuman (1917), 1917 385 (AB CA), 37 D.L.R. 419 (Alta. S.C.  
(C.A.)), some of the hearsay relied on was rightly rejected by the trial judge as  
“not determinative of anything”: para. 67. For example statements to the effect  
that someone’s “face dropped” when “Project Pistol” was mentioned do not  
establish that “Project Pistol” was anything more than the respondents say it was.  
[39] The hearsay consists of statements allegedly made to the affiant, the  
appellant Shields. Some of the statements lack probative value because  
they were made by unknown persons. Although it is possible to admit hearsay  
at a summary judgment stage, the admission is predicated on the expectation that  
the source of the evidence will be available for trial. When statements are made  
by unknown persons, that expectation does not exist.  
[40] In regard to some of the other alleged statements, the person who  
made the statement did not provide an affidavit. These statements also do  
28  
not meet the evidentiary burden for two reasons. First, the author of the  
statement did not provide an affidavit. Second, the alleged statement is capable  
of more than one interpretation or emanates from a lower level employee [sic]  
might merely be passing on corporate gossip. If a respondent to a summary  
judgment motion intends to rely on hearsay, it must explain why it is unable  
to adduce the evidence directly, particularly when the statements were  
allegedly made by employees of a corporate party who is subject to be  
examined at discoveries: Crusciel v. Nelson Lumber Co. (1991), 48 C.L.R.  
104 (Q.B.) at paras. 28-32. The appellants could also have employed R. 266  
of the Rules of Court to obtain evidence from non-parties in the  
jurisdiction. See Georges R. Brosseau Professional Corp. v. Condominium  
Plan No. 762 1095 (Owners) (1986), 1986 1954 (AB QB), 74 A.R. 362  
(Q.B.) at paras. 20-21.  
[41] Finally, many of the alleged sources of hearsay statements deny that they  
made the statements. In those instances there is no expectation that the source of  
the hearsay will testify and, indeed, the source can be expected to deny the  
hearsay. Refusal to accept second and third hand hearsay in these  
circumstances is not an error. (Emphasis added)  
[61] The plaintiffs have relied on affidavits only from Paul  
Maines. There was no affidavit from Gary Jessop, Gary Wright,  
Phillip Walsh, or Gary Evans, all of whom play prominently in  
the allegations set forth in the plaintiffs’ statement of claim. In  
fact, Jessop is the lawyer who drafted the MOU between 764 and  
Innovation PEI. He signed the MOU for 764. He had  
discussions with Dow regarding the status of the MOU after it  
became known there was a securities investigation into the conduct  
of Maines, CMT and 764. He made various efforts to contact  
Dowling during the course of the securities investigation. He was  
actively engaged with Cutcliffe. He is CMT’s and 764's corporate  
lawyer. He incorporated and essentially ran the company. He  
appears to be the “directing mind” for both CMT and 764 at all  
material times in respect of the matters currently before the court.  
He is the key player. Significantly, at the hearings on this  
motion, McDonald, counsel for CMT and 764, stated:  
And Jessop was really an engineer, an architect of pretty much everything  
that went on in this file. So that if you wanted to get a full understanding  
before you rule, that would be a prime candidate for a mini trial witness.  
[62] And yet we have no affidavit evidence whatsoever from  
Jessop filed by the plaintiffs for the purposes of this motion.  
Instead of the personal evidence of Jessop, we are left with second  
hand information presented indirectly through Paul Maines. In  
Maines’ affidavits and in the plaintiffs’ factum and submissions  
before the court, we are told there will be further and better  
29  
evidence provided at trial. That further evidence is to come from  
Maines, Jessop, Walsh, Wright, and Evans, all of whom are  
individuals Maines suggests in his affidavits told him what  
happened at certain events or meetings. If those individuals have  
important information on behalf of the plaintiffs, then instead of  
telling Paul Maines, who cannot answer questions on  
cross-examination because he was not involved, they should have  
been telling the court through direct, personal affidavits, which of  
course would subject them to cross-examination on their evidence.  
[63] Some examples will illustrate the nature of the evidence  
presented by Maines in his affidavits.  
[64] Counsel for the Government made reference to a meeting  
which occurred on October 17, 2012, between Allan Campbell,  
Steve MacLean, Gary Jessop, Gary Evans, Gary Wright (by  
telephone), and Sameet Kanade. The only record of that meeting  
presented to the court was the handwritten notes of Allan Campbell  
taken during the meeting. Maines was not at the meeting. Yet,  
in his affidavit, Maines contradicts affidavit evidence of others  
who were at the meeting based on what he says others have told  
him they will testify about if there is a trial.  
[65] Another example of the information provided by Maines  
highlights concerns about the completeness and accuracy of the  
evidence he presents, and raises issues of credibility and reliability  
of that evidence. The evidence shows that during the course of the  
MOU, Innovation was repeatedly asking 764 to specifically  
identify and explain what it was seeking from the province with  
respect to the potential establishment of a financial services centre  
on PEI. This request has frequently been referred to as the “ask”  
from the province. The defendants associated with Innovation  
show in their testimony that they did not receive a proper business  
plan setting out what 764 wanted or expected of the province to  
assist in creating the project. Even Cutcliffe, who worked for and  
on behalf of 764, was after 764 to define the “ask” as soon as they  
possibly could. The plaintiffs claim that they had provided their  
business plan with the specific “ask” of the province, but that the  
Government had not responded. The plaintiffs’ claim is that the  
Government did not act in good faith in attempting to further the  
objectives of the MOU.  
[66] In Maines’ January, 2019, affidavit he quotes from an email  
30  
sent from Cutcliffe, 764's own consultant, to him on August 13,  
2012, commenting on a recent meeting with Innovation with  
respect to the MOU. I have set out the first part of the email  
which Maines duplicates in his affidavit. However, there are two  
significant statements in the email which Maines deleted, which I  
have highlighted in bold below. Cutcliffe wrote:  
Hello folks,  
Had a good discussion over coffee with Mr. Maines this morning and just  
wanted to confirm the follow up advice. I think the meeting on Friday went  
reasonably well and took Trinity Bay a few steps forward in having government  
understand the company’s intentions for North America, the range of  
possibilities and the potential for PEI. However, I believe the folks at  
[Innovation] still need to have the ask, particularly the immediate ask,  
clearly articulated. As I discussed with Paul, my understanding for Trinity  
Bay’s immediate ask is for support/endorsement from the province of PEI to  
essentially recruit financial companies to the Trinity Bay gtp, in PEI.  
If my understanding is correct, I think it would be worthwhile to present  
exactly what Trinity Bay would like from the province to accomplish this  
immediate goal. (Emphasis added)  
[67] The two parts of the email which were deleted by Maines,  
relate to further information the province required regarding the  
“ask” that 764 or TBT wanted from the province. The sentence left  
out of the first paragraph of Cutcliffe’s email to Maines is telling,  
and reads as follows:  
However, I believe the folks at [Innovation] still need to have the ask,  
particularly the immediate ask, clearly articulated. (Emphasis added)  
[68] The first sentence of the second paragraph of the email,  
which is also excluded from Maines’ affidavit, reads as follows:  
If my understanding is correct, I think it would be worthwhile to present  
exactly what Trinity Bay would like from the province to accomplish this  
immediate goal. (Emphasis added)  
[69] The issue of the “ask” and the success or failure of TBT to  
provide its business plans to Innovation will be addressed more  
fully later in this decision. It is referred to here as an example of  
the issues raised by the defendants concerning the nature and  
quality of the evidence presented by the plaintiffs. The type of  
shading of the evidence reflected in the above example  
substantially impairs the credibility of the deponent’s evidence.  
31  
[70] In an email dated February 13, 2013, from Evans to  
Campbell, MacLean, Dow, and Jessop, Evans speaks of first  
becoming involved with Trinity Bay in May, 2012. After  
highlighting some of his involvement, and referencing the MOU,  
Evans refers to the slow progress experienced in moving the file  
forward. He states:  
Ten months have since passed and as far as I can see there is still a considerable  
amount of work left to complete before these parties could sign a deal.  
Although I remain a happy investor in TBT, I am no longer interested in  
continuing my role as a facilitator or champion between TBT and government.  
It is very clear to me that this is no longer a file that simply needs someone to  
make a quick call to move things in one direction or another.  
[71] Concerning another area which will be dealt with in more  
depth later in this decision, the amended statement of claim speaks  
of Simplex’s outstanding invoice in connection with Simplex’s  
work on the e-gaming project at the request of Scales and MC.  
The claim states, at para. 91, “the invoice was never satisfied  
despite repeated assurances by Scales that it would be looked  
after...” However, Maines confirmed on cross-examination that  
he knew, by March 2013, a full 20 months before the statement of  
claim was filed, that the invoice had been paid in full. The claim  
was made notwithstanding it was known to be false.  
[72] Further deficiencies are evident in the affidavits provided  
by Maines. Affidavits are supposed to provide facts, which  
constitute evidence. Hearsay is presumptively inadmissible, subject  
to certain limited exceptions such as in Rules 20.02 and 39.01(4).  
And yet in the affidavits from Maines he attaches numerous  
“passive exhibits”, the contents or purported facts of which he has  
no personal knowledge. Those exhibits include press releases,  
investigation reports, letters involving third parties, letters received  
by politicians, and newspaper articles. He also attaches statements  
from Hansard, which are subject to parliamentary privilege, and are  
inadmissible for proof of liability on a civil case. Other  
inappropriate attachments which do not constitute evidence of any  
fact in this proceeding are pleadings, letters between lawyers, legal  
argument and submissions, opinion, speculation, and supposition.  
[73] The cross-examination of Maines confirms that he does not  
have personal knowledge of events and documents that bear  
directly on the allegations made by the plaintiffs. He confirms  
32  
that he did not participate in any meetings with Innovation PEI in  
connection with the MOU. In fact, in reference to a time prior to  
the MOU, Maines stated that he did not go to government  
meetings. Nor did he participate in any conference calls on the  
MOU. Nor was he a member of the MOU working group.  
Maines also confirmed that he was never an employee, director or  
officer of Simplex, and had no involvement in the MOU through  
Simplex. Finally, he was not a director of either CMT or 764 at  
the times material to this proceeding. He only became a director  
of CMT on April 24, 2014, and of 764 on January 16, 2017, both  
dates being well after any events which are the subject of these  
claims. He also confirmed on cross-examination he had nothing  
to do with the finances of CMT and that it was Jessop who made  
the material decisions in relation to CMT. Maines’ direct personal  
knowledge of the facts of this case are truly insignificant. The  
case of Kolosov v. Lowe’s Companies Inc., 2018 ONSC 7541,  
dealt with similar affidavit evidence. Verbeem J. made the  
following statements:  
55. Argument, speculation and irrelevant information should not be contained  
in an affidavit. Legal arguments belong in a factum, not in affidavit form.  
Generally, legal submissions contained in an affidavit should be struck pursuant  
to r. 25.11 of the Rules, as scandalous, frivolous, or vexations: see Chopik v  
Mitsubishi Paper Mills Ltd. (2002), 26 C.P.C. (5th) 104 (Ont. S.C.). Assertions  
in an affidavit that are irrelevant, argumentative or inserted for colour, or  
that constitute bare allegations may be struck out as scandalous: see George  
v. Harris, 2000 CarswellOnt 1714 (S.C.) at paras. 19-20.  
...  
57. ... The bulk of her evidence does not serve to increase the probability of a  
fact or facts that are material to the subject matter of the motions. Further, some  
aspects of her evidence amount to unqualified opinion evidence. Finally,  
aspects of her evidence are argumentative or otherwise constitute Ms.  
Avery’s conclusory inferences that she has drawn ...  
...  
58. Throughout the majority of her affidavit, Ms. Avery purports to give  
evidence concerning factual matters in which she was not directly involved.  
...  
74. To the extent that Ms. Avery gives evidence in which she purports to  
subjectively interpret what other witnesses “meant” in, or by, their  
evidence, she intrudes on the function of this court. ... The court is  
well-equipped to comprehend, review and consider the evidence before it in  
33  
determining the defendants’ summary judgment motions without the need  
for further evidence from a stranger (in this case Ms. Avery) to the factual  
transaction that is the subject of the evidence, offering his or her own  
evidence about how they interpret what a particular witness “really” meant when  
they testified. The vehicles for such advocacy are not affidavits, but rather facta  
and submissions. (Emphasis added throughout)  
[74] And finally, at para. 84, responding to the submission that  
Ms. Avery’s affidavit evidence was admissible, Verbeem J.  
stated:  
84. The difficulty with that submission is that the “evidence” said to be  
placed “in its proper context” by Ms. Avery’s statements of position and her  
conclusions is not primarily her own. Instead, her conclusions and statements  
of position are said to place in context the portions of her evidence,  
summarizing, partially summarizing, and quoting with emphasis, the evidence of  
other witnesses. In actuality, it is her evidence purportedly summarizing and  
quoting the evidence of other witnesses that frames the context for Ms. Avery’s  
evidence of her own subjective conclusions, opinions, views, inferences, and  
interpretations of the other evidence before the court. In turn, the latter aspects  
of her evidence are consistent with an effort (whether intended or not) to argue  
the plaintiffs’ case in affidavit form. (Emphasis added)  
[75] The court struck out large portions of Ms. Avery’s affidavit  
in Kolosov. In a lengthy decision, summary judgment was  
granted. Maines’ affidavit bears all of the offensive features of Ms.  
Avery’s affidavit.  
[76] Regarding the facts related to this case, I am faced with two  
starkly different types of evidence. On the one hand, I have direct,  
personal testimony from witnesses who attended meetings,  
participated in conversations, or wrote or received emails, letters or  
other documents. On the other hand, I have testimony from an  
individual who is not providing direct, personal evidence, but is  
instead providing second hand information as an individual who  
did not attend the meetings of which he speaks, did not participate  
in the conversations of which he speaks, and did not write or  
receive the emails, letters or other documents of which he speaks.  
Where the facts are in dispute, unless there is something specific to  
alter the assessment of a particular piece of evidence, I accept the  
first-hand, direct, personal evidence over the second hand, indirect,  
evidence presented through another individual.  
2. No explanation for the failure to provide direct evidence  
[77] The plaintiffs have offered no explanation for the failure to  
34  
provide affidavit evidence of these “trial” witnesses in advance of  
the summary judgment motion. There was no explanation that the  
would-be witnesses were suffering any physical or mental  
disability which would prevent them from completing an affidavit  
and responding to cross-examination. There was no explanation  
that the whereabouts of any would-be witness were unknown.  
There was no suggestion any of the proposed witnesses were  
beyond the reach of a subpoena. There was no suggestion any of  
the proposed witnesses were refusing to cooperate or comply with  
a request to provide testimony. There was no indication that any  
such witness was statutorily prohibited from providing testimony.  
Instead, we are left with only a promise of evidence to come.  
[78] Jessop, the “engineer, an architect of pretty much  
everything that went on in this file”, is a lawyer practising in  
Ottawa. Both the plaintiffs’ current and former counsel on the  
actions by CMT and 764 against the Government et al are lawyers  
practising in Toronto. It is common practice for lawyers to  
present affidavits of witnesses living throughout Canada or indeed  
around the world. With respect to this motion, the Government  
filed 14 affidavits from the named defendants and several others  
who were deemed to have important information. The  
Government also filed an additional three reply affidavits. Some  
of the Government defendants now reside outside of Prince  
Edward Island. Cross-examination of 16 defence witnesses and  
the one plaintiffs’ witness was arranged and conducted by video  
conference between Charlottetown and Toronto, without challenge  
or difficulty. Over a thousand pages of cross-examination  
testimony were presented for use on this motion. Yet we were  
not provided with any testimony from the various witnesses  
claimed by the plaintiffs to have the most significant  
information, including the key player for the plaintiffs’ own  
case, Jessop. Even a local individual, declared to be a “trial  
witness” for the plaintiffs, was not called upon to provide an  
affidavit.  
3. Ample time was available to provide all affidavits  
[79] Separate and apart from the initial proceeding in which the  
plaintiffs’ statement of claim was struck out in its entirety with  
permission for the plaintiffs to recommence, numerous other steps  
have been taken by the parties. The plaintiffs filed a second  
statement of claim. They then filed a motion to add additional  
35  
parties. The plaintiffs succeeded on that aspect of their motion  
before me, and less than three months later the plaintiffs filed the  
third version of their statement of claim (the amended statement of  
claim) on June 14, 2018.  
[80] On the same day, counsel for the Government and related  
defendants filed a statement of defence and a motion for summary  
judgment. More than 10 months passed between the filing of the  
initial summary judgment motions (June 14, 2018) and the hearing  
of these motions (April 23-26, 2019). There was ample  
opportunity for the parties to file whatever materials they chose to  
file. Document filing deadlines were known well in advance.  
Dates for cross-examination were agreed to well in advance.  
Dates for interim motions in advance of the summary judgment  
motion were set months in advance to address any disputes such as  
the production of documents or requests for late filing, etc.  
Through the case management process, the documentary filing  
dates were adjusted upon request from certain defendants. After  
the expiration of the final filing deadline the plaintiffs requested  
and received permission to file additional documentation, on  
consent. Notwithstanding time had been set aside to deal with  
contested interim motions, no party sought any such motion.  
[81] As I noted earlier and repeat here, the obligation of a  
responding party on a summary judgment motion is set out in Rule  
20.02(2):  
20.02 (2)  
In response to affidavit material or other evidence supporting a  
motion for summary judgment, a responding party may not  
rest solely on the allegations or denials in the party’s  
pleadings, but must set out, in affidavit material or other  
evidence, specific facts showing that there is a genuine issue  
requiring a trial. (Emphasis added)  
[82] Coupled with the obligation to put their best foot forward,  
it is difficult to comprehend the plaintiffs’ strategic decision to not  
provide direct, personal evidence from its purported list of star  
witnesses, Jessop in particular.  
4. Strategic choices have strategic consequences - Failure to  
produce affidavits and present witnesses for cross-examination  
[83] I previously referred to the Ontario Superior Court decision  
in Mazza v. Ornge Corporate Services Inc., 2015 ONSC 7785,  
36  
regarding the need of each party to place before the court all of the  
evidence they intend to lead at trial. That decision also addressed  
the consequences that flow from a party’s, or their counsel’s,  
strategic decisions in the course of litigation. At para. 50, Dunphy  
J. stated:  
... Strategic choices, including the choice to bring summary judgment  
motions and how to respond to them, have strategic consequences. Parties  
who fail to cross-examine on affidavits or adduce evidence available to them  
that they require for argument will be held to the consequences of their  
strategic choices: c.f. ThyssenKrup Elevator Canada Ltd. v. Amos, 2014  
ONSC 3910 (). Both parties must assume that the service of a notice  
of motion starts a train heading down the procedural tracks that will lead  
to a decision on the merits of each and every issue raised by the notice of  
motion subject only to those issues the court determines genuinely require a  
trial in the interests of justice.  
(Emphasis added)  
[84] Dunphy J. went on to conclude that the plaintiff, “appears  
to have opted for the ostrich strategy to responding to this motion.  
He filed no first hand evidence at all. ...”  
[85] The Court of Appeal affirmed the decision at Mazza v.  
Ornge Corporate Services Inc., 2016 ONCA 753. I note they  
specifically addressed the failure to provide an affidavit from “one  
of the architects” of the structure and activities of the corporation  
under scrutiny:  
[9] The motion judge did not misapply the burden of proof as the appellant  
asserts. He simply applied the well-established rule that both parties on a  
summary judgment motion have an obligation to put their best foot forward: See  
Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (), at  
para. 32, aff’d 214 ONCA 878. The appellant did not swear an affidavit on  
the motion. He simply relied on an affidavit filed by his wife. Considering  
that the appellant was one of the architects of the corporate structure and  
the senior officer of the corporate entity, the motion judge was entitled to  
draw an adverse inference from his failure to adduce personal evidence.  
(Emphasis added)  
[86] In another Ontario case, Murphy v. Mullen, 2018 ONSC  
4292, the court drew an adverse inference based on the failure of  
the defendant to file direct evidence on a contested matter. The  
defendant claimed an identified third party overheard a crucial  
conversation between the plaintiff and defendant. However, the  
defendant did not provide evidence from that individual to support  
his position. Citing the summary judgment rules allowing for an  
37  
adverse inference, Hebner J. stated:  
Given the absence of an affidavit from Mr. Pierce, or any explanation as to why  
one was not provided, I draw the inference that he would not have supported  
Timothy’s version of the conversation.  
[87] In Smith v. Waterloo Taxi Limited, 2013 ONSC 1466, in  
similar circumstances, speaking of the defendant’s evidence, the  
court stated:  
27. ... Significantly, none of this “information and belief” evidence was ever  
relayed to the plaintiffs on discoveries and indeed most was categorically denied.  
As well, not one of these people has sworn an affidavit to support these  
very serious and significant allegations. No explanation whatsoever was  
advanced before me as to why there was no direct evidence from these  
individuals. I am entitled and I do draw an adverse inference from this  
unexplained omission of direct evidence. (Emphasis added)  
[88] The court concluded that “the evidence of Disano is much  
more persuasive than that of the defendant and where they disagree  
I accept the plaintiff’s evidence.”  
[89] The case was appealed, and in Smith v. Waterloo Taxi  
Limited, 2014 ONCA 37, the Court of Appeal concluded, at  
para.10, that, “Given the seriousness of the allegations... and their  
centrality to the litigation, the motion judge did not err in his  
treatment of Waterloo’s Taxi evidence and in preferring the  
Disano’s direct, specific responding evidence ...” .  
5. Adverse inference  
[90] After a thorough review of the evidence presented on behalf  
of the plaintiffs, and of the law relating to such evidence, I draw an  
adverse inference from the complete and utter failure of the  
plaintiffs to produce direct evidence which was within their power  
to produce. I can only conclude that the absence of evidence from  
Jessop, Wright, Walsh, Evans, and others indicates their evidence  
would not support or coincide with the second hand evidence  
provided by Maines.  
6. Compelling documentary production  
[91] Counsel for the plaintiffs maintained that the defendants  
failed in their duty to disclose all relevant material to the plaintiffs.  
Further, he advised that he had presented a Request to Admit the  
38  
authenticity of up to 100 documents to each of the defendants, and  
they failed to provide satisfactory responses. The plaintiffs filed  
their amended statement of claim on June 14, 2018 and followed  
that on June 15, 2018 with their first Request to Admit. The  
defendants responded in various ways which included admitting  
the authenticity of certain documentation and declining to admit  
other documentation such as that between non-parties, documents  
consisting of legal argument, privileged documents, or irrelevant  
and non-material documentation.  
[92] In addition, counsel for the plaintiffs wrote several letters to  
counsel for the defendants referring to each party’s obligation to  
produce all available evidence for assessment on a summary  
judgment motion. He referred to this correspondence as  
Lameman letters”, being a reference to the case of Lameman,  
supra, from the Supreme Court of Canada which confirmed the  
stated obligation.  
[93] The issue of the production and/or admission of documents  
was repeatedly raised by counsel for the plaintiffs over the course  
of numerous case management calls. It was suggested by defence  
counsel and by the court that he ought to pursue a motion to the  
court seeking documentary production, or further direction from  
the court. This was particularly true with respect to the plaintiffs’  
claim against Dowling who conducted the investigation on behalf  
of the Superintendent of Securities. Dowling declined to produce  
an affidavit of documents citing a statutory prohibition on the  
production of any documentation obtained in the course of an  
investigation. Counsel for the plaintiffs who preceded current  
counsel commenced a motion for production but was replaced as  
counsel before proceeding with the motion. The plaintiffs’ current  
counsel was also encouraged to proceed with that motion, but he  
elected to abandon it instead. He insisted his preference was to  
make his motion for disclosure as part of his presentation on the  
summary judgment motion.  
[94] In the course of the plaintiffs’ oral submissions on this  
motion counsel referred to a number of exhibits attached to the  
January, 2019 affidavit of Maines. Those exhibits were the various  
Requests to Admit together with the responses from defence  
counsel and copies of the “Lameman letters” he had written.  
Counsel then stated:  
39  
And I’m well aware of Sweda Farms and, you know, the fact that if I don’t take  
certain initiatives and certain steps to get the evidence before you on a summary  
judgment motion, I’ll have to live with those consequences and that, that’s the  
state of the law.  
[95] He expressed that he had been frustrated by the request to  
admit procedure, and he acknowledged that he could not sit idly  
by. He also stated in correspondence to defence counsel that he  
would normally move for a further and better affidavit of  
documents, but in this case he chose to present his argument for  
further documents as part of his summary judgment motion. When  
pressed by the court regarding his obligation to put his best foot  
forward and take appropriate steps to present all available evidence  
to the court, counsel acknowledged that presenting a motion to the  
court was one avenue but instead he chose to write what he  
described as “fairly powerful, lengthy letters” spelling out the  
documents he wished to receive, and otherwise chose to pursue the  
release of documentation under the FOIPP (Freedom of  
Information) procedures. It seems the plaintiffs preferred to come  
to court saying they have been denied documentary disclosure  
rather than go to court in advance of the hearing seeking  
documents, and risk being told they are not entitled to such  
documents because they are irrelevant, subject to solicitor client  
privilege, or their disclosure is prohibited by statute.  
[96] In Sweda, supra, the court addressed the failure of counsel  
to take appropriate measures under the Rules to obtain production  
of documentation they felt they required. After expressing  
concern about the manner in which the plaintiffs presented their  
evidence in their case, the court stated:  
[40] Overlaying this confusion, Sweda alleges that its difficulty establishing  
its case arises because of non-production from Burnbrae. The materials do  
not include motion materials for any motion to compel further production.  
...  
A motion for production from L.H. Gray was scheduled before the Master in  
December 2013, and was pending at the time of the motion before C.J. Brown J.;  
I was not advised of any motion that had been brought in respect to  
contested production from Burnbrae. (Emphasis added).  
...  
[97] On appeal of that decision, in Sweda Farms Ltd. v. Egg  
40  
Farmers of Ontario, 2014 ONCA 878, the court stated:  
2. On the main appeal, the appellants’ principal submission is that the granting  
of summary judgement is premature. In counsel’s  
words, repeated several times during oral argument,  
the motion judge had only two percent of the  
evidence.  
...  
4. ... If the appellants’ complaint was that Burnbrae had not complied with  
its disclosure obligations, then the appellants were obliged to take steps to  
compel production. They did not do so. Accordingly, they did not meet their  
obligation to put their best foot forward on the motion.  
...  
6. Finally, as the motion judge observed, the appellants did not even put  
forward evidence of those aspects of their claim within their own  
knowledge. (Emphasis added).  
[98] In this case the plaintiffs requested disclosure by way of the  
Request to Admit procedures and by way of Lameman letters. But  
they did not take steps to compel production. That was a  
conscious decision taken by the plaintiffs.  
[99] I repeat the statement from the Ontario Superior Court’s  
decision in Mazza, supra, at para. 50:  
... Strategic choices, including the choice to bring summary judgment  
motions and how to respond to them, have strategic consequences. Parties  
who fail to cross-examine on affidavits or adduce evidence available to them  
that they require for argument will be held to the consequences of their  
strategic choices:  
[100] Each party is required to take appropriate and reasonable  
steps to acquire and present all of the evidence they require for the  
summary judgment motion. Failure to fully pursue the acquisition  
of evidence they do not have but consider they require, constitutes  
a failure to advance their best case. In Drummond v. The Cadillac  
Fairview Corp. Ltd., 2018 ONSC 4509 (), Perell J. wrote:  
[25] Hryniak v. Mauldin does not alter the principle that the court will  
assume that the parties have placed before it, in some form, all of the  
evidence that will be available for trial. The court is entitled to assume that  
the parties have advanced their best case and that the record contains all the  
evidence that the parties will present at trial.[13] Thus, if the moving party meets  
41  
the evidentiary burden of producing evidence on which the court could conclude  
that there is no genuine issue of material fact requiring a trial, the responding  
party must either refute or counter the moving party’s evidence or risk a  
summary judgment.[14] (Emphasis added) (footnotes omitted)  
[101] The nature and extent of evidence required on summary  
judgment motions is well-known. The plaintiffs and defendants  
each had ample time to provide evidence from persons having  
direct personal knowledge of the events in which they were  
engaged. Ample time was built into the case management  
schedule to allow for motions by the parties seeking the production  
of evidence from opposing parties.  
[102] As Corbett J. stated in Sweda Farms, supra, at para. 201,  
“The plaintiff who treats a defence motion for summary judgment  
as a speed bump on the long highway to trial risks crashing its case  
in the deep ditch of dismissal.”  
7. Documentary disclosure by defendants versus documents  
received through FOIPP  
[103] In the course of presenting his argument before the court in  
April, 2019, counsel for the plaintiffs referred to Exhibit 15 of  
Maines’ January 2019 affidavit. That exhibit shows an email  
exchange between LeClair and Sheridan on August 1, 2012. I will  
deal with the content of those emails below. However, in referring  
to the exhibit, counsel for the plaintiffs expressed that in their  
disclosure of documents counsel for the Government “left out”  
some “pretty important evidence”, being the emails shown in  
Exhibit 15. He pointed out that at the very top of the page on that  
exhibit there was a stamp showing “FIN 2017", followed by some  
additional numbers. He explained that the stamp was the indication  
that the plaintiffs had received the information through the FOIPP  
process, rather than through disclosure from opposing counsel.  
He expressed that the emails were “conveniently left out of my  
friend’s material”. Other follow-up emails were similarly described  
as being received through FOIPP and not through disclosure.  
[104] In effect, this was a not-so-subtle accusation that counsel  
for the Government had intentionally not complied with the Rules  
respecting disclosure.  
[105] However, Coady replied, demonstrating he had indeed  
provided the information to the plaintiffs as part of his disclosure  
42  
of documents to them. Coady reminded the court of the “great  
moment” or fanfare plaintiffs’ counsel made of his struggle to  
obtain the emails in question through a Freedom of Information  
application because Government’s counsel “conveniently” did not  
include them in his disclosure. Counsel for the Government then  
referred to those documents which were documents 2086 and 2095  
in the Government’s affidavit of documents given to the plaintiffs  
well before any FOIPP application was made seeking the same  
documents.  
[106] Even after acknowledging during the cross-examination of  
witnesses in January, 2019 (See Q. 40, p, 310, of the transcripts of  
cross-examination) that he did receive those materials as part of the  
disclosure from the defendants, McDonald made representations  
to the contrary to the court at the hearing on these matters in  
April, 2019. That is not the only occasion on which the plaintiffs  
have made much of an alleged breach or failure of Government or  
one of the other defendants when, all the while, the plaintiffs knew  
their statements were false.  
[107] Having said that, there were other documents obtained by  
the plaintiffs through the FOIPP process which were not included  
in the defendants’ disclosure. In general, the defendants challenge  
the relevance or admissibility (eg., solicitor-client privilege,  
statutory prohibition, etc.), of the information received by the  
plaintiffs in that manner. It was noted as well that the plaintiffs  
failed to produce or disclose documents they themselves had  
created, which documents were instead produced by the defendants  
after the plaintiffs had filed their own affidavit of documents.  
When faced with confirmation of that during the  
cross-examinations process, McDonald said, “That’s an irony, but,  
you know, our document management is not perfect either.”  
8. The Pro-C case  
[108] In his oral presentation, McDonald, counsel for CMT and  
764, referred to Pro-C Ltd. v. Computer City Inc. [2000] O.J. No.  
2823, 2000 CarswellOnt 2696, 7 C.P.R. (4th) 193, a case in which  
he acted for Pro-C Ltd. on an alleged trademark infringement.  
McDonald advised the court that he was successful on the case for  
his clients and further because of the malicious behaviour of  
Computer City, his client was awarded $750,000 in punitive  
damages. He described it as a “good faith” case and expressed that  
43  
he saw “parallels”with the CMT/764 case against Government as it  
related to the “lady with cancer” rumour of which you will hear  
more later in this decision. He stated:  
But I see parallels here because if you believe in the concepts of access to  
justice, you know, if we believe that somebody that has a rumour like I  
defrauded a lady with cancer of her life savings,, and you have to go up against a  
very well-funded government, there’s got to be a balance that I’m asking you to  
balance with the access to justice principle in mind.. And, I think ProC is, is, is  
good precedent for that.  
[109] However, in his reply, Coady, counsel for Government,  
informed the court that, significantly, McDonald failed to advise  
the court that the decision was fully overturned on appeal by the  
Ontario Court of Appeal at Pro-C Ltd. v. Computer City, Inc.  
2001 7375 (ONCA), O.J. No. 3600, 55 O.R. (3d) 577.  
[110] There are two other significant aspects of that Ontario  
Court of Appeal decision which do bear similarities to this case.  
[111] First, McDonald argued in that case that Computer City  
failed to produce documents that his client, Pro-C, felt ought to  
have been produced, and they asked the court to draw an inference  
against Computer City. Carthy J.A., with Doherty and Moldaver  
JJ.A. concurring, stated at paras 17-18:  
17. Pro-C’s argument was in part directed to Computer City’s failure to  
produce documents and, in particular, those associated with its sales of  
computers. We are asked to infer from the failure to produce that there were  
sales in Canada of computers bearing the trademark Wingen, and thus that the  
arguments against “use” in Canada have been met. The trial judge did not draw  
that inference and I am not prepared to do so. Pro-C’s counsel wrote a letter  
requesting documents early in the proceeding and was told that the defendant  
had no documents other than those produced. No steps were taken to compel  
production and the respondent [Pro-C] did not even conduct an oral discovery of  
the appellant. ... No effort to seek third party production was made.  
18. In these circumstances, it does not seem appropriate to fill in the major  
holes in the respondent’s proof of its claim by an inference against the appellant,  
particularly because there are no rulings, even at trial, indicating impropriety  
concerning production.  
[112] Second, the Court of Appeal addressed the issue of  
damages and the failure of McDonald’s client, Pro-C, to produce  
any evidence of damages. Carthy J.A. stated at para. 24:  
24. In my view, the trial judge should have found that the plaintiff failed to  
44  
meet the onus of proving damages. This was not a case with the difficulty of  
proof was such that the trial judge should make an unaided assessment. The facts  
concerning damages were all available and in the hands of the plaintiff. If they  
could not be moulded into anything but a mystical claim, the conclusion must be  
that damages were not proved.  
[113] I address the issue of damages claimed by CMT and 764  
starting at para. 654 of this decision.  
[114] The plaintiffs failed to put their best foot forward and failed  
to present evidence of their claim within their own personal  
knowledge. They failed to present all of the evidence they  
described as necessary for the court to have on the summary  
judgment motion. As I have stated earlier, this motion will be