2014 NBCA 37, 2014 NBCA 37

COURT OF APPEAL OF COUR D'APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 7-13-CA PAULINE METTI APPELLANT PAULINE METTI APPELANTE - and - - et - FERNAND GAUDET, in his capacity as executor of the estate of YVON GAUDET RESPONDENT FERNAND GAUDET, en sa capacité d'exécuteur de la succession d’YVON GAUDET INTIMÉ Metti v. Gaudet, 2014 NBCA 37 Metti c.

Gaudet, 2014 NBCA 37 CORAM: The Honourable Justice Robertson The Honourable Justice Bell The Honourable Justice Quigg CORAM : l’honorable juge Robertson l’honorable juge Bell l’honorable juge Quigg Appeal from a decision of the Court of Queen’s Bench: December 17, 2012 Appel d’une décision de la Cour du Banc de la Reine: le 17 décembre 2012 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : inédite Preliminary or incidental proceedings: [2012] N.B.J. No. 262 [2013] N.B.J.

No. 46 Procédures préliminaires ou accessoires : [2012] A.N.-B. no 262 [2013] A.N.-B. no 46 Appeal heard: February 25, 2014 Appel entendu : le 25 février 2014 Judgment rendered: June 5, 2014 Jugement rendu : le 5 juin 2014

Reasons for judgment: The Honourable Justice Quigg Concurred in by: The Honourable Justice Robertson The Honourable Justice Bell Counsel at hearing: For the appellant: Lucie Richard, Q.C. For the respondent: James E. Fowler, Q.C. Motifs de jugement : l’honorable juge Quigg Souscrivent aux motifs : l’honorable juge Robertson l’honorable juge Bell Avocats à l'audience : Pour l’appelant : Lucie Richard, c. r. Pour l’intimé : James E. Fowler, c. r. THE COURT The appeal is allowed and the Order dated December 17, 2012, is set aside with costs of $1500.

The appellant is entitled to an order, as set out in paragraph 17 of the reasons for decision. LA COUR L’appel est accueilli et l’ordonnance datée du 17 décembre 2012 est annulée. Des dépens de 1 500 $ sont adjugés à l’appelante. L’appelante a droit à l’ordonnance énoncée au paragraphe 17 des présents motifs de décision. The judgment of the Court was delivered by QUIGG, J.A. I. Introduction [ 1 ] Prior to his death, Yvon Gaudet and Pauline Metti had purchased jointly a car and a house. The central issue is whether Mr. Gaudet’s estate is legally obligated to pay the balance remaining on the car loan and mortgage.

The litigation commenced as an application to determine whether Yvon Gaudet’s last will and testament obliged the executor to pay these two outstanding debts. The application was subsequently converted to an action. Thereafter, the procedural issues overtook the substantive ones. II. Background and Procedural History [ 2 ] A review of the record indicates that Mr. Gaudet and Ms. Metti became acquainted when Mr. Gaudet began attending the hair salon where Ms. Metti worked. On August 13, 2009, Ms. Metti and Mr. Gaudet purchased a vehicle for approximately

$29,000, by way of a secured loan. On October 28, 2009, they purchased a residential property in joint tenancy. The purchase price of $211,000 was secured by a mortgage executed by both Mr. Gaudet and Ms. Metti. Mr. Gaudet died on July 13, 2010, without acquiring life insurance for either the vehicle loan or the mortgage. On December 10, 2008, and prior to entering into the two loans, Mr. Gaudet had executed his last will and testament wherein he appointed his son, Fernand Gaudet, as executor. Mr.

Gaudet’s widow and children were unaware of the existence of either the purchases or the loans used to acquire the assets. [ 3 ] On October 28, 2011, Ms. Metti filed a Notice of Application requesting an

interpretation of Mr. Gaudet’s will in order to determine if Mr. Gaudet’s estate was responsible to pay the amount owing on the motor vehicle loan and the mortgage. The Notice of Application also sought an order that the executor of the estate pay out the motor vehicle loan and the mortgage. Fernand Gaudet is named in the style of cause in his capacity as executor. [ 4 ] On June 1, 2012, Fernand Gaudet brought a motion asking that the Application be converted into an action. On June 6, 2012, the judge so ordered.

He also ordered the parties to follow a precise timeline which included the date by which to file a Statement of Claim. This was followed by an Order, dated June 19, 2012, which required a Notice of Action with Statement of Claim Attached be filed. On July 23, 2012, a motion for leave to appeal this decision was denied: [2012] N.B.J. No. 262 (QL) . [ 5 ] On June 26, 2012, Ms. Metti filed a notice of Action with Statement of Claim Attached.

In the style of cause, Pauline Metti is the Plaintiff, and the defendants are Fernand Gaudet, named both in his personal capacity and as the Executor of the estate of Yvon Gaudet. In the Notice of Application, Fernand had been made in a party only in his capacity as executor of his father’s estate. The Statement of Claim also added new claims for relief against Fernand in his personal capacity. [ 6 ] In his capacity as executor of his father’s estate, Fernand filed a motion to strike the June 26, 2012 Notice of Action with Statement of Claim Attached.

In the alternative, he requested an order that the Notice of Action be amended by removing him as a defendant in his personal capacity and by striking the personal claims. On September 17, 2012, the judge issued an Order staying the June 6, 2012 Order pending hearing of the motion. [ 7 ] On December 17, 2012, the motion to strike the June 26, 2012 Notice of Action was heard. The motion judge struck the Notice of Action with Statement of Claim Attached and, as well, the original Application. Costs of $1,500 were awarded to the estate. In the Order, the judge stated that Ms.

Metti was free to commence new proceedings without fear of res judicata . On January 16, 2013, Ms. Metti filed a Notice of Appeal and on February 11, 2013, she made a motion to this Court for a stay of the December 17, 2012 Order. The motion was dismissed: [2013] N.B.J. No. 46 (QL) . In Ms.

Metti’s Notice of Appeal she refers to the following decisions and orders: 1) the December 17, 2012 order striking the Notice of Action and Application; 2) the June 6, 2012 decision converting the Application to an Action; 3) the June 19, 2012 order converting the Application to an Action; 4) the August 2, 2012 decision (teleconference call with judge no order resulted); 5) the August 22, 2012 decision (hearing of motion to have decision stayed). [ 8 ] On July 29, 2013, the executor filed a Statement of Defence.

Therein, he pleads the action is statute barred. [ 9 ] On December 12, 2013, a Supplementary Notice of Appeal was filed, concentrating solely on the December 17, 2012 decision to strike the new Notice of Action with Statement of Claim Attached and abandoning the appeals respecting the other decisions or orders.

III. Issues on Appeal [ 10 ] Ms. Metti submits the motion judge erred in law in the following respects:

a) In striking out the June 26, 2012 Notice of Action with Statement of Claim A ttached;

b) In concluding that the Notice of Action with Statement of Claim Attached had to “mirror” the Notice of Application;

c) In concluding that Ms. Metti’s counsel had consented to an order to strike out the Notice of Action with Statement of Claim Attached; and

d) In striking out the Notice of Application when it had not been put before the court. IV. Analysis [ 11 ] Both parties agree the Court of Appeal may only interfere with a discretionary order if it is founded upon an error of law, an error in the application of the governing principles or a palpable and overriding error in the assessment of the evidence: The Beaverbrook Canadian Foundation v. The Beaverbrook Art Gallery , 2006 NBCA 75 , 302 N.B.R. (2d) 161; Chiasson v. Thébeau , 2009 NBCA 64 , 348 N.B.R. (2d) 1. As will become evident, the issue raised on this appeal involves a question of law.

It follows that no deference is owed to the judge’s decision. [ 12 ] It is against this factual and procedural background that this Court must consider the central issue: whether the judge was correct, in his order dated December 17, 2012, in determining the following: 1) The Statement of Claim filed on June 26 th , 2012 by the Plaintiff be struck. This shall put an end to the procedure initiated in court file numbers M/M/0088/11 and M/C/785/12. 2) The Plaintiff is authorized to file a new action. 3) The Plaintiff shall pay costs of $1,500.00, all inclusive, to the Defendant. [ 13 ] I agree with Ms.

Metti that the judge erred in law when he struck: (1) the June 26, 2012 Notice of Action with Statement of Claim Attached; and (2) the original Notice of Application. In reaching this conclusion, I have not lost sight of the fact that the motion judge did not err in converting the original application into an action. Rule 38.09 of the Rules of Court states:

38.09 Disposition of Application On the hearing of an application, the court may (

a) allow or dismiss the application or adjourn the hearing, with or without terms, or (

b) where it is satisfied that there is a substantial dispute of fact, direct that the application proceed to trial or direct the trial of a particular issue or issues and, in either case, give such directions and impose such terms as may be just, subject to which the proceeding shall thereafter be treated as an action. 38.09 Décision À l’audition d’une requête, la cour peut

a) accorder celle-ci, la rejeter ou ajourner l’audience avec ou sans conditions ou,

b) si elle constate qu’il y a une contestation importante des faits, prescrire l’instruction de la requête ou l’instruction d’une ou de plusieurs questions soulevées et, dans l’un ou l’autre cas, donner les directives et imposer les conditions qu’elle estime justes, après quoi l’instance sera conduite comme une action. [ 14 ] In his June 6, 2012 decision, the motion judge reasoned: In the case at bar, the issues raised goes beyond the question of an

interpretation of a Will. With respect to the mortgage, the Court will be asked to determine if the Applicant has a right to have the mortgage paid by the estate. This without a doubt is contested. With respect to the car loan, a dispute exists as to the ownership of the vehicle and, again, what is the estate liability toward this loan. The Applicant presented no less than ten case law and articles that relates to

interpretation and other issues relating to matters such as the case at bar. I believe that for a judge to be able to determine the issue that are raised in this matter, to determine credibility of witnesses for the estate, to determine who should be part of this procedure such as the intended beneficiary under the Will who might well be affected by a substantial payment by the estate on the loans that are being questioned, the insurance file relating to the car loan, there are numerous consideration that would be better (inaudible) in a trial. They’re all importance factors that militate in favor of a trial.

The estate would certainly benefit from a discovery of Ms. Metti. As pointed out in Fernand Joseph Gaudet’s affidavit, he states that the Applicant is a stranger to the deceased [‘s] wife and children and she is not recognizable to him. Pauline Metti has given very little evidence in her affidavit in relation with the purchase documents of the vehicle and the residence. There is more to this application than a question of

interpretation of a Will. It is the conclusion of this Court that a trial would be better – a better choice of procedure to determine the issues. [Transcript of the decision, June 6, 2012, page 5, lines 25 to 28; page 6, lines 1 to 23; page 7, lines 1 to 4] I agree. The issues raised in Ms. Metti’s original application require more than the

interpretation of a provision of a will. There is a dispute about ownership of property and the liability of the estate for all or some of the outstanding debts. These factors certainly militate in favour of conversion of the application to an action. [ 15 ] However, where the motion judge and I part ways is in regard to the subsequent motion and decision to strike the entire Notice of Action with Statement of Claim Attached, together with the original Notice of Application.

In my view, the motion judge should have struck only those parts of the pleading that were incompatible with the original Notice of Application. Specifically, the motion judge should have struck out the action against Fernand Gaudet, in his personal capacity, and the related claims. Those claims were frivolous and vexatious. Moreover, by adding Fernand as a party in his personal capacity, Ms.

Metti sought to add a party to the originating process without complying with the Rules . [ 16 ] It follows, in my view, that the motion judge erred in the December 17, 2012 Order when he struck the original Application and authorized Ms. Metti to “file a new action”. As well, he went too far in effectively striking out the original Notice of Application. By “putting an end” to file M/M/0088/11, the motion judge dismantled the foundation upon which Ms. Metti’s claim is based and brought into play, unnecessarily, limitation issues. Clearly, this was not the intent of the motion judge.

Otherwise, he would not have made reference to the inapplicability of the res judicata doctrine. [ 17 ] I would allow the appeal by setting aside the motion judge’s order of December 17, 2012, in which he set aside both the original Notice of Application and the Notice of Action with Statement of Claim Attached. In its place, I would grant an order amending the Statement of Claim so as to strike out the action against Fernand Gaudet, in his personal capacity, together with the attendant claims. Such relief restores the parties to the position they would have been in had Ms.

Metti complied with the conversion order granted on June 6, 2012.

V. Disposition [ 18 ] I would allow the appeal in the manner set out in paragraph 17 of these reasons, and award Ms. Metti costs of $1,500. _________________________________ KATHLEEN A. QUIGG, J.A. WE CONCUR: _______________________________ J.T. ROBERTSON, J.A. _______________________________ B. RICHARD BELL, J.A.