GEORGE FRY v. 3044143 NOVA SCOTIA LIMITED, 2023 NBKB 080

Citation: 2023 NBKB 080 File Number: SJC-244-2021 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF SAINT JOHN BETWEEN: GEORGE FRY and 3044143 NOVA SCOTIA LIMITED Plaintiffs - and - GUIMOND MARINE FINISHERS INC., and CORY GUIMOND Defendants - and - IRVING EQUIPMENT LIMITED Third Party BEFORE: Justice William T. Grant HEARING HELD: Saint John DATES OF HEARING: March 28 th and April 21 st , 2023 DATE OF DECISION: May 10, 2023 COUNSEL: Barry R. Morrison, K.C., for the Plaintiffs G. Scott Ellsworth, K.C. and Christian Michaud, K.C. for the Defendants J. Paul M.

Harquail and Sarah-Jane Lewis, for the Third Party DECISION GRANT J. [ 1 ] On April 3 rd , 2019 the Plaintiffs and the Defendants entered into an Agreement (the “ Contract ”), wherein the Defendant,

Guimond Marine Finishers Inc. agreed to build a boat to be known as the “Triple Crown” for the Plaintiffs at its yard in Escuminac, New Brunswick according to the terms and specifications set out in their Contract. The price was $884,000.00 and the estimated completion date was November 30 th , 2019. The Plaintiff, George Fry, is a lobster fisherman based in Yarmouth, Nova Scotia and he intended to use the boat for that purpose. [ 2 ] During the course of construction, changes were made at the request of Mr. Fry which, according to the Defendants, added $99,430.00 to the price.

The Contract provided for progress payments during construction and it is agreed that to date the Plaintiffs have paid a total of $830,000.00 which, according to the Defendants, leaves a total of $153,430.00 owing. [ 3 ] Under the contract the completion date of November 30 th , 2019 was an “estimated” date and while the Defendant Cory Guimond told Mr. Fry he’d do his best, he also told him he couldn’t guarantee that date. When it became apparent to Mr.

Fry that the Triple Crown wouldn’t be finished by that date, he leased another boat for the winter lobster season. [ 4 ] Construction continued through 2020 and a date of November 19 th , 2020 was set for the Triple Crown to be moved into the Miramichi River where its sea trials would take place. [ 5 ] The Defendants hired the Third Party, Irving Equipment Limited, (“ IEL ”) to lift it into the water but during the lift an accident occurred and the Triple Crown was dropped causing damage. [ 6 ] The Defendants allege that they have repaired the damage at a cost of $91,593.00 plus HST. [ 7 ] On June 27 th , 2021 the Plaintiffs started this action claiming the Defendants breached the Contract by not completing the boat by November 30 th , 2019 and that Cory Guimond intentionally interfered with their economic interests, mislead them about the delay and acted outside the scope of his authority as an officer of the corporate defendant.

They claimed an order for delivery of the Triple Crown to Mr. Fry, special damages for loss of income and other amounts due to the delay, general damages, aggravated and punitive damages as well as solicitor and client costs. On August 6 th , 2022 they filed an Amended Statement of Claim wherein they have abandoned their request for delivery of the Triple Crown. [ 8 ] On August 6 th , 2021 the Defendants filed a Statement of Defence in which they allege, inter alia , that prior to the accident the Triple Crown was substantially complete and ready for sea trials and delivery to Mr. Fry by November 19 th , 2020.

They further allege that the repairs are now completed and the Triple Crown is again ready for sea trials and inspection by Transport Canada but that the Plaintiffs refuse to pay the balance owing on the Contract. [ 9 ] As for the delays, they allege that they are not responsible for them and that the Contract does not, either explicitly or implicitly, provide that time is of the essence.

The Defendants further assert a possessory lien against the boat for the balance owing by the Plaintiffs pursuant to both the Contract and the extra work for which they also make a counter-claim. [ 10 ] The Defendants also filed a Third Party Claim against IEL alleging it is solely responsible for the accident and claiming reimbursement for the cost of the repairs as well as indemnity for any amounts for which they may be found liable to the Plaintiffs. [ 11 ] On December 14 th , 2021 IEL filed a Third Party Defence and counter- claim, in which it denies liability for the accident and alleges that it relied on representations from the Defendants in lifting the Triple Crown and alleges that any losses flowing from the accident were the result of the negligence and omissions of the Defendants. [ 12 ] IEL further claims that under its Contract with the Defendants, the Defendants agreed to indemnify and hold it harmless from any claims arising from the lift. [ 13 ] It further claims that under its Contract with the Defendants, the Defendants were required to have a Builder’s Risk Insurance Policy in effect to protect IEL and it claims that if no such policy was in place the Defendants must indemnify IEL for any loses IEL

incurs arising from the accident. [ 14 ] IEL also claims that a separate action dealing with the existence of a Builder’s Risk Policy may directly impact on the rights of the parties in this action and asks the Court to make such orders as are appropriate and just concerning the issues in that action as they relate to this one. [ 15 ] The Defendants have filed a defence to IEL’s counter-claim in which they deny IEL’s allegation that they were negligent and allege that there was a Builder’s Risk Policy in place. [ 16 ] The Defendants’ liability insurer appointed separate counsel for their Third Party Claim and the defence of IEL’s counter-claim. [ 17 ] In this motion dated January 25 th , 2023 the Plaintiffs request the following: Orders (

a) granting

Summary Judgment for part of the Plaintiffs’ claims pursuant to Rule 22.01 of the Rules of Court and/or Rule 47.03(3) of the Rules of Court and an Order severing the Third Party Claim from the main action pursuant to Rule 47.03(1) of the Rules of Court. No grounds in support of the requested Orders are set out in the motion. [ 18 ] The Defendants submit that the Plaintiffs’ motion should be dismissed for failure to comply with Rule 37.03 of the Rules of Court which states: A Notice of Motion or Preliminary Motion shall (

a) state the precise order sought, (

b) state the grounds to be argued, including a reference to any statutory provision or rule to be relied on, and (

c) list the documentary evidence to be used at the hearing of the motion. [ 19 ] Clearly the Plaintiffs’ motion does not state the precise order sought. It refers only to “Summary Judgment for part of the Plaintiffs’ claim”. It is not until the conclusion of George Fry’s affidavit that the precise order sought is revealed where he states at paragraph 53: 53. I make this Affidavit in support of Motions for a

Summary Judgment Order that the Defendant Guimond Marine make part payment of special damages at least in the amount of $830,000.00 or such other sum as this Court deems just … [ 20 ] As for the grounds relied on in support of the

summary judgment motion and the severance motion, they simply don’t exist. [ 21 ] Rule 2.01 permits the Court to dispense with compliance with any Rule and at the hearing, I ruled that I would do so in this case but take these deficiencies into account in awarding costs.

SUMMARY JUDGMENT [ 22 ] I turn then to the Plaintiffs’ motion for an order for partial

Summary Judgment which, I find, is a request for an Order that the Defendants repay them the $830,000.00 that they have paid to date for the Triple Crown. [ 23 ] Rule 22.04(1)(

a) states: The court shall grant

Summary Judgment if

(

a) the court is satisfied there is no genuine issue requiring a trial with respect to a claim or defence … [ 24 ] In Russell v. Northumberland Co-Operative Limited 2019 NBCA 70 , LeBlond, J.A. stated that in considering a motion for

Summary Judgment the Court must follow a two-step process. He stated, in part, at paragraphs 22 and 23: [22] In step one, the judge must determine if the evidence put before him reveals a genuine issue requiring a trial. At this point, there is no need to resort to the fact-finding powers contained in Rules 22.04(2) and (3). Adjudication under step one may include cross-examination on any Affidavit (Rule 39.03). Any such cross-examination does not trigger the mini trial prescribed by Rule 22.04(3). If, on the filed evidence alone, the judge can fairly and justly adjudicate the dispute, there will be no genuine issue requiring a trial and the judge must grant

Summary Judgment. … [23] A judge only proceeds to step two if the assessment of the filed evidence leads to the conclusion that there may be a genuine issue requiring a trial. In that case, the judge then needs to determine if that trial can be avoided by resorting to the fact-finding powers of Rules 22.04(2) and (3).

The guiding principle is that it will always be in the interest of justice for the judge to make use of these fact-finding powers if, applying the principles of timeliness, affordability and proportionality, the judge believes a trial can be avoided and a fair and just result can be obtained. … [ 25 ] It is common ground between the Plaintiffs and the Defendants that the Sale of Goods Act , S.N.B. 2016 c. 110 applies to their Contract which means that the implied warranties of quality and fitness for the purpose as found in

Section 17 of that Act , apply to the sale of the Triple Crown. [ 26 ] In asking for the return of the $830,000.00, the Plaintiffs rely, inter alia, on a finding that they are entitled to reject the Triple Crown in the circumstances of this case because it is not of merchantable quality or fit for the purpose for which it was intended. In support of this submission they rely on the expert evidence of Christa Specht of E.Y.E. Marine Consultants, who is a naval architect and who opined that it would be more efficient to build a new boat than to repair the Triple Crown.

She based her opinion on her own observations as well as those of another naval architect and an electrical engineer as well as the cost estimates of two shipyards. [ 27 ] However, the Defendants submitted the affidavit of Philippe Cormier, a licensed professional mechanical engineer with a practice specialty in navel engineering and architecture who heads Corbo Engineering’s marine division. They were involved in the construction of the Triple Crown. Mr.

Cormier deposes that the Triple Crown met or exceeded industry standards for structural integrity and expressed the opinion that it is a premium value custom-built fabrication of superior quality. He disagrees with the opinion of Ms. Specht that the vessel would be unsuited for its intended purpose as a lobster fishing vessel and George Fry’s assertion that it is “either a constructive total loss or requiring such substantial repairs that it is not of merchantable quality or suitable for the purpose intended.” [ 28 ] Mr. Cormier further takes issue with a number of specific items in the report of Ms.

Specht, including her reliance on the European “Lloyd’s” standards which, he says, do not apply to the construction of the Triple Crown which, he says, was designed and built in accordance with the North American ABS standards which relate to the fabrication of such a vessel built in Canada. [ 29 ] Neither of these expert witnesses was cross-examined at the hearing. [ 30 ] The Plaintiffs submit that Mr. Cormier is not unbiased due to his company’s involvement in the construction of the Triple Crown so his opinion should be disregarded.

While he was unquestionably involved in the construction he nevertheless raises a host of issues related to the merchantability and fitness for the intended purpose of the Triple Crown which, in my view, are best resolved in a trial where the experts can testify in Court and be cross-examined. These issues are grounded in substantial disputes of fact bearing on the issue of whether or not the Plaintiffs are entitled, in law, to reject the Triple Crown and have the $830,000.00 repaid to them.

It is therefore possible that after trial the court may find that the Plaintiffs still owe the Defendants for the balance of the Contract plus extras, i.e., that they are not, in law, entitled to repudiate the Contract. [ 31 ] Moreover, in Hyrniak v. Mauldin , 2014 SCC 7 the court cautioned that partial

Summary Judgment, which is what the Plaintiffs are requesting in this motion, … may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. …

[ 32 ] In Babin v. CJM Dieppe Investment Ltd. 2019 NBCA 44 the court adopted the factors to be considered in dealing with motions for partial

Summary Judgment as set out by the Ontario Court of Appeal in Butera v. Chown, Carrins LLP 2017 ONCA 783 including:

a) whether the issue is severable from the balance of the case;

b) is there a risk of duplicative or inconsistent findings at trial, including if the record at trial could be different from that of the motion; and

c) is the granting of partial

Summary Judgment advisable in the context of the litigation as a whole. [ 33 ] I am not satisfied that the issue of whether or not the Plaintiffs are entitled, in law, to reject the Triple Crown is severable from the various other disputes of fact in this case particularly given the wide divergence of the expert opinions submitted on this motion, neither of which have been subjected to cross-examination. I therefore find that there is a risk of inconsistent findings if

summary judgment were granted in this motion. [ 34 ] I further find that the granting of partial

Summary Judgment in this action is not advisable in the context of the litigation as a whole. [ 35 ] Moreover, I find that due to the complexity of these disputes of fact, resulting in large part from the accident, as well as many other issues that need to be resolved in this litigation, a trial cannot be avoided. Consequently, I find that there would be no merit in ordering a mini trial. [ 36 ] I therefore dismiss the Plaintiffs’ motion for

Summary Judgment. [ 37 ] With respect to the Plaintiffs’ motion to sever the Third Party Claims, I am also not persuaded that would be appropriate as both the main Claim and the Third Party Claim revolve around the accident and both the liability and damages flowing therefrom.

I therefore dismiss the Plaintiffs’ motion for severance as well. [ 38 ] In the cross-motion the Defendants request dismissal of the Plaintiffs’ motion as well as the following relief: 4) Directions be given for the consolidation of a related proceeding before this Court in File SJC-234-2022, or that it be heard concurrently with the within proceeding; 5) The Defendants be authorized to take all reasonable steps necessary for the sale and disposition of the fishing vessel known as the Triple Crown (the “Vessel”) with the view of achieving Fair Market Value and for the purpose of obtaining sale proceeds (the “Proceeds”) stemming from the sale of the said Vessel to a bona fide purchaser; 6) The Proceeds realized on the sale of the Vessel be utilized and applied towards the following related liens and expenses, in the following priority:

a) The costs related to the sale of the Vessel, including the costs for an appraisal of the Vessel, the brokerage fees and the costs of advertising relating to the said sale;

b) Payment in full be made of the possessory lien of the boatbuilder, being the Defendant, Guimond Marine Finishers Inc. (“GMF”), which will include the following: i the Vessel sale Contract Balance in the sum of $153,430.00;

ii the storage costs related to the care and custody of the Vessel up to and including the date of sale and delivery to a buyer, in an amount to be approved by the Court upon further Motion to approve the terms of the sale of the Vessel; iii the insurance costs up to and including the date of sale and delivery to a buyer, in an amount to be approved by the Court upon further motion to approve the terms of sale of the Vessel; iv the security and compliance costs relating to Transport Canada technical requirements, up to and including the date of sale and delivery to the buyer, in an amount to be approved by the Court upon further Motion to approve the terms of the sale of the Vessel;

c) Payment of any mortgage held on the Vessel by any and all creditors of the Plaintiffs, including a marine mortgage held by the Bank of Montreal; 7) Upon completion of the sale of the Vessel in strict compliance with item 5 herein, the buyer shall acquire good title to the Vessel; 8) The net Proceeds that result after payment of the liens and expenses listed at item 3 shall be held in an interest-bearing trust account by the Defendants’ legal counsel, the firm of Ellsworth Johnson Michaud, such net Proceeds to be eventually distributed as per Order of the Court at trial or by further order or directions provided by this Honourable Court, upon motion or otherwise; 9) The Plaintiffs shall produce a more complete and detailed Affidavit of Documents within thirty (30) days that shall contain particulars relative to their expert reports; including communications as between the Plaintiffs, their experts and their counsel; 10) The Plaintiffs be required to attend Examination for Discovery within three (3) months of the requested Order; and 11) … [ 39 ] The Plaintiffs do not object to having the action in Court File SJC-234-2022 heard concurrently with their action which I hereby order. [ 40 ] They also don’t object to providing an Amended Affidavit of Documents to disclose the particulars relevant to their expert reports, which is also ordered. [ 41 ] Neither do they object to attending an Examination for Discovery, provided documentary discovery is complete.

In that regard, I order that Discovery commence by July 21, 2023; provided that any party may return for further directions if they are not satisfied that documentary discovery is complete prior to the scheduled date; for that purpose I will adjourn the Defendants’ cross- motion sine die . [ 42 ] Finally if unsuccessful on their

Summary Judgment motion the Plaintiffs did not object to the Triple Crown being sold as proposed in the Defendants’ motion, which is also hereby ordered. COSTS [ 43 ] On the question of costs, I order the Plaintiffs to pay costs of $3,500.00 including disbursements to the Defendants forthwith ($2,500.00 to Ellsworth Johnson Michaud and $1,000.00 to Ritch Williams & Richards). [ 44 ] I further order that the Plaintiffs pay costs of $1,000.00 including disbursements to the Third Party forthwith.

________________________________________________ William T. Grant Judge of the Court of King’s Bench of New Brunswick