2420188 Nova Scotia Limited v. Peter G. Alex, 2011 NSCA 74

NOVA SCOTIA COURT OF APPEAL Citation: 2420188 Nova Scotia Ltd. v. Hiltz , 2011 NSCA 74 Date: 20110823 Docket: CA 340604 Registry: Halifax Between: 2420188 Nova Scotia Limited and Peter G. Alex Appellants v. Michelle L. Hiltz and Jeffrey Earl Hiltz Respondents Judge: The Honourable Justice Joel E. Fichaud Appeal Heard: May 18, 2011 in Halifax, Nova Scotia Subject:

Summary judgment on evidence - Nova Scotia CPR 13.04

Summary: Mr. and Mrs. Hiltz purchased land from the corporate appellant. Mr. and Mrs. Hiltz sued Mr. Alex, principal of the corporate appellant, for breach of an alleged personal warranty to maintain a road. Mr. Alex sought

summary judgment. The motions judge in the Supreme Court of Nova Scotia dismissed the motion. Mr. Alex appealed to the Court of Appeal. The pleadings were not in issue on the appeal. Issue: Did the motions judge err by dismissing Mr. Alex ’ s motion for

summary judgment on the evidence? Result: The Court of Appeal dismissed the appeal. The majority held that there was a dispute of material fact respecting whether Mr. Alex made a representation, and this meant that Mr. Alex had not satisfied the first step of the two step test for

summary judgment on the evidence. Beveridge, J.A. dissented. The appellant presented evidence that there was no contract between him and the respondents. The respondents not only did not dispute that evidence, but agreed their contract was with the corporate appellant. In the circumstances, the issue of whether a representation was made was not a material fact requiring a trial.

This information sheet does not form part of the court ’ s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 24 pages. NOVA SCOTIA COURT OF APPEAL Citation: 2420188 Nova Scotia Ltd. v. Hiltz , 2011 NSCA 74 Date: 201108 23 Docket: CA 340604 Registry: Halifax Between: 2420188 Nova Scotia Limited and Peter G. Alex Appellants v. Michelle L. Hiltz and Jeffrey Earl Hiltz Respondents Judges: Oland, Fichaud and Beveridge, JJ.A.

Appeal Heard: May 18, 2011 in Halifax, Nova Scotia Held: Leave to appeal granted, and appeal dismissed per reasons for judgment of Fichaud, J.A., Oland, J.A. concurring; Beveridge, J.A. dissenting. Counsel: Brian K. Awad for the appellants Devin M. Maxwell for the respondents

Reasons for judgment : [ 1 ] The defendants moved for

summary judgment on the pleadings and alternatively on the evidence, under Rules 13.03 and 13.04. The motions judge dismissed the motions. The defendants appeal only the dismissal of their motion for

summary judgment on the evidence under Rule 13.04. Background [ 2 ] The Appellants are 2420188 Nova Scotia Limited (Numbered Company) and Peter Alex. The Numbered Company was incorporated in 1995 to develop and sell building lots in the Fairmont Subdivision of the Municipality of Antigonish. Peter Alex is its President. [ 3 ] In January 2000, Michelle and Jeffrey Hiltz purchased land from the Numbered Company. Ms. Hiltz ’ s affidavit responding to this motion says: 4. Prior to entering into the Agreement of Purchase and Sale, Mr.

Alex represented that he would maintain the road leading to the Property and that he would bring the road up to a standard so the road could be deeded over to the Municipality of the County of Antigonish and it would become a public road with maintenance being the responsibility of the Department of Transportation. 5. At no time did I deal with anyone other than Mr. Alex, and his lawyer, regarding the purchase of the real property or the maintenance of the road.

He advised me that the land belonged to his family and I was unaware of the existence of 2420188 Nova Scotia Ltd. until the day my husband and I signed the Agreement of Purchase and Sale. Mr. Alex ’ s affidavit, on the other hand, denies that he made any personal representations (quoted below, para. 16). At the hearing in this court, his counsel said that Mr. Alex denies making any representation, personal or corporate. [ 4 ] Mr. and Ms. Hiltz say that a portion of the road has been neither turned over to the Municipality, nor maintained. [ 5 ] On May 3, 2010 Mr. and Mrs.

Hiltz filed a Notice of Application in Court under Rule 5.07, naming the Numbered Company and Mr. Alex as respondents. The Notice sought an order requiring the Numbered Company and Mr. Alex to maintain the road and claimed damages. The Notice ’ s grounds were that Mr. Alex “ covenanted to maintain ” portions of the road to a standard where the Department of Transportation would take over the maintenance, and this covenant has not been performed. [ 6 ] The Numbered Company and Mr. Alex moved in the Supreme Court for

summary judgment under Rules 13.03 (summary judgment on pleadings) and 13:04 (summary judgment on evidence). [ 7 ] Justice McDougall heard the motions in chambers, and issued an oral ruling on September 30, 2010. He dismissed both motions. [ 8 ] As to the motion on the pleadings under Rule 13.03, the judge said of the pleaded grounds: “ Assuming the fact stated in the Pleadings can be proved, it discloses a cause of action ” , and: The Respondents have failed to establish that the claim of the Applicants is clearly unsustainable when the Pleadings is read on its own, and as a result, the Motion for

Summary Judgment on Pleadings is dismissed.

[9] For the motion on the evidence under Rule 13.04, the judge said that the respondents sought a dismissal only against Mr.Alex and that, if the motion were granted, the proceeding would continue against the Numbered Company. He referred to the test inGuarantee Co. of North America v. Gordon Capital Corp., (SCC), [1999] 3 S.C.R. 423, followed by many Nova Scotiadecisions, that the applicant for

summary judgment must show there is no genuine issue of material fact requiring trial and then theresponding party on the

summary judgment motion must establish that its claim has a real chance of success. The judge noted: “Thesecond part of the two-part test is only engaged if the moving party meets the initial threshold”. He referred to the evidence respectingwhether or not Mr. Alex made a personal representation and concluded: There are obvious factual differences that remain in dispute...The Respondents have failed to meet the threshold, and consequently, theirMotion must also fail. The judge dismissed the motion as not having met the first part of the two part test for

summary judgment on the evidence. [10] Mr. Alex and the Numbered Company apply for leave to appeal. Issue [11] Mr. Alex’s factum challenges only the dismissal of the motion for

summary judgment on evidence. The issue in this court iswhether the judge made an appealable error in his dismissal of that motion under Rule 13.04. [12] At the hearing, Mr. Alex’s counsel confirmed that the judge’s dismissal of the motion for

summary judgment based on thepleadings is not appealed. I do not comment on the pleadings or the judge’s ruling on that topic. [13] As I have noted, the motion sought

summary dismissal of only the claim against Mr. Alex. I will refer to the Appellants’submissions as Mr. Alex’s submissions. Standard of Review [14] In Nova Scotia (Attorney General) v. Brill, 2010 NSCA 69 this court said: 170. On an appeal from a

summary judgment ruling, the Court of Appeal’s standard is that the court will intervene only if the chambersjudge’s decision erred in law or would cause a patent injustice. Maritime Travel Inc. v. Go Travel Direct. Com Inc., 2007 NSCA 11, ¶ 3and authorities there cited. Analysis [15] I will summarize Mr. Alex’s submission. His factum quotes Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld & P.E.I.R. 317, para. 76 sub 3(b), where the Newfoundland Supreme Court said that, under Newfoundland’sRule 17A, the moving party for

summary judgment should “. . . put forward an evidentiary base establishing a defence to the claim asdefined in the pleadings or tending to show that the other party’s claim has no substance to it”. Mr. Alex’s factum next says: 31. “It is submitted that it follows from the foregoing that, at the first stage of the Two-Stage Test, the motions judge is to look only atthe evidence presented by the moving party. Further, the moving party need not demonstrate that there are no material facts in dispute(although the absence of material facts in dispute is certainly helpful at the second stage).

Rather, the motions judge is to assess whetherthe moving party’s evidence establishes a defence. ... [Appellants’ underlining]

[16] Mr. Alex’s factum quotes Mr. Alex’s affidavit that says: “At all times I presented myself as an officer of [the NumberedCompany] . . .” and “At no time did I advise [Hiltz] that [the Numbered Company] was entering into any agreements as agent for me,nor was [the Numbered Company] ever my agent for any purpose”. His factum then submits: 38. It is submitted that the above-noted evidence overcomes the threshold of stage one of the Two-Stage Test. It provides evidence thatmakes out a defence to the claims against Alex ... [17] From this perspective, Mr. Alex contends that the motions judge erred by dismissing their motion for

summary judgment onthe evidence at the first (threshold) stage. [18] I respectfully disagree with Mr. Alex’s submission. Marco dealt with Newfoundland’s Rule 17A, on which I make nocomment. But Mr. Alex’s suggested approach misapplies the test for Stage 1 of a

summary judgment motion on the evidence underNova Scotia’s Rules. [19] In Guarantee v. Gordon, Justices Iacobucci and Bastarache for the Court said: 27. The appropriate test to be applied on a motion for

summary judgment is satisfied when the applicant has shown that there is nogenuine issue of material fact requiring trial, and therefore

summary judgment is a proper question for consideration by the court.[citations omitted] Once the moving party has made this showing, the respondent must then “establish his claim as being one with areal chance of success” [citation omitted] [emphasis added] [20] In Canada (Attorney General) v. Lameman, 2008 SCC 14 , [2008] 1 S.C.R. 372, the Court per curiam reiterated thetest for

summary judgment: 11. For this reason, the bar on a motion for

summary judgment is high. The defendant who seeks

summary dismissal bears theevidentiary burden of showing that there is ‘no genuine issue of material fact requiring trial’: [citing Guarantee v. Gordon, at para. 27]. The defendant must prove this; it cannot rely on mere allegations in the pleadings: [citations omitted]. If the defendant does prove this,the plaintiff must either refute or counter the defendant’s evidence, or risk

summary dismissal: [citations omitted]. Each side must‘put its best foot forward’ with respect to the existence or non-existence of material issues to be tried [citations omitted]. The chambersjudge may make inferences of fact based on the undisputed facts before the court, as long as the inferences are strongly supported by thefacts: [citing Guarantee v Gordon, para. 30]. [emphasis added] [21] In Nova Scotia v. Brill, this Court said: [173] ...The applicant must show there is no genuine (or arguable) issue of material fact requiring trial. If the applicant does not showthis, the application is dismissed.

If the applicant shows this, then, to defeat the application, the responding party must show, on theundisputed facts, that his claim or defence has a real chance of success: [citations omitted] [emphasis added] [22] Similarly, in AMCI Export Corporation. v. Nova Scotia Power Incorporation, 2010 NSCA 41, Justice Saunders for this Courtsaid: 14. ... As the moving party, NSPI had the burden of establishing that there was no genuine or arguable issue in dispute with respect toparagraph 8 which would necessitate a trial, and that therefore entitlement to

summary judgment could be properly considered by theChambers judge. Provided NSPI met this initial burden, then the responding party, AMCI, was required to show a real chance ofsuccess in its defence. [citations omitted] 15. ... Only if he were persuaded that NSPI had satisfied this initial threshold, would he then go on to ask himself the secondquestion, whether AMCI had demonstrated that it had a real chance of success in advancing the pleading set out in paragraph 8 of itsamended defence. [emphasis added]

To similar effect: Eikelenboom v. Holstein Canada, 2004 NSCA 103, para. 24; United Gulf Developments Limited. v. Iskandar, 2004NSCA 35, paras. 8-9, 15; Selig v. Cook’s Oil Company, 2005 NSCA 36, paras. 9-10. In AMCI, paras. 16-17, Justice Saunders quotedOceanus Marine Inc. v. Saunders (1996), 1996 NSCA 139 , 153 N.S.R. (2d) 267 (C.A.), para. 20, per Pugsley J.A. andCampbell v.

Lienaux (1998), 1998 NSCA 70 , 167 N.S.R. (2d) 196 (C.A.), para. 14, per Cromwell J.A., stating that “[s]ummaryjudgment applications are not the appropriate vehicle for determining disputed facts, ...”. [23] Eikelenboom is an example of the Stage 1 test being satisfied: 30...The material facts, as found by the Chambers judge, were not in dispute. The record as to what occurred prior to and in the presenceof the panel is evident from the transcript of the hearings and the answers to interrogatories of Mr. Kestenberg.

This is not a case wherethe motions judge had to reconcile competing affidavits from opposing sides. The only disagreement between the parties concerned theapplication of the law of waiver to undisputed facts in order to decide whether waiver had in fact occurred. This is precisely whatoccurred in Gordon Capital, supra, where the only dispute concerned the application of the law, a point with which the Court quicklydispensed in rather terse prose: The application of the law as stated to the facts is exactly what is contemplated by the

summary judgmentproceeding. [emphasis added] AMCI, para. 35 reiterated this passage from Eikelenboom. [24] To summarize these authorities, Stage 1 requires the motions judge to ask whether there is a disputed issue of material fact. Ifthe answer is Yes, the judge should dismiss the application for

summary judgment, without engaging in Stage 2's assessment of themerits. I disagree with Mr. Alex’s submission quoted above (para. 15) that “. . . the moving party need not demonstrate that there are nomaterial facts in dispute . . .”. That is precisely what the moving party must show at Stage 1. [25] Further, whether there is a disputed issue of material fact involves a comparison of both parties’ evidence and positions. Adispute by definition engages more than one party. I disagree with Mr.

Alex’s submission quoted above (para. 15) that at Stage 1 “. . .the motions judge is to look only at the evidence presented by the moving party.” (Appellants’ underlining). [26] Mr. Alex’s submission assumes that Stage 1 assesses the strength of the moving party’s case in isolation, then Stage 2 assessesthe strength of the responding party’s case. This misunderstands the test. Stage 1 assesses whether there is a dispute of fact between theparties.

Then Stage 2, if it is engaged, assesses the relative merit of the parties’ positions. [27] The disputed fact under Stage 1 must be “material”, ie. essential to the claim or defence. A dispute over an incidental fact willnot derail a

summary judgment motion at Stage 1. [28] Mr. Alex’s submissions effectively would circumvent Stage 1 of the

summary judgment test, and move directly to Stage 2'squalitative assessment of the merits. That is not the law under Nova Scotia’s Rule 13.04 according to the authorities I have cited. Thetwo stages are sequential. Stage 2's assessment of the merits awakens only if Stage 1 (whether there is a disputed issue of material fact)is put to rest. Whether the responding party’s evidence refutes the moving party’s evidence does not relate to Stage 1's issue of whetherthere is a dispute.

Rather it relates to the Stage 2's assessment of the merits of that dispute. [29] So I will apply those principles to this appeal. [30] Ms. Hiltz’s affidavit, quoted above (para. 3) says that, before entering into the Agreement of Purchase and Sale, “Mr. Alexrepresented that he would maintain the road leading to the Property and that he would bring the road up to a standard so the road couldbe deeded over to the Municipality . . .”. At the hearing in the Court of Appeal, Mr. Alex’s counsel was asked whether Mr. Alex disputes

the facts stated in paragraph 4 of Ms. Hiltz ’ s affidavit. Mr. Alex ’ s counsel unequivocally said that Mr. Alex disputes those facts, including that Mr. Alex even voiced the alleged representation in any capacity - personal or corporate. The disputed representation clearly is a material fact - Mr. Alex ’ s alleged representation is the foundation of Mr. and Mrs. Hiltz ’ s claim. [ 31 ] The judge dismissed the motion for

summary judgment on the evidence because Mr. Alex had not met the threshold test of showing there was no dispute of material fact under Stage 1. In my view, the judge made no error in this conclusion. [ 32 ] Justice Beveridge agrees that whether Mr. Alex made a representation is a factual dispute, but says the factual dispute is not “ material ” . My colleague ’ s reason is that Mr. and Mrs. Hiltz “ had full opportunity to ‘ lead trump ’ or ‘ put their best foot forward ’ ” , but “ [t]hey did not set out in their affidavit material any evidence that could substantiate a contract between them and Mr.

Alex personally ” . Similarly, my colleague says earlier in his reasons that, once Mr. Alex ’ s “ affidavit clearly challenges the existence of any contractual relationship with the respondents . . . ” , “ [i]t was then up to the respondents to put their best foot forward, refuting or countering the defendants ’ evidence, or risk

summary dismissal ” . My colleague asks “ So, what was the best foot forward by the respondents? ” , and concludes that “ absolutely no evidence was presented ” to support a personal contractual obligation from Mr. Alex. [ 33 ] My colleague ’ s approach would erase the boundary between what the authorities have described as a sequential two stage test, and would convert

summary judgment into a single stage that weighs the merits out of the starting block. Under the authorities from the Supreme Court of Canada and this Court cited above, if there is a material dispute of fact then the motion for

summary judgment is dismissed, and the motions judge never addresses the merits of whether the responding party has refuted the evidence of the moving party. The merits - including whether one party ’ s evidence refutes the other party ’ s evidence - are left for the trial judge. If there is a material dispute of fact then, to defeat the

summary judgment motion, Mr. and Mrs. Hiltz need not refute Mr. Alex ’ s evidence. They will have to do that at trial. [ 34 ] My colleague says that a dispute of fact is not “ material ” unless the responding party ’ s evidence refutes the moving party ’ s evidence. So the chances of success would enter Stage 1. In my view, the word “ material ” in Stage 1 is not code for collapsing the two stages into one. If the merits occupied the first stage, there would be no point to a second stage.

Conclusion [ 35 ] I would grant leave to appeal, but dismiss the appeal with costs for the appeal of $500, payable by the Appellants in any event of the cause. Fichaud, J.A. Concurred:Oland, J.A. Dissenting Reasons for judgment : [ 36 ] I have had the opportunity to read the reasons of Justice Fichaud. I have no disagreement with anything my colleague has set out regarding the background to this appeal, the standard of review, and the test judges should apply in considering a motion for

summary judgment. [ 37 ] It is my colleague ’ s analysis, and consequent conclusion, that the Chambers judge was correct in deciding there was a dispute of material fact. I must, with respect, differ. I will only refer to those parts of the record necessary to illustrate why I disagree. [ 38 ] Merely because the evidence presented by the parties to a motions judge demonstrate differing versions about some fact is insufficient. The fact must not only be material, it must also be such that, in the legal and factual context of the claim or defence,

resolution of the dispute requires a trial. [39] The wording of the current Nova Scotia Civil Procedure Rule bears repeating. It provides: 13.04

(1) A judge who is satisfied that evidence, or the lack of evidence, shows that a statement of claim or defence fails to raise agenuine issue for trial must grant

summary judgment.

(2) The judge may grant judgment for the plaintiff, dismiss the proceeding, allow a claim, dismiss a claim, or dismiss a defence.

(3) On a motion for

summary judgment on evidence, the pleadings serve only to indicate the laws and facts in issue, and the question of agenuine issue for trial depends on the evidence presented.

(4) A party who wishes to contest the motion must provide evidence in favour of the party’s claim or defence by affidavit filed by thecontesting party, affidavit filed by another party, cross-examination, or other means permitted by a judge.

(5) A judge hearing a motion for

summary judgment on evidence may determine a question of law, if the only genuine issue for trial is aquestion of law.

(6) The motion may be made after pleadings close. [40] Prior to the introduction of Rule 13.04, the legal landscape in Nova Scotia, and elsewhere, was replete with articulations ofwhich party bears the burden, and of the different stages in the process of judicial determination of a

summary judgment motion. It is notnecessary to set out the history behind what some say is an unnecessarily complicated approach that seems to bedevil consistent and easyapplication. That may be for another day. What is beyond dispute is that the purpose of a

summary judgment mechanism is to save theparties and the administration of justice cost and delays from having to go through the full panoply of the civil litigation systemwrestling with claims or defences that do not merit a trial (Canada (Attorney General) v. Lameman, 2008 SCC 14). [41] In this case, the personal defendant, Peter Alex, sought dismissal of the claim against him pursuant to Rule 13.04. Briefs werefiled. Oral submissions were made on September 22, 2010. The motions judge reserved his decision to September 30, 2010. Just priorto delivering his oral decision, counsel for the appellants (different counsel than on appeal) made a last minute suggestion that the motionfor

summary judgment on the evidence was also brought in relation to the plaintiffs’ claim against 2420188 Nova Scotia Limited(Numbered Company). Since no appeal was taken from the dismissal of the motion vis-à-vis the Numbered Company, I make nocomment on the merits of the Rule 13.04 motion in relation to the Numbered Company. THE LEGAL PRINCIPLES [42] The leading decisions from the Supreme Court of Canada on motions for

summary judgment all involve motions bydefendants. In Hercules Managements Ltd. v. Ernst & Young, (SCC), [1997] 2 S.C.R. 165, the plaintiffs wereshareholders in an investment company. The defendants were auditors who performed audits on the company, providing annual reportsto the shareholders. In 1984 the company went into receivership. The shareholders sued the auditors alleging that the audit reports for1980, 1981 and 1982 had been negligently prepared causing the shareholders financial losses because of their reliance on the reports. The auditors brought a motion for

summary judgment to dismiss the shareholders’ claims. The auditors argued there was no contractbetween the parties, the auditors did not owe the individual shareholders a duty of care, and that the claims asserted could only bebrought by the company and not the shareholders. The auditors’ application for

summary judgment was granted. The shareholders’appeal to the Manitoba Court of Appeal was dismissed. Their further appeal to the Supreme Court of Canada was also dismissed. As apreliminary matter the Court described the approach that ought to be taken in disposing of motions for

summary judgment under theprevailing rules of procedure in Manitoba. La Forest J., writing for a unanimous seven member court, wrote at para. 15:

...the procedure to be followed in a motion for

summary judgment brought under Rule 20.03(1) of the Manitoba Court of Queen's BenchRules. That rule provides as follows: 20.03(1) Where the court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the court shall grantsummary judgment accordingly. I would agree with both the Court of Appeal and the motions judge in their endorsement of the procedure set out in Fidkalo, supra, at p.267, namely: The question to be decided on a rule 20 motion is whether there is a genuine issue for trial.

Although a defendant who seeks dismissal ofan action has an initial burden of showing that the case is one in which the existence of a genuine issue is a proper question forconsideration, it is the plaintiff who must then, according to the rule, establish his claim as being one with a real chance of success. In the instant case, then, the appellants (who were the plaintiffs-respondents on the motion) bore the burden of establishing that theirclaim had “a real chance of success”. They bear the same burden in this Court. [43] This topic was again considered in Guarantee Co. of North America v.

Gordon Capital Corp., (SCC), [1999]3 S.C.R. 423. The defendant Guarantee Co. moved successfully for

summary judgment. The Ontario Court of Appeal reversed. Onfurther appeal, the motion judge’s ruling was upheld. The Supreme Court, again unanimously, reiterated the appropriate test forsummary judgment: 27The appropriate test to be applied on a motion for

summary judgment is satisfied when the applicant has shown that there is nogenuine issue of material fact requiring trial, and therefore

summary judgment is a proper question for consideration by the court. SeeHercules Managements Ltd. v. Ernst & Young, (SCC), [1997] 2 S.C.R. 165, at para. 15; Dawson v. Rexcraft Storageand Warehouse Inc. (1998), (ON CA), 164 D.L.R. (4th) 257 (Ont. C.A.), at pp. 267-68; Irving Ungerman Ltd. v.Galanis (1991), (ON CA), 4 O.R. (3d) 545 (C.A.), at pp. 550-51. Once the moving party has made this showing, therespondent must then “establish his claim as being one with a real chance of success” (Hercules, supra, at para. 15). [44] What then amounts to a genuine issue of material fact requiring a trial?

One of the best explanations of this concept is that byMorden A.C.J.O. in Irving Ungerman Ltd. v. Galanis (1991), (ON CA), 4 O.R. (3d) 545 (C.A.), [1991] O.J. No. 1478where he wrote (pp. 549-550): The key provision in the new practice, as far as the present appeal is concerned, is rule 20.04(2), which reads:

(2) Where the court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the court shall grant

summaryjudgment accordingly. The expression “genuine issue” was borrowed from the third sentence in Rule 56(

c) in the Federal Rules of Civil Procedure in the UnitedStates which were adopted in 1938. It reads: The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file,together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to ajudgment as a matter of law. Our rule does not contain, after “genuine issue”, the additional words “as to any material fact”. Such a requirement is implicit.

If a fact isnot material to an action, in the sense that the result of the proceeding does not turn on its existence or non-existence, then it cannot relateto a “genuine issue for trial”. (See Wright, Miller and Kane, Federal Practice and Procedure, 2nd ed. (1983), vol. 10A, pp. 93-95.)Similar reasoning applies to the absence from our rule of the words “and the moving party is entitled to a judgment as a matter of law”.This is implicit.

Because the term “genuine issue” is taken from Rule 56(

c) it is reasonable to think that some of the judicial experience with that provision would be of assistance in applying the term. In a relatively early United States decision concerned with Rule 56( c ), Engl v. Aetna Life Insurance Co ., 139 F.2d 469 (1943), Judge Charles E. Clark, one of the drafters of the Federal Rules of Civil Procedure, said at p. 472: But the matter is sufficiently important so that we should go beyond the bare words of the

summary-judgment rule to the reasons behind it. The federal

summary judgment proceeding is the most extensive of any jurisdiction in that it is equally available to plaintiffs and defendants and in all forms and kinds of civil actions. But the history of the development of this procedure shows that it is intended to permit “a party to pierce the allegations of fact in the pleadings and to obtain relief by

summary judgment where facts set forth in detail in affidavits, depositions, and admissions on file show that there are no genuine issues of fact to be tried”. 3 Moore’s Federal Practice 3175. [ 45 ] The similarity of the Ontario Rule in play in Irving , to the present Nova Scotia Rule 13.04(1), is evident. Rule 13.04(3) reminds us that it is the pleadings and substantive law that informs the inquiry what facts are material to a claim or a defence.

It is then up to the court to determine if, based on the evidence presented, there is a genuine issue for trial. [ 46 ] This approach is succinctly set out by Robert J. van Kessel in his text, Dispositions Without Trial , 2nd ed (Markham, Ontario: LexisNexis Canada Inc., 2007) at p. 213: The determination of a genuine issue of material fact is made with reference to the applicable substantive law. For example, if the dispute were over the existence of a contract, there would have to be clear evidence on the motion of an offer, acceptance and consideration.

If the dispute were in tort, the evidence would have to factually support each element of the cause of action and so on, with actions in equity. If the motions judge determines that a genuine issue for trial does not exist, the court must grant

summary judgment to the defendant moving party. APPLICATION OF THE TEST [ 47 ] Before addressing how the motions judge erred, an appreciation of the context of the motion is necessary. The respondents sued the Numbered Company and Peter G. Alex by way of an Notice of Application in Court.

The respondents claimed an order requiring the appellants to maintain portions of Triton Brook Court, and to bring that road up to Department of Transportation standards and for damages arising from their failure to maintain that road. [ 48 ] The claimed grounds for the order were that the respondents purchased the property at 17 Triton Brook Court from the Numbered Company on September 27, 2001.

They claim that at the time they purchased the property, Peter Alex, the president of the Numbered Company, “ covenanted to maintain portions of Triton Brook Court and to bring portions of Triton Brook Court up to a standard where the Department of Transportation would maintain it. ” The respondents also said that the appellants again covenanted to do so in a letter dated December 23, 2008. Lastly, they asserted that Peter Alex is the president, directing mind and alter ego of the Numbered Company.

Unspecified damages and loss were claimed. [ 49 ] A Notice of Contest is the required form of defence to a Notice of Application. Peter Alex and the Numbered Company filed a Notice of Contest. The Notice denied the validity of any claim against them, and announced an intention to bring a motion for

summary judgment. They also asserted the respondents had not suffered any damages. [ 50 ] A motion for

summary judgment was duly brought by the appellants, both on the pleadings pursuant to Rule 13.03 and on evidence under Rule 13.04. Since the ruling on the motion with respect to Rule 13.03 is not before us, I will not address it. [ 51 ] On the motion under Rule 13.04, the appellant Alex argued that

summary judgment should be granted in relation to the claim

against him personally. He filed his affidavit sworn August 30, 2010. He attested that he is the President of 2420188 Nova Scotia Ltd.,a company incorporated on April 18, 1995 to develop and sell building lots in the Fairmont Subdivision, Antigonish County, NovaScotia. At all times he presented himself as an officer of that company when selling the lots. The listing agreement, agreement ofpurchase and sale and the Deeds all show 2420188 Nova Scotia Ltd. as the vendor. He also swore that at no time was he ever a party tothe contract of sale with the respondents.

He did not provide any personal guarantees to the contract of sale, nor was the NumberedCompany ever his agent for any purpose. [52] No cross-examination was sought of the appellant Alex. In my opinion, his affidavit clearly challenges the existence of anycontractual relationship with the respondents. No other type of claim was advanced. There was no suggestion before the motions judgeor in this court of any claim for negligent or fraudulent misrepresentation. It was then up to the respondents to put their best footforward, refuting or countering the defendants’ evidence, or risk

summary dismissal. This has long been the recognized approach. Roscoe J.A. in MacNeil v. Bethune, 2006 NSCA 21 wrote: [31]I would underline, however, that as I have said the

summary judgment test has two steps, each of which has a different onus. Thefirst step is that the moving party must show that “there is no genuine issue of material fact for trial and therefore

summary judgment is aproper question for consideration...”: Guarantee Co. of North America, supra. This requirement has been described in Somers Estatev. Maxwell (1995), (MB CA), 107 Man. R.(2d) 220; [1996] M.J. No. 46 (Q.L.)(C.A.), as follows: 10In some respects a defendant's motion for

summary judgment is like a motion to dismiss a claim as one disclosing no cause of action. The most significant [difference] is that, unlike the motion to dismiss on the pleadings, a motion for

summary judgment is not decided onthe assumption that the facts alleged are true. The defendant must prove the facts to be such that, prima facie, the action fails in law. The burden then shifts to the plaintiff to prove facts which establish, if not the validity of the claim, at least a genuine issue fordetermination. 11The initial question for the motions judge was not therefore that which she asked herself.

There was no onus on the plaintiff toestablish either a genuine issue or a prima facie case until the defendant had proven, on a prima facie basis, the absence of a valid claimin law. [32]I have also found the comments of Green, J., as he then was, in Marco, supra, helpful in this regard: 76... 3.To bring himself or herself within the Rule the applying party must: (

a) in a case where he or she has the ultimate burden of proof on the merits, put forward an evidentiary basis for the claim which, ifconsidered alone, would prove each element of the cause of action; or (

b) in a case where the other party has the burden of proof on the merits, put forward an evidentiary base establishing a defence to theclaim as defined in the pleadings or tending to show that the other party's claim has no substance to it. 4.In either of the foregoing cases, the applying party's case must consist of an organized set of facts set out in a coherent way, either fromprimary sources or the best sources available, including admissions on interrogatories and discoveries, that constitute proof of a properfoundation of the claim or defence, as the case may be. (See also Turner v.

Halifax (Regional Municipality), 2009 NSCA 106 at para. 19: Frothingham v. Perez, 2011 NSCA 59 at para. 39.) [53] This fundamental concept was recently affirmed by the Supreme Court of Canada in Canada (Attorney General) v. Lameman,supra, where the Court wrote: [11]For this reason, the bar on a motion for

summary judgment is high. The defendant who seeks

summary dismissal bears theevidentiary burden of showing that there is “no genuine issue of material fact requiring trial”: Guarantee Co. of North America v. GordonCapital Corp., (SCC), [1999] 3 S.C.R. 423, at para. 27. The defendant must prove this; it cannot rely on mereallegations or the pleadings: 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), (ON CA), 21 O.R. (3d) 547 (C.A.);

Tucson Properties Ltd. v. Sentry Resources Ltd. (1982), (AB KB), 22 Alta. L.R. (2d) 44 (Q.B. (Master)), at pp. 46-47.If the defendant does prove this, the plaintiff must either refute or counter the defendant's evidence, or risk

summary dismissal: MurphyOil Co. v. Predator Corp. (2004), 365 A.R. 326, 2004 ABQB 688, at p. 331, aff'd (2006), 55 Alta. L.R. (4th) 1, 2006 ABCA 69. Eachside must “put its best foot forward” with respect to the existence or non-existence of material issues to be tried: Transamerica LifeInsurance Co. of Canada v. Canada Life Assurance Co. (1996), (ON SC), 28 O.R. (3d) 423 (Gen. Div.), at p. 434;Goudie v. Ottawa (City), [2003] 1 S.C.R. 141, 2003 SCC 14, at para. 32.

The chambers judge may make inferences of fact based on theundisputed facts before the court, as long as the inferences are strongly supported by the facts: Guarantee Co. of North America, at para.30. [54] So, what was the best foot forward by the respondents? It was one affidavit from the respondent, Michelle Hiltz, swornSeptember 10, 2010. She does not claim any offer or acceptance between the respondents and Mr. Alex, nor consideration or damagesthat may or may not have been caused by any alleged breach of contract (assuming there was any contract). The letter dated December2008 where it alleged that Mr.

Alex “covenanted” to do certain things in relation to Triton Brook Court was not produced. In short,absolutely no evidence was presented that would permit any court to find a contractual obligation between the appellant Alex,personally, and the respondents. [55] What Ms. Hiltz does do in her affidavit is to confirm that she and her husband bought their property from the NumberedCompany, not from Mr. Alex. She swore: 3.My husband, Jeffrey Earl Hiltz, and I purchased real property (hereinafter referred to as “the Property”) from 2420188 Nova ScotiaLtd. on 7 January 2000.

A copy of the Warranty Deed and attachments are attached hereto as Exhibit A. 4.Prior to entering into the Agreement of Purchase and Sale, Mr. Alex represented that he would maintain the road leading to theProperty and that he would bring the road up to a standard so the road could be deeded over to the Municipality of the County ofAntigonish and it would become a public road with maintenance being the responsibility of the Department of Transportation. 5.At no time did I deal with anyone other than Mr. Alex, and his lawyer, regarding the purchase of the real property or the maintenanceof the road.

He advised me that the land belonged to his family and I was unaware of the existence of 2420188 Nova Scotia Ltd. untilthe day my husband and I signed the Agreement of Purchase and Sale. [56] The deed from the Numbered Company to the respondents was attached to her affidavit. It contains no covenants to maintainany roadway. [57] How is it then that the motions judge found this was not a proper case for

summary judgment? His reasons provide theanswer. The operative part of his oral reasons is as follows: The Applicants, in their Notice of Application in Court at Paragraph 4 of the grounds for the Order, allege Peter Alex is the President,directing mind and alter ego of 2420188 Nova Scotia Limited. They go on to identify seven potential witnesses from whomAffidavits can be expected on the subject of the, and I quote: "Respondents' promise to maintain Triton Brook Court and failure and refusal to do so." In the Affidavit of Michelle Hiltz filed by the Applicants in opposing the Respondents' Motion for

Summary Judgment, reference ismade in Paragraph 7 to a letter dated November 18, 2005 sent to residents of Triton Brook Court, and purportedly signed by Peter Alex,personally. That's attached as Exhibit C to Michelle Hiltz's Affidavit sworn on September 10, 2010, and filed September 14, 2010. In his Affidavit sworn the 30th day of August 2010, and filed on the 7th day of September 2010, Mr. Alex states at Paragraph 5 that he,and I quote: "At all times presented myself as an officer of the company."

He goes on at Paragraph 6 to state: "At no time was I ever a party to the contract of sale with the Applicants, nor did I provide any personal guarantee to this contract of sale." And, finally, at Paragraph 7, he states: "At no time did I advise the Applicants that 2420188 Nova Scotia Limited was entering into any agreements as agent for me, nor was 2420188 Nova Scotia Limited ever my agent for any purpose." There are obvious factual differences that remain in dispute. The decision on whether to pierce the corporate veil, or to determine whether the company was simply acting as an agent for Mr.

Alex is a fact-finding exercise that would require a Trial. The Respondents have failed to meet the threshold, and consequently, their Motion must also fail. [My emphasis] [ 58 ] In my opinion, it was an error for the motions judge to rely on the suggestion in the pleadings (the Notice of Application) by the respondents that there are seven potential witnesses “ from whom Affidavits can be expected ” on the subject of the promise by the appellants to maintain the road. As emphasized in Canada (Attorney General) v. Lameman , supra : [19]We add this.

In the Court of Appeal and here, the case for the plaintiffs was put forward, not only on the basis of evidence actually adduced on the

summary judgment motion, but on suggestions of evidence that might be adduced, or amendments that might be made, if the matter were to go to trial. A

summary judgment motion cannot be defeated by vague references to what may be adduced in the future, if the matter is allowed to proceed. To accept that proposition would be to undermine the rationale of the rule. A motion for

summary judgment must be judged on the basis of the pleadings and materials actually before the judge, not on suppositions about what might be pleaded or proved in the future. This applies to Aboriginal claims as much as to any others. [ 59 ] The requirement for a motion for

summary judgment to be decided on the evidentiary record actually produced by the parties is explicit. Rule 13.04 directs that “ the question of a genuine issue for trial depends on the evidence presented ” . [ 60 ] A more significant error in the context of this case is the basis upon which the motions judge declined to consider if this was a proper case to grant

summary judgment. His reasons make it clear that he did so, not by finding any genuine issue for trial about an alleged contractual relationship between the respondents and Mr. Alex personally, but due to a vague and unsupported notion that the corporate veil might be pierced. [ 61 ] However, it is easy to understand why the motions judge focussed on the notion that the respondents were seeking to attach personal liability to the appellant Alex by somehow hoping to pierce the corporate veil.

The respondents ’ motion brief does not contain one word of suggestion that there was a contract between them and the appellant Alex. To the contrary, it only references a contract between the Numbered Company and the respondents (indeed that is what the affidavit of the respondent Michelle Hiltz said). For example they argued in their brief: The Respondents respectfully submit that Mr. Alex’ participation in this action depends heavily on findings of material fact.

He states, in his Affidavit, that he was acting as an agent for the numbered company and there are no grounds for ‛piercing the corporate veil’ in this case. The Respondents allege that he is the “directing mind and alter ego” of the company and that the ‛corporate veil’ ought to be ‛pierced’. . . .

It is equally clear that there are numerous and significant material facts at issue in this Application. In addition to the questions raised onthe Motion for

Summary Judgment on pleadings, the Motion for

Summary Judgment on evidence asks Your Lordship to determinewhether to “pierce the corporate veil” in this case. The jurisprudence in this area makes two things clear: 1) the protection afforded byincorporation is not absolute; and 2) the decision to ‛pierce the corporate veil’ is a factual one that varies depending on the context ofeach case.

Put simply, the decision whether to put aside the protections of incorporation can not be made without answering genuinequestions of material fact. [62] In my opinion, there was no evidence before the motions judge that demonstrated even the remotest, let alone realisticpossibility, that a trier of fact could “pierce the corporate veil” leading to a potential for personal liability for Mr. Alex.

The potential forpersonal liability would also have to be predicated that there was a valid enforceable contractual term between the Numbered Companyand the respondents that was breached, and the breach caused the respondents damage. In any event, in my opinion, there was nogenuine issue for trial with respect to the assertion of alter ego liability or piercing the corporate veil (see, for example: TransamericaLife Insurance Co. of Canada v. Canada Life Assurance Co. (1996), (ON SC), 28 O.R. (3d) 423, [1996] O.J. No.1568, affirmed [1997] O.J. No. 3754 (C.A.); Robinson v. Daewoo Canada Ltd., [2000] O.J.

No. 3591, affirmed [2001] O.J. No. 2232(C.A.). [63] The respondents, on appeal, conceded there were no facts put before the motions judge on how the corporate veil might bepierced. When asked what facts were put before the motions judge that would make it possible for a court to pierce the corporate veil,counsel responded: Well, I didn't put any facts before him because it wasn't – it's not his role on a motion for

summary judgment to consider the merits of thecase. [64] With respect, that is precisely the role of a motions judge, at least to the extent of being satisfied that there is an evidentiarybasis to be able to say the issue of piercing the corporate veil is a genuine issue that requires a trial to resolve. Here, there was no suchbasis. Hence, this was a proper case to grant

summary judgment dismissing the claim against the appellant Alex. [65] There are no doubt tactical advantages for plaintiffs in civil litigation to try to expand the scope of the liability net to includeas many parties as can be theorized. Some parties may have limited or no means to answer to a future judgment, and, of course, withmore parties involved, there maybe increased economic pressure to settle as costs of litigation loom. That is not to say there may well belegitimate factual and legal reasons to name multiple parties, but where a motion is brought for

summary judgment challenging such anet, it is up to the courts to ensure that only the latter type of claims get to continue. [66] The reasons by Justice Fichaud do not address the basis upon which the motions judge dismissed the motion for

summaryjudgment. Instead, my colleague’s analysis is that because the respondents claim Mr. Alex made representations he would maintain theTriton Brook Road, and Mr. Alex denies making any such representations, means there is a dispute about a material fact. With respect, Icannot agree. [67] Whether a representation was made is a factual dispute, but is it material to a claim against Mr. Alex personally such as torequire a trial? In my opinion, it is not. Assume for a moment that Mr. Alex made such representation. How does that create anypotential for affixing liability against Mr. Alex?

If the litigation alleged negligent or fraudulent misrepresentation, it might be different. The pleadings, such as they were, and interpreted generously, only allege a breach of contract. As previously set out, the affidavit of Mr.Alex is unchallenged that there was no contract except between the Numbered Company and the respondents. The respondents admit inMichelle Hiltz’s affidavit that the agreement of purchase and sale was between them and the Numbered Company and they bought theirproperty from that company. They had full opportunity to “lead trump” or “put their best foot forward”.

They did not set out in theiraffidavit material any evidence that could substantiate a contract between them and Mr. Alex personally. So why should there be a trialabout whether Mr. Alex made a representation when there is no way, based on the evidence presented by Mr. Alex, unrefuted by therespondents, that there was a contract between them? [68] Justice Fichaud comments on my approach as erasing the boundary set out in the authorities concerning the sequential twostage test, and would “convert

summary judgment into a single stage that weighs the merits out of the starting block”. He also expressesthe view the “word “material” in Stage 1 is not code for collapsing the two stages into one”. As already set out, the appellant put forth

his evidence that there was no contract personally between he and the respondents. The respondents did not dispute that evidentiary assertion. Their affidavit submitted on the motion confirmed it. With respect, the analysis about materiality is required. It does not collapse the two stages into one nor amount to “ code ” to do so. [ 69 ] In terms of applying the two stage test, it is not just an issue of finding some factual difference between the two parties that deflects a

summary judgment motion from requiring the responding party to demonstrate a real chance of success. To defeat the motion, on the first stage of the test, we have to consider, in the words of the Supreme Court of Canada in Guarantee Co. of North America v. Gordon Capital Corp. , supra whether “ there is no genuine issue of material fact requiring trial ” . My colleague does not explain how the issue of the representation is a material fact, let alone one “ requiring trial ” .

If there was a contractual relationship between the appellant personally and the respondents, or a dispute disclosed on evidence about a personal contract, then the existence of the representation may well be a material fact requiring trial. But, there is no need to have a trial about whether a representation was made or not, since the existence or non-existence of that fact is patently insufficient to establish any potential personal liability for the appellant. [ 70 ] Nothing in these reasons should be taken as an endorsement of the dismissal of the motion for

summary judgment on the pleadings or the dismissal of the

summary judgment on the evidence as against the Numbered Company. With respect to the decision, and consequent order refusing

summary judgment for dismissal of the claim of the respondents against Mr. Alex personally, the motions judge erred, which error resulted in an injustice. I would grant leave to appeal, and allow the appeal with costs for the appeal in the amount of $750 payable by the respondents, in any event, of the cause. Beveridge, J.A.