Canada: Alberta Court Of Appeal Clarifies Summary Judgment And Limitation Period For Breaches Of Contract

On February 6, 2019, the Alberta Court of Appeal delivered its much anticipated decision in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 (Weir-Jones). The decision provides clarification and guidance on two topics in which competing lines of authority had recently emerged in Alberta: (1) the correct standard of proof for summary judgment and, to a lesser extent, (2) the application of the discoverability principle in determining the limitation period applicable to breaches of contract in Alberta.

Background

The Supreme Court of Canada's 2014 decision in Hryniak v Mauldin called for a "culture shift" towards more proportionate, timely and affordable alternatives to a full trial and embraced summary judgment (the resolving of a dispute without a trial) as one such alternative. But in the aftermath of Hryniak, the standard of proof to be met by the party seeking summary judgment slowly became an open question. Hryniak appeared to support a lower, easier to satisfy standard (balance of probabilities) than the standard previously required to obtain summary judgment but in the years following Hryniak, courts described the standard as everything from "obvious," and "incontrovertible" to "beyond doubt". At the Court of Appeal level in Alberta, two diverging camps had formed—one saying that the applicable standard to be met by the moving party was that their position was "unassailable", or unable to be attacked by the respondent, and the other maintaining that the applicable standard was a "balance of probabilities."

The standard of proof for summary judgment is confirmed as balance of probabilities

In Weir-Jones, the Court of Appeal (comprised of a rare 5-judge panel) rejected the unassailability standard and confirmed that that the threshold burden on the moving party with respect to establishing the factual basis of a summary judgment application is, in fact, proof on a balance of probabilities. Citing the Supreme Court of Canada in F.H. v McDougall, 2008 SCC 53, the Majority confirmed that "there is only one standard of proof in civil law: proof on a balance of probabilities".1

"Balance of probabilities" generally means "more probable than not" and is sometimes expressed as "more than 50 per cent likely to be true." However, what Weir-Jones makes clear that balance of probabilities applied in the context of summary judgment does not mean that summary judgment will always be appropriate when the standard is met—it isn't the case that "51% carries the day".2

Merely establishing the facts on a balance of probabilities is no guarantee of summary judgment

The balance of probabilities standard only applies to proof of the facts and is but one of the steps in determining whether it is possible to decide the case on a summary basis.3 Establishing the facts on a balance of probabilities is not a proxy for summary judgment.4Consistent with the modern principles of summary judgment set out in Hryniak, "whether summary judgment is appropriate and fair involves an element of judicial discretion, but making the underlying findings of fact is an exercise in weighing the evidence".5 Where there are "difficult factual questions, requiring a tough call on contested facts", there may well be a "genuine issue requiring a trial, even if the moving party has met the balance of probabilities threshold burden of proof".6

The key considerations that apply to summary judgment applications in Alberta

The Majority of the Court of Appeal set out the key considerations to apply to summary judgment applications in Alberta at paragraph 47 of its decision, noting that the elements can be applied in any order. In summary, the key considerations are as follows:7

  1. Is it possible to fairly resolve the dispute on a summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?
  2. Has the moving party met the burden on it to show that there is either "no merit" or "no defence" and that there is no genuine issue requiring a trial? Mere establishment of the facts to that standard is not a proxy for summary adjudication.
  3. If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party's case, by identifying a positive defence, by showing that a fair and just summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial.
  4. In any event, the Court must be left with sufficient confidence in the state of the record such that it is prepared to exercise the judicial discretion to summarily resolve the dispute.

The Majority further explained that, at any stage of the analysis, the Court may rule that determining the action summarily "is inappropriate or potentially unfair because the record is unsuitable, the issues are not amenable to summary disposition, a summary disposition may not lead to a "just result," or there is a genuine issue requiring a trial".8

Other notable findings relevant to the standard of proof on summary judgment

Other notable findings and clarifications of the Majority relevant to the standard of proof on summary judgment include the following:

  • "Presuming that summary disposition will always be 'unjust' unless it meets some high standard of irrefutability defeats the whole concept of the 'culture shift' mandated by Hryniak v Mauldin".9
  • "The law is now clear that the mere presence of some conflicting evidence on the record does not preclude summary disposition".10
  • "...having regard to overall considerations of fairness and the ability 'to achieve a just result', there can be occasions when the 'best foot forward' approach is not strictly applied. That may happen, for example, where one party effectively controls all of the records and evidence with respect to the claim... In those circumstances, the application for summary determination can be adjourned to permit some pre-trial discovery".11

The discoverability principle applies to breaches of contract in Alberta

The Court of Appeal in Weir-Jones also clarified whether or not the discoverability principle applies to breach of contract claims in Alberta. It does. The Court confirmed:

  • The limitation period starts to run for breaches of contract based on the three part test set out in the Limitations Act, "based on a reasonable awareness of the injury, attribution of the injury to the defendant, and a claim warranting a proceeding for a remedial order."12
  • "The present Limitations Act contains no separate rule for limitation periods for breaches of contract."13
  • In many cases arising from breach of contract the three part test under the Limitations Act may in fact be met at the time of the breach of contract, but that is not invariably so.14

Weir-Jones clears up a line of authority in Alberta that treats breaches of contract differently

The Court of Queen's Bench in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2017 ABQB 491 held, on the basis of a number of older Alberta cases, that the discoverability principle does not apply to breaches of contract actions in Alberta.15 The discoverability principle is the principle that a plaintiff's limitation period begins running when it knew or ought to have known of the breach.

In clarifying that the discoverability principle does in fact apply to breaches of contract, the Court of Appeal in Weir-Jones explained that, in each of the decisions that the lower court relied on to support the proposition that the discoverability principle did not apply, the Court had been interpreting a prior version of the Limitations Act. That older version of the Act drew a distinction between claims for breach of contract and claims in tort, while the current Act does not. This interpretation is consistent with the Court's previous pronouncements (endorsed by the Supreme Court of Canada)16 that "a main purpose of the Limitations Act was the simplification of limitations law, by the imposition of one period (two years) for nearly all causes of action."17

The current Limitations Act does not distinguish contract claims from other claims

The Limitations Act in force in Alberta now clearly applies the discoverability principle to all claims which fall under the Act, including contractual breaches.

Since the current Limitations Act provides the test for the commencement of the limitation period, alternative starting points (such as the date of the breach, the date the last services are provided under a service contract, the date the economic loss emerges, the date of acceptance of repudiation, or termination of the contract) do not apply, unless the alternative proposed dates happen to coincide with the test in the Act.18

Conclusion

Weir-Jones offers welcome clarification to two points of Alberta law. First, it confirms that the appropriate standard of proof to be met by an applicant seeking summary judgment is "a balance of probabilities", but confirms that this is just the first step in the overall summary judgment analysis. Secondly, the case clarifies that the discoverability principle does indeed apply to breach of contract claims in Alberta.

Footnotes

1 Para 28

2 Para 30

3 Para 30

4 Para 27

5 Para 29

6 Para 30

7 Para 47

8 Para 47

9 Para 25

10 Para 36

11 Para 40

12 Para 50

13 Para 52

14 Para 52

15 Para 30 (Chambers decision)

16 Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19 at para 36

17 Daniels v. Mitchell, 2005 ABCA 271 at para 30

18 Para 53

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