Duty of Honesty and Good Faith; Supreme Court of Canada in Bhasin v. Hrynew 2014 SCC 71

The way in which the common law will look at contracts has changed dramatically with the decision of the Supreme Court of Canada in Bhasin v. Hrynew 2014 SCC 71.  The Honorable Justice Cromwell, concurred with by the Honourable Chief Justices McLachlin, Lebel, Abella, Rothstein, Karakatsanis, and Wagner, has found that the duty to perform a contract honestly and in good faith will now be implied as a term of contracts and will, subject to very careful drafting, not be precluded by an entire agreement clause.

 

What follows are quotes from this ground breaking case which will be a welcome relief to many contracting parties frustrated by what are alleged to be dishonest dealing motivated by male fides; two paragraphs, [33], [74] and [86], summarize the new obligations:

 

"[33] In my view, it is time to take two incremental steps in order to make the common law less unsettled and piecemeal, more coherent and more just. The first step is to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance. The second is to recognize, as a further manifestation of this organizing principle of good faith, that there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations."   

 

“[74] There is a longstanding debate about whether the duty of good faith arises as a term implied as a matter of fact or a term implied by law: see Mesa Operating, at paras. 15_19. I do not have to resolve this debate fully, which, as I reviewed earlier, casts a shadow of uncertainty over a good deal of the jurisprudence.  I am at this point concerned only with a new duty of honest performance and, as I see it, this should not be thought of as an implied term, but a general doctrine of contract law that imposes as a contractual duty a minimum standard of honest contractual performance. It operates irrespective of the intentions of the parties, and is to this extent analogous to equitable doctrines which impose limits on the freedom of contract, such as the doctrine of unconscionability.”

 

“[86] The duty of honest performance that I propose should not be confused with a duty of disclosure or of fiduciary loyalty.  A party to a contract has no general duty to subordinate his or her interest to that of the other party. However, contracting parties must be able to rely on a minimum standard of honesty from their contracting partner in relation to performing the contract as a reassurance that if the contract does not work out, they will have a fair opportunity to protect their interests."

 

Justice Cromwell reflected on three circumstances which historically have attracted the duty of good faith and unpin the manner in which the Court will impose this duty; at paragraph 47 and 48:

 

[47] “By way of example, Professor McCamus has identified three broad types of situations in which a duty of good faith performance of some kind has been found to exist: (1) where the parties must cooperate in order to achieve the objects of the contract; (2) where one party exercises a discretionary power under the contract; and (3) where one party seeks to evade contractual duties (pp. 840_56; CivicLife.com Inc. v. Canada (Attorney General) (2006), 215 O.A.C. 43, at paras. 49_50).

 

[48] While these types of cases overlap to some extent, they provide a useful analytical tool to appreciate the current state of the law on the duty of good faith."

 

Justice Cromwell then went on to make it clear that this obligation will apply to real estate contracts and will be applied to prevent contracting parties who regret a bargain from reneging on the bargain:

 

"[49] The first type of situation (contracts requiring the cooperation of the parties to achieve the objects of the contract) is reflected in the jurisprudence of this Court. In Dynamic Transport Ltd. v. O.K. Detailing Ltd., [1978] 2 S.C.R. 1072, the parties to a real estate transaction failed to specify in the purchase_sale agreement which party was to be responsible for obtaining planning permission for a subdivision of the property. By law, the vendor was the only party capable of obtaining such permission. The Court held that the vendor was under an obligation to use reasonable efforts to secure the permission, or as Dickson J. put it, “[t]he vendor is under a duty to act in good faith and to take all reasonable steps to complete the sale”: p. 1084."

 

"[51] This Court’s decision in Mason v. Freedman, [1958] S.C.R. 483, falls in the third type of situation in which a duty of good faith arises (where a contractual power is used to evade a contractual duty). In that case, the vendor in a real estate transaction regretted the bargain he had made. He then sought to repudiate the contract by failing to convey title in fee simple because he claimed his wife would not provide a bar of dower. The issue was whether he could take advantage of a clause permitting him to repudiate the transaction in the event that he was “unable or unwilling” to remove this defect in title even though he had made no efforts to do so by trying to obtain the bar of dower.  Judson J. held that the clause did not “enable a person to repudiate a contract for a cause which he himself has brought about” or permit “a capricious or arbitrary repudiation”: p. 486. On the contrary, “[a] vendor who seeks to take advantage of the clause must exercise his right reasonably and in good faith and not in a capricious or arbitrary manner”: p. 487."

 

Justice Cromwell makes it clear that commercial parties reasonably expect what he referred to as a basic level of honesty and good faith in their commercial dealings:

 

"[60] 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. The growth of longer term, relational contracts that depend on an element of trust and cooperation clearly call for a basic element of honesty in performance, but, even in transactional exchanges, misleading or deceitful conduct will fly in the face of the expectations of the parties: see Swan and Adamski, at §1.24." 

 

Justice Cromwell also suggests that the duty of honesty and good faith leads to the conclusion that contracting parties should have “appropriate regard” for their contracting parties “legitimate contractual interests and makes it clear that this duty is distinct from a fiduciary duty.  Justice Cromwell makes it clear that it is not okay to lie or mislead contracting parties but such obligation does not create a duty of disclosure:

 

“[65] The organizing principle of good faith exemplifies the notion that, in carrying out his or her own performance of the contract, a contracting party should have appropriate regard to the legitimate contractual interests of the contracting partner. While “appropriate regard” for the other party’s interests will vary depending on the context of the contractual relationship, it does not require acting to serve those interests in all cases. It merely requires that a party not seek to undermine those interests in bad faith. This general principle has strong conceptual differences from the much higher obligations of a fiduciary.  Unlike fiduciary duties, good faith performance does not engage duties of loyalty to the other contracting party or a duty to put the interests of the other contracting party first.”

 

“[73] In my view, we should. I would hold that there is a general duty of honesty in contractual performance. This means simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract. This does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one’s contractual performance. Recognizing a duty of honest performance flowing directly from the common law organizing principle of good faith is a modest, incremental step. The requirement to act honestly is one of the most widely recognized aspects of the organizing principle of good faith.”

 

The Bhasin case will have far reaching implications.  It will be interesting to see how creative lawyers try to limit the scope of the duty of good faith without suggesting that dishonesty is contemplated by the contracting parties.  I query if much of the attempt to exculpate such obligations may simply be unenforceable as against public policy in light of Bhasin.  More significantly litigating parties and their litigators will add this to their pleadings and it will create potential liability even in the face of the well drafted contracts often foisted upon less powerful contracting parties.

Provincial Court Civil Division limit is raised to $50,000.00; An exhortation to not make verbal agreements and reduce all contracts to writing

The Alberta Government has recently increased the limit for the Provincial Court Civil Division to $50,000.00.  This means that any dispute which exceeds $25,000.00 but does not exceed $50,000.00 no longer needs to be brought in the Court of Queen's Bench of Alberta.  This increase is bound to increase the amount of actions brought in what is affectionately referred to as Small Claims and along with this there will be an increase in spurious and groundless claims.


Not that I am saying anything new, but to protect yourself against the possibility of being sued it is best to only do business in writing with the clearest of terms.  Paying a lawyer to assist you in drafting a contract just become an even better investment of money.

An excellent assessment of when the Alberta Rules of Court will apply to Provincial Court Civil Division Action

In Alberta the lowest civil Court is our Provincial Court Civil Division; affectionately referred to as "Smalls Claims Court" or "PCCD".  This Court serves a very important purpose in allowing parties to "have their day in Court" without the formalities required by our Court of Queens Bench.  Systemically the PCCD promotes a civil resolution of disputes and its existence bolsters our democratic system; that is citizens of Alberta are able to resolve their disputes without resort to extra-judicial conduct.



The current monetary limit which parties may bring before the PCCD is $25,000.00.  Currently, this can be increased by our Provincial Government by Regulation to as much as $50,000.00 if approved by our Lieutenant Governor in Council.  The Provincial Court Act governs all actions commences in PCCD.  Notwithstanding this, the Judges in the PCCD are adept at navigating litigants to a conclusion without the process becoming to onerous; that is, becoming mired in the formalities found in the Rules of Court used in the Court of Queen's Bench.  However, there are instances which occur in PCCD when the Rules of Court need to be applied.  


In the case Cabrera v. Steed, 2013 ABPC 361 Judge Higa adroitly reviewed section 8 of the Provincial Court Act and provided some direction as to when the PCCD should have recourse to the Rules of Court:

[7]        The Applicants in support of their application rely on specific rules of the Rules of Court of Alberta.  The Applicants state there are no legislative provisions contained in the Provincial Court Act, RSA 2000, c. P-31 (“Act”) that addresses the relief sought in this application.  Accordingly, the Applicants submit that pursuant to Section 8 of the Act, the Court may apply the Rules of Court.  Section 8(2) states,

Where the Act or the regulations do not provide for a specific practice or procedure of the Court that is necessary to ensure an expeditious and inexpensive resolution of a matter before the Court, the Court may

(a)   apply the Alberta Rules of Court, and

(b)   modify the Alberta Rules of Court as needed.

In the Cabrera case Judge Higa concluded that in respect of an application to strike an action based on long delay that the Rules of Court should be applied.  Judge Higa applied the rules from the Rules of Court which were applicable and concluded that the action should be struck due to a delay of 3 years.  This decision sheds light on when a Judge in the PCCD will embrace the formalities of the Court of Queen's Bench and is a welcome addition to the PCCD jurisprudence.

Do I have to fill those pot holes? The duty of Alberta municipalities under the Municipal Government Act (Alberta)

This year (2014) in Calgary residents were delighted that we did not have to experience another flood.  Concerns of flooding was replaced with Calgarian's concerns about the enormous number of pot holes which have appeared over our very long winter.  While reviewing the Municipal Government Act (Alberta) ["MGA"] for other reasons I stumbled across paragraph 532 which appeared to create a mandatory obligation on Municipalities to maintain the roads; the section is repeated below:


Municipal Government Act, RSA 2000, c M-26

Part 13

Liability of Municipalities, Enforcement of Municipal Law and Other Legal Matters

Division 1

Liability of Municipalities

   Repair of roads, public places and public works

532(1)  Every road  or other public place that is subject to the direction, control and management of the municipality, including all public works in, on or above the roads or public place put there by the municipality or by any other person with the permission of the municipality, must be kept in a reasonable state of repair by the municipality, having regard to

(a)    the character of the road, public place or public work, and

(b)    the area of the municipality in which it is located.

(2)  The municipality is liable for damage caused by the municipality failing to perform its duty under subsection (1).

(3)  This section does not apply to any road made or laid out by a private person or any work made or done on a road or place by a private person until the road or work is subject to the direction, control and management of the municipality.

(4)  A municipality is not liable under this section unless the claimant has suffered by reason of the default of the municipality a particular loss or damage beyond what is suffered by the claimant in common with all other persons affected by the state of repair.

(5)  A municipality is not liable under this section in respect of acts done or omitted to be done by persons exercising powers or authorities conferred on them by law, and over which the municipality has no control, if the municipality is not a party to those acts or omissions.

(6)  A municipality is liable under this section only if the municipality knew or should have known of the state of repair.

(7)  A municipality is not liable under this section if the municipality proves that it took reasonable steps to prevent the disrepair from arising.

(8)  When a traffic control device has been defaced, removed or destroyed by someone other than a designated officer or employee or agent of the municipality, the municipality is liable under this section only if the municipality

(a)    had actual notice of the defacement, removal or destruction, and

(b)    failed to restore, repair or replace the traffic control device in a reasonable period of time.

(9)  A person who brings an action under this section must notify the municipality of the event that gives rise to the action within 30 days after the occurrence of the event.

(10)  Failure to notify the municipality bars the action unless

(a)    there is a reasonable excuse for the lack of notice, and the municipality is not prejudiced by the lack of notice,

(b)    death is the result of the event complained of, or

(c)    the municipality waives in writing the requirement for notice.

I noted up (looked for cases which considered this section) and located the Kuz v. Calgary (City), 2008 ABPC 340 case.  In Kuz, Judge McCarthy (at that time a Provincial Court Judge and now of our Court of Appeal) considered this section.  Justice McCarthy explicates the nature of the duty imposed by section 532 of the MGA and then applies the “Policy” Versus “Operational” Dichotomy which must be applied in respect of claims of negligence against municipalities; negligence will only lie if the conduct alleged was negligence in operation.

The Duty of Care Owed by the City:

 

[18]           If I am correctly interpreting the decisions of the Supreme Court of Canada in Just v. British Columbia 1989 CanLII 16 (SCC), [1989] 2 S.C.R. 1228 and Brown v. British Columbia 1994 CanLII 121 (SCC), [1994] 1 S.C.R. 420, the City, as the road authority, owes a duty of care to those using its roads.  Furthermore, I interpret those cases to hold that the duty of care extends to taking reasonable steps to prevent injury to users of its roads.  In other words, the duty of care extends beyond the City’s statutory duties set out in Section 532(1) and (7) of the Municipal Government Act, namely to keep roads in a reasonable state of repair and to repair malfunctioning traffic control devices in a reasonable period of time.  The City, of course, had a duty to fix the traffic lights in a reasonable period of time and it discharged that duty in this case; but that does not end the matter because there is also the duty to take reasonable steps to prevent injury to motorists.

 

The “Policy” Versus “Operational” Dichotomy:

 

[22]           And before this court can even embark on an inquiry into the adequacy of that precaution, it must decide whether its traffic signal lights re-setting practices are the product of a policy decision by the road authority or are simply an operational decision.  The standard of negligence applied by the courts in determining whether a duty of care has been breached cannot ordinarily be applied to a policy decision, but it can be applied to an operational decision:  Sutherland Shire Council v. Heyman (1985) 60 A.L.R. (Australian High Court-Mason, J) cited with approval in Brown v. British Columbia, supra, (although it should be noted that Sopinka, J., in dissenting in Brown, expressed grave reservations about the use of the “policy/operational” test as the touchstone of liability).

 

[23]           The principles to be applied in determining whether a decision of government, or in this case of a municipality, is one of policy or operations are set out in Just v. British Columbia, supra.  In Just v. B.C., Justice Cory of the Supreme Court of Canada cited the Australian High Court decision in Sutherland Shire Council v. Heyman as providing “helpful guidelines”.  In the Australian case, the court said at p.35:

 

“The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognize that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints.  Thus budgetary allocations and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care.  But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness.”

In finding for the Plaintiff against the municipality Justice McCarthy repeated the words of the Honourable Justice Dixon:

[34]           Furthermore, on the authorities cited to me, this was not a new problem. In a scathing judgment in 1990, Mr. Justice Dixon of the Alberta Court of Queens Bench in Kozina v. Lajoie, 1990 CanLII 5857 (AB QB), (1990) 103 A.R. 55,  found the City to be negligent in not providing adequate and timely signage in the case of malfunctioning traffic signal lights at Deerfoot Trail and Memorial Drive, the next interchange south of that intersection which is the subject of the within litigation.  Admittedly, much of Justice Dixon’s judicial reproach was reserved for the police department and the facts were different  Kozina  in that the traffic light outages involved more intersections, lasted longer and the response times were nowhere near as quick as in the case at bar; but on the question of traffic control, Mr. Justice Dixon had this to say:

 

“Before leaving the issue of liability, I must record that I am astounded that the three intersections in question were not controlled by peace officers long before the time of the accident....Had the City of Calgary Police Commission been or remained a party in these proceedings, I would have found them liable for neglect of duty.  I concur with the submissions of Mr. Abougoush that the effect of Section 3 of the City of Calgary By-law 40M80 and of the Judgment of Master Quinn in Caratozzolo v. Murdock, Eqatski and City of Edmonton, 47 A.R. 394, are that peace officers have the responsibility for the direction of traffic at uncontrolled intersections within the City of Calgary...”

This section and the application of the legal reasoning of Justice McCarthy could very well form the basis of a judgment against municipalities for failing to repair pot holes in a timely manner.

Surely you can evict a tenant for prostitution; our Charter of Rights & Freedoms is impacting the landscape of landlord and tenant relations AND Summary Judgment; somethings change but yet might stay the same

One of the more difficult grounds to terminate tenancies for is breach of lease or breach of bylaws by acting in a manner which is criminal.  The reason for this is that the burden of proof in criminal matters is "beyond a reasonable doubt" whereas the civil standard is "on the balance of probabilities".  Notwithstanding this if a condominium corporation or a landlord has evidence of criminal activity related to prostitution by a tenant that an eviction would imminent on application to the Court.


In 1214777 Alberta Ltd v 480955 Alberta Ltd, 2014 ABQB 301 Master Schlosser was asked to terminate a tenancy based on the allegation that the tenant was participating in the criminal activity of prostitution.  He concluded that he could not based on the recent SCC case law which has now confirmed that the rights of prostitutes are protected by our Charter of Rights and Freedoms.  Master Schlosser concluded:

[44] If we put the conflicts in the evidence aside for a moment, the complicating factor about the landlord’s arguments is that the law of selling sex for money is in a state of limbo. Canadian prostitution laws were challenged in the Supreme Court of Canada and found to be unconstitutional. Madam Justice McLachlin said for the Court in Canada (AG) v. Bedford, 2013 SCC72:

3. Three applicants, all current or former prostitutes, brought an application seeking declarations that three provisions of the Criminal Code, R.S.C. 1985, c. C-46, are unconstitutional.

4. The three impugned provisions criminalize various activities related to prostitution. They are primarily concerned with preventing public nuisance, as well as the exploitation of prostitutes. Section 210 makes it an offence to be an inmate of a bawdy-house, to be found in a bawdy-house without lawful excuse, or to be an owner, landlord, lessor, tenant, or occupier of a place who knowingly permits it to be used as a bawdy-house. Section 212(1)(j) makes it an offence to live on the avails of another’s prostitution. Section 213(1)(c) makes it an offence to either stop or attempt to stop, or communicate or attempt to communicate with, someone in a public place for the purpose of engaging in prostitution or hiring a prostitute.
5. However, prostitution itself is not illegal. It is not against the law to exchange sex for money. Under the existing regime, Parliament has confined lawful prostitution to two categories: street prostitution and “out-calls” – where the prostitute goes out and meets the client at a designated location, such as the client’s home. This reflects a policy choice on Parliament’s part. Parliament is not precluded from imposing limits on where and how prostitution may be conducted, as long as it does so in a way that does not infringe the constitutional rights of prostitutes.

[45] Although these laws were found to be inconsistent with the Charter and void, the declaration of invalidity was suspended for one year. (The date of the Judgment was December, 2013).
[46] The old laws are still on the books but in a kind of legal limbo. Some of the activities at 50th Street Massage Centre might technically constitute crimes but neither 50th Street Massage Therapy nor its inmates or proprietors have been convicted, or pleaded guilty to any municipal or federal offences, much less offences under the Criminal Code of Canada.
[47] The commercial lease speaks to legality not morality. I am not willing to terminate this commercial lease on the basis of this state of the law and evidence. 

The case was also noteworthy to see how the recent judicial pronouncements with respect to Summary Judgment applications are being applied in Applications to Masters ; Master Schlosser commented:

[14] The Hryniak approach was recently endorsed by our Court of Appeal in Windsor v Canadian Pacific Railway Ltd., 2014 ABCA 108. Although that case was a ‘law case’, not ‘a facts case’, and the remarks in that decision are obiter with respect to whether there are any enhanced fact-finding powers now enjoyed by judges in this province, the Court did observe that the approach chosen by the Supreme Court of Canada in Hryniak was consistent with the Alberta rules. Rule 7.3 uses the very wide term, ‘merit’, and Rule 6.11, which lists the types of evidence that can be considered on a motion, includes oral evidence (6.11(g)). Our Court of Appeal has now also endorsed this approach for rule 3.68 applications (O’Connor Associates Environmental Inc. v. MEC OP LLC, 2014 ABCA 140 ).

[15] It remains to be seen whether a judge sitting in chambers in Alberta can now find facts or determine credibility based on Affidavit evidence. As was noted in the Ontario Civil Justice Reform Project, there are many layers of decisions against it (and see Beier v. Proper Cat Construction Ltd., 2013 ABQB 351,at para. 68, O’Hanlon Paving Ltd. v. Serengetti Develoments Ltd., 2013 ABQB 428 and Schaffer v. Lalonde, 2014 ABQB 222 (M)). Like the case in Ontario, a rule change, or a legislative change might be necessary.

[16] If we put these decisions together, the approach that now ought to be taken toward summary determination is as follows. I am drawing remarks of Master MacLeod in the Pammett decision and those of Wakeling, J., (as he then was) in the Proper Cat case. The new approach has been described as the “roadmap approach”. As I see it, the Alberta roadmap is as follows:

[17] The starting point (as found in the Windsor decision para. 13 and Hryniak at para. 49) is ‘to examine the record to see if a disposition that is fair and just to both parties can be made on the existing record’. The court is to look at the record and the dispute to decide whether it is essential to the resolution of the dispute that the court see the witnesses. If the answer is yes, the matter must go to trial. If the initial answer is ‘no’, the court is to engage in a six step process:

1. The court is to presume that the best evidence from both sides is before the court. (e.g. Canada v. Lameman, 2008 1 SCR 372, at 378 and 382). The decided cases tell us that summary judgment applications have to be decided on the evidence before the court and not on what the evidence might be. Parties are required to put their best foot forward. This
   reinforces the importance of treating summary judgment applications advisedly and with due caution. The only caveat that might apply here is that if the summary judgment application is before a Master and the losing party does not like the Master’s opinion, it is not so difficult to patch up the evidence on appeal.
2. As a corollary to number 1, the court is to ask whether a negative inference can be drawn from the absence of evidence on certain points.
3. Next, the court should look at the complete package and ask whether all of the evidence is admissible. Rule 13.18 (3), for example, tells us that we can’t use hearsay for a final application.
4. Next, the court should ask whether there is a conflict in the evidence and, if so, whether, (a) the conflict has been resolved on cross examination: Janvier v 834474 Alberta Ltd., 2010 ABQB 800, or, (b), whether the evidence giving rise to the conflict is purely self-serving and is otherwise unsupported: Guaranty v. Gordon, 1999 SCC. Self serving evidence does not give rise to a triable issue.
5. The next step is to examine the evidence. As Master MacLeod said in the Pammett decision:
   
   
   

   [28] There are subtle distinctions here. The court may assess the sufficiency of the evidence admissibility of evidence and reliability of evidence without access to enhanced fact finding powers. The court may also apply the law to the facts without deciding a genuine question of law.

   
   

   (emphasis added).   Assessing the sufficiency of the evidence will also involve considering whether the issue can fairly be decided on the factual record before the court (Tottrup v. Clearwater Municipal District (99) (2007) 68 Alta L.R. (4th) 237 at 242 and Gayton v. Lacasse, 2010 ABCA 123 at para. 11).
6. Having performed that evidentiary exercise, as Master MacLeod further says in the Pammett case: (and see Proper Cat at paras. 61-64, 69):

   
   

    [31] A plaintiff will be entitled to judgment if the plaintiff can prove all elements of the cause of action and the defendant either has no defence or is missing critical elements of proof necessary to maintain that defence. A defendant will be entitled to judgment if the plaintiff cannot prove an essential element of its cause or if the defendant has a complete defence.

[18] In a sense, much of the above is not truly new. It is more like a field guide to the principles summarized in Proper Cat and elsewhere. The main change is that the concept of proportionality urges the court to give summary remedies where it can.

[19] None of this affects the well established legal burdens. The legal or persuasive burden is on the Applicant throughout. The Respondent is not obliged to furnish evidence. However, if an Applicant discharges the evidentiary burden imposed upon it on a balance of probabilities, the evidentiary burden then falls to the Respondent to show that there is arguable merit to the case: Murphy Oil Company Ltd. v. Predator Corporation Ltd., 2006 ABCA 69, Proper Cat at paras. 66-7, 70, and Dasilva v McLean, 2011 ABQB 618 (M), and, now, that there is a compelling reason that it should go to trial.

[20] As noted in Schaffer v. Lalonde, Masters have an additional power under section 9(3)(b) of the Court of Queen’s Bench Act. If the evidence leads to something that cannot be resolved on the basis set out above, the parties can agree to have the court determine the issue, which would be fully in keeping with the concept of proportionality and would be consistent with embracing the culture shift noted by the Supreme Court of Canada in Hryniak.

[21] There is one last issue. And it requires guidance from above. The Hryniak case suggests that the threshold for granting summary judgment may be at the civil standard (balance of probability), rather than ‘plain and obvious’, or ‘beyond doubt’, which is closer to the criminal standard. The Supreme Court of Canada did not directly address this issue, or for that matter, any of the cases that establish the standard. It was not necessary to the decision as a chambers judge found that the outcome ‘was clear’, which seems to imply that the higher standard was met.

[22] Nevertheless, there is a tension between the language used in the Hryniak case and the well established standard for granting summary remedies. Until this issue is dealt with, when the court asks whether there is ‘any issue of merit that genuinely requires a trial’ (Windsor at para. 16), or whether a fair and just determination can be made on the merits, the threshold remains ‘plain and obvious’, ‘or beyond doubt’. In the meantime, this court is not free to conduct ‘paper trials’ on the civil standard.


[23] The concept of proportionality does not mean, as some hopeful plaintiff’s seem to think, that plaintiff’s now have a license to railroad the defendant. The concept cuts both ways. 

I have taken the comments from Master Schlosser to reflect that though much has changed not much has changed.  This was also reflected to me on a recent Special Application to Master Robertson.  The Court will continue to expect a high standard of proof to conclude that Summary Judgment should be granted but the Hryniak and Windsor cases will work to extol Masters and Justices to take one last look at the evidence to see if an equitable result can be achieved without the burden of trial.

Dragon's Den - Part of the legacy of Kevin O'Leary; We are so big and you are so small

A lawyer is challenging the enforceability of the documents which purport to allow defamation in the editing and presentation of the business idea shown on Dragon's Den:

http://business.financialpost.com/2014/05/20/dragons-den-entrepreur-to-learn-fate-of-defamation-case-on-thursday/

Reblog: "The Common Law Relationship Mystery: Are you an Adult Interdependent Partner in a Joint Family Venture and don't even know it" by Erique Dubon-Roberts

Though I do not at this time practice family law, I do assist sensible and cooperative clients who are are either preparing for marriage or entry into an adult interdependent partnership or leaving one.  That is I assist client with prenuptial and nuptial agreements, matrimonial property agreements, adult interdependent partnership agreements and separation agreements.  I hope to at some point bring into Bridgeland Law a lawyer who practices in the area of matrimonial law.

In the winter issue of "Law Matters" published by the Canadian Bar Association, Enrique Dubon-Roberts has written an excellent summary of the law related to common law partnerships and adult interdependent partnerships.  It is repeated below in its entirety:

The Common Law Relationship Mystery: Are you an AIP in a JFV and don’t even know it? by Enrique Dubon-Roberts

As a family law lawyer, I often find that couples, especially young ones, often ask: “as we considered common-law, 
yet?” This question is often followed by an awkward silence. The silence is due to the current state of the law in Alberta 
for unmarried couples, and because I know how difficult it is to give a simple answer to this question. Statistics 
Canada’s 2011 Census, as summarized in its Portrait of Families and Living Arrangements in Canada, showed that 
common-law couples have increased by 13.9% since 2006, making common-law couple families account for 16.7% of census families. Therefore, I smile, and try to answer the questions; what follows is a shorter version of my basic overview of a very complex area of law. 

The rights of unmarried partners in Alberta can be better explained by dividing them in two categories: (1) the rights conferred on unmarried couples by legislation; and (2) the property rights that may arise due to the parties’ contributions to the relationship.

Firstly, in Alberta, Section 3 of the Adult Interdependent Relationship Act, SA 2002, c. A-4.5 defines an Adult Interdependent Partner (“AIP”) as a person who (a) has lived with another person in a relationship of interdependence (i) for a period of not less than 3 years, or (ii) of some permanence, if there is a child of the relationship by birth or adoption. The act outlines the indicia of an AIP relationship and it allows AIPs to enter into an agreement to be AIPs. Once this definition is met, unmarried partners may access rights and remedies under Part 3 of the Family Law Act, SA 2003, c. F-4.5, and Part 3 of the Wills and Successions Act SA 2010M c. W-12.2. Part 3 of the Family Law Act mostly deals with child support and AIP Support Rights. The Family Law Act outlines the factors that a court is to consider if/when an AIP makes a partner support application. The Wills and Successions Act deals with 
the distribution of intestate estates and gives an AIP, whose 
partner has passed away without a will, the potential ability 
to inherit from the deceased partner’s estate. By no means 
are any of these rights guaranteed, but the potential claim is 
only available to those who meet the definition of an AIP. The Income Tax Act and pension legislation also prescribe further rights and obligations to unmarried partners. 

There are no statutory property rights for unmarried couples 
(married couples enjoy a presumption of equal division of 
matrimonial property). The property rights and obligations 
of unmarried couples are dictated by the same rules that apply to other non-romantic relationships where unjust enrichment claims arise, as our Supreme Court outlines in its Kerr v. Baranow, 2011 SCC 10, decision. In short, when (1) one party receives a benefit/enrichment, (2) while the second party suffers a corresponding deprivation, and (3) there is no juristic reason for the same, the second party may have claim against the first. 

Once the case for an unjust enrichment has been met, our 
Supreme Court in Kerr gave our courts a bit of flexibility in 
relation to the remedies available to unmarried partners by 
introducing the idea of a Joint Family Venture (“JFV”). The 
direction from the SCC is that we are to consider the unmarried partners’: (1) mutual effort, (2) economic integration, (3) actual intent, and (4) priority of the family in establishing the existence of a JFV. The Supreme Court supplied us with some details of what evidence is needed to decide if a JFV exists by exploring the habits, behaviours and arrangements between unmarried partners.

At this point, I usually stop and check to see if anyone is still 
listening, and I am often met with blank stares. I then assure 
my audience, who usually had no idea that moving in together could give rise to all these issues, that family law lawyers are eagerly reading up on reported decisions interpreting Kerr, in order to get a better grasp on this very difficult area of law.

Again the Alberta Human Rights Tribunals of Alberta interferes where it should NOT

In the recent decision of  Mihaly v. The Association of Professional Engineers, Geologists and Geophysicists of Alberta, 2014 AHRC 1 (CanLII) the Alberta Human Rights Tribunal has interfered with the ability of APEGGA, a self-regulated profession, to self regulate.  This decision ostensibly renders nugatory the legislation which authorizes engineers to self regulate.  Hopefully this will be appealed as it is not the place of the Alberta Human Rights Tribunal to dictate to APEGGA how to test for competency.

Ezra Levant, as he often does, leads the charge against this incremental interference with what are fundamentally private sectors of our society; the link to his site is Tweets show human rights judge’s unvarnished views .

Civility in Complaining - a Reblog

A reblog of portions of: HOW TO COMPLAIN - To get results, be prepared and be persistent. It also pays to be civil - BY LISA GERSTNER

WHETHER IT FILLS YOU WITH dread or gets your adrenaline pumping, confronting a business about a problem with a product or service is a task that takes time and patience. Some companies have customer service reps who are trained to ensure that you get satisfaction—up to a point. Others put you through phone-menu pinball, bouncing you around until you throw up your hands in frustration. Fortunately, even if you encounter the kind of business that hopes you give up and go away, with the right preparation, tools and mind-set, you have a good chance of getting what you want.

TAKE A DEEP BREATH

...

SPEAK UP

...

KEEP IT CIVIL

If a customer-service issue has you steamed, cool down enough so you can have a civil conversation. Remember that a human is at the other end—you’re likely to get better results if you don’t lose sight of that. “If you’re genuine, that goes a very long way,” says Sampson. Be firm, but keep your interaction free of insults, shouting (or its online equivalent, using all capital letters) and cursing. Reps who feel verbally abused may refuse to assist you or flag you in their files—meaning that you’ll go into future conversations with a strike against you.

Do you have anything nice to say? Launch the conversation with that, says Khozam. For example, tell a bank that you’ve been a satisfied customer for 25 years, or a restaurant that you usually love the meals it serves. Then explain your issue specifically and clearly, and ask the representative if she’s the right person to help you with it. Keep records of your correspondence: Get the names of people you speak to, take note of the date and time of your interaction, and save online conversations of all types—you may, for instance, want to take a screen shot of any Twitter dialogue you have with a company in case it removes tweets later. If the problem isn’t resolved immediately, tell the business that you plan to follow up by a certain date if you don’t hear back.

If the agent asks a lot of questions about the circumstances surrounding the issue, it may benefit you to go along with the request, even if what she’s asking for seems irrelevant. “Sometimes representatives can make exceptions if you phrase a problem a certain way,” Sampson says.

Still, even well-meaning agents may have limits on what they can do for you. They may be required to read from a script or permitted to credit, say, only up to $25 to your account, says Guy Winch, author of The Squeaky Wheel: Complaining the Right Way to Get Results, Improve Your Relationships, and Enhance Self-Esteem. If your conversation with a lower-level representative is fruitless or you feel that his best offer doesn’t do your issue justice, ask for a supervisor. You could also try asking to connect to the customer-retention or customerloyalty department.

Unhappy enough to stop using the business’s product or service? Say so. That’s what Meryn Rathert of Columbus, Ind., did after a vehicle from National Car Rental broke down as she drove to the airport. The agency sent a cab, but it took 45 minutes to arrive—especially stressful given that Rathert had to catch an international flight—and she had to use much of the cash she had planned to take on her vacation to cover the fare. When she got to the airport, agents at the National desk said they didn’t have any cash to pay her back and could reimburse only the $60 car-rental fee. So when she returned from the trip, she called the agency and spoke to a manager, who reassured her that she’d receive full compensation for the cab fare. Nevertheless, Rathert told him that the headache was severe enough to steer her away from National in the future. In an effort to win her back, National sent her a check for more than $200—the cash equivalent of a three-day car rental plus the cost of the cab ride.

Try offering a creative solution. When Amy Schmitz couldn’t locate the proof of purchase for a malfunctioning blender, the manufacturer told her that she’d have to send it back on her dime so that the company could verify that the blender didn’t work before sending her a replacement. Schmitz says the shipping fees probably would have cost more than the blender was worth. To prove that she wasn’t faking the complaint in an attempt to nab a free blender, she offered to snip the blender’s electrical cord and e-mail the company a photograph of it to show that it would no longer be useful. The company agreed.

If a representative does a bang-up job on your case, let him know—and his manager too, if possible. And if you took your complaint to social media, create some goodwill by telling your followers that your saga had a happy ending.

PRESS ON

...

I have focused on the issue of civility.  In my practice I have found that you "get more bees with honey than you do with vinegar".  I cannot encourage persons enough to remember that when communicating with others in a creditor and debtor relationship that we are all human beings and none of us like being sworn at, disrespected or otherwise treated poorly.  The bully may think that this will succeed but it will not; civility is always best.

Purchaser's Liens - A Summary

In a recent case out of the Supreme Court of BC, Pan Canadian Mortgage Group Inc. v. 679972 B.C. Ltd.,2013 BCSC 1078, the Honourable Madam Justice M. Koenigsberg provided an excellent summary of the nature of a Purchaser's Lien in dismissing the assertion of Judgment Creditors that they had priority.  The following text from pages 19 to 22; I have highlighted what I consider a few salient points:

 "What are the Essential Features or Requirements for a Purchaser’s Lien?

[90] A purchaser’s lien is a well-established equitable charge over property that arises at the time a purchaser of property provides a deposit or funds to the vendor or their agent in part or whole payment of the purchase price. A purchaser’s lien is created by equity not by contract. The law establishing a purchaser’s lien has a long history stretching from at least the mid-1800’s to today. A case similar to the one at bar is Whitbread & Co., Limited v. Watt, [1902] 1 Ch. 835 at 838. In this case the purchaser was purchasing a freehold public-house plot on a building estate. The purchase was to complete as soon as 300 houses had been built on the estate. The 300 houses were not built. The purchaser sued for a return of their monies based upon a purchaser’s lien. Lord Justice Vaughan Williams stated at 838:

...

The lien which a purchaser has for his deposit is not the result of any express contract; it is a right which may be said to have been invented for the purpose of doing justice. ...

[91] One of the first cases to discuss purchaser's liens is the oft cited case of Rose v. Watson, [1864] 10 H.L.C. 672. The House of Lords found that when a portion of the purchase price for property was paid the payor obtained a security interest, similar to that of a mortgagee, equivalent to the funds paid. Lord Westbury stated at 682:

...

.... It was money advanced upon the faith that the land, the subject of the contract, would become the property of the Respondent; and being so paid as part of the purchase-money under the contract, and being paid in advance, on the faith of the vendor’s performance of the contract, I think that your Lordships will have little difficulty in coming to the conclusion that those sums of money thus paid formed principal sums, in respect of which there became a lien from the time of the payment of them; ... [Emphasis added]

[92] As stated by Di Castri in the Law of Vendor and Purchaser, 3rd edition, Volume 3 at para. 913, p. 18-20:

...

... The lien is decreed independently of the contract, which does not give it, but furnishes the reason for the decree. ...

[93] At the time any payment on account of the purchase price is made, a purchaser obtains an equitable right to security in the land to the extent of their payments. This right is immediately vested to secure repayment of the purchase monies so paid in the event the contract is not completed through no fault of the purchaser. (Whitbread; Rose; Capital Plaza Developments Ltd. v. Counterpoint Enterprises Ltd., [1985] B.C.J. No. 321 (S.C.) at paras. 9-11).

[94] Put another way, the courts have found that the payment on account of the purchase price (whether as a deposit or otherwise) is not just a partial payment but is security for the completion of the purchase. If the purchaser fails to perform their part of the contract, the vendor has security against the funds; if the vendor fails to perform, the purchaser can recover the funds and is entitled to a lien on the subject matter of the contract. By virtue of the lien the purchaser is a secured creditor. (Levy v. Stogdon, [1898] 1 Ch. 478 (C.A.) at 486; J.A.R. Leaseholds Ltd. v. Tormet Ltd. and Kaye (1965), 48 D.L.R. (2d) 97 (Ont. C.A.))

[95] Di Castri has described the nature of a purchaser's lien at (Law of Vendor and Purchaser, 3rd edition, Volume 3, at para. 913, pp. 18-20):

...

Where a contract goes off without any misconduct or default on the part of the purchaser, he acquires an equitable lien, on the subject land, in general commensurate with the purchase money paid. To put this another way, in order to do justice between a vendor and a purchaser under a contract for the sale of land, equity gives the latter a lien on the estate by way of an equitable charge in respect of all payments made on account of the price, interest, and costs.

While there is no doubt that an action to enforce a purchaser’s lien is based on an affirmance of the contract, there appears to be some technical legal question as to the affirmative right of a purchaser to claim his lien, where he has rescinded the contract. It is submitted, however, that whether the transaction falls through by reason of the inability of the vendor to convey as agreed or whether the contract is rescinded before completion by reason of the vendor’s misrepresentation of a material fact, in either event, the purchaser’s right to a lien cannot be affected. The objection is urged that, assuming the right of a purchaser to a lien, it is abandoned where the contract is rescinded. The argument is that

...

In order to ascertain the real nature of the exercise of equitable power, it may be considered in relation to its basis and to the result of its operation. The basis is the promise of the vendor to convey the land, as and when agreed, and that meanwhile he is a trustee of the legal title for the purchaser to the extent of the purchase moneys paid. The extent of its operation is to subject the land to the execution of a trust, either to convey, where there has been full performance by the purchaser or to return him his moneys, where the contract has failed and ceases to be binding through no fault of the latter. It supplies a remedy where the law falls short of accomplishing full justice. If equity lays hold of a pretext, or adopts a fiction, in such a case it is not more than it does in many other cases, in order to enforce a natural right and to affect a just result.

...

[96] The enforcement of a purchaser’s lien can be sought when there is no ability to enforce specific performance or where the purchaser does not want specific performance. If specific performance is available to a purchaser title can be transferred or the purchaser can elect to claim under the purchaser's lien. In the circumstances where specific performance is not possible, the purchaser’s equitable interest in the land remains which is enforceable through the lien. (Rose; Levy; Cornwall v. Henson, [1899] 2 Ch. 710 at 714; Law of Vendor and Purchaser,

3rd edition, Volume 3, at para. 919, pp.18-26; J.A.R. Leaseholds Ltd. at para. 28).

[97] The court found that upon paying the monies the purchaser obtained a purchaser’s lien over the property as a whole (Whitbread). The principle that the lien will apply to the property as a whole rather than to the particular portion of the property for which the funds were advanced was reiterated in the British Columbia case of Lehmann v. B.R.M. Enterprises Ltd. (1978), 88 D.L.R. (3d) 87 (B.C.S.C.). In this case the plaintiff was the purchaser of a strata unit in a planned strata development. He had paid the entire purchase price for the unit to the vendor. The vendor went bankrupt and did not complete the development and did not file a strata plan. The court found that the right to the purchaser’s lien was not affected by the fact that the strata plan had not been registered. The right to the lien was not dependent upon the ability of the vendor to convey title and the purchaser was entitled to a lien over the entire development property for the amount paid notwithstanding that the lands that were the subject of the contract did not exist and specific performance could not be ordered."

Justice Koenigsberg applied this equitable principal to find in favour of the parties who registered purchaser’s liens.  It is a powerful remedy which arises in any circumstance when a purchaser pays money on a condominium project which is not completed. Developer’s often try to control this dynamic by providing in the purchase and sale agreement that a purchaser may not register a Caveat/Lien to protect money which has been paid to the Developer prior to the development occurring.  This failure to register can be fatal and it is suggested that purchasers should not agree to such limitation.

The purchaser’s lien also arises under what is referred to as an Agreement for Sale (this is distinct from an Agreement to Sell).  In this circumstance a purchaser provides money against the purchase price and continues to make payments until the full purchaser price is paid.  The title to the property subject of the sale remains in the name of the vendor and the vendor is not obliged to transfer the property to the purchaser until all payments are made.  In Alberta our Law of Property Act imposes upon vendors the obligation to commence a foreclosure in the even that a purchaser breaches an Agreement for Sale.  This statutory requirement prohibits vendors from being unjustly enriched.  The property subject of the sale will as part of the foreclosure be required to be sold and the monies paid by the purchaser are contemplated by the Court in establishing the redemption period which proceeds the Court ordered sale.  The money paid by the purchaser forms an equitable interest in the subject property and is only forfeited to the vendor and the Agreement for Sale extinguished upon completion of the foreclosure action.