Schiewe v Schiewe, 2016 ABQB 525

Court of Queen’s Bench of Alberta Citation: Schiewe v Schiewe, 2016 ABQB 525 Date: 20160920 Docket: 1203 17504 Registry: Edmonton Between: Calvin Lyle Schiewe Respondent/Plaintiff/ Defendant by Counterclaim - and - Douglas Arthur Schiewe And Grant Schiewe Appellants/Defendants/ Plaintiffs by Counterclaim _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Appeal from a Master’s Order: 2016 ABQB 4 Delivered on January 4, 2016 Introduction [ 1 ] This is an appeal of a Master’s order granting

summary dismissal of portions of the Appellants’ counterclaim.

Background [ 2 ] The Schiewe family has operated a commercial farming business with different members and organization structures. Schiewe Farms was initially operated as a partnership between Douglas and his father, Arthur. The other two brothers joined the partnership over time. At a certain point, they incorporated. [ 3 ] The parties are Douglas and his two brothers, Grant and Calvin. They jointly farmed certain lands over many years. The parties allegedly entered into various arrangements and agreements.

For example, extra draws were paid from the farming operation for payment of mortgage and taxes on property held in Calvin’s name (Calmar Property) and in Douglas’ name (Leduc Property), resulting in unequal partnership distributions as between the three brothers. [ 4 ] Another property, Southfork, made up of three quarter sections, was purchased. Grant and Douglas allege that it was intended that Grant would obtain title to one of the sections. However, the Southfork property was held jointly by Arthur and the three brothers for mortgage financing purposes.

It was listed for sale, along with the Calmar and Leduc Properties, when the farming operation ran into financial difficulties. The Southfork Property was the only one sold, and it was sold for the benefit of the operations of Schiewe Farms. The profits from that sale were allegedly distributed unequally.

Grant and Douglas allege that Grant received no compensation for his ownership interest in the Southfork Parcel and that it was agreed that, in order to compensate him for the loss of that parcel, another parcel would be purchased in Grant’s name. [ 5 ] Grant and Douglas further allege that Grant was to receive an interest in the Calmar and Leduc Properties once the mortgages were paid off. As soon as the mortgages on the Calmar and Leduc Properties were paid off, applications were made to subdivide them.

A subdivision plan signed by Calvin on July 2, 2008, which would have divided the Calmar Parcel into three equal parcels, was ultimately rejected by the planning authority. A second application was made to subdivide the Leduc Parcel. Subdivision of the Leduc Property was approved after the Master’s decision was issued. [ 6 ] The Calmar Parcel was used to secure a line of credit for Schiewe Farms. Rents from a transmission tower on the Leduc Parcel were shared among the brothers. [ 7 ] Since 1994, Grant has been involved in working the Calmar and Leduc Properties.

He alleges that he has taken lesser total draws than the other two brothers for the duration of his work with Schiewe Farms on the understanding that he would receive an interest in land equal to theirs. Douglas supports this position. [ 8 ] In May 2015, Arthur died. His entire estate passed to his wife.

No property passed to Grant in his father’s will. [ 9 ] Calvin claims that he is a one half beneficial owner of the Leduc Property held in Douglas’ name. [ 10 ] In the counterclaim, Douglas and Grant claim that each of Douglas, Grant and Calvin are one third beneficial owners in the Leduc Property held in Douglas’ name and the Calmar Property held in Calvin’s name. The counterclaim is based on an oral agreement, or alternatively on a proprietary trust based on unjust enrichment and proprietary estoppel.

In the further alternative, the counterclaim alleges that Douglas has a one half interest in the Calmar Property by virtue of the same partnership memoranda that is relied on by Calvin to claim an interest in the Leduc Property. [ 11 ] Calvin filed a

summary dismissal application. All three brothers swore affidavits. Parties’ Positions [ 12 ] The Appellants argue that any legal determination in this matter will depend on which version of the many significant factual disputes is preferred at trial. The claim and counterclaim are inextricably linked legally and factually. The Appellants submit that the affidavit evidence of Grant and Douglas has not been challenged. They point to conflicts in opposing affidavits, as well as inconsistencies as between Calvin’s examination evidence and subsequent affidavit. [ 13 ] The Appellants point to evidence which supports their claims. They submit that, even if this matter were appropriate for

summary dismissal, Calvin has failed to provide uncontroverted facts and law that would discharge his onus. [ 14 ] The Respondent argues that the Master was correct. He submits that admissions given at Douglas’ and Grant’s questionings undermined their counterclaim.

Furthermore, any agreements alleged by the Appellants do not satisfy the Statute of Frauds . [ 15 ] The Respondent also argues that Douglas’ actions in applying to subdivide the Leduc Property is relevant and material evidence. [ 16 ] The Respondent submits that the evidence supports the conclusion that Grant had entered into discussions with Arthur for a portion of Arthur’s lands to be subdivided and given to Grant to equalize the brothers’ land holdings, which never came to fruition prior to Arthur’s death.

The Respondent argues that, if there was any agreement as alleged by Grant (which Calvin denies), it was replaced by this subsequent arrangement with Arthur, and frustrated by his death. Accordingly, any claim is now against Arthur’s estate. Master’s Decision [ 17 ] The Order dismissed those portions of the counterclaim asserting that Calvin, Douglas and Grant each hold a one third interest

in both the Calmar and Leduc Properties, while maintaining Grant’s claim for a potential monetary claim, and Douglas’ partnership agreement claim. He found that there was nothing in writing that would vest any legal or beneficial ownership in the Calmar or Leduc lands with the partnership, the farm corporation or Grant. Standard of Review [ 18 ] The standard of review of a Master’s decision is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 19 .

Summary Dismissal [ 19 ] The purpose of

summary dismissal is to weed out claims having no chance of success: Hryniak v Mauldin , 2014 SCC 7 at para 47 ; Windsor v Canadian Pacific Railway , 2014 ABCA 108 at para 12 . [ 20 ] In Hryniak , the Supreme Court noted that undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes. The Court advocated a broader

interpretation of

summary judgment rules to reflect the proportionality principle, being that the best forum for resolving a dispute is not always that with the most painstaking procedure. The Court saw

summary judgment as an opportunity to move the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. [ 21 ] Rule 7.3 requires that a holistic approach be taken to determine if there is any issue of merit in the claim genuinely requiring a trial, and whether there is a reasonable prospect that a claim will succeed: Windsor at paras 12, 14, 16 . [ 22 ]

Summary judgment is appropriate only if a disposition that is fair and just to both parties can be made on the existing record. With respect to substantive matters,

summary judgment will only follow if there is “no merit” to the non-moving party’s position: 776826 Alberta Ltd v Ostrowercha , 2015 ABCA 49 at para 10 .

Summary dismissal is not appropriate where opposing affidavits conflict on material facts: Stout v Track , 2015 ABCA 10 at para 52 and cases cited therein. [ 23 ] A claim can only be found to be without merit if the facts and law make the opposing position unassailable; the likelihood the moving party’s position will prevail must be very high: Stout at paras 9, 45 . Analysis [ 24 ] It is not necessary for the purposes of this appeal to analyze all of the arguments regarding specific facts and allegations.

The affidavits filed in this matter contain many disputed and intertwined facts which are fundamental to determination of both the claim and the counterclaim. [ 25 ] It does not appear that the Respondent has pled the Statute of Frauds , although it was raised in argument before the Court.

Assuming it is properly raised, and without purporting to determine the issue, in my view it may be arguable that evidence of alleged part performance by Grant, and Calvin’s application to subdivide the Calmar Property, along with other evidence, constitute sufficient evidence to satisfy the requirements of the Statute of Frauds . [ 26 ] Further, in my view it is not unassailable, based on the material before the Court, that the Appellants would be unable to establish proprietary estoppel or unjust enrichment. [ 27 ] Finally, there is logical merit to the argument that Grant’s and Douglas’ claims to one third interests in the Calmar Property is fundamental to the defence to Calvin’s claim for a one half interest in the Leduc Property. [ 28 ] In all of the circumstances, I am satisfied that no judicial economy will result from dismissal of a portion of the counterclaim as was ordered by the Master.

The same evidence would be presented despite the partial disposition. Conclusion [ 29 ] I find that the Master erred in granting partial

summary judgment in this case. [ 30 ] It is no surprise that the Supreme Court’s decision in Hryniak has given rise to an increased number of

summary judgment or dismissal applications. While judicial economy may flow from a successful

summary disposition in an appropriate case, the opposite is often true where judicial resources are required to address partial disposition in cases where virtually all of the same evidence will be heard at trial in any event. Heard on the 15 th day of September, 2016. Dated at the City of Edmonton, Alberta this 20 th day of September, 2016.

D.L. Shelley J.C.Q.B.A. Appearances: Christopher G. Hoose Stillman LLP for the Respondent/Plaintiff/Defendant by Counterclaim Darin J. Hannaford/Alisha Hurley Miller Thomson LLP for the Appellants/Defendants/Plaintiffs by Counterclaim