3021386 Nova Scotia Limited. v. Barrington District (Municipality)

3021386 Nova Scotia Limited. v. Barrington District (Municipality) Court Supreme Court Date 2019-07-16 Citation 2019 NSSC 224 Docket Hfx 309535 Judge/Registrar/Adjudicator Brothers, Christa M. (Honourable Justice) Document Type Decision Relations See also - 3021386 Nova Scotia Ltd. v. Barrington (District) - 2010 NSSC 173 - 2010-04-27 - Decision See also - 3021386 Nova Scotia Ltd. v. Barrington (Municipality) - 2015 NSCA 30 - 2015-03-25 - Decision See also - Tri-County Regional School Board v. 3021386 Nova Scotia Limited - 2021 NSCA 4 - 2021-01-07 - Decision Decision Content SUPREME COURT OF Nova Scotia Citation: 3021386 Nova Scotia Limited. v. Barrington District (Municipality), 2019 NSSC 224 Date: 20190716 Docket: Hfx 309535 Registry: Halifax Between: 3021386 Nova Scotia Limited Plaintiff v. Municipality of the District of Barrington, the Tri-County Regional School Board and Donald G. Harding Defendants Summary Judgment Decision Judge: The Honourable Justice Christa M. Brothers Heard: October 30, 31 and November 2, 2018, in Halifax, Nova Scotia Counsel: Christopher I. Robinson and Lauren Murphy, for the Plaintiff Robert Mroz and Ian Dunbar, for the Defendant, Tri-County Bruce Outhouse, Q.C., and Justin Adams for the Defendant, Donald G. Harding Overview [1] This is a motion for summary judgment on evidence brought by both defendants. The background to these motions are as follows. [2] In 2002, the Tri-County Regional School Board (the Board) decided to close the former Barrington Municipal High School. The Municipality of the District of Barrington (the Municipality) owned the land on which the high school was situated (the property). The Board had the authority to occupy the property while the school operated. The Board managed and controlled the school from 1982 until June 30, 2006, when the property was transferred back to the Municipality. [3] The background to the claim is the purchase of the property by the plaintiff, 3021386 Nova Scotia Limited, from the Municipality. After the purchase was completed, the plaintiff discovered the soil on the site was contaminated with hydrocarbons. There is a claim for damages allegedly resulting from soil contamination. Hydrocarbons were found in the soil, allegedly caused by the prior existence of underground fuel tanks (UFTs). [4] The Municipality issued a Request for Proposals (RFP) on February 1, 2006, for the development of the property. Two bids were received, including one submitted by Kenneth Anthony on behalf of Anthony Properties Ltd. Neither bid was accepted. A second RFP was issued in October 2006. It stated, in s. 2.3, that “[t]he Municipality will not provide any environmental assessment on this property”. [5] On October 30, 2006, Anthony put in two offers, one on behalf of the plaintiff and one on behalf of Anthony Properties Ltd. The plaintiff’s offer was ultimately accepted. An Agreement of Purchase and Sale (APS) was signed by the plaintiff and the Municipality on November 30, 2006. The Board was not a party to the APS. Donald Harding acted as solicitor for both the Municipality and the plaintiff in relation to the APS. [6] The property was not turned over to the Municipality until January 22, 2007. Oil tanks were removed from the property by the Board before then. The Board provided a soil analysis report from AGAT Laboratories dated February 5, 2007. The acquisition by the plaintiff closed on February 16, 2007. [7] The plaintiff alleges that after it purchased and began developing the property, hydrocarbon contaminants were discovered, which resulted in the plaintiff incurring remediation costs. [8] The plaintiff originally claimed against the Municipality but filed a Notice of Discontinuance on April 8, 2015. The plaintiff now claims against the Board and Harding. The plaintiff advances the following claims against the Board: 1. Negligence for breach of statutory obligations; 2. Negligence simpliciter; and 3. Negligent misrepresentation. [9] The Board advances a motion for summary judgment on evidence, claiming it owed no duty of care to the plaintiff, made no representations to the plaintiff, and that the plaintiff could not reasonably have relied upon any alleged representations. In addition, the Board argues this is a claim for pure economic loss, which it says is not recoverable in law. [10] Harding has been a practicing solicitor in Nova Scotia since 1983. The plaintiff’s principal, Anthony, has known Harding since the early 1990s, when Harding began acting as his solicitor. [11] The plaintiff claims against Harding, who represented both the plaintiff and the Municipality for the purposes of the APS. The plaintiff claims that Harding breached a duty to the plaintiff by failing to advise it that a Phase II environmental assessment or similar investigation should be undertaken upon the property prior to the closing. In addition, the plaintiff claims that Harding failed to advise of the impact of a “hold harmless” clause in the APS, and further, that he kept confidential discussions with the Municipality about the “hold harmless” clause, in breach of his professional obligations to the plaintiff. [12] The Municipality and the Board were unsuccessful before Duncan, J. as reported in 3021386 Nova Scotia Ltd. v. Barrington (Municipality), 2010 NSSC 173, affirmed on appeal, 2015 NSCA 30, in advancing summary judgment motions on the pleadings. [13] The parties filed extensive materials on this motion, which required almost three full days to be heard. Preliminary Motion on Affidavit Evidence [14] The Board brought a preliminary motion to strike various portions of Anthony’s affidavit (the “Anthony Affidavit”). A large portion of the first day of the three-day motion was spent dealing with these arguments. Counsel reached agreement on many of the issues raised and a Consent Order reflecting those agreements was eventually signed by the parties in June 2019, reducing the number of impugned paragraphs requiring a decision of the court to eight. I gave an oral decision at the time addressing these arguments and an Order consented to as to form issued July 2, 2019, reflects these rulings. [15] Many of the issues raised related to the fact that the Anthony Affidavit contained apparent hearsay evidence. That is, Anthony deposed to conversations he said he had with various individuals, which he relies on for aspects of his claims. The parties agreed that these portions of the Anthony Affidavit were not put forward for the truth of their contents but for the fact that these statements were made to Anthony. Evidence – School Board Motion [16] The Director of Operations for the Board, Steven Stoddart (Stoddart), swore an affidavit in support of the Board’s summary judgment motion. [17] In response, the President and Director of the plaintiff company, Anthony, swore an affidavit and a supplemental affidavit on October 30, 2019, opposing the motion. There was cross-examination of Anthony, but only by counsel for Harding. In addition, the plaintiff relies upon the affidavit of Melissa Berry, sworn on October 15, 2018, and the affidavit of Lovitte Blades, sworn February 24, 2015. Evidence – Harding Motion [18] Harding provided an affidavit dated October 3, 2018, in support of his motion for summary judgment. In addition, Harding relies on an affidavit of his counsel, Justin Adams, sworn October 5, 2018. The plaintiff relied on the same affidavits sworn by Anthony. Issues [19] The issues are as follows: 1. Is the Board entitled to Summary Judgment? 2. Is Harding entitled to Summary Judgment? Law and Analysis [20] Both motions for summary judgment on evidence are brought pursuant to Civil Procedure Rule 13.04, which provides: 13.04(1) A judge who is satisfied on both of the following must grant summary judgment on a claim or a defence in an action: (a) there is no genuine issue of material fact, whether on its own or mixed with a question of law, for trial of the claim or defence; (b) the claim or defence does not require determination of a question of law, whether on its own or mixed with a question of fact, or the claim or defence requires determination only of a question of law and the judge exercises the discretion provided in this Rule 13.04 to determine the question. (2) When the absence of a genuine issue of material fact for trial and the absence of a question of law requiring determination are established, summary judgment must be granted without distinction between a claim and a defence and without further inquiry into chances of success. (3) The judge may grant judgment, dismiss the proceeding, allow a claim, dismiss a claim, or dismiss a defence. (4) On a motion for summary judgment on evidence, the pleadings serve only to indicate the issues, and the subjects of a genuine issue of material fact and a question of law depend on the evidence presented. (5) A party who wishes to contest the motion must provide evidence in favour of the party’s claim or defence by affidavit filed by the contesting party, affidavit filed by another party, cross-examination, or other means permitted by a judge. (6) A judge who hears a motion for summary judgment on evidence has discretion to do either of the following: (a) determine a question of law, if there is no genuine issue of material fact for trial; (b) adjourn the hearing of the motion for any just purpose including to permit necessary disclosure, production, discovery, presentation of expert evidence, or collection of other evidence. [21] The test applied on a motion for summary judgment on evidence was articulated by Fichaud, J.A. in Shannex Inc. v. Dora Construction Ltd., 2016 NSCA 89, at paras 33-34: [33] The amended Rule 13.04 frames, but does not materially change Burton’s tests. On the first test, instead of the former Rule’s “genuine issue for trial”, the new Rule 13.04(1) speaks of a “genuine issue of material fact, whether on its own or mixed with a question of law”. On the second, the amended Rule 13.04(3) repeats the former Rule 13.04(2), that the judge may grant judgment, dismiss a proceeding, and allow or dismiss a claim or defence. These provisions remain consistent with Justice Saunders’ formulation in Burton. [34] I interpret the amended Rule 13.04 to pose five sequential questions: • First Question: Does the challenged pleading disclose a “genuine issue of material fact”, either pure or mixed with a question of law? [Rules 13.04(1), (2) and (4)] If Yes, it should not be determined by summary judgment. It should either be considered for conversion to an application under Rules 13.08(1)(b) and 6 as discussed below [paras. 37-42], or go to trial. The analysis of this question follows Burton’s first step. A “material fact” is one that would affect the result. A dispute about an incidental fact - i.e. one that would not affect the outcome - will not derail a summary judgment motion: 2420188 Nova Scotia Ltd. v. Hiltz, para. 27, adopted by Burton, para. 41, and see also para. 87 (#8). The moving party has the onus to show by evidence there is no genuine issue of material fact. But the judge’s assessment is based on all the evidence from any source. If the pleadings dispute the material facts, and the evidence on the motion fails to negate the existence of a genuine issue of material fact, then the onus bites and the judge answers the first question Yes. [Rules 13.04(4) and (5)] Burton, paras. 85-86, said that, if the responding party reasonably requires time to marshal his evidence, the judge should adjourn the motion for summary judgment. Summary judgment isn’t an ambush. Neither is the adjournment permission to procrastinate. The amended Rule 13.04(6)(b) allows the judge to balance these factors. • Second Question: If the answer to #1 is No, then: Does the challenged pleading require the determination of a question of law, either pure, or mixed with a question of fact? If the answers to #1 and #2 are both No, summary judgment “must” issue: Rules 13.04(1) and (2). This would be a nuisance claim with no genuine issue of any kind – whether material fact, law, or mixed fact and law. • Third Question: If the answers to #1 and #2 are No and Yes respectively, leaving only an issue of law, then the judge “may” grant or deny summary judgment: Rule 13.04(3). Governing that discretion is the principle in Burton’s second test: “Does the challenged pleading have a real chance of success?” Nothing in the amended Rule 13.04 changes Burton’s test. It is difficult to envisage any other principled standard for a summary judgment. To dismiss summarily, without a full merits analysis, a claim or defence that has a real chance of success at a later trial or application hearing, would be a patently unjust exercise of discretion. It is for the responding party to show a real chance of success. If the answer is No, then summary judgment issues to dismiss the ill-fated pleading. • Fourth Question: If the answer to #3 is Yes, leaving only an issue of law with a real chance of success, then, under Rule 13.04(6)(a): Should the judge exercise the “discretion” to finally determine the issue of law? If the judge does not exercise this discretion, then: (1) the judge dismisses the motion for summary judgment, and (2) the matter with a “real chance of success” goes onward either to a converted application under Rules 13.08(1)(b) and 6, as discussed below [paras. 37-42], or to trial. If the judge exercises the discretion, he or she determines the full merits of the legal issue once and for all. Then the judge’s conclusion generates issue estoppel, subject to any appeal. This is not the case to catalogue the principles that will govern the judge’s discretion under Rule 13.04(6)(a). Those principles will develop over time. Proportionality criteria, such as those discussed in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87, will play a role. A party who wishes the judge to exercise discretion under Rule 13.04(6)(a) should state that request, with notice to the other party. The judge who, on his or her own motion, intends to exercise the discretion under Rule 13.04(6)(a) should notify the parties that the point is under consideration. Then, after the hearing, the judge’s decision should state whether and why the discretion was exercised. The reasons for this process are obvious: (1) fairness requires that both parties know the ground rules and whether the ruling will generate issue estoppel; (2) the judge’s standard differs between summary mode (“real chance of success”) and full-merits mode; (3) the judge’s choice may affect the standard of review on appeal. [22] The fact it is the defendants who are moving for summary judgment is relevant to the test to be applied. A defendant’s motion requires slight modification, as noted in United Gulf Developments Limited v. Iskandar, 2004 NSCA 35, at para. 9: [9] I agree with Justice Moir that it is not possible to mirror the usual test for a plaintiff on a summary judgment application where a defendant brings the motion. I agree as well, that there is no appreciable difference between the standard of no genuine issue, and no arguable issue. I concur with the Chambers judge that the appropriate test where a defendant brings an application for summary judgment in Nova Scotia is the test as set out in Guarantee Co. of North America v. Gordon Capital Corp. [1999] 3 S.C.R. 423: 27 The appropriate test to be applied on a motion for summary judgment is satisfied when the applicant has shown that there is no genuine issue of material fact requiring trial, and therefore summary judgment is a proper question for consideration by the court… Once the moving party has made this showing, the respondent must then "establish his claim as being one with a real chance of success" (Hercules, supra, at para. 15). [23] The moving parties must demonstrate that there is no genuine issue of material fact for trial. If they fail, the motion for summary judgment must be dismissed. In Hatch Ltd. v. Atlantic Sub-Sea Construction and Consulting Inc., 2017 NSCA 61, the Court stated: 23 The role of the motions judge on a summary judgment motion is to determine whether the challenged claim discloses a genuine issue of material fact (either pure or mixed with a question of law). The onus is on the moving party to show there is no genuine issue of material fact. If it fails to do so the motion is dismissed. A material fact being one that would affect the result. 24 The motions judge must determine whether the evidence is sufficient to support the pleading, but he/she cannot draw inferences from the available evidence to resolve disputed facts. 25 This prohibition on weighing evidence was addressed by Saunders, J.A. in Coady. After discussing the law of summary judgment in Nova Scotia, he provides a list of principles, including: [87] . . . 10. Summary judgment applications are not the appropriate forum to resolve disputed questions of fact, or mixed law and fact, or the appropriate inferences to be drawn from disputed facts. 11. Neither is a summary judgment application the appropriate forum to weigh the evidence or evaluate credibility. [24] I will consider both motions in sequence, with the Board’s motion first. Before doing so, the following comment on the nature of summary judgment from Coady v. Burton Canada Co., 2013 NSCA 95, is instructive: [22] In my respectful opinion this process has become needlessly complicated and cumbersome. Summary judgment should be just that. Summary. "Summary" is intended to mean quick and effective and less costly and time consuming than a trial. The purpose of summary judgment is to put an end to claims or defences that have no real prospect of success. Such cases are seen by an experienced judge as being doomed to fail. These matters are weeded out to free the system for other cases that deserve to be heard on their merits. That is the objective. Lawyers and judges should apply the Rules to ensure that such an outcome is achieved. [25] Similarly, in Canada (Attorney General) v. Lameman, 2008 SCC 14, the court commented on purpose of summary judgment: 10 This appeal is from an application for summary judgment. The summary judgment rule serves an important purpose in the civil litigation system. It prevents claims or defences that have no chance of success from proceeding to trial. Trying unmeritorious claims imposes a heavy price in terms of time and cost on the parties to the litigation and on the justice system. It is essential to the proper operation of the justice system and beneficial to the parties that claims that have no chance of success be weeded out at an early stage. Conversely, it is essential to justice that claims disclosing real issues that may be successful proceed to trial. 11 For this reason, the bar on a motion for summary judgment is high. The defendant who seeks summary dismissal bears the evidentiary burden of showing that there is "no genuine issue of material fact requiring trial": The Board’s Motion [26] The plaintiff’s claims against the Board are summarized as follows: 1. The Board breached the Petroleum Management Regulations, N.S. Reg 44/2002, in failing to register, remove and/ or monitor tanks on the subject property, and failed to deal with spills in accordance with the regulations, and therefore is liable to the plaintiff in negligence; 2. The Board was liable in negligence as a result of alleged breaches of the Education Act in failing to monitor, maintain, remove, or otherwise ensure the underground tanks servicing the building did not produce contaminants. 3. The Board was negligent in failing to conduct an environmental assessment of the property; 4. The Board was negligent in failing to warn the plaintiff of the possibility of petroleum contamination 5. The Board was negligent in failing to advise of previous underground tanks on the property and the location and removal of those tanks; 6. The Board negligently misrepresented the environmental conditions of the property. [27] Much of the plaintiff’s claim in relation to the Board is framed as negligent misrepresentation. The elements of negligent misrepresentation were set out in Queen v. Cognos Inc., [1993] 1 S.C.R. 87, as follows: 34 The required elements for a successful Hedley Byrne, supra, claim have been stated in many authorities, sometimes in varying forms. The decisions of this court cited above suggest five general requirements: (1) there must be a duty of care based on a "special relationship" between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentation; (4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted. In the case at bar, the trial judge found that all elements were present and allowed the appellant's claim. [28] When assessing whether there are genuine issues of material fact, it is important to keep in mind which alleged facts are relevant to the claims being advanced. Genuine Issue of Material Fact For Trial [29] The Board argues, inter alia, that it owed no duty of care to the plaintiff and therefore the claims in negligence must be dismissed at the summary judgment stage. The Board says it made no representations to the plaintiff and was not a party to the APS. In addition, the Board says the damages sought by the plaintiff are pure economic loss and are not recoverable in law. [30] The first step is to consider whether there is a genuine issue of material fact in dispute. [31] What is a material fact? This question has been answered in various cases, including 2420188 Nova Scotia Ltd. v. Hiltz, 2011 NSCA 74, where the court stated: 27. The disputed fact under Stage 1 must be “material”, ie. essential to the claim or defence. A dispute over an incidental fact will not derail a summary judgment motion at Stage 1. [32] In Burton, supra, Justice Saunders described material facts as “important factual matters that anchor the cause of action or defence”. [33] The Board speaks of the facts not in dispute, but those are not my concern. The question is what material facts, if any, are disputed. Has the Board satisfied its burden to show that there are no genuine issues of material fact? The plaintiff argues that there are genuine issues of material fact that require a trial. The Material Facts in Dispute [34] The Board claims that “neither before nor after delivering the AGAT Report to the Municipality did the Board make representations to either the plaintiff or Municipality that the report would address the complete environmental condition of the property, nor that the report would show that the property had no environmental contamination”. In short, the Board says it made no representations to the plaintiff with respect to the environmental condition of the property, and that it made no representations to the plaintiff or the Municipality concerning the content of the report it would provide to the Municipality. [35] To understand the context of the factual issues, it is worth noting that Anthony alleges he has known Stoddart, the Director of Operations for the Board, for well over 20 years. In the context of these individuals having a long-term relationship, in a small community, there are several categories of facts in issue. These include what representations were made and by whom. As the Board submits in its brief, “the nature of the relationship between the parties is fundamental to whether a duty of care existed”. [36] The Board says it made no such representations. The plaintiff points to various alleged representations, including the Board’s silence about the removal of earlier UFTs on the property. There are e-mails, and evidence of verbal discussions, concerning information and assurances concerning the environmental state of the property that may or may not have been provided to the plaintiff through Anthony, its principal. For example, Anthony deposed that he met with John Hogg, who dealt with operations for the Board, on the property on November 29, 2006, and discussed the UFTs being removed and the environmental clearance the Board was responsible for. In an e-mail on November 30, 2006, Anthony wrote to Hogg: A quick outline of what we went over is the following: … … The School Board is responsible for taking out the in ground oil tank where the buses gas up and is solely responsible for the cleanup and a letter from Jacques Whitford or acceptable qualified company stating that it is environmentally clean… [37] This is a direct communication with the Board arguably articulating the plaintiff’s expectations and understanding. There is no evidence apparent on the record that could be taken as disabusing Anthony of this understanding. [38] Then, on December 6, 2006, Anthony continued his direct communication with the Board through an e-mail to Stoddart, the Board’s Director of Operations, copied to Brian Holland, the Municipality’s Clerk-Treasurer, in part: … I want to make sure that the oil contamination is cleaned up and a letter from Jacques Whitford, etc. … I know you are on a time restraint but as long as I have a guarantee on the soil, then I will work with you. [39] Stoddart replied, saying: Hi Brian I just want to clarify that I will be communicating with you until the property is returned to the municipality. [40] This was sent to Anthony. Was the Board’s silence, in the face of these e-mails, a representation? Whether there were representations is a material fact in dispute to be decided in a trial. [41] Another material fact in dispute is whether the plaintiff closed the transaction and took the property on an “as is, where is” basis from the Municipality, based on the AGAT report, or whether the sale closed on the basis of representations by the Board, or assurances conveyed through the Municipality. The plaintiff points to various documents to support its contention that representations were made and reliance resulted. The plaintiff argues that since it replied to the RFP, it has maintained its concern for a clean property. The evidence on this material fact includes, for example, an e-mail from Anthony on November 14, 2006, referencing receiving a property with “no contamination”. This is a material fact in dispute. [42] The Board also argues that Anthony was experienced in business and was familiar with environmental clauses in real estate transactions, and that, because of that experience, he closed the transaction knowing there were neither representations nor a report certifying the environmental condition of the entire property. The plaintiff maintains that while Anthony was experienced in business he was relying on others for information respecting the environmental condition of the property. He says he was relying on what he understood to be the Board’s obligations and assurances to the Municipality and to him. These are material facts in dispute. [43] In order to determine whether the plaintiff was provided with representations concerning the state of the property, a court will have to weigh evidence including e-mails, documents, and verbal discussions going to the credibility of witnesses, in light of the relationship between the parties. It is not as straightforward as the Board suggests. [44] The plaintiff has provided evidence of representations made to the Municipality by the Board concerning the environmental condition of the property and the oil tanks. The Board argues that any discussions between it and the Municipality were insufficient to provide the foundation of the plaintiff’s claim. However, the significance of the communications between the Municipality and the Board are a matter of weight, to be determined by a trial judge after hearing all the evidence. It is not a question of law, but one of fact that must be assessed in view of evidence concerning the nature and extent of the relationship and sharing of information among Anthony, Stoddart, Hogg, Holland, and Harding. [45] On February 2, 2005, Holland wrote to the Board and advised them that the Municipality was developing plans for the high school property, raising the question of when the property would be returned to the Municipality. The letter goes on to state that “[w]e anticipate receiving an assurance that there will be no environmental concerns outstanding at the time of transferring ownership back to us”. In another letter of June 20, 2006, Holland, again acting for the Municipality, wrote to the Board: In order for the Municipality to be able to use this property or to be able to dispose of it to developers, it is necessary that there be a written environmental clearance provided by the School Board. Could you please ensure that the Tri-County Regional School Board provides an environmental clearance either for the Department of Environment or Labour or as a Phase II Environment Assessment, … and any other environmental clearance that may be required for the building. [46] On July 4, 2006, Stoddart wrote to Holland, and stated: Before we turn the property back to the Municipality we have to remove the existing underground diesel fuel tank and have soil analysis completed and approved by the Department of Environment. [47] Anthony has provided letters to support the contention by the plaintiff that representations were made to the plaintiff, including one dated July 25, 2006, in a communication by the Board to the Municipality, where Stoddart stated: As you are aware before we can abandon the existing site, I must have a new diesel fuel pump and tank installed at the new site and the existing pump and tank removed from the existing site. When the existing tank is removed there will be a soil analysis completed to ensure there is no soil contamination. [48] On January 22, 2007, Stoddart wrote to the Municipality advising that the diesel pump and tank had been removed from the property. He wrote: Everything appears to be okay and soil samples have been taken and sent to the lab for analysis. [49] Was this a representation made to the plaintiff? There is evidence that the Board knew the ultimate purchaser was the plaintiff. Was this a representation that could be relied upon by the plaintiff, and did the plaintiff rely on it? [50] Anthony provided evidence that he had conversations with Hogg, from the Board, on November 29, 2006. There is also evidence that Anthony continued to have direct contact with the Municipality and the Board throughout the transaction. This contact included e-mails with Holland, in which he arguably articulated his understanding that the Board would ensure the property had no environmental issues when it reverted back to the Municipality. The Board argues that it made no such assurances. The evidence indicates that this is a material fact in dispute. [51] In addition, there are e-mails between Holland, Stoddart, and Anthony, in which Anthony’s expectations and reliance was arguably articulated. On November 15, 2006, Holland e-mailed Stoddart advising him that Anthony “has asked that Jacques Whitford provide a letter within 3 months that the oil tanks have been removed and the soil tested and there is no contamination…”. An e-mail of November 21, 2006, from Holland to Stoddart, copied to Anthony, stated: In any case you informed me by email on November 1, 2006 that the oil tank behind the Junior High School had been pumped out, so there can be no contamination from it. Nevertheless, the sooner it is removed and the letter from Jacques Whitford is provided, the better. [52] E-mails between Anthony and Hogg also address the issue of oil tanks and receiving a clean property. In particular, an e-mail from Anthony of December 5, 2006, states the following: The School Board is responsible for taking out the in ground oil tank where the buses gas up and is solely responsible for the cleanup and a letter from Jacques Whitford or acceptable qualified company stating that it is environmentally clean. I will then allow the tank to stay there until the end of this lease and therefore the Board doesn’t have to remove it within the next 60 days as planned or promised. Therefore I will be closing (purchasing) the property prior to the tank removal but guaranteed from the Mun. of Barrington and the School Board that it will be cleaned up prior to you vacating the premises. [53] More e-mails between Anthony and Stoddart were produced regarding the Board’s alleged assurances. An e-mail from Anthony to Stoddart is contained in the Anthony Affidavit wherein Anthony made reference to the soil contamination being cleaned up and referred to a letter from Jacques Whitford. [54] Anthony maintains that he discussed the environmental assurances with Hogg and Stoddart. He refers to a fax of January 22, 2007, e-mails and a call with Stoddart discussing the oil tank removal, environmental concerns, and the plaintiff’s need for action by the Board. Anthony, on review of a January 22, 2007 letter from Stoddart to the Municipality, wherein Stoddart said “everything appears to be okay….”, advised Holland and Harding that he found “the environment to be very weak” and indicated that he needed “better assurances and more paperwork”. [55] The plaintiff claims that it relied on the Board to ensure there was no contamination of the property. Did the plaintiff in fact have such a reliance and expectation? Is it borne out by the verbal and written communications? There is evidence adduced on this motion by the plaintiff which raises a genuine issue of material fact as to those very issues. In addition, after the fact, on February 18, 2008, Harding wrote to the Board, copying the Municipality, stating the following: As expressed in a letter of June 20, 2006, the School Board was to provide full disclosure and complete environmental assessments as well as remedy any and all environmental contamination on the site in order for the Municipality to make use or dispose of the land. Under the Education Act, the School Board had control and conduct of the property. … The School Board must take the steps to remedy the contamination immediately as obligated under the Education Act and the Environment Act.. [56] This is evidence of what the plaintiff may have thought was the Board’s obligations respecting the property. [57] In addition, a Court will have to determine if the Board had any statutory obligations and, if so, whether they were breached. This will require findings of fact. There is also an allegation that the Board did not advise the Municipality about two tanks allegedly installed in 1956 and 1969 that had been removed earlier, prior to the property being transferred back to the Municipality. A court will have to decide what information was communicated by the Board to the Municipality, what information the Board had, and what information the Board should have had. This will include an assessment of evidence and weighing of documents and viva voce testimony. This is not my role on a motion for summary judgment. [58] There is evidence that Anthony received a letter from Stoddart on January 22, 2007, concerning the Board’s removal of a diesel pump and tank, in which Stoddart stated “everything appears to be okay”. There is evidence of discussions between the parties about these issues. This evidence will need to be considered and determined by a trial judge. [59] Anthony maintains that Holland advised him on behalf of the Municipality that the Board, as the occupier of the property, was obligated to turn the land over with no contamination. He says that throughout the process he made it known that he expected to receive land that had no contamination. He refers to his discovery evidence, appended to the affidavits, regarding his understanding that the Municipality would receive assurances about the soil condition from the Board. Anthony also points to a letter of February 2, 2005, from Holland to the Board as context for this. [60] In discovery excerpts filed in this motion, Anthony stated that Stoddart told him “along the way the tanks would be removed and a clean bill of health”, but he could not say when those conversations took place. This is contradicted by the Board, which says no assurances were ever made. This is clearly a material fact in issue. [61] There is a dispute as to whether the plaintiff accepted the property on an “as is” basis or whether he signed the APS as it is worded in reliance on the property being clean, because he understood that the Board had obligations to return the property to the Municipality free from contamination or with a clean bill of health. [62] The Affidavit of Lovitte Blades also points to material facts in issue, specifically as to what the Board knew and what did they communicate? In an Affidavit sworn February 24, 2015, Mr. Blades indicated that two UFTs located on the property were removed. One had been installed in 1956 and the other in 1968. Both were removed in late 1994 or early 1995. Mr. Blades deposed that the 1956 UFT was not in good condition. He said it was rusty, and had been leaking oil for some time. This raises an issue of what the Board knew or did not know at the time of the property sale. On discovery, Stoddart reviewed his responsibility to know about tank installation and removal and to know whether “soil conditions meet their environment regulations, or, if they don’t, the responsibility to have the – that site where those tanks are removed cleaned up.” The Board’s knowledge about those older UFTs and their removal, and what was told to the Municipality and the plaintiff, are issues which require an assessment of evidence and findings of fact be made. Summary judgment is no place for these questions to be answered. [63] In his Supplemental affidavit, Anthony referred to an e-mail exchange between himself and Stoddart concerning the use of the Board office on the property and Anthony’s stated need for a Jacques Whitford letter. He also stated that he and Stoddart spoke on the phone about environmental issues and removal of the oil tanks. He also deposed that he and Hogg also spoke about these issues. What was discussed, what may or may not have been represented is not for me to determine or resolve at this motion. [64] In an e-mail from Holland, the Clerk of the Municipality, to Stoddart the following was written: This will require the School Board to be moved out and have the tanks removed and reports done by Jacques Whitford by then. [65] While the Stoddart affidavit goes to great lengths to avoid disputes as to material facts, it is clear there remains a significant dispute between the plaintiff and the Board concerning whether the Board made representations to the plaintiff directly, or made representations to the Municipality on which the plaintiff could rely, that the Board would deliver the property back to the Municipality with no environmental contamination. Paragraphs 24 and 26 address the factual dispute as follows: 24. The School Board made no representations to either the Plaintiff or Municipality that the report it would deliver to the Municipality would address the complete environmental condition of the Property, or that the report would show that the Property had no environmental contamination. … 26. The School Board made no representations to the Plaintiff with respect to the environmental condition of the Property. [66] However, in a letter to the Board dated February 29, 2008, Holland, on behalf of the Municipality, stated: All the correspondence and conversations between the Municipality and the School Board officials make it clear that the Municipality expected the property to be clean and certified clean with no environmental concerns. The School Board also was clear both in correspondence and discussions that development could or would go on with the property which would require it to be clean. You are aware that all parties involved relied on the School Board to ensure that there was no contamination. [67] This is the signing officer for one of the contracting parties expressing what the expectations were in relation to the Board. This is a genuine issue of material fact for a trial judge to determine. Communications between the Board and the Municipality will also have to be considered in determining whether there was an obligation on the part of the Board, and whether the plaintiff was given assurances or representations. [68] The Board points to the APS, arguing that it did not stipulate a “clean property”. In particular, the Board points to clause 9, which stated: 9. The Vendor makes no representations about the condition of the property but agrees to obtain from the School Board and or their consultants an opinion as to the removal of tanks and the condition of the property being satisfactory to the purchaser. [69] The Board argues that the plaintiff accepted the property “as is, where is”, received an AGAT report, and subsequently closed the property transaction. They argue that this is the end of the issue. It is not. This contractual provision must be considered in light of the surrounding circumstances and the factual matrix (Sattva Capital Corp v. Creston Moly Corp., 2014 SCC 53). With respect to the assertion that no positive representations were made, it is true that silence will not generally amount to a representation, but circumstances may impose a duty to correct a misapprehension. There is evidence here that could support such an argument: see Libfeld v. Patica Corp., 2018 ONSC 3373, at para. 19. [70] The Board may very well have a good defence. It has, in its brief, raised issues, including lack of recoverability, based on the principles concerning recovery for pure economic loss, lack of a duty of care, absence of reasonable reliance, and caveat emptor. However, a court on a summary judgment motion cannot embark on a consideration of such issues in the face of genuine material disputes of fact. [71] On the motion for summary judgment on the pleadings in this matter, Duncan J. referenced the claim that the Board made representations to the plaintiff, and made comments on the law that are also relevant on this motion: 34 The defendant Board says that there is no evidence that it made "representations" to the plaintiff and that there is no basis upon which it could be said to have owed a duty of "good faith" to the plaintiff. It says that it dealt directly with the Municipality regarding all matters related to the transfer of the property. 35 The Municipality similarly complains about a lack of particularity in the plaintiff's allegations. 36 The plaintiff submits that direct communication is not required to find a claim of negligent misrepresentation. What is required is a finding of sufficient proximity between the representor and representee. As was observed in Fullowka, supra, at para. 40: ... many of the reported cases refusing to strike out pleadings are about just such proximity or duty questions in negligence law. They say that the law of negligence in Canada is now fluid and being rebuilt, especially respecting the duty of care, and decisions are very sensitive to the facts of individual cases, so the courts should not strike out a claim over such difficult or uncertain proximity or duty questions. 37 The plaintiff says that on the facts as set out in the claim, it can be inferred that the Board was aware of the intended resale and development of the property by the Municipality, and the "plain sense of the claim" is that the Board knew or ought to have known that its' representations as to the state of the property were to be relayed by the Municipality to the plaintiff. It continues that if the Board and/or the Municipality consider that more particulars are required, then their remedy is to demand them. 38 There is support for the plaintiff's position. Paragraph 11 of the claim includes that the Municipality wrote to the Board and informed the Board that "an environmental clearance" had to be provided by the school board as a precondition to the Municipality's ultimate disposition of the property. It also identified to the School Board that those representations were intended for the ultimate reliance of persons such as the plaintiff, being a developer. 39 Fullowka, at para. 23, notes that where there is more than one defendant that may be liable, yet it is unclear as to which one, then the action should not be struck out even though the claim may appear debatable or even "dubious" in relation to one of them. This case may be representative of that concept. Though on first appearances the discussions were solely as between the plaintiff and the Municipality, the claim demonstrates that the Board was aware or ought to have been aware that its' representations to the Municipality were going to be relayed to the plaintiff and relied upon, ultimately it is alleged by the plaintiff, to its' detriment. It may be that, upon closer examination, the Board will successfully defend on the basis of a lack of "representations" but the existence of a good defence is not the basis upon which a pleading should be struck. [72] There are facts to be determined concerning this claim. [73] For all of these reasons, the Board has not satisfied me that there is no genuine issue of material fact to be decided. The first part of the summary judgment test is not met. Based on Shannex, that is the end of my analysis. I must dismiss the Board’s motion. Harding Summary Judgment Motion [74] I will not reiterate the law applicable to this motion. The plaintiff claims that through its principal, Anthony, it discussed with Harding the potential purchase of the subject property, and Harding agreed to represent the plaintiff in the transaction. Anthony claims that Harding then advised that he would also be acting for the Municipality as well in relation to the APS. Anthony consented to this dual retainer, in correspondence of November 22, 2006. Anthony deposed that he relied upon Harding to provide necessary and appropriate advice on the purchase of the property. Of relevance are the following claims from the Amended Notice of Action dated February 22, 2013: 16E. The Plaintiff says that with respect to all matters relevant to the purchase and sale of the Subject Property, Mr. Harding acted as its solicitor and the Plaintiff relied on Mr. Harding to provide them with all necessary and appropriate advice so as to protect their interests with respect to their purchase of the Subject Property, including advice regarding potential environment issues with the Subject Property. 16F. On November 20, 2006, Mr. Harding forwarded to Mr. Anthony an email of Brian Holland, dated November 15, 2006, in which Mr. Holland instructed Mr. Harding to prepare an agreement of sale for the Subject Property. The email mentions four specific terms which were to be included – those terms did not include a clause which stated, “the Vendor makes no representations about the condition of the property…” – a “hold harmless” clause. 16G. Mr. Anthony then printed the forwarded email of Mr. Holland and hand wrote a fifth term to be included in the agreement which stated “letter from Jacques Whitford that the any tanks are removed & up to environment standards” – Mr. Anthony hand delivered the hard copy of the forwarded email containing his notes to Mr. Harding on or about the afternoon of November 20, 2006. 16H. On or about November 20, 2006, Mr. Harding advised Mr. Anthony that the Plaintiff did not require the clause Mr. Anthony requested regarding the “letter from Jacques Whitford” because the School Board was going to look after cleaning-up the Subject Property. Mr. Anthony accepted the advice of Mr. Harding and as a result the agreement of purchase and sale did not contain a clase requiring a letter from Jacques Whiford regarding environmental standards. 16I. The Plaintiff says that at no time did Mr. Harding inform them that the Municipality had requested a “hold harmless” clause in their favour be included in the purchase and sale agreement, or that Mr. Harding had advised the Municipality to include such a clause in the agreement. 16J. The Plaintiff further says that at no time prior to the closing of the purchase did Mr. Harding advise the Plaintiff that a Phase II environmental assessment or similar investigation should be required to be performed on the Subject Property. [75] The plaintiff claims that Harding was negligent on the following basis: 1. Harding breached his duty as a reasonable and prudent solicitor by failing to advise the plaintiff that a Phase II or similar investigation should be undertaken in relation to the property prior to closing; 2. Harding breached his retainer and his duty owed to the plaintiff by failing to inform the plaintiff of the impact of the hold harmless clause; 3. Harding failed to recognize and advise the plaintiff of the potential conflict once the plaintiff raised concerns about the removal of oil tanks and assurances as to environmental standards; and, 4. Harding breached his retainer with the plaintiff by holding confidential discussions with the Municipality about the inclusion of a hold harmless clause. [76] The plaintiff provided Anthony’s affidavit sworn on October 16, 2018, and he was cross-examined. The background to Anthony’s affidavit concerning the facts underpinning the plaintiff’s claim against Harding is that he considered Harding one of his closest friends, who he socialized with daily. [77] The plaintiff’s affidavit raises factual issues. [78] On November 15, 2006, Anthony, writing to the Municipal council acknowledged that Harding would be representing both the plaintiff and the Municipality, and stated “The lawyer Don Harding can look after both sides on this land transaction”. On November 22, 2006, Harding wrote to the plaintiff, in a letter addressed to Anthony, and stated that Harding would represent both the plaintiff and the Municipality “in the proposed purchase of certain real estate”. The letter also indicated that a solicitor can undertake this if the parties consent. Harding also advised of three issues and then asked Anthony to sign the letter if there was agreement. The significance of this letter is a material fact in dispute. Harding claims he was acting under a limited retainer. A court will need to interpret the evidence and this letter in light of the surrounding circumstances and make findings of fact respecting the relationship of these parties. [79] Harding knew, throughout the Spring and Fall of 2006 of Anthony’s interest in buying the property. Harding had a knowledge of Anthony’s land dealings and had acted for him on dozens of property transactions. This is not denied. Harding claims that because of Anthony’s experience and sophistication, he had a limited role in these transactions. Anthony, by contrast, deposed that Harding was “acutely aware of my limitations when it comes to fully grasping the effect of certain legal verbiage and terms, and the manner in which they can impact my interests”. Anthony says he has relied on Harding’s legal advice over the years because of these limitations. [80] Anthony deposed that Harding told him that the Board would make sure the property was clean before it was returned to the Municipality. Anthony deposed that by October 2006, when the RFP was sent out by the Municipality, he had been assured by Harding that the Board would ensure the property was clean and there would be no environmental issues with regards to the property. Harding, in his affidavit, said he did not tell Anthony the property would be given a clean bill of health or would be free from environmental concerns. What Harding did or did not advise is clearly a contested material fact. [81] Anthony also deposed that he expressed concerns to Harding about the refueling of buses on the property and the potential for oil contamination. Anthony alleges Harding assured him that this was not a concern, as the Board would return the property to the Municipality in a proper and clean state. [82] Anthony stated that he responded to the RFP indicating the plaintiff would purchase the property “as is” and without a “Phase 1” only because of the assurances given by Harding and Holland about the process of the land being given back by the Board with no environmental concerns. He said he always maintained his concern for an environmentally clean property and made known this expectation, including in a letter to the Municipality on November 14, 2006: Within approximately 3 months, a letter from Jacques Whitford stating the oil tanks have been removed and it is acceptable, no contamination. The Old Annex building, I would expect to be turned over in approximately 3 months and my plans are again to tear it down immediately when passed over. [83] Anthony deposed that he received assurances from Harding, for many months, that the Board would ensure the property was clean before it reverted to the Municipality, and that he understood from both the Municipality and Harding that the Municipality would not accept the property back from the Board unless it was clean. [84] The APS is dated November 30, 2006. Harding was contacted by Holland on November 15, 2006, to draft the APS. Harding e-mailed Anthony on November 20, 2006, asking what else he wanted in the APS. Anthony deposed that he printed off the e-mail and wrote in an additional provision to be included in the APS, which he gave to Harding. The handwritten addition says: “letter from Jacques Whitford that the tanks are removed & up to environmental standards”. Anthony says that after his advising Harding of this, it was not including in the APS. There is a factual dispute between Anthony and Harding as to whether Harding drafted the APS based on instructions given by Anthony, as per the e-mail of November 20, 2006, and the handwritten addition Anthony says he made and gave to Harding. Anthony provided evidence that he wanted a Jacques Whitford letter as a term of the APS to provide evidence of the environmental condition of the property. No such term is in the APS. There is a dispute about what if any conversation took place after this handwritten notation by Anthony seeking inclusion of this term. Instead, clause 9 was inserted which has been described as a “hold harmless” clause. Anthony gave discovery evidence that this clause was inserted without Harding reviewing it with him. Based on this, Anthony believes there were confidential discussions between Harding and the Municipality about the APS and the inclusion of what he characterizes as a detrimental clause. [85] Harding argues that the evidence does not support the plaintiff’s claim that it relied on him to protect its interests in relation to environmental issues, and provides evidence in his affidavit to contradict this. Harding alleges that over the course of a number of previous property transactions, Anthony organized environmental site assessments. One of these environmental assessments was alleged to have been sought by one of Anthony’s other companies in relation to land adjoining the property, and to have indicated that former UFTs are a potential source of hydrocarbons. However, Anthony said he had no recollection of these reports, and that he did not have them when he was dealing with the purchase of this property. In summary, Harding says Anthony knew or ought to have known that the potential existed for the property to have soil contamination. Anthony denies this. What he knew or ought to have known in the context of his dealings with Harding is a genuine issue of material fact for trial. [86] Anthony says Harding knew that the Municipality’s insurer recommended documentation from the Board to ensure that there was no contamination, as well as recommendations about what should be contained in the APS, but never advised him of any of this. One of the recommendations purportedly made by the insurer was that the APS contain an indemnification, or “hold harmless”, clause. Anthony maintains that this was not communicated to him, pointing to this as an example of confidential communications passing between Harding and the Municipality to which he was not a party. [87] There is also a dispute about the nature of Harding’s retainer. Harding maintains that he had a limited retainer. Anthony maintains that he was never advised by Harding that his representation was limited to “conveyancing aspects”, and says he understood that his interests would be protected by Harding throughout the purchase of the property. Harding disputes this in his Affidavit sworn on October 3, 2018. This is a material factual dispute. [88] Anthony and Harding also dispute the nature of the advice Harding would typically provide. Anthony’s evidence is that he relied on Harding for advice related to an APS, including issues relating to environmental condition of the land. Harding, in his affidavit, distances himself from due diligence issues, stating that Anthony never relied on him for that type of advice, quite the opposite of Anthony’s evidence. Harding also claims he had little professional experience with environmental contamination. [89] Harding claims the dual retainer was a limited retainer wherein he would simply reduce the terms of the APS to written form. In effect, he suggests that he would have been acting as little more than a scrivener. Harding also claims his advice was limited to “conveyancing aspects”. Anthony deposed that he knew nothing about the allegedly limited nature of the retainer, and said Harding’s affidavit was the first occasion he ever heard it suggested that Harding’s advice was limited in any way. He said he was never asked, and never agreed, that Harding would provide limited legal advice. There is no documentary evidence from Harding that appears to support his general evidence that his retainer was limited; he did provide a “conflict letter”. Whether this bears upon the substance of his retainer must be left to a trial. This is a material fact in dispute. [90] There is then a factual dispute between Harding and Anthony about what Harding knew and when, and what advice he should have given based on his state of knowledge. [91] Anthony deposes at para 54 of his affidavit as follows: In Harding’s affidavit at paragraph 25 he says that he, “…did not discuss simple legal concepts with [me] and it was not my practice to review the content of legal agreements with [me] – I’m not sure what that statement means. I had always relied on Harding to bring anything contained in a legal agreement to my attention and advise me, if it was something that might impact my interests. At no time and in no way, would I agree to Harding to lave me on my own as regards legal concepts or the content of legal agreements. [92] Anthony disputes Harding’s characterization of him as a sophisticated business person. [93] There is an issue of whether Harding provided advice to Anthony about the separation between the Municipality as the owner of the property and the Board as the occupier of the property, and what consequences this may have. Once again Harding points to the alleged limited retainer and limited nature of the advice he was to give. Harding further maintains that Anthony needed no advice with respect to environmental issues and that he, Harding, did not have experience in this area. Anthony contradicts Harding’s evidence that he had little professional experience dealing with environmental due diligence, referring to a Sherose Island land deal involving soil contamination. In addition, Anthony deposed that, while he is able to understand certain environmental reports he needs and has received Harding’s advice “about when and why environmental due diligence might be or ought to be considered.” In his supplemental affidavit, Anthony said Harding never advised him of legislative obligations that the Board may have had to clean up any soil contamination on the property. Once again, Harding points to his allegedly limited retainer. There are clearly genuine disputes of material fact going to the nature of the relationship between Harding and Anthony, and to the nature of Harding’s retainer. [94] There was a dual role assumed by Harding given the nature of his retainer on the property transaction. Harding has not discharged the burden to show there are no material facts in dispute. Given the evidence of what Anthony maintains he understood from discussions with the Board, Municipality, and Harding, and given what is found in the APS, there is an issue with regards to the dual retainer and a trial is required to determine if Harding found himself in a conflict of interest and failed to advise the plaintiff properly. [95] Based on the above genuine disputes of material fact, I dismiss Harding’s motion for summary judgment. Next Steps [96] Civil Procedure Rule 13.08 indicates the next steps after a failed motion for summary judgment on the evidence. The Rule states: Hearing after dismissal of motion for summary judgment on evidence 13.08 (1) A judge who dismisses a motion for summary judgment on evidence must, as soon as is practical after the dismissal, schedule a hearing to do either of the following: (a) give directions for the conduct of the action, if it is not converted to an application; (b) on the motion of a party or on the court's own motion, convert the action to an application in court, set a time and date for the hearing of the application, and give further directions as called for in Rule 5 - Application. (2) A judge who gives directions for the conduct of an action that is not converted may include directions that do any of the following: (a) restrict discovery in view of disclosure made through an affidavit or cross examination on an affidavit; (b) narrow the issues to be tried by specifying what facts are not in dispute; (c) regulate disclosure or production of documents, electronic information, or other evidence; (d) permit evidence on the motion for summary judgment to stand as evidence at trial; (e) provide for a speedy trial. [97] The parties should address their respective positions on this rule and next steps in writing within 45 days. At the very least, a date assignment conference should be held expeditiously to set trial dates. [98] If the parties are unable to agree on costs, I will consider submissions either in person or in writing as the parties choose. Brothers, J.