Poole v. Tibert, 2011 NSSC 384

SUPREME COURT OF NOVA SCOTIA Citation: Poole v. Tibert , 2011 NSSC 384 Date: 20111018 Docket: Hfx. No. 342548 Registry: Halifax Between: Faye Poole Plaintiff - and - Dennis Tibert and Dana Pye Respondent LIBRARY HEADING Judge : The Honourable Justice A. David MacAdam Heard: July 28, 2011, in Halifax, Nova Scotia Subject:

summary judgment on evidence, contracts; parol evidence rule

Summary: In 2006 the defendants agreed to a leasing arrangement for certain fishing licenses and to purchase a boat owned by the plaintiff's husband, who operated a fishing business with the plaintiff. The leasing arrangement was reflected in a written agreement in 2007. The defendants later bought the boat, pursuant to an oral agreement. They bought the boat without having it inspected. New leasing agreements for the licenses were entered into in 2008 and 2009. In 2010, a written agreement was reached for the purchase of the licences, excluding a crab quota that the defendants had been leasing.

The plaintiffs made an initial payment, then stopped paying the installments required by the agreement. The plaintiff then commenced this action, claiming special damages or a declaration that the defendants had breached the agreement and were required to return the licences. The defendants filed a defence and counterclaim. They claimed that it had been agreed as part of the 2006 oral agreement that they would have the option of purchasing the licenses, including the crab quota. They also claimed that the plaintiff had assured them that the fishing boat was in good working order.

However, they say they found it necessary to do extensive repair work. They also claimed that they had no choice but to agree to buy the licenses without the crab quota because they needed the fishing income to service their debt. They further claimed that they had paid more than market value for the boat. The plaintiff moved for

summary judgment dismissing the defendants' claims and counterclaims with respect to the alleged failure to sell them the crab quota, the alleged excessive cost of the boat and the cost of repairs to the boat. Issue: Should the court grant

summary judgment on the evidence?

Result: There was a dispute as to the existence of the 2006 oral agreement that the defendants alleged gave them an option on the crab quota. The plaintiff denied the defendants ’ claim that the 2006 oral agreement included an option to purchase the lobster fishing licenses and crab quota. It was argued that even if there was such an agreement, it would have no legal effect because of the subsequent written agreement in 2010 and the application of the parol evidence rule. The existence of this agreement was not a matter to be determined on

summary judgment. The claims in relation to the sale price and repair of the boat were effectively a single alternative claim. There was no authority cited for the proposition that a party was entitled to a remedy after having agreed to pay more than market value. As to the cost of repairs, there was a dispute as to whether the plaintiff had made the representations alleged, and, if so, what the nature of those representations was. The motion for

summary judgment was dismissed on the issue of the alleged 2006 oral agreement in respect of the crab quota and on the defendants' claim for repair costs, due to the existence of issues of material fact.

Summary judgment was allowed on the issue of the allegedly excessive purchase price of the boat. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF NOVA SCOTIA

SUPREME COURT OF NOVA SCOTIA Citation: Poole v. Tibert, 2011 NSSC 384 Date: 20111018 Docket: Hfx. No. 342548 Registry: Halifax Between: Faye Poole Plaintiff v. Dennis Tibert and Dana Pye Defendant DECISION Judge: The Honourable Justice A. David MacAdam Heard: July 28, 2011, in Halifax, Nova Scotia Final Written Submissions: July 20, 2011 Counsel: Peter C. Rumscheidt & Sharon L. Avery, for the plaintiff Richard A. Bureau & Adam D. Crane, for the defendant By the Court : [ 1 ] This is an application for

summary judgment on evidence, pursuant to Rule 13.04 of the Nova Scotia Civil Procedure Rules , in which the plaintiff (and defendant by counterclaim)seeks dismissal of certain provisions of the defence and, additionally, certain provisions of the defendants' counterclaim.

Background [ 2 ] The plaintiff, Fay Poole, and her late husband, John Poole, also known as Jack Poole, operated a fishing business in Port Dufferin, Nova Scotia. Mr. Poole, was a fisherman and owned certain fishing licenses, including a lobster license and a crab quota. Throughout his working life he owned several vessels, the last of which was the Fay Marie III , built in 1991. [ 3 ] The plaintiff claims that around July 2006 Mr. Poole was contacted by the defendants, who inquired about leasing the lobster license. Following discussions between Ms. Poole and Mr.

Poole and the defendants, an agreement was reached whereby his lobster license would be leased in exchange for 35 percent of the revenue from the lobster catch. A written agreement was entered into on March 28, 2007. Counsel says that around the same time there were discussions between the parties about the possible sale of the Fay Marie III . An oral agreement was reached by which the defendants would buy the boat for the price of $45,000.00, the transaction to be on an "as is" basis.

Counsel submits, and the evidence on the motion indicates, that the defendants had an opportunity to inspect the vessel, including, if they chose, the opportunity to have it viewed by a third party. Although the defendants did view the vessel themselves, they purchased without having it inspected by anyone on their behalf nor did they place it in the water in order to undertake a test run. [ 4 ] Further written lobster fishing agreements were entered into for the 2008 and 2009 fishing seasons, with the percentage payable to the Pooles reduced. [ 5 ] Counsel for the plaintiff says that in early 2009, Mr.

Poole ’ s health began to deteriorate and he and Ms. Poole decided to sell the fishing licenses. Having a satisfactory relationship with the defendants, they decided to make the licenses available to them. Counsel says that following discussions an agreement was reached to sell six licenses for a total of $200,000.00, to be paid in annual installments of $20,000.00 without interest, over ten years. A written agreement was prepared and signed by the parties on February 5, 2010. The plaintiff says it was known to the defendants that the February 2010 agreement did not include Mr. Poole ’ s crab quota.

One half of the initial installment was paid in August 2010; however, no further payments have been made by the defendants. [ 6 ] The plaintiff commenced this proceeding on January 18, 2011, claiming special damages in the sum of $10,000.00 or, in the alternative, a declaration that the defendants were in breach of the agreement and that the licenses were to be returned to the plaintiff. [ 7 ] The defendants say that prior to 2006 they had very limited experience in the fishing industry. They say that in or about July 2006 they learned that Mr. Poole and Ms.

Poole were selling their fishing licenses, their crab quota and their fishing vessel. The defendants contacted the Pooles and were advised that the fishing licenses were for sale, as well as their crab quota. The defendants say they were primarily interested in the lobster license and the crab quota because they were the more lucrative. They were offered the opportunity to purchase the fishing licenses and crab quota for $200,000.00, but only if they first leased the lobster license for the 2007 and 2008 seasons and purchased the Fay Marie III for $45,000.00.

The lease of the lobster license for 2007 and 2008 would require them to pay the Pooles 35 percent of the daily catch, with the defendants responsible for paying all taxes, as well as providing their own boat, fuel, bait and gear.

The defendants say that at the end of the lobster season in 2008 they were to have the option to purchase the fishing licenses and the crab quota for $200,000.00. [ 8 ] The defendants say that following this agreement they contacted the Department of Fisheries and Oceans about obtaining the appropriate licenses and the Department of Transportation to inquire about any required safety courses. [ 9 ] Some weeks after the first discussion, in or about August 2006, the defendants attended at the Pooles ’ residence to further discuss the purchase. At that time Ms.

Poole reconfirmed that the licenses and the crab quota were still for sale for $200,000.00, on the same terms as previously stated; namely, leasing of the lobster license for the 2007 and 2008 seasons and the purchase of the Fay Marie III for $45,000.00. The other terms for the leasing of the lobster license were restated and they were advised that all payments had to be made in cash. The defendants say that Ms.

Poole also advised them that the Fay Marie III was in "good working order." [ 10 ] The defendants say they agreed to the terms and provided the Pooles with the sum of $10,000.00 to hold the deal while they obtained financing for the purchase of the boat. The defendants say that at this point they believed that, subject to obtaining financing for the purchase of the Fay Marie III , they had an oral agreement for the purchase of the vessel, the lease of the lobster licenses for the

2007 and 2008 lobster fishing seasons, and an option to purchase the fishing licenses and the crab quota. [ 11 ] Counsel for the defendants says that near the end of August 2006 the defendants attended at the Pooles ’ residence to inspect the vessel. They say that Ms. Poole assured them that the wiring had been maintained and that the electronics were in good working condition. The defendants say they did not notice anything wrong with the boat during their inspection. They say they relied on the assurance of Mr. Poole and Ms. Poole that the boat was in good working condition.

They obtained a loan and purchased the vessel. On or about October 6, 2006, they again attended at the residence of the Pooles to complete the purchase, for the sum of $45,000.00. [ 12 ] On or about November 6, 2006, the defendants returned to the Pooles ’ residence, with a truck, to pick up the Fay Marie III and place it in the water. Once the boat was in the water, they discovered that the electronics, except for the VHF radio, did not work. They also learned that the vessel had not been in the water for the two preceding years, the wiring had corroded and the bilge pump did not work.

In the fall of 2006 the defendants began to purchase electronics in order to have the vessel ready for the 2007 lobster fishing season. [ 13 ] The defendants say that in the fall of 2007 the defendants noticed that the boat ’ s deck was rotting and was unsafe and they had no option but to tear it up and replace it. Once they tore up the deck, counsel says, they noticed many other problems. They mentioned these problems to Mr. Poole and Ms. Poole who responded that they did not believe them and that the boat had been sold on an "as is" basis.

A number of repairs had to be carried out and the defendants spent approximately $14,500.00 to make the vessel ready for the 2007 lobster season. [ 14 ] According to the defendants, in the fall of 2008, believing they had satisfied their part of the 2006 oral agreement, they attended at the Pooles ’ residence to discuss the option to purchase the fishing licenses and the crab quota for $200,000.00. The plaintiffs refused to honour the 2006 oral agreement and instead advised the defendants that they could continue to lease the lobster license for the 2009 season.

The defendants say they had no option but to agree to lease the lobster licenses, as they had an outstanding loan relating to the purchase of the vessel.

They say they were reassured by the Pooles that they would receive the lobster license and the crab quota, but that the Pooles refused to put anything in writing to confirm this. [ 15 ] In April 2009 the defendants entered into a lobster fishing agreement for the 2009 season on the same terms as the prior agreements, except that they were to pay the Pooles a lower percentage of the daily catch. [ 16 ] In or about January 2010 the defendants became aware that the Pooles were attempting to sell the fishing licenses and the crab quota. They attended at the Pooles ’ residence to inquire about this.

They say the Pooles indicated that they were not sure if the defendants were interested in buying the fishing licenses and crab quota, and that they could still purchase the licenses for $200,000.00, but not the crab quota. The Pooles said they wanted to hold onto it for another two years, at which time the defendants could purchase it for $50,000.00. [ 17 ] The defendants say that at this point they had no option, because they were so far in debt and dependent on fishing to service their loan and provide them with an income.

They entered into a written agreement dated February 5, 2010, for the purchase of the fishing licenses for $200,000.00, which agreement did not include the crab quota. [ 18 ] The defendants also say that they have since learned that the amount they paid for the vessel was well above fair market value. [ 19 ] The plaintiff has provided an affidavit, together with a number of exhibits, including the lobster fishing agreements and extracts from discovery examinations of the defendants. The defendants filed affidavits and extracts from the discovery examination of Ms. Poole.

Also filed was an affidavit of Andrew Fraser, who operates Pictou Fishing Supplies, where, in the summer of 2006, an advertisement was placed on the bulletin board for the sale of a fishing license package for $200,000.00. Also filed was the affidavit of Clem Fleet, who deposed that he learned in 2006 that the Pooles were selling their fishing licenses, boat and crab quota, and that he made inquiries with them and was advised that the licenses and quota were available for $200,000.00, plus the vessel for $45,000.00.

He stated that he inspected the vessel and determined that it was not worth $45,000.00, saying it was probably worth approximately$20,000.00. He deposed that the vessel was in bad shape and he was not interested in purchasing it and decided not to purchase thepackage offered by the Pooles. Ms. Poole and Mr. Pye were cross-examined in respect of their affidavits. [20] The defendants filed a defence and counterclaim on March 31, 2011. Relevant to this application for

summary judgment aretheir allegations that certain of the agreements between Mr. Poole and Ms. Poole and themselves were breached, including the agreementto include the crab quota as part of the sale of the fishing licenses. They also allege misrepresentations in respect to the quality andfitness of the Fay Marie III and an alleged overpayment in the purchase of the vessel. [21] It is in respect to these issues that the plaintiff now seeks

summary judgment, by the striking of these allegations as they appearin the statement of defence and in the counterclaim. Other claims by the defendants, in the defence and counterclaim, are not at issue onthis motion. The Law [22] This motion is brought pursuant to Civil Procedure Rule 13.04 which reads as follows: 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 questionof a genuine 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 bythe contesting 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 trialis a question of law.

(6) The motion may be made after pleadings close. [23] The test for

summary judgment, including the onus on the moving and responding parties, is not in dispute. Counsel for bothparties reference the decisions of Boudreau J. in Bell Aliant Regional Communications Inc. v. Cabletec Ltd., 2011 NSSC 136, at paras.18, 19 and 20, and Bryson J. (as he then was) in AGC Flat Glass North America Ltd. (c.o.b. AFG Glass Centre) v. CCP Atlantic Specialty Products Inc. (c.o.b. Roofing Connection), 2010 NSSC 108, at paras. 13 and 14. In Bell Boudreau J. observed: 18 The leading case on the subject of

Summary Judgment in Canada appears to continue to be Guarantee Co. of North America v.Gordon Capital Corp., (SCC), [1999] 3 S.C.R. 423. This case has been followed and cited with approval by Superiorand Courts of Appeal in just about every province. This continues to be so in this province even though there is a slight variation in theCivil Procedure Rules of the various provinces and even though Nova Scotia has recently amended its Rules... 19 The Supreme Court in Guarantee, supra, at para. 27, framed the test as follows:

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. SeeHercules Management Ltd. v. Ernst & Young, (SCC), [1997] 2 S.C.R. 165 (S.C.C.) At para. 15; Dawson v. RexcraftStorage & 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 (Ont. C.A.) At pp. 550-51. Once the moving party has made this showing,the respondent must then "establish his claim as being one with a real chance of success." Hercules, supra, at para. 15. [24] In AGC, supra, Bryson J observed: 13 Keeping in mind that it is the plaintiff who is moving for

summary judgment, and who must establish that there is no "genuineissue" for trial, I would characterize the test and applicable legal principles in this way;

(1) The plaintiff must show that, on uncontroverted facts, it is entitled, as a matter of law, to succeed; that is to say, that there is nofact material to the cause of action that is in issue;

(2) The burden then shifts to the defendant to show evidence that the defence has a real prospect of success; that is to say that thereis a genuine issue of fact material to the claim or defence, that must be decided before the case can be determined on its merits;

(3) The responding party must put "its best foot forward" or risk losing. This requires more than a simple assertion, but requiresevidence....

(4) If material facts are not in dispute, the court has an obligation to apply the law to those facts and decide the matter.... 14 To defeat a

summary judgment application, a responding party cannot be coy about its true position. A vague assertion of factualdisputes will not do. In Canada (Attorney General) v. Lameman, [2008] 1 S.C.R. 372, 2008 SCC 14, the Court said: [11] ... Each side must "put its best foot forward" with respect to the existence or non-existence of material issues to be tried ... Thechambers judge may make inferences of fact based on the undisputed facts before the court, as long as the inferences are stronglysupported by the facts... [19] ... In the Court of Appeal and here, the case for the plaintiffs was put forward, not only on the basis of evidence actually adduced onthe

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

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

summaryjudgment must be judged on the basis of the pleadings and materials actually before the judge, not on suppositions about what might bepleaded or proved in the future.... [25] Also referenced by defence counsel is the decision of the Nova Scotia Court of Appeal in Globex Foreign Exchange Corp. v.Launt, 2011 NSCA 67, where Farrar J.A., in writing the majority opinion, said at paras. 13-16 and 28-31: 13 The prerequisites for

summary judgment to dismiss an action are -- first, that the applying defendant shows that there is nogenuine issue of material fact requiring trial; and second, that the responding plaintiff fails to show that his claim has a real chance ofsuccess.... 14 Accordingly, the first question the Chambers judge had to ask herself was whether she was satisfied that there were no matters of

fact or of mixed law and fact requiring trial. Only if she were persuaded that this initial threshold had been met, would she then go on to ask the second question, that is, whether Globex demonstrated that it had a real chance of success in advancing its argument that an agency relationship existed between Launt and Numberco.... 15 In conducting the requisite analysis the clear directions of this Court on a number of occasions bear repeating. It is not the function of the Chambers judge on a motion for

summary judgment to determine matters of fact or mixed law and fact which are in dispute.... 16 The Court's role is limited to assessing the threshold of whether a genuine issue exists for trial. The evaluation of credibility, the weighing of evidence and the drawing of factual inferences (except in limited circumstances) are functions reserved for the trial judge. ... 28 The Chambers judge is making the determination of whether it would be appropriate to find an agency relationship on the evidence before her. As I expressed earlier, it is not the function of the Chambers judge on a motion for

summary judgment, to determine matters of fact or mixed law and fact which are in dispute. The evaluation of credibility, the weighing of evidence and the drawing of factual inferences are functions for the trial judge. The Chambers judge here did all three. She reviewed the evidence, determined, by inference, that Launt was credible in his affidavit evidence and "demonstrated" he was not the principal in these transactions. She then made the finding that an agency relationship did not exist between Launt and Numberco.

Again, with respect, that was not her function. 29 In certain circumstances, a Chambers judge may make inferences of fact based on the undisputed facts before the court, as long as the inferences are strongly supported by the facts. Guarantee v. Gordon, supra , para. 30. However, that is not the situation here. This is not a situation where there is a full factual record with no material facts in dispute.

Whether the agency relationship existed is in itself a finding of fact, whether to lift the corporate veil involves considerations of whether the failure to do so would be unfair and lead to a result "flagrantly opposed to justice" and/or whether this was a situation where the corporation is merely the puppet of Launt.

It is not simply a matter of looking at the denial of Launt that Numberco was not acting as his agent. ... 31 Where there is a disputed issue of material fact involving a comparison of parties' respective evidence and positions, as was done by the Chambers judge in this case, it is not a proper case for

summary judgment. The fact in dispute is not an incidental fact, it involves consideration of whether an agency arrangement existed. That fact is essential to the plaintiff's claim. A proper approach would have focussed the Chambers judge on the ultimate issue as to whether Launt had met the requirements of the first stage of the

summary judgment test. Had she done so, the result would have been different... Argument [ 26 ] As noted, the plaintiff seeks to strike the defendants ’ claim and counterclaim in respect of the alleged failure of the plaintiff to sell them the crab quota, the payment by the defendants of in excess of the fair market value for the Faye Marie III and the cost of repairs to the boat. (

A) Sale of the Crab Quota [ 27 ] In his written submission, counsel for the plaintiff says the sale and purchase agreement of February 5, 2010, makes no reference to the crab quota as an asset being transferred and that the defendants knew, well in advance of signing the agreement, that the crab quota was not to be included. Counsel also submits that they reviewed the agreement prior to signing, and had the opportunity to obtain legal advice, and elected not to do so. They were not coerced nor pressured into signing the agreement.

The plaintiff, he says, is entitled to the balance of the payment due on August 1, 2010, in the amount of $10,000.00. Having satisfied the first prerequisite, namely demonstrating that the plaintiff is entitled to succeed it was for the defendants to show that they had a real chance of success.

[28] Although acknowledging that the statement of defence alleges that the defendants say they entered into an agreement with Mr.Poole in 2006 to purchase his fishing vessel, certain fishing licenses and his crab quota, the terms of which included leasing the fishinglicenses and the crab quota for a period of two years, at the end of which the defendants would purchase them for $200,000.00 to be paidover 10 years, plaintiff’s counsel notes the defendants do not assert that there is any written agreement setting out these terms.

Counselsuggests that the oral agreement is contrary to the terms of the written agreement of February 5, 2010, and that in the circumstances theparol evidence rule is applicable. His written submission references the statements by Glube C.J.T.D. (as she then was) in CandlepinMachine Parts Ltd. v. Britten, (1991) (NS SC), 109 N.S.R. (2d) 366, [1991] N.S.J. No. 485, at p. 6: The defendants submit that parol evidence is necessary because the contract does not contain a delivery date nor a date for the inspectionof the equipment.

The defendants submit that the parties agreed to an inspection date six weeks after signing the contract. The plaintiffsubmits that the written contract speaks for itself and that no additional evidence is admissible to allow additional terms to beincorporated. The rule on parol evidence is classically stated in the judgment of Denman, C.J. in Goss v.

Lord Nugent (1833), 5 B. & A.D. 58 at page64-5, 110 E.R. 713: "By the general rules of the common law, if there be a contract which has been reduced into writing, verbal evidence is not allowed to begiven of what passed between the parties, either before the written instrument was made, or during the time it was in a state ofpreparation, so as to add to or subtract from, or in any manner to vary or qualify the written contract ... ." (emphasis added by GlubeC.J.T.D.)) [29] Also referenced by plaintiff's counsel is a statement by MacDonald J.A., in Shaw (Gordon) Concrete Products v.

DesignCollaborative Ltd. (1986), (NS CA), 72 N.S.R. (2d) 133 (S.C.A.D.), at p. 137: ...When a written contract exists, the terms of the agreement govern the rights and obligations of the parties. The contract is deemed tostate finally the intent of the parties and the terms upon which they agreed and prior negotiations are deemed to have been merged intoand settled by the contract as finally stated. It is for that reason that courts have uniformly held that evidence of oral agreement is notadmissible to add to, vary or contradict the written contract.

However oral agreements are admissible in evidence to explain ambiguousparts of the contract or to show the parties agreement as to a matter upon which the contract is incomplete or totally silent.... ...

Before allowing extrinsic evidence to explain a written agreement, there must be an ambiguity in the instrument or a difficulty oruncertainty in the application of the facts; it may be admissible to explain the sense in which words are used, but not to contradict them.Where the words in the documents are clear, extrinsic or parol evidence is not admissible to alter or amend or explain the words.... [30] Counsel for the plaintiff submits that there being no ambiguity in the written agreement, and the defendants having receivedexactly what they expected to receive by virtue of its terms, the parol evidence rule precludes the admission of evidence of an oralagreement.

It is submitted that the portions of the defence and counterclaim alleging the existence and subsequent breach of an oralagreement to sell the defendants the crab quota would therefore have no real chance of success. [31] On the other hand, the defendants say that the parol evidence rule has no application since the 2006 oral agreement wasperformed by the defendants and breached by the plaintiff before the agreement of February 5, 2010, was ever made.

Their position issummarized in counsel's prehearing written submission: It is the Defendants position that the parole(sic) evidence rule is not applicable in this matter as the 2006 oral agreement was alreadyentered into with sufficient consideration by all the parties, and that the Defendants partially performed their obligations under theagreement in October, 2006 when they purchased the Fay Marie III and fully performed their obligations under the agreement in 2008after they completed the lease of the lobster license for the 2007 and 2008 lobster fishing seasons. Ms. Poole and Mr.

Poole did nothonour their part of the 2006 oral agreement since they refused to sell the Fishing Licenses and share in crab quota to the Defendants.

Instead, Ms. Poole and Mr. Poole used their unequal bargaining position to force the Defendants to lease the lobster license for the 2009 lobster fishing season. The 2006 oral agreement was a completely separate contract that was entered into and the Defendants met the two conditions precedent well in advance of the execution of the Sale and Purchase Agreement. [ 32 ] The existence of this oral agreement is in dispute. At the very least Ms.

Poole said she has no recollection of such an agreement and that the sale of the Fay Marie III was not tied to the sale of the fishing licenses. [ 33 ] Clearly there are matters of fact or mixed law and fact in dispute.

In view of Justice Farrar's comments in Globex , supra , that the "evaluation of credibility, the weighing of evidence and the drawing of factual inferences (except in limited circumstances) are functions reserved for the trial judge", the issues of whether the position of the defendants or of the plaintiff in respect to the existence of an oral agreement in October 2006 is to be preferred, and the terms of any such oral agreement are not matters to be determined on a motion for

summary judgment. Also in dispute would be whether the parol evidence rule has any application in the event it is found that there was an oral agreement as alleged by the defendants. The determination of that question will likely depend on the nature and terms of any oral agreement in 2006, and whether its terms were breached by any of the parties. [ 34 ] Therefore, the application by the plaintiff for

summary judgment in respect to the claim by the defendants in reference to the alleged option to purchase the fishing licenses, including the crab quota, for $200,000.00 is dismissed. (

B) Sale of the Fay Marie III [ 35 ] The defendants have advanced two claims in reference to the sale of the Fay Marie III . They claim the amount paid "above fair market price" and the cost of repairs necessary to return the vessel to proper working condition.

In oral submission defence counsel acknowledged that effectively there was only one claim, either for the amount of the overpayment, arising because of the condition of the vessel, or for the cost of repairs necessary to return the vessel to good working condition. [ 36 ] Although invited by the court, counsel cited no authority to support a claim that a party was entitled to be reimbursed for having negotiated a contract in which they agreed to pay in excess of what might have been the fair market value.

To the extent the claim is for the cost of restoring the vessel to a proper working condition, that is a separate matter. [ 37 ] The plaintiff also says that there has not been sufficient evidence introduced to establish that, in fact, the sale price of $45,000.00 was in excess of the fair market value of the vessel. In this respect the defendants would rely, presumably, on the affidavit of Mr.

Fleet, in which he says he inspected the boat and it was not worth $45,000.00 "but probably worth approximately $20,000.00." [ 38 ] Whether this would amount to sufficient evidence to support the claim of an overpayment is unnecessary for me to decide. I am satisfied that there has been no basis established to support such a claim against the plaintiff. In respect to the purchase of the vessel, the evidence of the defendants is that in order to obtain the fishing licenses, including the crab quota, they were required to purchase the vessel at this price.

No law was cited to support a "redo" in respect to the purchase price for the vessel. At the time it was purchased they were free to proceed, or not proceed. Mr. Fleet, in effect, decided not to proceed, apparently, on the basis that he thought the vessel was overpriced. [ 39 ] The plaintiff's application for

summary judgment in respect to the claim for an overpayment for the purchase of the Fay Marie III is allowed. [ 40 ] In respect to the boat there is also the claim by the defendants for the repairs to the Fay Marie III , in the amount of approximately $14,000.00. [ 41 ] Counsel for the plaintiff, in his oral and his written submission, says the misrepresentation alleged by the defendants with respect to the quality of the boat did not occur. However, Ms. Poole in her evidence did not take issue with defendants ’ counsel ’ s statement to her that she had told the defendants that the vessel was in good working order.

[42] Plaintiff's counsel also says the boat was purchased on an "as is" basis and that although there was no written agreement, this isindicated on the bill of sale. Counsel says, consequently, to the extent there may have been any defects with the vessel, which is denied,that the defendants bore the risk and the principle of "buyer beware" applied. [43] The defendants’ counsel, on the other hand, says in response that in the case of misrepresentations or misstatements, thedefence of caveat emptor is no longer available. He references the comments of Wright J, in Desmond v.

McKinley (2000), (NS SC), 188 N.S.R. (2d) 211, at paras. 52 and 59: 52 While it may be unnecessary, in light of the foregoing findings, I have concluded that liability can be ascribed to the defendantvendor in a parallel way under the tort doctrine of negligent misstatement. The general principles of this doctrine were recently referredto by Cromwell, J.A. in Barrett v. Reynolds et al. (1998), 1998 NSCA 109 , 170 N.S.R. (2d) 201 who began his review of thelaw as follows (at p. 224): In Queen (D.J.) v.

Cognos Inc., (SCC), [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1; 99 D.L.R. (4th) 626, at p. 110,Iacobucci, J. (writing for 5 of the 6 judges participating in the appeal) set out five general requirements for liability in negligentmisrepresentation: 1. there must be a duty of care based on a "special relationship" between the representor and the representee; 2. therepresentation in question must be untrue, inaccurate or misleading; 3. the representor must have acted negligently in making themisrepresentation; 4. the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and, 5. the reliancemust have been detrimental to the representee in the sense that damages resulted. ... 59 The main thrust of the defence was that no misrepresentation had been made by the defendant vendor to the plaintiff purchaserand hence the defendants were entitled to rely on the doctrine of caveat emptor.

It is clear from the legal authorities, however, that once afinding of misrepresentation has been made, whether characterized as a collateral warranty or as a negligent misstatement, the defence ofcaveat emptor is no longer available. [44] There is therefore a dispute as to whether there was a representation, and if there was, the nature of the representation. Additionally, the legal effect of any representation, in view of the bill of sale stating the vessel was sold "as is" is also contested betweenthe parties.

It is only when the existence and nature of any representation is determined, that the legal effect, if any, can be assessed. [45] The plaintiff's application for

summary judgment in respect to the defendants’ claim for damages due to alleged deficiencies inthe Fay Marie III is therefore dismissed. [46] Judgment accordingly. MacAdam J.