LLOYD POWER APPELLANT AND: LOYOLA HUTCHINGS RESPONDENT, 2022 NLCA 46

IN THE COURT OF APPEAL OF NEWFOUNDLAND AND LABRADOR Citation : Power v. Hutchings , 2022 NLCA 46 Date : August 1, 2022 Docket Number : 202101H0054 BETWEEN: LLOYD POWER APPELLANT AND: LOYOLA HUTCHINGS RESPONDENT Coram: Fry C.J.N.L., Goodridge and Butler JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador, General Division 201701G8467 Appeal Heard: June 29, 2022 Judgment Rendered: August 1, 2022 Reasons for Judgment by: Butler J.A. Concurred in by: Fry C.J.N.L. and Goodridge J.A. Counsel for the Appellant: Cletus E. Flaherty Counsel for the Respondent: Anna M. Wadden Authorities Cited: CASES CITED: Brook Construction

(2007) Inc. v. North Atlantic Cement and Construction Ltd. , 2020 NLCA 42 ; Hennessey v. Eastern Regional Integrated Health Authority , 2022 NLCA 45 ; R. v. P.H. , 2022 NLCA 37 ; R. v. Brunelle , 2022 SCC 5 ; Andrews v. Canada

(Attorney General) , 2019 NLSC 42 ; Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 SCR 235. RULES CONSIDERED: Rules of the Supreme Court , 1986 , SNL 1986, c. 42,

Schedule D, rule 17 A. Butler J.A. : INTRODUCTION [ 1 ] On this appeal the Court must consider whether the judge erred either in conducting a

summary trial pursuant to rule 17A of the Rules of the Supreme Court , 1986 , SNL 1986, c. 42,

Schedule D , or in awarding damages of $93,714.96 to Mr. Hutchings following

summary trial. BACKGROUND [ 2 ] Loyola Hutchings is a contractor. Lloyd Power was engaged to and subsequently married Mr. Hutchings’ daughter, Nicole Hutchings, on August 27, 2016. [ 3 ] In the months leading up to their wedding, the engaged couple had conversations with Mr. Hutchings respecting the possibility of using Mr. Power’s property at School Road, Tors Cove, Newfoundland and Labrador, as the wedding venue (the “Property”). [ 4 ] It was subsequently agreed that Mr.

Hutchings would provide materials, services and labour in relation to the removal of an existing cabin and the construction of a new dwelling on the Property. [ 5 ] Mr. Hutchings completed the work and submitted invoices for his out of pocket expenses in relation to the project but Mr. Power made no payment to Mr. Hutchings. [ 6 ] Lloyd Power and Nicole Hutchings signed a marriage contract on August 26, 2016, the day before their wedding. Paragraph 12 confirmed that Mr. Power was the sole beneficial owner of the Property, having a value of approximately $300,000.00, and that Ms.

Hutchings would not acquire any interest in the Property’s current value but that she would have an interest in any additional equity or value. [ 7 ] The couple separated on November 14, 2017 and executed a separation agreement on April 9, 2018. Paragraph 12 of the Separation Agreement confirmed the terms of the marriage contract relative to the Property and in paragraph 13, Mr. Power agreed to “be fully and solely responsible for any mortgages, loans, debts and any and all other claims against the Tors Cove Property” (Appeal Book, Tab 17, at page 5). Mr.

Power sold the Property on September 9, 2019 for $173,000.00. [ 8 ] Meanwhile, on December 19, 2017, Mr. Hutchings commenced an action against Mr. Power claiming, amongst other relief, damages in the amount of $94,094.00. This was represented to be Mr. Hutchings’ out of pocket expenses only as Mr. Hutchings had agreed to donate his labour. Mr. Hutchings’ Statement of Claim was subsequently amended twice. [ 9 ] In deciding the issues placed before him, the judge was guided by the claims made in the second Amended Statement of Claim filed August 17, 2020. In this pleading Mr.

Hutchings maintained the assertions that in or during the month of June 2016, he and Mr. Power had entered into an agreement whereby Mr. Hutchings would provide materials, services and labour in relation to the removal of an existing structure erected on the Property and the construction of a replacement structure and that Mr. Hutchings had not paid him for the agreed services. [ 10 ] However, paragraphs 6-7 and 9-15 of the second Amended Statement of Claim represented a substantial modification to Mr. Hutchings’ original claim. In these paragraphs Mr.

Hutchings asserted “in the alternative” to his contract claim, that if: … the agreement between the Parties did not contain specific provisions with respect to payment, then the Plaintiff claims entitlement to be paid by the Defendant on the following basis: (

a) quantum meruit ; and/or (

b) unjust enrichment. [ 11 ] The basis of Mr. Hutchings’ claim for equitable relief was specified in the paragraphs which followed. He alleged a benefit to Mr. Power, deprivation to Mr. Hutchings and the lack of any juristic reason for Mr. Power’s enrichment. [ 12 ] On September 22, 2020, Mr. Hutchings filed an application for

summary trial which was heard on July 27, 2021. The judge gave an oral decision on July 28, 2021. He ordered that Mr. Power pay Mr. Hutchings damages for breach of contract in the amount of $93,714.96 plus interest pursuant to the Judgment Interest Act , RSNL 1990, c. J-2 . The judge also ordered restitution for unjust enrichment in the same amount noting however that Mr. Hutchings could recover only once (Transcript, July 28, 2021, at pages 55-56). [ 13 ] On this appeal, Mr. Power alleges error in the judge’s conclusions on both contract and equity. However, during the appeal hearing Mr.

Power’s counsel conceded that if this Court found no error in the judge’s assessment of Mr. Hutchings’ claim in contract, the grounds of appeal respecting the claim in equity need not be addressed. ISSUES [ 14 ] The following issues will be addressed on this appeal: 1. Did the judge err in conducting a

summary trial under rule 17A of the Rules of the Supreme Court, 1986 ? 2. Did the judge err in determining that Mr. Hutchings was entitled to damages for breach of contract?

3. Did the judge err in determining that Mr. Hutchings was also entitled to equitable relief? ANALYSIS Issue 1 - Did the judge err in conducting a

summary trial under rule 17A of the Rules of the Supreme Court, 1986 ? [ 15 ] The jurisprudence establishes that there are threshold questions that the court must address on an application for

summary trial ( Brook Construction

(2007) Inc. v. North Atlantic Cement and Construction Ltd. , 2020 NLCA 42 , Schedule). On this appeal no issue is taken with the judge’s conclusion that there was compliance with rule 17A and it was “appropriate to deal with the issues in dispute by

summary adjudication” (Transcript, July 27, 2021, at page 30). [ 16 ] Brook Construction provided a Suggested Decision Tree to assist judges with the

summary trial process. Although the judge made no specific reference to Brook Construction , “it now represents the law to be applied when dealing with

summary trial applications” ( Hennessey v. Eastern Regional Integrated Health Authority , 2022 NLCA 45 , at paragraph 29 ). This Court will therefore be guided by it in the assessment of the errors alleged. [ 17 ] A

summary trial judge must address three questions, namely: 1. Is there a genuine issue with respect to a claim or defence? 2. Is the Court able to find the facts necessary on the existing record to decide the question of fact or law?; and 3. Is it nevertheless unjust to decide the question of fact or law on the application? (see Brook Construction, Schedule) [ 18 ] The judge addressed the first question.

Following a review of the alleged facts, procedural history and the position of each of the parties (including their affidavit and viva voce evidence), the judge concluded that “there are some genuine issues for trial with respect to both the claim for breach of contract and the claim for unjust enrichment” (Transcript, July 28, 2021, at pages 35-36). [ 19 ] Specifically, the judge identified the terms of the completed agreement and the quantum of damages as genuine issues on the contract claim.

On the equitable claim, he identified the quantification of relief as well as whether either the alleged misconduct of Mr. Hutchings or the existence of a contractual claim would disentitle Mr. Hutchings to the equitable relief sought (Transcript, July 28, 2021, at pages 36-37). [ 20 ] The judge then turned his mind to the second question namely, whether the Court was able to find the facts necessary on the existing record to decide the questions of fact or law (Transcript, July 28, 2021, at page 37). [ 21 ] The judge determined that he could and explained why he drew this conclusion.

He referenced that the three key players to the alleged agreement had provided evidence by affidavit supported by documents, discovery evidence and/or by cross-examination. The judge concluded that through this evidence as a whole it was uncontroversial that the “work was done and that there was an agreement to pay for the work at some point” (Transcript, July 28, 2021, at page 40). [ 22 ] The next question required to be addressed was “is it nevertheless unjust to decide the question of fact or law on the application?” It is apparent from his reasons as a whole that the judge put his mind to this question.

Specifically, the judge was satisfied that as a result of the significant evidence placed before him including cross examination of both Mr. Hutchings and Mr. Power, he could make determinations on the issue of credibility (Transcript, July 28, 2021, at pages 42-44). [ 23 ] I would conclude that no error is disclosed in the judge’s decision to conduct a

summary trial and I would dismiss this ground of appeal. Issue 2 - Did the judge err in determining that Mr. Hutchings was entitled to damages for breach of contract? The Judge’s Credibility Assessment [ 24 ] In assessing Mr. Hutchings’ claim in contract the judge appropriately put his mind to the question of “what each party to the alleged contract would have reasonably concluded from the statements, writings and conduct of the other party” (Transcript, July 28, 2021, at page 41). [ 25 ] The judge conducted a credibility assessment concluding that “Mr.

Hutchings was a credible witness and I accept that his evidence is reliable as to what was discussed between the parties in late May or early June 2016 on the date the plan was shown to him and up to the date when the project began” (Transcript, July 28, 2021, at pages 41-42). [ 26 ] The judge rejected the evidence of Mr. Power on key facts. The first was Mr. Power’s suggestion that the absolute highest amount Nicole Hutchings and he would pay for the services provided was $60,000.00. In this regard, the judge was aware that Mr. Hutchings, Mr. Power and Ms.

Hutchings were interested witnesses and as such their credibility: … must not be gauged solely by the test of whether the personal demeanour of a particular witness carries conviction of the truth. The test must reasonably subject the story of the witness to an examination of its consistency with the probabilities that surround the existing circumstances at the time of the formation of the alleged agreement. (Transcript, July 28, 2021, at page 44) [ 27 ] The judge concluded that “Mr. Hutchings’ story is most in harmony with the preponderance of probabilities” (Transcript, July 28, 2021, at page 45).

He referenced the surrounding circumstances of a father providing an estimated cost of construction to his

daughter and future son-in-law as an experienced home builder with an undertaking to do all he could do to keep his costs down on the project. The judge found these surrounding circumstances inconsistent with the suggestion by Mr. Power that Mr. Hutchings would be offering a fixed price for the work. [ 28 ] In R. v. P.H . , 2022 NLCA 37 , at paragraph 47 , citing R. v. Brunelle , 2022 SCC 5 , at paragraphs 8-9 , this Court recently commented on the deference due to a judge’s credibility findings.

A trial judge is in a privileged position in assessing the evidence and it is not appropriate for an appellate court “without clearly identifying a palpable and overriding error in [the judge’s] analysis” to “simply substitute its opinion for that of the trial judge with respect to the assessment of the credibility of witnesses.” [ 29 ] No palpable and overriding error is identified in the judge’s credibility assessment. The Elements of the Contract Claim [ 30 ] As Mr.

Power’s factum correctly identifies, there are several elements that must be present in the formation of a contract: offer, acceptance, consideration, intention to create legal relations and certainty of the essential terms that go to the core of an agreement ( Andrews v. Canada (Attorney General) , 2019 NLSC 42 , at paragraphs 13-23 ). [ 31 ] Based upon the evidence that he found to be reliable, the judge found that “the plan for a 1600 square foot cabin was provided to Mr. Hutchings by Mr. Power around the last of May or early June 2016” (Transcript, July 28, 2021, at page 42).

He found further that “the couple requested that [Mr. Hutchings] provide an estimate to complete the shell of the cabin based on that design and that he gave them a verbal estimate of $100,000.00, but told them that he would use his contacts to perform the work for less and would not charge them for his work in managing the project or on his own part” (Transcript, July 28, 2021, at page 42). [ 32 ] The judge concluded: … that a party to an alleged contract in the position of Mr. Power and Ms. Hutchings would reasonably conclude from the statements, writings and conduct of Mr.

Hutchings that he had offered to perform the work for the cost of the construction, not for a fixed price, and that he would not charge them for his work in managing the project or on his own

part in completing the work. (Transcript, July 28, 2021, at page 42) [ 33 ] The judge found further that Ms. Hutchings and Mr. Power: … agreed with his offer and that following that discussion and up to the first day of work, commencing when Mr. Power was present … Mr. Power provided directions and clarifications regarding the work to build the cabin … [and] that Mr. Power conducted himself in a manner consistent with the acceptance of that offer. (Transcript, July 28, 2021, at pages 42-43) [ 34 ] The judge’s reasons as a whole confirm that he was satisfied that Mr.

Hutchings had made an offer which was accepted by Mr. Power and Ms. Hutchings, that Mr. Hutchings’ services in return for the promise to pay were appropriate consideration, and that there was an intention to create a legal relationship. [ 35 ] The judge identified the price and payment due date as key issues he must address. [ 36 ] The judge concluded that the estimated price was $100,000.00 but acknowledged “[t]hat does not end the matter” (Transcript, July 28, 2021, at page 46). He then considered the reliability of the evidence presented by Mr.

Hutchings (and other witnesses) with respect to the invoices which added to $93,714.96. He found the invoices, which had been attached to Mr. Hutchings’ September 15, 2020 affidavit and on which he had been cross examined, reliable and concluded “[t]he amount of the Plaintiff’s loss is quantified to the penny, being $93,714.96” (Transcript, July 28, 2021, at page 50). [ 37 ] On the terms of repayment, Mr. Power asserts that the evidence of Mr. Power, Mr. Hutchings and Ms.

Hutchings was in conflict and that the judge erred in finding consensus on this term of the oral contract. [ 38 ] The judge referred to the evidence provided by each of the three parties to the contract on this term. He noted that Mr. Hutchings testified that he would be paid in full when Mr. Power and Ms. Hutchings refinanced (Transcript, July 28, 2021, at page 38). Ms. Hutchings’ evidence was provided in the form of a discovery transcript. The judge acknowledged that Ms.

Hutchings had testified that her father “would build it for us and then we would pay him when it was finished” (Transcript, July 28, 2021, at page 32). Mr. Power filed an affidavit on which he was cross examined. The judge noted that Mr.

Power had agreed that the construction of the cabin was not intended to be a gift, that he disagreed on the amount due but did not tender any evidence that would challenge or contradict the evidence of either Loyola or Nicole Hutchings on when payment was due (Transcript, July 28, 2021, at pages 33 and 40). [ 39 ] The judge’s credibility assessment played a role in his determination of this term of the oral contract. As stated earlier, he found Mr. Hutchings to be a credible witness and his evidence to be reliable (Transcript, July 28, 2021, at page 41).

The judge’s reasons as a whole confirm that he concluded that payment was due to Mr. Hutchings when Mr. Power had funds available by some reasonable means. [ 40 ] The judge therefore found that the agreement was breached “when Mr. Power, having arranged his affairs such that he was the sole beneficial owner of the property and solely responsible for all debts and claims against the property, failed to make any payments to Mr. Hutchings, despite acknowledging that he owed some amount to him as a result of the construction” (Transcript, July 28, 2021, at page 46). [ 41 ] As stated in Housen v.

Nikolaisen , 2002 SCC 33 , [2002] 2 SCR 235:

[22] … Although we agree that it is open to an appellate court to find that an inference of fact made by the trial judge is clearly wrong … where evidence exists to support this inference, an appellate court will be hard pressed to find a palpable and overriding error. As stated above, trial courts are in an advantageous position when it comes to assessing and weighing vast quantities of evidence. In making a factual inference, the trial judge must sift through the relevant facts, decide on their weight, and draw a factual conclusion.

Thus, where evidence exists which supports this conclusion, interference with this conclusion entails interference with the weight assigned by the trial judge to the pieces of evidence. … [24] … where a factual finding is grounded in an assessment of credibility of a witness, the overwhelming advantage of the trial judge in this area must be acknowledged. … [ 42 ] The evidence placed before the judge provided a valid basis for the conclusions that he made on issues of contractual formation, breach and assessment of damages, and they are entitled to deference. [ 43 ] No error is established in the judge’s conclusion that Mr.

Hutchings and Mr. Power had formed a contract, which was breached, and that Mr. Hutchings was entitled to damages in the amount of $93,714.96. I would therefore dismiss this ground of appeal. Issue 3 - Did the judge err in determining that Mr. Hutchings was also entitled to equitable relief? [ 44 ] In light of this Court’s conclusion on Issue 2 and Mr. Power’s concession during the appeal hearing, this ground of appeal is not required to be addressed. COSTS [ 45 ] Mr. Hutchings has been successful and is entitled to his costs on column 3.

DISPOSITION [ 46 ] I would therefore dismiss this appeal with costs to the respondent on column 3. _____________________________ G.D. Butler J.A. I concur: _____________________________ D.E. Fry C.J.N.L. I concur: _____________________________ W.H. Goodridge J.A.