Cormack Estate v, 2021 ABQB 956

Court of Queen’s Bench of Alberta Citation: Cormack Estate v 1673603 Alberta Ltd, 2021 ABQB 956 Date: 20211202 Docket: 2001 10359 Registry: Calgary Between: Estate of George Cormack and Camrose Well Servicing Ltd. Applicants - and - 1673603 Alberta Ltd and Scott Warner Respondents _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice C.L. Arcand-Kootenay _______________________________________________________ Introduction [ 1 ] This matter came before me today as an Application for Judgment by Way of

Summary Trial pursuant to 7.5 of the Alberta Rules of Court . [ 2 ] Counsel for 1673603 Alberta Ltd and Scott Warner, in his filed brief, objected to the Application for Judgment by Way of

Summary Trial pursuant to 7.8 of the Alberta Rules of Court , which states: 7.8(1) The respondent to an application for judgment by way of a

summary trial may object to the application at or before the hearing of the application on either or both of the following grounds: (

a) the issue or question raised in the claim, or the claim generally, is not suitable for

summary trial; (

b) a

summary trial will not facilitate resolution of the claim or any part of it.

(2) Notice of the objection and anything on which the objector intends to rely must be filed and served on the applicant 5 days or more before the objection is scheduled to be heard.

(3) The Judge must dismiss the objection if, in the Judge’s opinion,

(

a) the issue or question raised in the claim, or the claim generally, is suitable for a

summary trial, and (

b) the

summary trial will facilitate resolution of the claim or part of it. Facts [ 3 ] On February 28, 2012 the parties entered into a joint venture for the operation of leased trucks; truck equipment; and well servicing work. The trucks and leases were in the names of both parties. The financial and bank accounts were divided between the two parties, it is submitted that poor management of finances lead to cash flow shortages and debt. [ 4 ] In August 2014, the joint venture was insolvent and the parties agreed to dissolve the joint venture.

A third-party mediator was engaged to reorganize the joint venture and separate the assets. It was found that the joint venture had a loss of approximately $1,000,000. [ 5 ] George Cormack, who was quite ill with cancer at that time, sold off personal assets to pay the debts and monies owed to creditors. [ 6 ] Mr. Warner acquired the goodwill and equipment from the joint venture. Mr. Warner executed three separate agreements: Joint Venture Settlement Agreement, Rental Agreement, and Promissory Note (the “Agreements”). Under the Agreements Mr.

Warner agreed to make monthly payments of $2500 to George Cormack commencing January 20, 2016 to compensate for his proportionate share of the joint venture losses, for a total of $300,000. In the

Preamble to the Joint Venture Settlement Agreement, in the Agreed Statement of Facts, bullet thirteen (13) speaks to a loan outstanding from “CWS to 1673606 AB Ltd.” [ 7 ] On January 2016 the payments started by Mr. Warner. [ 8 ] On April 2, 2016, George Cormack passed away. A term in the Joint Venture Settlement Agreement stated that if George Cormack became incapacitated, Gloria and Dereck Cormack will represent and act for George Cormack. [ 9 ] In December, 2017, Mr. Warner decreased his payments to $1250 per month. [ 10 ] In July 2019, Mr. Warner decreased his payments to $250 per month. [ 11 ] Mr.

Warner states that he communicated with Gloria Cormack regarding missed or reduced payments. [ 12 ] Both parties agree that, to date, Mr. Warner has paid $69,132.50 pursuant to the Agreements. [ 13 ] On August 24, 2020, Cormack’s Estate filed a Statement of Claim against 1673603 Alberta Ltd and Scott Warner to enforce a Joint Venture Settlement Agreement, executed between August 25, 2015 and October 12, 2015; a Rental Agreement, executed between August 25, 2015 and October 12, 2015; and a Promissory Note executed by Scott Warner on October 12, 2015. [ 14 ] Mr.

Warner, through counsel, submits that the amounts owing to George Cormack should be set-off against other debt incurred through the joint venture, as follows: costs for the default under the Vacuum Truck Lease for a total of $73,160.86; and loans made to Camrose Well Servicing by 1673603 in the amount of $150,000. [ 15 ] The Applicant disputes they were responsible for the payments on the Vacuum Truck Lease and resulting default; and the Loan made to Camrose Well Servicing by 1673603 (the “Loan”) indicated above. [ 16 ] I find that the issue of whether the Respondent is indebted to the Applicant, and if so, whether the debt should be set-off due to the default by the Applicant of the Vacuum Truck Lease and Loan are not issues suitable for

summary trial, and should be resolved at a full trial. [ 17 ] To determine whether this case can be resolved by way of a

summary trial rather than a full trial, it is necessary to examine the relevant factors. The factors to consider in determining an application for

summary trial include these: 1. The amount involved; 2. The complexity of the matter; 3. Its urgency; 4. Any prejudice likely to arise by reason of delay; 5. The cost of taking the case forward to a conventional trial in relation to the amount involved; 6. The course of the proceedings; 7. Whether all witnesses or only some were (will-be) cross-examined in court; 8. Whether there is a real possibility that a party can bolster its evidence by discovery of the other’s documents and witnesses; and 9. Whether the resolution will depend on findings of credibility. [ 18 ] Moncrieff v Hayne , 2013 ABQB 657 at para 49 .

In the matter before me, the analysis of these factors leads to the following observations: 1. The amount involved: As found in Moncrieff , this is a neutral factor. 2. The complexity of the matter: The issues with respect to

interpretation of contracts is well settled. I do not see this issue as particularly complex. Overall this is a neutral factor. 3. Its urgency: Mr. Warner has been making payments on the debt. The action was commenced by Mr. Cormack’s estate in August, 2020. No particular urgency was identified by either party. This factor favours a full trial. 4. Any prejudice likely to arise by reason of delay: The matters to which witnesses will be testifying occurred within the past five years, and George Cormack is now deceased. His estate has brought this action. This is a neutral factor. 5.

The cost of taking the case forward to a conventional trial in relation to the amount involved: The parties did not provide evidence on this point. A

summary trial is likely to be less costly. Costs for the preparation of some affidavits has already been incurred. The Respondent has already been cross-examined and has provided his undertakings. Counsel for the Respondent did not cross examine the Plaintiff’s Affidavit as counsel stated the “affiant did not have personal knowledge of the verbal agreements”. This factor favors a

summary trial. 6. The course of the proceedings: The parties did attend before a third-party mediator before executing the Agreements. The Agreements were prepared by the parties themselves, and have been described as “unsophisticated in the terms”. This is a contentious dispute with respect to the actual debt owed by the Respondent to the Applicant. Engaging in other dispute resolution options may be futile. The nature of the claim is not one that is likely to result in an agreement between the parties. This factor favours a full trial. 7.

Whether all witnesses or only some were (will-be) cross examined in court: Counsel for the Respondent has submitted that there are oral agreements that were entered into between the Respondent and the deceased, George Cormack. The Respondent submits that material facts are not agreed upon. “A cause of action can be tried summarily if the court can decide the issues by a process which relies heavily or totally on affidavits and cross-examination on affidavits...” Imperial Oil v. Flatiron Constructors Canada Ltd. , 2017 ABCA 102 at para 25 .

And further, “Adjudicators who are uncomfortable resolving contested material facts are likely to conclude that the record does not allow for a fair and just determination and decline to award

summary judgment.” Hannam v. Medicine Hat School District No.76 , 2020 ABCA 343 at para 166 . The written agreements and record may be flawed. It was submitted by the Respondent that the written agreement’s do not reflect the actual agreement reached by the parties. Oral evidence will provide that evidence. Although the Respondent has already been cross-examined on his Affidavit, in-court cross examination should not be precluded. This factor favours a full trial. 8.

Whether there is a real possibility that a party can bolster its evidence by discovery of the other’s documents or witnesses: The Respondent did not provide evidence as to whether further production or questioning is necessary. The Applicant submitted that all necessary information has been exchanged between the parties. This is a neutral factor. 9. Whether the resolution will depend on findings of credibility: “The judge will be provided with the total factual matrix by the parties, and will then make factual findings out of that matrix.

Conflicting affidavits do not negate the trial judge’s ability to assess conflicting facts, and do not mean that a

summary trial is inappropriate:…The conflict in evidence described here is not so much that one witness tells one version of a story and another witness tells another. Rather it is various witnesses offering their own perspective from which inferences are sought to be drawn.” Moncrieff at para 50 . In the matter before, as in Moncrieff , concerns as to the credibility and reliability of Mr. Warner and the Cormack’s are best addressed by their cross-examination in Court. This factor favours a full trial. Conclusion [ 19 ] I find that the issues raised in the claim are not suitable for

summary trial. All issues will be resolved by a full trial. I agree with the Respondent, “that a fulsome and proper

interpretation of a variety of agreements, both oral and written, be carried out.” Costs [ 20 ] May be spoken to. Heard on the 26 th day of November, 2021. Dated at the City of Edmonton, Alberta this 2 nd day of December, 2021. C.L. Arcand-Kootenay J.C.Q.B.A.

Appearances: Charles Osuji and Amanda Ovaici for the Applicants Scott Hammel and Mark Puszczak for the Respondents