Empire Communities Ltd. et al. v. H.M.Q. et al., 2015 ONSC 4355
CITATION: Empire Communities Ltd. et al. v. H.M.Q. et al., 2015 ONSC 4355 COURT FILE NO.: 09-CV-376505 DATE: 20150707
SUPERIOR COURT OF JUSTICE - ONTARIO
RE:
EMPIRE COMMUNITIES LTD. and EMPIRE PLEASANTVIEW COMMUNITIES LTD.
Plaintiffs
-AND-
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO and ONTARIO REALTY CORPORATION
Defendants
BEFORE: F.L. Myers J.
COUNSEL: Ronald Carr and Richard Ogden for the defendants
Paul DeMelo and Rahul Shastri for the plaintiffs
HEARD: July 3, 2015
ENDORSEMENT
[1] The defendants move for summary judgment dismissing this action. The claim arises out of alleged nondisclosure of material facts in a real estate transaction between the parties. The defendants argue that there is no genuine issue requiring a trial on the claim that the defendants owed the plaintiffs a duty to disclose the facts alleged. I agree. Therefore, the action is dismissed.
[2] The action arises out of the sale of surplus government land to the plaintiffs for development of residential housing. There is no issue that the defendants as vendors knew the purpose for which the land was purchased. The plaintiffs were real estate developers who wished to build a substantial number of residential houses on the land. The defendants offered the land zoned and with planning approval for just that purpose.
[3] The purchased lands are in the City of Brantford. The lands are within a larger area known as the Haldimand Tract. The Haldimand Tract runs 6 miles deep on either side of the Grand River from Lake Erie to the head of the river. It includes the entire City of Brantford among others.
The Six Nations’ Claims and Lawsuit against the Federal and Provincial Governments
[4] Between 1980 and 1995, the Six Nations of the Grand River band of Indians submitted twenty-nine (29) claims to the Government of Canada in respect of portions of the Haldimand Tract under a programme that offered monetary compensation for certain aboriginal claims. In 1995, the Six Nations of the Grand River sued the federal and provincial governments for mismanagement and breach of fiduciary duties concerning Six Nations’ lands within the Haldimand Tract including the lands later sold by the defendants to the plaintiffs which are the subject matter of this proceeding.
[5] In the amended statement of claim delivered by the Six Nations (that the parties agree was the current version at the time of the real estate transaction between them) the prayer for relief provided, in part:
- The plaintiff claims:
a. an Account of all money, real property and other assets belonging to the Six Nations of the Grand River band of Indians (the “Six Nations”), which was or ought to have been received or held by the Defendants, or either of them, or others for whom they or either of them are in law responsible (collectively the “Crown”) for the benefit of the Six Nations, and of the manner in which the Crown managed such assets;
b. an inquiry as to what assets of the Six Nations remain or ought to remain in the hands of or under the control of the Crown for the benefit of the Six Nations;
c. a declaration that the Defendants or either them are liable to replace all assets or the value thereof, which ought to have been received or held by the Crown on behalf of the Six Nations in which are not properly accounted for;
[6] It is clear from the affidavit of Ms. Roback-Lescinsky and from review of the amended statement of claim in the Six Nations’ lawsuit, that the Six Nations band was seeking monetary compensation from the government. It was not asserting a claim that it held aboriginal title to lands sold to third parties. It sought money to compensate it for losses that the band alleged it suffered at the governments’ hands. The plaintiffs argue that paragraphs 1(b) and (c) of the amended statement of claim set out above make it possible that the claim was a claim for title. However, I do not read those prayers for relief as seeking anything more than compensation for the fair value of aboriginal lands, including those held and those sold by the government. Moreover, reviewing the rest of the pleading as a whole supports this conclusion.
[7] The defendants relied on the decision of Arrell J. in City of Brantford v. Montour et al., 2010 ONSC 6253 granting an injunction against leaders of blockades seeking to enforce aboriginal claims over the entire Haldimand Tract purportedly made by a group of Six Nations’ members calling themselves Haudenosaunee Development Institute in 2010. At para. 55 of the decision, Arrell J, held:
[55] …For more than 150 years the Six Nations did nothing to indicate to innocent third-party purchasers that there was any problem with title to their lands. Property has been bought and sold over that time period. The Six Nations did commence a claim in 1995 against the federal and provincial governments seeking compensation, but never for return of the land. Still there was no notice to private landowners, when that action was commenced or after, of any problem with their title. Limitation periods were missed many times over. [Emphasis added]
[8] No law was cited for the proposition that findings of fact in one case may be used in another case among different parties. It seems to me that I should not do so. Accordingly, I read the amended statement of claim and reached my own conclusion regarding the nature of the claims asserted. I do not know what was before Arrell J. that led to his conclusion. I have before me the pleading that I have cited above and the affidavit of Ms. Roback-Lescinsky concerning the federal compensation claims process.
The Defendants did not Disclose the Six Nations Claims and Lawsuit to the Plaintiffs
[9] The defendants did not disclose the existence of the Six Nations’ claims or 1995 lawsuit to the plaintiffs as part of the sale of land that is the subject of this lawsuit. Mr. Guizzetti, the president of the plaintiffs, testifies that:
Had Empire been advised of the Claims or the 1995 Lawsuit, it would not have proceeded with the purchase the [sic] Subject Lands from the Defendants.
[10] For the purpose of this motion, I accept this statement although the defendants submit that it may not be entirely credible. Given the view that I take of the claims advanced in this lawsuit as a matter of law, there is no need to resolve this issue of fact. In my view, nothing in the agreement between the parties, and no other relevant law, obliged the defendants, as vendors in the sale transaction, to disclose to the plaintiffs the monetary claims advanced by the Six Nations. Therefore, the fact that the plaintiffs would not have closed had they known of the claims is not a matter that rests at the feet of the defendants. Rather, the principle caveat emptor, or buyer beware, applies and leaves it to the plaintiffs to have made whatever inquiries they wished to satisfy themselves as to the desirability of buying the subject lands.
The Defendants Knew of the Six Nations’ Claims
[11] In 1992, the defendant Ontario Realty Corporation (“ORC”) commenced a review of provincial Crown lands to be declared surplus and sold. An ORC internal committee minute dated April 10, 1992 records the following:
Brantford: Assembly
There are 19 on-going land claims in this Assembly by Six Nations. Peter Johansen is to follow-up with Native Affairs to find out where we stand in terms of these claims.
[12] The defendants have delivered their lists of documents. They are unable to locate any indication that Mr. Johansen or anyone from ORC took any steps to actually look into the claims advanced by the Six Nations for compensation concerning the lands that made up the Brantford land assembly. The defendants confirm that at the material time, the practice would have been for ORC to check with other agencies of the provincial government to determine if there were any aboriginal interests or claims with respect to lands to be sold. The defendants are unable to determine if any such steps were taken in this case. There is also no indication whether the defendants consulted with the Six Nations prior to the sale of the land. The defendants have no further relevant documents. Moreover, they have not been able to locate Mr. Johansen or any other witness who may have been involved in 1992.
[13] The plaintiffs rightly state that had there been inquiries made by ORC of other government ministries or departments, there should be a paper trail. The lack of a paper trail leads to an inference that no inquiries were made by ORC prior to the land that is the subject matter of this action being declared surplus and sold.
The Agreement of Purchase and Sale
[14] In September, 1996, ORC solicited offers for the land in issue. Included in the offering package distributed by ORC is the following statement:
DUE DILIGENCE
ORC strongly advises Respondents, prior to submitting their offers to complete any required review of registered title, determination of zoning and servicing status, environmental review or any other similar review. ORC will not accept offers which are conditional upon a respondent satisfying itself with respect to such matters, the economic feasibility of the development, or obtaining a financing. ORC will make no warranty with respect to matters of title, zoning, servicing or environmental condition of the subject lands.
[15] On October 23, to 1996, an affiliate of the plaintiffs submitted an offer in writing to purchase the land for $1 million. Discussions between the parties ensued. By letter dated October 29, 1996 the plaintiffs’ affiliate increased its offer to $2 million. Despite the provision of the tender terms indicating that ORC was not prepared to accept a due diligence condition, both of the plaintiffs’ offers contained a condition allowing it to conduct limited “customary financial, legal, physical, environmental, and documentary due diligence.” Both offers also provided:
We understand that you will grant us full access to the Property and your records regarding the Property, subject to compliance with your existing contractual arrangements, so that we may complete due diligence in a timely manner. If for any reason, we do not purchase the Property, we will return all information that you have delivered to us.
[16] By letter dated October 29, 1996, ORC indicated that it would negotiate exclusively with the plaintiffs in good faith with a view to entering into an agreement of purchase and sale. It said that it would look favorably upon an offer of $3.75 million with a $1 million dollar down payment and a mortgage back for the remainder amortized over 25 years. In response to the request for access to records for due diligence, ORC wrote:
ORC will provide whatever information we have in our possession regarding the site and allow you your due diligence period to run for 30 days following the acceptance by ORC of an Agreement of Purchase and Sale. The Agreement of Purchase and Sale will include partial discharge provisions, as well as conditional periods for soil testing, etc.
[17] The parties executed the formal agreement of purchase and sale dated January 15, 1997 on the monetary terms suggested by ORC. In the agreement, the plaintiffs acknowledged having inspected the land. The land was purchased “as is” subject to environmental testing. Section 10 of the agreement provided that the purchaser had 30 days to investigate title at its own expense. If the plaintiffs objected to title and the defendants were unable or unwilling to correct the title defect objected to, the plaintiffs were entitled to terminate the agreement and get their deposit back. Section 18 of the agreement provides:
This Agreement constitutes the entire agreement between the parties and there is no representation, warranty, collateral agreement or condition affecting this Agreement or the Land, other than expressed herein.
The Plaintiffs’ Development of the Purchased Lands
[18] As anticipated, after the purchase closed the plaintiffs proceeded to develop the lands. They did so in two phases. First, they built approximately 1,200 homes which sold well and are now an established community. In 2007, they commenced construction of the second phase of approximately a further 1,500 homes. As at the end of 2008, 46 of those homes have been constructed.
Protests
[19] Commencing in 2006, protesters from the Six Nations began an occupation of land in Caledonia, Ontario that attracted substantial publicity. Other lands in the vicinity of the Grand River have since been subject to protests.
[20] On January 27, 2009, the plaintiffs’ development was blockaded by a group of protesters claiming to be members of the “Haudenosaunee Men’s Fire of Grand River.” Although the Six Nations band is clear that they it seeks only monetary compensation in their claims and lawsuit, an entity referring to itself as Haudenosaunee Development Institute has asserted that it has a right of consent over any future development of the plaintiffs’ lands and, in 2014, that they may seek to encumber the lands.
[21] The 2009 blockade of the plaintiffs’ lands lasted for approximately 2 weeks. The plaintiffs continued their construction and sold their houses. They claim, however, that the lands were stigmatized and, as a result of the construction delays and stigmatization, they have suffered losses of between $18 million and $25 million compared to what they expected to make on their development project. The plaintiffs seek to recover these losses from the defendants.
The Legal Bases for the Plaintiffs’ Claim
[22] The plaintiffs assert three legal bases to claim damages from the defendants:
a. Breach of the duty of good faith;
b. The conduct of the defendants, including, in particular, the offer to deliver “whatever information we have in our possession regarding the site” in ORC’s letter dated October 29, 1996; and
c. The duty to disclose latent defects.
[23] There is no issue requiring a trial in respect of any of these three legal arguments.
No Breach of the Duty of Good Faith
[24] The plaintiffs argue that the defendant’s failure to disclose what they knew about the Six Nations’ claims and lawsuit prior to the sale of land violated the duty of honesty and to avoid knowing misrepresentation recognized by the Supreme Court of Canada in Bhasin v. Hrynew 2014 SCC 71.
[25] Ignoring for the moment that there is no hint in the evidence of either intentional dishonesty or knowing misrepresentation by the defendants, in my view, it is important to understand what Bhasin did and did not do. I agree with the following discussion of the case that was recently penned by Belobaba J. in Data & Scientific Inc. v Oracle Corp., 2015 ONSC 4178:
[10]…In Bhasin, an obviously important development in the continuing modernization of Canadian contract law, the Court in essence, did two things: one, it recognized that the ‘situational’ and ‘relational’ examples or pockets of a judicially recognized good faith doctrine were aspects of a broader organizing principle of good faith – “that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily;” and two, the Court decided on the facts before it that it was time to recognize a new duty - “a general duty of honesty in contractual performance.”
[11] The Court made clear that this new duty of honesty in contractual performance flowed “directly from” and was an “aspect” (albeit “one of the most widely recognized aspects”) of the general organizing principle of good faith. In other words, the pre-existing situational and relational aspects or pockets of implied good faith (such as the obligation to exercise discretionary contractual powers reasonably) were not eliminated but were simply realigned under a broad organizing principle of good faith. And the newly established duty of honesty in contractual performance was applied on the facts in Bhasin to confirm that the defendant Can-Am breached this duty by misleading the plaintiff and acting dishonestly in numerous ways leading up to and including the non-renewal of their agreement.
[26] That is, the Supreme Court has rationalized, renamed, and provided an overall framework for understanding several pre-existing aspects of duties of good faith that have been recognized by the law. In addition, it added one arguably new (arguably not new) duty not to lie to one’s contractual counterparty. Nothing in Bhasin eliminated the pre-existing law of latent defects or the contractual interpretation principles enunciated just a few months earlier in Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 SCR 633, 2014 SCC 53. Neither did it create a freestanding, ill-defined, and potentially arbitrary duty of good faith against which to measure all aspects of contractual performance. I agree with Mr. Justice Dunphy’s view in Addison Chevrolet Buick GMC Limited et al. v General Motors of Canada Limited et al., 2015 ONSC 3404 as follows:
[115] In suggesting this approach to the doctrine of good faith, Cromwell J. indicated that this “will bring a measure of coherence and predictability to the law and will bring the law closer to what reasonable commercial parties would expect it to be” (Bhasin, supra at para. 41). It would be ironic indeed if a ruling intended to bring coherence and predictability by underscoring the common sense minimum standards of honesty in the commercial context should be misconstrued as a pretext for injecting uncertainty and risk of arbitrary outcomes into the world of commercial agreements whose very raison d’être is the pursuit of predictability and certainty.
[116] Bhasin is no authority for unbridled creativity in the creation from whole cloth of obligations in a contractual context which the parties have not provided for or have addressed in a fashion which one party regrets in hindsight. Good faith and honesty are the boundaries of the field on which the contractual relationship is negotiated and performed:
“Commercial parties reasonably expect a basic level of honesty and good faith in contractual dealings. While they remain at arm’s length and are not subject to the duties of a fiduciary, a basic level of honest conduct is necessary to the proper functioning of commerce” (Bhasin, supra at para. 62) .
[27] The plaintiffs allege that the defendants were dishonest in failing to disclose the Six Nations’ claims and lawsuit. If, as I find below, the defendants were not obliged to disclose the claims or lawsuit under the agreement between the parties or by the doctrine of latent defects, the intention of the defendants is irrelevant. Apart from the duty not to lie, Bhasin does not create contractual obligations or replace the existing law. As to the (possibly) new duty not to lie or knowingly misrepresent; absent a duty to disclose, the defendants’ silence can be neither. If one does not have a positive obligation to disclose certain facts, then silence as to those facts is neither dishonest nor a misrepresentation.
[28] The plaintiffs also concede that they have no evidence of actual dishonesty or fraud on the part of the defendants. They argue that a trial is required for them to discover why Mr. Johenson did not make the inquiry that he was directed to make in 1992 or, if he did, why the results were not disclosed. However, there are no more documents or witnesses available to answer those questions. The “best foot forward” principle required the plaintiffs to light their powder now. On a motion for summary judgment, the court will assume that the parties have put forward all evidence that they would have available at trial. See: 2313103 Ontario Inc. et al. v JM Food Services Ltd. et al., 2015 ONSC 4029 at para. 40. Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200, at paras. 32 to 34. Even without that assumption, the parties agree that there is no more evidence available in any event. I am in as good a position as the trial judge would be to decide the issue if it were to come to that. Absent any evidence of a actual dishonestly or a knowing misrepresentation, if the issue were relevant, I would have no hesitation ruling that there is no genuine issue on the evidence requiring a trial on the honesty of the defendants’ motives and conduct.
[29] One might pause to consider how disclosure of a monetary lawsuit brought by a recognized band in 1997 might have allowed one to reasonably predict wildcat protests by a splinter group some dozen years later. However, as noted above, for the purposes of this motion, I accept the plaintiffs’ evidence that they would not have bought the lands if they had known of the Six Nations’ claims and lawsuit in 1997.
[30] Absent dishonesty, a knowing misrepresentation, or a duty to disclose that could make silence a misrepresentation, on the facts pleaded and evidence adduced by the plaintiffs, there is no genuine issue requiring a trial on the issue of good faith.
The Contract does not Require Disclosure by the Defendants
[31] The plaintiffs argue that the defendants’ conduct, especially ORC’s offer to provide information in its October 29, 1996 letter in response to the plaintiffs’ request for access to records, imposed on the government a proactive duty to disclose the Six Nations’ claims and lawsuit. Of course conduct alone does not create enforceable legal obligations. There must be a contract or an estoppel or some other cognizable legal category of enforceable right to create a legally enforceable obligation.
[32] The plaintiffs did not use the words “estoppel” or “collateral warranty” in their pleadings or their factum. But those are the applicable principles to try to enforce a statement or offer that one relies upon as a basis to enter into a further agreement. Neither of these doctrines however can apply in face of the entire agreement clause in section 8 of the agreement of purchase and sale. The parties agreed expressly that there were no collateral agreements or pre-contractual representations affecting the agreement. There is no basis to ignore that well-understood clause. Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), [2010] 1 SCR 69, 2010 SCC 4. Its very purpose is to avoid claims that pre-contractual conduct has binding, contractual force. Considering the objectively expressed intentions of the parties viewed with a practical lens required by Sattva, supra, the parties’ agreement is clear, unambiguous, and binding upon them.
[33] Moreover, all of the pre-contractual documents are clear that there was to be a formal agreement entered into by the parties. Both sides had able lawyers. The letters were just negotiations. They may form some of the background facts that were known and understood by both parties that assist in the interpretation of the contract were it ambiguous. But it is not. Moreover, the letters are also clear on their faces that they are not agreements with contractual force. The entire agreement clause prevents reliance upon the letters as part of the contract in any event.
[34] The agreement is an “as is” deal that provided for due diligence to be conducted by the buyer. There are no warranties provided by the government as vendor. The plaintiffs are entitled to call for title documents in the defendants’ possession. Under subsection 10(2) of the due diligence clause, the purchaser was required to satisfy itself as to any subdivision agreement, other agreement, or restriction relating to the land. In this type of deal structure, the burden lies on the buyer to satisfy itself in the absence of warranties on issues of relevance to it. There is no basis to imply a clause obliging the government to disclose documents that are not required either by the due diligence clause itself or by the defendants in the exercise of their due diligence reviews.
[35] Moreover, the fact that the government was being sued for money damages for how it had dealt with the subject lands is not a claim to an interest in the land. The sworn declaration of possession delivered by the defendants on closing of the sale transaction was truthful and correct in that regard. The claims and lawsuit might have been relevant to the potential profitability or economic feasibility of the proposed development of the site. However there is nothing in the contract that required the government to disclose information concerning the potential profitability or economic feasibility of the land. Subject to the law of latent defects discussed below, the principle of caveat emptor applies in all of its majesty to contracts for the sale of bare land such as this. There is no genuine issue requiring a trial as to the meaning of the contract.
The Claims and Lawsuit were not Latent Defects that were Required to be Disclosed
[36] There is an exception to the law of caveat emptor for hidden or latent defects. But not all latent defects need be disclosed by a vendor. In McGrath v. MacLean et al. (1979), 1979 1691 (ON CA), 22 OR. (2d) 784 (C.A.) the majority of the Court of Appeal approved of following description of the law written by Professor Bora Laskin (as he then was):
Absent fraud, mistake or misrepresentation, a purchaser takes existing property as he finds it, whether it be dilapidated, bug-infested or otherwise uninhabitable or deficient in amenities, unless he protects himself by contract terms.[^1]
[37] The Court of Appeal noted in McGrath that the law had advanced from the time of Prof. Laskin’s learned article and allows that where a vendor knows that due to a hidden defect a house that he or she is selling is uninhabitable, i.e. it is completely unfit for its intended purpose, it would be tantamount to fraud or reckless disregard for the truth were the vendor to sell it for that purpose without disclosing the hidden or latent defect. The law also allows a second exception and imposes on vendors of any real or personal property a duty to warn the purchasers if the vendors know that the thing being sold is dangerous. That duty exists apart from any sale contract and pre-dates even the general law of negligence. These exceptions were both recently restated by the Court of Appeal in Barbieri v. Mastronardi et al., 2014 ONCA 416, at para. 17.
[38] The plaintiffs rely on Dennis v. Gray, 2011 ONSC 1567, in which Hoy J. (as she then was) refused to strike out a claim by purchasers who bought a house for themselves and their two children where the vendor knew and did not tell them that a convicted child pornographer lived across the street. Hoy J. referred to the need to consider the purchaser’s known purpose in assessing whether an alleged defect is in fact or law the type of defect that must be disclosed. She relied on the decision of LaForme J. (as he then was) in Swayze v. Robertson, [2001] O.J. No. 968 (S.C.J.) at p. 5 which held that the applicable test is whether a latent defect has caused a “loss of use, occupation and enjoyment of any meaningful or material portion of the premises or residence that results in the loss in the loss of enjoyment of the premises or residence as a whole.” [Emphasis added] Hoy J. held that the existence nearby of a convicted child pornographer might pose a danger sufficiently grave to be required to be disclosed or, at least, that it was not plain and obvious that the claim could not succeed.
[39] The test on a pleadings motion of “plain and obvious” is not the test on this motion. The issue here is whether there is a genuine issue requiring a trial on the question of there being a latent defect requiring disclosure. I find that there is no such issue on the facts in evidence. First, it is not clear to me that either exception – for habitability or dangerousness - applies to the sale of bare land as opposed to a re-sale home. Land is land. There was nothing uninhabitable or dangerous about the land sold in 1997. Here, the existence of monetary claims brought by a recognized band in 1995 against the federal and provincial Crowns did not make the land dangerous in 1997. Moreover, the claims did not cause any loss of use, occupation, and enjoyment of a material portion of the land resulting in the loss of enjoyment of the premises as a whole.[^2] The lands in this case have in fact been used for the intended purpose of the sale transaction. The lands were developed by the plaintiffs and are inhabited by people living in houses that were built as intended. The purpose of the transaction was not thwarted.
[40] The Six Nations’ claims and lawsuit were perhaps relevant to the assessment of profitability or economic feasibility of the plaintiffs’ plans. But they did not prevent the lands from being used as intended. The plaintiffs have presented no precedent for the proposition that in the absence of a contractual requirement, a vendor must disclose information that might affect a buyer’s assessment of the profitability of the intended use of land. That is far beyond any expansion of the doctrine of latent defect to date. Moreover, it is inconsistent with the prevailing policy of caveat emptor and the corollary doctrine of freedom of contract. The ability of parties to a real estate transaction to know their rights going into negotiations and to know that they are free to contract for changes to their rights if they agree to do so are fundamental building blocks of real estate law and practice. The duty proposed by the plaintiffs would make vendors insurers of the commercial success of purchasers’ proposed business plans. Swayze and Dennis, supra, are the widest expressions of the exceptions to caveat emptor represented by the doctrine of latent defect. Neither case supports the duty proposed by the plaintiffs. Certainty, predictability, and freedom of contract have long been recognized as fundamentally important elements of commercial practice. Absent express agreement by the parties, all of the prevailing policies require rejection of a duty of disclosure concerning the desired profitability of the buyer as opposed to defects that go to use, habitability, and dangerousness of the subject matter of the transaction.
Summary Judgment
[41] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada set out a roadmap for a court to follow to determine if summary judgment was an efficient, affordable, proportionate process for the fair and just resolution of a civil claim such as this one. Corbett J. described the approach in Sweda, supra, at paras 32 to 34 as follows:
[32] Summary judgment motions come in all shapes and sizes, and this is recognized in the Supreme Court of Canada’s emphasis on “proportionality” as a controlling principle for summary judgment motions. This principle does not mean that large, complicated cases must go to trial, while small, single-issue cases should not. Nor does it mean that the “best foot forward” principle has been displaced; quite the reverse. If anything, this principle is even more important after Hryniak, because on an unsuccessful motion for summary judgment, the court will now rely on the record before it to decide what further steps will be necessary to bring the matter to a conclusion. To do this properly, the court will need to have the parties’ cases before it.
[33] As I read Hryniak, the court on a motion for summary judgment should undertake the following analysis:
The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;
If the court cannot grant judgment on the motion, the court should:
a. Decide those issues that can be decided in accordance with the principles described in 2), above;
b. Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues; and
c. In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.
[34] The Supreme Court is clear in rejecting the traditional trial as the measure of when a judge may obtain a “full appreciation” of a case necessary to grant judgment. Obviously greater procedural rigour should bring with it a greater immersion in a case, and consequently a more profound understanding of it. But the test is now whether the court’s appreciation of the case is sufficient to rule on the merits fairly and justly without a trial, rather than the formal trial being the yardstick by which the requirements of fairness and justice are measured.
[42] I am confident that I can find the necessary facts and apply the relevant law on the evidence filed and that it is in the interests of expedient, affordable and proportionate justice to do so. I do not need to make any credibility findings although that would not necessarily require a trial in any event. In fact, I accept above all of the plaintiffs’ evidence and still reach the conclusion that none of the bases that it argues support its claims. Therefore, I do not need to consider the enhanced fact-finding powers under Rule 20.04(2.1) or the Hryniak roadmap.
[43] In para. 6 of their factum, the plaintiffs set out a number of issues that they argue require a trial. Issue (a) is a question of contractual interpretation that I have conducted above. Issues (b) and (c) are irrelevant if the defendants do not have a duty to disclose as I have found to be the case. Issue (d) through (h) turn on Bhasin creating a duty of disclosure as an element of the organizing principle of good faith beyond the duty to disclose latent defects. I have found that Bhasin did not have that effect. Issues (i) and (j) involve questions of whether it was reasonably foreseeable that protests or a dispute would emerge in 2009 given the conduct of the defendants in failing to adequately investigate and address the Six Nations’ claims before the sale. The concept of reasonable foreseeability is a causation issue in a breach of contract claim. As there is no breach of contract by the defendants, there is no need for a trial on causation in the contract claim. As such, issues of whether it was reasonably foreseeable from the existence of the Six Nations band monetary claims in 1995 that protests would be brought more than a decade later by Haudenosaunee Men’s Fire of Grand River in 2009 and Haudenosaunee Development Institute are not relevant to any of the three grounds advanced by the plaintiffs.
[44] Accordingly, an order for summary judgment is granted dismissing this action.
[45] The parties are encouraged to try to settle costs. The likely outcome is obvious to counsel. If the parties cannot agree, the defendants may deliver no more than three (3) pages of costs submissions and a Costs Outline by July 17, 2015. The plaintiffs may deliver no more than three (3) pages of costs submissions which shall be accompanied by their own Costs Outline by July 31, 2015. All submissions shall be made in searchable PDF format and delivered as attachments to an email to my assistant. Copies of case law shall not be provided. Rather, references to case law, if any, shall be provided by hyperlinks to canlii.org or another publicly available internet site embedded in the submissions filed. If counsel need assistance preparing PDF searchable documents, reference may be had to The Guide Concerning e-Delivery of Documents in the Ontario Superior Court of Justice that can be found at http://www.ontariocourts.ca/scj/practice/practice-directions/edelivery-scj/
________________________________ F.L. Myers J.
Date: July 7, 2015
[^1]: As fraud and misrepresentation are already recognized bases to hold a vendor liable in this area (as in most other areas of the common law) it is not at all clear that Bhasin’s recognition of a duty of honesty in contractual performance adds anything new to the law.
[^2]: It was perhaps arguable in Dennis that the family would have to move and could not use the use the house that they bought at all. There is no trial or appeal decision reported in the case to see if this argument succeeded.