3021386 Nova Scotia Ltd. Plaintiff v. Municipality of the District of Barrington v. Tri-County Regional School Board, 2010 NSSC 173

SUPREME COURT OF NOVA SCOTIA Citation: 3021386 Nova Scotia Ltd. v. Barrington (District), 2010 NSSC 173 Date: 20100427 Docket: Hfx 309535 Registry: Halifax Between: 3021386 Nova Scotia Ltd. Plaintiff v. Municipality of the District of Barrington and Tri-County Regional School Board Defendants Judge: The Honourable Justice Patrick J. Duncan Heard: September 15, 2009, in Halifax, Nova Scotia Final Written Submissions: March 31, 2010 Counsel: Robert M. Purdy, Q.C., for the plaintiff Kevin C. MacDonald, for the defendant, Municipality of the District of Barrington John C. MacPherson, Q.C., for the defendant, Tri-County Regional School Board By the Court :

Introduction [ 1 ] In January 2007, the plaintiff, 3021386 Nova Scotia Ltd. (386 NSL), purchased real property (subject property) from the defendant Municipality of the District of Barrington (Municipality). The land had been the site of the Barrington Municipal High School and for a number of years was managed and controlled by the defendant Tri-County Regional School Board (Board). [ 2 ] After completing the purchase, the plaintiff determined that soil on the site was contaminated with hydrocarbons in consequence of which it commenced action against the defendants seeking damages. The defendants have brought a motion for

summary judgement and dismissal of the claims against each of them. The Pleadings [ 3 ] The history of the matter as set out in the statement of claim can be summarized as follows. [ 4 ] Title to the subject property was initially acquired by the Municipality in 1968. In turn, title passed to the Board who, in the ensuing years, controlled and managed the property in accordance with the provisions of

section 92 of the Education Act S.N.S. 1995- 96, c.1 , and its predecessor legislation. This provision requires the Board to provide “adequate maintenance and repairs”. [ 5 ]

Section 93 of the Education Act , provides that where a school board declares the land and buildings to be surplus, the municipality has the option of having those lands reconveyed to it. [ 6 ] The statement of claim sets out a history of correspondence and communications that took place in the period 2005 to 2007 as between the Municipality and the Board, and as between the Municipality and the plaintiff. The key allegations, not tested in a trial yet, include that:

i) in February 2005, the Municipality advised the Board of its’ intention to develop the property and sought assurances from the Board that there would be “no environmental concerns outstanding” (para. 6); ii) the Board declared the property surplus in accordance with section 93(1) of the Education Act which in turn provided the Municipality with the opportunity of having the property reconveyed to it (paras. 8, 9, and 10); iii) in June of 2006, the Municipality sent a letter to the Board that stated: In order for the Municipality to be able to use this property or to be able to dispose of it to developers, it is necessary that there be a written environmental clearance provided by the School Board.

Could you please ensure that the Tri-County Regional School Board provides an environmental clearance either from the Department of Environment and Labour or as a Phase II Environmental Assessment, along with the asbestos audit that has been done in the building and any other environmental clearance that may be required for the building. ( para 11 ) iv) in October 2006, the Municipality published a Request for Proposals for Development (RFP) without first obtaining the clearances or environmental assessment (para. 12);

v) negotiations took place as between the plaintiff and the Municipality which concluded with the subject property being conveyed to the plaintiff on January 31, 2007 in return for the sum of $25,001. On closing, a deed was provided that includes covenants for “quiet enjoyment” and that the Grantor would procure such other assurances as may be reasonably required. (paras. 13, 14, 15, 17 and 19);

vi) prior to closing, the plaintiff sought and received assurances that the Municipality would provide an environmental clearance letter with respect to an underground fuel tank on the property.

The plaintiff also sought confirmation of removal of the tank from the site and that there would be no contamination of the land (paras. 13, 16 ); vii) the agreement of purchase and sale included a clause that says: The Vendor makes no representations about the condition of the property but agrees to obtain from the School Board and or their consultants an opinion as to the removal of tanks and the condition of the property being satisfactory to the purchaser.

The purchaser never signified its satisfaction with respect to the “removal of the tank and the condition of the property” (paras. 17, 18); viii) subsequent to closing, the plaintiff obtained municipal approval to commence subdivision and development. In the course of excavation it uncovered “...former buried tank locations that stored petroleum for historical site operations, and the presence of petroleum at various concentrations”. This information was brought to the attention of the defendants.

As a result of the discovery, the plaintiff incurred costs to investigate and remediate the contamination problem, which has negatively impacted on the timing, and financial prospects, of the proposed development (paras. 20 - 25); ix) the defendants breached the Petroleum Management Regulations N.S. Reg. 44/2002 and

section 92 of the Education Act , and that they, with full knowledge of the plaintiff’s intended use of the subject property, made representations to the plaintiff which it relied on, all to the detriment of the financial and physical well being of the company, its’ agents and contractors (paras. 26-29).

Position of the defendant Board [ 7 ] The Board submits that the plaintiff’s statement of claim, which seeks remedies for alleged breach of the Education Act and Petroleum Management Regulations , reliance on “representations and good faith”, negligence, and breach of contract fails to disclose the essential elements upon which such actions must be founded. In consequence thereof, the Board submits that the plaintiff’s claims cannot be sustained, the statement of claim must be set aside, and the proceeding against the Board dismissed.

In support of its’ position the Board relies on Civil Procedure Rule 13.01 which permits a party to move for

summary judgment on pleadings that are “clearly unsustainable”. [ 8 ] In particular, the Board alleges that the statement of claim is deficient in that it discloses no cause of action ( CPR 13.03 (1) (a)) and/or that it makes a claim that is clearly unsustainable when the pleading is read on its own.( CPR 13.03 (1) (c)) Position of the defendant Municipality [ 9 ] The Municipality joins in the reasons put forward by the Board in support of the motion and seeks the same remedy. It adds that the plaintiff has failed to plead material facts.

Position of the plaintiff [ 10 ] The plaintiff rejects the positions of the defendants saying that the pleadings are sufficient and meet the threshold test applicable for disclosing a sustainable cause of action. It suggests that the defendants, in some instances, have misinterpreted the pleadings. It also submits that there are other mechanisms that are more appropriate to address the concerns of the defendants. e.g., a demand for particulars.

Law [ 11 ] The motion is brought pursuant to Nova Scotia Civil Procedure Rule 13, of which the relevant portions for the purposes of this matter are: 13.01

(1) This Rule allows a party to move for

summary judgment on the pleadings that are clearly unsustainable... 13.03

(1) A judge must set aside a statement of claim, ...that is deficient in any of the following ways: (

a) it discloses no cause of action...; (b) ... (

c) it otherwise makes a claim, ...that is clearly unsustainable when the pleading is read on its own.

(2) The judge must grant

summary judgment of one of the following kinds, when a pleading is set aside in the following circumstances: (a) ... (

b) dismissal of the proceeding, when the statement of claim is set aside wholly; (c) ... (

d) dismissal of a claim, when all parts of the statement of claim that pertain to the claim are set aside.

(3) A motion for

summary judgment on the pleadings must be determined only on the pleadings, and no affidavit may be filed in support of or opposition to the motion.

(4) A judge who hears a motion for

summary judgment on pleadings may adjourn the motion until after the judge hears a motion for an amendment to the pleadings.

(5) A judge who hears a motion for

summary judgment on pleadings, and who is satisfied on both of the following, may determine a question of law: (

a) the allegations of material fact in the pleadings sought to be set aside provide, if assumed to be true, the entire facts necessary for the determination; (

b) the outcome of the motion depends entirely on the answer to the question.

[ 12 ] This rule subsumes the related provisions of the former Nova Scotia Civil Procedure Rule (1972) 14.25. That rule was considered in the case of Cape Breton (Regional Municipality) v. Nova Scotia (Attorney General), 2009 NSCA 44 where the court affirmed the burden on the defendant seeking to have an action dismissed summarily . MacDonald C.J. writing for the court said: [17] Rule 14.25 offers a drastic remedy. It provides for an action to be dismissed summarily, thus denying litigants their “day in court”. Understandably, therefore, any defendant seeking such relief bears a heavy burden.

The Chambers judge would have to consider this claim at its highest, by assuming all allegations to be true without the need to call any evidence. Then even with this assumption, it must still remain "plain and obvious" that the pleadings disclose no reasonable cause of action. In Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC) , [1990] 2 S.C.R. 959 at p. 980, the Supreme Court of Canada, when considering the corresponding British Columbia provision: Thus, the test in Canada governing the application of provisions like Rule 19(24)(

a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat".

Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case.

Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a). [18] In following Hunt , our court has recently confirmed that in order to strike pleadings under Rule 14.25 (1)(a), they must appear to be either "certain to fail" ( Sable Offshore Energy Inc. v. Ameron International Corp., 2007 NSCA 70 at para. 13 ) or "absolutely unsustainable” ( CGU Insurance Co. of Canada v.

Noble, 2003 NSCA 102 at para. 13 ). [ 13 ] The starting point then is to understand what constitutes a “cause of action”. In the words of Diplock L.J., writing in Letang v. Cooper, [1964] 2 All E.R. 929 , at p. 935 : A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person. [ 14 ] The general principles as to what “facts” must be pleaded in support of the “cause of action” are set out in CPR 38: 38.02

(1) A party must, by the pleading the party files, provide notice to the other party of all claims, defences, or grounds to be raised by the party signing the pleading.

(2) The pleading must be concise, but it must provide information sufficient to accomplish both of the following: (

a) the other party will know the case the party has to meet when preparing for, and participating in, the trial or hearing; (

b) the other party will not be surprised when the party signing the pleading seeks to prove a material fact.

(3) Material facts must be pleaded, but the evidence to prove a material fact must not be pleaded. [ 15 ] The defendants have submitted legal authority as to the consequences of the failure to plead a material fact, which is central to certain of their arguments. In Bruce v. Odhams Press Ltd. , [1936] 1 K.B. 697 , at pp. 712-713, 1 All E.R. 287 at pp. 294-295 , Scott, L. J. wrote:

The cardinal provision in rule 4 is that the statement of claim must state the material facts. The word “material” means necessary for the purpose of formulating a complete cause of action; and if any one “material” statement is omitted, the statement of claim is bad; it is “demurrable” in the old phraseology, and in the new is liable to be “struck out” under RSC Ord XXV, r 4 (see Philipps v Philipps ); or a further and better statement of claim may be ordered under rule 7. The function of “particulars” under rule 6 is quite different.

They are not to be used in order to fill material gaps in a demurrable statement of claim - gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff’s cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff’s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial.

Consequently in strictness particulars cannot cure a bad statement of claim. But in practice it is often difficult to distinguish between a “material fact” and a “particular” piece of information which is reasonable to give the defendant in order to tell him the case has to meet; hence in the nature of things there is often overlapping. [ 16 ] The defendants rely on the decision of Rosenberg J. in Region Plaza Inc. v. Hamilton-Wentworth (Regional Municipality) (1990), 1990 CanLII 6761 (ON SC) , 12 O.

R. (3d) 750 , at para. 5 , where he held that: Under rule 25.06, the plaintiff must plead all material facts on which it relies and must plead all of the facts which it must prove to establish a cause of action which is legally complete.

If any material fact is omitted, the statement of claim is bad and the remedy is the motion to strike the pleading, not a motion for particulars. [ 17 ] It is interesting to note that one of the authorities cited by Justice Rosenberg is the decision in Bruce, supra, which in fact offers that in such cases an alternative remedy to striking out the pleading is to direct a further and better statement of claim. [ 18 ] For its’ part, the plaintiff relies on the decision of the Northwest Territories Court of Appeal in Fullowka v.

Whitford , 1996 CanLII 10199 (NWT CA) , [1997] N.W.T.R. 1 as setting out the key principles relevant to such an argument as the plaintiff offers.

I will summarize from the lengthy citation provided by counsel: - “... the impugned pleading must be read generously” and “... will not be struck out if the flaws in it are capable of amendment” ( para. 11); - “... a pleading will not be struck out for want of a cause of action unless the law is plain and obvious and beyond doubt.” It “... must be hopeless to be struck out” ( para. 12); - “A court must use extreme caution on a motion to strike a pleading for want of a cause of action” (para. 12); - “That the plaintiffs will have to make novel arguments is no ground to strike out” (para. 12); - “... a pleading is valid and suffices to raise a certain cause of action if it gives facts which create that cause of action.

It need not name that or any cause of action or give a legal conclusion, and indeed it may name a different cause of action, or the wrong cause of action” (para. 16); - “A pleading should not be struck out for want of a cause of action, even if interpreting a statute one way would bar the suit” (para. 18);

- It is not appropriate “... to decide a general important or serious question of law in a motion to strike of the pleading” (para. 22); - In speaking to claims directed at more than one defendant the court states: A claim against any one defendant may sound debatable, even dubious. But sometimes it is clear, or probable, that someone is liable, the real issue is which defendant. If all those persons are sued in the alternative, then the statement of claim may disclose a very good cause of action, though it may be unclear which of them acted, or was at fault. Such a claim should not be struck out: Alexander v.

Pacific Trans-Ocean, supra , at 27. ( para. 23 ) - The court specifically rejected any suggestion that it is appropriate to strike a statement of claim, where the claim pleads the facts which give a cause of action, but does not give the details of when, where or how. (para. 28) “Details in the claim of where, when or how are useful, even necessary, but only to let the defendant defend himself, not to create a cause of action.” (para. 30).

Issue s [ 19 ] The overriding issue presented by the motion of the applicants is whether the statement of claim as against the Board and/or the Municipality should be set aside pursuant to CPR 13.03,and

summary judgement granted pursuant to CPR 13.01. [ 20 ] The applicants have structured their arguments around the following claims: 1. (

a) Whether the Board and/or the Municipality is strictly liable to the plaintiff for their alleged breach of the Petroleum Management Regulations N. S. Reg. 44/2002; (

b) Whether the Board is liable to the plaintiff for its alleged breach of

section 92 of the Education Act ; 2. Whether the Board made any representations to the plaintiff prior to the transferring of the subject property and whether the Board had an obligation to act in good faith towards the plaintiff; 3. Whether the Board owed a duty of care to the plaintiff as a future purchaser of the subject property and whether the Board acted in a negligent manner towards plaintiff pursuant to this duty; 4. Whether the Board was a party to any contract with the plaintiff and, if such a contract existed, whether the Board was in breach of that contract; 5.

Whether the plaintiff’s pleading provides the necessary material facts to support the alleged causes of action set out in paragraphs 29 and 30 as against the Municipality. Analysis Issue 1 : Whether the Board and/or the Municipality is strictly liable to the plaintiff for their alleged breach of the Petroleum Management Regulations N. S. Reg. 44/2002 ;

Whether the Board is liable to the plaintiff for its alleged breach of

section 92 of the Education Act ; [ 21 ] The first prong of the defendants’ attack is directed at the following paragraphs from the statement of claim: 26. The plaintiff says that the defendants and each of them have breached the Petroleum Management Regulations, NS Reg. 44/2002 , insofar as they and each of them have failed to register, remove, and/or monitor tanks on the subject property, and have failed to deal with spills in accordance with the regulations. The plaintiff says that the defendants are strictly liable to the plaintiff in respect of their breaches of these regulations. 27.

The plaintiff says further that the School Board, during its tenure in occupation and control of the subject property, and as successor to previous school boards, is liable for the breach of statutory obligations under

section 92 of said Education Act in failing to maintain, monitor, remove, or otherwise ensure that the underground tanks servicing the buildings did not produce contamination of the subject property. [ 22 ] The defendants submit that there is no tort of “statutory breach” and as such the allegations set out above do not disclose a “reasonable cause of action.” In consequence, they seek that these portions of the statement of claim be struck. [ 23 ] In support of this position, they rely on the decision of the Supreme Court of Canada in Canada v Saskatchewan Wheat Pool, 1983 CanLII 21 (SCC) , [1983] 1 S.C.R. 205 and in particular the following statement of Dickson J. writing for the court, at p. 225: ...

I would be adverse to the recognition in Canada of a nominate tort of statutory breach. Breach of statute, where it has an effect upon civil liability, should be figured in the context of the general law of negligence. Negligence and its common law duty of care have become pervasive enough to serve the purpose invoked for the existence of the action for statutory breach. [ 24 ] At pp. 227-228, Justice Dickson summarized his views, in these words: 1. Civil consequences of breach of statute should be subsumed in the law of negligence. 2.

The notion of a nominate tort of statutory breach giving a right to recovery merely on proof of breach and damages should be rejected, as should the view that unexcused breach constitutes negligence per se giving rise to absolute liability. 3. Proof of statutory breach, causative of damages, may be evidence of negligence. 4.

The statutory formulation of the duty may afford a specific, and useful, standard of reasonable conduct. [ 25 ] Driving these conclusions was the court’s aversion to imposing “absolute” liability, that is liability without a demonstration of fault, on a defendant who is shown to have breached a statute. The possibility of such an outcome was rejected. At p. 244: One of the main reasons for shifting a loss to a defendant is that he has been at fault, that he has done some act which should be discouraged.

There is then good reason for taking money from the defendant as well as a reason for giving it to the plaintiff who has suffered from the fault of the defendant. But there seems little in the way of defensible policy for holding a defendant who breached a statutory duty unwittingly to be negligent and obligated to pay even though not at fault. The legislature has imposed a penalty on a strictly admonitory basis and there seems little justification to add civil liability when such liability would tend to produce liability

without fault. The legislature has determined the proper penalty for the defendant's wrong but if tort admonition of liability without fault is to be added, the financial consequences will be measured, not by the amount of the penalty, but by the amount of money which is required to compensate the plaintiff. Minimum fault may subject the defendant to heavy liability. ( Emphasis added ) [ 26 ] Several years later, Justice Major, writing on behalf of the Court, in Ryan v.

Victoria (City) , 1999 CanLII 706 (SCC) , [1999] 1 S.C.R. 201 , at p. 222, stated that: Legislative standards are relevant to the common law standard of care, but the two are not necessarily co-extensive. The fact that a statute prescribes or prohibits certain activities may constitute evidence of reasonable conduct in a given situation, but it does not extinguish the underlying obligation of reasonableness. See R. in right of Canada v. Saskatchewan Wheat Pool , 1983 CanLII 21 (SCC) , [1983] 1 S.C.R. 205.

Thus, a statutory breach does not automatically give rise to civil liability; it is merely some evidence of negligence... ( Emphasis added ) [ 27 ] The Supreme Court of Canada again addressed the

interpretation of Saskatchewan Wheat Pool in Odhavji Estate v. Woodhouse 2003 SCC 69 where Iacobucci J. says: 31 I wish to stress that this conclusion is not inconsistent with R. v. Saskatchewan Wheat Pool, 1983 CanLII 21 (SCC) , [1983] 1 S.C.R. 205, in which the Court established that the nominate tort of statutory breach does not exist. Saskatchewan Wheat Pool states only that it is insufficient that the defendant has breached the statute. It does not, however, establish that the breach of a statute cannot give rise to liability if the constituent elements of tortious responsibility have been satisfied.

Put a different way, the mere fact that the alleged misconduct also constitutes a breach of statute is insufficient to exempt the officer from civil liability. Just as a public officer who breaches a statute might be liable for negligence, so too might a public officer who breaches a statute be liable for misfeasance in a public office. Saskatchewan Wheat Pool would only be relevant to this motion if the appellants had pleaded no more than a failure to discharge a statutory obligation. This, however, is not the case.

The principle established in Saskatchewan Wheat Pool has no bearing on the outcome of the motion on this appeal. ( Emphasis added ) [ 28 ] Finally, in BCE Inc. v. 1976 Debentureholder 2008 SCC 69 , the court reaffirmed this principle: 44 A second remedy lies against the directors in a civil action for breach of duty of care. As noted, s. 122(1)(

b) of the CBCA requires directors and officers of a corporation to "exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances". This duty, unlike the s. 122(1)(

a) fiduciary duty, is not owed solely to the corporation, and thus may be the basis for liability to other stakeholders in accordance with principles governing the law of tort and extracontractual liability: Peoples Department Stores. Section 122(1)(

b) does not provide an independent foundation for claims. However, applying the principles of The Queen in right of Canada v. Saskatchewan Wheat Pool , 1983 CanLII 21 (SCC) , [1983] 1 S.C.R. 205 , courts may take this statutory provision into account as to the standard of behaviour that should reasonably be expected . ( Emphasis added ) [ 29 ] On the strength of these authorities I conclude that the plaintiff is entitled and may properly advance breach of statutory obligation as relevant to a pleading of negligence.

Unlike Saskatchewan Wheat Pool, where the plaintiff did not include a claim in negligence, the plaintiff in this case has advanced such a claim in paragraphs 29 and 30 of the statement of claim, which read: 29. The plaintiff says that the conduct of the defendants and each of them was in wanton disregard for the health, safety and economic circumstances of the plaintiff, the plaintiff’s agents and contractors, and persons to whom the plaintiff, to defendants’ knowledge, intended to devise or permit to occupy the subject property. 30.

The plaintiff repeats the foregoing and says that the defendants and each of them were, negligent, reckless, in statutory breach, and in breach of contract and warranty, particularly: a. In failing to conduct an environmental assessment of the subject property and make its results known to the plaintiff as prospective purchaser;

b. In failing to conduct any or any adequate inquiry into the existence and location of underground petroleum tanks; c. In failing to warn the plaintiff of the possibility of petroleum contamination; d. In failing to advise the plaintiff that there were previous underground tanks on the subject property, and their locations e. in the case of the Municipality only, in warranting to the plaintiff that the subject property was “clean”. [ 30 ] The plaintiff’s claim that the defendants are “strictly liable” for breach of the Petroleum Management Regulations is inelegant drafting.

It does not call for the imposition of absolute liability, which is the concept the Supreme Court of Canada has repeatedly says does not exist. Rather, it connotes the existence of liability unless the defendant can establish that they exercised due diligence in meeting their obligations under the regulatory regime. This is consistent with the principle that there cannot be liability without some fault, but is rather a concept that is applicable in the assessment of the defendants ’ conduct where they are subject to prosecution for the regulatory offence.

It does not have a place in making out a claim for civil liability. [ 31 ] The plaintiff may plead the breach of a statutory obligation, but only as an element of its’ claim in negligence. The pleadings will not be struck but the plaintiff will be required to amend the claim to properly reflect that such a breach is being advanced as evidence of negligence. [ 32 ] The second question, the assertion that the Board is “liable” for breach of the Education Act , is answered in the same way.

There can be no liability for the breach of the statute, but it may be evidence of negligence and so the pleading should be amended to properly reflect that. Issue 2 Whether the Board made any representations to the plaintiff prior to the transferring of the subject property and whether the Board had an obligation to act in good faith towards the plaintiff ; [ 33 ] The impugned claim is: 28.

The plaintiff says further that the defendants and each of them had full knowledge of the plaintiff’s intention to excavate the soils on, and to subdivide and develop the subject property, and had full knowledge that the plaintiff relied upon their representations and good faith in transferring the subject property to him for this purpose. [ 34 ] The defendant Board says that there is no evidence that it made “representations” to the plaintiff and that there is no basis upon which it could be said to have owed a duty of “good faith” to the plaintiff.

It says that it dealt directly with the Municipality in regard to all matters related to the transfer of the property. [ 35 ] The Municipality similarly complains about a lack of particularity in the plaintiff’s allegations. [ 36 ] The plaintiff submits that direct communication is not required to found a claim of negligent misrepresentation. What is required is a finding of sufficient proximity between the representor and representee.

As was observed in Fullowka , supra , at para. 40 : ... many of the reported cases refusing to strike out pleadings are about just such proximity or duty questions in negligence law. They say

that the law of negligence in Canada is now fluid and being rebuilt, especially respecting the duty of care, and decisions are very sensitive to the facts of individual cases, so the courts should not strike out a claim over such difficult or uncertain proximity or duty questions. [ 37 ] The plaintiff says that on the facts as set out in the claim, it can be inferred that the Board was aware of the intended resale and development of the property by the Municipality, and the “plain sense of the claim” is that the Board knew or ought to have known that its’ representations as to the state of the property were to be relayed by the Municipality to the plaintiff.

It continues that if the Board and/or the Municipality consider that more particulars are required, then their remedy is to demand them. [ 38 ] There is support for the plaintiff’s position. Paragraph 11 of the claim includes that the Municipality wrote to the Board and informed the Board that “ an environmental clearance ” had to be provided by the school board as a precondition to the Municipality ’ s ultimate disposition of the property.

It also identified to the School Board that those representations were intended for the ultimate reliance of persons such as the plaintiff, being a developer. [ 39 ] Fullowka , at para. 23 , notes that where there is more than one defendant that may be liable, yet it is unclear as to which one, then the action should not be struck out even though the claim may appear debatable or even “dubious” in relation to one of them. This case may be representative of that concept.

Though on first appearances the discussions were solely as between the plaintiff and the Municipality, the claim demonstrates that the Board was aware or ought to have been aware that its’ representations to the Municipality were going to be relayed to the plaintiff and relied upon, ultimately it is alleged by the plaintiff, to its’ detriment.

It may be that, upon closer examination, the Board will successfully defend on the basis of a lack of “representations” but the existence of a good defence is not the basis upon which a pleading should be struck. [ 40 ] The relationship as between the Municipality and the plaintiff is more clearly defined in the claim and demonstrates a direct relationship as between these parties. [ 41 ] I accept the position advanced by the plaintiff and reject the request to strike paragraph 28 of the claim.

The defendants seek information of the “when, where, and how”, as that information relates to the “representations” and the resulting “good faith” claim. Those questions are properly necessary to their defence but the absence of that information does not speak to the cause of action. It is a matter for particulars.

Issue 3 Whether the Board owed a duty of care to the plaintiff as a future purchaser of the subject property and whether the Board acted in a negligent manner towards plaintiff pursuant to this duty ; [ 42 ] The Board argues that the plaintiff has failed to allege facts which would demonstrate the Board had an obligation to be mindful of the plaintiff’s interest in the subject property. It says that its’ obligation was fulfilled by conducting itself in a reasonable manner toward the Municipality, which was the only party with which it had any direct relationship.

Its’ argument continues that there is no support for the proposition that the Board stood in sufficient proximity to the plaintiff as to cause the Board to owe a duty of care to the plaintiff and to be answerable in negligence. [ 43 ] The plaintiff tersely replies that it is open to the Board to defend the claim on the basis that it did not owe the plaintiff a duty of care however, and relying on Fullowka , at paragraph 21 , it suggests that the existence of a “good defense” does not create a want of a cause of action, nor a ground to strike out.

[ 44 ] The pleadings allege that there were certain actions taken, or failed to be taken, by the Board that, if proven, may have contributed to a loss incurred by the plaintiff in its’ attempt to develop the property. Further, the Board was made aware of the intentions of the Municipality and was ostensibly put on notice by the Municipality of an obligation on the Board to fulfill a responsibility to provide environmental clearances in anticipation of the transfer of the property to a developer.

I agree with the plaintiff that in such circumstances the Board may have an arguable defense, but that does not render the claim clearly unsustainable.

Difficult questions as to proximity or duty of care are best left to adjudication on trial and should not result in the disposition of a claim at this early stage, particularly given the facts set out in the claim. [ 45 ] The Municipality while joining in the general submissions of the Board, is certainly in no better position than the Board and arguably has a much less compelling argument to strike the impugned paragraph. [ 46 ] I refuse the application to strike paragraph 28 of the statement of claim.

Issue 4 Whether the board was a party to any contract with the plaintiff and, if such a contract existed, whether the board was in breach of that contract . [ 47 ] In paragraph 30 of the claim, the plaintiff submits that both defendants were “ ... in breach of contract and warranty...” . [ 48 ] There was a contract in the form of the agreement of purchase and sale as between the Municipality and the plaintiff.

For that reason, there is a basis for the plaintiff to advance this argument. [ 49 ] However, the plaintiff candidly acknowledges that there was no contract as between it and the Board and undertakes to amend its pleading to properly reflect this fact. That is an appropriate resolution to this legitimate concern of the Board. Issue 5 Whether the plaintiff’s pleading provides the necessary material facts to support the alleged causes of action set out in paragraphs 29 and 30 as against the Municipality . [ 50 ] This agreement has been advanced by the Municipality only.

I have reviewed the statement of claim and conclude that this argument is without merit. In particular, I refer to the information set out in paras. 11-13, 15-19 and 23 as providing sufficient material facts to support the alleged causes of action set out in paras. 29 and 30. CONCLUSION [ 51 ] The defendants have correctly identified a concern with respect to the drafting of paragraphs 26 and 27 in that they suggest that liability should attach to the defendants as a result of alleged statutory breaches by each of them.

For reasons set out herein, I have concluded that the plaintiff may properly advance assertions of statutory breach as evidence of negligence, which it has pleaded. I am prepared to permit an amendment of the claim to conform to this conclusion.

[ 52 ] I reject the application to strike paragraph 28. There is evidence pleaded in paragraph 11 of the claim, and when seen in the context of the entirety of the statement of claim, which shows the Board to have been put on notice by the Municipality that the Board would be required to provide environmental clearances satisfactory for the purpose of allowing the Municipality to dispose of the property to developers such as the plaintiff.

It is open to the plaintiff to argue that the defendant Board was required to make representations which it knew or ought to have known would be relied upon by the plaintiff. [ 53 ] I further reject the argument of the defendants that there is insufficient information in the claim to support the existence of a duty of care owed by the Board to the plaintiff as the future purchaser of the property.

Such a complex and uncertain question should not result in the striking of a claim unless the claim is clearly unsustainable. [ 54 ] Finally, paragraph 30 of the claim is defective in that it alleges a breach of contract as between both defendants and the plaintiff. In fact, there is no basis on which to conclude that the contract existed as between the Board and the plaintiff. There is, however, a sufficient basis for the argument to proceed as between the plaintiff and the Municipality.

Therefore, the claim of “breach of contract and warranty” as against the defendant Board is struck and the plaintiff is permitted to amend the pleading to correct this defect. [ 55 ] The motion for

summary judgment is denied. I am not satisfied that the plaintiff’s claim as against each of the defendants is “clearly unsustainable”. [ 56 ] Amendments to the statement of claim are to be filed within 15 days of the date of the Order to be issued in this application. [ 57 ] If the parties are unable to agree as to costs I will consider submissions either in person or in writing as the parties choose. Dated at Halifax Nova Scotia this 27 th day of April, 2010. ____________________________ DUNCAN, . _____________________________ Duncan J.