2016 MBCA 52, 2016 MBCA 52

Citation: Lenko v The Government of Manitoba et al, Date: 20160525 2016 MBCA 52 Dockets: AI15-30-08397 AI15-30-08407 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Holly C. Beard Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner BETWEEN : ) G. D. Lenko ) on his own behalf ) GARY D. LENKO ) A. J. Ladyka ) for the Respondents ) The Government of (Plaintiff) Appellant ) Manitoba and the ) Manitoba Housing and ) Renewal Corporation - and - ) ) M. Muller ) for the Respondent THE GOVERNMENT OF MANITOBA, ) the City of Winnipeg THE MANITOBA HOUSING AND ) RENEWAL CORPORATION, THE CITY ) W. M.

Onchulenko OF WINNIPEG, and THE CANADA ) for the Respondent MORTGAGE AND HOUSING ) the Canada Mortgage CORPORATION ) and Housing Corporation ) ) Appeals heard: (Defendants) Respondents ) December 3, 2015 ) ) Judgment delivered: ) May 25, 2016 On appeal from 2014 MBQB 233 BEARD JA A. THE FIRST APPEAL I. THE ISSUE [ 1 ] While this case raises many issues, the appeal is, at its core, an appeal of an order of a judge of the Court of Queen’s Bench (the motion judge) granting

summary judgment to the defendants dismissing Mr. Lenko’s claim for damages for negligent misrepresentation. The motion judge made it clear that he was only “provid[ing] direction on the

summary judgment motion as it pertains to negligent misrepresentation” (at para 11). II. THE FACTS [ 2 ] Mr. Lenko owned a house in Winnipeg that was in need of repairs. On or about May 5, 2006, he applied for a

forgivable loan under a government program called The Residential Rehabilitation Assistance Program (RRAP), which was a program to assist low income homeowners with the cost of repairs to their houses that related to health and safety standards. [ 3 ] RRAP was being delivered under a 2005 agreement between the Canada Mortgage and Housing Corporation (CMHC) and the Manitoba Housing and Renewal Corporation (MHRC), which were jointly funding the program.

MHRC was responsible to evaluate and approve or dispose of applications, and it could enter into agreements to delegate the delivery and administration of the program. When Mr. Lenko made his application, RRAP for properties within the city of Winnipeg was being administered by the City of Winnipeg (Winnipeg) on behalf of MHRC. Thus, Winnipeg was responsible to receive the applications, meet the applicants, inspect the properties, determine whether to recommend the applications and send them to MHRC to make a decision on whether to approve them. [ 4 ] Once Winnipeg determined that Mr.

Lenko qualified financially for the program, an inspector was sent to inspect the house. The initial inspection took place on August 22, 2006. Mr. Lenko had a meeting with the inspector on August 29, 2006, at which time they discussed the work that was required to be done. While there is a disagreement as to exactly what was said, it is agreed that the inspector advised Mr. Lenko that he would have to obtain a report from a structural engineer and that he would be required to complete all work that the engineer recommended. [ 5 ] The essence of this case involves the discussions that took place between Mr.

Lenko and the inspector and what, if anything, he told Mr. Lenko regarding his qualification for RRAP, payment for the structural engineer’s report and the removal of his furnace and heating ducts. According to Mr. Lenko, the inspector told him that he had been approved for RRAP. He says that the inspector said that he could take out the furnace, which would facilitate the engineering inspection in the crawl space, and that a new furnace would be covered under RRAP. Finally, he says that the inspector also told him that RRAP would cover the cost of the engineering report.

There is no evidence from the inspector responding to these allegations. [ 6 ] Following those meetings, Mr. Lenko removed the non-functioning gas furnace and ductwork from the crawl space of the house and retained a structural engineer to inspect the house and prepare a report. When he called the inspector to arrange for payment of the engineer’s report so that he could get a copy, he was told that payment would not be forthcoming. [ 7 ] There were further conversations between Mr. Lenko, the inspector and his supervisor that led to a meeting on September 25, 2006, between the three of them and, in addition, Mr.

Lenko’s current wife, to discuss his application. He was provided with a letter from the supervisor dated September 27, 2006, expressing concerns about his ability to do the work on his own and setting out the further information required in order to complete his application for consideration. [ 8 ] Mr. Lenko was not happy with either his treatment at the meeting or the outcome. Instead of providing the further information, in early October 2006, he contacted a more senior administrator at Winnipeg and representatives of MHRC and CMHC for help in proceeding with his repairs.

He was unsuccessful in having his application approved or receiving any funding. [ 9 ] Mr. Lenko says that he did not have the resources to replace the furnace. He tried to heat his home with electric heaters that winter, but that was expensive and he could not afford to do so. As a result, he says that he sold his home at a loss, which led to him suing the defendants for damages. [ 10 ] Winnipeg’s evidence is found in an affidavit sworn by Miles Watts, who was employed by Winnipeg as the program co- ordinator for RRAP when Mr. Lenko’s application for RRAP was processed.

In his affidavit, he stated that the inspector was no longer employed by Winnipeg, having retired some 11 weeks earlier, and that Winnipeg had been unable to obtain an affidavit from him. As a result, Mr. Watts was relying on the file documents and his recollection of his conversations with the inspector to provide the evidence in his affidavit. [ 11 ] Mr. Watts’ affidavit, as it relates to the inspector’s contact with Mr. Lenko, states as follows: 7. [The inspector] first inspected 2047 Gallagher on August 22, 2006. At that initial inspection, [the inspector] provided Mr.

Lenko with two information sheets prepared by the City:

(1) R ESIDENTIAL R EHABILITATION A SSISTANCE P ROGRAM ( RRAP ) for Homeowners ; and

(2) WHAT TO EXPECT: R ESIDENTIAL R EHABILITATION A SSISTANCE P ROGRAM ( RRAP ) FOR HOMEOWNERS. I have attached to this affidavit as Exhibit C a copy of both information sheets and [the inspector’s] cover note. 8. On or about August 29, 2006, [the inspector] produced and provided to Mr. Lenko a “Report-RRAP-Work Description”, which I have attached to this affidavit as Exhibit D . At that time, [the inspector] told Mr.

Lenko that the estimated cost of the mandatory repairs he would have to undertake to qualify for the RRAP loan was $43,650, the total cost of all of the items identified in the report. [The inspector] asked Mr. Lenko if he would be able to finance the balance of $27,650 above the maximum amount of a RRAP loan of $16,000. [The inspector] also told Mr. Lenko that an inspection and report of a structural engineer was required for the RRAP application and that all work identified by the structural engineer as necessary would be a mandatory condition of any RRAP loan. 9.

In the next month, there was periodic contact between me, [the inspector], Mr. Lenko and his friend Nancy Thomas. On September 25, 2006, I wrote a note to Mr. Lenko’s file, a copy of which I have attached to this affidavit as Exhibit E . In the note, I summarized our office’s dealings with Mr. Lenko and my thoughts regarding his RRAP application. 10. On September 26, 2006, Mr. Lenko delivered [the inspector] a “quote” for the completion of most (but not all) of the mandatory repair work with himself acting as the general contractor. I have attached a copy of the “quote” to this affidavit as Exhibit F .

The “quote” was not substantiated by any actual quotes from material suppliers or building trade contractors. Mr. Lenko said that he was qualified to do the work himself and proposed to do so. [The inspector] and I were concerned because Mr. Lenko had no documented formal construction trades experience besides his claim that he had built a house and renovated many houses. 11. On September 27, 2006, I wrote to Mr. Lenko a letter providing the City’s position with respect to Mr. Lenko’s RRAP application. I have attached a copy of the letter to this affidavit as Exhibit G . In the letter, I told Mr.

Lenko that the City would only proceed with his RRAP application upon receipt of the information/documentation requested in the letter.

[ 12 ] Exhibit C, the cover note referred to in Mr. Watts’ affidavit, is brief and states: 5 OCT 2006 Reviewed these (attached) documents with the client at Initial Inspection [Signed] [ 13 ] Mr. Lenko filed an affidavit dated August 6, 2014, in reply to Mr. Watts’ affidavit. In reply to paras 6 to 11, he states: 8. In reply to paragraph 6 and 7, [the inspector] was to testify on behalf of the City of Winnipeg and a

summary of his evidence was filed. [The inspector] did not provide me with the documents attached as Exhibit C or any documents when he came to do the inspection of my home on August 22, 2006.

In fact, the City of Winnipeg, provided through the disclosure process, the same handwritten note and a different document entitled 2006 Home Renovation Tax Assistance Program as number 6 in its list of documents. 9. [The inspector] and I discussed the repairs my home needed and I told him that I would be doing the work myself except for the electrical work which involved replacing the 200 amp electrical panel and installing a new electric furnace. [The inspector] advised me to retain the services of a structural engineer to inspect the foundation and structure and to provide a report detailing the necessary repairs.

I asked [the inspector] if it was okay to start and remove the old furnace and ductwork, he said yes that I could go ahead as I was getting a new electric furnace with the RRAP. [The inspector] confirmed that I could do the labour and that the RRAP would advance funds to purchase materials for the repairs and progress payments would be made as work was completed. 11. I retained the services of a structural engineer and removed the old furnace and ductwork. The engineer spent considerable time with me discussing the necessary work and how it should be completed.

Attached and marked as Exhibit “A” to this my affidavit is a copy of the engineer’s invoice. 10. In reply to paragraph 8, I contacted [the inspector] to obtain the RRAP Work Description Report (WDR) and he stated that I should just forget the program as all the repairs would cost $43,650. I was shocked. I requested a breakdown of the repair items and amounts that [the inspector] had estimated, he emailed me a WDR that contained no estimates or dollar amounts for any of the repairs. I did not receive the WDR document attached to Mr. Watts’ affidavit as Exhibit D.

In fact, that WDR has been altered regarding the amperage of my electrical panel. I deny that I was asked if I could finance the balance of the repairs. Attached and marked as Exhibit “B” to this my affidavit is a copy of the request I sent to obtain a breakdown of the estimated costs and a copy of CMHC’s RRAP Guidelines and a copy of the only WDR without prices I received. 11. I requested a meeting to review the WDR and requested an advance to pay for the completed engineer’s report. [The inspector] refused to meet with me.

I became very worried at that point as it appeared that I was being denied the loan after I had been advised to start the work. I would have had the furnace repaired. I would have never got involved with RRAP had I known that the local delivery staff operated RRAP in a manner contrary to the RRAP Guidelines in that they first said I was approved and then denied me for no valid reason after I started the work. I was also advised by local delivery staff, including MHRC, that all of the materials for the repair would have to [be] paid for by me and once everything was completed I would be reimbursed.

I could not afford to pay for the repairs which was the reason I applied for help. 12. On September 25, 2006, I and my partner, Nancy Thomas, met with Miles Watts and [the inspector]. [The inspector] did not say one word during the meeting. I presented my quotes for all material, provided the electrician’s name, quotes for windows, doors, beam for foundation from Saber Industries, Kitchencraft cabinets and counter top and exterior siding from Rona, McDiarmid Lumber and Home Depot. All of the quotes I obtained were from reputable commercial stores and businesses.

I requested that RRAP pay for the engineer’s report and I provided the invoice. Mr. Watts became very angry and refused to pay for the report. I returned to the RRAP office the next day and submitted all of the quotes I had obtained to the attention of Miles Watts. [ 14 ] Mr. Lenko did not have any contact with anyone representing MHRC or CMHC until early October 2006. Further, no one from MHRC, CMHC or Manitoba had any involvement in the dealings between Mr. Lenko and the inspector. [ 15 ] Winnipeg did not file any material in reply to Mr.

Lenko’s affidavit and none of the parties conducted any cross- examinations on the affidavits that were filed in support of the motions. III. THE APPEAL REGARDING WINNIPEG’S MOTION FOR

SUMMARY JUDGMENT The Motion Judge’s Decision [ 16 ] The motion judge began his analysis by referring to the Supreme Court of Canada’s decision in Hryniak v Mauldin , 2014 SCC 7 , [2014] 1 SCR 87, but then stated that “this case can be disposed of by applying the principles that are in effect in Manitoba prior to Hryniak or those in effect after Hryniak ” (at para 32 ). [ 17 ] The motion judge set out the test for

summary judgment, as found in Homestead Properties (Canada) Ltd v Sekhri et al , 2007 MBCA 61 at paras 14-17 , 214 ManR (2d) 148. He noted the provisions of rules 20.01(3), 20.02(1) and 20.03(1) of the Manitoba, Court of Queen’s Bench Rules , Man Reg 553/88, and then observed that “It is not sufficient for the parties to rely upon their respective pleadings. They shall introduce evidence for consideration” (at paras 34-35).

[18] The motion judge then considered whether, regarding Winnipeg’s motion for

summary judgment, it had “met [its] burdenon a prima facie basis that Mr. Lenko’s action must fail” (at para 36). [19] He noted that Winnipeg had not produced any evidence from the inspector and it had not cross-examined Mr. Lenko onhis affidavits. Rather, it was relying on the information that the inspector had placed on the file. He provided a

summary of Mr. Watts’affidavit and concluded (at para 57): I find based upon the above

summary that Winnipeg has met its burden on a prima facie basis. Mr. Lenko was never approved for aRRAP loan as he failed to complete the requirements set out in the September 27, 2006 letter from Watts. I accept the evidence ofWinnipeg that there is no information in Mr. Lenko’s RRAP application file to indicate that [the inspector] had advised Mr. Lenko hecould remove the furnace. [20] The motion judge then considered whether Mr. Lenko had met his burden to demonstrate that his claim had a real chanceof success. He says (at para 61): Mr. Lenko’s claim is based in negligent misrepresentation.

As there is conflicting evidence before me as to what was or was notsaid by [the inspector] to Mr. Lenko, I am required to make credibility findings as to the evidence of the parties. [21] After referencing this Court’s decision in Caisse populaire de La Salle Credit Union Ltd v River Ridge Properties Ltd etal (1997), (MB CA), 115 ManR (2d) 115, which stated that it was difficult to make credibility findings based onconflicting affidavit evidence, the motion judge stated, “However, findings of credibility must be made” (at para 62). [22] The motion judge noted that Mr.

Lenko was aware that he had to put his best foot forward, and he stated that Mr. Lenko’sbest position would have been enhanced if he had presented evidence from the inspector acknowledging that he had told Mr. Lenko thathe could remove the furnace. He rejected Mr. Lenko’s position that he believed that it was Winnipeg’s responsibility to produceevidence from the inspector. The motion judge noted that Mr. Lenko did not cross-examine Mr.

Watts. [23] The motion judge stated that the five general requirements to establish the tort of negligent misrepresentation were set outby the Supreme Court of Canada in Queen v Cognos Inc, (SCC), [1993] 1 SCR 87. He then reviewed the evidence todetermine whether the inspector made the statements and representations alleged by Mr. Lenko. [24] The motion judge stated that “The notes on the file indicate that [the inspector] left the two RRAP information sheetswith Mr. Lenko, which formed the basis for the program” (at para 69).

After reviewing parts of the documentation provided by theparties, the motion judge concluded (at paras 80-81): To accept Mr. Lenko’s position, one would have to believe that Mr. Lenko was misled by [the inspector] on aspects of RRAP whichwere contrary to what had been set out in the written documentation. In effect, [the inspector] had to instruct Mr. Lenko that the rules didnot apply to him. There is no evidence before me to support this position. I find that [the inspector] and Mr. Lenko never discussed removing the furnace during the August 22, 2006 inspection.

Nor wasfurnace removal discussed during the September 25, 2006 meeting. Although Mr. Lenko’s evidence is that [the inspector] made such astatement, I am unable to find that such a statement had been made. [25] The motion judge noted that “Mr. Lenko’s evidence is that [the inspector] advised him he could remove the furnace” (atpara 82). He then drew two negative inferences against Mr. Lenko: - He stated that, once Mr. Lenko received the structural engineer’s report, a reasonable person would have replaced the furnace at theearliest possible date. - He also stated that Mr.

Lenko did not raise the removal of the furnace at the meeting with the inspector on September 25, 2006, andhe inferred that “a reasonable and prudent person would have demanded that this be addressed at the time of the discussions with [theinspector] and Watts.” He then says, “If he had raised this issue throughout his dealings with Winnipeg, his credibility would have beenenhanced. However, he did not. Therefore, I find that Mr.

Lenko’s evidence is not credible” (at para 82). [26] The motion judge then went on to consider another of the requirements to establish negligent misrepresentation as set outin Cognos, being that, “the person claiming negligent misrepresentation must have reasonably relied on the representation to hisdetriment” (at para 84). [27] The motion judge noted that the inspection occurred on August 22, 2006, and that “Winnipeg weather is such that itwould be reasonable to expect that within five weeks, a properly functioning heat source needed to be in place in Mr. Lenko’s home.

The heat source would not be a luxury, but a necessity” (at para 85). He accepted that Mr. Lenko did not have the resources to replace

the furnace, so he concluded (at paras 90-91): It is clear that it was unreasonable for Mr. Lenko to remove the furnace given all the matters that remained outstanding to approvehis application, and his lack of resources. He did not have the resources to complete the project. A reasonable and prudent person wouldnot have removed the furnace in these circumstances. Without the ability to replace the furnace using his own resources, it was not reasonable for him to rely upon the alleged statementmade by [the inspector].

I would have found his actions to be unreasonable even if I had found that [the inspector] had made the allegedstatement about removing the furnace. [28] The motion judge also considered whether Winnipeg had a duty of care to him. He stated (at para 94): [The inspector] and Mr. Lenko were not in what can be described as a “special relationship” such that a duty of care would arise. [The inspector] was a property standards inspector. RRAP is clear that all of the responsibility for any repairs to be undertaken rests withthe applicant (Mr.

Lenko) and his contractor. [The inspector] was not in a position of offering any advice to Mr. Lenko. [The inspector]was not a building inspector enforcing city by-laws as set forth in [Kamloops (City of) v Nielsen et al, (SCC), [1984] 2SCR 2]. He was only identifying what mandatory repairs that needed to be performed in the event that Mr Lenko’s application wasapproved. [29] Finally, the motion judge concluded that, in applying Cognos, Mr. Lenko did not have a claim for negligentmisrepresentation.

He found that he had not met his burden to demonstrate that he had a genuine issue for trial and that his claim had areal chance of success. As a result, he granted Winnipeg’s motion for

summary judgment and dismissed Mr. Lenko’s claim against it. The Parties’ Positions [30] Mr. Lenko argues that the motion judge erred as follows: - by applying the principles in Hryniak without taking into account the key differences between the new

summary judgment rules inOntario and the different

summary judgment rules in Manitoba; - by failing to address the question of whether the facts established that there was a genuine issue for trial and, instead, improperlydetermining issues of credibility and resolving those issues; - by failing to draw an adverse inference against Winnipeg for not providing any evidence from the inspector; and - by ignoring his unchallenged sworn evidence on the central issue, being his discussions with the inspector regarding the removal ofthe furnace. [31] Winnipeg agrees with Mr. Lenko that Queen’s Bench rules 20.01(3) and 20.03(1) apply to its motion and that the test forgranting

summary judgment is that set out in Homestead. It also relies on this Court’s decision in Bodnarchuk v RBC Life Insurance Coet al, 2011 MBCA 18 at paras 32-33, 262 ManR (2d) 225, as explaining the second stage of the analysis and the onus on the respondingparty following a finding that the moving party has established on a prima facie basis that the claim or defence should fail. It relies onHryniak for the proposition that courts are to be more liberal in granting

summary judgment to save litigants time and expense, and tosave the court system’s resources. [32] Winnipeg argues that the motion judge based his decision that Winnipeg had met the first step of the test for

summaryjudgment on the evidence on the record and he did not misdirect himself on that point. It further argues that the motion judge did not error misdirect himself in not drawing an adverse inference against it for not providing evidence from the inspector. [33] In

summary, its position is that the Mr. Lenko did not establish that the motion judge misdirected himself or came to adecision so clearly wrong that it resulted in an injustice when determining that there were no genuine issues for trial. Standard of Review [34] The standard of review on an appeal of a

summary judgment order was explained by Freedman JA in Towers Ltd vQuinton’s Cleaners Ltd et al, 2009 MBCA 81 at paras 22-28, 245 ManR (2d) 70. In

summary, questions of law are reviewed on thestandard of correctness and questions of fact are reviewed on the standard of palpable and overriding error. A question of mixed fact andlaw, being the application of the facts to the law, is generally reviewed on the standard of palpable and overriding error. If, however, thequestion of mixed fact and law involves an error relating to an extricable principle of law, the applicable standard is that of correctness. [35] The final determination of whether an applicant for

summary judgment has made out a prima facie case and, if so,whether the respondent on the motion has established that there is a genuine issue for trial are both discretionary decisions. This isbecause each decision requires the motion judge to apply her or his judicial experience and expertise to all of the relevant facts andapplicable law and then to make a judgment as to whether the required burden of proof has been met.

[36] Such a discretionary decision is reviewed according to a deferential standard, and appellate courts will not interveneunless the motion judge misdirects herself or himself or her or his decision is so clearly wrong as to amount to an injustice. This is alsosometimes referred to as an unreasonable decision. Analysis – Was the Statement or Representation Made? [37] Mr. Lenko’s claim against Winnipeg is based on the tort of negligent misrepresentation regarding statements andrepresentations made to him by the inspector in relation to his application under RRAP.

His claim is summarized in para 30 of theamended statement of claim: [Mr. Lenko] says that the RRAP personnel acted in bad faith and that they provided negligent advice that [Mr. Lenko] reasonablyrelied upon to his detriment. [Mr. Lenko] was left without a primary heating source and his principal residence remained in need ofextensive repair. [Mr. Lenko] was placed in a dangerous situation and he incurred overwhelming electric bills as he had to heat the housewith space heaters. [Mr. Lenko] would have repaired the furnace rather than remove it as instructed by [the inspector] had [Mr.

Lenko]known that RRAP funds were to be withheld. [Mr. Lenko] was subsequently forced to sell his house at a loss. [38] A key element of the claim is the allegation that the inspector made certain statements and representations to Mr. Lenko. In its statement of defence, Winnipeg denied that the inspector made any of the statements or representations attributed to him in thestatement of claim (see statement of defence of the City of Winnipeg, paras 8, 14 and 20). Thus, whether the inspector made the allegedstatements and representations to Mr.

Lenko would be a significant issue for trial. [39] The only evidence put forth by Winnipeg in support of its motion for

summary judgment was the affidavit sworn by Mr.Watts, in which he referred to information that the inspector had placed on the file. As already noted, the inspector did not provide anaffidavit and no substantive explanation was offered except that the inspector had recently retired and Winnipeg was unable to obtain anaffidavit from him. [40] While the motion judge puts much weight on the contents of the file, there was no evidence as to how the records werekept, what was supposed to be recorded and when it was to be recorded.

This is a problem because the note at Exhibit C was hand-written on what appears to be a scrap of paper dated October 5, 2006, some six weeks after the inspection and after it was clear that therewere problems being alleged with the inspection and with statements and representations alleged to have been made by the inspector. [41] In fact, the motion judge was quite critical of Mr. Lenko for not raising the issue of the furnace until October 10, 2006,several weeks after the inspection, and on that basis he found that Mr. Lenko’s evidence was not credible (see para 82).

He does not castthe same critical eye on the Exhibit C note. That note was accepted by the motion judge, and he made no adverse finding as to thecontents or motivation for the note, even though it was not made until October 5, 2006, the same delay as he attributes to Mr. Lenko’sstatements about the furnace. It should be noted that Mr. Lenko disputes the contents of that note and takes the position that theinspector did not give him those documents. [42] Further, there was a meeting between Mr. Lenko and the inspector on August 29, 2006, at which they discussed theRRAP application, but Mr.

Watts has not produced any file notes at all about that discussion. In fact, while the motion judge found thatthe inspector and Mr. Lenko did not discuss the furnace removal on either August 22, 2006, or September 25, 2006, he makes noreference to their discussion of August 29, 2006 (see para 81). [43] Critically, however, while Mr. Watts provided information found in Mr. Lenko’s RRAP file, nowhere in his affidavit doesMr. Watts address the key issue of the oral statements and representations attributed by Mr. Lenko to the inspector.

Most notably, Mr.Watts does not deny, in his affidavit, that those statements were made by the inspector. While Mr. Watts stated that his affidavit wasbased on the file documentation and his recollection of his conversations with the inspector, he does not refer to any conversations inwhich the inspector denied Mr. Lenko’s allegations. Winnipeg led no evidence at all to support the averment in its statement of defencethat the inspector did not make those statements and representations. [44] As was stated by Freedman JA in Homestead (at para 19): Parties moving or responding on

summary judgment matters ought to put their best and strongest case before the court, since themotion, and possibly the case will be disposed of on the basis of the evidence before the court. See, for example, the comments ofHelper, J.A., in Atlas Acceptance Corp. et al. v. Lakeview Development of Canada Ltd. et al. (1992), (MB CA),78 Man.R. (2d) 161; 16 W.A.C. 161 (C.A.) (at para. 35): It is not enough for a party opposing a motion for

summary judgment to [advert] to evidence that may be forthcoming at trial to supportits claim. The affidavit evidence must establish that the evidence upon which the party relies does in fact exist and, if accepted, willestablish the claim presented. ... [45] Winnipeg put no evidence before the court on this key issue. [46] The motion judge did acknowledge that Winnipeg did not present evidence from the inspector and that it was under anobligation to present its best evidence.

He noted that the inspector had left Winnipeg’s employ on April 5, 2014, and accepted that, as aformer employee, he could not be compelled to assist Winnipeg in any way. That statement does not take into account the variousprocedures for obtaining evidence from unco-operative witnesses, such as obtaining a subpoena and calling evidence viva voce orproceeding under r 31.10, and the fact that there was no evidence to indicate that Winnipeg had attempted to obtain the inspector’sevidence through one or more of these means.

[ 47 ] The motion judge also did not take a critical look at Winnipeg’s failure to obtain the inspector’s evidence while it could. It was clear to Winnipeg, from at least early October 2006, that Mr. Lenko was not happy with the outcome of his RRAP application and he was pursuing other avenues to have his claim resolved. He filed his original statement of claim on December 12, 2008, while Winnipeg filed its statement of defence on January 8, 2009, and its motion for

summary judgment on November 7, 2013. The inspector did not retire until April 5, 2014, over five years after the statement of defence was filed and six months after the motion for

summary judgment was filed. Winnipeg had a substantial amount of time to obtain the inspector’s evidence before he retired, and it has not explained its failure to do so. This should raise questions about the nature of the inspector’s evidence on this issue and whether it would have been helpful to Winnipeg, but the motion judge made no comment in this regard. [ 48 ] In

summary, the motion judge found that Winnipeg had met its burden on a prima facie basis because Mr. Lenko was never approved for a RRAP loan and because there was no information on his file to indicate that the inspector had advised Mr. Lenko that he could remove the furnace. These findings do not address the issue of the failure of Winnipeg to bring forward any evidence as to whether the inspector made the alleged oral statements and representations to Mr. Lenko without making a notation in the file. I have already commented on the issues related to the preparation of the note and the contents of the file.

In my view, the motion judge erred in law in finding that Winnipeg had met its burden, given that it put forward no evidence on this key issue. [ 49 ] Further, given that there was no evidence put forth by Winnipeg that the inspector did not make the statements and representations attributed to him, the finding that Winnipeg had met its burden was unreasonable and amounted to an injustice. As a result, it is entitled to no deference. [ 50 ] After finding that Winnipeg had met its burden, the motion judge stated, “As there is conflicting evidence before me as to what was or was not said by [the inspector] to Mr.

Lenko, I am required to make credibility findings as to the evidence of the parties” (at para 61). In fact, there was no such conflicting evidence. The unchallenged evidence of Mr. Lenko was that the inspector made the statements and representations that are at issue. This was sufficient, in my view, to meet the burden on Mr. Lenko of establishing that there is a genuine issue for trial as to whether the inspector made the statements and representations alleged by Mr. Lenko.

Analysis – Reasonable Reliance on the Representation and Duty of Care [ 51 ] The motion judge went on to consider another of the requirements of the tort of negligent misrepresentation, that being whether the representee relied, in a reasonable manner, on the negligent representation. He concluded as follows (at para 91): Without the ability to replace the furnace using his own resources, it was not reasonable for him to rely upon the alleged statement made by [the inspector].

I would have found his actions to be unreasonable even if I had found that [the inspector] had made the alleged statement about removing the furnace. [ 52 ] In considering this requirement of the tort, the motion judge erred in that he did not apply the test for granting

summary judgment; that is, he did not determine whether Winnipeg had proved, on a prima facie basis that Mr. Lenko’s claim must fail as regards the requirement that there be reasonable reliance on the inspector’s statements and, if so, whether Mr. Lenko had satisfied the burden of establishing that there is a genuine issue for trial. Rather, the motion judge considered the evidence as if he were deciding the matter at trial. [ 53 ] Even if I assume that it was reasonable for the motion judge to conclude that Winnipeg had satisfied the burden that, prima facie, Mr. Lenko’s claim must fail, the motion must fail at the second stage of the

summary judgment analysis. That second stage requires that Mr. Lenko must show that there is a genuine issue for trial. [ 54 ] The motion judge considered this requirement on the basis that the inspector had made the representations as alleged by Mr. Lenko. What were those statements and representations? Mr. Lenko’s position is that the inspector told him that he had been approved for RRAP, that he should obtain a structural report from an engineer, that he could remove the furnace to facilitate the inspection by the engineer and that the cost of the new furnace would be covered by the RRAP loan. As Mr.

Lenko pointed out in his affidavit, RRAP is a program to help people who do not have the resources to do the repairs on their own. If he had had the resources to do this work, he would not have applied for the program. [ 55 ] I would find that Mr. Lenko has led evidence that shows that there is a genuine issue for trial as regards the reasonableness of his reliance on the representations. The representations, if made, confirmed that Mr. Lenko could proceed to remove the furnace and that it would be replaced within RRAP.

He believed that it would facilitate the engineer’s inspection to remove it at that point in time. While he could not afford to replace the furnace himself, that was the reason for the application for the RRAP loan. [ 56 ] The evidence, looked at through the lens of the test for

summary judgment, leads to the conclusion that there is a genuine issue for trial on this issue. I am satisfied that the motion judge erred in law in applying the wrong test and that the application of the correct test would have led to a different result. [ 57 ] The motion judge also found that there was no duty of care on Winnipeg’s part. He states (at para 94): [The inspector] and Mr. Lenko were not in what can be described as a “special relationship” such that a duty of care would arise. [The inspector] was a property standards inspector.

RRAP is clear that all of the responsibility for any repairs to be undertaken rests with the applicant (Mr. Lenko) and his contractor. [The inspector] was not in a position of offering any advice to Mr. Lenko. [The inspector] was not a building inspector enforcing city by-laws as set forth in Kamloops . He was only identifying what mandatory repairs that needed to be performed in the event Mr. Lenko’s application was approved.

[58] Again, the motion judge does not appear to have considered this issue through the lens of the test for

summary judgment. Rather, it is written as a decision following a trial. [59] According to Mr. Watts’ affidavit, the inspector was an employee of Winnipeg and, as a representative of RRAP, he wentto inspect Mr. Lenko’s property. Further, Mr. Watts attests that, while there, the inspector provided Mr. Lenko with documentationregarding the program. Further, according to the inspector’s note Exhibit C, the inspector “Reviewed these . . . documents with theclient”. This indicates that he explained the program to Mr. Lenko. According to Mr. Watts, the inspector also provided Mr.

Lenko withinformation about how he should proceed, such as that he required an inspection by a structural engineer, he discussed the estimated costof the repairs and whether Mr. Lenko could finance the balance over the RRAP maximum loan. [60] If one applied the correct test for a

summary judgment motion and asked whether Winnipeg had proved on a prima faciebasis that the claim must fail as it relates to the duty of care, the only reasonable conclusion is that the test has not been met. Theevidence indicates that the inspector did much more than just inspect the property. There is, clearly, at least a genuine issue for trial as towhether the inspector, in making those statements to Mr. Lenko in the course of exercising his duties in relation to RRAP, had a duty ofcare to Mr.

Lenko. [61] While the motion judge relied on the test for a duty of care as set out in Cognos, it would be fair to say that the test hasevolved with subsequent jurisprudence, all of which was reviewed by this Court in North American Life Assurance Co v Pitblado &Hoskin et al, 2009 MBCA 83 at paras 76-104, 245 ManR (2d) 111. [62] Thus, I would find that the motion judge erred in finding that there was no duty of care. I would also find that Mr. Lenkohas proved that there is a genuine issue for trial as to whether the inspector, and, therefore, Winnipeg, owed him a duty of care. Conclusion – Winnipeg’s Motion for

Summary Judgment [63] For these reasons, I would find that the motion judge erred in granting Winnipeg’s motion for

summary judgment asregards Mr. Lenko’s claim for damages based on negligent misrepresentation. I would, therefore, grant Mr. Lenko’s appeal and dismissWinnipeg’s motion. IV. THE APPEAL REGARDING THE MOTIONS FOR

SUMMARY JUDGMENT BY MANITOBA, MHRC AND CMHC [64] As noted above, the motion judge limited his decision to Mr. Lenko’s claim for damages arising out of the negligentmisrepresentations of the inspector, and this is an appeal of that decision. To the extent that Mr. Lenko may have claims against thesedefendants on some other bases, they were not dealt with by the motion judge and are not the subject of this appeal. [65] As regards these defendants, the motion judge found (at paras 37-45, 51): Mr. Lenko’s claim in negligent misrepresentation has no basis against these defendants. There was no contact between Mr.

Lenkoand CMHC, MHRC or Manitoba. Mr. Lenko’s amended statement of claim and his affidavit evidence confirms this. It was [the inspector] who had contact with Mr. Lenko. [The inspector] did not:

a) Report to CMHC or MHRC;

b) Take directions from CMHC or MHRC; and

c) Have any contact with CMHC or MHRC. [The inspector], at all material times, was an employee of Winnipeg. Mr. Lenko’s claim in negligent misstatement relates tocomments made to him by [the inspector] concerning the removal of the furnace. There is nothing in the evidence to indicate thatanyone else made or confirmed [the inspector]’s statement. There can [be] no basis for assessing liability to CMHC or MHRC in thesecircumstances as they were not responsible for [the inspector]’s actions. Without any connection between CMHC or MHRC and the actions of [the inspector], there cannot be a claim against them. Therefore, I find that CMHC, MHRC and Manitoba have established a prima facie case for

summary judgment dismissing Mr.Lenko’s claim. I now turn to the second part of the test as outlined in Homestead, that is, whether Mr. Lenko has established that there is a genuineissue for determination, or as stated in Hercules Managements Ltd. v. Ernst & Young, (SCC), [1997] 2 S.C.R. 165,that there is a real chance of success. Mr. Lenko confirmed during the course of the hearing that he knew he was required to make his best case at this stage. Heacknowledged that if the defendants were successful, that there would not be another opportunity to present evidence. In examining Mr.

Lenko’s affidavits, the only reference to CMHC, MHRC or Manitoba is in correspondence written by Mr. Lenkoto each of these agencies “after” he had met with [the inspector] and Watts. It is clear that CMHC, MHRC and Manitoba never made anyrepresentations to Mr. Lenko. Mr. Lenko has failed to establish there is any real chance of success when his own evidence does notdisclose any contact between him and these defendants on the issue of negligent misstatement. As to the promotional materials, I do not find that there is a direct link between Manitoba/MHRC and CMHC to be of benefit to Mr.Lenko.

It is [the inspector]’s alleged negligent misrepresentation which forms the basis of Mr. Lenko’s claim. There is no reference tothe promotional materials concerning Manitoba/MHRC and CMHC being relied upon by Mr. Lenko such to support a foundation for aclaim in negligent misrepresentation.

Therefore, Mr. Lenko has not demonstrated that there is a genuine issue for trial and I find that MHRC, Manitoba and CMHC are hereby granted

summary judgment, and Mr. Lenko’s claim against them is dismissed. [ 66 ] Winnipeg’s position before the motion judge and on this appeal is that it should be the only defendant to this action. It adopts the motion judge’s finding that “As stated by Winnipeg, if any defendant is responsible to Mr. Lenko it would have to be Winnipeg. Mr. Lenko applied to Winnipeg for a loan. The responsibility to approve or deny his application was Winnipeg’s” (at para 48). [ 67 ] Not surprisingly, the other defendants have adopted Winnipeg’s position. [ 68 ] In my view, the motion judge did not misdirect himself in granting

summary judgment dismissing Mr. Lenko’s claim against these defendants for the inspector’s negligent misstatements, nor was his decision so clearly wrong as to amount to an injustice. [ 69 ] Thus, I would dismiss Mr. Lenko’s appeal of the motion judge’s decision as regards his claim of negligent misrepresentation against Manitoba, MHRC and CMHC. V. THE HRYNIAK DECISION [ 70 ] The defendants all relied upon the Supreme Court of Canada’s decision in Hryniak to argue that the courts should be more liberal in granting

summary judgment motions. This Court has accepted this direction in the spirit of increasing access to justice. (See, for example, Rochelle v St Clements (Rural Municipality) et al , 2014 MBCA 102 at para 5 , 310 ManR (2d) 202; Vend-All Marketing Inc v Hunter et al , 2015 MBCA 10 at paras 71-72 , 315 ManR (2d) 84; Klippenstein v Manitoba Ombudsman , 2015 MBCA 15 at para 32 , 315 ManR (2d) 149; and Lelond v Park West School Division , 2015 MBCA 116 at paras 79-84 , 323 ManR (2d) 188.) [ 71 ] Hryniak did not, however, change the test to be applied on a motion for

summary judgment in Manitoba. The test remains whether the claim or defence raises a genuine issue for trial (r 20.03(1)). If there is a genuine issue for trial, it is not for the motion court to resolve that issue; rather, the motion should be dismissed and the matter should proceed to trial. The situation is different in Ontario, where the

summary judgment rules have been substantially amended to expand the role of the court in resolving claims without a trial. This difference must be kept in mind when applying Hryniak to a motion for

summary judgment under the Manitoba rules. [ 72 ] Many motions for

summary judgment raise issues of credibility. In this case, the motion judge was of the view that he was “required to make credibility findings as to the evidence of the parties” (at para 61). He repeated this proposition, stating “findings of credibility must be made” (at para 62) and “I must determine credibility” (at para 64). That is not the correct test for

summary judgment in Manitoba. The motion judge referred to this Court’s decision in Caisse populaire , in which Monnin JA said (at para 11): . . . Matters of credibility requiring resolution in a case of conflicting evidence ought to go to trial; however, that depends upon the circumstances of the case; the court in taking the “hard look” at the merits must decide if any conflict is more apparent than real, i.e., whether there is really an issue of credibility that must be resolved in order to adjudicate on the merits. [ 73 ] Based on a hard look at the evidence in that case, Monnin JA concluded that the defences to the claim did not hold up, and he granted the

summary judgment motion. It should be noted, however, that the evidence in that case was extensive, including three affidavits from the applicant, six affidavits from the respondents and just under 1,000 pages of transcript from the cross-examinations of the parties on the affidavits. [ 74 ] This Court commented on this issue more recently in Haji-Hamzeh v Wawanesa Mutual Insurance Co , 2005 MBCA 17 , 192 ManR (2d) 154 (at para 4 ): Normally, issues of credibility are not resolved on a motion for

summary judgment, but in certain instances the evidence may be so overbalanced in one direction that the “so-called credibility issue evaporates”, to use the words of the motions judge. (See also Chaves et al v Shum et al , 2004 MBCA 56 at para 8 , 184 ManR (2d) 164; Sooter Studios Ltd v 74963 Manitoba Ltd et al , 2006 MBCA 12 at para 60 , 201 ManR (2d) 179; Ecclesiastical Insurance Office plc v Michaud , 2008 MBCA 129 at paras 10-11 , 14; and Hyczkewycz v Hupe , 2016 MBCA 23 at para 3 .) [ 75 ] While a motion judge is required to take a “hard look” at the evidence to ensure that what appears to be a credibility issue is, in fact, a genuine issue and not merely a simple denial by the responding party, once that threshold is met, it is not for the motion judge to go on and resolve those credibility issues.

Those are issues for trial. VI. CONCLUSION [ 76 ] For the reasons set out herein, I would allow Mr. Lenko’s appeal of the

summary judgment dismissing his claim against Winnipeg as regards his claim for negligent misrepresentation. I would, however, dismiss Mr. Lenko’s appeal of the

summary judgment dismissing his claim against Manitoba, MHRC and CMHC as regards his claim for negligent misrepresentation.

[ 77 ] As Mr. Lenko was successful against Winnipeg, he will have costs against Winnipeg. [ 78 ] As Manitoba, MHRC and CMHC were successful against Mr. Lenko, each will have costs against Mr. Lenko. B. THE SECOND APPEAL [ 79 ] Before the entry of the judgment related to the motion judge’s decision on the

summary judgment motion, Mr. Lenko filed a motion to set aside that decision or, alternatively, to reopen the hearing and permit the filing of new evidence, and for an order for the production of documents previously requested from the defendants but not produced. [ 80 ] The motion judge dismissed that motion, stating that Mr. Lenko was not raising anything different than the argument that he made at the hearing on the

summary judgment motion. [ 81 ] Given my decision on the first appeal which will permit Mr. Lenko to proceed with many of his claims, I am of the view that this second appeal has become moot and need not be considered further. [ 82 ] The defendants will each have one set of costs against Mr. Lenko regarding this appeal. Given that this matter was minor in nature and was argued at the same time as the first appeal, the defendants’ costs will cover the preparation, filing and service of documents, but there will be no additional costs for the appearance in court. JA I agree: JA I agree: JA