2018 NBCA 8, 2018 NBCA 8

COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 69-17-CA J. SHAWN O’TOOLE APPELLANT J. SHAWN O’TOOLE APPELANT - and - - et - DAVID L.E. PETERSON RESPONDENT DAVID L.E. PETERSON INTIMÉ O’Toole v. Peterson, 2018 NBCA 8 O’Toole c.

Peterson, 2018 NBCA 8 CORAM: The Honourable Chief Justice Drapeau The Honourable Justice Richard The Honourable Justice Quigg CORAM : l’honorable juge en chef Drapeau l’honorable juge Richard l’honorable juge Quigg Appeal from a decision of the Court of Queen’sBench: May 25, 2017 Appel d’une décision de la Cour du Banc de laReine : le 25 mai 2017 History of Case: Historique de la cause : Decision under appeal: 2017 NBQB 94 Décision frappée d’appel : 2017 NBQB 94 , 2017 NBBR 94 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: January 15, 2018 Appel entendu : le 15 janvier 2018 Judgment rendered: January 25, 2018 Jugement rendu : le 25 janvier 2018

Reasons delivered March 29, 2018 Motifs déposés : Le 29 mars 2018 Counsel at hearing: For the appellant: Richard Scott, Q.C. For the respondent: David W. McMath Avocats à l’audience : Pour l’appelant : Richard Scott, c.r. Pour l’intimé : David W. McMath THE COURT Appeals are against dispositions, not the reasons proffered in support. The motion judge granted

summary judgment dismissing the appellant solicitor’s Amended Third Party Claim against the respondent solicitor for breach of his alleged undertaking to obtain a discharge of mortgage. Although the judge’s reasons feature errors of fact and law, reversal is unwarranted,

summary judgment being the correct disposition. Accordingly, the appeal is dismissed, with costs to the respondent. LA COUR Les appels sont interjetés des dispositifs, et non des motifs formulés à l’appui. La juge saisie de la motion a accordé le jugement

sommaire et rejeté la mise en cause modifiée qui a été déposée par l’avocat appelant contre l’avocat intimé pour non-respect de l’engagement qu’il aurait pris d’obtenir une mainlevée hypothécaire. Même si les motifs de la juge révèlent des erreurs de fait et de droit, il n’est pas justifié d’infirmer sa décision, l’octroi d’un jugement

sommaire étant le bon dispositif. En conséquence, l’appel est rejeté et l’appelant est condamné au paiement des dépens. The following are the reasons for judgment delivered by THE COURT I. Introduction and

Summary [ 1 ] This appeal provides the Court with an opportunity to spotlight some of the improvements to our

summary judgment process brought about by the incorporation in the Rules of Court of a revamped Rule 22. While the new Rule reflects, in most respects, Rule 20 of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, as amended in 2010, there is at least one significant difference: our Rule goes further in opening the door to

summary judgment by expanding the type of evidence the parties may lead and from which the court may draw to make a determination. Importantly, Rule 22 joined the Province’s procedural repertoire on January 1, 2017, in the wake of Hryniak v. Mauldin , 2014 SCC 7 , [2014] 1 S.C.R. 87 , where the proper approach to the

interpretation of Ontario’s

summary judgment rule and a most helpful set of guidelines for its application were authoritatively identified. That approach and those guidelines apply to Rule 22 of our Rules of Court . [ 2 ] Rule 22 stands to be “interpreted broadly, favouring proportionality and fair access to the affordable, timely and just

adjudication of claims”: Hryniak v. Mauldin, para. 5. In that case, the Supreme Court of Canada underscored the need for “a culture shift[…] in order to create an environment promoting timely and affordable access to the civil justice system”: para. 2. The Court went on toemphasize the usefulness of

summary judgment motions as a means of concretely realizing that universally endorsed objective. [3] A few years prior to Hryniak v. Mauldin, in AMEC Americas Limited v. MacWilliams, 2012 NBCA 46, 388 N.B.R. (2d) 254,this Court had drawn the link between a judicious use of our pre-2017

summary judgment rule and access to justice: Experience teaches us there is a great deal of wisdom in the old adage “Justice delayed is justice denied”. Over time, rules of procedurehave been crafted to speed up access to justice. One of those is Rule 22 of the Rules of Court (“Summary Judgment”), which provides avehicle for early determination of liability. Another is Rule 47.03(3), which allows the court to direct an advance payment of specialdamages where liability has been established. Admittedly, the test for

summary judgment is stringent. Yet, one discerns a greaterawareness by the litigation bar of the benefits accruing from a skillful use of Rule 22 and a growing judicial openness toward

summaryjudgment and advance payments of special damages in favour of deserving claimants. These are indisputably welcome developments inthe pursuit of timely access to justice. [para. 1] [4] However, our pre-2017 Rule 22 was aligned with the exceptionality of

summary judgment and the conviction of its draftersthat “except in clear cases, the best truth-finding device is a trial”: Cannon v. Lange et al. (1998), (NB CA), 203N.B.R. (2d) 121, [1998] N.B.J. No. 313 (C.A.) (QL), para. 17. Our new Rule 22, properly interpreted, embodies the sought-after “cultureshift”.

Summary judgment is no longer an exceptional remedy, the hearing and determination of any related motion now constituting “asignificant alternative model of adjudication”: Hryniak v. Mauldin, para. 45. As will be seen, this acknowledgement of the transformativeeffect of our new

summary judgment rule warrants jettisoning the “stringent test” required by the wording of its predecessor and themindset of its drafters. [5] That said, the ultimate objective is justice according to law. Needless to say, Rule 22 is not designed to eliminate trials thatare necessary for a fair resolution of the dispute. Nor does it operate outside the adversarial system. Rather, the objective of the Rule is tobring about, within that system, an early determination where there is no issue requiring a trial with respect to a claim or defence.Hryniak v.

Mauldin explains when that will be the case: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion forsummary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows thejudge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. These principles are interconnected and all speak to whether

summary judgment will provide a fair and just adjudication. When asummary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not beproportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be theproportionate way to resolve a dispute.

It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as atrial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as toresolve the dispute. [paras. 49-50] [6] In our view, the motion judge rightly concluded the appellant solicitor’s Amended Third Party Claim against the respondent,also a solicitor, did not give rise to a genuine issue requiring a trial.

That Claim raised a threshold issue: did the respondent undertake toprovide an executed discharge of the mortgage held by his client on the parcel of land the appellant’s corporate client sold to theplaintiffs? The transaction closed on the appellant’s express and unequivocal undertaking to provide an executed discharge of thatmortgage. Whether the respondent gave a corresponding undertaking turns on a contextual

interpretation of statements he made in twoletters sent to the appellant, the most recent a few days before the closing. When the plaintiffs subsequently agreed to sell their parcel ofland, it was discovered the mortgage in question was still in place, and the sale fell through as a result of the mortgagee’s refusal todeliver an executed discharge.

The plaintiffs brought an action in damages against their own solicitor on the purchase and the appellant. [7] In turn, the appellant issued and later amended a Third Party Claim against the respondent’s corporate client and itsprincipals, alleging it was legally obligated to provide a discharge of its mortgage, and against the respondent himself for breach of his“undertaking” to obtain same.

The respondent contested the Claim, asserting he had not provided any such undertaking and that,alternatively, it was subject to conditions that had not been satisfied by the appellant and/or his corporate client and its principals. Ajudge of the Court of Queen’s Bench granted

summary judgment dismissing the Amended Third Party Claim on the last-mentionedbasis: 2017 NBQB 94, [2017] N.B.J. No. 112 (QL). The appellant takes issue with that disposition, arguing it is the product of amisapprehension of the evidential record and an error of law in the application of Rule 22.

[ 8 ] On January 25, 2018, we dismissed the appeal with reasons to follow. Here are those reasons in abridged form. [ 9 ] We agree the motion judge’s reasons for decision evince significant misapprehensions of the evidential record, notably in connection with the issue of the appellant’s legal obligations as a solicitor. Correlatively, she also erred in law in conflating those obligations and the separate and distinct legal obligations of the appellant’s corporate client and its principals. However, appeals are from dispositions, not the supporting reasons. [ 10 ] In determining the respondent’s motion for

summary judgment, the judge should have focused on the threshold controversy, which was whether he had given an undertaking to obtain an executed discharge of mortgage, as alleged by the appellant in his pleading. Had she done so, and given the record assembled for her consideration, the judge would undoubtedly have concluded, on a balance of probabilities, that this allegation was unfounded and, consequently, there was no genuine issue requiring a trial. While it follows the

summary judgment dismissing the Amended Third Party Claim against the respondent must stand, the judge’s findings are set aside to the extent they bear on the issues raised in the Amended Third Party Claim against the respondent’s corporate client and its principals, and we direct adjudication of those issues without any consideration being given to those findings. II. Context [ 11 ] The debate spawned by the dispute between the parties is context-driven, hence the particularly detailed account that follows. [ 12 ] DH Developments Corp. is in the business of real estate development. P.R.

Gahan and Sons Ltd. (“Gahan”) is a landscaping company. [ 13 ] In the course of developing a property in Noonan, New Brunswick, DH Developments hired Gahan to clear portions of the land, specifically PID 60177847 (“Lot 1”) and to build service roads. [ 14 ] Gahan did the work it contracted to perform. However, DH Developments failed to pay its invoice for services. It is common ground that the amount outstanding was $150,000. [ 15 ] As a result, Gahan retained the respondent, David Peterson, to prepare a claim for lien under the Mechanics’ Lien Act , R.S.N.B. 1973, c. M-6.

For its part, DH Developments relied on the professional services of the appellant, J. Shawn O’Toole. The parties entered into negotiations for the payment of Gahan’s outstanding account without a Claim for Lien being filed. Given the impending expiration of the statutory limitation period for filing, time was of the essence. [ 16 ] On January 4, 2013, DH Developments’ principals, Kevin Moore and Dwaine McKay, attended at Mr. Peterson’s office and proposed to settle Gahan’s account on the following terms: (

a) Gahan would withhold filing a Claim for Lien until January 10, 2013 to allow DH Developments time to re-mortgage Lot 1 and PID 60154150 (“Lot 2”) with the existing mortgagee, Graysbrook Capital; (

b) Gahan would be paid $30,000 on January 10, $20,000 in February and $20,000 in March out of advances under the new Graysbrook Capital mortgage (with a face value of $270,000); (

c) Graysbrook Capital’s mortgage would rank in first position on Lot 1 and Lot 2; (

d) Gahan would be granted a second mortgage for $150,000 on Lot 1 and Lot 2 (14% interest paid monthly until payment in full of the principal);

(

e) Gahan would also hold a third mortgage on property owned by Mr. McKay (PID 75416206) behind a first mortgage with CIBC Mortgages Inc. (face value of $100,000) and a second mortgage with Graysbrook Capital (face value of $25,000); (

f) Gahan would hold a second mortgage on a residential property registered to Ryan Stacy Earl and Nicholas James Moore (PID 60162260) with an outstanding first mortgage to CIBC Mortgages Inc. (face value of $285,600). Two mortgages registered to Yolanda Faith Piper, one with a face value of $117,500 with interest at 18%, were apparently paid off and would be discharged; and (

g) Upon payment of the sum of $5,000 from the proceeds of sale for any residential parcel subdivided from Lot 1, Gahan would provide a release of its mortgage for that parcel. [ 17 ] In a letter to Mr. O’Toole bearing same date, Mr. Peterson faithfully set out the substance of the proposal before adding: Please advise as to how Mr. [Kevin] Moore proposes to give this property as security and as to the relationship he may have to Yolanda Faith Piper and Nicholas James Moore and the outstanding balance on these mortgages.

Assuming you are able to put this package together by January 10, 2013 please forward the various mortgages to my attention for review. We pause to note Mr. Peterson’s letter initially refers to Lot 1 as PID 60177848. The last digit (8) is a typo: it should be 7. Indeed, the letter goes on to correctly identify Lot 1 as PID 60177847. [ 18 ] On January 8, 2013, Mr. O’Toole wrote back: […] further to your letter to me of January 4, 2013. I have met with my client today and can advise as follows. Unfortunately, we will require more time to complete the tasks that you have listed in your letter.

Graysbrook Capital Ltd. is out today and won’t be able to provide us with any details to do some of the mortgages that you are requesting. I can advise that I have completed a mortgage today on [Lot 1] in favor of Graysbrook Capital Ltd. in the sum of $165,000.00. The client is extremely anxious to settle with your client but there are a significant number of transactions that have to be completed to achieve that. Therefore, will you please hold off filing any liens until I advise where things stand with all of these transactions. Thank you for your understanding. [ 19 ] On January 9, 2013, Mr.

Peterson provided further particulars of the proposed arrangement: Upon further discussion with my client I have been instructed to propose the following: 1. Third mortgage on PID 75416206, owned by Ellery Dwaine McKay and Ruth Zena McKay, his wife; based upon confirmation by Mr. McKay that this PID also includes his body shop/garage. 2. Second Mortgage on PID 60162260, owned by Ryan Stacey Earle and Nicholas James Moore; with your undertaking to discharge collateral mortgage #27116640 and mortgage #26474693 [in favour of Yolanda Faith Piper] which Mr. Moore advised Mr. Gahan are paid out. 3.

Mortgage on [Lot 1] owned by DH Developments Corp. on the same terms and conditions as above. Our client will agree to postpone this mortgage behind the new Graysbrook Capital Ltd. refinancing to place P.R. Gahan & Sons Ltd. in a second position

behind Graysbrook on this property. 4. Letter of Direction from you that sets out the proposed payment

schedule proposed by Mr. Moore to come from each of the next three advances on the Graysbrook Capital Ltd. financing. I understand it is $30,000.00 immediately upon receipt of the first advance and $20,000.00 in February and March . Mr. Gahan advises that Mr. Moore agrees with this proposal. These mortgages must be executed and in your possession on January 10, 2013 and be registered before the end of the business day. I have completed the Claim for Lien but have been instructed to allow Mr. Moore time to put this plan in place.

Enclosed please find rough drafts of the first two mortgages and I trust you have all of the information you need to prepare the third using the same basic information. I realize this is a rush but the cause of all of this hurried confusion is Mr. Moore. Mr. Gahan is trying to help. Please keep me informed. [Emphasis added.] As is evident from the underlined passage, Mr. Peterson and his client understood the $30,000 payment and the two $20,000 payments were to come out of advances under the new Graysbrook Capital mortgage, and not from Mr. O’Toole’s personal funds.

This state of affairs bears directly on the scope of the undertakings Mr. O’Toole gave in connection with what the motion judge described as the “Forbearance Agreement”. [ 20 ] At any rate, i n a January 10, 2013 letter to Mr. Peterson, Mr. O’Toole provided the following undertaking: “when we receive Graysbrook instructions for my client’s pending mortgage of $270,000.00 which mortgage will be registered against [Lot 1] and [Lot 2], I will register a second mortgage in [favour] of your client against the same two properties.” The other pertinent parts of the letter read as follows: 5.

I will forward on direction of my client Developments Corp. instalments to you in the amount of $30,000.00 immediately after we register the $270,000 Graysbrook mortgage, $20,000.00 in February 2013 and $20,000.00 in March 2013. 6. I attach for your review two mortgages as follows: (

A) the Ellery Dwaine McKay mortgage, (

B) the Ryan Stacy Earle and Nicholas James Moore mortgage. As you know, we are placing a second mortgage in favor of Graysbrook on the Earle and Moore property. Your client will be in third position vis-à-vis this property. If we don’t receive the Graysbrook mortgage instructions today, I can register the mortgage in favor of your client but he will need to postpone this mortgage when I am in a position to register the Graysbrook mortgage. I will require your undertaking that your client will agree to this. 7. It is also agreed and understood that the total indebtedness of my client to your client is $150,000.00. It is agreed and understood

further that although we are arranging several mortgages on different properties as outlined above, my client is only indebted to your client for the total sum of $150,000.00. 8. It is also further agreed and understood that my client will be able to pay all of these mortgages out at any time without penalty. 9. I also require a copy of your Invoice for services rendered regarding this transaction for my client to review prior to him agreeing to pay same.

Please acknowledge receipt of this letter, provide me with your undertaking referred to in paragraph 6 and further confirm that your client is in agreement with all of the contents of this correspondence. [ 21 ] Mr. Peterson responded later that day: 1. We accept your undertaking that when you receive Graysbrook Instructions for a mortgage refinancing to $270,000.00, which mortgage will be registered against [Lot 1] and [Lot 2], you will register a second mortgage on the current terms and conditions in favor of P.R. Gahan & Sons Ltd. against the same two properties. 2. The direction you propose is not acceptable.

Kindly have your client DH Developments Corp. execute a direction to you and/or any subsequent solicitor acting on their behalf to make the instalments as proposed. In that document I would expect you to acknowledge that direction and agree to carry through on same. Perhaps that is what you intend but I need to see a copy of the direction. [N.B.: The record suggests Mr. Peterson abandoned the requirement that the Letter of Direction feature Mr. O’Toole’s agreement “to carry through” with his clients’ direction.] 3. Mortgages attached [and referenced in sub-paragraphs 6 (

A) and (

B) of your letter] appear satisfactory. Mr. Gahan will agree to postpone his mortgage on PID 60182260 [property registered in the name of Ryan Stacy Earle and Nicholas James Moore]. 4. Mr. Gahan agrees with the principle that the total debt is $150,000.00. 5. Mr. Gahan agrees with paragraph 8 and will be pleased to accept full payment at any time. [ 22 ] The motion judge found those exchanges culminated with a “Forbearance Agreement” under which Gahan agreed not to file a Claim for Lien in return for secured financial commitments on the part of DH Developments and its principals.

The judge summarized the parties’ legal obligations in these terms: i. [DH Developments] would register a new mortgage with Graysbrook Capital Ltd. (hereinafter “Graysbrook”) against [Lot 1] and [Lot 2] to rank in first position for $270,000.00 to obtain additional financing. ii. [DH Developments] would pay to Gahan the sum of $30,000.00 on January 10, 2013, the sum of $20,000.00 in February, 2013 and the sum of $20,000.00 in March, 2013. iii. Gahan would receive a mortgage in second position in the amount of $150,000.00 on [Lot 1] and [Lot 2] with interest at 14%, payable monthly until paid in full. iv.

Gahan would hold a mortgage in third position on PID 75416206 owned by McKay on the same terms (interest at 14% and paid monthly). v. Gahan would hold a mortgage on PID 60162260 owned by Ryan Stacy Earle and Nicholas James Moore.

vi. O’Toole would prepare and have his clients Moore and McKay sign a [Letter of Direction] to O’Toole confirming their agreement that they or [DH Developments] would pay to Gahan the following: i. $30,000.00 immediately after the $270,000.00 Graysbrook mortgage is completed and registered; ii. $20,000.00 in February 2013; and iii. [$20,000.00] in March 2013. vii. Moore would pay the legal fees incurred by Gahan to the time of the Forbearance Agreement. On 11 January 2013 O’Toole confirmed the above noted undertakings.

Gahan, as part of the above noted Forbearance Agreement, also agreed to release future lots developed on [Lot 1] for $5,000.00 per lot. [para. 10] It bears noting, once again, that it is Mr. O’Toole’s clients, and not Mr. O’Toole himself, who undertook to make the payments required under the Forbearance Agreement. [ 23 ] On January 10, 2013, DH Developments’ principals, Ellery Dwaine McKay and Kevin Robert Moore, executed a Letter of Direction under which Mr.

O’Toole was instructed to pay in trust for Gahan the sum of $30,000 “immediately after the $270,000 Graysbrook Mortgage is completed and registered”, $20,000 in February 2013 and $20,000 in March 2013. Mr. Peterson does not argue the Letter of Direction failed to comply with the Forbearance Agreement and, on any reasonable

interpretation, the Letter does not give rise to an undertaking by Mr. O’Toole to personally pay the installments should his clients or Graysbrook Capital fail to put him in funds. On the same date, Messrs. Moore and McKay confirmed in writing their agreement with the contents of Mr. O’Toole’s letter to Mr. Peterson and their undertaking to fulfill its terms. [ 24 ] On January 11, 2013, Mr. Moore wrote Mr. Peterson to confirm his agreement to pay the latter’s invoice for professional services rendered to Gahan ($4,401.90). [ 25 ] Mr.

O’Toole’s undertaking to register a second-position mortgage of $150,000 in Gahan’s favour on Lot 1 (in its original un- subdivided state) and Lot 2 remained outstanding. [ 26 ] In a move that, as might have been anticipated, provoked a very negative reaction on the part of Gahan and Mr. Peterson, on January 23, 2013, Mr. O’Toole registered a subdivision plan entitled “Grape Vine Estates, Phase II, Lots 2012-1 to 2012-8”. Under this plan, eight new lots, including Lot 2012-2, were created out of Lot 1. As a result, the size and value of Lot 1 were significantly reduced.

The work for which Gahan had not been paid and for which it intended to file a Claim for Lien prior to reaching the Forbearance Agreement included work in relation to those eight lots and the adjacent public street (Chardonnay Street). Gahan expected its mortgage to cover Lot 1 in its original dimension. [ 27 ] On February 4, 2013, Mr. O’Toole registered a mortgage in the amount of $280,000 in favour of Graysbrook Capital on Lot 1 in its original un-subdivided state and Lot 2. He also registered a second mortgage for $150,000 in Gahan’s favour on Lot 1 ( minus the eight subdivided lots and Chardonnay Street ).

On that same day, and in accordance with the Letter of Direction mentioned above, Mr. O’Toole forwarded to Mr. Peterson his trust cheque for the first installment under the Forbearance Agreement ($30,000). [ 28 ] On March 4, 2013, Mr. Peterson wrote Mr. O’Toole, objecting to the failure of the second mortgage in his client’s favour to cover the eight lots excised from Lot 1. In Mr. Peterson’s view, Mr. O’Toole’s undertaking was to register a second mortgage in Gahan’s favour on Lot 1 in its original un-subdivided state. On the record at our disposal, including evidence that Mr.

O’Toole subsequently registered a second mortgage in Gahan’s favour on five of the eight lots and forwarded a cheque for $15,000 to cover the amount that would have been owing for the three other lots had the Gahan mortgage applied to them, we conclude all stakeholders agreed with Mr. Peterson’s view.

[ 29 ] Meanwhile, the plaintiffs in the main action entered into an agreement with DH Developments to purchase Lot 2012-3, which, as mentioned, was one of the eight lots carved out of Lot 1. [ 30 ] On March 14, 2013, Mr. O’Toole provided Mr. Peterson with Certificates of Registered Ownership for five of the eight subdivided lots, including Lot 2012-3. The Certificates confirmed Gahan held a second mortgage on those five lots. [ 31 ] Formal title to the three other lots had been previously transferred out of DH Developments’ name. [ 32 ] On March 15, 2013, Mr. Peterson wrote Mr.

O’Toole, thanking him for registering his client’s second mortgage against the five lots. He noted one of the other three recently subdivided lots had been transferred to Kevin Moore on February 4, 2013, and expressed the assumption that “Mr. Moore (DH Developments Corp.) intends to forward $5,000.00 for that Lot as it was part of [Lot 1] on January 11, 2013” when Mr. O’Toole confirmed his undertaking to register a second mortgage on Lot 1. As well, Mr. Peterson confirmed Gahan had not received the sum of $20,000 due in February from DH Developments pursuant to the Forbearance Agreement. Finally, Mr.

Peterson advised: “Mr. Gahan is on vacation and will return on or about March 28, 2013. I will prepare the discharge for Lot 2012-3 (PID 60179587) for his signature upon his return.” As will be seen, Mr. O’Toole relies, in part, on the quoted statements for his contention that Mr. Peterson gave his undertaking to obtain a discharge of mortgage signed by Gahan. [ 33 ] Closing for the sale of Lot 2012-3 was scheduled for March 18, 2013. [ 34 ] At closing, Mr. O’Toole gave the purchasers’ solicitor, Stephen R.W.

Collingwood, his undertaking to provide a discharge of Gahan’s mortgage on Lot 2012-3. [ 35 ] On March 19, 2013, and purportedly in furtherance of Mr. Peterson’s letter of March 15, 2013, Mr. O’Toole forwarded a cheque for $5,000 drawn on Mr. Collingwood’s trust account, in exchange for a discharge of Gahan’s mortgage on Lot 2012-3. [ 36 ] On April 9, 2013, Mr. Peterson wrote Mr. O’Toole, referencing the latter’s undertaking to register a second mortgage in Gahan’s favour on Lot 1 and insisting, once again, that, at the time Mr.

O’Toole had given that undertaking, Lot 1 included the eight lots shown on the subdivision plan entitled “Grape Vine Estates, Phase II, Lots 2012-1 to 2012-8”. Mr. Peterson went on to underscore his letter of March 15, 2013 set out what needed “to happen for the discharge to be provided”. In other words, he had not undertaken in that letter to obtain a signed discharge of the Gahan mortgage on Lot 2012-3. [ 37 ] On the same date, Mr. O’Toole forwarded to Mr.

Peterson a cheque for $15,000, which was designed to cover the amount owing to Gahan ($5,000) for each of the three lots over which its second mortgage did not extend at the time they were transferred out of DH Developments’ name. [ 38 ] On April 10, 2013, Mr. Peterson wrote Mr.

O’Toole, advising that, as DH Developments failed to make the February and March 2013 payments of $20,000 in accordance with the Forbearance Agreement, Gahan would not release its mortgage on any lots, including Lot 2012-3. [ 39 ] Slightly more than a year later, more precisely in May 2014, the plaintiffs entered into an agreement to sell Lot 2012-3. In due course, it was ascertained the Gahan mortgage on Lot 2012-3 had not been and would not be discharged and, as a result, the sale fell through. [ 40 ] On October 1, 2015, the plaintiffs brought an action in damages against their solicitor, Mr.

Collingwood, and against Mr. O’Toole. [ 41 ] On December 4, 2015, Mr. Collingwood filed a Notice of Third Party Claim against DH Developments, its principals, Kevin Moore and Dwaine McKay, and Gahan. Mr. Collingwood also filed a Statement of Defence to the main action and a Cross-Claim against Mr. O’Toole.

[ 42 ] On December 30, 2015, Mr. O’Toole filed a Notice of Third Party Claim against Mr. Peterson and Gahan, seeking indemnity or contribution for any damages he might be ordered to pay. In paragraphs 7 and 8 of the Third Party Claim, as amended, Mr. O’Toole alleges Mr. Peterson undertook to prepare a discharge of the mortgage on Lot 2012-3 (the lot purchased by the plaintiffs) and “to obtain its execution by Gahan Ltd.” On January 28, 2016, Mr. Peterson filed a Defence in which he denies the allegations formulated in those paragraphs and puts Mr. O’Toole to their “strict proof”.

He goes on to emphasize this denial by stating he did not provide “an undertaking to release or discharge the blanket Gahan mortgage on any lot sold by DH Developments Corp., including the lot sold by DH Developments Corp. to the Plaintiffs”. [ 43 ] On November 1, 2016, the plaintiffs applied for

summary judgment against their solicitor on the purchase of Lot 2012-3, Mr. Collingwood, and against Mr. O’Toole. [ 44 ] On January 26, 2017, Mr. Peterson applied for

summary judgment dismissing Mr. O’Toole’s Amended Third Party Claim against him. [ 45 ] On February 2, 2017, Mr. Collingwood applied for

summary judgment allowing his Cross-Claim against Mr. O’Toole. [ 46 ] All three

summary judgment motions were scheduled to be heard on February 24, 2017. At the outset of the hearing, Mr. O’Toole admitted liability to the plaintiffs/purchasers for breach of his undertaking to provide them with a discharge of the Gahan mortgage on Lot 2012-3. Mr. Collingwood withdrew his motion for

summary judgment. [ 47 ] Mr. Peterson’s motion for

summary judgment proceeded to a hearing . The record consisted of a copy of the Notice of Motion, Mr. Peterson’s supporting affidavit, Mr. O’Toole’s responding affidavit and the letters (and documents) referenced hereinabove. Prior to the hearing in the Court of Queen’s Bench, the parties exchanged affidavits of documents. Given the manifest relevance of letters, emails, notes and drafts of documents other than those exchanged between the parties, any failure by Mr. Peterson to serve a Rules - compliant affidavit of documents could have fueled a legitimate objection to his motion for

summary judgment. The Court’s decision on point in Whelton v. Mercier et al. , 2004 NBCA 83 , 277 N.B.R. (2d) 251 , at paras. 26-29 , remains authoritative for purposes of our new Rule 22; that decision is designed to achieve transparency and to ensure a just and fair adjudication on the merits. [ 48 ] On May 25, 2017, the judge granted Mr. Peterson’s motion. She found there was no genuine issue requiring a trial on the following basis: […] The evidence which formed the Forbearance Agreement points to several undertakings by O’Toole.

The first is that he would register a new mortgage with Graysbrook Capital Limited ranking in first position for an amount of $270,000.00. Second, he would pay to Gahan the sum of $30,000.00 on 10 January and the sum of $20,000.00 each in both February and in March. This element of the contract was breached by DHD and O’Toole in that the only amount paid was the first sum of $30,000.00. Next, Gahan would receive a mortgage in second position in the amount of $150,000.00 on [Lot 1] and [Lot 2] with interest at 14% payable monthly until paid in full.

This undertaking was not fulfilled and the Gahan mortgage was not registered by O’Toole as he had undertaken to do, but rather on 23 January 2013 O’Toole, on behalf of [DH Developments], registered a new subdivision plan the effect of which was to create eight new lots out of [Lot 1] causing the remnant of [Lot 1] to be much smaller and of considerably less value. Consequently, Gahan did not have its encumbrance registered against the eight new lots. Next, the agreement sets out that Gahan would hold a mortgage in third position on PID 75416206 owned by McKay and on the same terms.

Again, the evidence demonstrates that this was breached by O’Toole. O’Toole knew or ought to have known that his actions substantially altered the Forbearance Agreement. There is no merit to the third party claim of the defendant O’Toole against Peterson. I find that even if Peterson provided a conditional undertaking, O’Toole did not honour the Forbearance Agreement and fulfill the conditions that would trigger Peterson’s undertaking. [paras. 24-26] [ 49 ] Mr.

O’Toole appeals, arguing the motion judge misapprehended the evidence in finding he breached the Forbearance Agreement and failed to fulfill his undertakings, and that she erred in law in finding there was no genuine issue requiring a trial. III. The Text of Rule 22 and its Predecessor [ 50 ] The salient parts of Rule 22 and its predecessor are reproduced in Appendices A and B.

IV. Analysis and Decision [ 51 ] The motion judge found there was no genuine issue requiring a trial of Mr. O’Toole’s Amended Third Party Claim against Mr. Peterson because the former had failed to fulfill the “several undertakings” he had given. In her view, those undertakings were: (

a) to register a new mortgage in favour of Graysbrook Capital for $270,000. As mentioned, this mortgage was to rank in first position on Lot 1 and Lot 2. While it is not clear whether Graysbrook Capital expected its security to include Lot 1 in its original un-subdivided state, it is Mr. Peterson’s un-contradicted evidence that the mortgage registered on its behalf does so; (

b) to pay Gahan the sum of $20,000 in both February and March 2013; (

c) to register a mortgage for $150,000 in Gahan’s favour on Lot 1 (in its original un-subdivided state) and Lot 2. This mortgage was to rank in second position behind Graysbrook Capital’s new mortgage; and (

d) to register a third-position mortgage for $150,000 in Gahan’s favour on property owned by Kevin McKay and bearing PID 75416206. [ 52 ] Mr. O’Toole submits the motion judge misapprehended the record in finding he failed to fulfill undertakings (

a) and (d), in finding he gave undertaking (

b) as she described it and in finding Gahan was prejudiced by his failure to strictly comply with undertaking (c). Those submissions have not been satisfactorily countered by Mr. Peterson. We come to this conclusion for the following reasons. [ 53 ] Undertaking (

a) was fulfilled. As mentioned, Mr. Peterson states in his affidavit that the Graysbrook Capital mortgage ranked in first position and covered Lot 1 in its original un-subdivided state. At any rate, that undertaking inured to the benefit of Mr. O’Toole’s clients and Graysbrook Capital, not Gahan. If the motion judge’s concern was with the higher face value of the mortgage that was ultimately registered ($280,000, instead of $270,000), the point was not argued, either before her or on appeal, and there is no evidence that the full $280,000 was advanced.

Prejudice to Gahan arising from the increased face value of the mortgage has not been shown. More pertinently for our present purposes, there is no basis, on the record at our disposal, for a finding that some feature of undertaking (

a) or its fulfillment, directly or indirectly, provides an answer to Mr. O’Toole’s Amended Third Party Claim against Mr. Peterson. [ 54 ] Mr. O’Toole did not provide undertaking (b). The motion judge misapprehended the evidence in finding Mr. O’Toole undertook to make the February and March 2013 instalment payments of $20,000, whether he was put in funds or not. On any reasonable view of the record, Mr.

O’Toole’s undertaking was to forward, in accordance with his clients’ Letter of Direction, his trust cheque for $20,000 in February and March 2013 once he was put in funds by means of advances under the Graysbrook Capital mortgage. There is no suggestion that this happened. [ 55 ] Mr. O’Toole provided undertaking (

c) and, strictly speaking, it was not fully complied with: he failed to register a second mortgage in Gahan’s favour on three of the eight lots created by the January 23, 2013 subdivision plan. However, Mr. O’Toole did register a second mortgage on the remainder of Lot 1, including the other five lots created by the subdivision plan, and he sent a cheque for $15,000, which arguably satisfied Gahan’s financial entitlement under the second mortgage that should have been registered against those three lots. Gahan may have been prejudiced by Mr. O’Toole’s failure to fully satisfy undertaking (

c) but, on the record at our disposal, the nature and significance of any such prejudice is nebulous. This issue may be addressed and perhaps resolved in the prosecution and resolution of the Amended Third Party Claim against Gahan. [ 56 ] As to undertaking (d), its breach is not evident on the record at our disposal. Significantly, Mr. Peterson makes no mention of this issue in his affidavit, its focus being the breach by Mr.

O’Toole of his undertaking to register a second mortgage in Gahan’s favour on Lot 1 in its original un-subdivided state. [ 57 ] Given these errors in the motion judge’s decision, we turn to the standard that informs our review and jurisdiction to intervene. A. Standard of appellate review of the disposition of a motion for

summary judgment [ 58 ] As Justice Larlee, writing for the Court, observed in Godin v. Star-Key Enterprises and Carquest Canada , 2006 NBCA 91 , 305 N.B.R. (2d) 180 , the “standard of review applicable to each question raised on appeal is always the starting point of any appellate analysis” (para. 7). She went on to endorse the view expressed in Roy v. Doucet , 2005 NBCA 84 , 288 N.B.R. (2d) 12 , that the merits of an appeal “stand to be assessed through the prism of the particular standard that governs the review on appeal of each question raised” (para. 13). In Hryniak v.

Mauldin , the Supreme Court of Canada authoritatively settled the standard of review for each question that might be raised on appeal from a

summary judgment disposition:

[…] absent an error of law, the exercise of powers under the new

summary judgment rule attracts deference. When the motion judgeexercises her new fact-finding powers under Rule 20.04(2.1) and determines whether there is a genuine issue requiring a trial, this is aquestion of mixed fact and law. Where there is no extricable error in principle, findings of mixed fact and law should not be overturnedabsent palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 36. Similarly, the question of whether it is in the “interest of justice” for the motion judge to exercise the new fact-finding powers providedby Rule 20.04(2.1) depends on the relative evidence available at the

summary judgment motion and at trial, the nature, size, complexityand cost of the dispute and other contextual factors. Such a decision is also a question of mixed fact and law which attracts deference. Provided that it is not against the “interest of justice”, a motion judge’s decision to exercise the new powers is discretionary. Thus, unlessthe motion judge misdirected herself, or came to a decision that is so clearly wrong that it resulted in an injustice, her decision should notbe disturbed.

Of course, where the motion judge applies an incorrect principle of law, or errs with regard to a purely legal question, such as theelements that must be proved for the plaintiff to make out her cause of action, the decision will be reviewed on a correctness standard:Housen, at para. 8. [paras. 81-84] [59] As indicated, the motion judge’s reasons for decision are tainted by palpable errors of fact that, in materially differentcircumstances, would override her disposition of Mr. Peterson’s motion for

summary judgment and ordain reversal. However, and asposited, appeals are from dispositions, not the reasons advanced in support. As will be demonstrated, the errors adumbrated hereinaboveturn out to be harmless as the motion judge ultimately prescribed the correct disposition. That brings us to a consideration of our currentRule 22 and its application to the case at hand. B. Key changes implemented by the new Rule

(1) Elimination of the pre-existing “stringent” test for

summary judgment [60] Over the two decades preceding the adoption of Rule 22 in its current incarnation, our Court took steps to encourage greatersuccessful resort to the

summary judgment process. [61] It did so in Cannon v. Lange by emphasizing the primary purpose of Rule 22, as it then read, which was “to rid innocentparties and the system not only of meritless actions, but also of frivolous claims or defences”: para. 9. In the same vein, stakeholderswere reminded that meritless claims and defences “render the proceedings cumbersome and are a source of unnecessary expense anddelay”. The solution was thought to lie in greater judicial openness to granting

summary judgment, a belief that prompted the exhortationto motion judges not to be “unduly timid where the circumstances demonstrate a clear absence of merit”: para. 9. In Cannon v. Lange,the Court respectfully suggested Haché v. Boudreau (1993), (NB KB), 132 N.B.R. (2d) 262, [1993] N.B.J. No. 24(Q.B.) (QL), was “probably an example of unwarranted judicial timidity”: para. 11. In that case,

summary judgment had been denied to apassenger on a motorcycle even though nothing in the record excused the driver’s failure to keep his vehicle on the travelled portion ofthe roadway. The driver could not explain why his vehicle left the roadway and the brain-injured passenger had no knowledge of thecircumstances surrounding the occurrence of the accident. [62] In The Government of Nunavut v. Humphrey Schram, 2014 NBCA 53, 423 N.B.R. (2d) 294, the Court, per Larlee J.A.,recorded its direction to “lawyers and judges of the Court of Queen’s Bench to aggressively use Rule 22 for

summary judgment with aview to avoiding lengthy litigation, thus saving precious time and money” (para. 7). In addition to efforts designed to foster a morefavorable judicial attitude toward

summary judgment, the Court liberalized the process underlying Rule 22, all the while careful not to doviolence to its wording. [63] Recall that under the previous Rule 22, the court could grant

summary judgment only if there was “no merit” to the defence or“no merit” to the claim, or part thereof. The time-honoured test for a finding of “no merit” had been confirmed in Ripulone v. Pontecorvo(1989), (NB CA), 104 N.B.R. (2d) 56 (C.A.), [1989] N.B.J. No. 1138 (QL), at para. 13: “[…]

summary judgmentshould be granted only when there is no reason for doubt as to what the judgment of the court should be if the matter proceeds to trial.The moving party’s case must be unanswerable”.

[64] In Cannon v. Lange, the Court, ever mindful of the stare decisis doctrine, let stand the Ripulone v. Pontecorvo understandingof Rule 22, opining the stringent test it generated was justifiable having regard to the Rule’s express standard (“no merit”), which left “noroom for anything but a very stringent test”: para. 17. Nonetheless, the Court sought to dilute the deterring effect of the traditional test ontimely and affordable access to justice by: (1) equating it to the test articulated in Aguonie v. Galion Solid Waste Material Inc., (ON CA), [1998] O.J. No. 459 (C.A.) (QL) under which

summary judgment was warranted where there was no genuineissue requiring a trial; and (2) holding this determination stood to be made based not only on the pleadings and the issues they raised, butalso on admissible evidence found in the record. In other words, the issue of case un-answerability stood to be determined on the recordas it existed at the time of the motion hearing. Theoretical arguments arising solely from the pleadings and intimations of potentiallyfavorable evidence to be led at trial would no longer suffice to save the day for a responding party. [65] Moreover, while Cannon v.

Lange acknowledged the moving party’s burden “to satisfy the court that an apparent factualcontroversy or credibility conflict is a sham”, the Court added the responding party was “required to produce admissible evidence whichwill prevent a conclusion that the action or defence is bereft of merit”: para. 23.

As will be seen, this requirement has been incorporatedin the new Rule 22. [66] That said, judges who perceived in the former Rule 22 a means of improving access to justice remained shackled by itsnarrow scope of application, one that was shaped by the Rule’s test-defining wording and the shallow evidential pool it sanctioned. Withrespect to the former, in Cannon v. Lange, the Court noted the “no merit” criterion for granting

summary judgment reflected theconviction of the trial lawyers and judges who drafted the Rule “that, except in clear cases, the best truth-finding device is a trial”: para.17. That conviction does not inform the

interpretation of our new Rule 22. [67] In Hryniak v. Mauldin, the Supreme Court of Canada explained the Ontario

summary judgment Rule (upon which our newRule 22 is modeled to a large extent) represents a “culture shift” that has moved “the emphasis away from the conventional trial” (para.2). Rule 22, in its current formulation, “demonstrates that a [full] trial is not the default procedure” (para. 43) and “[embodies] theevolution of

summary judgment rules from highly restricted tools used to weed out clearly unmeritorious claims or defences to theircurrent status as a legitimate alternative means for adjudicating and resolving legal disputes” (para. 36). The hearing and determinationof a motion for

summary judgment must now be viewed as an “alternative model of adjudication” (para. 45). This understandingpercolates, inter alia, from the wording of our current Rule 22.04(1), which obligates the court to grant

summary judgment if it issatisfied there is no genuine issue requiring a trial. Thus, the motion judge’s discretion under the former rule to deny

summary judgmenteven where there was no merit to the responding party’s case has been discarded. The judicial obligation to grant

summary judgmentwhere the Rule’s condition precedent is satisfied is aligned with the view that the process represents a legitimate alternative model ofadjudication. [68] The “no merit” test is nowhere to be found in our new Rule 22. The test for

summary judgment is simply whether there is agenuine issue requiring a trial: Rule 22.04(1)(

a) and 22 King Street Inc. et al. v. The Bank of Nova Scotia, 2018 NBCA 16, at para. 15.As is well known, adjudication in civil litigation involves the application of the balance-of-probabilities standard. Since the movingparty is the one making the allegation that there is no genuine issue requiring a trial, he or she bears the burden of persuading the court ithas been established on a balance of probabilities. That is the extent of the moving party’s evidential and persuasive burden. Both sidesmust “put their best foot forward” (Cannon v.

Lange, at para. 23), the responding party having to “lead trump or risk losing”: 1061590Ontario Ltd. v. Ontario Jockey Club, (ON CA), [1995] O.J. No. 132 (C.A.) (QL), at para. 35. As Justice Clendeningastutely noted in Gillis v. Law Society of New Brunswick et al., 2017 NBQB 212, [2017] N.B.J. No. 283 (QL), the process-liberalizinginstructions provided by Cannon v. Lange “retain all of their relevance notwithstanding the legislative and jurisprudential changes”(para. 26). [69] Moreover, the new Rule 22 frees the

summary judgment process of many evidential constraints inherent in its predecessor’swording and underlying philosophy. It does so by deepening the pool of admissible evidence.

(2) The enhanced evidential record [70] Under the former Rule 22, affidavit statements based on information and belief were inadmissible (see Shareline Systems v.New Brunswick and New Brunswick Distance Education Network, 2001 NBCA 29, 235 N.B.R. (2d) 162, at para. 13). That is no longerthe case. Statements in an affidavit for use on a motion for

summary judgment may now be made on information and belief so long as,pursuant to Rule 39.01(4), the deponent identifies the source. In this regard, however, Rule 22.02 provides a cautionary warning: thesummary judgment motion judge “may draw an adverse inference from the failure of a party to provide the evidence of a person havingpersonal knowledge of contested facts”.

[ 71 ] Additionally, the former Rule denied evidential admissibility to opinions expressed in affidavits. That may still be the case under Ontario’s

summary judgment rule. Under our current regime, motion judges may allow into the record affidavit-sourced opinion evidence: Rule 22.02(3). However, that evidence is only admissible if the deponent would be allowed to provide it while giving oral testimony in court: Rule 22.02(3). An example of inadmissible opinion evidence is found in paragraph 13 of Mr. Peterson’s affidavit where he estimates at $270,000 the value of the eight lots removed from Lot 1; that opinion would not have been admissible if he had proffered in the course of his testimony at trial. That said, the appeal’s determination does not turn on the point. [ 72 ] Furthermore, under Rule 22.04(2), the

summary judgment motion judge may allow oral evidence at a “mini-trial” for the purposes of weighing the evidence, evaluating the credibility of a deponent and drawing a reasonable inference from the evidence. Whether the power to weigh the evidence and draw a reasonable inference formed part of the adjudicating tools of a

summary judgment motion judge under the pre-2017 Rule 22 may be debatable. What is beyond debate is that the judge could not evaluate the credibility of a deponent (see Robichaud Apartments Inc. v. TG 112 & 114 Murphy Ltd. et al. , 2015 NBCA 19 , 433 N.B.R. (2d) 367 , at para. 4 ). Because our new Rule 22 is designed to operate within the adversarial system, an order pursuant to Rule 22.04(3) “that oral evidence be presented by one or more parties” should not be made motu proprio by the motion judge, but on application by one of the parties.

The party seeking leave to lead oral evidence “should be prepared to demonstrate why such evidence would assist the motion judge in weighing the evidence, assessing credibility, or drawing inferences and to provide a “will say” statement or other description of the proposed evidence so that the judge will have a basis for setting the scope of the oral evidence”: Hryniak v. Mauldin , at para. 64 . [ 73 ] Finally, under our former

summary judgment rule, the admissibility of an adverse party’s discovery evidence was arguably uncertain (see Village of Saint-François de Madawaska v. Nadeau Poultry Farm Limited and Maple Lodge Farms Limited , 2011 NBCA 55 , 390 N.B.R. (2d) 107 and Sewell v. Sewell et al. , 2010 NBCA 32 , 358 N.B.R. (2d) 27 , at para. 3 ). That evidence is admissible under Ontario’s Rules of Civil Procedure because Rule 20.01(3) entitles a party to a motion for

summary judgment to rely on affidavit material and “other evidence” (see Michael G. Tweedie, Ontario

Summary Judgment - Civil and Family - 2017 (Toronto: Canada Law Book, 2017) at para. 8:90, p. 234). Our Rule 22 also allows resort to affidavits and “other evidence”. Accordingly, the quoted phrase opens the door to admission of an adverse party’s discovery evidence. Whether the phrase goes further will no doubt be the subject of debate in proceedings to come, as will the issue of what conditions might be required to ensure fairness to all parties impacted by the admission of discovery evidence. C.

Application of Rule 22 to the case’s factual matrix [ 74 ] Undertakings by solicitors are an integral feature of real estate and commercial transactions.

Those undertakings give rise to legal obligations that may, depending on the circumstances, be enforced against the solicitor or his or her client, or both. [ 75 ] The constituent elements of a legally enforceable undertaking are generally understood to be: (1) an oral or written statement made by the author in his or her capacity of solicitor; (2) the statement typically includes the words “undertake” or “undertaking”, but need not do so as a matter of law, the context being influential in determining intent and effect; (3) the person to whom the statement is directed reasonably relies on it; and (4) by the statement the authoring solicitor unequivocally pledges: (

a) to do or refrain from doing something; or (

b) to cause someone, almost invariably the client, to do or refrain from doing something. While generally enforceable, the last-mentioned undertaking may offend professional standards notably where its satisfaction is beyond the solicitor’s control. [ 76 ] In the Amended Third Party Claim, Mr. O’Toole alleges Mr.

Peterson undertook to prepare a discharge of the mortgage on the lot purchased by the plaintiffs and “to obtain its execution by Gahan Ltd.” Paragraphs 7 and 8 are on point, and read as follows: By fax dated January 4, 2013, from Peterson to O’Toole, Gahan Ltd., by its authorized agent Peterson, undertook to release its mortgage on any lot sold by DH Developments Corp. for $5,000.00 each until the related mortgage was paid in full [Gahan Undertaking].

By fax dated March 15, 2013 from Peterson to O’Toole, in consideration of the payment of $5,000 to be made to Gahan Ltd. by or on behalf of DH Developments Corp., Peterson undertook to prepare a discharge of Gahan Ltd.’s mortgage on the lot to be sold by DH Developments Corp. to Brodie Brendan Bradley and Rebecca Edith Kaley and to obtain its execution by Gahan Ltd. [Peterson Undertaking]. [ 77 ] In paragraph 2 of his Defence, Mr. Peterson denies the allegations formulated in those paragraphs and puts Mr. O’Toole to their “strict proof”. In paragraph 4, Mr. Peterson reinforces his denial by stating:

With respect to the allegations contained in paragraphs 7 and 8 of the Amended Third Party Claim, the Third Party Peterson denies that he provided an undertaking to release or discharge the blanket Gahan mortgage of any lot sold by DH Developments Corp., including the lot sold by DH Developments Corp. to the Plaintiffs. [ 78 ] Clearly, the pleadings raise, but do not settle, the threshold issue of whether Mr. Peterson undertook not only to prepare a discharge of Gahan’s mortgage but also to obtain its execution.

This issue stands to be determined before all others, and it must be settled on the basis of the evidence . [ 79 ] It is Mr. O’Toole’s evidence that the undertaking in question arises from two letters he received from Mr. Peterson, the first dated January 4, 2013, the second dated March 15, 2013.

Paragraph 12 of his affidavit is directly on point and reads as follows: As part of the Closing Statement, I undertook to payout and discharge Gahan’s mortgage on the property based on the January 4, 2013 promise of Solicitor Peterson to release mortgages in exchange for $5,000 and the March 15, 2013 letter stating he would prepare the discharge as requested. [ 80 ] In his January 4, 2013 letter, Mr. Peterson set out the terms for the settlement of his client’s account proposed by Mr. O’Toole’s clients, Kevin Moore and Dwaine McKay.

One of those terms is a conditional agreement by Gahan to provide partial discharges of its blanket mortgage for lots sold by DH Developments: Further to our discussion earlier this week please be advised that Kevin Moore and Dwaine McKay attended at my office this morning to propose a settlement of the above account as follows: 1. P.R. Gahan & Sons Ltd. will withhold filing a Claim for Lien until January 10, 2013 to allow your clients time to obtain refinancing of PID 60177848 and PID 60154150 through Graysbrook Capital Ltd. in an amount to cover the current Graysbrook Mortgages of $265,000.00 and $165,000.00.

In addition this mortgage will also cover an additional $270,000.00 to be advanced by Graysbrook Capital Ltd. in installments beginning January 10 th and again in February and March. Graysbrook Capital will be a FIRST mortgage on both PIDs. 2. P.R. Gahan & Sons Ltd. shall receive $30,000.00 on January 10, 2013, $20,000.00 in February, 2013 and $20,000.00 in March, 2013. 3. P.R. Gahan & Sons Ltd. shall hold a second mortgage on PID 60177847 and PID 60154150 for the balance due (approximately $100,000.00) at 14%, payment of interest monthly until paid in full. 4. Part of the proposal is that P.R.

Gahan & Sons Ltd. will take a third position on PID 75416206 (Ellery Dwaine McKay) behind a first mortgage to CIBC Mortgages Inc., face value $100,000.00) and a second to Graysbrook Capital Ltd. (face value of $25,000.00 at 14%). 5. P.R. Gahan & Sons. Ltd. shall agree to release any lot sold by D & H Developments Ltd. for $5,000.00 each until the mortgage is paid in full . 6. Part of the proposal is that P.R. Gahan & Sons Ltd. will take a third position on the “purported” residence of Kevin Moore at 82 Aquarius Street.

However upon review of the SNB registry it appears that property is registered to Ryan Stacy Earl and Nicholas James Moore with outstanding mortgages to CIBC Mortgages Inc. (face value of $285,600.00), Yolanda Faith Piper (collateral mortgage of unknown value) and a third to Yolanda Faith Piper (face value of $117,500.00 at 18%). Please advise as to how Mr. Moore proposes to give this property as security and as to the relationship he may have to Yolanda Faith Piper and Nicholas James Moore and the outstanding balance on these mortgages.

Assuming you are able to put this package together by January 10, 2013 please forward the various mortgages to my attention for review. [Emphasis added]

[ 81 ] In the second letter relied on by Mr. O’Toole in paragraph 12 of his affidavit (the March 15, 2013 letter), Mr. Peterson states: Thank you for your letter of March 14, 2013 and the Certificates of Registered Ownerships for PIDs 60179561, 60179579, 60179587, 60179595 and 60179603. I noted that PID 60179611 was transferred to Kevin Moore and Jodi Ann Lamey on February 4, 2013, I assume Mr. Moore (DH Developments Corp.) intends to forward $5,000.00 for that Lot as it was part of PID 60177847 on January 11, 2013. I spoke with Mr.

Gahan this morning and confirmed that your client has not made the February $20,000.00 payment and $20,000.00 is now due for March. Please advise when we may expect those payments. Mr. Gahan is on vacation and will return on or about March 28, 2013. I will prepare the discharge for lot 2012-3 (PID 60179587) for his signature upon his return. [Emphasis added.] [ 82 ] Clearly, the underlined passage does not articulate the undertaking upon which the Amended Third Party Claim against Mr.

Peterson is founded, namely “to prepare a discharge of Gahan Ltd.’s mortgage on the lot [Lot 2012-3] to be sold by DH Developments Corp. to Brodie Brendan Bradley and Rebecca Edith Kaley and to obtain its execution by Gahan Ltd.” (emphasis added). In the letter’s underlined passage, Mr. Peterson simply undertakes to prepare the discharge for his client’s signature. Importantly, he does not suggest Gahan has agreed to sign the discharge and, at this juncture, DH Developments was already in default of its obligation to pay Gahan the February $20,000 instalment prescribed by the Forbearance Agreement.

On March 15, 2013, Mr. O’Toole was aware of the default. [ 83 ] In that context, Mr. Peterson’s undertaking to prepare a discharge for signature by his client cannot be equated to an unequivocal undertaking to obtain its execution, and we can only presume Mr. O’Toole, an experienced real estate law practitioner, was alive to the difference between the two when he chose to give his undertaking to the plaintiffs to provide a discharge of the Gahan mortgage. [ 84 ] Nevertheless, it was Mr.

O’Toole’s submission before the motion judge and in this Court that, viewed contextually, the closing paragraph of the March 15, 2013 letter is, in essence, an undertaking by Mr. Peterson to obtain an executed discharge of the Gahan mortgage. As noted, the motion judge did not determine whether that threshold controversy gave rise to a genuine issue requiring a trial. Applying the proportionality principle, we choose to make that determination. In that regard, the stark difference between Mr. O’Toole’s submission and his affidavit evidence bears highlighting. [ 85 ] In paragraph 12 of his affidavit, Mr.

O’Toole describes the closing paragraph of the March 15 letter as no more than a statement by Mr. Peterson that he “would prepare the discharge as requested”. Critically, it is not Mr. O’Toole’s evidence that the closing paragraph constituted an undertaking by Mr. Peterson to obtain a signed discharge of the Gahan mortgage. In paragraph 12, Mr. O’Toole asserts that undertaking was given by Mr. Peterson in his January 4, 2013 letter . [ 86 ] With respect, nothing in that letter binds Mr. Peterson to obtain a release of any mortgage.

What the letter contains are terms for settlement of the Gahan account, as proposed by Mr. O’Toole’s clients, which terms include Gahan’s agreement , on terms, to partially release its blanket mortgage for any lot sold, upon payment of $5,000. Mr. O’Toole’s submission impermissibly conflates Mr. Peterson’s promise of March 15, 2013, to prepare a discharge for signature by his client, Gahan, and the Gahan conditional pledge to provide mortgage discharges described in Mr. Peterson’s January 4, 2013 letter. [ 87 ] Rule 22.02(2) obligated Mr.

O’Toole to set out, in affidavit or other evidence, specific facts showing there was a genuine issue requiring a trial. As mentioned, the closing paragraph in the March 15, 2013 letter does not, on its terms, amount to an undertaking by Mr. Peterson to obtain an executed discharge of the Gahan mortgage. Indeed, Mr. O’Toole does not stake a contradictory position in his affidavit. [ 88 ] His submission is that the larger context justifies equating the closing paragraph’s otherwise inadequate terms to such an undertaking. That being so, Mr.

O’Toole was required to establish contextual elements that justified the proposed equation. He failed to do so. In truth, Mr. O’Toole’s own affidavit demonstrates the undertaking to which his Amended Third Party Claim against Mr. Peterson

is anchored was not given. V. Conclusion and Disposition [ 89 ] As indicated in our introductory remarks, we agree the motion judge misapprehended the evidence in delimiting the appellant’s legal obligations as a solicitor and fell into error by conflating those obligations and the separate and distinct legal obligations of his clients. However, we conclude those errors are inconsequential, the motion judge having rightly found, albeit for reasons that do not pass muster, there is no genuine issue requiring a trial of the appellant’s Amended Third Party Claim against the respondent. [ 90 ] In the result, the

summary judgment must stand. Accessorily, and in the interests of justice, we set aside the motion judge’s other findings to the extent they bear on the issues raised in the Amended Third Party Claim against the respondent’s client and direct their adjudication without any consideration being given to those findings. [ 91 ] The appellant will pay costs on appeal of $2,500. APPENDIX /

ANNEXE A (Current

summary judgment rule) DISPOSITION WITHOUT TRIAL RULE 22

SUMMARY JUDGMENT 22.01 Where Available To Plaintiff

(1) After the defendant has served a Statement of Defence or served a Notice of Motion, a plaintiff may move with a supporting affidavit or other evidence for

summary judgment on all or part of the claim CONCLUSION SANS PROCÈS RÈGLE 22 JUGEMENT

SOMMAIRE 22.01 Applicabilité Au demandeur

(1) Le défendeur ayant signifié l’exposé de sa défense ou son avis de motion, le demandeur peut, par voie de motion appuyée de preuve par affidavit ou autre, solliciter un jugement

sommaire sur tout ou

partie de la demande

in the Statement of Claim.

(2) The plaintiff may move, without notice, for leave to serve a Notice of Motion for

summary judgment together with the Statement of Claim, and leave may be given if urgency is shown, subject to such directions as are just. To Defendant

(3) After the defendant has served a Statement of Defence, the defendant may move with supporting affidavit or other evidence for

summary judgment dismissing all or part of the claim in the Statement of Claim. 22.02 Evidence on Motion

(1) An affidavit for use on motion for

summary judgment may be made on information and belief as provided in Rule 39.01(4), but, on the hearing of the motion, the court may draw an adverse inference from the failure of a party to provide the evidence of a person having personal knowledge of contested facts.

(2) In response to an affidavit or other evidence supporting a motion for

summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but shall set out, in affidavit or other evidence, specific facts showing there is a genuine issue requiring a trial.

(3) With leave of the court, an affidavit for use on motion for

summary judgment may contain opinion evidence if the deponent would be allowed to give that evidence while testifying in court. formulée dans l’exposé de sa demande.

(2) Par voie de motion présentée sans préavis, le demandeur peut prier la cour de l’autoriser à signifier avec l’exposé de sa demande un avis de motion visant l’obtention d’un jugement

sommaire, et cette autorisation peut être accordée, sous réserve des directives que la cour estime justes, si l’existence d’un cas d’urgence est établie. Au défendeur

(3) Ayant signifié l’exposé de sa défense, le défendeur peut, par voie de motion appuyée de preuve par affidavit ou autre, solliciter un jugement

sommaire rejetant tout ou

partie de la demande formulée dans l’exposé de la demande. 22.02 Preuve à l’appui d’une motion

(1) Dans le cadre d’une motion visant l’obtention d’un jugement

sommaire, un affidavit peut faire état des renseignements que le déposant a appris ou qu’il croit être vrais, comme le prévoit la règle 39.01(4), mais, si n’est pas produit le témoignage d’une personne ayant une connaissance directe des faits contestés, la cour peut, à l’audience, en tirer une inférence défavorable.

(2) Lorsqu’une motion visant l’obtention d’un jugement

sommaire est appuyée de preuve par affidavit ou autre, l’intimé ne peut se limiter à invoquer des allégations ou des dénégations énoncées dans ses plaidoiries. Au moyen de preuve par affidavit ou autre, il doit relater des faits précis faisant apparaître une véritable question en litige qui nécessite la tenue d’un procès. (3) Avec l’autorisation de la cour, tout affidavit utilisé dans le cadre d’une motion visant l’obtention d’un jugement

sommaire peut comprendre un élément de preuve sous forme de témoignage d’opinion dans la mesure où cet élément de preuve serait admissible en preuve dans le cadre du témoignage en cour du déposant. 22.03 Mémoires à fournir

(1) Dans le cas d’une motion visant l’obtention d’un jugement

sommaire, chaque

partie signifie aux autres parties à la motion

22.03 Briefs Required

(1) On a motion for

summary judgment, each party shall serve on every other party to the motion a brief consisting of a concise statement of all relevant facts, the argument, law, and authorities relied on by the party.

(2) The moving party’s brief shall be served and filed, with proof of service, in the office of the clerk of the judicial district where the motion is to be heard at least seven days before the hearing.

(3) The responding party’s brief shall be served and filed, with proof of service, in the office of the clerk of the judicial district where the motion is to be heard at least four days before the hearing. 22.04 Disposition of Motion General

(1) The court shall grant

summary judgment if (

a) the court is satisfied there is no genuine issue requiring a trial with respect to a claim or defence, or (

b) the parties agree to have all or part of the claim determined by a

summary judgment and the court is satisfied it is appropriate to grant

summary judgment. Powers

(2) In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and may exercise any of the following powers for the purpose, unless it is in the interests of un mémoire, lequel se compose d’un exposé concis des faits pertinents, des arguments, des règles de droit et des autorités que la

partie invoque.

(2) Sept jours au moins avant l’audience, l’auteur de la motion signifie son mémoire et le dépose, avec preuve de signification à l’appui, au greffe de la circonscription judiciaire dans laquelle la motion sera instruite.

(3) Quatre jours au moins avant l’audience, l’intimé signifie son mémoire et le dépose, avec preuve de signification à l’appui, au greffe de la circonscription judiciaire dans laquelle la motion sera instruite. 22.04 Décision sur la motion Dispositions générales

(1) La cour rend un jugement

sommaire lorsqu’elle constate :

a) ou bien qu’une demande ou une défense ne soulève pas de véritable question en litige nécessitant la tenue d’un procès;

b) ou bien qu’il convient de rendre pareil jugement et les parties sont d’accord pour que tout ou

partie de la demande soit tranché de la sorte. Pouvoirs

(2) Lorsqu’elle décide de l’existence d’une véritable question en litige qui nécessite la tenue d’un procès, la cour tient compte des éléments de preuve que les parties ont présentés et peut exercer l’un quelconque des pouvoirs ci-dessous énumérés, sauf si l’intérêt de la justice commande de ne les exercer que dans le cadre d’un procès :

a) apprécier la preuve;

b) évaluer la crédibilité d’un déposant;

justice for those powers to be exercised only at a trial: (

a) weighing the evidence; (

b) evaluating the credibility of a deponent; and (

c) drawing a reasonable inference from the evidence. Oral Evidence (mini-trial)

(3) For the purposes of exercising the powers set out in this subrule, a judge may order that oral evidence be presented by one or more parties, with or without time limits on its presentation. If Only Genuine Issue is Amount

(4) If the court is satisfied the only genuine issue is the amount to which the moving party is entitled, the court may direct a trial of that issue. If Only Genuine Issue is Question of Law

(5) If the court is satisfied the only genuine issue is a question of law, the court may determine that question and grant judgment accordingly. If Only Claim is for an Accounting

(6) If the only claim is for an accounting and the defendant fails to satisfy the court there is some preliminary issue to be tried, the court may grant judgment on the claim and give directions for an accounting.

c) tirer de la preuve une inférence raisonnable. Témoignages oraux (mini-procès)

(3) Aux fins d’exercice des pouvoirs qu’énumère le présent article, le juge peut ordonner qu’une ou plusieurs parties rendent des témoignages oraux, avec ou sans limite de temps pour leur présentation. Si la seule véritable question en litige porte sur le montant de la demande

(4) Si elle constate que la seule véritable question en litige a trait au montant auquel a droit l’auteur de la motion, la cour peut ordonner l’instruction de cette question. Si la seule véritable question en litige porte sur une question de droit

(5) Si elle constate que la seule véritable question en litige a trait à une question de droit, la cour peut la trancher, puis rendre jugement en conséquence. Si la demande vise uniquement une reddition de Comptes

(6) Si la demande se limite à une reddition de comptes, la cour peut rendre jugement sur la demande et donner des directives à cette fin, à moins que le défendeur ne la convainque qu’il y a lieu d’instruire quelque question préliminaire.

APPENDIX /

ANNEXE B (Former

summary judgment rule) DISPOSITION WITHOUT TRIAL RULE 22

SUMMARY JUDGMENT 22.01 Where Available To Plaintiff

(1) Before an action is set down for trial, the plaintiff may apply for

summary judgment against a defendant who has filed and served his Statement of Defence or has served a Notice of Motion, on the ground that (

a) there is no defence to the action or to one or more of the claims in the action or to part of any such claim, or (

b) the only defence is to the amount claimed. In Urgent Cases

(2) Where there is urgency, the plaintiff may apply, without notice, for leave to serve a Notice of Motion for

Summary Judgment with the Statement of Claim, and such leave may be given subject to such directions as may be just. To Defendant

(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. CONCLUSION SANS PROCÈS RÈGLE 22 JUGEMENT

SOMMAIRE 22.01 Applicabilité Au demandeur

(1) Le demandeur peut, avant la mise au rôle de l’action, demander un jugement

sommaire contre un défendeur qui a déposé et signifié l’exposé de sa défense ou qui a signifié un avis de motion, au motif

a) qu’aucune défense n’est opposable à l’action ou à une ou plusieurs des demandes qui y sont formulées ou encore à la totalité ou à une

partie d’une de ces demandes ou

b) que la seule défense opposable porte sur le montant de la réclamation. En cas d’urgence

(2) En cas d’urgence, le demandeur peut, sans préavis, demander la permission de signifier en même temps que l’exposé de la demande un avis de motion pour jugement

sommaire. La permission peut être accordée sous réserve des directives estimées justes. Au défendeur

(3) Après avoir déposé et signifié l’exposé de sa 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.

22.02 Affidavit Evidence

(1) A plaintiff applying for

summary judgment shall file and serve an affidavit (

a) setting out the facts verifying the claim or part of the claim, and (

b) stating that he knows of no fact which would constitute a defence to the claim or part of the claim except as to amount.

(2) A defendant applying for

summary judgment shall file and serve an affidavit (

a) setting out the facts verifying his contention that there is no merit in the whole or part of the claim, and (

b) stating that he knows of no fact which would substantiate the whole or part of the claim.

(3) To the extent that a party who files and serves an affidavit under paragraphs (1) or (2) does not have personal knowledge of the facts upon which he intends to rely, he shall also deliver the affidavit of someone having such knowledge.

(4) Where the defendant is acting in a representative capacity, or is under disability and is represented by a litigation guardian or a committee, and the defendant or his litigation guardian or committee, as may be, after careful inquiry, is unable to comply with the requirements of this subrule and does not feel justified in admitting the claim of the plaintiff, he may file and serve an affidavit to that effect. 22.03 Cross-Examination Rule 39.03 applies to applications under this rule. 22.02 Preuve par affidavit

(1) Le demandeur qui demande un jugement

sommaire doit déposer et signifier un affidavit

a) exposant les faits qui appuient sa demande en tout ou en

partie et

b) dans lequel il affirme ne connaître aucun fait qui puisse constituer une défense à la demande ou à une

partie de celle-ci, si ce n’est quant au montant de la réclamation.

(2) Le défendeur qui demande un jugement

sommaire doit déposer et signifier un affidavit

a) exposant les faits qui appuient son argument voulant que la demande, en tout ou en partie, ne soit pas fondée et

b) dans lequel il affirme ne connaître aucun fait qui puisse justifier la demande en tout ou en partie.

(3) Dans la mesure où la

partie qui dépose et signifie un affidavit en application des paragraphes (1) ou (2) ne connaît pas personnellement les faits sur lesquels elle entend se fonder, elle doit également délivrer un affidavit d’une personne qui les connaît personnellement.

(4) Lorsque le défendeur agit en qualité de représentant ou si, étant frappé d’incapacité, il est représenté par un tuteur d’instance ou par un curateur, lui-même, son tuteur d’instance ou son curateur, selon le cas, peut, si après enquête sérieuse il ne parvient pas à se conformer aux prescriptions du présent

article tout en ne croyant pas être en droit d’admettre la demande du demandeur, déposer et signifier un affidavit en ces termes. 22.03 Contre-interrogatoire La règle 39.03 s’applique aux requêtes formulées en application de la présente règle. 22.04 Décision sur la motion

22.04 Disposition of Motion Where No Defence or Merit to Action

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

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

b) the applicant is entitled to judgment the court may grant judgment. Where Only Defence is to the Amount Claimed

(2) Where the plaintiff satisfies the court that the only defence is to the amount claimed, the court may direct a trial of that issue. Where Only Issue is a Question of Law

(3) Where the court is satisfied that the only issue is a question of law, the court may determine t

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