2014 NBCA 33, 2014 NBCA 33

COURT OF APPEAL OF NEW BRUNSWICK COUR D’APPEL DU NOUVEAU-BRUNSWICK 55-13-CA HAROLD GREW (Defendant) APPELLANT HAROLD GREW (défendeur) APPELANT - and - - et - MILEMORE HOLDINGS LTD. (Plaintiff) RESPONDENT MILEMORE HOLDINGS LTD. (demanderesse) INTIMÉE - and - - et - LARRY C. FULLERTON, RICHARD CARVER and DOUGLAS STEWART (Third Parties) RESPONDENTS LARRY C. FULLERTON, RICHARD CARVER et DOUGLAS STEWART (mis en cause) INTIMÉS Grew v. Milemore Holdings, Fullerton et al., 2014 NBCA 33 Grew c.

Milemore Holdings, Fullerton et autres, 2014 NBCA 33 CORAM: The Honourable Justice Robertson The Honourable Justice Quigg The Honourable Justice Green CORAM : l’honorable juge Robertson l’honorable juge Quigg l’honorable juge Green History of Case: Historique de la cause : Decision under appeal: 2013 NBQB 158 Décision frappée d’appel : 2013 NBBR 158 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o. Appeal heard: October 30, 2013 Appel entendu : le 30 octobre 2013

Judgment rendered: May 29, 2014 Jugement rendu : le 29 mai 2014 Reasons for judgment by: The Honourable Justice Green Motifs de jugement : l’honorable juge Green Concurred in by: The Honourable Justice Robertson The Honourable Justice Quigg Souscrivent aux motifs : l’honorable juge Robertson l’honorable juge Quigg Counsel at hearing: For the appellant: Ronald J. Ashfield, Q.C. For the respondent, Milemore Holdings Ltd.: Randy G. Bishop For the respondents, Richard Carver and Douglas Stewart: Gregory E. Murphy, Q.C. No one appeared for the respondent, Larry C. Fullerton.

Avocats à l’audience : Pour l’appelant : Ronald J. Ashfield, c.r. Pour l’intimée Milemore Holdings Ltd. : Randy G. Bishop Pour les intimés Richard Carver et Douglas Stewart : Gregory E. Murphy, c.r. Personne n’a comparu pour l’intimé Larry C. Fullerton. THE COURT The appeal is dismissed, with costs. LA COUR L’appel est rejeté avec dépens. The judgment of the Court was delivered by GREEN, J.A. I.

Introduction [ 1 ] In 1993, Harold Grew was retained by Larry Fullerton to provide legal services to Fullerton’s company, Milemore Holdings Ltd. (Milemore), within the context of the acquisition by Milemore of an existing business. Some years later, Mr. Fullerton alleged there were problems associated with the work done by Mr. Grew which purportedly caused damages to Milemore.

Milemore initiated an action against Grew, who maintains the action is proscribed by statute. In the proceeding under appeal, a judge of the Court of Queen’s Bench, Trial Division, refused to grant Mr. Grew’s motion for

summary judgment pursuant to Rules 22.01(3) and 22.04(1) of the Rules of Court . With leave, Mr. Grew comes before this Court seeking reversal of that decision, and dismissal of the underlying action. For the reasons which follow, I would dismiss the appeal, with costs. II. Background [ 2 ] In the spring of 1993, the respondent Milemore sought to purchase a trailer park owned by Cymor Ltd. situate in the City of Miramichi. The respondent Fullerton was at all material times president of Milemore.

Fullerton was having difficulty securing the financing necessary to make the desired purchase, and approached the respondents Carver and Stewart seeking their assistance. [ 3 ] Richard Carver and Douglas Stewart, who were business brokers, agreed to involve themselves in the venture, and were successful in securing the financing for the acquisition of the trailer park.

However, as a condition of the financing, Carver and Stewart were required to provide personal guarantees on the loan. [ 4 ] While Carver and Stewart were willing to provide their personal guarantees on the financing, they in turn sought some level of protection from Milemore. The motion judge determined that in response to their request, Fullerton, on behalf of the company: […] agreed that Carver and Stewart would assume the management and operation of the trailer park for a period of one year to ensure its viability”. It was also agreed that a numbered company, 054334 N.B.

Ltd. would be incorporated to act as a holding company for the shares of Cymor that were to be purchased to effect the transfer of the trailer park. The funding to finance the purchase of Cymor’s shares was to include the sum of $65,000.00 from Milemore, with the remainder coming from a loan from the lending institution secured by Carver and Stewart, which was the loan they had agreed to personally guarantee. At about the same time during the month of June 1993, Milemore, through Mr.

Fullerton, retained the services of solicitor Harold Grew [the appellant] to draft a Trust agreement that would allow Carver and Stewart to manage and operate the trailer park but at the same time protect Milemore’s beneficial interest in it. [paras. 4-6] [ 5 ] The trust agreement referenced above is at the heart of the present dispute. Grew drafted the agreement, which was then forwarded to, and signed by, Carver and Stewart.

When Grew subsequently presented the agreement to Fullerton for his signature, Fullerton refused to execute on the basis that it named him in his personal capacity as a party to the contract. Fullerton then directed Grew to modify the agreement by adding the words “in trust for Milemore Holdings Ltd.” thereby making Milemore the responsible party, and not Fullerton personally.

With the changes having been made, Fullerton signed on behalf of his company. [ 6 ] Given the narrow confines of this appeal, it is unnecessary to delve into great detail setting out the various problems which apparently beset this entire business venture. Suffice it to say the undertaking failed to unfold as intended, and Milemore commenced proceedings against Carver and Stewart, alleging breaches of the Trust Agreement.

For their part, Carver and Stewart had refused to be bound by the provisions of the agreement, maintaining there were “inconsistencies” between the version of the document they had signed, and that which was executed by Milemore. For this reason, they believed the agreement was unenforceable. [ 7 ] Fullerton deposes he had questioned his lawyer Grew “multiple times,” asking what inconsistencies Carver and Stewart were talking about, and that “each time Grew claimed ignorance”.

Grew eventually advised Fullerton that as Grew may be required to testify as a witness in any court proceedings, Fullerton would have to retain new counsel. At some point in time, Fullerton’s new counsel explained the nature of the inconsistencies complained of. It was subsequent to gaining this understanding of the situation that Milemore took action against Grew, alleging that Grew had breached his contract with, and fiduciary duty to, Milemore, and was negligent in providing advice to his client.

III.

Issues [8] The appellant alleges the motion judge: 1. misdirected himself and erred in law, by failing to direct his mind to the identity of those specific facts comprising material factsforming the basis of the plaintiff’s claim, coupled with the further objective determination as to when such material facts were actuallyknown to the plaintiff, or ought, through the exercise of reasonable diligence, to have been known to the plaintiff; 2. misdirected himself and erred in law, by directing his enquiry to an irrelevant matter, namely the adequacy of those subjectivereasons stated by the plaintiff concerning the plaintiff’s failure to commence its legal action within a period of 6 years from theplaintiff’s knowledge of those material facts forming the basis of the plaintiff’s claim therein; 3. erred in law, by failing to appreciate and determine, for the purposes of discovery of a cause of action, the distinction betweenknowledge of the material facts upon which a cause of action is based, as opposed to an awareness or realization that such facts may giverise to a good cause of action; and, 4. erred in law by purporting to apply a subjective test to the issue of when a particular plaintiff discovered a cause of action referencedin sections 7 and 9 of the Limitation of Actions Act.

IV. Law and Analysis [9] With respect to the grounds of appeal outlined above, I am of the opinion they need not be subjected toindividual scrutiny and analysis, in that this appeal stands to be determined on a much more straightforward basis: the application of therequisite standard of review to the decision of the motion judge. A. Standard of Review [10] Milemore cites and relies upon two decisions of this Court with respect to establishing the standard of review tobe applied in cases such as this. The first is The Beaverbrook Canadian Foundation v.

Beaverbrook Art Gallery, 2006 NBCA 75, 302N.B.R. (2d) 161, wherein Drapeau, C.J.N.B., writes: […] The impugned Order is quintessentially the product of an exercise of judicial discretion. Like any other discretionary judicialdecision, it may be interfered with on appeal only if it is founded upon an error of law, an error in the application of the governingprinciples or a palpable and overriding error in the assessment of the evidence (see British Columbia (Minister of Forests) v.

OkanoganIndian Band, [2003] 3 S.C.R. 371, 2003 SCC 71 at para. 43) or if it is unreasonable, in the sense that nothing in the record can justify it(see The Honourable R.P. Kerans, Standards of Review Employed by Appellate Courts (Edmonton: Juriliber Limited, 1994) at pp. 36-37and Secretary of State for Education and Science v. Tameside Metropolitan Borough Council, [1977] A.C. 1014 (H.L.) Lord Diplock atp. 1064). [para. 4] [11] The second decision advanced by Milemore is Burtt v. Boyle (2011), (NB CA), 382 N.B.R.(2d) 206, [2011] N.B.J.

No. 471 (QL), per Richard J.A.: I point out, however, that the standard of review of discretionary relief is one that is stamped with deference. As I have stated before, alsoin the context of leave to appeal a judge's refusal to adjourn a trial, the law is abundantly clear that the exercise of discretion "will not beinterfered with on appeal unless it can be shown that the motion judge did not direct herself correctly in law and did not observe theapplicable principles, or misapprehended the evidence to the point that an injustice would result": New Brunswick (Minister of Familyand Community Services) v.

A.R. et al. (2007), (NB CA), 322 N.B.R. (2d) 372, [2007] N.B.J. No. 345 (C.A.) (QL),at para. 15.

[…] In my view, a judge of the Court of Appeal should be reluctant to interfere with the process leading to a trial in the Court of Queen's Bench, and there are sound policy reasons for this. It is not the function of the Court of Appeal to supervise every step in the trial process. This is reflected by a standard of review of discretionary decisions that is, as I have stated, stamped with deference. [paras. 12- 16] B.

Key Findings by the Motion Judge [ 12 ] The critical findings underpinning the motion judge’s decision are as follows: It should be noted that the letter of February 22, 1999 from Carver and Stewart to Mr. Grew was received almost six years after the trust agreement had been modified and signed by Mr. Fullerton and it had been acted upon and implemented by the parties for that same period of time.

Further, in their letter of February 22, 1999 Carver and Stewart do no articulate the nature or details of the purported alterations they assert and also refer to two other unrelated areas of concern with the trust agreement and the parties’ relationship upon which they appear to assert as being a basis for their not being bound to the terms of the agreement. In such circumstances, and without deciding the point, it is conceivable that Mr. Fullerton might not comprehend what Carver and Stewart were referring to when they raised the issue of the unspecified “alterations” to the agreement and was looking to Mr.

Grew for some explanation which he says he sought and never received . To this stage, Mr. Grew has not refuted or answered the evidence Mr. Fullerton is relying upon to maintain these assertions. More specifically, Mr. Grew has not asserted that he informed Mr. Fullerton of the nature of the alleged “alterations” or “inconsistencies” Carver and Stewart were referring to as their basis for asserting the unenforceability of the agreement. He did say he informed Mr. Fullerton that he might have to retain new counsel in relation to the dispute over the enforceability of the trust agreement and that he, Mr.

Grew, may have to be a witness. [paras. 17-18] [Emphasis added.] The motion judge went on to conclude: In these circumstances, and based on the record before me on this motion, and in the absence of a response by Grew to Milemore’s assertions relating to the discoverability issue in this motion, I am satisfied that there remain material issues genuinely in dispute relating to the limitation period defence and the related discoverability issue. Accordingly, Mr. Grew’s motion for

summary judgment is dismissed. [para. 24] C.

Summary Judgment, Rule 22 [ 13 ] Rule 22.01(3) of the Rules of Court sets out the parameters within which

summary judgment is available to a defendant: 22.01(3) After he has filed and served his Statement of Defence and before the action is set down for trial, a defendant may apply for

summary judgment against the plaintiff on the ground that there is no merit to the action, or to one or more claims therein, or to part of any such claim. 22.01(3) Après avoir déposé et signifié l’exposé de a défense, le défendeur peut, avant la mise au rôle de l’action, demander un jugement

sommaire contre le demandeur au motif que l’action est sans fondement ou qu’une ou plusieurs des demandes ne sont pas fondées ou encore qu’une

partie d’une de ces demandes ne l’est pas. [ 14 ] Rule 22.04(1) goes on to explain the appropriate disposition of a successful motion:

22.04(1) Where, on a motion for judgment,the applicant satisfies the court that (

a) there is no defence or merit to a claim orpart thereof, and (

b) the applicant is entitled to judgment, thecourt may grant judgment. 22.04(1) Si, sur une motion pour jugement, lerequérant démontre de façon satisfaisante à lacour

a) qu’il n’existe aucune défense ni fondementà la demande ou à une

partie de la demandeet

b) qu’il a le droit d’obtenir un jugement, lacour peut rendre jugement. [15] The decision as to whether or not to grant

summary judgment is without question at the discretion of thepresiding judge, and is therefore entitled to the high degree of deference outlined in paragraphs 10 and 11 above. As stated by DrapeauJ.A. (as he then was) in Cannon v. Lange et al. (1998), (NB CA), 203 N.B.R. (2d) 121, [1998] N.B.J. No. 313 (QL): Manifestly, the court's discretion under Rule 22 extends far beyond the immediate disposition of an action, claim or defence: the ruleconfers a wide discretionary power, the judicious use of which will allow the court to move the action forward in a swift and focusedfashion.

This comprehensive discretion and the wording of Rule 22.04 have driven this Court to formulate and consistently adhere to astringent test before the drastic remedy of

summary judgment can be granted. [para. 16] [Emphasis added.] [16] Cannon v. Lange goes on to provide direction on the proper application of Rule 22: In dealing with any motion for

summary judgment, the court must undoubtedly take a hard look at the pleadings and the evidence todetermine whether there is truly some merit to the action or defence, or part thereof. The court's ability to do so will necessarily dependon the nature and quality of the evidentiary record which the parties can place before it. In some cases, perhaps not this one, theevidentiary constraints imposed by Rules 22 and 39.01(4) will make a judgment without trial inappropriate. Common sense should move the parties to put their best foot forward on a motion under Rule 22.

Such a course of conduct isparticularly wise for a respondent, since he or she has the most to lose. As stated by the Ontario Court of Appeal in 1061590 Ontario Ltd.v. Ontario Jockey Club (1995), (ON CA), 21 O.R. (3d) 547 at 557 in a vernacular expression, the respondent "mustlead trump or risk losing." It will rarely be sufficient for the respondent to promise that evidence, which is admissible pursuant to Rule39.01(4), will be produced at trial: absent a compelling explanation, the respondent is required to produce admissible evidence whichwill prevent a conclusion that the action or defence is bereft of merit.

I have no doubt that, where the ends of justice require, the courtwill allow all appropriate accommodations including leave to file further affidavit evidence. It is up to the moving party to satisfy the court that an apparent factual controversy or credibility conflict is a sham. If material factsremain genuinely in dispute after the court has taken a hard look at the evidence and the pleadings, it is not appropriate to grant

summaryjudgment (see RCL Operators Ltd.). Likewise, where there is an unresolved genuine credibility conflict relating to a material question, itis not appropriate to grant

summary judgment. [paras. 22-24] [17] In the case before us, the motion judge clearly considered the evidence presented, and did not find theappellant’s arguments persuasive. The motion judge concluded that one or more “material facts remain genuinely in dispute” and ruledaccordingly. The grounds of appeal advanced by the appellant fall short of meeting the threshold required by the deferential standard ofreview. I see no reversible error in the decision of the motion judge, and thus no scope for appellate intervention. V.

Disposition [18] I would dismiss the appeal, and order the appellant to pay costs to the respondent Milemore in the amount of$3,000, and one set of costs to the respondents Carver and Stewart in the amount of $1,500. Parenthetically, I note that although Carverand Stewart took no position at the hearing before the motion judge, and adopted the same stance before this Court, they werenonetheless represented by counsel, who filed a brief written submission and appeared at this hearing. As the respondent Fullerton was

unrepresented, and furthermore unable to appear on his own behalf owing to illness, no costs are payable to him. ____________________________________ BRADLEY V. GREEN, J.A. WE CONCUR: ____________________________________ J.T. ROBERTSON, J.A. _____________________________________ KATHLEEN A. QUIGG, J.A.