Stromberg v Olafson, 2023 SKCA 67

Court of Appeal for Saskatchewan Citation: Stromberg v Olafson , 2023 SKCA 67 Date: 2023-06-02 Docket: CACV3644, CACV3645 and CACV3650 Between: David Stromberg, Micro Oil Inc., and Jeffrey Stromberg Co-Appellants (Defendants) And Kyle Olafson Respondent (Plaintiff) Before: Richards C.J.S., Jackson and Barrington-Foote JJ.A. Disposition: CACV3644: Appeal allowed Written reasons by: The Honourable Mr.

Justice Barrington-Foote In concurrence: The Honourable Chief Justice Richards In dissent: The Honourable Madam Justice Jackson On appeal from: 2020 SKQB 122 and QBG 1560 of 2018, Saskatoon Appeals heard: April 4, 2022 Counsel: Christopher Boychuk, K.C., for David Stromberg Emily Kirkpatrick and Saheli Sodhi for Jeffrey Stromberg Sean Sinclair for Micro Oil Ltd.

Shaunt Parthev, K.C., and Paul Olfert for Kyle Olafson Docket: CACV3936 Between: Kyle Olafson Appellant/Applicant (Applicant) And Jeffrey Stromberg, Micro Oil Inc., and David Stromberg Respondents/Respondents (Respondents) Before: Richards C.J.S., Jackson and Barrington-Foote JJ.A. Disposition: CACV3936: Appeal dismissed; Application for interim payments dismissed Written reasons by: The Honourable Madam Justice Jackson In concurrence: The Honourable Chief Justice Richards The Honourable Mr.

Justice Barrington-Foote On appeal from: 2020 SKQB 122 and QBG 1560 of 2018, Saskatoon Appeals heard: April 4, 2022 Counsel: Shaunt Parthev, K.C., and Paul Olfert for Kyle Olafson Christopher Boychuk, K.C., for David Stromberg Emily Kirkpatrick and Saheli Sodhi for Jeffrey Stromberg Sean Sinclair for Micro Oil Ltd. Barrington-Foote J.A. I. INTRODUCTION [ 1 ] David Stromberg and Jeffrey Stromberg, who are brothers, and Kyle Olafson, are the sole shareholders of Micro Oil Inc. [Micro Oil], which carries on a very profitable business selling flotation and other specialty oils.

Each of them has also played a role as an employee of the company for most of its existence. David Stromberg is the sole director of the company. This appeal is the product of a breakdown in the relationship between David Stromberg and Jeffrey Stromberg, on the one hand, and Kyle Olafson on the other. [ 2 ] To avoid confusion, I will refer to David, Jeff and Kyle by their given names in these reasons for judgment. [ 3 ] While the parties differ as to the genesis of their dispute, it is clear that it came to be focused primarily on their respective contributions to, role in and compensation from Micro Oil.

As they were unable to resolve these differences, Kyle filed a statement of claim on October 24, 2017, naming David, Jeff and Micro Oil as defendants [main action]. The Statement of Claim asserts, among other things, that each of the defendants had acted in a manner that was oppressive and unfairly disregarded Kyle’s rights as a shareholder and that Kyle had been constructively dismissed by Micro Oil at the direction of David and Jeff.

It claims damages for wrongful dismissal and seeks other interim and final relief, including injunctive relief requiring the distribution of Micro Oil’s profits proportional to each

shareholder’s equity and the disgorgement by Jeff of $3,127,500 allegedly improperly paid to him by Micro Oil. [ 4 ] As matters have transpired, these claims remain outstanding. However, some of the relief requested by the Statement of Claim – including, inter alia , an order that Jeff offer to buy Kyle’s shares – have been overtaken by the events that have resulted in this appeal.

On August 29, 2018, Kyle filed a notice of application [Oppression Application] in the main action, seeking interim and final relief on the basis of an alleged act of oppression that was not pled in the Statement of Claim, as it had not yet occurred when the main action was commenced. That event was the allocation, in August of 2018, of income earned by Micro Oil in the 2017 fiscal year [2017 allocation]. [ 5 ] The Oppression Application was decided by a judge of the Court of Queen’s Bench for Saskatchewan [Chambers judge] on April 30, 2020: Olafson v Stromberg , 2020 SKQB 122 [ Oppression Decision ].

He granted final relief, concluding that the 2017 allocation constituted oppression, and ordering that the appellants purchase Kyle’s shares for the sum of $12,961,728. [ 6 ] The appellants have appealed the whole of this decision, raising a variety of jurisdictional, procedural and substantive grounds of appeal.

The principal jurisdictional argument is advanced by Jeff, who submits that the Chambers judge did not have the jurisdiction to grant the relief sought in the Oppression Application, as the allegation of oppression which underpinned it was not a cause of action pled in the Statement of Claim. [ 7 ] In my opinion, The Business Corporations Act , RSS 1978, c B-10 , The Queen’s Bench Act, 1998 , SS 1998, c Q-1.01 , and The Queen’s Bench Rules [ Rules ], provide a complete answer to the jurisdictional question that was posed by Jeff.

The correct approach to this issue was recently explained by the Court in Windels v Reddekopp , 2023 SKCA 38 [ Windels ], which dealt with substantially the same problem pursuant to the oppression provisions of The Non-profit Corporations Act, 1995 , SS 1995, c N-4.2 .

This ground of appeal does not call for resort to and thus should not be resolved on the basis of the status of the Court of King’s Bench as a superior court of original jurisdiction, and the inherent jurisdiction it enjoys as a result of that status. [ 8 ] More importantly, and unlike my colleague, it is my opinion that what may broadly be characterized as the procedural grounds of appeal have merit, and that the Chambers judge erred in finding that oppression had occurred and in granting the remedy that he did.

The Oppression Application, being an application for final relief brought in the context of an action commenced by a statement of claim, should have been brought as an application for

summary judgment pursuant to Rule 7-2 of the Rules. That Rule is found in Division 2 of

Part 7 of the Rules , which governs such applications in a manner that strikes a careful balance between the benefits of a

summary procedure, where appropriate, and the need to ensure the litigation process is fair. [ 9 ] The fact that Oppression Application was not in the proper form was not fatal to Kyle’s claim. However, the fact that the substantive requirements that must exist before a claim can be summarily determined on the merits was. A Chambers judge cannot grant

summary judgment if there is a genuine issue requiring a trial unless the parties have agreed to have the issue determined by

summary judgment and the judge is “satisfied that it is appropriate to grant

summary judgment” (Rule 7-5(1)(b)). This was, in substance, an application for

summary judgment. The need to determine if a

summary decision on the merits could properly be made had to be dealt with because a fair adjudication remains the bottom-line concern in this context. That was so, regardless of the fact that the Oppression Application was not cast as a

summary judgment application pursuant to Rule 7-2, as it should have been. [ 10 ] The question of whether the conditions necessary to justify

summary judgment have been met frequently cannot be determined in advance of the hearing, particularly where the facts are at issue. Rather, it can only be determined when the judge considers the evidence and final submissions of the parties. Indeed, the decision that there is a genuine issue for trial is, in practical terms, often inseparable from the decision on the merits. Self-evidently, the fact that a respondent responds to an application for

summary judgment cannot mean that they have agreed there is no genuine issue for trial. That is the unavoidable reality of the

summary judgment process, which sometimes results in efficient justice, but can also result in costs being thrown away. [ 11 ] Here, there were genuine issues for trial. There was conflicting affidavit evidence in relation to crucial issues that could not be reconciled. The alleged act of oppression that was the sole subject of the Oppression Application was inextricably intertwined with evidence and allegations that the Chambers judge correctly concluded could only be dealt with when the main action went to trial.

There was a continuing claim for wrongful dismissal that would not only address facts relevant to the finding of and remedy for oppression but could result in determinations at trial that could not be reconciled with the Oppression Decision . In these circumstances, justice demanded a trial – a procedure that was, given the nature and complexity of the issues and the amount at stake, entirely proportionate. [ 12 ] Further, the appellants did not agree either explicitly or implicitly that the allegation and the remedy sought should and could be dealt with summarily.

Rather, both Jeff and David took the position that the Oppression Application should be denied and that the matter must go to trial. They did so both in their pre-Chambers briefs and after all of the evidence was in and Kyle had made his submissions – that is, at the very time such submissions generally are and must be made in a

summary judgment application of this kind. If the Chambers judge had applied the law, he could not have been satisfied that it was appropriate to grant

summary judgment. There were simply too many gaps and conflicts in the evidence to do so. [ 13 ] Finally, I also agree with the appellant’s substantive ground of appeal. The question of whether the 2017 allocation was oppressive, and if it was, both the significance of the appellants’ conduct and the appropriate remedy, could not be decided without taking account of the entire context. That is so because the substantive law relating to the oppression remedy demanded that approach.

The Chambers judge, having considered the 2017 allocation in isolation from the events that led up to it, and the fact that the main action would continue to trial, failed to apply the correct legal test. Indeed, the procedural errors made by the Chambers judge are, in many respects, directly related to this error as to the substantive law as to the oppression remedy. My reasons for these conclusions follow. [ 14 ] As to the background facts and procedural history of this litigation, I adopt

Part II of Jackson J.A.’s dissenting reasons, which are at paragraphs 163 to 205 of this judgment. II. THE JURISDICTIONAL AND PROCEDURAL ISSUES

[ 15 ] There are several distinct jurisdictional and procedural grounds of appeal identified by the appellants. As noted above, Jeff argued that the Chambers judge lacked the jurisdiction to hear the Oppression Application because the allegedly oppressive conduct had not been pled and because this was an interlocutory application. Jeff was a shareholder and employee of Micro Oil. He was not an officer or a director, did not purport to speak for David or Micro Oil, and took different positions in relation to this and certain other issues. David and Jeff also argued that the Oppression Application should not have been decided on a

summary basis for other reasons, one of which Jeff characterized as having a jurisdictional aspect. I will deal first with the alleged jurisdictional issue arising from the failure to plead the 2017 allocation and then with the other procedural questions. A. Did the Chambers judge lack jurisdiction to hear the Oppression Application? 1. Failure to plead the 2017 allocation [ 16 ] Jeff contends that the Chambers judge lacked jurisdiction because the Oppression Application was not made in accordance with the rules of court governing such an application.

This calls for consideration of The Business Corporations Act , The Queen’s Bench Act , 1998 , and the Rules . [ 17 ] The jurisdictional and procedural path begins with s. 234 of The Business Corporations Act , which provides for an application for interim or final relief based on allegation of oppression, as follows: Application to court re oppression 234

(1) A complainant may apply to a court for an order under this section. Grounds

(2) If, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates: (

a) any act or omission of the corporation or any of its affiliates affects a result; (

b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner; or (

c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner; that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of. [ 18 ] This

section grants jurisdiction to a judge of the Court of Queen’s Bench for Saskatchewan – now the Court of King’s Bench – to hear an application for an oppression remedy relating to a corporation that is subject to The Business Corporations Act . However, that does not mean that the legislature cannot impose procedural requirements that must be met before that jurisdiction can be exercised. [ 19 ] This proposition is at the heart of Jeff’s argument.

As he notes, the Oppression Application is based on the 2017 allocation, which was made after the Statement of Claim was filed and is accordingly not addressed in that commencement document. In Jeff’s view, that means that Kyle could not seek relief by way of a notice of application, as he had not yet engaged the court’s jurisdiction in the manner required by the Rules . He cites Sahsi v Bhuthal (17 January 2020) Vancouver, S1913342 (BCSC) (in Chambers), in support of this argument.

In that case, the court dismissed an oppression claim brought by a notice of application, rather than in accordance with the requirement in Rule 2-1(2)(

b) of British Columbia’s Supreme Court Civil Rules , BC Reg 168/2009 , which specified that when an application is authorized by an enactment, it must be brought by petition. Justice MacDonald found that she had no jurisdiction as a result of this defect . Mion v Papais , 2013 BCSC 1548 , demonstrates the same approach. [ 20 ] This argument raises two questions: Was the Oppression Application made in accordance with the governing legislation and rules, and, if not, did the Chambers judge lack jurisdiction? As to the first of these questions, s. 241 of The Business Corporations Act provides that such applications may be made in a

summary manner:

Summary application to court 241 Where this Act states that a person may apply to a court, the application may be made in a

summary manner by petition, originating notice of motion, or otherwise as the rules of the court provide , and subject to any order respecting notice to interested parties or costs, or any other order the court thinks fit. (Emphasis added) [ 21 ]

Section 27 of The Queen’s Bench Act, 1998 , is also relevant, as it provides general direction as to the procedure to be followed in the Court of King’s Bench: Procedure generally 27

(1) Procedure in the court is to be in accordance with this Act and the rules of court. [ 22 ] The rules of court referred to in these provisions – the Rules – are, of course, more than a recommendation. They were made pursuant to s. 28(1) (

b) of The Queen’s Bench Act, 1998 , which provides that the judges of the court “may make rules of court … regulating procedure and pleadings in the court”.

Section 51.1 of The Queen’s Bench Act, 1998 confirms their status and binding effect: Rules of law apply in all courts

51.1 The rules of law enacted and declared by this Act are part of the law of Saskatchewan and must be applied in all courts ofSaskatchewan, so far as the matters to which the rules relate are cognizable by those courts. [23] Where the rules of court are a complete code, they supplant the common law and the court’s inherent jurisdiction to govern itsown procedure does not apply. It is only where they do not constitute a complete code that the court may invoke its inherent jurisdiction tofill the void: Neva R.

McKeague & Christine Johnston, 2022 Saskatchewan Queen’s Bench Rules Annotated (Regina: Law Society ofSaskatchewan Library, 2022) at 44; Royal Bank of Canada v Wright (1989), (SK CA), 74 Sask R 215 (CA), andMcRobb Holdings Ltd. v Chelico’s Restaurants Ltd., (SK KB), [1993] 8 WWR 752 (Sask QB). [24] Here, there is no such void. The Rules codify how an action must be commenced and how an application may be brought in thecourse of an action.

The relevant provisions are as follows: Rules govern Court actions 3-1 A Court action for a claim may only be brought and carried on, applications may only be filed and proceedings may only be taken inaccordance with these rules. How to start an action 3-2(1) An action, other than a family law proceeding, may only be started by filing in the appropriate judicial centre described in rule 3-3or 3-4: (

a) a statement of claim by a plaintiff against a defendant; (

b) an originating application by an originating applicant against a respondent; or (

c) a notice of appeal, reference or other procedure or method specifically authorized or permitted by an enactment.

(2) A statement of claim must be used to start an action, unless an enactment or these rules provide otherwise.

(3) An action may be started by originating application if these rules authorize the commencement of an action by originating application.

(4) If an enactment authorizes, requires or permits an application to be made to the Court and the application: (

a) is made in an action with respect to which a commencement document has been filed, the application must be made pursuant to

Part 6,unless the Court orders otherwise; or (

b) is not made in an action with respect to which a commencement document has been filed and the enactment does not provide aprocedure to be used, an originating application must be used unless the Court orders otherwise or these rules provide otherwise. [25] Rule 3-49, in turn, specifies when an action may be started by originating application, including where – as in the case of s. 234– an application is authorized by an enactment: 3-49(2) An action may be started by originating application if an enactment or these rules authorize or require an application, anoriginating application, an originating notice, an originating summons, a notice of motion or a petition to be used. [26] Kyle started his action by filing a statement of claim which, among other things, alleged various acts of oppression and soughtrelief pursuant to s. 234 of The Business Corporations Act.

Was he entitled to do so, or was he – in light of the above provisions relating tocommencement documents – obliged to use an originating notice? In my view, a statement of claim was a proper commencementdocument. Rule 3-49(2) is permissive, not exclusive. It provides that an action may, not must, be started by originating application wherean enactment authorizes an application. I interpret this, in the context of the Rules as a whole, to mean that it permits the commencementof an action by originating notice but does not preclude the use of a statement of claim. [27] This

interpretation is consistent with the observation, which appears to have been first published by O’Halloran J.A. in BritishAmerican Timber Company v Jones, (BC CA), [1944] 2 DLR 481 (BCCA), that the “[r]ules of practice are the servantsand not the masters of the Courts, whose duty it is to interpret the rules in the manner most likely to do justice between the parties” (at495–​496). This observation accords with the remedial and purposive approach to the

interpretation the Rules describe in s. 2-10 of TheLegislation Act, SS 2019, c L-10.2, which is adopted by Rule 17-4. The object of the Rules is to facilitate the resolution of disputes. Theability to commence an oppression action by way of a statement of claim, which is a well-established practice, advances this purpose, as itis a means to directly access the more robust procedural tools that are only available on application where an action is commenced by anoriginating application. Those tools include document disclosure, questioning and viva voce evidence, which are often necessary in anoppression action. [28]

Section 241 of The Business Corporations Act is also permissive. It too provides that an application may be made in a

summarymanner. It does not preclude the commencement of an oppression action by a statement of claim. [29] These provisions of the legislation and rules, read together, mean that Kyle, having commenced his action by a statement ofclaim, was not only permitted, but obliged to bring any s. 234 application in the course of that action in accordance with Division 1,

Part 6:Resolving Issues and Preserving Rights. That part applies “to every application filed in the Court unless a rule or an enactment providesotherwise or the Court orders or permits otherwise” (Rule 6-1(a)). Rule 6-3(1) provides that all applications – which are defined for thepurpose of that

section by Rule 6-2 as “application[s] in the course of an action with respect to which a commencement document has beenfiled” – “must be by notice of application except where otherwise specifically provided” (emphasis added). Further, Rule 6-3(2) dealsspecifically with applications made pursuant an enactment: “If pursuant to any enactment an application may be made to the Court or to ajudge, the application must be by notice of application unless the enactment or these rules provide otherwise”.

[30] Sections 234 and 241 of The Business Corporations Act do not provide otherwise. They allow such an application to be made“as the rules of court provide”. [31] However, the fact that Kyle was entitled to apply for relief by notice of application does not respond to Jeff’s jurisdictionalargument. To reiterate, Jeff’s point – with which I agree – is that a party is entitled to seek relief by notice of application under

Part 6, asJeff claims to have done here, only if the application relates to matters that are the subject of the action. They cannot seek and the courtcannot grant relief in relation to a cause of action that has not been pled. [32] Here, the Statement of Claim did not plead the claim that was the subject of the Oppression Application and the OppressionDecision. The Statement of Claim, which was filed October 25, 2017, alleged that there had been oppression on the basis that Jeff andDavid had done the following things: (

a) failed to maintain complete and accurate financial and corporate records; (

b) failed to establish and pay salaries in accordance with sound business practices, particularly by allocating corporate profits by“bonusing down”; (

c) failed to allocate shareholder profits in proportion to their shareholdings; and (

d) failed to repay shareholder loans. [33] As is noted above, the Statement of Claim did not and could not allege, when it was first issued, that the 2017 allocationconstituted oppression, as that event had not yet occurred. It was only in August 2018 that Kyle was told that his employmentcompensation for 2017 would be $250,000. He took the position that this constituted

an act of oppression and, on August 29, 2018, filedthe Oppression Application. It claimed certain interim relief based only on the 2017 salary paid to Kyle and others, including the paymentof Kyle’s shareholders loans, and document production. It did not seek relief based on or in relation to any of the alleged acts of oppressionspecified in the Statement of Claim.

The Oppression Application also asked for an expedited hearing to address the remainder of the reliefsought, that being an order for liquidation and dissolution of Micro Oil, a declaration of the fair market value of Micro Oil, or an order forJeff and David to purchase Kyle’s shares. The Statement of Claim did not seek any of these forms of relief. [34] Accordingly, the Oppression Application and the process that resulted in the Oppression Decision related to a single alleged actof oppression, namely, the 2017 allocation.

The Chambers judge effectively recognized this in the Oppression Decision, pointing out that“the particular circumstances prompting this application actually crystallized after the pleadings in the main action closed” (at para 2).Kyle did not apply to amend the Statement of Claim to include a claim based on the 2017 allocation. It is apparent that he did not think hisPart 6 application had to be tethered to a commencement document in the usual way, as The Business Corporations Act provided he couldapply for relief.

That misunderstanding is demonstrated by his counsel’s submission in response to the suggestions put to him in thecourse of argument that the Oppression Application should have been brought as a

summary judgment application: On the question of whether this is a

summary judgment application and the submissions made to you, My Lord, … the suggestion wasmade to you that we should’ve brought the application under the

summary judgment rules. With respect, My Lord, the SaskatchewanBusiness Corporations Act allows us to bring the application. We do not have to bring it under

summary judgment rules. We can bring itunder the application. That old-world thinking about sticking to the narrow specifics of the rules is -- is now gone. [35] With respect, and for the reasons I have explained, this statement was incorrect. The Rules still govern. An action that seeksrelief pursuant to s. 241 of The Business Corporations Act on the ground of oppression must be commenced by statement of claim ororiginating notice. That is a different question than whether a failure to use a commencement document can be cured. Further, acommencement document may be amended to add a cause of action.

However, no such action was commenced based on the 2017allocation, and the Statement of Claim was not amended. [36] However, this too does not end the matter. Neither Jeff nor any other appellant took the position in the Court of Queen’s Benchthat Kyle could not apply by notice of application under

Part 6 for relief based on the 2017 allocation. To the contrary, they consented toGabrielson J.’s scheduling order: Olafson v Stromberg (11 October 2018) Saskatoon, QBG 1560 of 2018 (Sask QB) [GabrielsonScheduling Order]. Had they objected on the basis that the claim had not been made in a commencement document, Kyle could haveapplied to amend.

Such applications are almost invariably granted where an amendment is necessary to determine the issues and theamendment can be granted without injustice to the other side: Boisvert v Milton (Rural Municipality), 2015 SKQB 2, 464 Sask R 28;Maksymew v Maksymew (1986), (SK CA), 51 Sask R 62 (CA) at paras 10–22; and Beemer v Brownridge, (SK CA), [1934] 1 WWR 545 (Sask CA).

There is no apparent basis to conclude that an order to amend would have not been made inthis case. [37] In these circumstances, Jeff cannot argue that the Chambers judge lacked the jurisdiction to grant the Oppression Applicationbecause Kyle did not take either of the two routes that Jeff submits were open to him to pursue this new cause of action; that is, to apply toamend the Statement of Claim or to commence a new oppression action by way of an originating application.

Accordingly, while Kyle isincorrect in his assertion that he was entitled to seek relief based on the 2017 allocation by notice of application under

Part 6, he is correctthat it is not now open to Jeff to allege that this defect is fatal.

In effect, the appellants’ consent to the Gabrielson Scheduling Order andparticipation in the process meant that this defect became a matter of form – a form to which Jeff agreed – rather than a matter that couldaffect the Court’s authority to find that the 2017 allocation constituted oppression. [38] For these reasons, the Chambers judge did not lack jurisdiction because the 2017 allocation had not been pled in acommencement document. [39] I would finally note that, at its root, this reasoning is consistent with this Court’s recent decision in Windels, which dealt with asimilar issue.

Windels was an appeal of an order made pursuant to s. 225 of The Non-profit Corporations Act, 1995, which provides that aparty may apply for relief in relation to a non-profit corporation on the same grounds as those specified in s. 234 of The BusinessCorporations Act.

Section 232 of The Non-profit Corporations Act, 1995 is to the same effect as s. 241 of The Business Corporations Act.The respondents, despite having never filed a statement of claim or originating application, filed a notice of application seeking relief

pursuant to s. 225 . [ 40 ] This Court held that if Mr. Windels wished to apply pursuant to s. 225 , he should have filed an originating application pursuant to Rule 3-49. As such, it confirmed that an oppression application brought pursuant to The Non-profit Corporations Act, 1995 must be made in accordance with the Rules , and that a commencement document is accordingly required.

That principle is the basis for the conclusion that the Oppression Application in the matter at hand was not made in a procedurally correct manner, as it was not in accordance with the Rules . [ 41 ] In Windels , the Court also concluded that the Chambers judge could have cured the defect that resulted from the failure to use a commencement document, “provided that he did so in a fashion that, in substance or effect, accorded Mr. Windels the same degree of procedural protection that he had insisted on and that he would have had if the action had been properly initiated by an originating application” (at para 63).

That aspect of the decision is relevant to the remaining procedural issues, to which I will now turn. B. The

summary determination grounds: Did the Chambers judge err by granting final orders on an interlocutory application that was not an application for

summary judgment? 1. Introduction: The

summary determination grounds [ 42 ] Both Jeff and David contend that the Chambers judge committed a variety of errors by making final orders despite irreconcilable conflicts in the evidence, in an application that was not one for

summary judgment . Micro Oil, while silent on this issue in the court below, supports certain of their arguments and their bottom-line position on this point. It is my view that Micro Oil is entitled to advance those arguments, as there has been no suggestion that it would be unfair or prejudicial to Kyle. [ 43 ] Jeff and David identify several related issues in this context. First, both submit that the Chambers judge lacked the jurisdiction to exercise the enhanced fact-finding powers granted to a court hearing a

summary judgment application under

Part 7 of the Rules , as this was an interlocutory application brought under

Part 6.

Part 7, which is titled Resolving Claims Without a Full Trial, provides three means to that end: the trial of an issue,

summary judgment, and applications to strike. Division 2 contains the

summary judgment rules, and provides, in part, as follows: Application for

summary judgment 7-2 A party may apply, with supporting affidavit material or other evidence, for

summary judgment on all or some of the issues raised in the pleadings at any time after the defendant has filed a statement of defence but before the time and place for trial have been set. … Disposition of application 7-5

(1) The Court may grant

summary judgment if: (

a) the Court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (

b) the parties agree to have all or part of the claim determined by

summary judgment and the Court is satisfied that it is appropriate to grant

summary judgment.

(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.

(3) For the purposes of exercising any of the powers set out in subrule (2), a judge may order that oral evidence be presented by one or more parties, with or without time limits on its presentation. …

(7) If an application for

summary judgment is dismissed, either in whole or in part, a judge may order the action, or the issues in the action not disposed of by

summary judgment, to proceed to trial in the ordinary way. [ 44 ] Jeff argues that the reason the enhanced fact-finding powers referred to in Rule 7-5(2) are not generally available on a

Part 6 application is that

Part 6 has a different purpose – to enable the resolution of issues and the preservation of rights within existing actions, prior to their resolution on the merits. As he puts it, those enhanced powers are not required, because the relief properly sought and granted under

Part 6 does not involve the final determination of substantive rights. [ 45 ] Jeff cites Mosiuk v Nagel’s Debt Review Inc. , 2016 SKQB 80 , aff’d 2019 SKCA 16 , [2019] 4 WWR 60, in support of this

argument. In Mosiuk, the defendants applied for

summary judgment on the merits. The plaintiffs initially agreed that the claim should besummarily decided, but, when the matter was argued, they took the position it should not be so decided. Justice Schwann (as she thenwas) found that there was a genuine issue requiring a trial, as she was unable to make factual findings necessary to dispose of the issuewithout hearing oral evidence, particularly as to the existence of an alleged agreement to hold land in trust.

She emphasized that “[n]otonly is the evidence controverted, but whose version of events will be preferred by the court is a matter of credibility” (at para 64). [46] Justice Schwann also made the following useful comments as to the difference between interlocutory applications broughtunder

Part 6 and applications for

summary judgment under

Part 7, which are, to some extent, consistent with Jeff’s position: [31] The

summary judgment process is housed in

Part 7 of The Queen’s Bench Rules.

Part 7 allows a claim to be resolved throughprocesses designed to expedite proceedings and avoid a full trial. An application for

summary judgment contained in

Part 7, Division 2, isone of those processes. Given the differing purposes underpinning

Part 6 in contrast to

Part 7 coupled with the exclusionary wordingof Rule 6-1, I am fully satisfied that the scope of admissible evidence for

summary judgment is much broader than it is for interlocutoryapplications. [32] Second, a careful reading of the

summary judgment rules highlights its distinctive flavour. Its purpose is to give procedural structureto an adjudicative process which is a cost effective, efficient and fair means of achieving a final adjudicative result without the usualtrappings and cost of trial. To achieve that purpose and give it life, a distinct, flexible process is necessary. (Tchozewski v Lamontagne,2014 SKQB 71, 440 Sask R 34 [Tchozewski]) For these reasons, the

summary judgment process and its rules should be interpretedbroadly and remedially to give effect in a practical sense to the “cultural shift” and to take into account the foundational principles ofproportionality. (Emphasis added) [47] Jeff submits that the Chambers judge committed a second jurisdictional error by granting final judgment on an applicationbrought under

Part 6 at all. He relies here on the decision of the British Columbia Court of Appeal in Liu v Zhang, 2018 BCCA 10 [Liu].There, each of the parties brought a petition against the other under s. 227 of the Business Corporations Act, SBC 2002, c 57, claimingrelief from oppression. The petitioner then made an interlocutory application seeking a final declaration of oppression, in advance of thehearing of the petition. Based on that application, a Chambers judge made an order declaring that certain expenses related to a vehicle anda management salary were proper company expenses. [48] On appeal, the appellant, Mr.

Liu, took the position that the Chambers judge had effectively granted interlocutory declaratoryrelief without jurisdiction. Chief Justice Baumann, writing for the British Columbia Court of Appeal, found that the Chambers judge had,in fact, acted without jurisdiction by granting final relief on an interlocutory application, as follows: [7] In my view, the respondent is essentially correct in his principal submission, although I would not characterize the order as one makinginterlocutory declarations.

On the contrary, it purports to be a final disposition of these aspects of the oppression proceeding made on thebasis of an interlocutory application in that proceeding. Such an application is wholly inappropriate. The application was misconceived. Itsought relief under s. 227 of the Business Corporations Act, S.B.C. 2002, c. 57, consequent on a principal finding of oppression before thepetition considering that principal relief has been heard. [8] To the extent the issue of jurisdiction was not raised before the Chambers judge, I would grant leave for it to be raised now.

It is in theinterests of the administration of justice that we determine this issue at this time. [9] While certain parts of the order made by the Chambers judge might represent appropriate interim relief under the oppressionprovisions of the Business Corporations Act, those parts are so closely tied to other forms of relief that should only be considered after afinding of oppression that they cannot be disentangled from the jurisdictional error. Accordingly, I would allow the appeal, and vacate theorder in its entirety.

The substantive issues addressed in the application, particularly the declarations as to apportionment of expenses,should be determined at the hearing of the main oppression petition in the Supreme Court of British Columbia. … [49] As Jeff notes, Liu bears striking similarities to this case. [50] Third, and on a closely related procedural note, Jeff and David both contend that, quite apart from the limitations that resultedfrom the fact that the Oppression Application was made under

Part 6 of the Rules – in part, a matter of form – the Chambers judge erredby either failing to decide if the question of whether the 2017 allocation was a genuine issue for trial or by committing errors of law indoing so. They submit that there were conflicts in the evidence that could not be and were not reconciled by the Chambers judge and thathad to be addressed in order to determine whether the 2017 allocation was oppressive and, if so, what remedy should be granted. 2. The

summary determination grounds – proceedings at the hearing [51] The two jurisdictional issues that Jeff relies on in this context – that is, whether the enhanced fact-finding powers granted byRule 7-5(2) could be used, and whether it was permissible to order final relief based on what the Chambers judge described as an interimapplication – were repeatedly raised as live issues during the hearing of the Oppression Application [Hearing]. So, too, was the fact thatthere were material conflicts in the evidence which could not be summarily determined, and that the entire matter must accordinglyproceed to trial.

To set the table, I will reproduce portions of discussion between counsel and the Chambers judge relating to these issues. [52] To be clear, I do not suggest that the interchange between counsel and the Chambers judge, and in particular, the statementsmade by the Chambers judge, should be treated as if they are part of his reasons.

As this Court noted in R v Lachance, 2023 SKCA 48,while it is sometimes appropriate to do so, “[c]aution is very much in order when a court is considering whether to draw inferences basedon exchanges between the judge and counsel as to the reasons a judge has decided as they did” (at para 68). See also: R v Smith (2001), (ON CA), 161 CCC (3d) 1 (Ont CA) at para 45, leave to appeal to SCC refused (2002), 168 CCC (3d) vi. However,the colloquy between the Chambers judge and counsel is relevant.

It confirms and summarizes some of the conflicts between the partieson the facts, and their positions as to the significance of those conflicts. It was an aspect of the procedure that was followed, and thisground of appeal relates to that procedure. Further, and more importantly, the question of whether the appellants agreed that the Chambers

judge could grant final judgment has been identified as a key issue on this appeal. [ 53 ] The enhanced powers and interim application issues were initially identified by the Chambers judge, who knew that he was skating on very thin procedural ice. This was demonstrated by the exchange between the Chambers judge and Kyle’s counsel which took place at the outset of counsel’s opening statement. This discussion began with a pre-emptive attempt by Kyle’s counsel, Mr.

Parthev, to deal with these procedural issues, that is: why was Kyle seeking final relief despite the fact much remained to be done before the action would be ready for trial? As counsel said: MR. PARTHEV: … you may wonder, Why are we here at this stage of the proceedings, having been inundated with all of this evidence? Certainly, we have not had a pre-trial management conference in the main action. We -- there are no transcripts from any examinations for discovery. Although, there are some transcripts from the cross-examination on the evidence that have been filed. You know, there’s, obviously, no witness list.

And the matter is not ready for -- for trial. We have not had -- we have had discovery on documents between the parties, but -- but we have not had an opportunity to properly cross-examine each other or, as they say now, question each other on -- on that -- on the action proper. So I think it’s also important for the Court, My Lord, to make the distinction -- and I know you have -- that we do have a statement of claim and we have this application.

And this application, even though it’s a bit of a hybrid, it -- it exemplifies the spirit of the new rules -- the new rules of court -- and that we are supposed to set aside formality and -- and deal with the substance of the matter. And I think it’s a credit to all of the counsel that -- that we’re here before you without too much bickering -- or none at all, quite frankly.

It’s also keep -- it’s in keeping with the direction from the Supreme Court in [ Hryniak v Mauldin , 2014 SCC 7 , [2014] 1 SCR 87], which has the courts dispense quick and -- not necessarily dirty justice -- but quick justice, as opposed to waiting for perfection. And that’s -- that’s what we’re attempting to do here. [ 54 ] In response, the Chambers judge expressed his gratitude for counsel’s attempt to, as Mr. Parthev put it, “orient the Court”, and then asked the obvious question: THE COURT: I -- I -- and I’m glad you did that, Mr.

Parthev, because when I was looking at this, I couldn’t help thinking that this was akin to a

summary judgment. And -- … -- and your reference to [ Hryniak ] has some relevance to my thoughts in that regard, which begged the question, Had any thought been given to bringing an application for

summary judgment? Because, as you could appreciate,

summary judgment doesn’t simply determine everything in a statement of claim. You can actually have part of the relief determined by

summary judgment. [ 55 ] The reason the Chambers judge raised this issue is readily apparent. The Oppression Application was not an application for interim relief. It sought a final judgment on the merits. Mr. Parthev had referred to Hryniak v Mauldin , 2014 SCC 7 , [2014] 1 SCR 87 [ Hryniak ], in an attempt to explain why it would be appropriate to grant judgment on the merits, on the basis of a notice of application brought in the context of an existing oppression action. The Chambers judge was alive to the fact that Hryniak was an appeal of a

summary judgment decision and, accordingly, wondered why the path dealt with in that decision had not been followed. [ 56 ] Kyle’s counsel, Mr. Parthev, responded to this question by explaining that, in effect, Kyle did not apply for

summary judgment because if he had, he may well have failed to persuade the judge hearing the application that there was no genuine issue for trial. That, in turn, led the Chambers judge to ask whether he could nonetheless use the unique fact-finding powers granted by Rule 7-5. This exchange was as follows: MR. PARTHEV: Yeah. And again, I -- I appreciate the direction, My Lord . That -- that would’ve been a good idea. A lot of this … was dictated by the reaction of Mr. Olafson to seeing the 2017 financial statements.

And the more immediate need at the time, My Lord, was to come to court and to stop what was happening, and we appeared him in front of Mr. Gabrielson. So I think the danger of going the

summary judgment route, at that stage, would’ve · been that the judge would’ve just said, there’s just too much stuff here, I can’t figure it all out by way of affidavit evidence. And that we would’ve needed an opportunity to cross-examine and what have you. But I think, in essence, that’s what you have right now. It’s not really that different. So whether it’s by way of -- well, it’s not by way of originating application, it’s just the notice of application here that … . THE COURT: Because the -- the reason I ask is that, as you’re aware , in [ Hryniak ], there are enhanced fact-finding abilities that are given to a judge who hears a

summary judgment application. There are -- if not, as you’ve indicated in your brief, there are some things not in dispute, but there are some things which are in dispute. And the question arises, the extent to which, me sitting here and addressing this application can use those enhanced fact-finding abilities that Justice Karakatsanis identified in [ Hryniak ]. … And -- and that was one of the things I was wondering is, am I being invited to do that? If I am, that’s fine, as long as it’s clear from counsel that I am being invited to do that. MR.

PARTHEV: Well, as far as we’re concerned, you are. … [ 57 ] Kyle’s position on the use of enhanced evidentiary powers, accordingly, was that he wanted to have his cake and eat it too. Having acknowledged that his application may well not have survived the rigors of the

summary judgment process, he nonetheless submitted that the Chambers judge should weigh the evidence and assess credibility in a manner that is – except in unusual and limited circumstances – generally impermissible in the course of a Chambers application, just as it was before the 2013 revisions to the Rules and before Hryniak was decided.

[ 58 ] The Chambers judge did not simply accept Mr. Parthev’s initial invitation that he should exercise enhanced fact-finding powers. Rather, as he was inevitably and repeatedly confronted by the conflicts in the evidence, he frequently returned to the question of whether he was subject to the usual constraints that apply to a judge hearing an interlocutory application that turns on conflicting affidavit evidence. That was evident, for example, in an exchange between the Chambers judge and Mr.

Parthev that took place after Kyle’s counsel had pointed to material differences in the certain affidavit evidence relating to facts that were relevant both to a valuation issue and to the contextual analysis that must be undertaken on an oppression application. After referring to these differences, the Chambers judge, once again, raised the

summary judgment and enhanced powers issues: THE COURT: One of the questions that crosses my mind is, are the parties in agreement as to how this Court should address the disputes on fact? The reason I say that is because am I to address that in the same way that Justice Karakatsanis said in [ Hryniak ], a judge is supposed to address those issues on

summary judgment applications. In other words, in

summary judgment applications, Justice Karakatsanis was very specific in saying that the Court has enhanced fact- finding powers. Because it was always believed beforehand in

summary judgment applications and it was believed under the Ontario Court of Appeal test that we did not have those enhanced fact-finding powers. … Am I supposed to address them in the same way that -- … -- Justice Karakatsanis said they should be addressed in a

summary judgment application? MR. PARTHEV: The short answer is yes. For the purposes of this application.

There’s a lot of chatter, there’s a lot of what we say is completely irrelevant material, which you do not need to deal with. … THE COURT: Because the reason being is -- the reason that trials of the issue were often ordered historically in oppression applications is because it invariably involved findings of fact that Chambers judges concluded could only be determined on a trial and, in many instances, the parties agreed it could only be determined at a trial. … And therefore, a trial of the issues was ordered.

That landscape -- the question arises as to whether or not that landscape has been changed by [ Hryniak ] and whether or not that now means that the Court can make findings of fact in the face of conflicting affidavit evidence. MR. PARTHEV: Yeah. We say you will -- yeah. … [ 59 ] Shortly thereafter, the Chambers judge commented that he would also ask Mr. Onishenko and Mr. Boychuk, who acted for Jeff and David respectively, what he was to do “with respect to findings of fact on matters that I am required to decide for which the evidence is conflicting”. Kyle’s counsel responded as follows: MR. PARTHEV: Yeah.

And -- and let me tell you where you will have to make one, for example, is on the valuation. You’re going to have to say to yourself -- THE COURT: No question. MR. PARTHEV: -- you’re going to have to say to yourself, You know what, paying $2.5 million to a bookkeeper of a company is not fair remuneration. And it was reasonable for Mr. -- Mr. -- whether he’s an HR specialist or not, me sitting here in court having decided hundreds of cases and practiced myself for 30 years, that’s not the kind of money people get paid to do bookkeeping in Saskatchewan. So you can make that call.

And … that’s going to be our submissions on the -- on -- on the -- THE COURT: And again, I’m just -- only talking about the theme of making -- … -- findings of fact in the face of disputed evidence. MR. PARTHEV: The answer is correct. Yes, we are here for you -- you need to make these findings. You need to make certain findings, but you don’t need to venture down the path of a lot of issues. And that’s why I said let’s make a distinction between the claim and the application. [ 60 ] The Chambers judge did indeed explore these issues with Mr. Onishenko, whose position was entirely clear.

He submitted that the Chambers judge could not use the enhanced fact-finding powers, as this was an interim application, not a

summary judgment application. I note, for example, the following exchange between him and the Chambers judge during his closing argument: MR. ONISHENKO: … I want to start off my submissions making a number of points in response to Mr. Parthev’s submissions. First off, this is not a

summary judgment application. It could’ve been, but Kyle chose not to do so. So I submit you do not have the same fact-finding powers if you determine that there is a genuine issue for trial. And

summary judgment, as Your Lordship knows, the applicant files their entire case. They put their best foot forward, including expert evidence at the start of the application. Here it’s -- it has been a mish-mash of evidence. Experts after cross, affidavits after affidavits after affidavits, some that haven’t been cross-examined on, and I submit that there is a serious conflict in the evidence. THE COURT: That begs the question whether or not this is one of those cases where the Court uses its enhanced fact-

finding powers, as Justice Karakatsanis describes it in [ Hryniak ] . MR. ONISHENKO: Yes, I would submit that the fact-finding powers are grounded in Rule 7- 2 , and that’s the second step of the

summary judgment test. THE COURT: That -- that’s right. They -- they are, but -- but here’s the question, if this is not a

summary judgment application, then the fact that there is conflicting evidence, does that beg that question as to whether or not it’s an appropriate case for the Court to use its enhanced fact-finding powers? MR. ONISHENKO: I submit not. I submit that that is confined to Rule 7- 2 . I don’t think on any -- I submit, on any application, the Court can just explore some alternate extraordinary fact-finding powers. There’s a conflict in the evidence. There’s a conflict in the evidence and the matter has to be set for trial.

THE COURT: And that -- because -- the reason I say that is then do I treat this as if it is any other interlocutory application where the Court -- and this really happens in family law -- the Court throws up its hands and says there’s completely irreconcilable affidavits. We can’t make the call. Therefore, we set this matter to a pre-trial conference or to a trial, whatever the case might be. That consistently happens in family law. MR.

ONISHENKO: And I submit it should happen here with one small exception, and I’ll get to that in my submissions. [ 61 ] The Chambers judge returned to this interlocutory application theme after Mr. Onishenko had highlighted Jeff’s evidence that Kyle had virtually no day-to-day involvement in Micro Oil and had failed to find or create new products since 2002. Mr. Onishenko summarized Jeff’s evidence as follows: MR. ONISHENKO: Well, this history, I submit, that Jeff’s expectations were that all the efforts would be tied to their efforts of the company or -- or their compensation.

All the guys were going to work together on this company. Jeff, throughout the years, started having complaints that Kyle wasn’t doing anything. He had no value added to the company. Then, when it came to 2017, when Kyle asks -- Kyle asks for compensation to be determined by -- by market, which is what -- what they understood to be efforts to the company -- THE COURT: Right. MR. ONISHENKO: -- that’s what was done. And I submit that Kyle’s expectation -- that’s reasonable expectation even for Kyle.

His employment -- his shares are tied to employment. [ 62 ] In response to this submission, the Chambers judge noted that Kyle’s evidence, in relation to these issues, differed from that of both David and Jeff – which led to renewed musings by him about what he could properly decide on an interim application: THE COURT: Again, I’m asking myself, what do I do with that? MR. ONISHENKO: -- well, I submit, in -- and my final submission is the -- THE COURT: Bearing in mind that this is an interim application still. MR.

ONISHENKO: My Lord, I’m going to -- at the end of my submission, I’m going to say the 2017 allocations have to go to trial. They have to. There’s just too much disagreement with all the basic facts. THE COURT: But am I understanding your submission correctly, that the two -- that -- that the question is, you don’t accept that the 2017 allocation of bonus, allocation of profit, whatever we choose to call it -- let’s just simply call it the allocation. You’re simply saying that the 2017 allocation is not the evidence of the breached expectation? Basically, that’s what it comes down to.

And isn’t that the issue that I have to decide in the context of the interim application? I’m not -- it -- it doesn’t seem to me that I’m being expected to decide in the context of this application, as opposed to what would be decided at trial, whether Kyle -- Kyle Olafson put in X dollars of value of work or not, because that’s clearly in conflict. MR. ONISHENKO: M-hm. THE COURT: I don’t have to make a conclusion at the end of the day. I know what your client’s version of the events is, I know what David Stromberg’s version of the events is. I also know that Kyle Olafson has a different version of that event.

So what do I do with it in the context of an interim application -- … -- notwithstanding that we are all in our bib and tucker here. MR. ONISHENKO: Yeah, My Lord -- THE COURT: It is still an interim application. MR. ONISHENKO: Yeah. You have to send -- I submit you have to send whether or not those (INDISCERNIBLE) allocations to trial. Because there’s just way too much conflict in the evidence. And -- and there’s no evidence put forward about, you know, any expert evidence that these are unwarranted bonus amounts.

Certainly, when you have a situation where we have Jeff secure -- procuring product at a very good rate, and David’s relationship and selling that product, that’s where the profits are made. They’re responsible for the profits. …

So, I guess, to circle around and answer your question, My Lord, the 2017 allocations must go to trial. I don’t even think you can find that they’re oppressive because it has to go to trial. THE COURT: But … it’s not a case -- when you say the 2017 allocation must go to trial, the question is to whether or not the manner of the 2017 allocation -- I shouldn’t point my finger. … But the -- the question is to whether or not the 2017 allocation is oppressive. That’s the issue that you’re saying should go to trial? MR. ONISHENKO: That has to go to trial. Yes. Yeah.

THE COURT: So and -- and you’re saying, also, that the 2017 -- you’re saying it, Jeff Stromberg is saying it, David Stromberg is saying it, Mr. Boychuk is saying it. They’re also saying that the 2017 allocation is not the breach in expectation that Mr.

Parthev suggests it was. [ 63 ] After further discussion of the conflicting evidence as to what Kyle had contributed to Micro Oil, how the parties’ compensation was to reflect contributions to Micro Oil, and the nature and effect of Kyle’s request that compensation be market-based, the Chambers judge commented as follows: THE COURT: -- it’s just that everybody seems to be presenting this evidence to me as if this is a conclusive, definitive truth. The problem is -- … -- there are a lot of conflicts for which it’s difficult to make any conclusion about any conclusive proof.

So I keep -- as I say -- … -- that’s why I remind myself, this is an interim application. MR. ONISHENKO: And like my friend -- my friend, Mr. Boychuk, said in his very brief 45-minute submissions, everything has to go to trial. … [ 64 ] Mr. Boychuk’s position was equally clear. He first explained his perspective following a very brief opening statement that was made by Mr. Onishenko and after the first witness at the Hearing had stepped down: MR. BOYCHUK: Well, I -- I always hate to feel the chime in because there’d been a -- mine would be very brief. But we’ve dealt with this. The application’s under

section 234 of The Business Corporation Act . That’s -- that’s the basis on which we dealt with the application ourselves. And also, in terms of presenting evidence, have responded to the grounds as set out in that notice of application. And so, going forward, I’m going to be arguing this is such a 234 application, you look at the grounds that they allege, have they established those, and if not, then the application ought to be dismissed. That’ll be our -- our roadmap, I suppose. [ 65 ] This remained Mr.

Boychuk’s position throughout; that is, that the issues that should be dealt with were those identified in the Oppression Application, and that Kyle had not made out a case of oppression based on the grounds he advanced.

Indeed, he spent a good deal of time in his closing remarks taking issue with Kyle’s application to amend the Oppression Application (to refer to s. 207 of The Business Corporations Act ) and with Kyle’s attempt to advance a new argument based on an agreement that he alleged had been made at a June 28, 2016, shareholders’ meeting [June 2016 Meeting]. [ 66 ] It was David’s position that, since Kyle had not made out the oppression claim described in the Oppression Application, the appropriate course was to grant interim relief only and that the matter should proceed to trial.

That was made clear in an exchange that occurred when Mr. Boychuk was asked by the Chambers judge whether it was urgent to decide the Oppression Application, to prevent future distributions being done in the same way as in 2017. Mr. Boychuk submitted that there was no urgency, as Gabrielson J.’s October 26, 2018, fiat granting interim and miscellaneous interlocutory relief achieved that result and could be continued, pending trial. That led to the following exchange: MR.

BOYCHUK: … I can tell you right now we are -- we will be comfortable -- my client is comfortable with an interim order freezing any payment on him in 2017, so Kyle still has his opportunity to overturn it. Making a global allocation in the years pending trial, so we can do the -- the tax things we need to do, and limiting the payout so that it’s equal amongst the three shareholders at 250. That fully addresses the issue. THE COURT: And then, the rest of the matter -- and then everything else be determined at trial? MR. BOYCHUK: At trial.

THE COURT: And you don’t believe that trial can be determined on the basis of an application for

summary judgment? MR. BOYCHUK: Right. It -- it’s just -- they’re so far apart ’cause how -- whether Kyle agreed to the historical method of compensation or not, ultimately, decides the issue of his reasonable expectation. THE COURT: You’re saying that the matter of reasonable expectation cannot be properly decided by me, based on the evidence that’s in the door? MR. BOYCHUK: You have to pick one too. I -- I will suggest to you that David and Jeff’s factual recital of how they did this over that ten-year period is more credible if you think you can. [ 67 ] Shortly thereafter, Mr. Boychuk again confirmed that it was David’s position that the matter should proceed to trial:

MR. BOYCHUK: … Our position is the -- the form of the order that Mr. Justice Gabrielson granted, we’re comfortable with that continuing in place to the trial. With the amendment that David can still, one, make the global allocations, and that no further [moneys] would be paid out, whether it’s 250 or some other number, equally, to trial. THE COURT: So in your view, what am I deciding? MR. BOYCHUK: What-- THE COURT: Your -- your -- MR. BOYCHUK: Just what I’m saying. THE COURT: -- your brief -- you’re simply inviting me to dismiss the application -- MR. BOYCHUK: Dismiss.

THE COURT: -- allow everything to be determined at trial? MR. BOYCHUK: But I think there’s scope for you if you want to continue the interim order. That’s something you can do. That’s within your power to do. THE COURT: And to modify it if I think it's necessary, based on the evidence now before me. MR. BOYCHUK: Right. I don’t dispute that. THE COURT: But you’re saying I do not have enough before me to make a finding specifically as to whether or not there’s -- MR. BOYCHUK: On oppression THE COURT: -- oppression.

And in the event I grant an amendment to the application, it’s not sufficient for me to make a determination as to what a just and equitable remedy is? MR BOYCHUK: Right. … [ 68 ] Chambers judge then touched briefly on the question of whether Hryniak applied in this case. Mr. Boychuk took a position consistent with his central point; that is, David had responded to the Oppression Application, this was not a

summary judgment application and Hryniak accordingly did not apply: MR. BOYCHUK: … I’m going to submit to you, My Lord, when -- when you read this over, there’s a reason why the rules require a party to set out the grounds of the relief they’re seeking. And that’s to allow the other party to decide how do I -- so I know the case I have to make. THE COURT: But that was why I asked the question about whether or not [ Hryniak ] applies here because this is not a

summary judgment application. MR. BOYCHUK: It’s -- I was going to get to that. This is not a -- he could’ve put in his notice of application that this was a

summary -- he was invoking the rules for a

summary judgment application on those issues that he’s raised. 3. The

summary determination grounds: Analysis [ 69 ] The Oppression Application, being an application for final relief brought in the context of an action commenced by a statement of claim, should have been brought as an application for

summary judgment pursuant to Rule 7-2 of the Rules . That result is in accordance with the rules of

interpretation specified in s. 2 - 10 of The Legislation Act , which is as follows: Acts and regulations remedial 2-10

(1) The words of

an Act and regulations authorized pursuant to

an Act are to be read in their entire context, and in their grammatical and ordinary sense, harmoniously with the scheme of the Act, the object of the Act and the intention of the Legislature.

(2) Every Act and regulation is to be construed as being remedial and is to be given the fair, large and liberal

interpretation that best ensures the attainment of its objects. [ 70 ] This provision is made applicable to the Rules by Rule 17-4: Application of The Legislation Act 17-4 Unless a contrary intention appears in these rules or these rules expressly provide otherwise, The Legislation Act applies to these rules. [ 71 ] As noted above, Rule 7- 2 is in Division 2 of

Part 7. The Rules are defined as an enactment by s. 2 - 29 of The Legislation Act . Accordingly, the heading for

Part 7 – “Resolving Claims Without a Full Trial” – is part of that enactment for the purpose of

interpretation (see: s. 2-19(2)(b)). There is no doubt that the Oppression Application – being an application to resolve Kyle’s claim that the 2017 allocation was oppressive without a full trial – falls within this description. In particular, the Oppression Application aligns exactly with the provisions of Division 2 of

Part 7, rather than Division 1 (Trial of Particular Questions or Issues) or Division 3 (Striking Out or Amending Pleading or Document and Related Powers of Court). Division 2 was tailor-made to enable parties to seek a final determination

of their claims on the merits, but in a manner that strikes a careful balance between the benefits of

summary procedures, where appropriate, and the need to ensure the litigation process is fair. There is, in my opinion, no reasonable basis to argue otherwise. [ 72 ] It is equally clear that the Oppression Application, to the extent it sought final relief, did not fall within

Part 6 (Resolving Issues and Preserving Rights), as it was not to resolve an issue or preserve a right, which is the business of

Part 6. The fact that a party is entitled to bring a notice of application does not mean they can apply for

summary judgment other than pursuant to Rule 7-2, or, for that matter, that they can expect a trial of an issue other than pursuant to Rule 7-1 or to strike pleadings other than pursuant to Rule 7-9. That would be inconsistent with the principles of

interpretation, which require that the Rules are to be read in their entire context. [ 73 ] Nothing in Hryniak casts doubt on this, including the broad appeal by Karakatsanis J. for a culture shift. Hryniak did not suggest that

summary judgment could be granted other than pursuant to the applicable rules of court – here, the

summary judgment rules. Nor did it suggest that the long-established and appropriate constraints that apply to the resolution of credibility and other evidentiary disputes in Chambers applications should be generally abandoned. Hryniak was concerned with the correct approach to Ontario

summary judgment rules that were promulgated as part of a major revision to their rules in 2010. It must be read accordingly and applied with care. The rigorous approach taken by Karakatsanis J. when providing direction as to when a claim is suitable for

summary determination is as central to her message as her appeal for change. [ 74 ] The revised Ontario rules at issue in Hryniak , as well as rules revisions in Alberta, Nova Scotia and British Columbia, had a major influence on the Saskatchewan rules revision project that was implemented through the “substantial overhaul” of the Rules that occurred in 2013.

As Popescul C.J.Q.B. wrote in Pervez , the “new rules were drafted with a view to making our system of justice more efficient, accessible and affordable for all the citizens of Saskatchewan, without compromising fairness” ( Pervez v Caskey , 2013 SKQB 377 at para 25 , [2013] 12 WWR 794). That goal is clearly reflected in Rule 1-3(1) – which is in

Part 1, Foundational Rules – which provides as follows: Purpose and intention of these rules 1-3

(1) The purpose of these rules is to provide a means by which claims can be justly resolved in or by a court process in a timely and cost effective way.

(2) In particular, these rules are intended to be used: (

a) to identify the real issues in dispute; (

b) to facilitate the quickest means of resolving a claim at the least expense … . …

(4) Resolving a claim justly in a timely and cost effective way includes, so far as is practicable, conducting the proceeding in ways that are proportionate to: (

a) the amount involved in the proceeding; (

b) the importance of the issues in dispute; and (

c) the complexity of the proceeding. [ 75 ] The

summary judgment rules are a significant aspect of the new rules. They reflect the increased focus on proportionality and, to that end, are intended to provide far more litigants a means of having all or part of the merits of their claim or defence decided without going to trial. However, this alternative path was designed to be open only if the judge is satisfied – having undertaken the nuanced analysis mandated by Hryniak and fully described, in the particular context of the Rules , in Tchozewski v Lamontagne , 2014 SKQB 71 , [2014] 7 WWR 397 [ Tchozewski ], to the extent required in the case – that a

summary judgment application would achieve a fair and just adjudication. This analytical structure is properly understood as embodying the principle, as the court commented in Flynn v Poole Estate , 2016 SKQB 288 : [9] …However, proportionality never calls for the court to lose track of the principal goal, which is a fair process that results in a just adjudication of the dispute. Rule 1-3(4) does not call for proportionality regardless of fairness, but only “so far as is practicable”.

To reiterate, as is noted in Tchozewski (at para 30 ): 30 … [3] The issue is… whether the judge is confident he or she can find the facts and apply the relevant legal principles so as to fairly resolve the dispute. If the judge has that confidence, proceeding to trial is generally not proportionate, timely or cost effective. A process that does not give the judge confidence in his or her conclusions, on the other hand, is never proportionate. ( Hryniak , paras. 50 and 57 ) [ 76 ] Fairness, the principal goal, is accordingly very much at the heart of the first question that must be answered by a judge hearing a

summary judgment application; that is, does there appear to be a genuine issue requiring a trial? If so, can a trial be avoided by using Rule 7-5(2)(

b) powers to weigh the evidence, evaluate credibility, and draw inferences, or is it in the interests of justice to exercise those powers only at trial? See, for example: Hoedel v WestJet Airline Ltd. , 2022 SKCA 27 at para 32 , 82 CPC (8th) 355; Holmes v Jastek Master Builder 2004 Inc ., 2019 SKCA 132 at para 81 , [2020] 6 WWR 386 ; Viczko v Choquette , 2016 SKCA 52 at paras 37–38 , 396 DLR (4th) 449; and Tchozewski at para 31 . The focus on fairness, and the manner in which the

summary judgment process operates to ensure that it is achieved, is reflected in the following observations by Leurer J.A., quoting Hryniak , in McCorriston v Hunter , 2019 SKCA 106 , 33 RFL (8th) 310 [ McCorriston ]: [23] … Rule 7-5(1) allows for

summary judgment where “the Court is satisfied that there is no genuine issue requiring a trial”. In this regard, in Hryniak , the Supreme Court of Canada inextricably linked the determination of whether a genuine issue requiring a trial exists

with the ability of the court to make a fair and just determination on the merits of the issue in dispute: [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. [50] These principles are interconnected and all speak to whether

summary judgment will provide a fair and just adjudication. When a

summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute.

It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute. (Emphasis in original) [ 77 ] As Leurer J.A. also discussed in McCorriston , the decision as to whether a matter is suitable for

summary judgment can generally be decided only after the evidence is in and the arguments have been heard: [44] The assessment of whether

summary judgment is appropriate as a process and whether there is a genuine issue requiring trial must generally be answered at the same time , because in most cases they are two sides of the same coin.

Summary judgment can be granted if “there is no genuine issue requiring trial with respect to a claim or defence” (Rule 7-5(1)(a)). In connection with this, the existence of a “genuine issue” is seldom in dispute. Instead, in most cases, the issue at large when a motion for

summary judgment is presented is whether the resolution of that issue requires a trial in order to sort out the facts. To assess if a trial is required, a Chambers judge must get into the detail of how the issue and evidence interrelate, and then decide if the evidence allows the issue to be fairly resolved. This follows from the idea that no genuine issue requiring a trial exists if facts can be found , law applied, and a fair and just determination on the merits achieved.

In the course of undertaking this process, the judge has discretion whether, if necessary, to use the so-called “new powers” set out in Rule 7-5(2) (i.e., to weigh evidence, evaluate credibility, and draw reasonable inferences) in order to sort out the facts. However, the fundamental question does not change – the question remains whether a trial is required to reach a fair and just determination of the issue.

These points were said, perhaps more succinctly, in Blue Hill Excavating Inc. v Canadian Western Bank Leasing Inc ., 2019 SKCA 22 , [2019] 4 WWR 393, with reference to paragraph 49 of Hryniak : [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. (Emphasis in original) See also Michel v Saskatchewan , 2021 SKCA 126 at para 116 . [ 78 ] The principle that the decision as to whether a claim or part thereof is suitable for

summary determination can often only be decided when the process has run its course is of particular importance here. That is so because Jeff and David responded to the application, agreed to the Gabrielson Scheduling Order, and yet submitted at the Hearing that the entire matter must go to trial. McCorriston explains why that is not only the normal course but is also baked into the

summary judgment process. I will return further to this issue below. [ 79 ] At the Hearing, Kyle, while discounting the need to make findings in the face of conflicting evidence, recognized that the Chambers judge could only decide the Oppression Application if he made targeted findings in relation to certain issues. It is for that reason he encouraged the Chambers judge to use the Rule 7-5(2) enhanced fact-finding powers. The problem with that submission was, of course, that those enhanced powers are granted only in the context of

summary judgment applications. That was a choice made by the judges of the Court of Queen’s Bench when they adopted the Rules . The rules of

interpretation demand that it be respected. [ 80 ] That is not to suggest that Chambers judges never weigh evidence, draw inferences or address credibility at all, other than on a

summary judgment application. However, they do so within long-established limits based on the recognized risks associated with affidavit evidence as to contested facts, particularly if the affiant has not been cross-examined and there is a lack of documentary evidence that corroborates their version of events. As Leurer J.A. commented in McCorriston , “[a]n affidavit is the ultimate form of leading a witness” (at para 25). Rule 7-5(2) loosens those strictures by granting newly enhanced fact-finding powers in the context of the

summary judgment rules, to enhance access to that procedural route.

This point was made by Karakatsanis J. in Hryniak in relation to the similar provisions in the Ontario rules, as follows: [44] The new powers in Rules 20.04(2.1) and (2.2) [Rules 7-5(2) and (3) in Saskatchewan] expand the number of cases in which there will be no genuine issue requiring a trial by permitting motion judges to weigh evidence, evaluate credibility and draw reasonable inferences. [45] These new fact-finding powers are discretionary and are presumptively available; they may be exercised unless it is in the interest of justice for them to be exercised only at a trial; Rule 20.04(2.1) [Rules 7-5(2) in Saskatchewan].

Thus, the amendments are designed to transform Rule 20 from a means to weed out unmeritorious claims to a significant alternative model of adjudication. (Emphasis in original) [ 81 ] What, then, turns on the fact that the Oppression Application should have been made pursuant to Rule 7- 2 ? That the Oppression Application should have been made under Rule 7-2 does not end the matter. None of the appellants have argued that this appeal should be allowed based merely on this defect in form. [ 82 ] That was the right choice on their part.

Just as in the relation to the defect resulting from the failure to plead, it is no longer open to Jeff or any of the appellants to argue that this defect was fatal to Kyle’s application in and of itself. The appellants’ consent to the

Gabrielson Scheduling Order, and their participation in the process, meant that this defect became just that – a matter of form – rather than a matter affecting the Chambers judge’s authority to find that the 2017 allocation constituted oppression. As in the case of the failure to plead, if one of the appellants had challenged the Oppression Application on the basis that it was defective because it was not brought under Rule 7-2, Kyle could have applied to have the defect cure

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