Kent Building Supplies v. Evans

Kent Building Supplies v. Evans Court Supreme Court Date 2013-01-29 Citation 2013 NSSC 36 Docket Hfx 393420 Judge/Registrar/Adjudicator Wood, Michael J. (Honourable Justice) (SC) Document Type Decision Relations Library Sheet - Kent Building Supplies v. Evans - 2013 NSSC 36 - 2013-01-29 - Library Sheet Decision Content SUPREME COURT OF NOVA SCOTIA Citation: Kent Building Supplies v. Evans, 2013 NSSC 36 Date: 20130129 Docket: Hfx No. 393420 Registry: Halifax Between: Kent Building Supplies, a division of J. D. Irving, Limited, a body corporate Plaintiff v. Jacqueline Elizabeth Evans Defendant v. Preston M. Evans, President, Director and Secretary of Peterbuilt Homes Limited and Peterbuilt Homes Limited Third Parties Judge: The Honourable Justice Michael J. Wood Heard: January 17 and 25, 2013 (in Chambers) in Halifax, Nova Scotia Decision: January 29, 2013 (Orally) Written Release of Decision: January 29, 2013 Counsel: Jeremy Gay, for Kent Building Supplies James D. MacNeil, for Jacqueline Elizabeth Evans By the Court: (Orally) [1] Jacqueline Evans resides in Ontario and in 2010 hired her brother, Preston Evans, to build a home for her on land she owns in Nova Scotia. In order to facilitate construction, Ms. Evans set up a credit account with Kent Building Supplies. On the credit application, Ms. Evans specified that the authorized users were her brother and her husband, Laurie Hamilton. [2] Materials were purchased and charged to the Kent account; however, no payments were made after January, 2011 and Kent initiated these proceedings in May, 2012, seeking payment of approximately $72,000.00 inclusive of interest. [3] Ms. Evans defended the action and issued a third party claim against Preston Evans and his company, Peterbuilt Homes Limited. [4] Kent has made a motion for summary judgment on evidence pursuant to Civil Procedure Rule 13.04. It has filed two affidavits of its Credit Manager, Brian Skinner, in support of the motion. Ms. Evans filed her own affidavit in response. At the hearing on January 17, 2013, both deponents were cross-examined. [5] The third parties were provided with notice of the summary judgment motion, but did not participate. [6] The parties agree that the applicable test is set out in the decision of AFG Glass Centre v. Roofing Connection, 2010 NSSC 108. In that case, Justice Bryson said as follows: [13] Keeping in mind that it is the plaintiff who is moving for summary judgment, and who must establish that there is no “genuine issue” for trial, I would characterize the test and applicable legal principles in this way: (1) The plaintiff must show that, on uncontroverted facts, it is entitled, as a matter of law, to succeed; that is to say, that there is no fact material to the cause of action that is in issue; (2) The burden then shifts to the defendant to show evidence that the defence has a real prospect of success; that is to say that there is a genuine issue of fact material to the claim or defence, that must be decided before the case can be determined on its merits; (3) The responding party must put “its best foot forward” or risk losing. This requires more than a simple assertion, but requires evidence, United Gulf, supra; (4) If material facts are not in dispute, the court has an obligation to apply the law to those facts and decide the matter, Eikelenboom, supra; [7] In addressing the first part of the test identified by Justice Bryson, the Court is concerned with the facts related to the cause of action claimed by the plaintiff, Kent. It does not focus on the various defences alleged by Ms. Evans and whether they raise issues of fact requiring a trial. That is the second part of the analysis. [8] Based upon the affidavit evidence and cross-examination, I would conclude that the following facts relating to the Kent claim are not in dispute: (1) Ms. Evans completed and signed the personal credit application with Kent on December 29, 2010 requesting the establishment of a credit account and identifying Preston Evans and Laurie Hamilton as authorized users. (2) Kent approved the application and Ms. Evans’ credit account was established in early 2011. Preston Evans and Laurie Hamilton purchased various items from Kent and charged them to Ms. Evans’ account. (3) Copies of the account statements and supporting invoices were mailed to Ms. Evans in Ontario on a monthly basis. [9] I am satisfied that these facts are sufficient for Kent to meet the first part of the AFG Glass test for summary judgment. There was an account agreement established by Ms. Evans and authorized users purchased goods and charged them to the account. She was provided with copies of invoices and the account statements on an on-going basis. [10] Ms. Evans’ defence acknowledges that she opened an account with Kent for the construction of a new home which was being built by her brother. She says that Kent was aware of this and that the account was being used for materials for that project and no other. She says that Kent was negligent in monitoring the operation of the account, the particulars of which are found in para. 7 of the defence which states: 7. The defendant states that the plaintiff was negligent in monitoring the defendant’s account in the following ways: (a) Failed to regularly advise the defendant of charges on her account; (b) Failed to advise the defendant in a timely manner of charges on her account; (c) Allowed the account to be overcharged and overused by other parties including Preston Evans and/or Peterbuilt Homes Limited; (d) Failed to realize that the account was being used for purchases that were not for the defendant’s new home construction; (e) Failed to advise the defendant that the account was being used for purchases not for the defendant’s new home construction; (f) Such further and other negligence as may appear. [11] Ms. Evans alleges in her defence that purchases were “extravagant, unnecessary and for some other purpose than construction of the defendant’s home”. Implicit in that allegation is the suggestion that Kent had an obligation to monitor purchases on the account and ensure that they were for purposes of construction of her home. [12] In her written submissions as well as oral argument following the hearing, counsel for Ms. Evans suggested the possibility of further amendments to her defence. There was no motion made to this effect and I therefore considered the defence as filed for purposes of the summary judgment motion. [13] Ms. Evans disputes the calculation of the amount of the account. She says that some of the invoices were not signed or were signed by persons other than the authorized users, and she does not know if these materials were purchased for her home or incorporated into it. In para. 15 of her affidavit, she refers to a meeting with an employee of Kent where invoices were reviewed and it was determined and agreed that some of these were not purchases for her home. She disputes responsibility for payment of these. [14] During cross-examination of Mr. Skinner, he testified that some of the invoices would have been telephone orders to the customer service desk. He did not know what process employees followed to verify the authority of the person on the phone to charge purchases to Ms. Evans’ account. [15] In argument, counsel for Kent acknowledged that approximately $500.00 in materials charged to the account by Mr. Preston Evans was done at a time when he was no longer an authorized user and that Ms. Evans should not be responsible for these. [16] For his part, counsel for Kent says that the normal business procedures for his client are such that invoices would not be issued unless material was ordered and delivered to the proper site, even if nobody signed the invoice. He says that the business practices as described by Mr. Skinner are sufficient to prove delivery of the goods to Ms. Evans’ home. He argues that it is incumbent on her to “put her best foot forward” by providing affidavit evidence from herself, her husband or other workers to say that certain items were not delivered, and she did not do so. He says that Mr. Skinner’s evidence allows the Court to draw the inference that the materials were properly ordered and delivered to the benefit of Ms. Evans and that she should be required to pay for them. [17] On a summary judgment motion, the Court is not to delve into disputed evidence, nor to come to factual conclusions on a limited evidentiary record. I am satisfied that Ms. Evans has established that at least some of the invoices included in the Kent account may not have been incorporated in her home. The amount of these invoices and whether there is additional evidence to resolve any uncertainty are matters which should be left to trial. At least with respect to quantification of damages Ms. Evans has shown that there are material facts in dispute. [18] The other defence raised by Ms. Evans is the allegation that Kent was negligent in supervising her account. Although there are no copies of written policies and procedures for Kent in evidence, some were referred to by Mr. Skinner in his cross-examination. Counsel for Ms. Evans argues that these policies and procedures need to be reviewed and an assessment done as to whether Kent employees followed them. In addition, he submits that Kent ought to have been on notice to monitor Mr. Preston Evans’ use of the account since he had a previous Kent account which had gone unpaid. In his cross-examination, Mr. Skinner confirmed this, as well as the fact that Kent would not extend any further credit to Mr. Preston Evans. [19] Counsel for Ms. Evans could provide no authority showing that a duty of care exists in similar circumstances. I am not satisfied that Kent had any legal obligation to verify what Mr. Preston Evans was doing with everything purchased as an authorized user on Ms. Evans’ account simply because he had previously defaulted on another Kent account. When a customer establishes a credit account and gives others permission to charge purchases to it, it is reasonable for a party in the position of Kent to assume the customer is satisfied with the trustworthiness of these persons. In addition, monthly statements and copies of invoices are being provided to the customer, which gives ample opportunity to verify purchases made. [20] I see no reason in logic or law that staff at Kent’s order desk should be required to make further inquiries when an authorized user charges building supplies to the account. If there were clear indications to Kent that the account was being operated in a fraudulent manner that might put them on notice to look into the matter further but Ms. Evans did not provide any evidence of such circumstances. [21] Even if I were wrong in concluding that no duty of care arose, Ms. Evans has provided no evidence to show that any particular purchases shown on the Kent account were used by Mr. Evans for some other project. There was a general allegation that he did so, but no examples given despite the fact that Ms. Evans’ husband was on site throughout the construction project. CONCLUSION [22] I am satisfied that Kent has proven that there are no material facts in issue requiring trial with respect to the existence of the account. Ms. Evans, in her cross-examination, acknowledged that she wished to pay money to Kent but did have concerns with some of the items which had been charged to the account. I believe that Ms. Evans has shown that the calculation of the amount owing raises evidentiary issues and for this reason I believe that Civil Procedure Rule 13.05(1) is applicable. That Rule provides as follows: 13.05 (1) A judge hearing a motion for summary judgment on evidence must grant judgment for an amount to be determined, if the only genuine issue for trial is the amount to be paid on the claim. [23] I will, therefore, order that judgment for liability be entered against Ms. Evans with damages to be assessed. In all other respects, the motion for summary judgment is dismissed. [24] With respect to the issue of costs, I believe there has been partial success. Kent has obtained a judgment on liability, but the remaining aspects of the summary judgment motion were not successful. I would fix the costs for the hearing at $2,500.00, but have them payable in the cause. [25] I would ask Mr. Gay, on behalf of Kent, to prepare an order reflecting my decision and forward it to Mr. MacNeil for his consent as to form. _______________________________ Wood, J.