Executive Summary: Key Legal and Evidentiary Issues

• Obligation to indemnify Mr. Poirier under the SPA and USA upon failure to secure AXA release

• Dispute over whether verbal repudiation of the SPA occurred during a 2012 conversation

• Relevance of limitation periods and whether Mr. Poirier's claim was time-barred

• Legal interpretation that failure to act promptly under USA did not waive rights to indemnity

• Credibility issues in affidavit evidence, especially Mr. Jessamine’s recollection of events

• Suitability of summary judgment based on completeness of the record and absence of triable issues

Background and facts of the case

This case involved a corporate dispute centered on indemnity obligations following a share sale in the construction sector. Brent Poirier was the sole shareholder and director of Dynamometry Projects Inc. (“Dynamometry”). In 2009, Dynamometry, 1063878 Alberta Ltd. (“106”), 1465046 Alberta Ltd. (“146”), and Matthew Mackay became shareholders in 1352306 Alberta Ltd. (“135”), formed to purchase Sprague Rosser Contracting Co. Limited (“Sprague”).

A Unanimous Shareholder Agreement (“USA”) and Share Purchase Agreement (“SPA”) governed the relationship. These included clauses requiring indemnification of any departing shareholder if personal guarantees were not released. In June 2009, all parties executed an indemnity agreement to obtain a performance bond from AXA for 135 and Sprague.

On October 13, 2010, MGN Constructors Inc. filed a Statement of Claim against Sprague for abandoning a construction project. AXA, under the bond, was also named as liable. In July 2011, Mr. Poirier sold Dynamometry’s shares in 135 to 106, owned by Jeff Jessamine. The SPA required 106 and Mr. Jessamine to use best efforts to release Mr. Poirier from guarantees and, failing that, provide a written indemnity within 90 days.

Although releases from RBC and Western Surety were secured, no release was obtained from AXA, and Mr. Poirier received no written indemnity. AXA, later acquired by Intact Insurance Company, settled with MGN and then sought recovery from all parties who signed the 2009 indemnity agreement. In January 2022, Intact settled with 106, Mr. Jessamine, Dan Edwards, and Mr. Mackay. Mr. Poirier, who was not included in the discontinuance, settled separately with Intact in May 2022 for $40,000.

Following this, Mr. Poirier obtained summary judgment from Applications Judge Birkett, ordering the defendants to indemnify him. This decision was appealed.

Policy terms and contractual clauses at issue

The SPA contained a clause obligating the remaining USA parties to indemnify Mr. Poirier if releases were not obtained within 90 days post-closing. The court found that the clause required actual indemnification, not merely the delivery of a written indemnity. The relevant SPA provision stated that:

“if, notwithstanding such best efforts, all releases as aforesaid are not obtained within 90 days after closing, the remaining parties to the USA shall deliver to vendor (Dynamometry) and Brent (Poirier) their indemnity in writing indemnify the vendor and Brent from any and all liabilities thereunder.”

The USA also contained several indemnity-related clauses, particularly Article XV, which obligated shareholders to indemnify others for liabilities exceeding their share and to act in good faith to secure releases from guarantees. Importantly, clause 15.2 clarified that failure to act upon a breach did not constitute a waiver of rights.

Appeal arguments and findings

Appellants argued that:

1. There was an express repudiation of the SPA in a conversation between Mr. Poirier and Mr. Jessamine in July or August 2012.

2. Mr. Poirier’s claim was barred due to limitation periods.

Justice Fraser rejected both points. He found that the conversation between Mr. Jessamine and Mr. Poirier, which took place during a chance street encounter, did not constitute valid notice of repudiation. Emails sent by Mr. Poirier afterward contradicted Mr. Jessamine’s account. The judge noted Mr. Jessamine’s recollection was unreliable.

Further, the judge agreed with Applications Judge Birkett that the limitation period had not expired. Mr. Poirier was not aware of the need for indemnity until he was served with Intact’s Statement of Claim. It was reasonable not to initiate legal action earlier since the indemnity had not yet become relevant.

Outcome

Justice Fraser dismissed the appeal and affirmed summary judgment in Mr. Poirier’s favor. The court ordered:

• Reimbursement to Mr. Poirier of the $40,000 paid to Intact

• Full compensation for legal fees incurred defending the Intact claim

The court also allowed parties to submit further written submissions regarding costs within 30 days of the decision. The ruling reinforces the binding nature of indemnity clauses and the appropriateness of summary judgment where no genuine issue for trial exists.