Acden Environment Limited Partnership v Environmental Metal Works Ltd, 2021 ABQB 160

Court of Queen’s Bench of Alberta Citation: Acden Environment Limited Partnership v Environmental Metal Works Ltd, 2021 ABQB 160 Date: 20210301 Docket: 1703 01816 Registry: Edmonton Between: Acden Environment Limited Partnership Plaintiff - and - Environmental Metal Works Ltd Defendant _______________________________________________________ Reasons for Decision of the Honourable Madam Justice J.M. Ross _______________________________________________________ Introduction [ 1 ] This is an appeal from a Master’s decision dated August 22, 2019. The Master granted

summary judgment to the Respondent/Plaintiff (Acden) in the amount of $996,720.00 plus GST, interest and costs. He stayed a portion of the judgment, $300,000, for proof of damages alleged to have been incurred by the Appellant/Defendant (EMW). [ 2 ] On October 3, 2019, EMW filed a Notice of Appeal appealing “the decision” of the Master. Acden did not file a Cross- Appeal. Factual Background

The Contract [ 3 ] In the fall of 2014, Acden ordered 330 custom-made waste disposal bins from EMW pursuant to a verbal agreement (the Contract). Terms of the Contract regarding the order and price are found in documents, including a quote and invoice, and are undisputed. [ 4 ] Discussions regarding the Contract began with an email request from Acden to EMW on September 10, 2014 requesting a quote for 330 waste bins of specified types. Acden indicated that it required the bins “ASAP” and requested a delivery schedule. [ 5 ] EMW provided a written quote, dated September 10, 2019, with a price of $3,646,706.70.

EMW also inquired by email what time lines Acden was looking at and what bins were a priority. EMW’s evidence is that it does not have a standard price for bins, but quotes prices as requests are received. Prices vary as the price of steel varies. EMW also states that it orders steel for confirmed orders only. [ 6 ] In September 2014, Acden verbally accepted the EMW quote. [ 7 ] A copy of the September 10, 2014 quote was sent by EMW to Acden on September 19, 2014.

In the accompanying email, EMW indicated that it had “ordered the steel for this order”. [ 8 ] On September 29, 2014, by email, Acden requested a delivery

schedule for 120 bins of specified types, adding that Acden needed to respond to its own client’s demands. Payment of the Contract Amount [ 9 ] In September 2014, Acden was significantly in arrears to EMW for previous orders, and was seeking financing. [ 10 ] Lindsay Haag, President of EMW, deposed that he spoke to the General Manager and the VP Finance of Acden about payment under the Contract.

He said that because of the large size of the order, and because of previous delays in payment by Acden, EMW needed to ensure prompt payment of the Contract amount, before all of the bins were delivered. [ 11 ] Acden obtained financing, and, on February 12, 2015, paid to EMW the amount of $4,016,491, respecting the entire Contract amount plus amounts owing on two outstanding work orders. Delivery under the Contract [ 12 ] Delivery of bins under the Contract commenced October 18, 2014. [ 13 ] Mr.

Haag deposed that in early February 2015, the Operations Manager and the General Manager of Acden contacted him, by telephone. They advised that, due to the economic downturn, customers of Acden would not be renting further bins from Acden. They asked EMW to stop production of bins until further notice. [ 14 ] These communications were confirmed in an email from the General Manager of Acden sent on February 3, 2015, which stated: We are looking at holding, not cancelling, the order to the backorder quantities listed above.

We would like to speak with you about this delivery-hold by telephone, or as you mentioned if you come up to FMM we can discus in person. [ 15 ] Mr. Haag replied by email on the same date. He indicated he would find out if there were bins ready for delivery, and would check to see if EMW “brought in all the steel”. He said he would get back to Acden “tomorrow with some numbers”, concluding “we will make it work.” [ 16 ] In a reply email of the same date, Acden’s General Manager thanked Mr.

Haag, and said “we will try to make this as painless as possible.” [ 17 ] Limited deliveries of bins under the Contract continued until March 10, 2015, at which point 237 bins had been delivered. There remained 93 undelivered bins under the Contract. [ 18 ] The evidence of both Acden and EMW is that, following the last delivery in March 2015, there was no communication between the parties until Acden sought a refund or delivery of the remaining bins in late 2015 or 2016.

Acden’s claim for undelivered bins [ 19 ] Bryan Botham, Vice President and Chief Financial Officer of Acden, deposed that in the fall of 2015, he contacted Mr. Haag by phone to discuss the undelivered bins. Economic conditions had further reduced Acden’s bin requirements. He inquired if EMW would cancel the order for the undelivered bins and refund their value to Acden. Mr. Haag refused this request. Mr. Botham then asked Mr. Haag to complete the order and deliver the undelivered bins to Acden. Mr.

Haag also refused this request, asserting that Acden had “cancelled” the order for the undelivered bins. [ 20 ] Acden sent an invoice dated December 31, 2015, to EMW seeking a refund for the purchase price paid for the undelivered

bins, in the amount of $996,720 (plus GST). EMW did not respond to this invoice. [ 21 ] On January 23, 2017, Acden commenced the within action seeking delivery of the undelivered bins or judgment or damages for the value of the undelivered bins. [ 22 ] Mr. Haag recalled the conversation much as Mr. Botham did, but it was his testimony that it took place in 2016. He recalled that when asked to build the bins, he replied that EMW didn’t have the steel. It was gone. He also testified that he never received the December 31, 2015 invoice from Acden. EMW’s alleged losses [ 23 ] Mr.

Haag deposed to losses suffered by EMW as a result of the foregoing. In affidavits sworn November 14, 2017 and January 25, 2019, he deposed that raw steel purchased by EMW for the bins could not be returned, and eventually degraded and was sold for scrap. Paint in a colour specific to Acden had also been ordered and could not be returned or used.

At the time the within application was heard by the Master, the evidence was that EMW’s actual loss was approximately $300,000: $307,000 for steel, $15,000 for paint, less $25,712 received in mitigation arising from the sale of the scrap, for a total of $296,288. [ 24 ] Subsequently, in an affidavit sworn October 30, 2019, Mr.

Haag deposed that as a result of the request by Acden to “hold not cancel” the order for bins, EMW “retained manufacturing staff at sufficient levels to allow EMW to manufacture the remaining Bins, if and when Acden Environment requested them.” EMW retained addition staff for the period of March, 2015 to October 31, 2015, at an estimated cost for additional wages of $442,442.22. [ 25 ] The admissibility of the October 30, 2019 affidavit on this appeal is not disputed. Parties’ positions before the Master [ 26 ] Before the Master, Acden sought

summary judgment in the amount of $996,720 (plus GST), or alternatively, “partial

summary judgment in the amount of $700,432 (plus GST), and that questions as to entitlement and quantification of costs claimed by EMW (set-off) be directed to a trial.” [ 27 ] EMW argued that Acden had repudiated the Contract, that EMW had accepted the repudiation, and that Acden had lost its right to recover the monies paid. EMW sought dismissal of Acden’s application for

summary judgment or partial

summary judgment. Master’s decision [ 28 ] In a written decision ( Acden Environment Limited Partnership v Environmental Metal Works Ltd , 2019 ABQB 659 ), the Master granted judgment against EMW in the amount of $996,720, and directed that a portion of the judgment, $300,000, be stayed for proof of EMW’s damages. [ 29 ] In his decision, the Master held that (at para 17): “the exchange between the parties does not amount to a repudiation.

At best it is equivocal and, pausing the contract, arguably, was agreed to by the Defendant subject to them determining their loss.” [ 30 ] The Master also considered whether, under the terms of the Contract, EMW could retain the pre-paid amount pursuant to a forfeiture provision.

The Master observed that there was no evidence that such a provision was contemplated by the parties, or would accord with reasonable expectations, suggesting that the pre-payment was “not like a deposit in a real estate contract”, and that “implying a strict term such as this appears to run contrary to what seems to have been a flexible relationship with some give-and-take.” [ 31 ] Finally, the Master concluded that, even if he were wrong in the foregoing, it would be appropriate to relieve from forfeiture.

If EMW were entitled to retain any amount of the pre-paid purchase price, this could not exceed EMW’s actual loss. [ 32 ] The formal Order for

Summary Judgment directs that the matter continue in order to determine “the damages alleged” by EMW, with the parties at liberty to apply for further advice and direction as required. The judgment does not specify whether this refers to quantification alone, or to entitlement and quantification. Acden submits that the Master did not determine EMW’s entitlement to damages, and the direction for trial should be interpreted as including entitlement as well as quantification of damages claimed by EMW.

Changes to the parties’ positions [ 33 ] There are differences between the parties’ positions before the Master and on this appeal. A major difference, arising from the new evidence, relates to the quantification of EMW’s claim of actual losses. EMW now claims additional losses of $442,442.22. [ 34 ] This change is reflected in the parties’ positions regarding partial

summary judgment and a direction for trial regarding EMW’s claimed costs. EMW seeks to have the application for

summary judgment dismissed, or, alternatively, “the amount stayed for proof of EMW’s damages to be increased to, at a minimum $762,442.22.” Acden seeks

summary judgment for the full amount of $996,722. Acden submits that EMW’s evidence of its alleged losses is “implausible” and “more importantly, there is no evidence of any breach of contract on Acden’s part” that would support EMW’s claim for set off. Alternatively, if there are any issues as to EMW’s losses or request for set-off requiring trial, Acden seeks to maintain the Master’s order, in other words, to limit the stayed amount to $300,000. [ 35 ] EMW’s articulation of its defence has also evolved since the Master’s appeal.

In its original Statement of Defence, EMW alleged that Acden had “expressly cancelled and terminated” the Contract. On November 6, 2019, EMW filed its Amended Statement of Defence, which provides (at para 6):

In late February or early March 2015, the Plaintiff purported to “hold not cancel” its order, citing a downturn in the Alberta oil sands (the Termination). The Plaintiff advised that the Bins that had been ordered would no longer be required at the time. [EMW] did not agree to amend, change or vary the terms of the Agreement. The refusal of the Plaintiff to accept delivery of the remaining Bins on the agreed upon timeline constituted a repudiation by the Plaintiff of the Agreement and forfeiture of the deposit paid to [EMW].

Accordingly, the Plaintiff lost its right to recover the monies paid to [EMW] and forfeited such amount. Scope of the Appeal [ 36 ] Acden did not cross-appeal, but it seeks to set aside the Master’s stay of $300,000 of the judgement.

Acden submits that there was no need for it to cross-appeal, as an appeal from a Master is a hearing de novo. [ 37 ] In my view the scope of the appeal under r 6.14 of the Alberta Rules of Court is not determined by the de novo nature of the appeal, but by the notice of appeal. [ 38 ] In Uniserve International Products Inc v Alberta Treasury Branches ( 2003 ABQB 475 [ Uniserve ]), ATB appealed a Master’s decision allocating $20,000 of a $100,000 order for security for costs to be paid before recommencement of examination for discovery, with the further sum of $80,000 to be paid prior to entry for trial. [ 39 ] Uniserve , respondent on the appeal, argued that no order for security for costs should be made, submitting that, as it was an appeal de novo , both parties should be able to argue fully all of the issues before the Master.

The entire order could be re-argued, not just the allocation portion. [ 40 ] Park J. agreed that the appeal was de novo, but held that the issues before him were determined by the notice of appeal. He stated ( Uniserve at para 57 ): I agree with [counsel for ATB’s] position that the only issue before me with respect to security for costs is the allocation of the security for costs. Neither party appealed to set aside Master Waller’s Order of $100,000 as security for costs to the Defendant. The Plaintiff cannot raise matters or issues on which there was no notice of appeal filed.

The only issues before me on this appeal from the Master are the issues set out in the Notice of Appeal of ATB. [Counsel for Uniserve] filed no Notice of Appeal. He gave no notice to ATB that he wished to appeal the posting of security for costs. ATB specified and gave notice to the Plaintiff of the portion of Master Waller’s Order which it wished to appeal. I am restricted to that portion of the Order. If the Plaintiff had wished to appeal a further portion of the Master’s Order, it should have filed a Notice of Appeal and given notice.

If an issue is not appealed in the Notice of Motion (Appeal) then the issue is not before me. [ 41 ] In this case, EMW’s Notice of Appeal appealed “the decision” of the Master. The scope of the appeal was not limited to any part of the decision. [ 42 ] The unlimited scope of the appeal is reflected in the parties’ submissions on the appeal. Both parties’ arguments addressed the Master’s decision as a whole. EMW sought to reverse the Master’s decision to grant

summary judgment, or, based on new evidence, to increase the amount stayed. Acden sought

summary judgment for the full amount, with no stay, or in the alternative, to maintain the Master’s order. [ 43 ] Park J.’s decision in Uniserve considers the scope of the appeal as defined by the parties. It also implicitly addresses concerns about procedural fairness, as impacted by the failure to give notice. ATB had specified and given notice of an appeal of limited scope. If Uniserve wished to expand the issues on the appeal, it should have given notice. [ 44 ] In this case, I am satisfied that the entire Master’s order, both the granting of

summary judgment and the stay, was included in the scope of the appeal. This arises from the unrestricted nature of the appeal brought by EMW. I am also satisfied that, from a perspective of fairness, both aspects of the order are properly considered. The parties’ submissions make it clear that they both understood that the Master’s decision as a whole would be reviewed on a de novo basis, including his decision to stay a portion of the judgment.

The Record [ 45 ] An appeal from a master’s judgment or order under r 6.14 is based on the record of proceedings before the master, and “may also be based on additional evidence that is, in the opinion of the judge hearing the appeal, relevant and material”. The admissibility of the additional evidence on this appeal (Mr. Haag’s October 30, 2019 affidavit) is conceded by Acden. I agree that the evidence is relevant and material and therefore properly considered on the appeal.

Standard of Review [ 46 ] The standard of review is correctness on all issues ( Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 [ Bahcheli ]; Singh v Noce , 2019 ABCA 55 at paras 7-8 ). This is also referred to as an “appeal de novo” ( Bahcheli at paras 3, 30 ). The

Summary Judgment Test [ 47 ] The standard for granting

summary judgment is found in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd ( 2019 ABCA 49 at para 47 [ Weir-Jones ]):

The proper approach to

summary dispositions, based on the Hryniak v Mauldin test, should follow the core principles relating

summary dispositions, the standard of proof, the record, and fairness. The test must be predictable, consistent, and fair to both parties. The procedure and the outcome must be just, appropriate, and reasonable. The key considerations are:

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for

summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,

summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. [ 48 ] Subsequent to the hearing of this appeal, the Court of Appeal released its decision in Hannam v Medicine Hat School District No. 76 ( 2020 ABCA 343 [ Hannam ]). The import of Hannam is described in the majority decision (at para 6): This appeal gives the Court an opportunity to assess the practical significance of Weir-Jones , evaluate its place in historical evolution of

summary judgement, and suggest other possible protocols that may allow courts to increase the likelihood that more disputes will be resolved as soon as possible at the least expense without sacrificing the quality of the adjudication and the fairness of the proceeding. [ 49 ] At my invitation, the parties provided additional written submissions addressing the impact of Hannam on this case. [ 50 ] Hannam was a “slip-and-fall” case. On a January morning in 2013, the custodian of an elementary school in Medicine Hat arrived at work at 6:30 am.

He checked the sidewalk to the school’s main entrance and concluded it was not slippery. Over the next couple of hours, and the air temperature warmed to around zero, the walk became slippery. At the request of the school’s vice-principal, the custodian spread sand on the main entrance sidewalks. [ 51 ] Seconds after the custodian had sanded the walks, Ms. Hannam slipped, fell and broke her ankle. [ 52 ] There was no evidence about the condition of the sidewalk that suggest the use of an ice chipper or ice melt would have improved the quality of the sidewalk surface for walkers. [ 53 ] The defendant sought

summary dismissal of the action. The Master granted the application, stating that there was no evidence to justify a finding of negligence, and that, “‘to the extent that there are conflicting bits of evidence here, it’s not material, it would not change the outcome of trial’” (at para 33). [ 54 ] An appeal to the Court of Queen’s Bench was allowed, the Justice commenting that “‘if there is conflicting bits of evidence, that is what I think a trial is designed to determine’” (at para 35).

He added that a finding of no negligence was not “‘so direct and so straightforward’”, and that there should be an opportunity to “‘test the credibility of the defendant’s witnesses and to determine why the defendant’s own policy was not followed and allow a trial judge to determine if the defendant is in fact negligent’” (at para 35). [ 55 ] The School District’s appeal to the Court of Appeal was allowed.

The majority decision held that the decision of the Queen’s Bench Justice, which preceded Weir-Jones , did not apply the proper test (at para 210): Instead of asking whether he could decide the facts on a balance of probabilities, he considered whether the ultimate disposition if there was a trial was obvious. The chambers judge said it was not obvious: “I cannot agree that a finding of no negligence on the part of the defendant is so simple, so direct and so straight forward. [ 56 ] The Weir-Jones test – that is, the proper test – was met (at paras 211-215): It is “possible to fairly resolve the dispute on a

summary basis”. The facts and the law are incontrovertible. A trial will not produce a more complete factual record than already exists…. … Under the circumstances, there is nothing more the Medicine Hat School District could or should have done to make the sidewalk any safer for Ms. Hannam and other sidewalk users. [ 57 ] Hannam offered guidelines for applying the Weir-Jones test. Hannam clarifies that a

summary judgment court can make contested findings of material facts, and that the “no genuine issue requiring a trial” test measures procedural fairness as opposed to the merits of the case. Keys points from a

summary of the law from the majority decision are as follows (at paras 147-161): [147] First, this

interpretation allows a

summary judgment court to make contested finds of material facts... [148] Second,

summary judgment courts should not be reluctant to make material fact findings...

[149] Third, before a

summary judgment court resolves a material factual dispute, it should ask if it constitutes a genuine issuerequiring a trial... [159] In Hryniak the Supreme Court of Canada adopted this definition of “no genuine issue requiring a trial”, the language in rule20.04(2) of the Ontario Rules of Civil Procedure: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits.

This will bethe case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts,and (3) is a proportionate, more expeditious and less expensive means to achieve a just result... [161] The “no genuine issue” concept no longer measures the merits of the parties’ positions. It now concentrates on proceduralfairness. Issues on the Appeal [58] The claim on which the Acden seeks

summary judgement is for damages in lieu of specific performance. [59] There is no dispute that the Contract called for delivery of 330 custom waste bins, that 93 bins remain undelivered, and thatEMW refused to deliver.

There is no dispute that Acden paid in advance for bins, and that the portion of the purchase price allocated tothe undelivered bins is $996,722, plus GST. [60] Any genuine issues for trial relate to EMW’s defences. [61] EMW raises three issues, all arising from an alleged repudiation of the Contract by Acden: 1. that Acden repudiated the contract, with the result that the pre-paid purchase price is forfeit; 2. that the pre-paid monies were a deposit, which is forfeit following Acden’s repudiation; and 3. that Acden should not be relieved from forfeiture. [62] EMW’s defences hinge on the alleged repudiation of the Contract by Acden when it refused “to accept delivery of theremaining Bins on the agreed upon timeline”.

EMW relies on 216927 Alberta Ltd v Fox Creek (Town) (1990 ABCA 29 at para23) where the Court of Appeal held that “[w]here the purchaser repudiates the contract, and the vendor elects to accept the repudiation,the purchaser loses his right to recover his purchase money at common law.” Alternatively, EMW submits that the pre-paid monies werea deposit, which was forfeit following Acden’s repudiation. Finally, EMW argues that Acden is not entitled to relief from forfeiture. Repudiation of Contract: Legal Principles [63] Acden’s written submissions set out the governing legal principles.

A party may be found to have repudiated a contract if heor she commits an anticipatory or a fundamental/substantial breach: It is essential to distinguish a “mere breach” of contract from a total repudiation of a party’s obligation thereunder. Unless a party’sobligation is expressly conditional upon prior performance by the opposite party, the first party normally will not be relieved of the dutyto perform simply because the opposite party has been guilty of some breach of contract.

But if the nature or consequences of theopposite party’s breach are so serious or fundamental as to go to the root of the contract and substantially deprive the first party of whathe or she bargained for, or if he or she by his words or conduct justifiably exhibits a clear and unmistakable intention to no longer bebound by his or her contractual undertaking, amounting to a serious breach of such undertaking, the opposite party will be considered tohave repudiated the contract.

CED 4th (online), Contracts, “Discharge of Contracts: Discharge by Breach of Contract: What Constitutes Repudiation of Contract:Repudiation of Contract Generally” (XII.3(a).(i)) at § 909. [64] Determining whether anticipatory breach justifies amounts to repudiation of a contract is a matter for

interpretation: Just as in cases of serious malperformance of contractual obligations, repudiation of a contract may be justified where a party hascommitted an anticipatory breach of the contract, either expressly or by implication. An anticipatory breach occurs where, prior to thedate fixed for completion, one party: (

a) expressly repudiates his or her future obligation under the contract; (

b) by acts or omissionsevidences an intention that he or she will not complete the contract; or (

c) by acts or omissions demonstrates that he or she cannot carryout the contract. In any such case, the innocent party may, without waiting for the time for performance or completion to arrive, acceptthe breach and put an end to the contract forthwith. Once this election is made, the innocent party is thereby freed of all his or herobligations under the contract, and is entitled to pursue such remedies as would have been available to him or her at the timeperformance was due. An anticipatory repudiation of contract does not, in itself, terminate or discharge a contract.

CED 4th (online), Contracts, “Discharge of Contracts: Discharge by Breach of Contract: What Constitutes Repudiation of Contract:Breach Justifying Repudiation – Anticipatory Breach” (XII.3(a).(iii)) at § 913 (emphasis added). [65] Similarly, whether a breach is sufficiently fundamental/substantial to justify repudiation is a matter for

interpretation: Whether or not a breach of contract is sufficiently substantial or fundamental to justify repudiation must be decided by reference to thecontract and the circumstances of each case. Factors that have been applied to measure whether or not a party’s future performance

should be excused include the following: (

a) the ratio of the party’s obligation not performed to the obligation as a whole; (

b) the seriousness of the breach to the innocent party; (

c) the likelihood of repetition of such breach; (

d) the seriousness of the consequences of the breach; and (

e) the relationship of the part of the obligation performed to the whole obligation. A trial judge’s finding of fundamental breach is a matter of mixed fact and law. The effect of a repudiation depends on the election made by the innocent party to the contract.

CED 4th (online), Contracts , “Discharge of Contracts: Discharge by Breach of Contract: What Constitutes Repudiation of Contract: Breach Justifying Repudiation – Substantial or Fundamental Breach” (XII.3(a).(ii)) at § 911 (emphasis added). [ 66 ] As referenced in the italicized portions of the references above, for a contract to come to an end as a result of repudiation by one party, the other (“innocent”) party must elect to accept the repudiation and treat the contract as at an end.

This essential requirement is further detailed below: An accepted repudiation is of legal effect; a repudiation that is not accepted is not effective in law to determine the contract. The crucial question is whether the innocent party has exercised his option or election in favour of treating the contract as at an end. This choice, which will be binding once it is made, must be made within a reasonable time, that is, after the innocent party has discovered the situation giving rise to the choice of action which is open to him.

If he delays at sufficient length to prejudice the other party or third parties by his eventual course of action, or so long that his conduct can be regarded as acceptance of the repudiation, the innocent party, in effect, will lose his right of election. As long as he acts with reasonable dispatch, the innocent party has a right of choice… The innocent party may therefore elect whether to have the contract “ended”, which frees him from further performance, and sue the repudiator, or to let it continue. If the latter, the contract will continue to exist for both parties .

In other words, it remains in existence for the benefit of the repudiator as well as the innocent party. GHL Fridman, The Law of Contract in Canada , 6th ed (Toronto: Thomson Reuters Canada, 2011) at 599-600 (emphasis in original). [ 67 ] EMW does not take issue with the general principles cited by Acden. EMW relies on Hill v Forest Gate Industries Limited ( [1950] OWN 491, 1950 CarswellOnt 257 (Ont Co Ct) [ Hill cited to CarswellOnt]) as authority that a purchaser’s delay in accepting delivery can constitute repudiation of a contract.

However, the case also makes clear the importance of the vendor’s response to delay. [ 68 ] Hill related to a contract for the delivery of 60 radios to a hotel. The total price was $5,910 and a deposit of $300 was paid. The contract was entered into on July 21, 1948, and called for immediate delivery. Afterwards, the purchaser delayed in taking delivery.

On September 8, 1948, the vendor wrote to the purchaser: At the time of our conversation [on 4th September] you promised to give us a prompt delivery date for at least sixty units as ordered by you and to possibly increase your order to ninety units, by not later than Thursday, September 9th, 1948.

We feel that we have been more than fair and more than patient and unless the above is adhered to then we must consider the order cancelled and the deposit forfeited. [ 69 ] The purchaser did not reply until September 15th and the contract was not completed. [ 70 ] In dismissing the purchaser’s suit for return of the deposit, the Court held (at para 3): Under the circumstances here it seems to me that the delay from the 21st July until the 15th September, on a contract specifying immediate delivery, would be repudiation unless the other party to the agreement waived its rights under the terms of the contract.

There is no doubt that there is waiver here up to the 9th September, and the only issue I have to decide is whether or not the letter of the 8th September is a proper determination of the contract by reason of the obvious waiver above set out. From the evidence I have gathered that while approval for the delay was wrung from the vendor, it was at all times pressing for performance and merely acquiesced in the delays so that performance could be completed in as friendly a way as possible and as soon as possible.

Under the circumstances I am satisfied that in spite of this acquiescence and waiver the notice of the 8th September was justified, and that by his acts the plaintiff had in all but form repudiated the contract before that letter was written. Is there a Genuine Issue for Trial? [ 71 ] EMW’s defences all arise from an alleged repudiation of the Contract by Acden, when Acden refused “to accept delivery of the remaining Bins on the agreed upon timeline”. [ 72 ] The undisputed evidence is that, on February 3, 2015, Acden requested to “hold not cancel” its order.

EMW indicated it would make inquiries and stated, “We will make it work.” Acden responded, “We will try to make this as painless as possible.” [ 73 ] On February 12, 2015, EMW accepted payment in full on the Contract. EMW continued to make deliveries under the Contract until March 2015. EMW also gave evidence on this appeal that it retained staff so that it would be in a position to provide deliveries under the Contract until October 2015. [ 74 ] It is undisputed that there was no other communication regarding delivery between the parties until Acden sought either a refund or performance in late 2015 or 2016.

On cross-examination, Mr. Haag agreed that he never advised Acden that he had retained staff to complete the Contract. [ 75 ] I agree with the Master that the Acden’s request to “hold not cancel” is not reasonably capable of being interpreted as a repudiation of the Contract. [ 76 ] Even if a request to “hold not cancel” deliveries could be interpreted as a repudiation of the Contract, EMW did not elect to treat the Contract as at an end. EMW’s response, “We will make it work”, and its actions, indicate a clear election to continue the Contract.

The Contract continued to exist for the benefit of Acden as well as EMW.

[ 77 ] EMW argues that its acceptance of delayed delivery was not a binding election, but an indulgence that continued only for a reasonable period of time. Under this theory, it was Acden’s inaction – its continued failure to request delivery – that constituted a repudiation of the Contract. Assuming that this “omission” could be interpreted as evidence of Acden’s intention that it would not carry out the Contract, there still remains the issue of whether EMW accepted the repudiation and elected to treat the Contract as at an end. [ 78 ] EMW argues that there is a parallel between Hill and this case.

The contract in Hill provided for immediate delivery, and the purchaser refused to accept delivery for an unreasonable period of time. The Contract in this case contemplated prompt deliveries, and Acden put a hold on deliveries and then did not restart it within a reasonable period of time. A prompt delivery timeline was significant to both parties. In seeking a quote on September 10, 2014, Acden indicated that it required the bins “ASAP”. On September 19, 2014, EMW indicated that it had “ordered the steel for this order”.

In the February 3, 2015 emails regarding the requested hold on deliveries, Acden said it would “try to make this as painless as possible,” suggesting an appreciation of difficulties arising from delayed deliveries. EMW submits that evidence about the commercial context of the Contract would support its argument that prompt delivery was a fundamental term of the Contract. [ 79 ] However, what stands in stark contrast between Hill and this case is the actions of the vendor. Faced with a request for delay in deliveries, EMW initially acquiesced, as did the vendor in Hill .

But unlike the vendor in Hill , EMW then took no steps to impose a deadline on deliveries or to advise Acden that continued delay would be regarded as a repudiation of the Contract. The first time that EMW purported to “accept” Acden’s alleged repudiation of the Contract was in late 2015 or early 2016, when Acden sought performance.

The evidence on this point is clear and uncontroverted. [ 80 ] As the evidence before the Court regarding the communications between the parties is undisputed, the issue of whether EMW accepted Acden’s alleged repudiation of the Contract involves the application of a legal test to accepted facts. This is an issue that can be properly determined in a

summary proceeding. [ 81 ] The email communications on February 5, 2015 are before the Court. The parties admit that there was no other communication between them regarding the resumption of deliveries until Acden sought performance of the Contract in late 2015 or 2016. Given this situation, what is the answer to the “crucial question [of] whether the innocent party has exercised his option or election in favour of treating the contract as at an end”?

The facts make it clear that EMW did not make a timely election to treat the Contract as at an end. [ 82 ] EMW’s initial response to the request to hold deliveries was to continue under the Contract, as shown both by its response, “We will make it work”, and by its subsequent actions. Could this initial choice, described by Professor Fridman as “binding once made”, be changed in light of continuing delay? If possible, that could only happen if EMW communicated its election within a reasonable time to treat the Contract as at an end.

EMW never did this. [ 83 ] EMW did not provide its purported election in late 2015 or early 2016 within a reasonable time. EMW’s late election caused clear prejudice to Acden, as Acden was denied any opportunity to accept further deliveries. The unreasonableness of EMW’s late election is highlighted by its own evidence that it retained staff until the end of October 2015 for the purpose of performing the Contract, but never advised Acden of this deadline. [ 84 ] I conclude that there is no genuine issue for trial regarding EMW’s defences based on alleged repudiation of the Contract.

The facts of the case regarding the February 5, 2015 communications and the absence of further communications about the delivery timeline are not only proven on the balance of probabilities; they are undisputed. [ 85 ] EMW has argued that Acden has not “put it best foot forward” in that it has not provided evidence from Acden employees most directly involved in negotiating the Contract. However, EMW also has to “put its best foot forward”. Mr. Haag of EMW was directly involved in negotiating the Contract. Mr.

Haag’s evidence about the terms of the Contract and communications between the parties on and after February 5, 2015 does not differ in any significant way from Acden’s evidence. [ 86 ] EMW also argues that the commercial context of the Contract is relevant to determine whether an ongoing refusal to accept delivery amounts to a repudiation of the Contract.

However, while this context may be relevant to determining whether delay by Acden in calling for deliveries constitutes a repudiation of the Contract, it does not change EMW’s election to treat the Contract as ongoing. [ 87 ] This is a case in which the approach outlined in Weir-Jones and elaborated in Hannam causes me to agree with the Master that

summary judgement is properly granted. The questions raised here regarding the alleged repudiation of the Contract by Acden and whether EMW elected to treat the Contract as at an end may not have “obvious” answers. But that is not the test: “The ‘no genuine issue’ concept no longer measures the merits of the parties’ positions. It now concentrates on procedural fairness” ( Hannam at para 161 ). [ 88 ] I conclude that it is possible to fairly determine EMW’s asserted defences on a

summary basis. Uncertainties in the facts and record relate only to whether Acden’s actions should be characterized as an anticipatory breach or fundamental/substantial breach amounting to a repudiation of the Contract. There is no uncertainty regarding EMW’s election to treat the Contract as continuing. There is also no uncertainty that this election was not changed in a timely way. [ 89 ] The law that repudiation has legal effect only if the innocent party accepts it and elects to treat the contract as at an end is incontrovertible.

A trial will not produce a more complete factual record than already exists in relation to this issue. Therefore, I conclude that there is no genuine issue for trial in relation to any of EMW’s defences based on an alleged repudiation of the Contract. [ 90 ] EMW argues that there are uncertainties in the facts in relation to 1) whether or not the pre-paid purchase price was intended as a deposit, and 2) the impact of EMW’s alleged actual losses in relation to Acden’s entitlement to relief from forfeiture. However, these issues would arise only if there were a genuine issue for trial regarding repudiation.

As there is no genuine issue for trial in that regard, factual uncertainties on these points are immaterial. [ 91 ] While EMW’s submissions on the appeal related only to defences arising from repudiation, I have also considered the question of a defence of set-off.

[ 92 ] In oral argument, Acden submitted that EMW’s defence must be limited to repudiation, as there is no cross-claim for damages. However, rule 3.59 allows set-off to be pled as a defence: “A matter that might be claimed by set-off may be claimed by counterclaim or by pleading set-off as a defence.” EMW’s Amended Statement of Defence pleads set-off of damages. Thus, it is appropriate to determine whether there is a genuine issue for trial regarding the defence of set-off. [ 93 ] It is unclear whether the Master’s decision to stay $300,000 of the judgment “for proof of damages” related to EMW’s defences based on repudiation, or a claim for set-off. The formal Order for

Summary Judgment directs that the matter continue in order to determine “the damages alleged” by EMW, with the parties at liberty to apply for further advice and direction as required. The Master did not determine that EMW had raised a genuine issue for trial in relation to entitlement to damages. [ 94 ] A damages claim may be based on a “mere” breach of contract, and it does not have to raise issues regarding anticipatory or fundamental/substantial breaches or the innocent party’s election to treat the contract as at an end.

Thus, the analysis conducted above does not address whether there is a genuine issue for trial regarding entitlement to damages giving rise to the defence of set-off. [ 95 ] Following the approach in Weir-Jones , it is clear that Acden met its initial burden to show that there is “no defence” to its claim for damages in lieu of performance of the Contract. The facts pertaining to its claim are undisputed. There is no genuine issue for trial regarding the repudiation-based defences relied on by EMW in response to Acden’s application for judgment. [ 96 ] The burden then moves to EMW.

As stated in in Weir-Jones (at para 47 (c)): If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,

summary disposition is not available. [ 97 ] EMW has not met this burden. An examination of the record from the perspective of the defence of set-off does not demonstrate a genuine issue requiring trial. The defence of set-off requires that EMW demonstrate that there is a triable issue regarding its entitlement to damages arising from breach of the Contract by Acden. It simply has not done so. There is no evidence that Acden ever refused to take delivery as provided in the Contract. The only evidence regarding a delivery timeline is that already reviewed.

Deliveries were contemplated to occur “as soon as possible”. Acden provided information to EMW regarding the bins required to meet its own customers’ requirements; EMW manufactured the bins and delivered them as they were completed. Acden requested a hold on deliveries, and EMW acquiesced. This remained the situation until Acden sought to reinstate deliveries, and EMW refused. It may be, given the significance to both parties of prompt deliveries, that EMW could have refused to hold deliveries or that it could have imposed a deadline on deliveries.

It did neither. [ 98 ] There is no suggestion that a trial would improve the state of the record on these issues. Evidence regarding the delivery timeline was central to EMW’s defences based on alleged repudiation. That evidence is before the Court. I agree with Acden that there is no evidence of a breach of the Contract on Acden’s part that could support EMW’s entitlement to damages. Factual uncertainties are present in relation to the quantification of claimed damages, but, in the absence of any evidence of entitlement, these factual issues are immaterial.

Conclusion [ 99 ] I conclude that the Master correctly determined that Acden is entitled to judgment against EMW in the amount of $996,720 plus interest and costs. That judgment is upheld. However, I conclude that the Master’s decision to stay a portion of the judgment was not correct, and should be set aside. [ 100 ] The parties may speak to me regarding costs if they are unable to agree. Heard on the 26 th day of August, 2020. Further written submissions received on the 28 th of October, 2020. Dated at the City of Edmonton, Alberta this 1 st day of March, 2021. J.M. Ross J.C.Q.B.A. Appearances:

Corbin Devlin of McLennan Ross LLP for Plaintiff, Acden Environment Limited Partnership Jordan R M Deering of DLA Piper (Canada) LLP for the Defendant, Environmental Metal Works Ltd.