



COURT OF APPEAL FOR ONTARIO

CITATION: Crosslink Bridge Corp. v. Canadian
    National Railway Company,

2014 ONCA 247

DATE: 20140401

DOCKET: C57905

Sharpe, LaForme and Tulloch JJ.A.

BETWEEN

Crosslink Bridge Corp.

Applicant (Appellant)

and

Canadian National Railway Company

Respondent (Respondent)

Chris G. Paliare and Alysha Shore, for the appellant

Mark Stewart and Marina Sampson, for the respondent

Heard: March 26, 2014

On appeal from the judgment of Justice John C. Murray of
    the Superior Court of Justice, dated October 24, 2013.

By the Court:

[1]

On December 18, 2006, the District Manager, Niagara District Office,
    Ontario Ministry of the Environment, made an order (the Directors Order) pursuant
    to the
Environmental Protection Act,
R.S.O. 1990, c. E.19 (the EPA),
    s. 18 requiring certain remedial work to be done on a parcel of land owned by
    the respondent CN. As contemplated by the EPA, s. 197(1), the Directors Order required
    CN, before dealing with the property in any way, to give a copy of the order
    or decision affecting the property to every person who will acquire an interest
    in the property as a result of the dealing. The Directors Order also required
    the registration in the land registry of a Certificate of Requirement pursuant
    to s. 197(2) and (3) to certify that a s.18 order had been made.

[2]

In May 2007 the appellant, Crosslink, made an offer to purchase the
    property. Following further negotiations and another offer, the sale of the
    property from CN to Crosslink was completed in November 2008.

[3]

Some four years later, Crosslink informed CN that it took the position
    that it had not been given a copy of the Directors Order and accordingly
    sought to avoid the transaction pursuant to the EPA, s. 197(4):

A dealing with real property by a person who is
    subject to a requirement imposed under subsection (1) or (3) is voidable at the
    instance of a person who was not given the copy of the order or decision in
    accordance with the requirement.

[4]

CN refused to void the transaction and this application followed.

[5]

The issue before the application judge was whether CN had given a copy
    of the Directors Order to Crosslink in compliance with the terms of the EPA
    and the terms of the Directors Order.

[6]

The application judge concluded that when all the evidence was
    considered, an inference could be drawn that Crosslink or its solicitors were
    provided with a copy of the Directors Order prior to closing the transaction.
    The application judge also found that even if the evidence did not establish
    that fact, the doctrine of promissory estoppel precluded Crosslink from
    bringing the application.

[7]

On appeal, Crosslink essentially relies on three submissions:

1.

the trial judge failed to apply the statutory onus imposed on CN to
    prove that it had provided Crosslink with a copy of the directors order;

2.

the trial judge erred by failing to draw an adverse inference against CN
    for having failed to call a witness;

3.

the doctrine of promissory estoppel was not pleaded or argued and in any
    event cannot be used to overcome a mandatory statutory provision.

1. Onus

[8]

At paragraph 57 of his reasons, the application judge listed twelve
    facts that, when considered as a whole, he found pointed overwhelmingly to an
    inference that CN had given Crosslink a copy of the Directors Order.  In our
    view, it was open on this record for the application judge to come to that
    conclusion. We do not agree that he made palpable and overriding errors that
    would justify appellate intervention.

[9]

Crosslinks submission as to the statutory onus essentially rests on the
    proposition that CN was required to establish precisely when, where and how it
    had given Crosslink a copy of the Directors Order. Crosslink contends that
    CNs case rested entirely on what it described as the attachment theory,
    namely that the Directors Order was attached the Certificate of Requirement
    that was included in the two boxes of material relating to the propertys environmental
    issues disclosed to Crosslink in March and August 2007.

[10]

Considerable
    time was spent on the application, and in oral argument before us, as to the
    state of the evidence on that point. The principals of Crosslink swore that the
    Directors Order was not included in the boxes, although it was not apparent
    how closely they had examined those materials. CNs evidence was that its
    representatives believed that the Directors Order had been attached to the
    Certificate of Requirement provided to Crosslink..

[11]

We
    note that the boxes contained very detailed information relating to the
    environmental problems for this property. It would have been apparent to
    Crosslink from the documents it admits receiving that there were serious
    environmental problems with the property. It would also have been apparent from
    the Certificate of Requirement, which was registered on title and specifically
    referenced in the Directors Order, that a Directors Order requiring remedial
    work had been made.

[12]

We
    do not agree that this case turns solely on the attachment theory. Nor do we
    accept the proposition that it was incumbent upon CN, four years later, to
    prove specifically when and how it gave Crosslink the Directors Order. In our
    view it was open to the trial judge to consider all of the evidence from which
    it could be inferred that CN had, at some point prior to the transfer of title,
    given Crosslink a copy of the Directors Order. We refer to the twelve points
    listed at para. 57 of the application judges reasons and, in particular, to
    the following facts:

·

Crosslink knew that  the Directors Order had been made;

·

there was full disclosure of the environmental reports that led
    to the Directors Order;

·

following a lengthy due diligence period, Crosslink waived all
    conditions with respect to the environmental condition of the property,
    acknowledged that CN had delivered all environmental reports in its possession
    and conclusively waived all requisitions concerning any matters relating to the
    property; and

·

before closing the transaction, Crosslink requisitioned a copy of
    the Order [t]o the extent not already provided and then failed to respond to
    CNs reply: [p]lease advise us if your client has not yet received a copy of
    this Order.

[13]

In
    our view, those facts provided a sufficient evidentiary record to support the
    application judges finding that CN had given Crosslink a copy of the
    Directors Order.

2. Adverse inference

[14]

We
    do not accept Crosslinks submission that the trial judge erred by failing to
    draw an adverse inference against CN for its failure to call Susan Sze, the CN
    employee who wrote the disclosure letters that accompanied the boxes of
    environmental reports provided to Crosslink. In answer to an undertaking given
    on his cross-examination, CNs real estate solicitor informed Crosslink that
    while Ms. Sze believed that she gave Crosslink a copy of the Directors Order
    together with the Certificate of Requirement, she had no specific recollection with
    regard to the production of this material that had taken place more than six
    years earlier. In our view, it was open to the application judge in his
    discretion to accept that explanation and to refuse to draw a negative
    inference.

3. Promissory Estoppel

[15]

As
    we see no error in the application judges finding that CN gave Crosslink a
    copy of the Directors Order, we do not find it necessary to consider whether
    there was any error with respect to the alternative ground of promissory
    estoppel.

4. Fresh Evidence

[16]

As
    the issue to which CNs fresh evidence application responded was not perused,
    the fresh evidence application is dismissed.

Disposition

[17]

Accordingly
    the appeal is dismissed. The respondent CN is entitled to its costs of the
    appeal fixed at $35,000 inclusive of disbursements and applicable taxes.

Robert J. Sharpe
    J.A.

H.S.
    LaForme J.A.

M.H. Tulloch J.A.

Released: April 1, 20114


