Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff, QSL Canada Inc., claimed unpaid invoices for services under a terminal services agreement.

• The defendant, Canpotex Terminals Ltd., countered with a claim for set-off and invoked an arbitration clause.

• QSL moved for summary judgment, arguing there was no genuine issue for trial.

• Canpotex sought a stay of the proceeding under the Arbitration Act to pursue arbitration.

• The court found no substantive dispute over the debt owed and no credible evidence supporting equitable set-off.

• Summary judgment was granted in favor of QSL; arbitration was denied except on confidentiality issues.

Facts and outcome of the case

QSL Canada Inc., a maritime terminal operator, brought an action against Canpotex Terminals Limited to recover $201,923.99 in unpaid invoices for operational and labour costs related to terminal management services. These services were originally governed by a Terminal Handling Agreement between Canpotex and a predecessor company later acquired by QSL. The dispute arose after Canpotex failed to pay several invoices issued between January and April 2024. In response, Canpotex alleged that QSL's prior negligence had resulted in the contamination of potash with bran, causing Canpotex to incur significant losses. It issued a Notice of Arbitration, invoking an arbitration clause in the agreement.

Canpotex opposed QSL’s summary judgment motion and filed its own motion to stay the court proceedings in favor of arbitration under subsection 50.1 of the Federal Courts Act and section 7 of the New Brunswick Arbitration Act. It also filed a counterclaim for breach of contract and confidentiality, citing QSL’s alleged disclosure of sensitive commercial information. QSL countered that its invoices were undisputed, that no credible set-off defense had been established, and that the issue was suitable for summary judgment.

The court analyzed whether a genuine issue existed that would require a trial. Justice Go found that Canpotex had not provided any evidence showing that its set-off claim was closely connected to or went to the root of QSL’s monetary claim. Furthermore, the court found that the arbitration clause did not bar summary judgment in this case because the statutory exception under section 7(2)(e) of the Arbitration Act applied—this was a proper case for summary judgment with no genuine issue for trial.

Justice Go granted QSL’s motion for summary judgment, ordering Canpotex to pay the full amount of the outstanding invoices with 5% post-judgment interest. She denied Canpotex’s motion to stay the proceeding, except on the limited issue of the alleged breach of confidentiality, which was referred to arbitration. Legal costs were awarded to QSL under the mid-range scale of Tariff B, Column III of the Federal Courts Rules.