Court File and Parties

Court File No.: CV-15-336-00 Date: 2017-03-01 Superior Court of Justice – Ontario

Re: Kevin Hamilton, Bobbie Hamilton, Edward Wilson and Yvonne Wilson, Plaintiffs And: Desert Lake Family Resort Inc., Defendant

Before: Mr. Justice Graeme Mew

Counsel: James L. McDonald, for the Plaintiffs/Moving Party Lulama Kotze, for the Defendant

Heard: 21 February 2017, at Kingston

Endorsement

(Motion for Summary Judgment)

[1] This is a summary judgment motion of the “trial in a box” variety. The plaintiffs seek not only judgment on their claims but, also, dismissal of the defendant’s counterclaim.

[2] Each side initially filed a motion record, factum and book of authorities. Thereafter, the moving party filed a supplementary motion record and a supplementary factum (with attached caselaw authorities). Six witnesses were cross-examined on their affidavits. The parties also filed a joint exhibit brief, consisting of productions and answers to undertakings arising from the cross-examinations, comprising over fifty further documents. A complete box full.

[3] The plaintiffs’ claims are grounded in contract. Arguably, the terms of the contracts they rely on are partly oral and partly written. Alternatively, their claims are based on misrepresentations allegedly made by the defendant, which induced them to enter into their contracts with the defendant.

[4] In the event that a breach of contract or of some other duty owed on the part of the defendant is found to have occurred, the plaintiffs ask for damages to be assessed: their claims are not liquidated.

[5] The counterclaim seeks damages for “interference with the defendant’s business”, for breach of confidence and conversion. During the course of argument, counsel for the defendant conceded that the necessary elements of the so-called “unlawful means” tort, which permits a plaintiff to recovery losses it suffers as a result of the defendant engaging in unlawful conduct against a third party, could not be satisfied: see AI Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para. 45. Although no formal concession was made, counsel also tacitly acknowledged that the defendant would also be unlikely to make out a viable claim based on the tort of conversion.

[6] The defence position on the main action is that there are multiple triable issues and that the most just and proportionate means of resolving the dispute between the parties is by way of a trial, conducted in accordance with the simplified procedure (the original statement of claim included claims for declaratory relief and damages exceeding $100,000; as now presented, the claims for declaratory relief have not been pursued and the damages sought are less than $100,000). Alternatively, the defence argues that if summary judgment is to be granted, the plaintiffs’ action should be dismissed and the defendant should have judgment on its counterclaim for breach of confidence.

[7] For the reasons that follow, I decline to grant summary judgment at this time.

Brief Facts

[8] The plaintiffs are two couples, Kevin and Bobbie Hamilton, and Edward and Yvonne Wilson. The Hamiltons and the Wilsons each own trailers, described as “Park Model Trailers”, which they purchased from the defendant in 2011. The trailers are substantial and cost in the range of $70,000 to $80,000.

[9] The defendant owns and operates a family campground property known as “Desert Lake Family Resort” and also operates as a dealer of trailers, which are manufactured by General Coach Canada. Desert Lake is located in the Township of South Frontenac.

[10] From the time they were purchased, until 2015, the plaintiffs’ trailers were located on what were described as premium waterfront lots at the defendant’s resort.

[11] The plaintiffs say that they bought their trailers because the defendant guaranteed them the ability to resell their trailers on the premium waterfront sites.

[12] When the plaintiffs bought their trailers, the owners of the corporate defendant were Sally Coleman and Brett Coleman. The plaintiffs’ dealings, in the course of their respective discussions which led to the purchase of their trailers, were with Brett Coleman.

[13] In February 2013, Sheena and Vernon Pillay purchased the shares in Desert Lake Family Resort Inc. from the Colemans.

[14] In 2014 and 2015, there were some discussions between Kevin Hamilton and the Pillays towards a possible acquisition, either by Mr. Hamilton himself, or by a group of renters at Desert Lake led by Mr. Hamilton, to purchase a majority of the shares in Desert Lake Family Resort Inc. Those negotiations eventually broke down and, shortly afterwards, the relationship between the Hamiltons and the Pillays became acrimonious. The interests of the Wilsons were largely aligned with those of the Hamiltons.

[15] On 17 June 2015, the defendant delivered an eviction notice to the Hamiltons, requiring the Hamiltons to remove their personal property (including their trailer) from the park by 23 July 2015. Subsequently, the eviction notice was, effectively, withdrawn, and the Hamiltons were instead advised that their licence to occupy the waterfront site which their trailer was located on would not be renewed upon its expiry on 15 October 2015. The Hamiltons were also informed that the defendant did not recognize the so-called “resale guarantee” which the plaintiffs claim was a critical factor in their decision to purchase the trailers.

[16] The Wilsons left Desert Lake around the same time as the Hamiltons, believing that they, too, would not be able to enforce the guarantee which they believed they had been given.

[17] The plaintiffs’ claims for damages are based on the costs that they incurred dismantling enhancements to their trailers (such as decks and railings), relocating their trailers, and also for the diminution in the value of their trailers. The theory behind the diminution in value claim is that although the trailers themselves would be a depreciating asset, the value of the trailers was enhanced because they were located on premium waterfront sites. In support of their claim for damages, the plaintiffs reference the sale of a comparable trailer by another renter at Desert Lake who achieved a net 6% enhancement in the value of his trailer (after deducting commissions) when his trailer was sold a year after he had bought it.

[18] The evidence of the so-called resale-on-site guarantees consists of copies of the printed order forms for their trailers, on each of which, under or beside the apparent signature of Brett Coleman, the words “Guaranteed resale on-site” have been written.

[19] There is no reference to these guarantees on the annual licences which were entered into between the plaintiffs and the defendant for the use of the sites on which the trailers were located. The 2012 and 2013 iterations of the licence of occupation provided that the licence would be automatically renewed solely at the discretion of Desert Lake from year-to-year unless terminated by either party, in writing, before September 30 of each calendar year. That provision disappeared in the 2014 and 2015 iterations.

[20] The licences to occupy contained a term which provided that Desert Lake reserved the right to act as the exclusive agent for the sale of any trailer located at the resort and to charge a 7% marketing fee for each such sale.

[21] The evidence of Sheena Pillay is that, in July 2013, she was told by Brett Coleman that no commitments or promises had been made by him to anyone about selling their trailers on waterfront lots. However, when, following the commencement of this action, the Pillays commenced third party proceedings against the Colemans, the Colemans delivered a third party defence in which they pleaded that the agreements for the purchase of the General Coach Park Model trailers by the Hamiltons and the Wilsons expressly guaranteed that the trailers could be sold on-site.

[22] The third party action has since been resolved. During the course of submissions, I was informed that a term of the settlement of that action precludes the Colemans from discussing with other parties, including the plaintiffs, the matters in dispute in the main action.

[23] In its factum and during the course of argument, the defendant has raised concerns about the provenance and authenticity of the order forms and, in particular, the words “Guaranteed resale on-site”. To date, only copies of those documents have been produced. However, no express request for production of the original documents has been made. The defendant, in argument, speculates that there is collusion between the Colemans and the plaintiffs.

[24] Furthermore, despite the substantial evidentiary record, there is no affidavit from the Colemans. Neither party has sought to have Brett Coleman examined as a witness pursuant to Rule 39.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Analysis

[25] Not every case where summary judgment is sought is appropriate for summary determination. In Griva v. Griva, 2016 ONSC 1820, a decision arising from a case conference to determine whether a party’s request to schedule a summary judgment motion should be acceded to, Firestone J. wrote, at para. 19:

I adopt the reasoning of Myers J. in 2287913 Ontario Inc. v. Blue Falls Manufacturing Ltd., 2015 ONSC 7982, at para. 17 he states in part: “[W]here a party advances a small number of discrete issues that may resolve the entire case, it is much easier to conclude that a thorough investigation of those issues may be the most proportional process even though the issues may be complex or have some facts in dispute.” At para. 59 of Hryniak, Justice Karakatsanis wrote: “[W]hat is fair and just turns on the nature of the issues, the nature and strength of the evidence and what is the proportional procedure.”

[26] The plaintiffs’ factum contains the ubiquitous reminder that parties on a summary judgment motion must put their best foot forward. That does not mean that the evidence provided to the court needs to be equivalent to that which would be available at trial, but it must be such that the presiding judge is confident that he/she can fairly resolve the dispute: Hryniak v. Mauldin, 2014 SCC 7 at para. 57.

[27] On the other hand, although a motion judge is required to assume that the parties have, in fact, placed before the court all of the evidence necessary for the judge to be able to confidently resolve the dispute, summary judgment should be denied where it is clear to the judge that there is material evidence that should be before the court but is not: Abuajina v. Haval, 2015 ONSC 7938 at paras. 33-34; Marrocco v. Heft, 2017 ONSC 654 at para. 47.

[28] The absence of any evidence from Brett Coleman is troubling. The plaintiffs, of course, have plenty to say about what Mr. Coleman said to them. And I have already made reference to what the Pillays say they were told, which is the polar opposite of what the plaintiffs say. The plaintiffs argue that the first hand evidence of Mr. Coleman is not available because the defendant has him “tied up” by the agreement to settle the third party action. Yet no explanation is offered for not examining him pursuant to Rule 39.03.

[29] Furthermore, while the defendant can be faulted for not having done more to pursue originals of the sale order documents, if there are originals, they should be inspected and, if necessary, placed into evidence.

[30] There are also problems with the plaintiffs’ damages claims. Some of the elements of the expenses claimed might have been incurred in any event. The loss of value claims, set at $10,000 by the Hamiltons and $15,000 by the Wilsons are based on the original purchase price of the trailers which included a variety of fittings and embellishments including, in the case of the Wilsons, bedding. The comparison to the unit that was sold is based on what Mr. Hamilton says he was told by the vendor of that trailer. There is nothing approaching an appraisal in evidence, let alone an expert valuation.

[31] The counterclaim is just as problematic. The basis for the counterclaim for breach of confidence is the alleged dissemination by Mr. Hamilton of confidential financial information which he obtained from the defendant during the course of his negotiations to purchase an interest in the defendant corporation. There is also an allegation that Mr. Hamilton misused this confidential information for purposes unconnected with the possible purchase of shares. This occurred when a company, incorporated by Mr. Hamilton for the purpose, attempted to take an assignment from the Colemans of a vendor take back mortgage on the resort.

[32] I am not confident that I am able to fairly resolve the dispute between the parties without hearing from Brett Coleman. Nor do I feel that the evidence, as presently presented, is sufficient for me to assess damages in the manner which the plaintiffs invite me to.

[33] With respect to the counterclaim, it is difficult to assess whether it is more than merely tactical. Suffice it to say that it is not totally devoid of merit, but even if I were to find that there is a valid claim, no evidence has been adduced which would enable me to assess the extent to which, if at all, the defendant has suffered damages.

[34] I do not rule out the possibility that deploying the court’s fact finding powers under Rule 20.04(2.1) might be sufficient to fill the evidentiary gaps that I have identified. But it is also possible that a tailored trial procedure employing some of the directions and terms set out in Rule 20.05(2) could provide an equally efficient and, possibly, fairer process.

[35] The parties are therefore invited to confer and consider their respective positions on the most efficient way to move forward, following which the parties should attend a directions hearing on a date to be set by the trial coordinator in Kingston. The parties should also be prepared to address, at that time, the issue of costs to date.

Graeme Mew J. Released: 1 March 2017