2020 NLCA 42, 2020 NLCA 42

Brook Construction

(2007) Inc. (appellant) v. North Atlantic Cement and Construction Ltd. (respondent) (19/76) Indexed As: Brook Construction

(2007) Inc. v. North Atlantic Cement and Construction Ltd. 2020 NLCA 42 6 C.A.N.L.R. 145 Court of Appeal of Newfoundland and Labrador Green, Hoegg and Butler JJ.A. December 11, 2020

Summary: North Atlantic Cement and Construction Ltd. filed a claim alleging money due under a construction sub-contract with Brook Construction

(2007) Inc. North Atlantic filed an application for

summary judgment, or in the alternative, for

summary trial. Brook argued that it did not have a contract with North Atlantic, but rather a sub-contract with another company. The

summary trial judge held that a contract between Brook and North Atlantic did exist and entered judgment for the claimed amount of $38,596.77. Brook appealed the decision. Brook accepted the finding that a contract existed with North Atlantic, but argued that the judge erred by entering judgment for the claimed amount without ordering a conventional trial to determine what was owed under the contract, including a determination regarding alleged deficiencies with the work completed under the contract. Held: Appeal dismissed (Butler J.A. dissenting).

Green J.A. (Hoegg J.A. concurring): The judge did not err in law by not conducting a separate threshold analysis of the deficiency/quantum issue. Having decided that the

summary trial process was appropriate for at least some of the issues, namely whether a contract existed, the judge did not have to go through the same threshold exercise for every other issue. There was no denial of procedural fairness due to the ruling on the threshold question at the end of the hearing (paragraphs 91-105). The judge did not err by not finding that there was a genuine issue for trial on the deficiency/quantum issue. The onus was on Brook to raise and prove any claim of deficiencies in the work.

However, such a claim was not properly pleaded and, considering the way in which it was treated by Brook in its submissions, was effectively abandoned (paragraphs 106-138). The judge did not err by finding that there was no genuine issue for trial. It was therefore neither necessary nor appropriate to address the issues regarding the adequacy of the record or the fairness of adjudicating on it (paragraphs 139-143). Butler J.A. (dissenting): The judge erred by failing to address the second sub-question of the threshold analysis.

The judge failed to identify and consider whether there was any apparent reason evident at the threshold stage that would have made it inappropriate to deal with some or all of the issues by way of

summary trial. Where a judge considers only the first sub-question of the threshold analysis, a

summary trial is not available (paragraphs 167-169). The judge erred in failing to consider whether there was any apparent reason evident at the threshold stage which would have made it inappropriate to deal with some or all of the issues by way of

summary trial (paragraphs 170-175). The judge erred by proceeding to

summary trial without advising the parties of the decision on the threshold analysis. The parties did not know what issues the judge had found were appropriate to be determined by

summary trial. This failure deprived the parties of the right to seek directions, re-group and reorganize. North Atlantic would not have suffered non-compensable prejudice if the judge had ruled on the threshold issue first, thereby allowing Brook the opportunity to reconsider its pleadings. Such a deprivation of this opportunity was a denial of procedural fairness (paragraphs 176-200).

Cases cited: Green J.A.: LeDrew v. Brake (1999), (NL CA), 176 Nfld. & P.E.I.R. 288, 49 R.F.L. (4th) 319 (Nfld. C.A.) Abbott v. Sharpe (1994), (NL SC), 121 Nfld. & P.E.I.R. 57, 48 A.C.W.S. (3d) 54 (Nfld. S.C. (T.D.)) Newfoundland and Labrador (Child, Youth and Family Services) v. T.J., 2010 NLTD(F) 21, 300 Nfld. & P.E.I.R. 90 Bank of Nova Scotia v. Atlantic Ocean Dinner Cruises Limited, 2010 NLTD 132 , 2010 NLTD(G) 132, 300 Nfld. & P.E.I.R. 15 Humby Enterprises Ltd. v. Humby, 2003 NLCA 20, 225 Nfld. & P.E.I.R. 268 Centennial Realties Limited v.

Retail Sales Limited, [1979] 2 A.C.W.S. 11, Court file 1979 No. 207 (Nfld. S.C. (T.D.)) Petten v. Stubbs Estate, 2003 NLCA 38, 226 Nfld. & P.E.I.R. 353 Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 55 A.C.W.S (3d) 477(Nfld. S.C. (T.D.)) [Marco No. 2] Daley Brothers Ltd. v. Taito Seiko Co., 2001 NFCA 29, 201 Nfld. & P.E.I.R. 139 Seadane International Inc. v. Morgan International Marketing Co. (1999), (NL CA), 180 Nfld. & P.E.I.R. 97 (Nfld.C.A.) Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 Marco Ltd. v.

Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 308, 55 A.C.W.S. (3d)277(Nfld. S.C. (T.D.)) [Marco No. 1] Young v. Noble, 2016 NLCA 58, 1 C.A.N.L.R. 197 L.H.E. v. D.A.E., 2019 NLCA 66 Dalley v. Northern Arm (Town), 2016 NLTD(G) 68, 381 Nfld. & P.E.I.R. 286 Master Charge v. Price (1977), (NS SC), 42 N.S.R. (2d) 244, [1978] 1 A.C.W.S. 236 (N.S. Co. Court) Colbourne v. MacLean, 2005 NSSC 324 Bartle & Gibson Co. Ltd. v. Spicer (1982), 35 A.R. 324, 13 A.C.W.S. (2d) 358 (Alta. Q.B.) Alberta Mortgage and Housing Corp. v. Delisle Holdings Ltd., 1999 ABQB 721 Browne v.

Dunn (1894), 1893 CanLII 65 (FOREP), 6 R. 67 (U.K. H.L.) Butler J.A. (dissenting): L.H.E. v. D.A.E., 2019 NLCA 66 Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 55 A.C.W.S (3d) 477 (Nfld. S.C. (T.D.))[Marco No. 2] Dalley v. Northern Arm (Town), 2016 NLTD(G) 68, 381 Nfld. & P.E.I.R. 286 Young v. Noble, 2016 NLCA 58, 1 C.A.N.L.R. 197 Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 K.M. v. J.F., 2004 NLCA 67, 241 Nfld. & P.E.I.R. 257 Montreal Trust Co. of Canada v. Hickman, 2001 NFCA 42, 204 Nfld. & P.E.I.R. 58 Shoal Investments Ltd. v. Murphy, 2019 NLCA 78 Rules considered:

Green J.A.: Rules of the Supreme Court, 1986 , rules 14.03, 14.11, 14.13, 14.16, 17, 17A Court of Appeal Rules , NLR 38/16 Butler J.A. (dissenting): Rules of the Supreme Court, 1986 , rules 14.13, 17, 17A, 29 Texts considered: Butler J.A. (dissenting): Halsbury’s Laws of Canada, First Edition, Civil Procedure (2017 Reissue) (Toronto, ON: LexisNexis Canada Inc., 2017) Counsel: Adam Crocker, for the appellant; John Sinnott Q.C., for the respondent. The appeal was heard on February 11, 2020 before Green, Hoegg and Butler JJ.A.

The following judgment was filed on December 11, 2020 by Green J.A., concurred in by Hoegg J.A., with separate dissenting reasons by Butler J.A. ______________________________________________________________ Green J.A.: [ 1 ] The respondent, North Atlantic Cement and Construction Ltd., claimed money allegedly due under a construction sub-contract with the appellant, Brook Construction

(2007) Inc. In an application for

summary judgment, or in the alternative for

summary trial, in which the main issue in contention was Brook’s submission that its sub-contract was with another company, not North Atlantic, the

summary trial judge held that a contract between Brook and North Atlantic did exist and ordered that judgment be entered against Brook for the full amount claimed by North Atlantic. [ 2 ] On this appeal, Brook accepts the finding that a contract with North Atlantic did exist but contends that the

summary trial judge erred in proceeding to enter judgment for the claimed amount of $38,496.77 instead of ordering a conventional trial to determine the amount to which North Atlantic was entitled. The position of Brook was that by denying North Atlantic’s allegation that it had performed the contract in accordance with the plans for the job, Brook had put the question of deficiencies in performance in issue and that because that issue could not have been resolved on a

summary trial, the

summary trial judge should have referred the question of what in fact was owing under the contract to a conventional trial. [ 3 ] The resolution of this appeal involves, amongst other things, consideration of: • The interrelation and the distinctions between the

summary judgment procedure under rule 17 of the Rules of the Supreme Court, 1986 and the

summary trial procedure under rule 17A; • The tests to be employed and the analytical framework to be used when applying rules 17 and 17A; • The scope and operation of the so-called “threshold question” that is engaged when a

summary trial application is made; and • The procedure to be employed on a

summary trial application. Procedural and Legal Background [ 4 ] Because the parties were at cross-purposes throughout the proceeding, both in the court below and in this Court, about the nature of the application and what was required to establish their respective positions, thereby leaving a confusing landscape for the applications judge to navigate, it is appropriate to review the process of such applications to clarify what is expected with respect to these matters. (

a) The Pleadings [ 5 ] North Atlantic issued a statement of claim against Brook alleging: the formation of a sub-contract with Brook, as general contractor, for the installation of a sewer line for a school at St. Anthony, NL; the performance of that sub-contract; and the failure to pay the amount due thereunder. For a claim for money due under a contract, that was all that was necessary to be pleaded. Regarding the

allegation of performance, the statement of claim stated: 6. [North Atlantic] … carried out the contract …in accordance with the plans for the job and the directions of a Government engineeronsite throughout the performance of the job. (Emphasis added.) [6] The defence filed by Brook collectively denied each of the paragraphs in the statement of claim, including the above-quotedparagraph 6, and stated that it was putting North Atlantic “to strict proof thereof”.

The only substantive allegation in the defence assertedthat a contract existed between Brook and another company, C & T Enterprises Ltd., not with North Atlantic, that it had paid C & T allsums due under that contract and asked for a dismissal of North Atlantic’s claim. (

b) The

Summary Judgment Application [7] North Atlantic then filed an application for

summary judgment under rule 17 of the Rules of the Supreme Court, 1986. Theapplication asserted facts relating to the formation of the contract, the price claimed, the performance of the contract by North Atlantic,the submission of an invoice, and the failure to pay. The application referred to the assertion in Brook’s defence that the contract was notwith North Atlantic but stated that there was no defence to the action and asked for

summary judgment under rule 17. [8] The affidavit of the manager of North Atlantic accompanying the

summary judgment application deposed to further details,supported by exhibits, relating to the formation of the contract and its performance by North Atlantic. It repeated the deponent’s beliefthat there was no defence to the claim as outlined in the statement of claim and that the sum of $38,496.77 was “justly and truly owing”by Brook to North Atlantic. In effect, North Atlantic was seeking judgment for a liquidated sum (an additional claim in the statement ofclaim for “general damages for breach of contract” was apparently not pursued), claiming there was “no defence” to the claim. [9] Rule 17 provides: 17.01

(1) Where the defendant has filed a defence … the plaintiff may, on the ground that the defendant has no defence to a claim inthe originating document or a part thereof or has no defence to such a claim or part except to the amount of any damages claimed, applyto the Court to enter judgment against the defendant.

(2) This rule applies to every proceeding begun by statement of claim other than one which includes … [not applicable] 17.02 On the hearing of an application under rule 17.01, the Court may on such terms as it thinks just … (

b) grant an order in favour of the plaintiff on the claim or any part thereof; … (

e) where the defence is to amount only, order an assessment of the amount or reference or accounting to determine the amount; … (

j) award costs; or (

k) grant any other order as it thinks just. 17.03 Where a plaintiff obtains an order under rule 17.02, the plaintiff may continue the proceeding in respect of any remaining part ofthe claim or any other claim or against any other defendant. [10] The proper approach to the application of the rule was succinctly outlined by Cameron J.A. in this Court’s decision in LeDrew v.Brake (1999), (NL CA), 176 Nfld. & P.E.I.R. 288, 49 R.F.L. (4th) 319 (Nfld. C.A.): [6] … The wording of Rule 17 requires that before

summary judgment is granted the defendant have "no defence" to the claim.Applications for

summary judgment involve a two step procedure. First, the plaintiff must, by affidavit, verify her claim and state herbelief that the defendant has no defence. If that hurdle is overcome, in order to successfully resist the claim for

summary judgment, thedefendant, by his affidavit, must disclose facts which, if proven, would constitute a defence. It is not intended that an application forsummary judgment require the applications judge to assess credibility, weigh evidence or make findings of fact. [11] It is important to note that the defendant must do more than stand on a simple denial of the claim in the defence coupled with ademand that the plaintiff be put to the strict proof of his claim (Abbott v. Sharpe (1994), (NL SC), 121 Nfld. &P.E.I.R. 57, 48 A.C.W.S. (3d) 54 (Nfld.

S.C. (T.D.)); Newfoundland and Labrador (Child, Youth and Family Services) v. T.J., 2010NLTD(F) 21, 300 Nfld. & P.E.I.R. 90, per LeBlanc J. at para. 9). A simple denial in pleading is not a “defence” for the purpose of therule. The defendant must plead the defence(

s) he or she is relying on and provide affidavit evidence of material facts which woulddisclose a potential defence. [12] Although Cameron J.A. used the phrase “would constitute a defence”, that should not be read as requiring the demonstration of adefence that was bound to succeed.

Later in her judgment, she referred to various phrases that have been used in the cases to describewhat the defendant must show to defeat the plaintiff’s assertion that the defendant has “no defence” to the claim – a fair probability of abona fide defence; reasonable grounds for setting up a defence; not a sham defence; a triable issue; or something capable of argument.She observed that these differences were “more a matter of semantics than substance” (para. 9). It is clear she was not purporting toimpose any higher standard than is implied by these different terminological formulations.

[13] Any potential defence raised by the defendant on a

summary judgment application must, however, be one that could exist withinthe scope of the defence as drafted (Bank of Nova Scotia v. Atlantic Ocean Dinner Cruises Limited 2010 NLTD 132 , 2010NLTD(G) 132, 300 Nfld. & P.E.I.R. 15; Newfoundland and Labrador (Child, Youth and Family Services) v. T.J., per LeBlanc J. at para.9). This is necessarily so because the pleadings define the scope of the controversy between the parties and are intended to identify thebasis of the claim or defence to which the other side must respond (Humby Enterprises Ltd. v.

Humby, 2003 NLCA 20, 225 Nfld. &P.E.I.R. 268, per Welsh J.A. at paras. 14-19). [14] If the defendant proposes to raise a defence that does not fairly fall within the pleadings, he or she must successfully make anapplication to amend the pleadings to allow the proposed defence to be properly considered as a response to the

summary judgmentapplication (Centennial Realties Limited v. Retail Sales Limited [1979] 2 A.C.W.S. 11; Court file 1979 No. 207). Alternatively, he or shecould obtain the other party’s consent to having the matter dealt with. [15] Furthermore, a plea that simply denied the plaintiff’s allegations and insisted upon strict proof, without more, would in any eventnot be sufficient as a pleading under the general rules of procedure and would be liable to be struck out as frivolous and vexatious (Centennial Realties Limited). Rule 14.03 requires a defendant to set out in

summary form the “material facts” on which he or she reliesfor the defence and rule 14.11 reinforces this by requiring “necessary particulars” in the defence. [16] This requires more than a simple denial and instead requires positive assertions of what specifically the defendant takes issuewith in the plaintiff’s claim. Rule 14.16 stipulates that a party must “specifically deny” any material allegation of fact in the opposingparty’s claim. To do that, the defence should identify what is being taken issue with in the opposing pleading and assert what thecontrary position is.

This approach is mandated because of the general policies underlying the rules of procedure that issues be narrowedas much as possible and that parties should not be taken by surprise by what they are expected to deal with (see rule 14.13). [17] In the current case, Brook did identify the question of whether any contract existed between it and North Atlantic and madeparticular assertions of fact that, if proven, would have had the potential of defeating North Atlantic’s claim. In respect of that matter, itcomplied with what was required as a matter of pleading. It did not do so with respect to any other matter.

In particular, it did not assertany material facts supporting a failure to perform the contract and identifying in what particulars the performance was not in accordancewith the plans for the job. [18] On its face, and without considering anything subsequently filed in response by Brook, it can fairly be said that North Atlantic’sapplication had properly engaged the

summary judgment procedure and complied with the first step referred to by Cameron J.A. inLeDrew. It put forward by affidavit a factual substratum to the allegations in the statement of claim, provided an explanation for theamount claimed and asserted that Brook had no defence. It is clear from the

summary judgment application that North Atlantic wasseeking judgment, not only with respect to a declaration that liability existed, but also for the full liquidated amount that was claimableupon completion of the work. Although the applications for

summary judgment and

summary trial did not expressly use words to theeffect “I want payment of the contract price”, that is implicit from the structure of the allegations in the applications themselves. Noreasonable reading of the applications could lead to any other conclusion. At the time when the applications under rule 17 and 17A werefiled, Brook had not filed any affidavit or other material raising any question about alleged deficiencies in the work.

Consequently, it isnot possible for a party to draw any inference from the language in the applications that would suggest that North Atlantic was merelyseeking a declaration of contractual entitlement without entry of judgment for the claimed amount. There would be no rational basis forNorth Atlantic to so limit its claims.

In any event, what may have been implicit in the language of the applications was made explicit inNorth Atlantic’s pre-trial memorandum: … the Plaintiff asks that the defence be dismissed and the Plaintiff be awarded judgment for the full amount of its claim. (Appeal Book, Tab 8, para. 31) [19] Accordingly, I do not accept my colleague’s assertion in her dissenting reasons that North Atlantic’s pleadings did not set outwith sufficient particularity that the contract price was being claimed in the

summary judgment application or the later-filed

summarytrial application. [20] At that point, the burden shifted to Brook to disclose by affidavit evidence of facts which, if proven, could constitute a defencewithin the pleadings or, more correctly, convince the court that it could not be said there was “no defence.” (

c) The

Summary Trial Application [21] Before Brook filed any material in response to the

summary judgment application, North Atlantic amended it to claim, as analternative to

summary judgment, a

summary trial under rule 17A. The substantive allegations in the application remained the same andNorth Atlantic relied on the same affidavit material that it had previously filed with respect to the

summary judgment application. [22] At the hearing of the application, counsel for North Atlantic explained that he added the

summary trial application as a result ofconversations he had had with counsel for Brook as to what he perceived to be the nature of Brook’s response to the original application.Brook had not at that point filed an affidavit deposing to facts that would potentially support its position, as stated in Brook’s defence,that the contract was with C & T and not North Atlantic. [23] Perhaps out of an abundance of caution and anticipating affidavit evidence that would be advanced in support of Brook’sposition, that the contract was with someone other than it, North Atlantic added the claim for a

summary trial. Certainly, if the affidavitmaterial ultimately filed by Brook were to have demonstrated an arguable case for such a defence, North Atlantic might have been hardpressed to maintain that Brook had “no defence” within rule 17. Adding a request for a

summary trial under rule 17A increased NorthAtlantic’s maneuverability with respect to obtaining judgment for the amount claimed short of a conventional trial, because of the greaterreach of the rule.

[24] The salient features of rule 17A are found in the following provisions: 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 partof the claim in the statement of claim, as the case may be. … 17A.02

(1) On an application under this rule, a party may adduce evidence by any or all of (

a) affidavit; (

b) an answer, or part of an answer, to interrogatories that may have been previously administered; (

c) any part of the evidence taken upon an examination for discovery.

(2) In response to affidavit material or other evidence supporting any application for

summary trial, a responding party may not rest onthe mere allegations or denials in the party’s pleadings, but shall set out, in affidavit material or otherwise, specific facts showing thatthere is a genuine issue for trial. … … 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 shallgrant

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 infavour of any party, 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 to decide thequestions 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 a trial of thatissue or grant judgment with a reference to determine the amount. … 17A.07

(1) Where an application for

summary trial is dismissed, either in whole or in part, the Court may order the proceeding orthe issues in the proceeding not disposed of, to proceed to trial in the normal course or upon the request of any party may order anexpedited trial …

(2) Where a proceeding is ordered to proceed to trial, in whole or in part, the court may give such directions or impose such terms as arejust … [25] Rule 17A.01(1) allows a plaintiff, following filing of a defence, to apply, with supporting affidavit material or other evidencefrom interrogatories or examination for discovery, for “summary trial seeking judgment” on all or part of the claim in the statement ofclaim. The defendant cannot “rest on the mere allegations or denial in the party’s pleadings” but, similarly to the case of

summaryjudgment under rule 17, must set out in evidence “specific facts showing that there is a genuine issue for trial” (rule 17A.02(2)). In thisregard, the defendant has to “put his best foot forward” from the best sources available and cannot argue that the matter should go to afull trial where other evidence under his control could have been presented on the application but was not.

Limited cross-examination onaffidavit evidence is permitted and the court may draw an adverse inference from the failure of a party to cross-examine on or fileaffidavit evidence in reply to, another affidavit (rules 17A.02(3), (5)). [26] As Cameron J.A. observed in Petten v. Stubbs Estate, 2003 NLCA 38, 226 Nfld. & P.E.I.R. 353, there are important differencesbetween applications for

summary judgment and applications for

summary trial: [8] … Rule 17 and Rule 17A are not the same in their application. For the purpose of this case, the most crucial difference is that Rule17 has been interpreted to require the applicant to demonstrate that the defendant has no defence to the claim. If there is any conflictingevidence or any basis on the facts or the law to conclude that there is an arguable case an application under Rule 17 would be denied.Rule 17A, however, permits a judge to grant

summary judgment in circumstances where it would be refused under Rule 17. … [27] The key matter that differentiates the

summary trial application from a

summary judgment application relates to the scope of theinquiry that can be undertaken on the application. There are two stages to the process. First, in much the same way in which the matter isapproached in a

summary judgment application, the court can, on a finding that there is “no genuine issue for trial with respect to a …defence” (compare: “no defence” under rule 17), give

summary judgment on that issue (rule 17A.03(1)). Unlike rule 17, however, adefendant as well as a plaintiff can raise a genuine issue argument under rule 17A. [28] The general principles applicable as a guideline for dealing with an application for a

summary trial were discussed in some detailin Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 55 A.C.W.S (3d) 477(Nfld. S.C. (T.D.)) [Marco No. 2]. This approach has been approved and followed on a number of occasions by this Court: Petten v.Stubbs Estate, per Cameron J.A. at para. 10; Daley Brothers Ltd. v. Taito Seiko Co., 2001 NFCA 29, 201 Nfld. & P.E.I.R. 139, perRoberts J.A. at paras. 12-14; Seadane International Inc. v. Morgan International Marketing Co.(1999), (NL CA),180 Nfld. & P.E.I.R. 97 (Nfld. C.A.), per Green J.A. at para. 52.

[29] In Marco No. 2, the existence of a genuine issue was described as follows: [76]… 9. There will be a “genuine issue for trial” if the issue in question is not spurious and the issue relates to a material fact or point oflaw that is necessary to be decided to resolve the ultimate controversy between the parties. Obviously, there will not be a genuine issuefor trial if the responding party can put forward no evidence that could constitute either a defence or a claim in law. [30] If the judge is satisfied that there is no genuine issue for trial with respect to a claim or defence, he or she must grant

summaryjudgment in respect of that claim or defence. If there are no other genuine issues identified, that will amount to a final disposition of thelitigation. [31] The converse situation – the identification of one or more genuine issues – does not however necessarily result in dismissal of theapplication and the ordering of a conventional trial. The second stage of the

summary trial process requires the court to go on andconsider whether it can nevertheless deal with the matter and grant judgment on an issue or generally unless, in the words of rule17A.03(2): (

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

b) it would be unjust to decide the issues on the application. [32] Effectively, this means that if the record is sufficient to enable adjudication to be made fairly to both sides (i.e. “there is asufficient evidentiary backdrop against which findings of fact can be made and in which there are no material unanswered questions”:Marco No. 2 at para. 76, #13), the court should proceed to do so. This approach has been reinforced in recent years by the decision of theSupreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, which emphasized the utility of using

summary trialsas a means of improving the efficiency of civil justice. For a more detailed discussion of considerations relevant to determining whetherthe record is sufficient to enable the court to find the facts necessary to decide some or all of the extant questions of fact or law andwhether it would be otherwise unjust to decide the issues on the application, see Marco No. 2 at para. 76, # 13-16. [33] Just as in the case of a

summary judgment application under rule 17, the issues that may be dealt with on a

summary trial underrule 17A must, of course, fall within the pleadings. This necessarily follows from the fact that the pleadings define the issues that are indispute.

It is those issues which must be scrutinized to determine whether there is a “genuine issue” for trial and may lead to anadjudication even if there is a genuine issue, provided the court can be persuaded that the record is sufficient and it is not otherwiseunfair to do so. [34] Procedurally, the case law that has been developed in applying rule 17A recognizes that there is a threshold question that, in theabsence of consent by both parties, the court may deal with before addressing the questions whether there is a genuine issue for trialand/or whether the matter can, even if there is a genuine issue, nevertheless be dealt with by

summary trial. See Marco Ltd. v.Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 308, 55 A.C.W.S. (3d) 277(Nfld. S.C. (T.D.))[Marco No. 1] at para. 5; Young v. Noble, 2016 NLCA 58, 1 C.A.N.L.R. 197 at paras. 21-28; L.H.E. v. D.A.E., 2019 NLCA 66 atparas.12-13. [35] This threshold consideration, when raised by a party or the judge, is whether in all the circumstances it is “appropriate” to hearthe

summary trial application (Marco No. 1). In Dalley v. Northern Arm (Town), 2016 NLTD(G) 68, 381 Nfld. & P.E.I.R. 286, Butler J.,parsing the analysis in Marco No. 2 at para. 76, # 3 and 7, described the threshold question as consisting of two sub-questions: (i)whether on the face of the application the applicant has brought himself or herself within the formal requirements of the rule, and (ii)whether, even if he or she has done so, it would be appropriate to deal with the issues presented by way of

summary trial as opposed to aconventional trial or some other means of disposition. [36] The first sub-question essentially involves a determination whether the applicant has complied with the formal requirements ofrule 17A and has put forward some evidentiary basis for the applicant’s position which, if unanswered, could establish all or part of theclaim. Thus if it is obvious from the face of the

summary trial application that the application does not fit the formal requirements of therule (as, for example, if the application is not accompanied by “supporting affidavit material or other evidence” (rule 17A.01(1)) whichon its face could, without considering anything more, establish the applicant’s claim or defence) then it would be open to the judge to puta stop to the application immediately (although in appropriate circumstances, an adjournment to allow the application to be perfectedcould also be granted). [37] The second sub-question is whether there may be any other reason, evident at that preliminary stage, why it may beinappropriate to deal with the issues by way of

summary trial. In Young, this question was described as [27] … whether the nature of the case is such that it is potentially capable of being dealt with in the attenuated manner contemplated bya

summary trial, bearing in mind the comments of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87about the salutary uses of such a procedure to ensure access to justice in appropriate cases. [38] Hryniak amounted to a reminder by the Supreme Court of Canada that the court should be alert to try to find a proportionatemeans of resolving disputes that could avoid lengthy, expensive and unnecessary conventional trials. The

summary trial is a means ofachieving this in appropriate cases. Yet, Hryniak also recognized that there would be some circumstances where a proportionateresponse would not involve a

summary trial and that a

summary trial could be “used inappropriately”, thereby requiring judges to “play arole in controlling such risks” (para. 32). [39] It is these potentially inappropriate cases that the threshold inquiry is designed to address. Absent from the cases that haverecognized a role for threshold screening, is an attempt at definition of the scope of the inquiry and the approach that should beundertaken at this preliminary stage.

[ 40 ] Care should be taken not to elevate the threshold inquiry to the status of a stand-alone, separate mandatory requirement additional to the requirements set out in rule 17A. The threshold inquiry is in reality only designed as a screening device based, as noted in Marco No. 1 , on the notion of the inherent power of the court to control its own process so as to ensure its powers are employed properly, or as expressed in Hryniak , to ensure that “clearly unmeritorious motions for

summary judgment [are not] abused and used tactically to add time and expense” (para. 68). [ 41 ] The inquiry does not require a searching investigation in every case to ensure that the

summary trial process is appropriate to be invoked; rather it is to ensure that the process is not invoked in wholly inappropriate circumstances. This follows from the Court’s endorsement in Hryniak of the more widespread use of

summary trial. There is in reality an acceptance of the use of a

summary trial in most cases, with the burden of persuasion resting on the opposing party to raise the issue and to convince the court that the

summary trial is an inappropriate process to invoke in all the circumstances. Of course, the applications judge of his or her own motion, may raise questions at the threshold stage relating to

summary trial appropriateness as well. [ 42 ] How a proportionate disposition in a given case, as encouraged in Hryniak , is achieved will depend on the structure of the applicable

summary trial regime.

Summary trial regimes are not the same across the country. Ontario was the region that formed the backdrop for the emphasis in Hryniak on whether the record as presented, or as augmented by fact-finding mechanisms within the

summary trial process, is adequate to enable adjudication by

summary trial. That is not identical to the one in Newfoundland and Labrador. [ 43 ] The question of the adequacy of the record to enable an adjudication by way of

summary trial to be achieved fairly in this jurisdiction is built into the

summary trial analysis in rule 17A itself (see rule 17A.03(2)). It does not need to be duplicated as part of the threshold analysis. That said, there may be cases where it is obvious at the threshold stage, from the nature of the intertwining of the issues, the apparent length and complexity of the case, and the potential for lengthy and possibly conflicting viva voce evidence that will necessarily involve credibility assessments, that a

summary trial would be inappropriate. In such cases, it is not inappropriate to weed such cases out at the threshold stage. But such situations must be obvious from the outset. The real fight on record-adequacy should in most cases be left for the application of the second stage of the

summary trial rule itself. [ 44 ] Other circumstances that could be weeded out at the threshold stage because they would be inappropriate to decide without a conventional trial or other form of disposition might include an extremely complex case involving multiple issues with cross-claims or alternate claims by multiple parties. Another circumstance of inappropriateness might involve the inappropriate timing of the

summary trial application, such as the application’s proximity to a trial date that has already been set, as in Marco No. 1 . [ 45 ] As emphasized in Young , the threshold question (involving the two sub-questions outlined above) is separate from and logically preliminary to the dual questions to be answered on the

summary trial application itself. In L.H.E. , Welsh J.A. described the whole procedure as a “two-step” process, the first step involving the threshold issue and its two sub-questions and the second step (assuming the threshold hurdle is satisfied) also involving potentially two further questions on the

summary trial application itself, namely, (

i) whether there is a genuine issue for trial and (ii) even if there is a genuine issue, whether the court is able to find the facts necessary on the existing record to decide the questions of fact or law and whether to do so would not be unjust. A suggested Decision Tree is set out in diagrammatic form as a

schedule to these reasons. The reference to a “two-step” process in L.H.E. should not, however, be taken as mandating a threshold analysis in all cases. The reference to there being, in some cases, a threshold question in Marco No. 1 and Marco No. 2 , was not intended to, and should not, be regarded as requiring a threshold analysis whenever the possibility of a

summary trial is raised. [ 46 ] Although the threshold question, when raised by a party or the judge, must logically be dealt with first, that does not mean that there should be a separate hearing in advance of the

summary trial application proper to resolve the threshold questions. If a threshold question is raised by a party or the judge, it could be conducted in a separate hearing, leaving time to regroup and reorganize their positions in light of a threshold ruling before proceeding further.

But the parties or the judge may alternatively think it more appropriate to address the threshold issues in the context of submissions relating to all issues, recognizing that if at the end of the hearing, the judge’s decision is that the threshold has not been met, there will be a dismissal on the preliminary point, with the rest of the argument, with hindsight, being regarded as unnecessary. [ 47 ] It cannot be said in the abstract that dealing with the threshold question one way or the other (i.e. in a separate preliminary hearing or as part of the

summary trial application proper) will necessarily promote trial efficiency. A separate preliminary hearing may in certain circumstances be more efficient in terms of time- and cost-effectiveness, especially if the result is a determination that it is not appropriate to proceed further by way of

summary trial, thereby eliminating the necessity of preparation for and participation in a full

summary trial. On the other hand, if there is a good possibility of finding that a

summary trial proceeding is appropriate, it would make more sense to deal with all matters in one hearing. [ 48 ] It is not necessary in all cases to address the threshold question in any detail. In fact, dealing with the threshold question will often involve a simple process that can be dealt with quickly and summarily. In some cases, all that may be required is for the judge, having satisfied himself or herself that the application on its face fits within the rule, to confirm with the parties that there is no other consideration (other than possible record-adequacy or other matters properly dealt with under rule 17A.03(2)) that would raise the question of the appropriateness of a

summary trial application in the circumstances. Further, the parties themselves might, by not raising a threshold issue, be content to move directly to a

summary trial application. If so, the applications judge might be justified in passing over the threshold question and moving directly to consideration of the

summary trial application issues unless, of course, the judge of his or her own motion considers it appropriate to raise a concern, given the nature of the case, about the appropriateness of using the

summary trial procedure as a proper mechanism for resolving the issues in dispute. [ 49 ] Whether the threshold question, if engaged, should be dealt with in a separate hearing with a ruling being given before proceeding further, or whether submissions should be received at the beginning of the

summary trial application hearing itself with the ruling delivered either before or at the same time as final judgment on the merits, is a matter of discretion for the applications judge, taking into account the position of the parties on the point and the nature of the issues presented. On appeal, such decisions attract deference, absent an error of law or principle ( Hryniak , para. 81 ).

[ 50 ] An example of a circumstance where it would be appropriate to make a ruling on the threshold question (if one has been raised by a party or the judge) before proceeding further can be found in the facts of L.H.E. The majority in that case concluded that the parties had proceeded on the understanding that the judge would determine the threshold question first and that if the judge decided that the matter was appropriate for

summary trial and judgment, the parties would have an opportunity to present further evidence by cross- examination on affidavits. This Court ruled that it was a denial of procedural fairness (para. 20) for the judge not to have ruled on the threshold (appropriateness) issue first and thereby given the parties an opportunity to cross-examine before proceeding with the

summary trial proper. In other words, the judge made an error in principle in the exercise of his discretion. [ 51 ] In the current case, the applications judge decided to deal with all issues together and stated he would “give a decision with respect to both issues after the fact” (Transcript, February 21, 2009 at p. 18). In other words, he was going to deal with all matters together following the hearing, whether arising from the issue of

summary judgment under rule 17 or from the issue of

summary trial under rule 17A including the threshold issue. Neither party took issue with this approach. (

d) Combined Applications [ 52 ] In this case, both a

summary judgment application and a

summary trial application were presented to the judge. In principle, there is no reason why both could not be dealt with, so long as care is taken to ensure that the differing principles applicable to each application are segregated and properly applied. [ 53 ] Alternatively, the applications judge has a discretion to proceed to deal with the issues presented under the more expansive rule 17A rather than under the more restrictive rule 17. In Ledrew v. Brake , Cameron J.A. noted that if the applications judge determines

summary trial is more appropriate, as where there are questions of credibility to be resolved – something that is not possible on a

summary judgment application – he or she can move directly to a consideration of whether a

summary trial would be appropriate (para. 9). I would add that should only be done where there will be no prejudice in the result affecting the other party. (

e) Subsequent Filings [ 54 ] Subsequent to North Atlantic’s amending its application to include the application under rule 17A, Brook filed an extensive affidavit from Brook’s engineering project manager in which, amongst other things, he deposed to interactions between North Atlantic, Brook and the principal of C & T which he said showed that the sub-contract was with C & T and not North Atlantic and that North Atlantic was in fact a sub-sub-contractor with C & T.

He also deposed to what he said were deficiencies in the conduct of the work by North Atlantic. [ 55 ] North Atlantic replied with a counter-affidavit responding to the evidence given by Brook as to the contractual relationships of the parties. It also asserted that the only defence pleaded by Brook was a “denial of a contract between [North Atlantic] and [Brook] with respect to the placement of the sewer line. There is no defence by [Brook] as to quality of work” (Appeal Book, Tab 16, at para. 10).

The deponent nevertheless went on and made evidentiary submissions which, he said, established that the work had been satisfactorily completed. [ 56 ] Rule 17A.02(6) requires each party in a

summary trial application to file with the court and serve on the other party a memorandum consisting of a concise statement of the facts and law relied on by the party. In the context of a

summary trial application, this is an important requirement which helps define the issues really in dispute and enables the parties to set out a framework as to how the various sub-issues on the application should be addressed and dealt with. Counsel who ignore this requirement or do not take it seriously do so at their peril. It is almost in the nature of a quasi-pleading. If issues are not dealt with in the memorandum, the judge may be justified in disregarding them. [ 57 ] In this case, both parties filed a memorandum. Their contents are relevant and instructive to the disposition of this case. [ 58 ] In North Atlantic’s case, it asserted that it had made out a case for

summary judgment and that Brook had not deposed to facts that if proven would constitute a defence. It also reasserted that the only defence pleaded related to whether the contract was with C & T and not North Atlantic. It also asserted that the issue of quality of work was not properly before the court because it was not pleaded as a defence. But, it went on, “without prejudice… that the defence of deficient work cannot be a defence against the

summary judgment application”, (Appeal Book, Tab 8, at para. 19) and presented argument based on the affidavit evidence that Brook had in any event failed to show that the work was in any way deficient. North Atlantic’s approach was to place primary emphasis on the

summary judgment application. It did not address whether the threshold test under rule 17A had been met nor did it address whether there was a genuine issue for trial or whether, even if there was a genuine issue, the court should nevertheless grant judgment or remit it for a conventional trial. [ 59 ] Brook’s memorandum, on the other hand, approached the matter as if the battleground was under both rule 17 and rule 17A.

It submitted, first, that Brook had presented sufficient evidence in response to North Atlantic’s rule 17 application to establish that there was “a triable issue, a substantial question of law, a fair case for a defence, reasonable grounds for setting up a defence, a fair probability of a bona fide defence and a basis for an arguable case on a matter of substance” relating to who the parties to the sub-contract were, and that therefore the application had to be dismissed (Appeal Book, Tab 9, at para. 16). [ 60 ] The memorandum then went on and addressed both the threshold issue and the substantive issues that present themselves on a

summary trial application under rule 17A. It asserted that the threshold test was not met because it was not appropriate to decide the case by way of

summary trial due to the absence of any evidence as to the formation of the contract from a principal player from C & T. Alternatively, it submitted: … in the event that the court decides that the threshold test is met, there is a genuine issue for trial in this matter. That issue is of course whether there was a contract between [North Atlantic] and [Brook] with respect to the Revisions.

(Appeal Book, Tab 9, at para. 26; underlining added.) [ 61 ] In support of the argument that there was a genuine issue, Brook referred to the conflicting affidavit evidence relating to contract formation which showed, in effect, that it was not a spurious issue and related to a material fact that was necessary to be decided to resolve the ultimate controversy between the parties.

Finally, Brook also submitted that it would not be appropriate for the court, even if there was a genuine issue, to proceed to decide the matter because credibility issues were engaged that could not be properly resolved without hearing evidence from other witnesses not presently before the court. Brook therefore asked for the

summary trial application to be dismissed as well. [ 62 ] What is significant, however, is that Brook’s memorandum did not address North Atlantic’s submission that the deficiency issue could not be raised because it was not pleaded, and presented no substantive argument on the evidence relating to whether deficiencies existed. The Application Hearing [ 63 ] At the commencement of the hearing both parties and the judge accepted that a “threshold” issue had to be dealt with but counsel differed as to what that threshold issue was. [ 64 ] Counsel for North Atlantic took the position that the matter should be dealt with as a

summary judgment application under rule 17. He submitted that North Atlantic had provided sufficient affidavit evidence to satisfy the first step outlined by Cameron J.A. in LeDrew and that therefore the “threshold” issue for the purpose of a rule 17 application had been met, thereby requiring Brook to respond. He further submitted that Brook’s response failed to establish that a contract did not exist between North Atlantic and Brook. [ 65 ] Counsel for Brook insisted that the application should be dealt with under rule 17A.

He took the position that the threshold issue that had to be dealt with was the one, described earlier, that should be decided before the court proceeds to deal with the

summary trial application, not a

summary judgment application. He also argued that the rule 17 application should be dismissed because Brook had presented an arguable case in support of its position as to who the contract was with. [ 66 ] Little progress was made in clarifying what it was that should be initially dealt with as a threshold issue.

The discussion among counsel and the judge degenerated into an unfocused discussion that ranged over what the threshold issue was, what the nature and strength of the affidavit evidence disclosed with respect to who the contract was with, whether there should be cross-examination on affidavits for either or both the rule 17 and 17A applications and whether additional evidence from C & T should have been called, amongst other things.

This preliminary discussion (which occupied 18 pages of transcript) did not resolve what the threshold question was; instead, as indicated previously, it ended with the judge saying he would give a decision on all matters at the end of the hearing.

The matter then moved into cross-examination on the affidavits. [ 67 ] I would observe at this point that the failure to define what application was being dealt with, what threshold questions, if any, were necessary to resolve, and how the submissions should be structured and presented made for a situation where the parties were essentially “punching into the fog” and not necessarily engaging with each other in a common debate. It made the applications judge’s job that much more difficult. [ 68 ] In final summation, counsel for North Atlantic again reiterated that the application was for

summary judgment but also suggested that his case was made out under the principles relating to

summary trial set out in Marco No. 2. He focused on the issue of whether there was a contract between Brook and North Atlantic and stressed that Brook had not put its evidentiary “best foot forward.” He submitted that on the evidence, the case for liability had been made out. He made no further submissions relating to the threshold issue and also made no reference to Brook’s allegation of deficiencies except to assert again that Brook had not pleaded deficiencies as a defence. [ 69 ] Counsel for Brook reiterated that there was sufficient evidence to resist a

summary judgment application. He also submitted that that same evidence demonstrated there was a genuine issue for trial under rule 17A and, further, that the court should not proceed to adjudicate the issue of whether there was a contract between North Atlantic and Brook because the available record was not sufficient to enable the court to make a fair determination of that issue.

The absence of a sufficient record also meant, counsel submitted, that the threshold test had not been met because first hand evidence from a principal of C & T as to the relationship between the parties was not before the court. [ 70 ] No submissions were made by Brook responding to North Atlantic’s argument that the issue of deficiencies had not been properly raised on the pleadings. Nor did Brook make specific submissions on the issue of deficiencies or suggest that the issue of deficiencies could not be adjudicated on a

summary trial even if the issue of the existence of the contractual relationship could. The Decision [ 71 ] The applications judge treated the case as an application for

summary trial under rule 17A. He made no reference to rule 17. Although he gave no reasons for proceeding under rule 17A as opposed to rule 17, he was justified in treating the case as an application for

summary trial. From a review of the record, I agree with counsel for Brook that Brook had, within the second step of the

summary judgment analysis in LeDrew v. Brake as discussed in these reasons, presented sufficient evidence to establish an arguable case or a triable issue that was not a sham as to the possibility of the contract being with C & T and not North Atlantic. Accordingly, it could not be said that Brook had “no defence” within the meaning of rule 17.01(1). The

summary judgment application would not therefore have succeeded. [ 72 ] In the circumstances of this case, therefore the real issue was whether there could be a

summary trial of one or more of the issues relevant under rule 17A and a ruling made on the existing record as to whether North Atlantic’s claim had been established. [ 73 ] As to the threshold issue under rule 17A, the judge simply stated as follows:

[5] [North Atlantic] satisfied the threshold test for the application of the Rule by putting forward an evidentiary basis for its position. [ 74 ] The only other reference by the judge to a threshold test occurred in a quotation of the

summary trial principles outlined in Marco No. 2 at para. 76, #7: If the applying party satisfies the threshold test for the application of the rule by putting forward an evidentiary basis for his or her position, the responding party then has an evidentiary burden to demonstrate that there is a genuine issue for trial... [ 75 ] It is obvious from the similarity of the language chosen by the applications judge and this quotation from Marco No. 2 that the judge was purporting to apply that formulation of the test.

While the test has been elaborated and refined somewhat in Dalley and subsequent cases, it cannot be said that the judge misapplied or did not apply the correct approach to determining the threshold issue. While, since Dalley , a further sub-question has been postulated for the court to consider, or the parties to raise, (namely, whether there was any other apparent reason making it inappropriate to deal with the issues on

summary trial), the parties did not identify any, such as length and complexity of the case or inappropriate timing issues, that would have had application, and the judge was apparently content with this approach. [ 76 ] The only submission made by Brook that could possibly have related to the threshold issue was that the insufficiency of the record relating to contract formation made it inappropriate to deal with the matter as a

summary trial. But that in fact was not a matter appropriate to be raised as part of the threshold issue. The sufficiency of the record is more properly dealt with on the

summary trial application itself as part of the analysis, following a determination that there is a genuine issue for trial, of whether, under rule 17A.03(2) the judge is able “on the whole of the evidence before the Court on the application to find the facts necessary to decide the questions of fact or law.” [ 77 ] Accordingly, there being no other reason raised for not allowing the

summary trial application to proceed, the judge was justified in not dismissing the application on a threshold analysis. It was proper in these circumstances to proceed to determine whether there was a genuine issue for trial and, if not, grant judgment to North Atlantic or, if there was a genuine issue, to go on and consider whether he should determine the issues in the context of a

summary trial instead of a conventional trial. If so, he was then mandated to proceed to make an appropriate disposition. [ 78 ] The judge next addressed the evidence submitted by each party as to whether a contract existed between Brook and North Atlantic.

Having concluded that North Atlantic had shown on the evidence it had submitted that “there was an offer, an acceptance of the offer and performance” (para. 4), and noting that Brook had the burden to demonstrate there was a genuine issue for trial and in discharging that burden had to put its evidentiary “best foot forward” to demonstrate that a contract existed between Brook and someone other than North Atlantic (paras. 7-8), he concluded that Brook’s evidence was wanting.

It had not put its best foot forward because crucial first hand evidence from a principal of C & T as to the existence of key conversations relevant to contract formation could have been presented by affidavit by Brook but was not. (I would observe that counsel for Brook had correctly pointed out in argument that the relevant witness was not under its control and could not be compelled to provide such an affidavit; however, that is not a full answer because he could have been compelled to answer questions on discovery and that evidence could, under rule 17A.02(1)(c), have been used on the application). [ 79 ] The judge summed up his conclusion on the issue of whether a contract existed between North Atlantic and Brook as follows: [16] It was incumbent upon [Brook] to show that the contract was between itself and a party other than [North Atlantic].

It could have done so easily with an affidavit from the third party. It chose not to do so.

It is therefore, caught by lack of evidence on an issue that is material, if not critical, to its defense of the application. [ 80 ] Without further analysis or discussion, the judge then concluded that North Atlantic was entitled to judgment for the amount of its claim: [17] Under the circumstances, I have no option but to grant to [North Atlantic] the relief that it seeks, namely judgment in the amount of $38,496.77, together with pre-judgment interest thereon. [ 81 ] It is this final step (entering judgment for the amount claimed, rather than simply declaring that a contract between North Atlantic and Brook existed) that is the focus of this appeal.

Appeal Issues [ 82 ] Brook submits that the

summary trial judge erred by failing to order a conventional trial on the issue of damages following the decision that a contract did in fact exist between North Atlantic and Brook. [ 83 ] Brook focuses on the general denial in paragraph 2 of the defence, which denied all of the substantive allegations in the statement of claim, including the allegation in paragraph 6 to the effect that North Atlantic had “carried out the contract … and all work in accordance with the plans for the job and the directions of a Government engineer on site throughout the performance of the job”.

It submits that this denial, coupled with its assertion in the defence that it put North Atlantic “to the strict proof thereof”, effectively put the correct performance of the work – and the determination of what was actually owed under the contract – in issue. [ 84 ] The sufficiency and quantum of the work being in issue, the judge was required, so Brook argues, to apply a proper analysis of

summary trial principles to that issue, something he failed to do. [ 85 ] Specifically, Brook submits the

summary trial judge: • failed to apply the “threshold” test to the sufficiency/quantum issue; • failed to determine whether there was a genuine issue for trial with respect to the sufficiency/quantum issue; and

• misapplied the applicable principles with respect to pleadings (by concluding that he could not consider Brook’s evidence relative to whether North Atlantic carried out the work in accordance with the plans for the job) and thereby committed a palpable and overriding error in his dealing with evidence that was relevant. Analysis [ 86 ] In Marco No. 2 , item #10 of paragraph 76 states: The court must approach the test for application of Rule 17A on an issue by issue basis.

Just because it is determined that a particular issue must go to trial, it does not follow that the court cannot adjudicate summarily on other issues if the pre-conditions for the application of Rule 17A have been made out in respect of those other issues. [ 87 ] Applied to the instant case, this would mean that just because North Atlantic established that it had a contract with Brook, it did not follow that the court could automatically adjudicate as well on the amount due under that contract. [ 88 ] Counsel for Brook is correct when he asserts that on a

summary trial the relevant issues must be dealt with severally. That requires application of the

summary trial principles on an issue by issue basis. It is only if the determination is made that all relevant issues can and should be determined in favour of the applicant that the judge is entitled to enter final judgment in the applicant’s favour. Otherwise, if some of the issues are, in the opinion of the judge, not capable of being decided summarily, those issues must be referred to conventional trial or some other form of adjudication. [ 89 ] Brook therefore says that if the judge had turned his mind to the question of whether the principles for application of a

summary trial justified dealing with the sufficiency/quantum issue summarily, he would and should have concluded that that issue should have been dealt with by a conventional trial. In not doing that, counsel says that the judge erred in law. [ 90 ] I will deal with Brook’s specific arguments in the context of an analysis of the applicable

summary trial principles. (

a) The Threshold Questions [ 91 ] The purpose of applying a threshold test to an application for

summary trial is to weed out at a preliminary stage those cases which, because of the way in which the application has been made, or the nature and complexity of the case, in terms of issues or parties, or its timing, it is clear that the purpose of the rule will not be met by allowing the application to proceed. [ 92 ] In Marco No. 1 , the point was explained this way: [5] As a matter of general principle, the court, as a threshold matter, may decline to hear a

summary trial application if, considering all the circumstances it is appropriate to do so. This follows from the inherent jurisdiction of the court to control its own process and from the language of Rule 17A.01(1) which talks in terms of a party being able to "apply" for a

summary trial rather than having a "right" to a

summary trial in all circumstances. Thus, where an application is brought close to trial in respect of an issue which is not severable from other issues, and where substantial time will be required for hearing the application, these are factors which may persuade an applications court to decline to hear a Rule 17A application… [ 93 ] The example given in Marco No. 1 of denying a

summary trial as a threshold matter – where an application is brought too close to a trial that has already been scheduled – is, of course, only one circumstance that may justify the court in refusing to hear the application. As mentioned earlier, the court may decline to hear a

summary trial application if the application itself and the affidavit evidence supporting it does not on their face bring it within the formal requirements for the application of the rule or do not disclose any evidentiary basis for the claim or defence asserted (the first sub-question mentioned in Dalley ). [ 94 ] Further, if it is apparent from the face of the application that the circumstances of the case, such as its length, complexity, timing or the degree to which credibility issues may be involved, make it likely that a conventional trial would be required to resolve a substantial portion of the issues (even if a

summary trial might be able to resolve some of them), the court may also, as a threshold matter, decline to allow the

summary trial process to proceed at all. This is the second branch of the threshold question mentioned in Dalley. [ 95 ] I would reiterate the point mentioned earlier that the second branch of the threshold inquiry is not the place to embark on a detailed examination of whether the

summary trial record is sufficient to enable the

summary trial judge to decide a particular issue. Resolution of that question is reserved as part of the

summary trial process itself when the court is required, under rule 17A.03(2)(

a) and (

b) to address the question whether, even if there is a genuine issue for trial, it is nevertheless appropriate and not “unjust” to adjudicate a particular issue summarily. [ 96 ] At the threshold question stage, the focus is on the more general question of whether the

summary trial, as a process , is appropriate to be invoked at all . Thus, for example, it might be suitable to have a

summary trial for one discrete issue but the presence of a substantial number of other interconnected issues that would likely not be capable of being resolved other than by a conventional trial, might nevertheless lead to the conclusion that the

summary trial process would not result in resolution of enough of the outstanding issues to make it efficacious to invoke the

summary trial process at all, or, as mentioned in Hryniak , it might “run the risk of duplicative proceedings or inconsistent findings of fact” (para. 60). [ 97 ] Conversely, once the application to invoke the

summary trial process passes the threshold hurdle, it is not necessary to apply the threshold considerations again on an issue-by-issue basis where the question arises in the course of the process as to whether a particular issue can be resolved on the existing record. Once the

summary trial process is engaged, all issues will be subjected to the two-step

summary trial analysis. Those issues that cannot be resolved justly on the record will be identified as part of the rule 17A.03(2) analysis and directed to some other form of resolution, be it a conventional trial or, say, a determination of fact or law under rule 38. [ 98 ] In the current case, the applications judge decided to proceed by way of

summary trial because the threshold hurdle had been

cleared. The record of argument in the court shows that the submissions were almost exclusively directed to the question of whether the evidence established that a contract existed between North Atlantic and Brook as opposed to being a contract between North Atlantic and a third party. Although the judge did not explicitly say so, it seems clear from the way the matter was argued that the significance of the question of whether the contract existed (which, as he said, was supported by an evidentiary base, in the context of the whole litigation) is what justified him not rejecting the

summary trial application on the basis of not clearing the threshold hurdle. [ 99 ] Admittedly, as counsel for Brook pointed out, the judge did not appear to consider, as a threshold issue, the appropriateness of whether the sufficiency/quantum issue was appropriate for a

summary trial. In the circumstances, however, he did not have to do so as part of a separate threshold analysis applied to that issue. Having decided that the

summary trial process was appropriate for at least some issues (in this case, the main question of whether a contract existed), he did not have to go through the same threshold exercise for every other issue individually. He was simply required, as part of the

summary trial process, to apply the

summary trial tests to each issue and, if a particular issue, applying the correct tests, was determined not to be suitable for

summary trial adjudication (because, for example, the record was not adequate), to decline to resolve that issue. [ 100 ] A further consideration (even though it was not argued as a ground of appeal) is whether it was appropriate for the applications judge to consider and pronounce his decision on the threshold issue at the same time as his decision on the merits, rather than giving a separate and earlier ruling, thereby giving the parties time to consider the implications of the threshold decision before proceeding to deal with the merits of the

summary trial application. It is arguable that knowing the matter would proceed to a

summary trial might have prompted one or both of the parties to change their strategy. For example, Brook might have applied to amend its defence to raise further issues regarding sufficiency of performance of the contract or might have sought to present further evidence or engaged in a broader cross-examination. Of course, such applications would not necessarily have been successful in any event. [ 101 ] I am not satisfied that the decision of the judge to proceed as he did showed any error of law or error of principle. The decision of how to deal with the question of appropriateness or proceeding by way of

summary trial is a discretionary one ( Hryniak ). There is no basis for disturbing the judge’s discretion in this regard. This case is materially different from this Court’s decision in L.H.E. , on which my colleague relies in her dissenting reasons. Unlike that case, the parties in the current matter had not expressed expectations that they would have an opportunity to cross-examine deponents or to take other steps before proceeding with a

summary trial proper. [ 102 ] An expectation that the threshold issues would be dealt with and announced before proceeding to a

summary trial, as my colleague in essence imputes to Brook, is not borne out by the record. In fact, when the judge advised them that he was going to deal with all issues at the end of the full hearing, the parties did not object or even indicate that such a procedure was contrary to their expectations. Furthermore, Brook made no submissions regarding inappropriateness except with respect to the accuracy of the record (which was in any event to be dealt with on the

summary trial itself under rule 17A.03(2)) and then only in relation to the contract- existence issue, not the deficiency/quantum issue. [ 103 ] In these circumstances, there was no denial of procedural fairness to either of the parties by ruling on the threshold question at the end of the hearing. In the circumstances of this case, requiring the judge to decide otherwise and deliver a ruling on the threshold issue before proceeding to deal with the application of rule 17A.03 would be tantamount to ruling that a separate hearing on the threshold issue is necessary in virtually all cases.

That is something that is not required. It is only the exceptional case where that is necessary as a matter of law or principle, as in L.H.E. , where the majority found that procedural fairness considerations were engaged. [ 104 ] I would also add that the record of pre- and post-application submissions on behalf of Brook discloses that the only submission on the threshold question related to the insufficiency of the record to enable the contract-existence issue to be resolved. Nothing was said about the appropriateness of the record to enable the deficiency/quantum issue to be decided.

In either case, however, these submissions were, for reasons explained above, more appropriate to be considered under rule 17A.03(2)(

a) and (

b) if the analysis got that far. [ 105 ] Accordingly, Brook’s argument that the applications judge erred in law by not conducting a separate threshold analysis of the deficiency/quantum issue cannot succeed. (

b) Summary Trial Question – Genuine Issue [ 106 ] If the threshold hurdles are cleared, the first question for determination on a

summary trial application itself is whether there was a genuine issue for trial (rule 17A.03(1)). If there is no genuine issue, then

summary judgment can be granted. In this case, North Atlantic was seeking judgment on the basis that there was no defence to their contractual claim. The judge addressed Brook’s pleaded defence that the contract was with a third party and not Brook. He analyzed the evidence on the record and found that Brook had not put its best foot forward in support of its “third party” defence and that “the evidentiary underpinning of [Brook’s] position has crumbled” (para. 14). He effectively concluded that a contract did exist with Brook.

As noted earlier, this point has not been appealed. [ 107 ] In conducting this analysis, the judge did not expressly deal with whether there was a genuine issue for trial on the issue of contract formation.

It is obvious, however, that from his recitation of the principles summarized in Marco No. 2 (in particular, para. 76, item #7) and his proceeding to an analysis of the evidentiary record that he must have concluded that a genuine issue had been disclosed and that the case had to be dealt with under rule 17A.03(2). [ 108 ] With respect to the deficiency/quantum issue, the judge said nothing except to note that, having dismissed Brook’s “no contract” defence, he had “no option but to grant to [North Atlantic] the relief that it seeks, namely judgment in the amount of $38,496.77” (para. 17).

Under rule 17A, he was required to apply the genuine issue test separately to each identified issue and, even if he found there was a genuine issue to be tried under rule 17A.03(1), he had to go on and decide under rule 17A.03(2) whether he was able on the whole of the evidence to find the facts necessary to decide the questions of fact or law and whether it would in all the circumstances be just to do so.

Brook submits that the judge’s apparent failure to conduct such an analysis amounted to legal error. [ 109 ] In the circumstances of this case, considering the pleadings and the submissions of the parties, I am not satisfied that any error has been disclosed that would justify the overturning of the judge’s decision. The deficiency/quantum issue was not properly identified as a live issue to be addressed.

[110] It is open to this Court to decide from a review of the pleadings and the application record whether there was in fact a genuineissue for trial on the deficiency/quantum issue. [111] Regarding the pleadings, I have already noted that Brook asserts that the statement in its defence simply denying North Atlantic’sassertion in the statement of claim that it carried out the work “in accordance with the plans and specifications of the job” and puttingNorth Atlantic “to the strict proof thereof”, coupled with affidavit evidence filed on the application suggesting there were deficiencies inthe work, was sufficient to show there was a genuine issue for trial. [112] As noted earlier, North Atlantic took issue with the appropriateness of Brook leading affidavit evidence suggesting there weredeficiencies in the work because, it says, the pleadings did not put any question of the amount of the claim in issue.

It took this positionin its pre-trial brief and in its submissions at the end of the case. [113] In its pre-trial brief, North Atlantic put the point starkly: [Brook] in its Defence pleaded one defence only namely that it denied there was a contract between [North Atlantic] and the [Brook]. Noclaim was made in the defence concerning quality of the work … [T]he question of quality of work is not properly before the courtbecause it has not been pleaded and no application to amend the defence has been made.

In [North Atlantic’s] respectful submission thequestion of quality of work is not a defence because it has not been pleaded. (Appeal Book, Tab 8, para. 17; emphasis added.) [114] North Atlantic referred to and relied on Bank of Nova Scotia v. Atlantic Ocean Dinner Cruises Ltd., where in an action on aguarantee, Hall J. held that in an application under the

summary judgment rule (rule 17) the existence of evidence supporting facts thatcould theoretically be a defence to a claim could nevertheless not constitute a good defence if that defence had not been properlypleaded. The defendant must show a good defence within the pleading as drafted. [115] Although the Atlantic Ocean Dinner Cruises case was decided under rule 17, the same point is applicable under rule 17A. Alllitigation must be conducted within the scope of the pleadings as originally drafted or as properly amended.

If a litigant wishes to defenda contract claim on the basis that the claimant breached the contract through defective performance and that claims for such deficienciescan be set off against the contract price, he or she must plead the breach and give reasonable particulars so that the claimant will not betaken by surprise. [116] On the appeal, Brook nevertheless submitted that because the question of deficiencies was referred to in Trent Burden’s affidavitevidence, and Brook denied in its defence that North Atlantic carried out the contract, the judge had an obligation to address whetherthere was a genuine issue regarding proper performance and even if there were, whether the matter could be resolved summarily.

Inessence, Brook says that the denial of North Atlantic’s allegation of proper performance without any positive assertion of defectiveperformance was sufficient to put the matter in issue. [117] In support of its position, Brook relied on Master Charge v. Price (1977), (NS SC), 42 N.S.R. (2d) 244, [1978]1 A.C.W.S. 236 (N.S. Co. Court).

In an action for recovery of amounts due as a result of use of a credit card, the defendant denied “eachand every allegation set forth in the plaintiff’s statement of claim…” but with the exception of challenging the status of the plaintiff as alegal entity, pleaded no other specific defence. The plaintiff applied to strike out the defence and for

summary judgment. O’Hearn,C.C.J. refused to strike out the defence on the ground that a “rolled-up plea” was permitted under the Nova Scotia rules of civilprocedure to obviate the necessity of traversing every claim allegation individually to avoid being deemed to have admitted everythingnot specifically denied, as was required under the former rules of pleading.

The Nova Scotia rules at that time were very similar to theRules of the Supreme Court, 1986 when later adopted in this province. [118] Master Charge does not, however, stand for Brook’s proposition that the making of a rolled-up plea or general denial eliminatesthe necessity of a defendant having to plead specific defences he or she wishes to raise. It merely allows a defendant to deny theplaintiff’s factual allegations compendiously without havin

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