Feb 26, 2016

ABCA SUMMARY: Condo Corp. 0321365 v Cuthbert

Condominium Corporation No. 0321365 v Cuthbert, 2016 ABCA 46 (CanLII)

This matter relates to the appeal of a case management judge’s refusal to grant summary dismissal applications.

Facts:

This matter arises from the construction of a condominium building, which was later evacuated and demolished due to structural deficiencies. The condominium corporation sued for damages arising from faulty design and construction.

The defendant, Cuthbert, was alleged to have acted as a “cost consultant”, defined by section 14 of the Condominium Property Act. In its duties, it issued reports as the lender based on the quantity of completed work. The condominium board, however, alleges that Cuthbert owed a duty of care to capably perform their contractual obligations, and that this included undertaking independent evaluations on the design, engineering, and construction quality of the project. In response, Cuthbert argued that its duty was to investigate the quantity of work, not the quality of it.

The other defendants, Macleod Dixon LLP and Burstall Winger LLP, were responsible for holding purchase monies in trust until the condominium project was substantially complete, as determined by Cuthbert. They argued that the monies were subject to trust conditions as well as provisions under the Condominium Property Act, which were satisfied before the funds were released. In response, the condominium board argued that these obligations were breached when the law firms learned about deficiencies in the project, but failed to hold back sufficient funds for remediation.

The case management judge dismissed both applications for summary dismissal, determining that the evidence presented was contradictory and contested on many material matters, including the roles and obligations of each party. The judge was, therefore, unable to decide whether either party owned an independent duty under section 14 of the Condominium Property Act and ruled that a genuine issue requiring trial was present.

Analysis:

Whether the court applied the proper test in deciding to dismiss an application for summary dismissal must be reviewed on the standard of correctness. The judge’s findings on the record, however, are to be reviewed for reasonableness. The Court noted that appellate intervention will only be warranted if the chambers judge “clearly misdirected himself on the facts or the law, proceeded arbitrarily, or if the decision is so clearly wrong as to amount to an injustice”. Appeals from denials of summary judgment motions will, therefore, be difficult to establish.

Summary judgement will not be possible if the evidence conflicts on material facts because a chambers judge cannot weigh evidence or credibility at that time. Further, summary judgment will not be proper if there are complex or unsettled legal issues, or legal issues intertwined with facts.

In this action, the chambers judge applied the proper test for summary judgement. It was noted, however, that there were legal questions intertwined with disputed facts, as well as novel claims in regards to the duty of care owed under the Condominium Property Act. Given that these were reasonable findings, the Court determined that there was no reviewable error on part of the chambers judge and dismissed the appeals.

Conclusion: If a matter deals with novel issues or legal issues intertwined with facts, and the chambers judge is presented with contradictory evidence regarding same, summary judgement will not be appropriate.