Berscheid v Government of Manitoba, 2022 MBCA 12

Citation: Berscheid v Government of Manitoba, 2022 MBCA 12 Date: 20220202 Dockets: AI20-30-09467; AI20-30-09492; AI20-30-09505; AI20-30-09506; AI20-30-09507 ; IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Holly C. Beard Madam Justice Jennifer A. Pfuetzner Madam Justice Janice L. leMaistre BETWEEN : tim berscheid ) T. Berscheid ) on his own behalf ) (Plaintiff) Appellant ) A. J. Ladyka ) for the Respondent - and - ) ) Appeals heard: Government of manitoba ) September 1, 2021 ) ) Judgment delivered: (Defendant) Respondent ) February 2, 2022 On appeal from 2019 MBQB 79 PER CURIAM Introduction [ 1 ] The plaintiff appeals the

summary dismissal of part of his claim against the defendant for damages from flooding on forage land he leases from the defendant. The judge found no genuine issue requiring a trial as she found that a clause in the lease excluding liability for flood damage (the exclusion clause) applied. As a result, she granted partial

summary judgment in favour of the defendant. [ 2 ] On appeal, the plaintiff argues that the judge erred in principle in finding that the exclusion clause would shield the defendant from liability for breach of the duty of honest performance in contractual relations and in finding that the exclusion clause would prevent the application of the equitable estoppel doctrines. [ 3 ] The plaintiff also appeals the dismissal of his own motion for partial

summary judgment and he appeals the following three orders made by the judge during case management conferences. First, she ordered that the plaintiff’s motions for injunctive and declaratory relief would not proceed to a hearing (the no hearing order). Next, she ordered that the claim would be heard at the same time as a related application (the combined hearing order). Finally, she ordered that the defendant was not required to file and serve a reply to the application until after these appeals were determined (the application reply order) (collectively, the case management orders). [ 4 ] For the reasons that follow, we allow the appeal of the

summary judgment dismissing part of the plaintiff’s claim and direct that it proceed to trial. However, we dismiss the appeal of the order dismissing the plaintiff’s motion for partial

summary judgment and we dismiss his appeals of the case management orders. Background

The Leased Land [ 5 ] Since 1980, the plaintiff and his family have been operating a farm near The Pas, Manitoba. The majority of the farm land is leased from the defendant; however, the plaintiff owns the parcel of land on which his homestead is located. The farm is primarily a cattle operation, although the plaintiff grows some crops to feed the cattle. [ 6 ] The parties signed a series of leases beginning in 1980 under legislation in force at the relevant time (see The Crown Lands Act , 1 RSM 1970, c 57,

section 1; The Crown Lands Act , 1 RSM 1987, c C340 (the 1987 Crown Lands Act ); and Being a Regulation Under The Crown Lands Act Prescribing the Rents, Terms and Conditions of Forage Leases , Man Reg 167/77, as repealed by the Forage Leases Regulation , Man Reg 46/88R at

section 7, and, in particular,

section 6 thereof). [ 7 ] In 1993, the parties signed Forage Lease No. 5454 (the forage lease). The forage lease amalgamated all of the agricultural Crown land being leased at that time by the plaintiff from the defendant under one lease. It covers 29 parcels of land, totalling 1,028.1 hectares (2,540.49 acres), and has a term of 35 years, expiring December 31, 2027. [ 8 ] In 1999, the parties entered into an amending agreement which added three additional parcels of land, totalling 131 hectares (323.71 acres), to the forage lease (the amending agreement).

The total land under the forage lease was then 1,159.1 hectares or 2,864.2 acres. [ 9 ] The forage lease contains the exclusion clause, which states: . . . LIABILITY FOR FLOOD DAMAGE 32. Notwithstanding anything contained in [the forage lease], the Lessor shall not be liable for any loss, injury or damage of any kind whatsoever caused or purported to be caused by the raising or lowering of any body of water. . . . [ 10 ] At a certain point, the plaintiff began using one of the parcels of land covered by the forage lease (lot 95) for cropping rather than foraging.

In 2015, the defendant provided the plaintiff with notice that, as of January 2017, lot 95 would be withdrawn from the forage lease and replaced with a cropping lease in accordance with Directive 401-6 (Cereal or Special Crops Production on Forage Leases/Renewable Permits which was effective September 1, 1997). The Drainage System [ 11 ] The plaintiff’s land is adjacent to the Pasquia River at a location known as Young’s Point, in an area known as the Pasquia Land Settlement (the Pasquia Settlement).

The Pasquia Settlement is an area of flat land between the Carrot, Pasquia and Saskatchewan Rivers that drains into the Carrot and Pasquia Rivers. The Carrot and Pasquia Rivers drain into the Saskatchewan River. [ 12 ] In its natural state, the Pasquia Settlement is marshy and wet. Between 1950 and 1990, approximately 178,000 acres of low-lying land in the Pasquia Settlement were reclaimed for agricultural production through a system of dikes, drains and pumping stations (the drainage system).

The drainage system was built in stages over a number of decades to drain the area to provide agricultural land for farming and to prevent flooding. [ 13 ] In the spring, the Saskatchewan River can be higher than the Carrot and Pasquia Rivers, so that water from the Saskatchewan River backs up into the other rivers, flooding the land between them.

The area between the rivers was divided into four polders (areas of reclaimed land) that were drained over time, as the drainage system was expanded. [ 14 ] The initial stage of the drainage system involved installing a dam (the Knapp Dam) and pumps at the Saskatchewan River, where it meets the downstream end of the Pasquia River, to stop water from backing up into the Pasquia River.

A water diversion was built at the upper end of the Pasquia River to divert water from it to the Carrot River, to lower the flow of water through the Pasquia River. [ 15 ] In 1989, the Victor Jory Pump Station went into operation on the Pasquia River to “[enable] the pumping of water from Polder III East into the Pasquia River” where, previously, there was only gravity water flow into the river. [ 16 ] The defendant has operated the drainage system in accordance with operating rules and guidelines that have changed over the years, namely: (

i) a memorandum dated July 6, 1962, which attaches the Pasquia River Reclamation Area General Operation Procedure for Pumping Plants and Dams Preliminary Operation Rules; (ii) Operating Rules for Victor Jory Pump Station that took effect on December 7, 1989 (the 1989 Rules); (iii) Pasquia Land Settlement Operating Guidelines for Pumping Runoff dated May 12, 2008 (the 2008 Guidelines); and (iv) Operating Guidelines for Pumping Runoff dated March 8, 2018 (the 2018 Guidelines).

[ 17 ] The 1989 Rules increased the maximum water level for the Pasquia River from 259 to 259.5 metres (measured at the Young’s Point culvert). [ 18 ] The 2008 Guidelines stated: . . . The goal is to keep the water level in the Pasquia River downstream of the Young’s Point culvert below elevation 259.00 m (849.74 ft.).

To achieve this goal of maintaining the water level downstream of Young’s Point below elevation 259.0 m (849.74 ft.) Regional Operations shall endeavour to have storage available in the Pasquia River by releasing and/or pumping water out of the river throughout the year. . . . . . . [ 19 ] In 2017, the defendant issued a proposal for changes to the 2008 Guidelines for discussion at an open house. The proposal stated that “[c]urrent guidelines specify that dedicated pumping of the Pasquia River at the Town Pump Station will commence when the level at Young’s Point exceeds 259.0 m.

The proposed revision would increase the threshold level for pumping to 260.35 m.” It noted that the disadvantages of this change would be flooding to agricultural land and hardship to lessees and property owners along the Pasquia River. The changes proposed in 2017 were approved in 2018. [ 20 ] The 2018 Guidelines set the Young’s Point level at 260.35 metres (854.17 feet). The Claim [ 21 ] The plaintiff filed a statement of claim in 2008 which was subsequently amended (the claim).

The claim alleges, among other things, that the defendant caused flooding on his leased land by its operation of the drainage system and that the flooding resulted in damage and financial loss.

He states that the defendant was operating the drainage system according to the 2008 Guidelines, rather than the 1989 Rules, and that the 2008 Guidelines were developed contrary to legislation. [ 22 ] The plaintiff asserts that he was given assurances as early as “the late 1980’s” by the defendant that the drainage system would not adversely affect his property. [ 23 ] The plaintiff says that, as a result of these assurances, he took a number of steps to his detriment, including leasing additional land in 1990 and 1999, not filing a statement of claim, and improving the leased land. [ 24 ] The plaintiff says that, when the water level is at 260.35 metres, his homestead is flooded, all of the land that was added to the forage lease in 1990 is either flooded or inaccessible by land, and the land added in 1999 is totally inaccessible. [ 25 ] The defendant denies that its operation of the drainage system caused flooding to the plaintiff’s land or that it made the alleged assurances regarding its operation.

The defendant relies on the exclusion clause in the forage lease. The Application [ 26 ] In 2019, the plaintiff filed a notice of application, which was subsequently amended, under r 77 of the MB, Court of Queen’s Bench Rules , MR 553/88 (the QB Rules ), regarding proceedings under The Expropriation Act , CCSM c E190 (the application). In the application, the plaintiff seeks various remedies related to allegations of actual expropriation, constructive or de facto expropriation and injurious affection arising from flooding of the leased land.

Summary Judgment Motions [ 27 ] In 2017, the plaintiff filed a motion for partial

summary judgment regarding certain aspects of his claim. He also filed motions for injunctive and declaratory relief. In 2018, the defendant filed a motion for partial

summary judgment dismissing the claim with respect to flooding of the leased land, relying on the exclusion clause. The judge heard the

summary judgment motions together. [ 28 ] The plaintiff raised three issues on his motion for partial

summary judgment related to his assertion that the defendant caused flooding on his land by its operation of the drainage system. In particular, he sought: (

i) a declaration that the 1989 Rules were in force and effect up to and including 2017; (ii) a determination of whether the 2008 Guidelines complied with The Water Rights Act , CCSM c W80 and The Water Resources Administration Act , CCSM c W70 ; and (iii) a declaration that the defendant was responsible for the operation of the drainage system in the Pasquia Settlement. [ 29 ] The judge found that

section 5 of The Water Resources Administration Act authorized the creation of the 1989 Rules and the 2008 Guidelines; that “a government department must be able to develop and change its policies for changing circumstances and conditions” (at para 67); and that the 1989 Rules and the 2008 Guidelines do not have the force of law. She also concluded that, despite

being responsible for the operation of the drainage system in the Pasquia Settlement, the defendant had no duty “to operate [the drainage system] in any particular way ” (at para 73) and that The Water Resources Administration Act [did] not dictate how the defendant’s responsibility [was] to be fulfilled (see para 74). [ 30 ] On the defendant’s motion for partial

summary judgment, the plaintiff argued that the defendant had given him assurances regarding the operation of the drainage system that he relied on to his detriment. He asserted that this was a breach of the duty of honest performance which is not covered by the exclusion clause. He also argued that various doctrines of estoppel operated to prevent the defendant from relying on the exclusion clause. [ 31 ] In granting the defendant’s motion for partial

summary judgment, the judge found that the combination of

section 6 of the Forage Leases Regulation and section 4(1)(

f) of the 1987 Crown Lands Act provided a complete answer to the question raised by the motion. [ 32 ] Section 4(1)(

f) of the 1987 Crown Lands Act provided: Reservations . 4(1) In the absence of express provision to the contrary therein, there is reserved to the Crown out of every disposition of Crown land, (

f) the right to raise or lower the levels of a body of water adjacent to the land, regardless of the effect upon the land, but subject to the payment of compensation for permanent improvements on the land to the extent that the improvements are damaged thereby. [ 33 ]

Section 6 of the Forage Leases Regulation provided: Form of lease 6 Every forage lease shall be in the form of, and shall contain the provisions set forth in

Schedule A. [ 34 ] The judge explained her conclusion as follows (at paras 20-21, 29): Section 4(1)(

f) of [the 1987 ] Crown Lands Act , on its plain reading, means that when the defendant leased Crown land to the plaintiff, it reserved the right to raise or lower the levels of any adjacent body of water, such as the Pasquia River, regardless of its effect on the leased land.

Section 6 of the Forage Leases Regulation . . . prescribes a required form of lease containing specific provisions for all forage leases. This mandatory standard form included [the exclusion clause] as it is worded in [the forage lease]. The [forage lease] is in compliance with the Forage Leases Regulation . [The exclusion clause], then, was mandated by regulation and in compliance with [the 1987 ] Crown Lands Act . Again, [the exclusion clause] was mandated by the Forage Leases Regulation in force in 1993. It gave effect to section 4(1)(

f) of [the 1987 ] Crown Lands Act in force in 1993, which reserved to the defendant the right to raise or lower the levels of a body of water adjacent to leased land, regardless of the effect on the land. . . . [ 35 ] The judge rejected the plaintiff’s argument that the exclusion clause could not limit the defendant’s liability because it had failed to comply with the duty of honest performance. She stated (at para 46): The plaintiff argued based on Bhasin v.

Hrynew , 2014 SCC 71 , [2014] 3 S.C.R. 494 , that the defendant could not rely on [the exclusion clause] to exclude liability because a duty of honest performance is an implied term of all contracts and the defendant was dishonest in assuring him that the land would not flood because of the operation of the Victor Jory Pump Station. The plaintiff is correct that Bhasin stands for the proposition that there is a duty of honest performance implied in all contracts.

It does not follow however, in my view, that where there is an alleged failure to comply with that duty, an exclusion clause cannot operate to limit liability. [The exclusion clause] itself states that it applies “(n)otwithstanding anything contained in [the forage lease]”.

[ 36 ] The judge also did not accept the plaintiff’s argument that estoppel by convention, proprietary estoppel, promissory estoppel, estoppel by representation or estoppel by negligence applied. In doing so, she stated, “Given my findings with respect to [the exclusion clause], it is unnecessary to conduct an analysis of the merits of those arguments. Suffice it to say that I find that none of these doctrines has application to this case” (at para 58). Fresh Evidence and Reconsideration of

Summary Judgment Decision [ 37 ] After the judge released her decision on the motions for

summary judgment, the plaintiff brought a motion to admit fresh evidence and to have the judge reconsider her

summary judgment decision. She dismissed this motion and the plaintiff filed a notice of appeal. However, at the hearing of the appeals, the defendant agreed that the fresh evidence the plaintiff sought to admit could be considered on the appeal of the

summary judgment decision and it is being considered by this Court. In addition, the plaintiff acknowledged that, since the judge’s

summary judgment decision is now being considered by this Court, his appeal of the judge’s dismissal of his motion for reconsideration is moot.

Motions for Injunctive and Declaratory Relief [ 38 ] The plaintiff filed motions for injunctive and declaratory relief relating to his dealings with the defendant regarding his leased land and, in particular, lot 95. [ 39 ] In terms of the injunction, he sought to restrain the defendant from “removing any of [the] lands from the [p]ropert[ies]” that were the subject of the forage lease and the amending agreement; from changing the terms of the forage lease; from changing the use of the property; from increasing the rent or the assessed value of the property; and from “breaching the covenant of quiet enjoyment” of the property. [ 40 ] In his motion for declaratory relief, the plaintiff sought a declaration regarding his rights with respect to lot 95 and the forage lease. [ 41 ] Whether the motions should proceed to a hearing was discussed at the case management conferences on May 6, 2019 and June 14, 2019. [ 42 ] Following the June 14, 2019 case management conference, the judge provided a memorandum to the parties.

In concluding that the motions would not proceed to a hearing and in making the no hearing order, the judge stated the following: . . . I made that order because I considered it necessary and advisable to facilitate the most expeditious and least expensive determination and disposition of the action. An injunction is not an available remedy in litigation against the Crown.

The circumstances of this case do not warrant an interlocutory or interim declaratory order in lieu of an injunction. [The plaintiff’s] farming operation is not impaired by the actions of [the defendant] in relation to the leased land and lot 95. Declaratory relief would not provide a final determination of the claim, and in particular, would not allow for an order of damages claimed by [the plaintiff]. A motion for declaratory relief is generally entertained when there is no other means whereby the issues raised can be addressed by the court.

In this case, the issues raised can be addressed through a final determination of the claim, whether by trial, by

summary trial, or by

summary judgment motion. . . .

The Combined Hearing Order [ 43 ] At a case management conference convened on October 4, 2019, to discuss his concerns about whether the claim and the application should be heard at the same time, the plaintiff asserted that the application should proceed separately from the claim, primarily because it could proceed more quickly, but also because examinations for discovery would not be required and he would be entitled to government funding for the application. [ 44 ] In her subsequent case management conference memorandum to the parties, the judge determined that the application and the claim have “questions of fact in common, the relief claimed in each arises out of the same occurrences, and there is considerable overlap in the anticipated evidence in each of the proceedings.” She also determined that, even if the application could proceed more quickly, this factor did not outweigh the other factors favouring combining the proceedings.

Accordingly, pursuant to r 6.01 of the QB Rules , she ordered that they be heard at the same time. Reply to the Application [ 45 ] After the judge dismissed the motion for reconsideration of the

summary judgment decision, the plaintiff indicated that he intended to appeal both the

summary judgment decision and the order dismissing his motion for reconsideration. At a case management conference held on February 28, 2020, the judge made the application reply order, directing that the defendant’s reply to the application need not be filed and served until the appeals to this Court had been determined. In doing so, she drew the following conclusion:

. . . . . . It would not be efficient, cost effective, or consistent with the principle of proportionality, to require that [the defendant] file and serve a reply to the application, as would normally be required under rule 77.05(3) at this time. The nature and content of [the defendant’s] reply can reasonably be expected to depend in part upon the outcome of the anticipated appeals. In my view, with the appeals anticipated, the expense of compliance with that rule would be disproportionate to the likely benefit. (See rule 2.04.) . . . Grounds of Appeal [ 46 ] In his notice of appeal of the judge’s

summary judgment decision, the plaintiff lists 63 grounds of appeal. The grounds can be grouped into the following general categories: (1) the plaintiff was denied procedural fairness at the hearing of the

summary judgment motions, (2) the judge erred in law in her

interpretation of the exclusion clause, (3) the judge erred in law in her

interpretation of the applicable legislation, and (4) the judge erred in law by misapplying the law of contract and the doctrines of estoppel. [ 47 ] The plaintiff raises multiple grounds of appeal with respect to the case management orders. Essentially, he alleges that the judge erred in law and fact, as well as displayed a reasonable apprehension of bias against him. Analysis

Summary Judgment [ 48 ] The judge’s decision on the motions for

summary judgment is discretionary and, therefore, entitled to deference. In Berscheid v Federated Co-operatives et al , 2018 MBCA 27 , Steel JA explained the standard of review as follows (at paras 12-13): This Court has repeatedly commented on the applicable standard of review for

summary judgment decisions. It is a discretionary decision by the motion judge. It is a discretionary decision because it requires the judge to apply her or his judicial experience and expertise to all of the relevant facts and applicable law and then to make a judgment as to whether the required burden of proof has been met (see Lenko v The Government of Manitoba et al , 2016 MBCA 52 at para 35 ).

It should not be interfered with by the appellate court unless there is a finding of misdirection on the law or the facts or unless the decision is so clearly wrong as to yield an unjust result (see Perth Services Ltd v Quinton et al , 2009 MBCA 81 at para 28 ; and Lodge et al v Red River Valley Mutual Insurance Company et al , 2017 MBCA 76 ). [ 49 ] Several of the plaintiff’s grounds of appeal can be dealt with summarily. We have carefully reviewed the record, including the transcript of the

summary judgment hearing. There is no merit to the plaintiff’s argument that he was denied procedural fairness by the judge. Nor are we persuaded that the judge made any misdirection on the law or the facts in her

interpretation of the terms of the exclusion clause or of the applicable legislation. [ 50 ] As for her dismissal of the plaintiff’s motion for partial

summary judgment, we are not convinced that the judge made any material error of fact or law or that her decision is so wrong as to amount to an injustice. [ 51 ] Having said that, the plaintiff’s arguments regarding the breach of the duty of honest contractual performance and the application of the doctrines of estoppel require further examination. [ 52 ] The plaintiff asserts that, after the defendant leased farm land to him and his family in 1980, it made assurances regarding the operation of proposed changes to the drainage system that he relied on to lease further land, to do a significant amount of work on the land, and to make expenditures and other financial decisions, all in furtherance of his farming operation. [ 53 ] The plaintiff states that the defendant has failed to operate the drainage system in accordance with the 1989 Rules as it promised it would.

He alleges that the defendant has changed the operation of the drainage system in accordance with the 2008 Guidelines and the 2018 Guidelines. He says the changes were done without his consent and have had (and will continue to have) the detrimental effect of making his farming operation unviable due to nearly constant flooding. [ 54 ] The plaintiff argues that the defendant’s actions breached its duty of honest performance of the forage lease.

He takes the position that, at law, the exclusion clause cannot protect the defendant from liability for actions done in breach of its duty of honest performance that directly cause damage by the raising and lowering of water levels.

Moreover, he asserts that the defendant is estopped from relying on the exclusion clause, given the assurances that it made to him that his land would not be flooded. [ 55 ] The defendant agreed in oral argument that, given the principles set out in CM Callow Inc v Zollinger , 2020 SCC 45 , the exclusion clause would not exclude liability for damages flowing from a breach of the duty of honest performance. It also acknowledged that there could be circumstances where the doctrine of promissory estoppel would preclude reliance on the exclusion

clause. It accepted that, in stating otherwise, the judge erred (see paras 46, 58). However, the defendant argues that the evidence doesnot raise any issues requiring a trial in respect of dishonesty in the performance of its contractual duties or promissory estoppel. [56] In our respectful view, the judge’s conclusion that the exclusion clause operated to limit the defendant’s liability arisingfrom a breach of its duty of honest contractual performance is an extricable error of law. In CM Callow, Kasirer J wrote the followingabout the duty to act honestly in the performance of a contract (at para 84): . . .

I emphasize once again that it is unquestionable that the duty is imposed as a matter of contractual doctrine rather than byimplication or

interpretation, and, by virtue of its status as contractual doctrine, parties are “not free to exclude” the duty altogether(Bhasin, at para. 75). . . . [57] Similarly, it is an extricable error of law to conclude that the estoppel doctrines (in particular, promissory estoppel) canbe excluded by virtue of a limitation of liability clause such as the exclusion clause. Reading the judge’s reasons as a whole, it isapparent that she dismissed the plaintiff’s arguments regarding estoppel because she found that the exclusion clause ousted itsapplication.

As a result, she found it “unnecessary to conduct an analysis of the merits” (at para 58) of the plaintiff’s arguments. Weagree with the plaintiff that this was an error in law. [58] While the plaintiff relied on several types of estoppel, in our view, only the doctrine of promissory estoppel couldpotentially apply in the circumstances of this case. [59] The Supreme Court of Canada recently wrote on the doctrine of promissory estoppel in Trial Lawyers Association ofBritish Columbia v Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47.

In that case, Moldaver and Brown JJ confirmedthe following principles regarding the doctrine (at paras 15-16, 51): Promissory estoppel is an equitable defence whose elements were stated by Sopinka J. for this Court in Maracle [Maracle v TravellersIndemnity Co of Canada, (SCC), [1991] 2 SCR 50], at p. 57: The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by wordsor conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on.

Furthermore, the(promisee) must establish that, in reliance on the (promise), he acted on it or in some way changed his position. (Emphasis added.) The equitable defence therefore requires that (1) the parties be in a legal relationship at the time of the promise or assurance; (2) thepromise or assurance be intended to affect that relationship and to be acted on; and (3) the other party in fact relied on the promise orassurance. It is, as we will explain, implicit that such reliance be to the promisee’s detriment.

Promissory estoppel seeks to protect against the “inequity of allowing the other party to resile from his statement where it has been reliedupon to the detriment of the person to whom it was directed” (Fort Frances v. Boise Cascade Canada Ltd., (SCC),[1983] 1 S.C.R. 171, at p. 202). . . . . . . Detrimental reliance has, however, always been a requirement for asserting promissory estoppel, or for that matter any form ofestoppel.

This is because, being an equitable doctrine, its goal is to address unconscionable, unjust, or unfair conduct . . .. . . . [60] In our view, it would be contrary to the purpose of the doctrine to find that a promisor could rely on an exclusion ofliability clause to oust the doctrine’s application and to resile from a promise.

The whole point of the doctrine is to prevent a party fromrelying on legal rights, which would otherwise be available to it, in circumstances where it would be inequitable to do so. [61] If the plaintiff were to establish the necessary evidentiary basis for the application of the doctrine of promissoryestoppel, this could prevent the defendant from relying on the exclusion clause.

This is because the doctrine can “serve as an effectivedefence to a claim by the promisor attempting to enforce the original contractual arrangement” (Prof John D McCamus, The Law ofContracts, 3rd ed (Toronto: Irwin Law, 2020) at 308). [62] Having concluded that the judge erred in principle in granting

summary judgment dismissing part of the plaintiff’sclaim on the basis that the parties had contracted out of both the duty of honest performance and the doctrine of promissory estoppel, wewill consider the defendant’s motion for partial

summary judgment afresh. [63] On a motion for

summary judgment, the moving party must establish, on a balance of probabilities, that there is nogenuine issue requiring a trial (see Dakota Ojibway Child and Family Services et al v MBH, 2019 MBCA 91 at paras 108-111). [64] The defendant has established that, on its face, the exclusion clause protects it from liability for flood damage to theplaintiff’s leased land.

[ 65 ] However, the plaintiff filed evidence in support of his position that a trial is required on the issues of honest performance and estoppel.

This includes affidavit evidence regarding the assurances given to him, including that the 1989 Rules would be followed. [ 66 ] For example, he attests that “[p]ublic meetings were held in 1989 where [he] was assured [his] family farm would not be affected by the new Jory Pump station.” He states that he received assurances from the defendant’s representatives that “the pumps would not affect downstream water level on the Pasquia River or cause flooding on [his] farm”, that they would “follow [the] rules” and that he would be “protected by the rules.” In his cross-examination, he identified those representatives as Clayton Stanger and Brent Erlendson.

There is evidence to confirm that Mr. Stanger was the land representative involved with the plaintiff’s leases in 1980 and 1986, and that Mr. Erlendson was involved between 1990 and 1999. This was effectively unchallenged during the cross-examination. [ 67 ] The plaintiff also relies on documentary evidence. We will refer only to two samples. In a letter dated January 23, 1997, from Minister J. Glen Cummings (the then Minister of Natural Resources) to the plaintiff’s lawyer at the time, the minister states: . . . As you have indicated, the Director of Water Resources, Mr. Steven D. Topping, P.

Eng., along with departmental personnel met with [the plaintiff] on his property on September 20, 1996. There were discussions with regard to the situation at the pumping station at The Pas. Mr. Topping did indicate that he would certainly be pursuing an initiative to construct a new pumping station in the Knapp Dam area within a three year period. He also indicated that portable pumps would be put in to operation to match the volume of water that is pumped by the Victor Jory pumping station. I certainly support the decision made by Mr.

Topping. . . . . . . [ 68 ] The minister sent a second letter to the plaintiff’s lawyer dated June 12, 1997, enclosing a copy of the 1989 Rules. The minister stated: . . . The department has a long established set of operating procedures for the Victor Jory pumping station. It is my understanding that your client is aware of these procedures but I have enclosed a copy for your information.

In the event that there is a requirement to pump at the Victor Jory station when the conditions in the operating procedures cannot be met the department will use portable pumps as outlined in my correspondence dated January 23, 1997. I have been advised that during the period when the pumps at Victor Jory were operating the conditions of the operating procedure were being met.

I trust this clarifies the department’s position. . . . [ 69 ] As previously indicated, the plaintiff attests that, in reliance on these assurances, he took a number of steps to his detriment, including not filing a statement of claim; leasing more land in this same area in 1999; and improving the leased land by bush clearing, land breaking, building an access road, and installing riparian and perimeter fencing, as well as dugouts/watering stations for cattle. [ 70 ] The judge considered the evidence regarding assurances very briefly (see paras 37-40), and only in the context of her analysis of whether the forage lease was unconscionable at the time it was signed.

She stated that “[t]he evidence regarding the specific content of the assurances, who gave them and in what context, is limited” (at para 39) and that “[t]here is no evidence, however, specifying which representatives gave these assurances or what language was used.

Moreover, there is no evidence that these assurances were repeated or referred to at the time of the signing of the [forage lease] in 1993” ( ibid ). [ 71 ] She concluded, “In my view, the only relevance of the alleged promise that the leased land would not be flooded by the operation of the [drainage system] is in relation to the question of unconscionability in the Tercon analysis [ Tercon Contractors Ltd v

British Columbia (Transportation and Highways) , 2010 SCC 4 ], which I will address below” (at para 40). [ 72 ] The judge did not consider this evidence to determine if it raised a genuine issue requiring a trial in the context of the plaintiff’s claims that the defendant breached its duty of honest performance or was estopped from relying on the exclusion clause. [ 73 ] T he determination as to whether the defendant breached the duty of honest performance is highly fact-specific, as is the determination of whether the doctrine of promissory estoppel should be applied.

We are persuaded that we cannot make those determinations on the evidence that we have. There are issues of credibility and reliability of the evidence that cannot be resolved on the basis of the record alone. As was the case in Business Development Bank of Canada v Cohen , 2021 MBCA 41 , here, “the written record is clearly not so overbalanced in one direction that the credibility issue evaporates” (at para 54).

While some witnesses, including the plaintiff, were examined on their affidavits, oral evidence will be required in order for the necessary findings of fact to be made and to reach a fair and just determination of the merits. [ 74 ] In our view, the plaintiff has established that there are genuine issues requiring a trial . Case Management Orders [ 75 ] On his appeal of the no hearing order, the plaintiff argues that the judge erred in law when she concluded that an injunction is not an available remedy against the Crown.

He asserts that Smith v Attorney General (NS) , 2004 NSCA 106 , supports his position. [ 76 ] In support of his appeal of the combined hearing order, the plaintiff asserts that the application would be an easier and faster process than a trial on the claim and the judge should not have ordered that they be heard together. [ 77 ] As for the appeal of the application reply order, the plaintiff argues that the QB Rules do not provide an option for the judge to effectively put the application in abeyance or to exempt the defendant from compliance with the QB Rules . [ 78 ] First, there is no merit to the plaintiff’s claim that the judge displayed a reasonable apprehension of bias against him. [ 79 ] The case management orders are all interlocutory , procedural decisions made pursuant to the QB Rules (see rr 50-50.1).

As stated by Burnett JA in Christie Building Holding Company Limited v Shelter Canadian Properties Limited , 2021 MBCA 103 (at para 5 ): The longstanding accepted practice of this Court is that, absent exceptional circumstances, appeals of procedural or evidentiary rulings made during the course of civil proceedings should be addressed in the appeal from the final determination and should not be undertaken on a piecemeal basis by way of interlocutory appeals (see Pimicikamak et al v Manitoba et al , 2016 MBCA 106 at paras 9-11 ; and Doyle v Suche , 2019 MBCA 67 at paras 9-11 ). [ 80 ] Moreover, the case management orders are discretionary decisions entitled to deference and should not be interfered with absent a misdirection by the judge or a decision that is so clearly wrong as to amount to an injustice (see Berscheid v Marlow Farms Ltd et al , 2019 MBCA 118 at paras 4-5 ; and Rylaarsdam v Balcaen , 2020 MBCA 91 at para 3 ). [ 81 ] Decisions of this nature are entitled to deference for a number of reasons.

In Sawridge Band v Canada , 2006 FCA 228 , Evans JA explained that case management judges acquire expertise warranting deference, particularly in the course of managing complex, lengthy and difficult cases (at paras 21-22): . . . As a result of living with the matter over time, the case management judge will have acquired an overall understanding of it which an appellate court, on the basis of hearing an appeal on a particular issue, cannot possibly match in either depth or breadth.

When performing essentially case management functions judges are appropriately given “elbow room” by appellate courts, so that they can get on with what is often a difficult job, calling for a mix of patience, flexibility, firmness, ingenuity, and an overall sense of fairness to all parties. . . .

Pre-trial judges are entitled to the same degree of deference for the same reasons (see 506913 NB Ltd v Canada , 2011 FCA 327 at paras 20-21 ). [ 82 ] In addition, case management and pre-trial decisions are often not determinative of the merits of the action, and an appellate court should rarely disrupt case management and pre-trial processes in light of the judge’s power to “adjust to evolving circumstances and even to re-visit directions when necessary” ( Robak Industries Ltd v Gardner , 2006 BCCA 395 at para 13 ). [ 83 ] The QB Rules were amended in January 2018 “in order to achieve the objectives of timely and affordable access to justice and the principle of proportionality” by facilitating “judicial management of actions.” The pre-trial management rules (r 50) “allow judges to manage pre-trial conduct by, for example, . . . avoiding wasteful and unnecessary pre-trial activities” (Prof Karen Busby, Manitoba Queen’s Bench Rules Annotated (Toronto: Thomson Reuters, 1992) vol 1 (loose-leaf updated 2021, release 4), ch 2 at 2-177).

[ 84 ] Similarly, the purpose of case management is “to facilitate the just, most expeditious and least expensive determination or disposition of the proceedings” (Busby at p 2-186). A judge presiding at a case management conference possesses all of the powers of a pre-trial judge under r 50. [ 85 ] Rule 2.04(

a) provides as follows: Modification or waiver of rules 2.04 If a person acts in a vexatious, evasive, abusive or improper manner or if the expense, delay or difficulty in complying with a rule would be disproportionate to the likely benefit, a judge may, on motion by any party or on his or her own motion, without materials being filed, do one or more of the following: (

a) modify or waive compliance with any rule; [ 86 ] We disagree that Smith supports the plaintiff’s position on the appeal of the no hearing order. In Smith , Cromwell JA (as he then was) explained that an injunction may only be granted against a Crown officer when they exceed their powers or commit acts that would attract personal liability (see paras 6, 99, 101). [ 87 ] In this case, the plaintiff sought injunctive relief against “the lessor (The Province of Manitoba)”. He did not seek relief against a Crown officer.

In addition, the plaintiff’s lease (the forage lease) and the rent payable were established pursuant to legislation and cannot be said to have been ultra vires . [ 88 ] In our view, the judge’s management of this litigation was appropriately focussed on reaching a final determination without motions that did not meaningfully advance the litigation, and she had the power to order that the motions not proceed (see the QB Rules at r 50.05(4)(c)).

Even though her order that the motions would not proceed may have had a final effect, it is still entitled to deference ( see Donald JM Brown with the assistance of David Fairlie, Civil Appeals (Toronto: Thomson Reuters, 2021) vol 2 (loose-leaf updated 2021, release 3), ch 15 at

section 15:35). We see no error warranting appellate intervention regarding the judge’s decision that the motions not proceed. We dismiss the appeal of the no hearing order. [ 89 ] Regarding the plaintiff’s appeals of the combined hearing order and the application reply order, we are of the view that they are premature. We are not persuaded that this is an exceptional case warranting appellate intervention in interlocutory, procedural rulings.

Accordingly, the appeals of the combined hearing order and the application reply order are dismissed without prejudice to the plaintiff's right to raise these issues as grounds of appeal in any subsequent appeal of the final determination of the claim or the application. Conclusion [ 90 ] We allow the plaintiff’s appeal of the

summary judgment dismissing part of his claim with respect to any loss, injury or damage of any kind whatsoever to the land under the forage lease caused or purported to be caused by the raising or lowering of any body of water, and direct that it proceed to trial. [ 91 ] We dismiss the appeal of the dismissal of the plaintiff’s motion for partial

summary judgment. [ 92 ] We dismiss the appeals of the case management orders. [ 93 ] As success on the appeals has been divided, we make no order as to costs. JA JA JA