court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Hutchings v. Power , 2020 NLSC 7 Date : January 16, 2020 Docket : 201701G8467 Between: LOYOLA HUTCHINGS Plaintiff And: LLOYD POWER Defendant Before: Justice David B. Orsborn Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: January 15, 2020

Summary: The plaintiff applied for a

summary trial of his claim for monies owed for his construction of a cabin for the defendant. The defendant objected to having the matter heard by way of

summary trial. Held : The plaintiff’s application was dismissed. The evidence filed by the plaintiff was not responsive to the claim as pleaded in the amended statement of claim. Accordingly, the application did not meet the “threshold” requirement that there be “some evidentiary basis for the assertions made”. Appearances: David L. Hearn Appearing on behalf of the Plaintiff

Cletus E. Flaherty Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: L.H.E. v. D.A.E., 2019 NLCA 66; Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 405 A.P.R. 317 (Nfld. S.C.(T.D.)); Dalley v. Northern Arm (Town), 2016 NLTD(G) 68; Young v.Noble, 2016 NLCA 58. RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D. REASONS FOR JUDGMENT Orsborn, J.: INTRODUCTION [1] Loyola Hutchings claims that Lloyd Power owes him $94,094 for the construction of a cabin. He has applied for a

summarytrial. Power takes the position that the matter should not be determined by

summary trial, but should be adjudicated only after a fulltrial. [2] At the beginning of the hearing and following submissions, I decided that it would be appropriate to first determine the“threshold question”, to use the phrase from decisions that have considered the

summary trial process. This is my decision on thatquestion. ISSUE [3] Using the criteria established by the authorities, is Hutchings’s claim one that is potentially capable of being dealt with by wayof the

summary trial process? BACKGROUND [4] The defendant Power deposed: 3. Loyola Hutchings is my former father-in-law. I married the daughter of the Plaintiff, Nicole Hutchings (“Ms. Hutchings”), onAugust 27, 2016. 4. We separated on or about November 14, 2017. … [5] In July-August 2016, Hutchings removed an old cabin on land owned by Power and built a new one. The terms of thearrangement are in dispute. Hutchings’s amended statement of claim says this: 4.

In or during the month of June 2016, the Plaintiff and the Defendant entered into an agreement (the “Agreement”), whereby thePlaintiff agreed to provide certain materials, services, and labour in relation to the removal of the existing structure erected on theProperty, and the construction of a replacement structure for use as a residence by the Defendant. 5. In consideration of the aforementioned materials, services, and labour, the Defendant agreed to provide a promissory note for theassociated costs of the materials, services, and labour (the “Promissory Note”).

As security for the Promissory Note, the Defendantagreed to enter into a mortgage of the Property in favour of the Plaintiff (the “Mortgage”). The associated costs of the materials,services, and labour, in addition to the registration cost of the Mortgage are further detailed as follows: … TOTAL: $94,094.00

6. In reliance upon the Agreement, the Plaintiff commenced work upon the Property in or during the month of July 2016 and completed the work shortly thereafter as agreed with the Defendant. 7. To date, the Defendant has failed to execute the Promissory Note or the Mortgage documents and has failed to pay the Plaintiff any amount of the cost of the materials supplied or the labour to complete the agreed work. 8.

The Plaintiff states that the Defendant breached the Agreement by failing to execute the Promissory Note and Mortgage, and remains indebted to the Plaintiff in the amount of $94,094.00. [ 6 ] Power sold the cabin in September 2019 for $173,000. [ 7 ] The statement of claim asks for a declaration that there is an equitable mortgage against the property, seeks damages of $94,094 based on the failure to execute a promissory note and mortgage and, in the alternative, asks for compensation based on quantum meruit or unjust enrichment. [ 8 ] Hutchings’s application for a

summary trial repeats the allegations in the amended statement of claim and asks for the same relief. [ 9 ] Hutchings’s evidence in support of the

summary trial application comes from his own affidavit. Attached to his affidavit are receipts said to represent the $94,094 costs incurred by him in building the cabin. As to the arrangement between himself and Power – the legal basis for reimbursement – he deposed: 3. In or around the month of June, 2016, Lloyd Power approached me about building a new cabin on the Property. At that time there was an existing cabin on the Property and Mr. Power wanted that building removed and replaced with a new cabin.

We discussed the type of cabin he wanted to build and I quoted him the price of $60,000.00 based on a design that I proposed. The floor plan for this cabin is attached hereto as Exhibit “A”. 4. Prior to construction commencing Mr. Power advised that he had chosen a different design for the cabin to be constructed. I reviewed the proposed design, which is attached hereto as Exhibit “B”, and quoted Mr. Power $100,000.00 for construction based on this design. Mr. Power requested that we proceed with construction of the new design for the price quoted and an agreement was reached (the “Agreement”). 5.

In reliance upon the Agreement, I arranged for construction to begin on the cabin in or around July 2016 with materials and labour being provided by myself to complete the work. The existing structure was removed from the Property and construction of the replacement cabin was completed as per the Agreement. 6. The costs for construction of the cabin were covered by me with the understanding I would be paid in full by Mr. Power based on the Agreement. … 7. Following completion of construction payment from Mr. Power with respect to the cabin was still not forthcoming. Mr.

Power and I had several conversations regarding the outstanding payment of the outstanding amount. I requested that Mr. Power sign a promissory note and, as security for the promissory note, to enter into a mortgage naming me as payee. Mr. Power agreed to this request and a draft mortgage and promissory note were provided to Mr. Power through my legal counsel, however Mr. Power failed to sign the documents. DISCUSSION [ 10 ] Rule 17A of Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D ., sets out the

summary trial procedure. In part: 17A.01.

(1) A plaintiff or defendant may, after defence has been filed and at any time prior to the proceeding being placed on a trial list, apply to the Court with supporting affidavit material or other evidence for

summary trial seeking judgment on or dismissal of all or part of the claim in the statement of claim, as the case may be. [ 11 ] Evidence may be adduced by affidavit, subject to cross-examination as permitted by the judge, by answers to interrogatories or by discovery evidence. Rule 17A(03) addresses the disposition of the application: 17A.03.

(1) Where the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant

summary judgment accordingly.

(2) Where the Court decides that there is a genuine issue with respect to a claim or defence, a judge may nevertheless grant judgment in favour of any party, either upon an issue or generally, unless

(

a) the judge is unable on the whole of the evidence before the Court on the application to find the facts necessary todecide the questions of fact or law; or (

b) it would be unjust to decide the issues on the application.

(3) Where the Court is satisfied that the only genuine issue is the amount to which a party is entitled, the Court may order atrial of that issue or grant judgment with a reference to determine the amount.

(4) Where the Court is satisfied that the only genuine issue is a question of law, the Court may determine the question andgrant judgment accordingly. … [12] The rationale behind providing the

summary trial procedure was explained recently by the Court of Appeal in L.H.E. v. D.A.E.,2019 NLCA 66, at paragraphs 9-10: 9 The objective in proceeding in a civil matter by way of

summary trial and judgment is discussed in Hryniak v. Mauldin, 2014 SCC7, [2014] 1 S.C.R. 87 (S.C.C.). Karakatsanis J., for the Court, explained: [4] ... In my view, a trial is not required if a

summary judgment motion can achieve a fair and j/ust adjudication, if it provides aprocess that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, moreexpeditious and less expensive means to achieve a just result than going to trial. [5] To that end, I conclude that

summary judgment rules must be interpreted broadly, favouring proportionality and fair access tothe affordable, timely and just adjudication of claims. 10 Similarly, in Curtis v. Smith’s Home Centre Ltd., 2010 NLCA 7, 295 Nfld. & P.E.I.R. 279 (N.L. C.A.), this Court commented onthe circumstances when a

summary trial may be a suitable procedural approach to litigation: [9] The trial judge may find that even though there is a genuine issue for trial disclosed in the statement of claim, such a genuineissue may nevertheless be decided in a

summary way without the need for a full trial under Rule 17A.03. This jurisdiction of a judgeconducting a

summary trial is fundamental to the purpose of Rule 17A governing

summary trials by facilitating decision-making oncontentious but straightforward issues between litigants without incurring unnecessarily burdensome trial costs. [13] The application of Rule 17A has, despite the objective of providing an expeditious and less expensive route to a fairadjudication, generated a considerable body of judicial comment. See, for example: Marco Ltd. v. Newfoundland Processing Ltd.(1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 405 A.P.R. 317 (Nfld. S.C.(T.D.)); Dalley v. Northern Arm (Town),2016 NLTD(G) 68; Young v. Noble, 2016 NLCA 58; and L.H.E. [14] The case law indicates that as part of the

summary trial process, the application judge is required to consider in the first instancewhether entry into the

summary trial process should be allowed. This is the “threshold question” referred to in the authorities. If thisthreshold is passed, the

summary trial will proceed and the judge will, after hearing the matter, decide if indeed a fair and justadjudication is possible based on the

summary proceeding. This was explained in L.H.E. at paragraph 12: 12 An application under rule 17A engages a two-step process. The analysis begins with a threshold question, that is, “whether thecase is appropriate for

summary adjudication” (Young v. Noble, 2016 NLCA 58 (N.L. C.A.), 1 C.A.N.L.R. 197, (2016), 411 D.L.R. (4th)223 (N.L. C.A.), at paragraph 23). In Young v. Noble, Green C.J.N.L. explained: [27] It is important to appreciate, however, that the threshold question that can, on these authorities, be determined in advanceof the

summary trial proper is truly a threshold question directed to determine whether, on the matters raised in the application, the caseappears to fall within the

summary trial rule, whether the applicant has provided some evidentiary basis for the assertions made andwhether the nature of the case is such that it is potentially capable of being dealt with in the attenuated manner contemplated by asummary trial, bearing in mind the comments of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87(S.C.C.) about the salutary uses of such a procedure to ensure access to justice in appropriate cases. [28] Such a threshold question is distinct from another similar question that may arise in the course of the

summary trial itself:whether, even if the applicant fails to establish that there is no genuine issue for trial, the court should, nevertheless, on the

summary

trial record, determine the legal and factual issues that have been raised. That requires a determination, within the language of rule 17A.03(2) of the Rules of the Supreme Court, 1986 , whether the judge “is unable on the whole of the evidence before the Court ... to find the facts necessary to decide the questions of fact or law” and whether “it would be unjust to decide the issues” by way of

summary trial. Even though a judge may have decided, on a preliminary threshold screening as described above, that the

summary trial procedure should be proceeded with, this latter inquiry is, of necessity, still at large and may have to be addressed and dealt with at the

summary trial hearing itself. [ 15 ] L.H.E. goes on to confirm that it is not inappropriate to first address and decide the threshold issue. That is what was done in this case. [ 16 ] What is the threshold question? The passage quoted above provides the answer. Essentially it asks whether the material presented – before any assessment of the reliability of the evidence and before considering any issue of credibility – could potentially support a fair determination by way of

summary adjudication. It is not a matter of assessing the sufficiency or otherwise of the respondent’s evidence. [ 17 ] In Dalley , Butler J., as she then was, at paragraph 11, recognized that “ Rule 17A does not reference either a threshold test or a two-step process”. [ 18 ] After reviewing case law, she wrote about the threshold test – at paragraphs 19-22: 19 I believe the threshold requirement is met if two elements are present. Firstly, an applicant brings himself/herself within the Rule and secondly, the Court concludes that at this preliminary stage it would appear appropriate to deal with the issues in a

summary trial hearing. 20 How does an applicant meet the first element? Principle 3 from Marco states: 3. To bring himself or herself within the Rule the applying party must: (

a) in a case where he or she has the ultimate burden of proof on the merits, put forward an evidentiary basis for the claim which, if considered alone, would prove each element of the cause of action; or (b) ... where the other party has the burden of proof on the merits, put forward an evidentiary base establishing a defence to the claim as defined in the pleadings or tending to show that the other party’s claim has no substance to it. 21 On a plain reading of principles 3(

b) and 7 from Marco , I conclude that Green. J. (as he was then) was stating that if an applicant had not presented an appropriate evidentiary basis for its position, the threshold would not be met and the responding party would have no evidentiary burden to meet. In such an event, the

Summary Trial Application would be denied. 22 The second element of the threshold test arises because of the Court’s inherent jurisdiction to refuse a

summary trial if, in all the circumstances, it is not appropriate to deal with the issues in this way (2014 Bar Admission Course Practice and Procedure, supra ). This involves a preliminary determination distinct from the enquiry that takes place at the

summary trial itself. [ 19 ] She acknowledged that the application of the Marco principles has caused some confusion over the appropriate manner of proceeding and concluded, at paragraph 24: 24 I prefer to state the nature of the enquiry at the threshold step as follows: 1. At the threshold step, the Applicant for a

summary trial must satisfy the Court that it has presented an appropriate evidentiary basis for either:

a) the claims made; or

b) the defences to the claims made;

in the affidavit and other documentary evidence presented by all parties (subject to the right to cross-examine deponents). 2. The second element of the threshold step is consideration of whether, at this preliminary stage, it would appear appropriate to deal with the issue in this

summary manner. 3. If the threshold step is not met, the Court may give directions, order the proceeding to proceed to trial in the normal course or order it to proceed by expedited trial. 4. If the threshold step is met, depending on the facts, the Court may give directions and/or address any requests for production of deponents for cross-examination. If the parties are ready and the Court has ample time available, the

summary trial hearing may proceed the same day. Alternatively, it may be set over to another date. In either case the

summary trial should be heard by the judge who determined the threshold issue. [ 20 ] Butler J. ended the discussion with a cautionary word at paragraphs 25-26: 25 ”But not every case is amenable to the procedure and Rule 17A applications should not be made frivolously” ( Hannam v. Farrell , 2007 NLTD 97 (N.L. T.D.) at paragraph 6 and Rowsell v. MacKinnon , 2010 NLTD(G) 119 (N.L. T.D.) at paragraph 6). 26 The use of the

Summary Trial Rule requires very careful consideration. It is intended to represent a proportionate, more expeditious and less expensive means to achieve a just result. However, an applicant may meet both elements of the threshold test of appropriateness for a

summary trial hearing and nevertheless at the conclusion of the

summary trial itself, the Court may determine that it is not able to reach a fair and just determination on the issues (Rule 17A.03(2)) and that the parties ought to have their day in Court. See P. (C.) v. Oblates of Mary Immaculate - St. Rosarie’s Province , 2008 NLTD 67 (N.L. T.D.) at paragraph 23 and Stewart v. Martin [ 2011 CarswellNfld 468 (N.L. T.D.) ] at paragraph 50. In such a case, the

summary trial hearing will have represented potentially wasted time and expense. [ 21 ] In my view, that caution is appropriate here. The threshold question is not one to be dismissed lightly. It is intended to screen out, at an early stage, those claims that cannot be fairly considered in a

summary trial process. It may well be that, in the vast majority of cases, there will not be a serious issue as to whether the threshold test has been met. But where there is a real question as to whether the record is “potentially capable” of supporting a

summary adjudication, it is a question that is best first answered before putting the parties to the time and expense of the

summary trial itself. [ 22 ] In this case, consideration of “… whether the applicant has provided some evidentiary basis for the assertions made …” leads me to the conclusion that this relatively modest condition has not been met. [ 23 ] Fairness, justice and a focused approach to court proceedings requires that the evidence led be directed to the matter in issue as reflected in the pleadings. There must be a confluence between the evidence and the pleadings.

To conduct a proceeding or to allow a proceeding to proceed otherwise than on this basis opens the door to potential unfairness and a waste of time and resources. [ 24 ] Hutchings’s case is set out – “asserted” – in the amended statement of claim. He claims damages in the amount of $94,094 for the breach of an agreement to execute a promissory note and mortgage, which agreement he relied on in commencing construction of the cabin. Alternatively, he claims relief through quantum meruit or unjust enrichment. [ 25 ] His affidavit in support of his

summary trial provides evidence to support his claim on an entirely different basis. He gives evidence of a completed contract, including an agreed price of $100,000, and of commencing construction in reliance on that contract. There is no mention of, or reliance on, an agreement to provide a promissory note and a mortgage. His evidence is that discussion of these matters arose only after construction was completed. [ 26 ] Put simply, the pleadings and the evidence do not correspond. The asserted agreements in the statement of claim and the

summary trial affidavit are different – one an agreement to provide a promissory note and mortgage with no reference to terms or amount, the other a fixed-price contract. [ 27 ] It seems to me that fairness and efficiency require that on a

summary trial application, the evidence put forward addresses the particular claim – and its legal foundation – that, based on the pleadings, the opposing party is expected to meet. This, I believe, is what is referred to as a part of the threshold analysis – “has the applicant provided some evidentiary basis for the assertions made”. [ 28 ] Here, there is no evidence to support the relied upon agreement as asserted in the statement of claim. Further, the evidence of a $100,000 fixed price contract may run counter to the pleaded claim based on quantum meruit . [ 29 ] In the particular circumstances of this case, I am satisfied that, as presented, it is not appropriate to enter into a

summary trial hearing. [ 30 ] Let me be clear that, in so deciding, I am not saying that an application accompanied by evidence that addresses the claim as pleaded could not be considered for a

summary trial adjudication. Counsel for Power raised concerns about credibility, reliability of the receipts provided, and the lack of expert evidence on the value of the property. These are not threshold issues. They are issues that relate to the assessment of the merits of the claim and might persuade a judge that it would be “unjust” to decide the matter without a full

trial. [ 31 ] This is an unfortunate outcome. Although Rule 17A contemplates a procedure intended to lessen time and expense, a determination to not allow the

summary trial to proceed as presented leads to the opposite – wasted time and expense. But allowing the matter to proceed, and in all likelihood concluding at the end that it would not be just to decide the case because of the mismatch of the affidavit evidence and the claim asserted, would lead to still more wastage of resources. [ 32 ] Rule 17A.07(1) provides that where an application from a

summary trial is dismissed, the Court may order that the matter proceed to trial. I am not prepared to do that. Given that this application has been dismissed at the threshold issue level, the possibility of consideration of

summary adjudication remains if an application were presented with evidence that addresses the claims made. In this connection, however, I refer the parties to the leave requirement set out in Rule 17A.05(1). Again, and to be clear, I express no view on whether the concerns raised by counsel for Power would, if a

summary trial were to proceed, persuade the judge that it would not be just to decide the matter summarily. [ 33 ] There remains the matter of costs. Rule 17A.05(2):

(2) Where on an application for

summary trial under this rule, the applying party obtains no relief, the Court shall fix the opposite party's costs of the application on a solicitor and client basis and order the applying party to pay them forthwith unless the Court is satisfied that the bringing of the application, although unsuccessful, was nevertheless reasonable, in which case the costs may be assessed on a party and party or some other lesser basis, or not at all. [ 34 ] I have dismissed the application at the threshold level.

The basis for dismissal goes more to the presentation of the application than to the underlining merits of Hutchings’s claim for payment of some amount. I note that in his statement of defence (to the original statement of claim) Power said at paragraph 3(ii) that “… he and Ms. Hutchings were prepared to spend up to $60,000 on the Work”. [ 35 ] This position was restated in Power’s affidavit filed on this application. [ 36 ] In the circumstances, I am not prepared to conclude that it was unreasonable for Hutchings to attempt to gain relief through the

summary trial process. Costs of the application will be in the cause. CONCLUSION [ 37 ] Loyola Hutchings’s claim for adjudication by way of

summary trial is dismissed. Costs of the application will be in the cause. _____________________________ David B. Orsborn Justice