Blue Hill Excavating Inc., Blaine Hardenne v. Tanya Hardenne, 2019 SKCA 22

Court of Appeal for Saskatchewan Docket: CACV3267 Citation: Blue Hill Excavating Inc. v Canadian Western Bank Leasing Inc. , 2019 SKCA 22 Date: 2019-02-26 Between: Blue Hill Excavating Inc., Blaine Hardenne and Tanya Hardenne Appellants (Defendants) And Canadian Western Bank Leasing Inc. Respondent (Plaintiff) Before: Whitmore, Schwann and Leurer JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr. Justice Leurer In concurrence: The Honourable Mr.

Justice Whitmore The Honourable Madam Justice Schwann On Appeal From: 2018 SKQB 173 , Swift Current Appeal Heard: January 11, 2019 Counsel: Lindsay A. Gates for the Appellant Dustin L. Gillanders for the Respondent Leurer J.A. I. Introduction [ 1 ] Blue Hill Excavating Inc. [Blue Hill], Blaine Hardenne and Tanya Hardenne [Hardennes] appeal the grant of

summary judgment in favour of the respondent, Canadian Western Bank Leasing Inc. [CWBL], for an amount owing under an equipment lease. The equipment was seized and sold by CWBL but the proceeds were insufficient to cover the amount due to CWBL. [ 2 ] The appellants admit to a breach of the lease and the legitimacy of the seizure. They argue, however, that CWBL acted unreasonably when it sold the equipment, increasing the deficiency otherwise owing under the lease. They say that the issue of so-called “improvident realization” cannot be determined on a

summary basis, but instead requires a trial. [ 3 ] The Chambers judge held that no trial was necessary to sort out this issue and granted judgment in favour of CWBL for the full amount of its claim. In my view, there is no basis to interfere with the grant of

summary judgment and I would dismiss this appeal. My reasons for reaching this conclusion follow. II. Background A. The lease and CWBL’s enforcement efforts [ 4 ] CWBL and Blue Hill are parties to a lease dated October 1, 2015 [lease], serving to finance the acquisition of a portable “crusher plant” [equipment]. The Hardennes are guarantors of Blue Hill’s liabilities under the lease. [ 5 ] Pursuant to the lease, Blue Hill made an initial payment of $79,724.81 plus taxes and thereafter was to make 59 monthly payments, each in the amount of $9,737.33.

Payments were calculated on the basis of the purchase price of the equipment, plus interest and costs. At the end of the lease, Blue Hill would have an option to purchase the equipment. [ 6 ] Blue Hill defaulted on its obligations under the lease. Mr. Hardenne frankly acknowledges that “Blue Hill was not in a financial position to continue making payments to Canadian Western” ( Affidavit of Blaine Hardenne , sworn January 11, 2018 [ Hardenne Affidavit ]). [ 7 ] As of August 26, 2016, CWBL claimed $518,818.10 as owing under the lease.

CWBL commenced an action against Blue Hill and the Hardennes claiming this amount as well as accruing interest. [ 8 ] In September 2016, Blue Hill consented to an order, pursuant to s. 63 of The Personal Property Security Act, 1993 , SS 1993, c P-6.2 [ PPSA ], allowing CWBL to take possession of the equipment. In December 2016, prior to the sale of the equipment, Blue Hill and the Hardennes defended the action asserting, inter alia , that the fair value of the equipment exceeded the debt owed to CWBL.

At this point in time, the equipment was in CWBL’s possession and the amount that would be left owing under the lease after the sale of the equipment was unknown. [ 9 ] The equipment was ultimately sold by CWBL at an unreserved public auction on March 4, 2017, for $160,000.00, resulting in net proceeds of $143,996.85, which CWBL applied against the amounts it was owed under the lease.

[ 10 ] Once CWBL had crystalized its loss through the sale of the equipment, it continued with its action against the appellants, seeking

summary judgment for the deficiency. In their opposition to

summary judgment, Blue Hill and the Hardennes conceded their presumptive liability to CWBL, but argued in defence that CWBL had breached its obligation pursuant to s. 65(3) of the PPSA to act “in good faith and in a commercially reasonable manner” in the sale of the equipment. B. The Queen’s Bench decision ( 2018 SKQB 173 ) [ 11 ] The Chambers judge framed two issues for his determination: (

i) whether a waiver of rights contained in the personal guarantees precluded the Hardennes from asserting issues relating to the alleged improvident realization efforts; and (ii) whether the issues surrounding the alleged improvident realization could be determined on the basis of the evidence before the court pursuant to the

summary judgment procedure prescribed The Queen’s Bench Rules . [ 12 ] In respect to the first issue, the Chambers judge concluded the lease was a security agreement subject to the PPSA . He held that s. 65(8) of the PPSA precluded CWBL from relying on the waiver of rights contained in the lease and as a result it was open to the appellants to raise a breach of s. 65(3) as a defence to CWBL’s claim.

No issue is taken in this appeal with this part of the Chambers judge’s decision. [ 13 ] With respect to the second issue, the Chambers judge held he was “able to fairly evaluate the evidence based on the record” before him (at para 48). His ultimate conclusion was that CWBL had acted in a commercially reasonable fashion in the disposition of the equipment. Because the base amount owing under the lease was not disputed, the Chambers judge granted judgment for the full amount claimed by CWBL, without diminishment for any amount attributable to the alleged breach of s. 65(3) of the PPSA . III.

Issues [ 14 ] Although the appellants approach matters from several different directions, the points they raise are best addressed by considering four issues: (

a) Did the Chambers judge apply the wrong legal test for improvident realization? (

b) Did the Chambers judge misunderstand the onuses applicable in the context of CWBL’s application for

summary judgment? (

c) Did the Chambers judge err in the exercise of his fact-finding powers? (

d) Did the Chambers judge err by deciding summarily that CWBL had disposed of the equipment in a commercially reasonable manner? IV. Analysis A. Did the Chambers judge apply the wrong legal test for improvident realization? [ 15 ] The appellants agree the Chambers judge “recited the correct legal test” when considering whether CWBL had disposed of the equipment in accordance with s. 65(3) of the PPSA , but say he applied a different, incorrect, one.

The appellants’ specific argument is that the applicable test “required the Learned Chambers Judge to consider not only what steps the Respondent took, but also what steps the Respondent could or should have taken to ensure that the best price possible was received” (emphasis added). [ 16 ] The appellants place particular reliance on HSBC Bank Canada v Kupritz , 2011 BCSC 788 at paras 34 and 35 , 88 BLR (4th) 328 [ HSBC ], which speaks to the obligation resting on a secured party to take “all reasonable steps to obtain the best price for the collateral”.

HSBC emphasizes that this is to be tested on an objective basis, in the context of the particular industry and type of collateral involved. In HSBC , Fenlon J. (as she then was) identifies considerations a court might take into account, such as the timing and method of sale, the extent of advertising, how the collateral was presented for sale, whether it should have been repaired or improved, and so on.

CWBL agrees with the applicable principles, but says there is no merit to the suggestion that the Chambers judge applied a different test. [ 17 ] The appellants’ allegation is one of error of law, extricable from a question of mixed fact and law, reviewable on a standard of correctness: Hryniak v Mauldin , 2014 SCC 7 at paras 80 and 81 , [2014] 1 SCR 87 [ Hryniak ].

I agree with the appellants’ assertion that a proper consideration of whether a secured party has fulfilled its obligation to act in a commercially reasonable fashion includes an examination of what alternative reasonable methods might have been used to maximize the value of its security. However, in my respectful view, the appellants misapprehend the Chambers judge’s decision when they suggest he failed to enter into this analysis. [ 18 ] The Chambers judge took into account the alternatives that were open to CWBL to maximize recovery from the equipment.

He found that there was no evidentiary basis to conclude that any other method of disposition reasonably open to CWBL would have resulted in higher net proceeds. I will return to the substance of the evidence the Chambers judge had before him when I address the appellants’ complaint that he should not have determined CWBL’s claim summarily. In the course of that review I will also consider whether the Chambers judge committed a reviewable error in determining that CWBL had acted in a commercially reasonable fashion.

For the moment, it is sufficient to dispose of this first issue to observe that the Chambers judge made express reference to the HSBC decision (at para 52 ) and ended his analysis by stating that he was “not persuaded the plaintiff could have or should have done anything else ” (at para 54, emphasis added). This later statement was made after the Chambers judge conducted a thorough review of the evidence respecting CWBL’s realization efforts and the appellants’ complaints respecting the same.

The Chambers judge’s statement can be understood in no way other than that he took into account not only what steps CWBL did take, but what steps it could or should have

taken, to ensure that the best price possible was received from the sale of the equipment. [19] As a result, I respectfully conclude that there is no merit to the appellants’ suggestion the Chambers judge recited the correctlegal test but applied a different one. B. Did the Chambers judge misunderstand the onuses applicable in thecontext of CWBL’s application for

summary judgment? [20] After the Chambers judge completed his analysis of the law surrounding improvident realization of security, he turned to thequestion of “whether this matter can properly be decided summarily”.

The opening paragraph of his analysis of this issue states asfollows: [34] To determine this I must examine the evidence to decide whether the defendants have demonstrated that a triable issue exists asto whether the sale was improvident that cannot be resolved summarily. (Emphasis added) [21] The appellants concede that at trial they would bear the onus of proving both that CWBL did not take all reasonable steps toobtain the best price for the equipment and a failure to act reasonably resulted in the recovery of less money than would otherwise havebeen the case. However, they argue that on

summary judgment the onus works differently. They say CWBL, as applicant for

summaryjudgment, bears the onus of establishing it took all reasonable steps to sell the equipment or, if it did not, such failure caused no loss. Theappellants then argue there are many unanswered questions surrounding the sale of the equipment, which require a trial to resolve. [22] I agree with the appellants that an applicant for

summary judgment bears an initial burden before any burden falls to the partyresponding to the

summary judgment request. However, in my respectful view, they misapprehend the analysis actually undertaken bythe Chambers judge in reaching his decision in this case. [23] In Canada (Attorney General) v Lameman, 2008 SCC 14, [2008] 1 SCR 372 [Lameman], the Supreme Court of Canadarecognized that an applicant for

summary judgment (the defendant in that case) carries an initial burden, stating as follows: [11] … The defendant who seeks

summary dismissal bears the evidentiary burden of showing that there is “no genuine issue ofmaterial fact requiring trial”… The defendant must prove this; it cannot rely on mere allegations or the pleadings … If the defendantdoes prove this, the plaintiff must either refute or counter the defendant’s evidence, or risk

summary dismissal … Each side must “put itsbest foot forward” with respect to the existence or non-existence of material issues to be tried … (Authorities omitted) [24] Peter Ballantyne Cree Nation v Canada (Attorney General), 2016 SKCA 124, [2017] 1 WWR 685 [Peter Ballantyne CreeNation], confirmed the continued vitality of the Lameman approach, even after the cultural “rethink” to

summary judgment that wasdirected by Hryniak. Justice Herauf stated in Peter Ballantyne Cree Nation: [30] Simply put, the onus and shifting burden of proof can be gleaned from the Rules. The applicant(

s) for

summary judgment (in thiscase all of the defendants) bear the evidentiary burden of showing there is no “genuine issue requiring a trial” (see Rule 7-2). Theapplicant must do so with supporting material or other evidence. In essence, an applicant for

summary judgment must put its best footforward. Failure to do so may result in the dismissal of the application since the court will assume that the record contains all theevidence the parties would present if there was a trial: see Canadian Broadcasting Corporation v Whatcott, 2016 SKCA 17 at paras 17and 27, 395 DLR (4th) 278. [31] If the applicant for

summary judgment discharges its evidentiary burden by proving there is no genuine issue which requires atrial, the burden shifts to the responding party to counter this by showing “there is a genuine issue requiring a trial” (see Rule 7-3(1)).Once again, the party responding to an application for

summary judgment must file supporting affidavits or evidence in support of itsposition and put its best foot forward. [32] Based upon this

interpretation, I find that the Chambers judge erred in holding that the Cree Nation had the initial burden ofshowing there is a genuine issue for trial. However, even though the Chambers judge did err in this regard, it does not affect the eventualoutcome in this case. In my view, the defendants met their burden and the evidential burden and onus shifted to the Cree Nation in anyevent. (Emphasis added) [25] In Deren v SaskPower, 2017 SKCA 104 [Deren], Caldwell J.A. expanded somewhat on the nature of this shifting burden, andits practical meaning in the context of an application for

summary judgment: [93] When a party applying for

summary judgment has adduced evidence sufficient to make out its claims or defences prima facie, theresponding party, whether plaintiff or defendant, will run the risk of losing on the application if it does not adduce evidence that puts theapplying party’s evidence, and thereby its success on its claims or defences, into question: Peter Ballantyne Cree Nation v Canada, 2016SKCA 124 at para 31, 485 Sask R 162.

To do this, the responding party, whether defendant or plaintiff, must adduce persuasive,admissible evidence establishing that there are triable questions of fact or credibility on an issue that underpins the success of theapplying party’s claims or defences.

In this way, the responding party bears the evidentiary burden of showing one or more of itsdefences or claims has “a real chance of success”: Hercules Managements Ltd. v Ernest & Young, (SCC), [1997] 2SCR 165 at para 15; Guarantee Co. of North America v Gordon Capital Corp., (SCC), [1999] 3 SCR 423 at para 27;Crystalline Investments Ltd. v Domgroup Ltd., 2004 SCC 3 at para 6, [2004] 1 SCR 60.

[26] There is an open question as to whether the initial onus resting on a plaintiff who applies for

summary judgment extends tonegating the existence of a triable issue in connection with a defence, which has been pleaded but which it is incumbent on the defendantto prove. Because both Peter Ballantyne Cree Nation and Deren involved an application by a defendant for

summary judgment, inneither case was the Court required to opine on the full extent of the the initial onus resting on a plaintiff who applies for

summaryjudgment. [27] On the one hand, the language used in Deren, in particular, suggests that where a plaintiff applies for

summary judgment infirst instance all it must establish is that the resolution of the necessary elements of its claim (but not any defences) does not require atrial. This approach aligns with the operation of onuses in a trial. On the other hand, it could be argued that the emphasis should be onthe

summary judgment application itself, and a plaintiff-applicant who says a trial is not required should provide evidence that negatespleaded defences, as the appellants argue in this case. This is the view of the Alberta Court of Appeal as expressed in Weir-JonesTechnical Services Incorporated v Purolator Courier Ltd., 2019 ABCA 49 at para 32. I prefer to leave the final resolution of this issue inthis province to a case where it will affect the outcome. This is not the situation here.

Let me briefly explain. [28] Although the appellants did not formally amend their statement of defence to allege a breach by CWBL of its obligation to actin a commercially reasonable fashion (which they clearly should have), CWBL understood that this issue was being raised as a defenceand as the basis for the appellants’ opposition to the grant of judgment on a

summary basis. CWBL set out to meet this argument in theevidence it filed. [29] CWBL supported its request for

summary judgment by filing the Affidavit of Jessie Taha, sworn September 1, 2017 [TahaAffidavit]. The Taha Affidavit sets out evidence intended to establish the absence of a triable issue, both with respect to the amount ofCWBL’s claim and the commercial reasonableness of CWBL’s actions by addressing, at some length, CWBL’s attempts to realize on itssecurity. In response, the appellants filed the Hardenne Affidavit, which was understood by CWBL as challenging whether CWBL hadacted reasonably in its realization efforts. CWBL then replied to Mr.

Hardenne’s evidence with the Affidavit of Lukas Lamont, swornJanuary 24, 2018 [Lamont Affidavit]. I will address the particulars of the evidence given in these three affidavits in the context of the lastissue in this appeal, but the immediate point is that by the time CWBL’s application for

summary judgment came on for hearing, theChambers judge had before him a very well-developed record relating to the issue of so-called improvident realization. [30] Two other things are of note. First, none of the parties sought to cross-examine any of the affiants. The Chambers judge madenote of this fact (at para 47) when he considered whether a trial would provide the court with a better record to determine the issue ofimprovident realization.

Part of the context for the Chambers judge taking note of the absence of cross-examination is Queen’s BenchRule 7-3(2), which states as follows: 7-3(2) The Court may draw an adverse inference from the failure of a party to cross-examine on an affidavit or to file responding orrebuttal evidence. [31] Although this Court has reiterated that the rule “does not provide a stated right to cross-examine” (Ter Keurs Bros. Inc. v RuralMunicipality of Last Mountain Valley No. 250, 2019 SKCA 10 at para 30 [Ter Keurs]), cross-examination is often consented to.

When itis not, leave is generously granted by the court in the context of

summary judgment applications. All of this occurs because of the court’sexpectation that each party will put its “best foot forward” in leading evidence in relation to the

summary judgment application (TerKeurs at para 54) and the court’s need to decide whether it can “reach a fair and just determination on the merits on [the] motion forsummary judgment” which is the litmus test for whether a genuine issue requiring trial exists (Hryniak at para 49). [32] This leads to the second point, which is that the Chambers judge was entitled to assume both parties had in fact given thecourt the evidence they had at their disposal that would assist in its assessing whether there was a genuine issue requiring trial.

Asalready quoted, the Supreme Court in Lameman endorsed the notion, expressed in Transamerica Life Insurance Co. of Canada v CanadaLife Assurance Co. (1996), (ON SC), 28 OR (3d) 423 (Ont Gen Div) at 434, that “[e]ach side must ‘put its best footforward’ with respect to the existence or non-existence of material issues to be tried”. This principle stands behind Rule 7-3(1), whichprovides as follows: 7-3(1) A response to an application for

summary judgment must not rely solely on the allegations or denials in the respondent’spleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial. [33] If there was an initial onus resting on CWBL in connection with the (unpleaded) defence, CWBL met that onus by leadingevidence as to the steps it took to realize, in a prudent way, on the security it held over the equipment. Having led this evidence, theappellants had a choice.

The appellants would have been well-within their rights to argue that even on the evidence led by CWBL therewas a genuine issue requiring trial. Perhaps with an eye to Rule 7-3(1) and the “best foot forward” principle they chose, as was their rightand the court’s expectation, to lead evidence of their own with a view to convincing the Chambers judge that there was a genuine issuefor trial. CWBL responded to that evidence by filing an additional affidavit.

Once the record was complete, the Chambers judge enteredinto the task of determining whether he was confident in deciding the issue on this evidence, or if a trial was required to make a decisionon the merits of the case.

The Chambers judge may have started out by asking if the defendants “have demonstrated that a triable issueexists as to whether the sale was improvident that cannot be resolved summarily” but, in the face of the record that was developed by theparties, he was left simply to determine if the evidence allowed him to be confident he could reach a fair and just determination on themerits. [34] In result, I find no basis to set aside the judgment of the Chambers judge because of how he approached issues of burden andonus. C.

Did the Chambers judge err in the exercise of his fact-finding powers? [35] The appellants argue that the Chambers judge erred in his application of fact-finding powers given to him pursuant to Rule 7-5(2), which provides as follows:

7-5

(2) In determining pursuant to clause (1)(

a) whether there is a genuine issue requiring a trial, the Court: (

a) shall consider the evidence submitted by the parties; and (

b) may exercise any of the following powers for the purpose, unless it is in the interest of justice for those powers to be exercised only at a trial: (

i) weighing the evidence; (ii) evaluating the credibility of a deponent; (iii) drawing any reasonable inference from the evidence [ 36 ] The Chambers judge found that there were no issues of credibility arising from the affidavits (at paras 47 and 50). He did, however, determine to exercise the power given by Rule 7-5(2) to draw inferences and weigh evidence. In accordance with Hryniak , his decision to do so attracts deference (at para 81). Perhaps because of this standard of review, the appellants do not challenge the fact the Chambers judge exercised these powers.

Rather, the appellants’ argument is that the Chambers judge erred in principle by acting outside the scope of the fact-finding powers provided by Rule 7-5(2) by drawing an inference that was not supported in evidence. In this regard, the appellants refer to Canadian Broadcasting Corporation v Whatcott , 2016 SKCA 17 , 395 DLR (4th) 278, arguing that “that all findings and/or inferences [must] be ‘grounded in at least some evidence that is before the court’”.

The appellants take particular aim at the Chambers judge’s statement that he was “not persuaded that the plaintiff could have or should have done anything else … [therefore finding] the sale was not improvident and was done in a commercially reasonable fashion”, which they say “appears to be speculation based solely upon the fact that the Respondent attempted one other method of sale”. The appellants say this was an inference made without evidentiary foundation, which rises to an error of law, rendering

summary judgment inappropriate. [ 37 ] I voice no disagreement with the proposition that inference must be grounded in evidence. However, respectfully, the appellants take the statement by the Chambers judge they refer to out of its complete context. Far from being an inference made without evidence, the Chambers judge had a significant body of evidence before him that related to CWBL’s conduct in general, and the attempts by CWBL to sell the equipment in particular. This evidence formed the basis for the specific inference which the appellants say was drawn without foundation.

As a result, if his finding that there was nothing more or different CWBL should reasonably have done is properly characterized as an inference, there is no basis to interfere with the Chambers judge drawing it or with his decision to make that finding using the powers given to him pursuant to Rule 7-5(2). [ 38 ] It is now appropriate to examine in greater detail the evidence that was before the Chambers judge and how he dealt with it in his judgment. D.

Did the Chambers judge err by deciding summarily that CWBL disposed of the equipment in a commercially reasonable manner? [ 39 ] The appellants present this issue as involving two questions: (

i) whether the Chambers judge erred in his actual finding that CWBL had acted in a commercially reasonable fashion; and (ii) whether the Chambers judge erred in concluding, as a matter of process , that this was an appropriate case to grant judgment summarily. On the first point, the appellants say that the Chambers judge “did not even consider whether the best price possible was received, nor did he properly consider whether the steps taken by [CWBL] were reasonable in an attempt to achieve the best price possible”.

They review the evidence contained in the various affidavits and ultimately invite this Court to enter into a “fresh consideration” of the factors that led the Chambers judge to conclude he could decide the case summarily. In presenting argument in this way, the appellants follow the reasoning of the Chambers judge, although they reverse its order. [ 40 ] There is considerable overlap in how the appellants present argument on these two points.

In my view, it is impossible to extricate the issue of process (should the judgment have been granted summarily) from the issue of substance (should judgment have been granted on the merits). Indeed, although the Chambers judge spends considerable time in his judgment explaining why he felt comfortable deciding the issue summarily, much of his analysis simply foreshadows his final conclusion on the merits of the case. This is hardly surprising given how a court is to determine if there is a genuine issue requiring trial.

Hryniak directs the matter be tested as follows: [49] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for

summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [ 41 ] This test presupposes that when

summary judgment is granted the court has reached a fair and just determination ; the point simply being that the

summary judgment process is appropriate in any particular case because it is possible for the court to reach a fair and just determination of the issue(

s) before it. Therefore, when

summary judgment is granted, the issues of process and merits are inextricably intertwined. [ 42 ] As I have already noted, in first instance, CWBL grounded its application for

summary judgment in the evidence contained in the Taha Affidavit . The affidavit discloses that CWBL made contact with 15 prospective purchasers, but none “resulted in a solid sale prospect”. Reasons for this included ( Taha Affidavit at paras 14 and 15): ... (

a) The interest in acquiring the equipment was as part of an acquisition of the entirety of Blue Hill’s business, which was an outcome that did not occur;

(

b) Interest was expressed, but at a price which appeared too low to accept ($150,000.00 or less); (

c) The equipment was too large or too small for the contact’s needs; (

d) The contact would require the equipment to be delivered to British Columbia, a cost which did not seem prudent; (

e) Upon inspection, the prospective buyer had concerns about the condition of the equipment. [ 43 ] In addition, CWBL sent notices to a number of its branches, “to permit them to expose the equipment to possible buyers who were already clients”, but no interest was generated by this approach. Ultimately, as already indicated, the equipment was sold by CWBL at public auction. The Taha Affidavit reveals the identity of the auction house and the date of sale. [ 44 ] As already mentioned, the Hardenne Affidavit was filed to challenge the proposition that CWBL had acted in a commercially reasonable fashion.

However, fairly read, the affidavit offers little, if any, direct evidence that CWBL had acted unreasonably. Instead it offers lay opinion and suggestions from which the appellants attempt to draw an inference that CWBL had acted in a commercially unreasonable fashion. The bases for the inferences the appellants invite the court to draw are, however, directly met by in the Lamont Affidavit filed by CWBL. [ 45 ] Beyond general blanket denials that CWBL had acted reasonably, Mr. Hardenne exhibits emails relating to CWBL’s efforts to sell the equipment privately.

For example, an email between CWBL employees, predating the consent order granting CWBL possession of the equipment, refers to an “offer” for the equipment in the amount of $300,000.00. Another CWBL email, sent after the consent order was granted but before the equipment was seized, refers to receipt by CWBL of a “solid written offer” for $215,000.00, but it was said that CWBL “could likely do better at auction”. [ 46 ] The Lamont Affidavit places the email exchanges in a broader context of uncertainty with respect to the equipment and Blue Hill’s operations more generally: 6.

In August and into September of 2016, there was a great deal of uncertainty about what was going to happen with the Equipment. The Equipment was but part of a larger assemblage of equipment used by Blue Hill Excavating Ltd. (“Blue Hill”), there were a number of leasing companies involved, and there were a number of rumours about what was to transpire, one of which was that Blue Hill would possibly find a buyer for the Equipment. 7.

At the time the events occurred which are referenced in paragraph 19 of the Affidavit, there was a great deal of uncertainty about the condition of the equipment, the manner in which a sale might be conducted, and who might be interested in purchasing the equipment. The sale possibility referenced in paragraph 19 and in Exhibit “E” was, in our view speculative, as we did not know if or when we might obtain possession of the Equipment, the consent order for possession not having been obtained until 10 days later.

Accordingly, I would not characterize the sale possibility mentioned therein as an offer, as the Plaintiff was not in a position to entertain any offers, prior to taking possession of the Equipment, and dealing with the necessary statutory notices. [ 47 ] Mr. Lamont also explains that a third party had provided CWBL with an estimate of value before CWBL was in possession of the equipment.

He further acknowledges that CWBL had an optimistic view as to the value of the equipment, but he says these were taken “in part on the opinion of third parties … and did not reflect an actual inspection of the equipment and its impact on value”. In connection with emails, which had suggested receipt of “offers”, he states: 10. In paragraph 18, the Plaintiff suggests that the earlier affidavit by Jessie Taha is in error and suggests that the Plaintiff received an offer to purchase the equipment for $215,000.00.

An examination of the emails will show that while various parties kept referencing an “offer”, it was clear the interest of the buyer was conditional upon the buyer conducting an inspection of the equipment, and accordingly was not a solid offer at that number until such time as the inspection was complete. [ 48 ] Mr. Hardenne denies that the equipment was in poor condition “or any condition that would cause potential buyers concern, prior to same being turned over to Canadian Western on November 16, 2016”. Mr. Hardenne further states in his affidavit: 22.

There is some suggestion in the emails attached hereto that I misused the Equipment and that same impacted the value of the Equipment. I deny any misuse and note that those allegations stem from the broker and manufacturer, who I am currently pursuing by way of Statement of Claim, because the Equipment did not meet the specifications initially promised. This however does not impact my position on value as set above, nor what the third parties indicate in the attached emails as same is based on the actual unit received, and not what was initially promised. [ 49 ] Mr. Lamont meets Mr.

Hardenne’s evidence on this point by describing the condition of the equipment when CWBL took possession. Mr. Lamont’s evidence is that when possession was taken the equipment “was in a partially disassembled state and looked to be in much different shape than shown in the previous pictures”. The equipment was “stripped of removable attachments and parts and that [it] had suffered overall damage which resulted in a poor appearance”. None of this is put in dispute by the appellants’ evidence.

Moreover, nowhere in the appellants’ evidence is there a suggestion the equipment deteriorated after CWBL took possession of it or a description of what specific changes or improvements should have been made to the equipment prior to its sale at auction. [ 50 ] Similar observations can be made about the appellants’ argument that the Chambers judge failed to consider the possibility that CWBL delayed in taking possession of the equipment and the suggestion that the equipment could have been sold privately or at a different time.

The appellants say it was “erroneous for the Learned Chambers Judge to simply dismiss the above noted alternatives/steps without further inquiry, consideration, or evidence, or evidence to support the reasonableness thereof”. However, in contrast to the explanations given by CWBL for why they took the specific actions they did, the appellants led no actual evidence that these alternatives were practical, or as to what results might have been obtained if they had been pursued. [ 51 ] In connection with the choice of auction and timing of sale, the Lamont Affidavit states:

16. Ultimately, after four months, a decision was made to send the equipment to Ritchie Brothers in an effort to get the best value for the equipment. The Bank was continuing to incur the costs of storage and administration related to trying to sell the Equipment and we believed that an auction would be the best way to procure the best possible price for the Equipment. 17.

It was represented to the Bank by Ritchie Brothers, that several pieces of equipment related to gravel crushing would be at the auction and as such it would attract a larger crowd of interested purchasers and be our best bet to attract the highest possible price.

Based on these representations we arranged to place the equipment in auction. [ 52 ] The appellants say that there was no evidence as to what goods were sold in conjunction with the equipment at the public auction, but they were aware of the details of the auction and could have led that evidence as easily as CWBL if it was material to the question of whether CWBL had acted in a commercially reasonable fashion.

Similarly, the appellants complain that CWBL did not pursue a warranty claim before the equipment was sold, but their counsel frankly acknowledged in oral argument that there was no evidence that CWBL had even been made aware about the existence of the warranty claim. [ 53 ] In the context of the record before him, it was fair for the Chambers judge to characterize the Hardenne Affidavit as having raised “attenuated concerns” (at para 43). As the Chambers judge also pointed out, “Mr. Hardenne provided no evidence as to what he would have done or what he actually tried to do from September 2016 to March 4, 2017”.

This observation is entirely appropriate in the context of the court’s expectation that, when an applicant seeking

summary judgment has demonstrated a prima facie basis to contend no trial is required to avoid a trial, the respondent must establish at least some evidentiary basis to put the issue into doubt ( Deren at para 94 ). [ 54 ] The Chambers judge was alive to all of this when he faced into the question as to whether a trial would provide the court with a better record to determine the issue of improvident realization: [47] A trial is often more evidence rich than affidavit evidence. Parties are cross-examined. Their demeanour in the court room is noted by the court and so forth.

However, the essence of this case is what the plaintiff did to try to sell the crusher and that is adequately set out in the affidavit material. Mr. Hardenne complains about it but as indicated, provides little additional information. I see nothing in the plaintiff’s affidavits that suggest any credibility issue nor do the emails that are attached to Mr. Hardenne’s affidavit ultimately assist the defendants. Finally, Mr. Lamont in his reply affidavit provides reasonable answers to the allegations contained in Mr. Hardenne’s affidavit.

I note the parties did not choose to question or cross-examine (other than the written questions provided to the defendants). [ 55 ] The Chambers judge’s summarized his final determinations as follows: [52] On the evidence before me I am persuaded that the plaintiff tried to sell the crusher privately in a diligent and reasonable fashion. A sale did not materialize. The defendants complain about the timing of the sale but it appears to have been done in the early spring and under the circumstances (the crusher was in the hands of the plaintiff in mid-November) this seems reasonable.

The sale was done by an auction company. I heard no complaint about the sale advertisement or any of the other factors as set out in the HSBC decision. As for repairs, it seems Mr. Hardenne believed the equipment was in good shape and therefore fixing it up for sale was not necessary. [53] In short this is a rather straight forward situation. The plaintiff reasonably tried to sell the crusher privately. It could not. In hindsight perhaps the so-called $215,000 offer should have been accepted but neither the plaintiff nor the defendants for that matter thought that was a reasonable price at the time.

I am not convinced that that was a genuine offer in any event. [54] In due course the plaintiff decided to sell the crusher through a public auction and not delay matters any further. I am not persuaded the plaintiff could have or should have done anything else. Therefore I find that the sale was not improvident and was done in a commercially reasonable fashion.

Therefore the defendants have not persuaded me that the plaintiff did anything wrong in the sale through the public auction of the crusher. [ 56 ] The question of whether there is a genuine issue requiring trial is a question of mixed fact and law, which is reviewable absent an error in principle against a standard of palpable and overriding error ( Hryniak at para 81 ; Deren at para 41 ). Again, I emphasize, the Chambers judge was entitled to proceed on the basis that both parties had put their best evidentiary foot forward.

Absent an evidentiary foundation for the appellants’ various suggestions as to what CWBL might have done differently, it was open for the Chambers judge to conclude, on the basis of the evidence in front of him, that a trial would not lead to a better record from which to make a fair and just determination of the issues.

On the basis of the evidence he had before him, it was also open to him to determine that CWBL’s efforts were commercially reasonable. [ 57 ] Stepping back from it all, many of the arguments the appellants make seem to arise from the fact the Chambers judge spent more time in his judgment considering the question of process (could he reach a fair and just determination without a trial) than he did analyzing the question of substance (whether CWBL had acted in a commercially reasonable manner). However, his analysis on the first point allowed him to be brief in his analysis of the second.

The Chambers judge might have more directly tied the determination of whether a just and fair determination could be made on a

summary basis to the determination of the issue on the merits. However, this is hardly a difference in principle, since the Chambers judge fairly considered both points. My conclusion from all of this is that the Chambers judge committed no error of law and his reasons exhibit no reviewable error in using the

summary judgment process and then concluding that CWBL acted in a commercially reasonable fashion. [ 58 ] I am left to deal with the final argument made by the appellants, which is an invitation for this Court to enter into a “fresh consideration” of the factors that the Chambers judge looked at in the course of considering if a trial was necessary. These factors included the complexity of the claim, the amount at issue, the importance of the issues, relative costs and expense of trial compared to

summary judgment and the availability of better evidence. Absent an extricable error in principle, this is an invitation for this Court to substitute its discretion for that of the Chambers judge, something that Hryniak does not permit absent an error in principle. Since the appellants make no allegation that any of the factors the Chambers judge took into account were inappropriate, I decline the appellants’ invitation. [ 59 ] For all the reasons given, I conclude that the Chambers judge made no error in deciding summarily that CWBL disposed of

the equipment in a commercially reasonable manner. V. CONCLUSION [ 60 ] There is no basis to interfere with the grant of

summary judgment. The appeal is dismissed with costs in favour of the respondent in the usual way. “Leurer J.A.” Leurer J.A. I concur. “Whitmore J.A.” Whitmore J.A. I concur. “Whitmore J.A.” for Schwann J.A.