





CITATION:  Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA
      764



DATE: 20111205



DOCKET: C51986, C52912, C52913, C53035, C53395



COURT OF APPEAL FOR ONTARIO



Winkler C.J.O., Laskin, Sharpe, Armstrong and Rouleau JJ.A.



C51986



BETWEEN



Combined Air Mechanical Services Inc., Dravo
          Manufacturing Inc. and Combined Air Mechanical Services



Plaintiffs (Appellants)



and



William Flesch, WJF Investments Inc., Service Sheet
          Metal Inc. and James Searle



Defendants (Respondents)



C52912



AND BETWEEN



Fred
          Mauldin, Dan Myers, Robert Blomberg, Theodore Landkammer, Lloyd Chelli,
          Stephen Yee, Marvin Cleair, Carolyn Cleair, Richard Hanna, Douglas Laird,
          Charles Ivans, Lyn White and Athena Smith



Plaintiffs (Respondents)



and



Cassels
          Brock & Blackwell LLP, Gregory Jack Peebles and
Robert Hryniak



Defendants (
Appellant
)





C52913



AND BETWEEN



Bruno
          Appliance and Furniture, Inc.



Plaintiff (Respondent)



and



Cassels
          Brock & Blackwell LLP, Gregory Jack Peebles and
Robert Hryniak



Defendants (
Appellant
)



C53035



AND BETWEEN



394
          Lakeshore Oakville Holdings Inc.



Plaintiffs (Respondent)



and



Carol
          Anne Misek
and Janet Purvis



Defendants (
Appellant
)



C53395



AND BETWEEN



Marie Parker, Katherine Stiles and Siamak Khalajabadi



Plaintiffs (Appellants)



and



Eric Casalese, Gerarda Dina Bianco Casalese, Pino
          Scarfo, Antonietta Di Lauro and Mauro Di Lauro



Defendants (Respondents)



J. Gardner Hodder and Guillermo Schible, for the appellants
          in
Combined Air v. Flesch



Daniel F. Chitiz
          and Tamara Ramsey, for the respondents in
Combined Air v. Flesch



Sarit E. Batner and
          Moya J. Graham, for the appellant Robert Hryniak in
Mauldin v. Hryniak
and
Bruno Appliance and Furniture v. Hryniak



Javad Heydary,
          David K. Alderson and Ruzbeh Hosseini, for the respondents in
Mauldin v.
          Hryniak
and
Bruno Appliance and Furniture v. Hryniak



David A. Taub and
          Dominique Michaud, for the appellant Misek in
394 Lakeshore v. Misek



William A.
          Chalmers, for the respondent in
394 Lakeshore v. Misek



Gregory M.
          Sidlofsky and Faren H. Bogach, for the appellants in
Parker v. Casalese



Mark A. Klaiman,
          for the respondent Scarfo in
Parker v. Casalese



Charles Wagman, for
          the respondents Casalese and Di Lauro in
Parker v. Casalese



Malliha Wilson and
          Kevin Hille, for the
amicus curiae
the Attorney General of Ontario



David W. Scott,
          Q.C. and Patricia D.S. Jackson, for the
amicus curiae
The Advocates
          Society



Paul R. Sweeny,
          Robert J. Van Kessel and David L. Sterns, for the
amicus curiae
Ontario Bar Association



Allan Rouben and
          Ronald P. Bohm, for the
amicus curiae
Ontario Trial Lawyers
          Association



Robert G. Zochodne,
          for the
amicus curiae
The County and District Law Presidents
          Association



Heard: June 21, 22 and 23, 2011



On appeal from the
          order of Justice Edward P. Belobaba of the Superior Court of Justice, dated
          April 8, 2010, with reasons reported at 2010 ONSC 1729 (C51986); and on
          appeal from the order of Justice A. Duncan Grace of the Superior Court of
          Justice, dated October 22, 2010, with reasons reported at 2010 ONSC 5490
          (C52912/C52913); and on appeal from the order of Justice Paul M. Perell of
          the Superior Court of Justice, dated November 2, 2010, with reasons reported
          at 2010 ONSC 6007 (C53035); and on appeal from the order of the Divisional
          Court (Justices Emile R. Kruzick, Katherine E. Swinton and Alison Harvison
          Young J.J.), dated October 21, 2010, with reasons reported at 2010 ONSC 5636
          (C53395).



Table of Contents

I.

Introduction
II.

The Former
    Rule 20
III.

The
    Osborne Report
IV.

The
    Amendments to Rule 20
V.  Analysis of the Amended Rule 20
1. Overview
2. The Types of Cases that are Amenable to Summary
  Judgment
3.

The Use of the Power to Order Oral Evidence
4.

Trial Management Under Rule 20.05
5. Costs in Rule 20.06
6. The Obligation on Members of the Bar
7.  Standard of Review
8. Summary
VI. Application to the
    Five Appeals

Combined Air
    Mechanical v. Flesch
(C51986)
1. Introduction
2. Facts
3. Motion for Summary Judgment
4. The Motion Judges Order for Oral Evidence Under Rule
    20.04(2.2)
5. Issues
6. Analysis
(1)

Did
    the motion judge err by finding that CRSC was not a same or similar business
    to, and that it did not compete with, Combined Air?
(2) Did the motion judge err in exercising his power to order
    the presentation of oral evidence under rule 20.04(2.2)?
7.

Conclusion

Mauldin v. Hryniak
(C52912);
Bruno Appliance and
    Furniture v. Hryniak
(C52913)
1.   Introduction
2.   Facts
(1)

The
    Mauldin Group Action
(i) The investment
(ii) What happened to the Mauldin groups
  investment?
(iii) Hryniaks explanation
(iv) The motion judges findings
(2)

The
    Bruno Action
(i)

The investment
(ii)

What happened to Brunos investment?
(iii)

Hryniaks explanation
(iv)

The motion judges findings
3.   Analysis
(1)

Did
    the motion judge err in holding that it was in the interest of justice to grant
    summary judgment?
(2)

Did
    the motion judge err by failing to hold that each action raised genuine issues
    requiring a trial?
(i)

The Mauldin group action
(ii)

The Bruno action
4.   Conclusion

394 Lakeshore Oakville Holdings Inc. v. Misek
(C53035)
1.   Introduction
2.   Facts
3.   Motion
    for Summary Judgment
4.   Issues
5.   Analysis
(1)

Did
    the motion judge err in deciding whether there was a prescriptive easement on a
    Rule 20 motion?
(2)

Did
    the motion judge err in deciding that Purvis enjoyed a personal license rather
    than a prescriptive easement?
(3)

Did
    the motion judge err in deciding that the easement claim was not defined with
    adequate certainty or limited in scope?
(4)

Did
    the motion judge err in deciding that the easement claim was not reasonably
    necessary to enjoy the Misek property?
6.   Conclusion

Parker v. Casalese
(C53395)
1.   Introduction
2.   Facts
3.   Motion
    for Summary Judgment
4.   Issues
5.   Analysis
(1)

How
    should Rule 20 be applied in the context of an action under Rule 76?
6.   Conclusion

Appendix: Text of Rule 20


By the Court:
I.

Introduction
[1]

On January 1, 2010, a significant package of amendments to the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194, came into effect. Motivating the
    amendments was the overriding objective of making the litigation system more
    accessible and affordable for Ontarians. Reflecting this objective, the
    touchstone of proportionality was introduced as a guiding interpretative
    principle under the
Rules
. To this end, rule 1.04(1.1) requires courts
    to make orders and give directions that are proportionate to the importance
    and complexity of the issues, and to the amount involved, in the proceeding.
[2]

Of the changes introduced, the amendments to Rule 20, which governs
    motions for summary judgment, were arguably the most important. Simply put, the
    vehicle of a motion for summary judgment is intended to provide a means for
    resolving litigation expeditiously and with comparatively less cost than is
    associated with a conventional trial. Although such motions have long been
    available in this province, their utility had been limited in part by a line of
    jurisprudence from this court that precluded a judge on a summary judgment
    motion from weighing the evidence, assessing credibility, or drawing inferences
    of fact.  These powers were held to be reserved for the trial judge.
[3]

The 2010 amendments to Rule 20 effectively overruled this line of
    authority by specifically authorizing judges to use these powers on a motion
    for summary judgment unless the judge is of the view that it is in the interest
    of justice for such powers to be exercised only at a trial. One of the
    objectives behind enhancing the powers available to judges on a summary
    judgment motion was to make this form of summary disposition of an action more
    accessible to litigants with a view to achieving cost savings and a more
    efficient resolution of disputes. Indeed, the principle of proportionality is
    advanced by the expansion of the availability of summary judgment.
[4]

However, it is equally clear that the amendments to Rule 20 were never
    intended to eliminate trials. In fact, the inappropriate use of Rule 20 has the
    perverse effect of creating delays and wasted costs associated with preparing
    for, arguing and deciding a motion for summary judgment, only to see the matter
    sent on for trial.
[5]

In the months following the amendments to Rule 20, it has become a
    matter of some controversy and uncertainty as to whether it is appropriate for
    a motion judge to use the new powers conferred by the amended Rule 20 to decide
    an action on the basis of the evidence presented on a motion for summary
    judgment. Judges of the Superior Court of Justice have expressed differing
    views on this and other interpretative issues raised by the amendments. Both
    the bench and the bar have turned to this court for clarification on what the
    amended rule does, and does not, accomplish.
[6]

To provide some guidance to the profession, this court convened a
    five-judge panel to hear five appeals from decisions under the amended rule. In
    some of these cases, summary judgment was granted, while in others the motion
    was dismissed in whole or in part. With their varying outcomes, these cases
    raise a number of issues concerning the interpretation of the new Rule 20,
    including the nature of the test for determining whether or not summary
    judgment should be granted, the scope and purpose of the new powers that have
    been given to judges hearing motions for summary judgment, and the types of
    cases that are amenable to summary judgment.
[7]

In addition to hearing from counsel representing the parties on the
    appeals, the court appointed the following five
amicus curiae
to provide
    submissions on how the amended rule should be interpreted and applied: the
    Attorney General of Ontario, The Advocates Society, the Ontario Bar
    Association, the Ontario Trial Lawyers Association, and The County and District
    Law Presidents Association. The
amicus
were asked to address the
    meaning and scope of the amended Rule 20, but advised to take no position on
    the facts or merits of any of the decisions under appeal.
[8]

These reasons will proceed as follows. First, there will be a historical
    review of Rule 20 before the 2010 amendments, including a review of some of the
    leading cases interpreting the former rule. Next, there will be an examination
    of the findings and recommendations of the former Associate Chief Justice of Ontario,
    the Honourable Coulter A. Osborne, Q.C., in his report entitled
Civil
    Justice Reform Project: Summary of Findings and Recommendations
(Toronto:
    Ontario Ministry of the Attorney General, 2007) (the Osborne Report). This
    will be followed by an analysis of the 2010 amendments to determine the extent
    to which Mr. Osbornes recommendations concerning summary judgment were
    implemented. We will then explain the general principles to be followed in
    applying the amended Rule 20.  Finally, we will apply these principles to the
    five appeals before the court.
II.        The
  Former Rule 20
[9]

Rule 20 came into force in Ontario on January 1, 1985. Prior to this,
    there had  been a summary judgment mechanism for resolving an action in the
Rules
    of Civil Procedure
, but it operated on a very limited basis  only a
    plaintiff was entitled to move for summary judgment and only on enumerated
    claims for a debt or liquidated demand. With the introduction of Rule 20, the
    remedy of summary judgment appeared to be more widely available. For example,
    summary judgment could be requested by either plaintiffs or defendants in the
    context of any action.
[10]

The pertinent provisions of the former Rule 20 state:
20.01 (1)  A plaintiff may, after the defendant has
    delivered a statement of defence or served a notice of motion, move with
    supporting affidavit material or other evidence for summary judgment on all or
    part of the claim in the statement of claim.
...
(3) A defendant may, after delivering a statement
    of defence, move with supporting affidavit material or other evidence for
    summary judgment dismissing all or part of the claim in the statement of claim.

20.04 (1)  In response to affidavit material or
    other evidence supporting a motion for summary judgment, a responding party may
    not rest on the mere allegations or denials of the partys pleadings, but must
    set out, in affidavit material or other evidence, specific facts showing that
    there is a genuine issue for trial.
(2)  The court shall
    grant summary judgment if,
(a) the court is satisfied that
    there is no genuine issue for trial with respect to a claim or defence; or
(b) the parties agree to have all or
    part of the claim determined by a summary judgment and the court is satisfied
    that it is appropriate to grant summary judgment.
...
(4) 
    Where the court is satisfied that the only genuine issue is a question of law,
    the court may determine the question and grant judgment accordingly, but where
    the motion is made to a master, it shall be adjourned to be heard by a judge.
20.05
    (1) Where summary judgment is refused or is granted only in part, the court may
    make an order specifying what material facts are not in dispute and defining
    the issues to be tried and may order that the action proceed to trial by being,
(a) placed forthwith, or within a
    specified time, on a list of cases requiring speedy trial; or
(b) set down in the normal course,
    or within a specified time, for trial.
[11]

Under the former Rule 20, a motion for summary judgment was heard
    entirely on the basis of a paper record that typically consisted of affidavits
    sworn by the witnesses, transcripts of examinations of the witnesses on their
    affidavits, and, if available, any transcripts of examinations for discovery.
[12]

Based on this written record, the court was required to determine
    whether there was any genuine issue for trial with respect to a claim or
    defence. If the court was satisfied that there was no such genuine issue, the
    court was required to grant summary judgment and the action would either be
    allowed or dismissed without the need for a full trial.
[1]

If the court was satisfied the only genuine issue was a question of law, then
    the judge had the discretion to determine the issue on the motion. If the court
    determined that a trial was necessary to resolve a genuine issue of fact or
    law, then the motion would be dismissed and the matter would proceed to trial.
    It was also open to the motion court to grant a motion in part, as well as to
    specify what material facts were not in dispute, to define the issues to be
    tried, and to order that the trial be heard on an expedited basis.
[13]

The leading case on the meaning of genuine issue for trial under the former
    Rule 20 is the decision of Morden A.C.J.O. in
Irving Ungerman Ltd. v.
    Galanis
(1991), 4 O.R. (3d) 545 (C.A.), at p. 551:
It is safe to say that genuine means not spurious
    and, more specifically, that the words for trial assist in showing the meaning
    of the term. If the evidence on a motion for summary judgment satisfies the
    court that there is no issue of fact which requires a trial for its resolution,
    the requirements of the rule have been met. It must be clear that a trial is
    unnecessary. The burden is on the moving party to
satisfy
the court that
    the requirements of the rule have been met. Further, it is important to keep in
    mind that the court's function is not to resolve an issue of fact but to
    determine whether a genuine issue of fact exists. [Emphasis in original.]
[14]

Morden A.C.J.O. also described the function served by the mechanism of
    summary judgment as follows, at pp. 550-51:
A litigants day in court, in the sense of a
    trial, may have traditionally been regarded as the essence of procedural
    justice and its deprivation the mark of procedural injustice. There can,
    however, be proceedings in which, because they do not involve any genuine issue
    which requires a trial, the holding of a trial is unnecessary and, accordingly,
    represents a failure of procedural justice. In such proceedings the successful
    party has been both unnecessarily delayed in the obtaining of substantive
    justice and been obliged to incur added expense. Rule 20 exists as a mechanism
    for avoiding these failures of procedural justice.
[15]

Another often-cited decision under the former Rule 20 is that of Henry
    J. in
Pizza Pizza Ltd. v. Gillespie
(1990), 75 O.R. (2d) 225 (Gen.
    Div.). Henry J. explained at p. 237 that a summary judgment court is to take a
    hard look at the merits and decide whether the case merits reference to a
    judge at trial. If there are real issues of credibility, the resolution of
    which is essential to determination of the facts, the case will no doubt,
    have to go to trial.  However, parties to the motion are required to put
    their best foot forward through filing sworn affidavits and other material. In
    Henry J.s words at p. 238:  It is not sufficient for the responding
    party to say that more and better evidence will (or may) be available at
    trial.  The occasion is now.
[16]

Henry J. also held at p. 238 that the motion judge is expected to be
    able to assess the nature and quality of the evidence and to determine if the
    case is so doubtful that it does not deserve consideration through a long and
    expensive trial. The court can draw inferences from the evidence on a common
    sense basis and look at the overall credibility of a partys position.  The
    court is to ask:  does the partys case have the ring of truth about it such
    that it would justify consideration at a regular trial?
[17]

Henry J.s view that it was open to a judge to assess the cogency of the
    evidence on a summary judgment motion was superseded by a subsequent decision
    of this court in
Aguonie v. Galion Solid Waste Material Inc.
(1998), 38
    O.R. (3d) 161.  Borins J. (sitting
ad hoc
) held, at p. 173:
In ruling on a motion for summary judgment, the
    court will never assess credibility, weigh the evidence, or find the
    facts.  Instead, the courts role is narrowly limited to assessing the
    threshold issue of whether a genuine issue exists as to material facts
    requiring a trial.  Evaluating credibility, weighing evidence, and drawing
    factual inferences are all functions reserved for the trier of fact.
[18]

To similar effect is Borins J.A.s decision in
Dawson v. Rexcraft
    Storage and Warehouse Inc.
(1998), 164 D.L.R. (4th) 257 (Ont. C.A.), at
    paras. 20 and 28:
However, in my respectful view, in determining this
    issue [of the necessity of a trial] it is necessary that motions judges not
    lose sight of their narrow role, not assume the role of a trial judge and,
    before granting summary judgment, be satisfied that it is clear that a trial is
    unnecessary.
...
[A]t the end of the day, it is clear that the
    courts accord significant deference to the trial process as the final arbiter
    of the dispute which has brought the parties to litigation. If there is a
    genuine issue with respect to material facts then, no matter how weak, or how
    strong, may appear the claim, or the defence, which has been attacked by the
    moving party, the case must be sent to trial.  It is not for the motions
    judge to resolve the issue.
[19]

In
Aronowicz v. Emtwo Properties Inc.
, 2010 ONCA 96, 98 O.R. (3d)
    641, at para. 15, Blair J.A. recently commented on the effect of the
Aguonie
and
Rexcraft Storage
decisions in restricting the analytical approach of
    judges on a summary judgment motion:
The proper test for summary judgment  as
    articulated by Morden A.C.J.O. in
Irving Ungerman Ltd. v. Galanis
(1991), 4 O.R. (3d) 545, at pp. 550-51  is whether there is a genuine issue of
    material fact that requires a trial for its resolution.  Neither
Aguonie
    v. Galion Solid Waste Material Inc
. (1998), 38 O.R. (3d) 161 (C.A.), nor
Dawson
    v. Rexcraft Storage and Warehouse Inc.
(1998), 164 D.L.R. (4th) 257 (Ont.
    C.A.)  the two summary judgment authorities most referred to in this province
     alter this test.  Indeed, they affirm it.  What
Aguonie
and
Dawson
and their jurisprudential progeny have done is develop a more restricted view
    of the analytical approach to be adopted by the summary judgment motion judge
    and of the judges role in determining the genuine issue for trial question.
[20]

As noted in the Osborne Report, the strict limits that the jurisprudence
    of this court placed on a judges power to assess the quality and cogency of
    the evidence in determining the genuine issue for trial question were viewed
    as undermining the efficacy of Rule 20 and as deterring litigants from using
    this mechanism for summarily resolving disputes.
III.      The
  Osborne Report
[21]

In June 2006, the Government of Ontario commissioned the former
    Associate Chief Justice of Ontario, the Honourable Coulter Osborne, to provide
    recommendations for making the civil justice system in Ontario more accessible
    and affordable. Following extensive consultations with members of the bench,
    the bar and the public, in November 2007, Mr. Osborne released his report
    containing detailed recommendations relating to 81 substantive areas of law,
    including numerous proposed changes to the
Rules of Civil Procedure
.
[22]

In the section of his report, Summary Disposition of Cases, Mr.
    Osborne observed at p. 33 that there was general agreement that Rule 20 was not
    working as intended: Both lawyers and Superior Court judges said that the
    Court of Appeals view of the scope of motion judges authority is too narrow.
    Mr. Osborne considered the proposal of replacing the no genuine issue for
    trial test in Rule 20 with the no real prospect of success at trial test, as
    appears in the
Civil Procedure Rules
in England and Wales.  However, Mr.
    Osborne expressed doubt that such a wording change would accomplish the
    objective of expanding the scope of summary judgment, noting that English case
    law interpreting the no real prospect of success test is as, or even more
    restrictive than, this courts interpretation of the no genuine issue for
    trial test.
[23]

Mr. Osborne recommended the following three changes to Rule 20. First,
    he proposed eliminating the jurisprudential restrictions that had been placed
    on the powers of a motion judge or master.  In the words of the Report, at p.
    35:
[F]rom my reading of the Court of Appeals
    decisions on summary judgment, it is how the court has confined the scope of
    the powers of a motion judge or master under rule 20, not the no genuine issue
    for trial test itself, that has limited the effectiveness of the rule.
If the objective is to provide an effective
    mechanism for the court to dispose of cases early where in the opinion of the
    court a trial is unnecessary after reviewing the best available evidence from the
    parties, then it seems to me to be preferable to provide the court with the
    express authority to do what some decisions of the Court of Appeal have said a
    motion judge or master cannot do.  That is, permit the court on a summary
    judgment motion to weigh the evidence, draw inferences and evaluate credibility
    in appropriate cases. Therefore, any new rule 20 should provide a basis
    for the motion judge to determine whether such an assessment can safely be made
    on the motion, or whether the interests of justice require that the issue be
    determined by the trier of fact at trial.
[24]

Second, Mr. Osborne proposed, at p. 36, that Rule 20 be amended to
    address the situation where a court is unable to determine the motion without
    hearing
viva voce
evidence on discrete issues:
In my view, amendments to rule 20 ought to be made
    to permit the court, as an alternative to dismissing a summary judgment motion,
    to direct a mini-trial on one or more discrete issues forthwith where the
    interests of justice require
viva voce
testimony to allow the court to
    dispose of the summary judgment motion. The same judge hearing the motion would
    preside over the mini-trial.
[25]

Mr. Osbornes third suggested amendment to Rule 20 was to eliminate the
    presumption in rule 20.06 that substantial indemnity costs be awarded against
    an unsuccessful moving party. As noted in the Osborne Report, at p. 36, there
    was concern that Rule 20 was not being used in appropriate cases because of the
    potentially significant adverse cost consequences of an unsuccessful motion.
    Mr. Osborne suggested replacing the presumption of substantial indemnity costs
    with a rule conferring permissive authority on the court to impose such costs
    on any party where the court is of the opinion that a party has acted
    unreasonably in bringing or responding to a summary judgment motion, or where a
    party has acted in bad faith or for the purpose of delay (at p. 37).
[26]

In addition to these three suggested amendments to Rule 20, Mr. Osborne
    also recommended that a new summary trial mechanism be adopted, similar to Rule
    18A in British Columbias
Supreme Court Civil Rules
, B.C. Reg. 221/90
    [now Rule 9-7].  Mr. Osborne noted, at p. 37, that such an option may provide
    an effective tool for the final disposition of certain cases on affidavit and documentary
    evidence alone.
[27]

These recommendations are encapsulated as follows in the List of
    Recommendations from the Osborne Report:
13.       Do not amend the test of no genuine
    issue for trial in rule 20.
14.       Amend rule 20 to expressly confer on a
    motion judge or master the authority to weigh evidence, evaluate credibility
    and draw any reasonable inference from the evidence and documents filed,
    including adverse inferences where a party fails to provide evidence of persons
    having personal knowledge of contested facts.  This power, however, ought not
    to be exercised where the interests of justice require that the issue be
    determined at trial.
15.       Amend rule 20 to permit the court to
    direct a mini-trial on one or more issues, with or without
viva voce
evidence, where the interests of justice require a brief trial to dispose of
    the summary judgment motion.  The same judicial official hearing the summary
    judgment motion would preside at the mini-trial.
16.       Eliminate the presumption of substantial
    indemnity costs against an unsuccessful moving party in a summary judgment
    motion in rule 20.06. Replace it with a rule conferring permissive authority on
    the court to impose substantial indemnity costs where it is of the opinion that
    any party has acted unreasonably in bringing or responding to a summary
    judgment motion, or where a party has acted in bad faith or for the purpose of
    delay.
17.       Adopt a new summary trial mechanism,
    similar to rule 18A in British Columbia.
IV.      The Amendments
to Rule 20
[28]

The Civil Rules Committee studied Mr. Osbornes recommendations and
    proposed a series of amendments to the
Rules
that adopted various of his
    recommendations. The amendments were implemented by regulation effective
    January 1, 2010.
[29]

For the purposes of the central issues before us, the material parts of
    the amended Rule 20 state:
[2]
20.04 (2) The court shall grant summary judgment
    if,
(a) the court is satisfied that
    there is no genuine issue requiring a trial with respect to a claim or defence;
    or
(b) the parties agree to have all or
    part of the claim determined by a summary judgment and the court is satisfied
    that it is appropriate to grant summary judgment.
(2.1)    In
    determining under clause (2) (a) whether there is a genuine issue requiring a
    trial, the court shall consider the evidence submitted by the parties and, if
    the determination is being made by a judge, the judge may exercise any of the
    following powers for the purpose, unless it is in the interest of justice for
    such powers to be exercised only at a trial:
1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference
    from the evidence.
(2.2)  A judge may, for the purposes of
    exercising any of the powers set out in subrule (2.1), order that oral evidence
    be presented by one or more parties, with or without time limits on its
    presentation.
[30]

The amendments to Rule 20 generally reflect Mr. Osbornes
    recommendations, albeit with some modifications. To start with, the wording of
    the test no genuine issue for trial, although not changed to no real
    prospect of success at trial, was re-worded to no genuine issue requiring a
    trial.
[3]
[31]

As recommended by Mr. Osborne, a motion court judge was granted the
    power to weigh the evidence, evaluate credibility, and draw reasonable
    inferences from the evidence. The wording of rule 20.04(2.1), which confers
    these powers, indicates that they may be used for the purpose of determining
    whether there is a genuine issue requiring a trial.  However, contrary to
    Recommendation 14 in the Osborne Report, only judges are given these powers and
    not masters.
[32]

With respect to Recommendation 15, an oral evidence option was added
    in rule 20.04(2.2), but the text of this rule differs from the wording of the
    recommendation in several important respects. This rule does not refer to a
    mini-trial on one or more issues, with or without
viva voce
evidence,
    where the interests of justice require a brief trial to dispose of the summary
    judgment motion.  Rather, the provision allows a judge (not a master) to order
    the presentation of oral evidence, with or without time limits, for the purpose
    of exercising any of the powers in rule 20.04(2.1).
[33]

Recommendation 16 in the Osborne Report was adopted in rule 20.06. The
    result is that costs on a failed motion are to be determined presumptively on a
    partial indemnity basis rather than on a substantial indemnity basis as was
    previously the case.  The rule still provides for substantial indemnity costs
    but only where the factors of unreasonableness or bad faith are present:
20.06  The court may fix and order payment of
    the costs of a motion for summary judgment by a party on a substantial
    indemnity basis if,
(a) the party acted unreasonably by
    making or responding to the motion; or
(b) the party acted in bad faith for
    the purpose of delay.
[34]

Finally, contrary to Recommendation 17, the amended
Rules
did not
    add a rule for the purpose of implementing a summary trial mechanism.
V.        Analysis
  of the Amended Rule 20
1.         Overview
[35]

By the time these appeals were argued, a well-developed body of
    jurisprudence from the Superior Court of Justice under the new Rule 20 was
    already in place: see e.g.,
Healey v. Lakeridge Health Corp.
, 2010 ONSC
    725, 72 C.C.L.T. (3d) 261;
Cuthbert v. TD Canada Trust,
2010 ONSC 830,
    88 C.P.C. (6
th
) 359;
New Solutions Extrusion Corp. v. Gauthier
,
    2010 ONSC 1037;
Hino Motors Canada Ltd. v. Kell
, 2010 ONSC 1329;
Lawless
    v. Anderson
, 2010 ONSC 2723;
Canadian Premier Life Insurance Co. v.
    Sears Canada Inc.
, 2010 ONSC 3834;
Enbridge Gas Distribution Inc. v.
    Marinaccio
, 2011 ONSC 2313; and
Optech Inc. v. Sharma
, 2011 ONSC
    680, with supplementary reasons at 2011 ONSC 1081. We have carefully reviewed
    and considered the conflicting jurisprudence from the Superior Court. However,
    we have chosen not to comment on the relative merits of the various
    interpretative approaches found in this body of case law because our decision
    marks a new departure and a fresh approach to the interpretation and
    application of the amended Rule 20.
[36]

The amendments to Rule 20 are meant to introduce significant changes in
    the manner in which summary judgment motions are to be decided. A plain reading
    of the amended rule makes it clear that the
Aguonie
and
Dawson
restrictions on the analytical tools available to the motion judge are no
    longer applicable. The motion judge may now weigh the evidence, evaluate the
    credibility of a deponent, and draw any reasonable inference from the evidence
    in determining whether there is a genuine issue requiring a trial with respect
    to a claim or defence: see rule 20.04(2.1). Moreover, the new rule also enables
    the motion judge to direct the introduction of oral evidence to further assist
    the judge in exercising these powers: see rule 20.04(2.2).
[37]

As we shall go on to explain, the amended rule permits the motion judge
    to decide the action
[4]
where he or she is satisfied that by exercising the powers that are now
    available on a motion for summary judgment, there is no factual or legal issue
    raised by the parties that requires a trial for its fair and just resolution.
[38]

However, we emphasize that the purpose of the new rule is to eliminate
unnecessary
trials, not to eliminate all trials. The guiding consideration is whether the
    summary judgment process, in the circumstances of a given case, will provide an
    appropriate means for effecting a fair and just resolution of the dispute
    before the court.
[39]

Although both the summary judgment motion and a full trial are processes
    by which actions may be adjudicated in the interest of justice, the
    procedural fairness of each of these two processes depends on the nature of the
    issues posed and the evidence led by the parties. In some cases, it is safe to
    determine the matter on a motion for summary judgment because the motion record
    is sufficient to ensure that a just result can be achieved without the need for
    a full trial. In other cases, the record will not be adequate for this purpose,
    nor can it be made so regardless of the specific tools that are now available
    to the motion judge. In such cases, a just result can only be achieved through
    the trial process.  This pivotal determination must be made on a case-by-case
    basis.
2.         The Types of Cases that are Amenable to Summary Judgment
[40]

Speaking generally, and without attempting to be exhaustive, there are
    three types of cases that are amenable to summary judgment. The first two types
    of cases also existed under the former Rule 20, while the third class of case was
    added by the amended rule.
[41]

The first type of case is where the parties agree that it is appropriate
    to determine an action by way of a motion for summary judgment. Rule
    20.04(2)(b) permits the parties to jointly move for summary judgment where they
    agree to have all or part of the claim determined by a summary judgment and
    the court is satisfied that it is appropriate to grant summary judgment. We
    note, however, that the latter wording  the court is satisfied  affirms
    that the court maintains its discretion to refuse summary judgment where the
    test for summary judgment is not met, notwithstanding the agreement of the
    parties.
[42]

The second type of case encompasses those claims or defences that are
    shown to be without merit. The elimination of these cases from the civil
    justice system is a long-standing purpose well served by the summary judgment
    rule. As stated by the Supreme Court of Canada in
Canada (A.G.) v. Lameman
,
    2008 SCC 14, [2008] 1 S.C.R. 372, at para. 10:
The summary judgment rule serves an important
    purpose in the civil litigation system.  It prevents claims or defences that
    have no chance of success from proceeding to trial.  Trying unmeritorious
    claims imposes a heavy price in terms of time and cost on the parties to the
    litigation and on the justice system.  It is essential to the proper operation
    of the justice system and beneficial to the parties that claims that have no
    chance of success be weeded out at an early stage.  Conversely, it is essential
    to justice that claims disclosing real issues that may be successful proceed to
    trial.
[43]

As we shall discuss further below,
[5]
the amended Rule 20 has given the motion judge additional tools to assess
    whether a claim or defence has no chance of success at trial.
[44]

Moreover, the amended Rule 20 now permits a third type of case to be
    decided summarily. The rule provides for the summary disposition of cases other
    than by way of agreement or where there is no chance of success. The prior
    wording of Rule 20, whether there was a genuine issue for trial, was replaced
    by genuine issue requiring a trial. This change in language is more than mere
    semantics. The prior wording served mainly to winnow out plainly unmeritorious
    litigation. The amended wording, coupled with the enhanced powers under rules
    20.04(2.1) and (2.2), now permit the motion judge to dispose of cases on the merits
    where the trial process is not required in the interest of justice.
[45]

The threshold issue in understanding the application of the powers
    granted to the motion judge by rule 20.04(2.1) is the meaning to be attributed
    to the phrase interest of justice. This phrase operates as the limiting
    language that guides the determination whether a motion judge should exercise
    the powers to weigh evidence, evaluate credibility, and draw reasonable
    inferences from the evidence on a motion for summary judgment, or if these
    powers should be exercised only at a trial. The phrase reflects that the aim of
    the civil justice system is to provide a just result in disputed matters
    through a fair process. The amended rule recognizes that while there is a role
    for an expanded summary judgment procedure, a trial is essential in certain
    circumstances if the interest of justice is to be served.
[46]

What is it about the trial process that certain types of cases require a
    trial for their fair and just resolution? In
Housen v. Nikolaisen
, 2002
    SCC 33, [2002] 2 S.C.R. 235, the majority decision of Iacobucci and Major JJ.,
    at para. 14, quotes a passage from R.D. Gibbens in Appellate Review of
    Findings of Fact (1991-92), 13
Advocates Q
. 445, at p. 446, which
    refers to the trial judges expertise in assessing and weighing the facts
    developed at trial.  The quoted passage states:  The trial judge has sat
    through the entire case and his ultimate judgment reflects this total
    familiarity with the evidence. The passage further notes that the trial judge
    gains insight by living with the case for days, weeks or even months. At para.
    18, Iacobucci and Major JJ. go on to observe that it is the trial judges
    extensive exposure to the evidence, the advantage of hearing testimony
viva
    voce
, and the judges familiarity with the case as a whole that enables
    him or her to gain the level of appreciation of the issues and the evidence
    that is required to make dispositive findings.
[47]

As these passages reflect, the trial judge is a trier of fact who participates
    in the dynamic of a trial, sees witnesses testify, follows the trial narrative,
    asks questions when in doubt as to the substance of the evidence, monitors the
    cut and thrust of the adversaries, and hears the evidence in the words of the
    witnesses. As expressed by the majority in
Housen
, at para. 25, the
    trial judge is in a privileged position. The trial judges role as a
    participant in the unfolding of the evidence at trial provides a greater assurance
    of fairness in the process for resolving the dispute. The nature of the process
    is such that it is unlikely that the judge will overlook evidence as it is
    adduced into the record in his or her presence.
[48]

The trial dynamic also affords the parties the opportunity to present
    their case in the manner of their choice. Advocates acknowledge that the order
    in which witnesses are called, the manner in which they are examined and
    cross-examined, and how the introduction of documents is interspersed with and
    explained by the oral evidence, is of significance. This trial narrative may
    have an impact on the outcome. Indeed, entire books have been written on this
    topic, including the classic by Frederic John Wrottesley,
The Examination of
    Witnesses in Court
(London: Sweet and Maxwell, 1915). As the author
    instructs counsel, at p. 63:
It is, perhaps, almost an impertinence to tell you
    that you are by no means bound to call the witnesses in the order in which they
    are placed in the brief.
It will be your task, when reading and noting up
    your case, to marshall your witnesses in the order in which they will best
    support your case, as you have determined to submit it to the [trier of fact].
[49]

In contrast, a summary judgment motion is decided primarily on a written
    record. The deponents swear to affidavits typically drafted by counsel and do
    not speak in their own words. Although they are cross-examined and transcripts
    of these examinations are before the court, the motion judge is not present to
    observe the witnesses during their testimony. Rather, the motion judge is
    working from transcripts. The record does not take the form of a trial
    narrative. The parties do not review the entire record with the motion judge.
    Any fulsome review of the record by the motion judge takes place in chambers.
[50]

We find that the passages set out above from
Housen
, at paras. 14
    and 18, such as total familiarity with the evidence, extensive exposure to
    the evidence, and familiarity with the case as a whole, provide guidance as
    to when it is appropriate for the motion judge to exercise the powers in rule
    20.04(2.1). In deciding if these powers should be used to weed out a claim as
    having no chance of success or be used to resolve all or part of an action, the
    motion judge must ask the following question:  can the full appreciation of the
    evidence and issues that is required to make dispositive findings be achieved
    by way of summary judgment, or can this full appreciation only be achieved by
    way of a trial?
[51]

We think this full appreciation test provides a useful benchmark for
    deciding whether or not a trial is required in the interest of justice. In
    cases that call for multiple findings of fact on the basis of conflicting
    evidence emanating from a number of witnesses and found in a voluminous record,
    a summary judgment motion cannot serve as an adequate substitute for the trial
    process. Generally speaking, in those cases, the motion judge simply cannot
    achieve the full appreciation of the evidence and issues that is required to
    make dispositive findings.  Accordingly, the full appreciation test is not met
    and the interest of justice requires a trial.
[52]

In contrast, in document-driven cases with limited testimonial evidence,
    a motion judge would be able to achieve the full appreciation of the evidence
    and issues that is required to make dispositive findings. Similarly, the full
    appreciation test may be met in cases with limited contentious factual issues.
    The full appreciation test may also be met in cases where the record can be
    supplemented to the requisite degree at the motion judges direction by hearing
    oral evidence on discrete issues.
[53]

We wish to emphasize the very important distinction between full
    appreciation in the sense we intend here, and achieving familiarity with the
    total body of evidence in the motion record. Simply being knowledgeable about
    the entire content of the motion record is not the same as
fully appreciating
the evidence and issues in a way that permits a fair and just adjudication of
    the dispute. The full appreciation test requires motion judges to do more than
    simply assess if they are capable of reading and interpreting all of the
    evidence that has been put before them.
[54]

The point we are making is that a motion judge is required to assess
    whether the attributes of the trial process are necessary to enable him or her
    to fully appreciate the evidence and the issues posed by the case. In making
    this determination, the motion judge is to consider, for example, whether he or
    she can accurately weigh and draw inferences from the evidence without the
    benefit of the trial narrative, without the ability to hear the witnesses speak
    in their own words, and without the assistance of counsel as the judge examines
    the record in chambers.
[55]

Thus, in deciding whether to use the powers in rule 20.04(2.1), the
    motion judge must consider if this is a case where meeting the full
    appreciation test requires an opportunity to hear and observe witnesses, to
    have the evidence presented by way of a trial narrative, and to experience the
    fact-finding process first-hand. Unless full appreciation of the evidence and
    issues that is required to make dispositive findings is attainable on the
    motion record  as may be supplemented by the presentation of oral evidence
    under rule 20.04(2.2)  the judge cannot be satisfied that the issues are
    appropriately resolved on a motion for summary judgment.
[56]

By adopting the full appreciation test, we continue to recognize the
    established principles regarding the evidentiary obligations on a summary
    judgment motion. The Supreme Court of Canada addressed this point in
Lameman
,
    at para. 11, where the court cited Sharpe J.s reasons in
Transamerica Life
    Insurance Co. of Canada v. Canada Life Assurance Co.
(1996), 28 O.R. (3d)
    423 (Gen. Div.), at p. 434, in support of the proposition that [e]ach side
    must put its best foot forward with respect to the existence or non-existence
    of material issues to be tried. This obligation continues to apply under the
    amended Rule 20. On a motion for summary judgment, a party is not entitled to
    sit back and rely on the possibility that more favourable facts may develop at
    trial:
Transamerica
, at p. 434.
[57]

However, we add an important
caveat
to the best foot forward
    principle in cases where a motion for summary judgment is brought early in the
    litigation process.  It will not be in the interest of justice to exercise rule
    20.04(2.1) powers in cases where the nature and complexity of the issues demand
    that the normal process of production of documents and oral discovery be
    completed before a party is required to respond to a summary judgment motion.
    In such a case, forcing a responding party to build a record through affidavits
    and cross-examinations will only anticipate and replicate what should happen in
    a more orderly and efficient way through the usual discovery process.
[58]

Moreover, the record built through affidavits and cross-examinations at
    an early stage may offer a less complete picture of the case than the
    responding party could present at trial. As we point out below, at para. 68,
    counsel have an obligation to ensure that they are adopting an appropriate
    litigation strategy. A party faced with a premature or inappropriate summary
    judgment motion should have the option of moving to stay or dismiss the motion
    where the most efficient means of developing a record capable of satisfying the
    full appreciation test is to proceed through the normal route of discovery.
    This option is available by way of a motion for directions pursuant to rules
    1.04(1), (1.1), (2) and 1.05.
3.         The Use of the Power to Order Oral Evidence
[59]

It is necessary at this point to discuss the limits on the discretion of
    the motion judge to order oral evidence under rule 20.04(2.2) of the amended
    Rule 20. First, while the terminology of the mini-trial provides a convenient
    short form, this term should not be taken as implying that the summary judgment
    motion is a form of summary or hybrid trial. A summary judgment motion under
    the new rule does not constitute a trial. Mr. Osbornes recommendation of adopting
    a summary trial mechanism was not adopted, and his recommendation relating to
    mini-trials was not accepted in full. Indeed, the term mini-trial did not
    find its way into the body of the rule.
[60]

The discretion to order oral evidence pursuant to rule 20.04(2.2) is
    circumscribed and cannot be used to convert a summary judgment motion into a
    trial. Significantly, it is the motion judge, not counsel, who maintains
    control over the extent of the evidence to be led and the issues to which the
    evidence is to be directed. The distinction between the oral hearing under rule
    20.04(2.2) and the narrative of an actual trial is apparent. The discretion to
    direct the calling of oral evidence on the motion amounts to no more than
    another tool to better enable the motion judge to determine whether it is safe
    to proceed with a summary disposition rather than requiring a trial.
[61]

In appropriate cases, the motion judge is empowered to receive oral
    evidence on discrete issues for purposes of exercising the powers in rule
    20.04(2.1). In other words, the motion judge may receive oral evidence to
    assist in making the determination whether any of the issues raised in the
    action require a trial for their fair and just resolution. We discuss below, at
    paragraphs 101-103, the circumstances in which it will be appropriate to order
    the presentation of oral evidence. However, at this stage, we stress that the
    power to direct the calling of oral evidence under rule 20.04(2.2) is not
    intended to permit the parties to supplement the motion record. Nor can the
    parties anticipate the motion judge directing the calling of oral evidence on
    the motion.
[62]

The latter point requires that we address a practice issue in the
    Toronto Region. As a case management matter, parties to a summary judgment
    motion in Toronto are required to complete a summary judgment form, which
    includes questions about whether the parties intend to call
viva voce
evidence on an issue in dispute, and estimating the time required for such
    evidence. Although no doubt well-intentioned, these questions are misplaced in
    that they create the misconception that a summary judgment motion is in fact a
    summary trial.
[63]

A party who moves for summary judgment must be in a position to
    present a case capable of being decided on the paper record before the court.
    To suggest that further evidence is required amounts to an admission that the
    case is not appropriate, at first impression, for summary judgment. It is for
    the motion judge to determine whether he or she requires
viva voce
evidence under rule 20.04(2.2) for the purpose of exercising any of the powers
    conferred by the rule.  This is not an enabling provision entitling a party to
    enhance the record it has placed before the court. It may be that, for
    scheduling reasons, the oral evidentiary hearing will need to be held after the
    hearing of the main motion. Nonetheless, it is the purview of the motion judge,
    and the motion judge alone, to schedule this hearing, which is a continuation
    of the original motion and not a separate motion.
4.         Trial Management Under Rule 20.05
[64]

Rule 20.05 facilitates a greater managerial role for judges and masters
    in circumstances where a summary judgment motion is dismissed in whole or in
    part and where the court orders that the action proceed to trial expeditiously.
    The summary judgment court, having carefully reviewed the evidentiary record
    and heard the argument, is typically well-positioned to specify what issues of
    material fact are not in dispute and to define the issues to be tried. Rule
    20.05(2) sets out a lengthy list of directions that a court may make with a
    view to streamlining the proceedings and empowers the court to make a variety
    of orders, including requiring the filing of a statement setting out what
    material facts are not in dispute, specifying the timing and scope of
    discovery, and imposing time limits on any oral examination of a witness at
    trial.
[6]

[65]

While the court may make use of the provisions in rule 20.05 to salvage
    the resources that went into the summary judgment motion, the court should keep
    in mind that the rule should not be applied so as to effectively order a trial
    that resembles the motion that was previously dismissed. For example, while
    rule 20.05(2)(f) provides that the affidavits or any other evidence filed on
    the motion and any cross-examinations on them may be used at trial in the same
    manner as an examination for discovery, these materials should not be treated
    as a substitute for the
viva voce
testimony of the witnesses in the
    trial judges presence.  Any trial management order flowing from a failed
    summary judgment motion must facilitate the conduct of a genuine trial that
    will permit the full appreciation of the evidence and issues required to make
    dispositive findings. In other words, the trial ought not to be simply a
    reconfiguration of the dismissed motion.
[66]

Further, litigants must not look to rule 20.05 as a reason for bringing
    a motion for summary judgment or as a substitute for effective case management
    of the trial of an action. The newly-introduced Rule 50 permits parties to obtain
    orders and directions that will assist in ensuring that a trial proceeds
    efficiently.
5.         Costs in Rule 20.06
[67]

As a result of the amendments to rule 20.06, the onus is now on
    the party seeking substantial indemnity costs to convince the court that the
    other side acted unreasonably or in bad faith for the purpose of delay in
    bringing or responding to a motion for summary judgment. This amendment removes
    a disincentive to litigants from using Rule 20 by eliminating the presumption
    that they will face substantial indemnity costs for bringing an unsuccessful
    motion for summary judgment. However, as the jurisprudence becomes more settled
    on when it is appropriate to move for summary judgment, the reasonableness of
    the decision to move for summary judgment or to resist such a motion will be
    more closely scrutinized by the court in imposing cost orders under rule 20.06.
6.         The Obligation on Members of the Bar
[68]

It is important to underscore the obligation that rests on
    members of the bar in formulating an appropriate litigation strategy. The
    expenditure of resources, regardless of quantum, in the compilation of a motion
    record and argument of the motion is not a valid consideration in determining
    whether summary judgment should be granted. It is not in the interest of
    justice to deprive litigants of a trial simply because of the costs incurred by
    the parties in preparing and responding to an ill-conceived motion for summary
    judgment.
7.         Standard of Review
[69]

A final matter to address before assessing the merits of the appeals is
    the standard of review that applies to a decision to grant or deny a motion for
    summary judgment. Under the former Rule 20, courts reviewed the question
    whether the motion judge applied the appropriate test of a genuine issue for
    trial on a standard of correctness: see, e.g.,
Whalen v.
    Hillier
(2001), 53 O.R. (3d) 550 (C.A.), at para. 14;
Canadian Imperial Bank of Commerce v. F-1 Holdings &
    Investments Inc.
, 2007 CarswellOnt 8012 (Div. Ct.), at para. 6; see also
    Donald J.M. Brown, Q.C.,
Civil Appeals
(Toronto: Canvasback Publishing,
    2011), at pp. 15-52 to 15-53 and the case law cited at footnote 348
.
[70]

There is no reason to depart from this standard under the new rule. The
    determination of whether there is a genuine issue requiring a trial is a
    legal determination.  In the leading authority on the standard of review, the
    majority of the Supreme Court in
Housen
explained, at para. 8, that the
    standard of review on a question of law is correctness.  Similarly, the
    standard of review on a question of mixed fact and law that 
can
    be attributed to the application of an incorrect standard, a failure to
    consider a required element of a legal test, or similar error in principle is
    also correctness:
Housen
, at para. 36
.  As Blair J.A. said in
Bell
    Canada v. The Plan Group
, 2009 ONCA 548, 96 O.R. (3d) 81, at para. 27:
Where the matter referred to is more a matter of
    legal principle and sits towards the error of law end of the spectrum, the
    standard is correctness.  Where the matter is one in which the legal
    principle and the facts are inextricably intertwined  where the facts
    dominate, as it were  it falls more towards the factual end of the spectrum,
    and significant deference must be accorded.
[71]

Where the appellate court determines that the motion judge
    correctly applied the legal test for determining whether to grant summary
    judgment, any factual determinations by the motion judge in deciding the motion
    will attract review on the deferential standard of palpable and overriding
    error.
8.         Summary
[72]

We have described three types of cases where summary judgment may be
    granted. The first is where the parties agree to submit their dispute to
    resolution by way of summary judgment.
[73]

The second class of case is where the claim or defence has no chance of
    success.  As will be illustrated below, at paras. 101-111, a judge may use the
    powers provided by rules 20.04(2.1) and (2.2) to be satisfied that a claim or
    defence has no chance of success. The availability of these enhanced powers to
    determine if a claim or defence has no chance of success will permit more
    actions to be weeded out through the mechanism of summary judgment. However, before
    the motion judge decides to weigh evidence, evaluate credibility, or draw
    reasonable inferences from the evidence, the motion judge must apply the full
    appreciation test.
[74]

The amended rule also now permits the summary disposition of a third
    type of case, namely, those where the motion judge is satisfied that the issues
    can be fairly and justly resolved by exercising the powers in rule 20.04(2.1). In
    deciding whether to exercise these powers, the judge is to assess whether he or
    she can achieve the full appreciation of the evidence and issues that is required
    to make dispositive findings on the basis of the motion record  as may be
    supplemented by oral evidence under rule 20.04(2.2)  or if the attributes and
    advantages of the trial process require that these powers only be exercised at
    a trial.
[75]

Finally, we observe that it is not necessary for a motion judge to try
    to categorize the type of case in question. In particular, the latter two
    classes of cases we described are not to be viewed as discrete compartments. For
    example, a statement of claim may include a cause of action that the motion
    judge finds has no chance of success with or without using the powers in rule
    20.04(2.1). And the same claim may assert another cause of action that the
    motion judge is satisfied raises issues that can safely be decided using the
    rule 20.04(2.1) powers because the full appreciation test is met. The important
    element of the analysis under the amended Rule 20 is that, before using the powers
    in rule 20.04(2.1) to weigh evidence, evaluate credibility, and draw reasonable
    inferences, the motion judge must apply the full appreciation test in order to be
    satisfied that the interest of justice does not require that these powers be
    exercised only at a trial.
[76]

We now turn to apply these principles to the appeals before us.
VI.      Application
  to the Five Appeals
Combined Air
  Mechanical v. Flesch
(C51986)
On appeal
          from the order of Justice Edward P. Belobaba of the Superior Court of
  Justice, dated April 8, 2010, with reasons reported at 2010 ONSC 1729.
1.

Introduction
[77]

The appellants, Combined Air Mechanical Services Inc. and related
    companies (collectively, Combined Air), appeal a summary judgment dismissing Combined
    Airs action against the respondents, William Flesch, James Searle and related
    companies. The action included a claim for damages for alleged breaches of
    restrictive covenants by the respondent Flesch.
[78]

The restrictive covenants were contained in an acquisition agreement
    pursuant to which Combined Air purchased a heating, ventilating and air
    conditioning (HVAC) business from the respondents. Following the acquisition,
    Flesch provided consulting services for Strategic Property Management, a
    property manager, and later worked for Computer Room Services Corporation
    (CRSC), a company engaged in designing, building and maintaining customized
    computer and information technology (IT) infrastructure facilities. Combined
    Air alleged that Strategic Property Management and CRSC were engaged in businesses
    similar to, and in competition with, Combined Air, and that Flesch violated the
    restrictive covenants.
[79]

The motion judge found that Combined Air failed to adduce any evidence
    to support its various allegations against the respondents, including the
    allegations that Fleschs employers were engaged in businesses similar to, or
    in competition with, Combined Air.
[80]

Before reaching the conclusion concerning CRSC, the motion judge
    considered a document advanced by Combined Air that listed CRSC as a bidder,
    along with some of Combined Airs HVAC competitors, for a project for the City
    of Pickering. The motion judge made an order under rule 20.04(2.2) directing
    the respondents to present oral evidence from a witness  ideally a CRSC
    representative  who could explain this document. The judge limited the
    questions that could be asked of the witness to the bid document and refused to
    allow Combined Airs counsel to cross-examine the witness on other bids or
    projects. Ultimately, the motion judge held that the document supported the respondents
    position that CRSC was not in competition with Combined Air.
[81]

Combined Air argues that the motion judge erred in interpreting
    the terms same or similar [business] and compete in the acquisition
    agreement, that he misapplied the burden of proof on the motion, and that he
    erred in both directing and limiting the scope of the oral evidence under rule
    20.04(2.2).  For the reasons that follow, we do not accept these arguments and
    would dismiss the appeal.
2.
Facts
[82]

In 2003, Flesch and Searle formed a partnership, Combined Air
    Mechanical Services, to sell and service HVAC systems in the commercial and
    industrial market. In June 2006, they sold their partnership interests to two
    corporations controlled by Vicken Aharonian  Combined Air Mechanical Services
    Inc. and Dravo Manufacturing Inc. The parties executed an acquisition agreement
    containing a number of restrictive covenants. These covenants were summarized
    by the motion judge as follows, at para. 20:
·

For the first two years after closing (June 2006 to June 2008),
    Flesch could not be involved in any way with any business or undertaking that
    is the same or similar to the business of Combined Air; nor could he deal
    in any way with any supplier of Combined Air other than for the purposes of
    personal consumption;
·

For the next three years (July 2008 to July 2011) Flesch could
    not work for any business or undertaking that competes with Combined Air and
    could not interfere with the relationship between Combined Air and any
    supplier;
·

Competition is not specifically defined, but s. 8.18 provides
    that an entity shall be deemed to compete with Combined Air if it sells a
    product or service that was sold by Combined Air in the five years before
    closing (2001 to 2006), to anyone who was a customer of Combined Air during
    this same five-year period;
·

The business of Combined Air is defined as the business
    presently carried on by the Partnership consisting of mechanical contracting,
    including purchasing heating, ventilating and air conditioning equipment for
    resale to commercial and industrial end users, servicing and maintaining
    heating, ventilating and air conditioning equipment and all operations related
    thereto.
[83]

Flesch and Searle agreed to stay on as key employees for a defined term
    and signed separate employment agreements with Combined Air. The employment
    agreements imposed no additional restrictions. In February 2007, Flesch gave 30
    days notice that he was terminating his employment agreement. In March 2007,
    Combined Air gave notice to Searle that it was terminating his employment
    agreement.
[84]

From September to December 2007, Flesch provided intermittent consulting
    services to Strategic Property Management, a property manager. Prior to the
    acquisition, Strategic Property had used Combined Air to service the HVAC needs
    in its portfolio of ten buildings.
[85]

In January 2008, Flesch was hired by CRSC. CRSC is in the business of
    designing, building and maintaining customized computer and IT infrastructure
    facilities. CRSC was also a client of Combined Air prior to the acquisition and
    often retained Combined Air as a subcontractor for the HVAC work on its computer
    room projects.
[86]

After Flesch began working with Strategic Property, Aharonian noticed a
    decrease in service calls from Strategic Property and advised Flesch via email
    that he was holding Flesch responsible. Aharonians concern was magnified when
    Flesch joined CRSC. In November 2008, CRSC decided to go with a lower-priced
    HVAC subcontractor on a Hydro One project in Barrie.  Shortly thereafter,
    Combined Air commenced this action alleging,
inter alia
, that Flesch and
    Searle had breached their fiduciary duties as senior employees, and had committed
    the torts of conversion, misrepresentation and unlawful interference.
3.

Motion for Summary Judgment
[87]

Flesch brought a motion for summary judgment arguing that there was no
    basis for any of these allegations. Searle took the same position. Following
    the exchange of affidavits and cross-examinations of witnesses for the summary
    judgment motion, Combined Air amended the statement of claim to include
    allegations that Flesch had breached the restrictive covenants in the
    acquisition agreement by working for Strategic Property and CRSC, since those
    companies were in the same or similar business or competed with Combined Air.
[88]

On the hearing of the motion, Combined Air acknowledged that it
    had no case against Searle for the claim of breach of the restrictive covenants
    and that he had been joined as a defendant because of an indemnification clause
    in the acquisition agreement. Combined Air conceded that if Fleschs motion
    were granted, the action against Searle should also be dismissed.
[89]

The motion judge granted summary judgment dismissing the action. He
    found that there was no evidence raising a genuine issue requiring a trial on
    any of the claims advanced by Combined Air. On appeal, Combined Air only
    challenges the motion judges holding that the restrictive covenant claim
    failed to raise a genuine issue requiring a trial.
[90]

The motion judge found it was abundantly clear that neither
    Strategic Property nor CRSC competes with Combined Air. Strategic Property is
    a property management company. It is not a licensed HVAC contractor and does
    not perform HVAC contracting services for its clients.  As for CRSC, it does not
    sell the same products as Combined Air; nor does it sell to the same customers.
    CRSC designs, builds and maintains controlled environments to support IT
    infrastructure. It is a general contractor that oversees components of the
    computer room project. It does not and cannot do any HVAC work. Both Strategic
    Property and CRSC hired Combined Air to do HVAC work for them in the past. The
    motion judge concluded, at para. 34: A company that cannot do HVAC work and
    has to hire a subcontractor to do this work is not in the same or similar
    business as the HVAC subcontractor.
4.

The Motion Judges Order for Oral Evidence Under Rule 20.04(2.2)
[91]

In attempting to raise a genuine issue requiring a trial on the question
    whether Flesch was in breach of the restrictive covenants due to his work for
    CRSC, Combined Air relied on a document containing the unofficial bid results
    for a project for the City of Pickering. That document listed CRSC and four
    other bidders  three of which were known HVAC contractors who competed with
    Combined Air. Combined Air submitted that the presence of these three
    competitors implied that CRSC was also competing with Combined Air.
[92]

To understand this document and assess the weight that it should be
    given, the motion judge directed the presentation of oral evidence under rule
    20.04(2.2). He invited the defendants to call a witness, ideally from CRSC, who
    was familiar with the Pickering bid, and made it clear to counsel that the
    focus of the hearing was on the Pickering bid alone and that examination-in-chief
    and cross-examination were strictly limited to this specific and narrow point.
    He directed Combined Airs counsel in the following terms: [Y]ou must limit
    yourself to the focus of the Pickering document. Its not a free-wheeling
    cross-examination of [CRSCs] business.
[93]

Matt Eaton, the son of CRSCs owner, Greg Eaton, testified that
    in June 2008, CRSC was invited to submit a bid for a server room upgrade at the
    Pickering Civic Complex. This bid included amounts for architectural services,
    electrical work, mechanical (HVAC) work and equipment rentals. The HVAC
    component comprised just under one-third of the overall cost of the bid. CRSCs
    bid was for much more than just the HVAC work and the HVAC work was to be
    subcontracted to Combined Air. The motion judge concluded that Combined Airs
    only specific example of alleged competition actually supported the
    respondents.
5.

Issues
[94]

Combined Air raises the following issues:
(1)

Did the motion judge err by finding that CRSC was not a same or similar
    business to, and that it did not compete with, Combined Air?
(2)

Did the motion judge err in exercising his power to order the
    presentation of oral evidence under rule 20.04(2.2)?
6.

Analysis
(1)

Did the motion judge err by finding that CRSC was not a same or similar
  business to, and that it did not compete with, Combined Air?
[95]

Combined Air submits that the motion judge erred by misconstruing the
    definition of the terms same or similar and competes in the acquisition
    agreement.  According to Combined Air, these terms defined the partnership
    business expansively to include the servicing and maintaining of HVAC equipment
    and all operations related thereto.
[96]

Compete is not defined in the acquisition agreement. However, Combined
    Air relies on s. 8.18 which provides that an entity shall be deemed to
    compete with it if the entity sells a product or service that was sold by
    Combined Air during the five years before closing to anyone who was a customer
    of Combined Air during the same period. Combined Air argues that because CRSC
    dealt with Hydro One and Primus, which were both customers of Combined Air during
    the five-year period before closing, Flesch breached the non-competition
    covenant.
[97]

Combined Air further submits that the motion judge erred by failing to
    draw an adverse inference under rule 20.02(1) from the respondents failure to
    lead evidence from CRSC representatives as to whether or not their business was
    the same or similar to, or competed with, Combined Air. This rule provides
    that the court may, if appropriate, draw an adverse inference from the failure
    of a party to provide the evidence of any person having personal knowledge of
    contested facts.
[98]

We do not accept the submission that the motion judge erred by finding
    that CRSC was not a same or similar business to, and that it did not
    compete with, Combined Air. The motion judge properly assessed the evidence
    that CRSC was a general contractor that oversaw multiple components of computer
    room projects. The respondents provided affidavits from Flesch, Searle and
    Shawn Thorne, who had worked at Combined Air for approximately 15 years. These
    individuals deposed that they did not consider CRSC to be in a similar business
    to Combined Air. In particular, Thorne asserted on examination that Combined
    Air was not involved in projects of the same type and size as CRSC, and that
    CRSC typically requested HVAC services from Combined Air.
[99]

Combined Air led no evidence that CRSC had sold HVAC equipment to its customers.
    The only possible evidence that it offered of direct competition, the Pickering
    bid, actually supported the respondents because Combined Air was included in
    that bid as the subcontractor to supply the HVAC equipment. The language of the
    deeming provision in s. 8.18 cannot assist Combined Air in the face of the
    evidence as to CRSCs business. The motion judge was entitled to conclude that
    the nature of CRSCs business was that of a general contractor and that there
    was no issue requiring a trial.
[100]

The motion
    judge did not err by failing to draw an adverse inference against the
    respondents pursuant to rule 20.02(1). As the moving parties, the respondents
    bore the legal burden to demonstrate that there was no genuine issue requiring
    a trial. As the responding party, Combined Air bore an evidentiary burden to
    respond with evidence setting out specific facts showing there is a genuine
    issue requiring a trial: see
Esses v. Bank of Montreal
, 2008 ONCA 646, 241
    O.A.C. 134, at para. 44. As we have explained, the respondents adduced evidence
    as to the nature of CRSCs business and Fleschs involvement in it to show that
    CRSC was not in competition with Combined Air. The respondents were entitled to
    rely on that evidence and they were not obliged to lead evidence from a
    representative of CRSC. Combined Air failed to adduce any evidence showing that
    CRSC was a competitor and when the details about CRSCs Pickering bid were
    disclosed in the oral evidence hearing, the evidence supported the respondents
    rather than Combined Air.
(2)       Did the motion judge err in exercising his power
  to order the presentation of oral evidence under rule 20.04(2.2)?
[101]

Rule
    20.04(2.2) provides as follows: A judge may, for the purposes of exercising
    any of the powers set out in subrule (2.1), order that oral evidence be
    presented by one or more parties, with or without time limits on its
    presentation.
[102]

Generally
    speaking, a rule 20.04(2.2) order will be appropriate where the motion judge
    concludes that the exercise of the powers conferred by rule 20.04(2.1) will be
    facilitated by hearing the oral evidence of a limited number of witnesses on one
    or more specific, discrete and likely determinative issues. For ease of
    reference, rule 20.04(2.1) provides:
In determining under clause (2) (a) whether there
    is a genuine issue requiring a trial, the court shall consider the evidence
    submitted by the parties and, if the determination is being made by a judge,
    the judge may exercise any of the following powers for the purpose, unless it
    is in the interest of justice for such powers to be exercised only at a trial:
1.         Weighing the evidence.
2.         Evaluating the credibility of a
    deponent.
3.         Drawing
    any reasonable inference from the evidence.
[103]

While we
    do not wish to be taken as establishing an exhaustive list of when a judge may
    choose to make a rule 20.04(2.2) order, such an order would be appropriate
    where:
(1)

Oral evidence can be obtained from a small number of witnesses and
    gathered in a manageable period of time;
(2)

Any issue to be dealt with by presenting oral evidence is likely to have
    a significant impact on whether the summary judgment motion is granted; and
(3)

Any such issue is narrow and discrete 
i.e
., the issue can be
    separately decided and is not enmeshed with other issues on the motion.
[104]

In our
    view, the motion judge had ample grounds to make a rule 20.04(2.2) order in the
    circumstances of this case. The Pickering bid document relied on by Combined
    Air was at best ambiguous and required some explanation. The issue was narrow
    and discrete. The only question was whether the fact that CRSC was listed as a
    bidder along with other HVAC subcontractors was capable of proving that CRSC competed
    with Combined Air. That discrete issue could be resolved by hearing a limited
    number of witnesses (here, only one witness) testify for a relatively short
    period of time. The explanation was likely to have a significant impact on
    whether the summary judgment motion was granted. If, as appeared likely from
    the balance of the evidence, the oral evidence did not indicate that CRSC
    competed with Combined Air, the summary judgment motion would succeed on the
    basis of the evidence led by the respondents.
[105]

Combined
    Air argues that a motion judge may only impose a temporal restriction on the
    presentation of oral evidence under rule 20.04(2.2) and that a motion judge has
    no power to restrict the type of questions that may be asked of a witness under
    cross-examination. According to Combined Air, the motion judge erred by prohibiting
    its counsel from asking the witness questions about other instances where CRSC
    may have been competing with Combined Air and by strictly limiting counsels
    questions to the Pickering bid document.
[106]

We do not
    accept Combined Airs contention that the motion judges decision to limit the
    oral evidence in this way amounted to a breach of procedural fairness. In our
    view, it is implicit in both the language and purpose of rule 20.04(2.2) that,
    when exercising the power to direct that oral evidence be presented by a party,
    the judge hearing a summary judgment motion is entitled to limit the scope of
    that evidence to one or more discrete issues. To allow the examination or
    cross-examination to enter into issues that the motion judge has determined do
    not require a trial would risk turning an oral evidence hearing into a trial
    and would defeat the whole purpose of rule 20.04(2.2).
[107]

The motion
    judge did not deny Combined Air procedural fairness by limiting the scope of
    the cross-examination. Combined Air had been given full opportunity to present
    its evidence. Examinations of witnesses under rule 39.03 had taken place before
    the motion and counsel for Combined Air conducted extensive cross-examinations
    on all affidavits filed by the respondents. Given the nature of the evidence
    and issues presented, this was a straightforward case; it was not one that had
    to proceed through the full discovery process before becoming ripe for summary
    judgment.
[108]

In
    responding to the motion for summary judgment, Combined Air could have led
    evidence from a CRSC representative or from any other witness as to conduct by
    the respondents that violated the restrictive covenants. It was only after both
    parties had been given full opportunity to argue the motion and present their
    supporting evidence that the motion judge directed a limited examination to
    clarify the significance of the evidence of the Pickering bid document. The
    motion judge was entitled to direct an oral hearing on that discrete issue
    without allowing Combined Air to open new issues or re-open old issues, whether
    by cross-examination or otherwise.
[109]

Combined
    Air argues that the evidence of the Pickering bid document was sufficient to
    give rise to an issue requiring a trial and that the motion judge erred by, in
    effect, allowing the respondents to use the oral evidence hearing to plug a gap
    in their case.
[110]

We do not
    accept that submission. The respondents led evidence that CRSC did not compete
    with Combined Air. Combined Air led no evidence of actual competition and could
    do no better than the Pickering bid document that revealed bids from CRSC and
    three entities that did compete with Combined Air. The motion judge was not
    certain whether this document might be some evidence of competition warranting
    a trial and directed the presentation of oral evidence so that he might make a
    finding on the point.
7.         Conclusion
[111]

After ordering
    the presentation of oral evidence under rule 20.04(2.2), the motion judge
    exercised the powers granted by rule 20.04(2.1) to make a finding that this
    evidence actually supported the respondents position that CRSC was not in
    competition with Combined Air. Having made this finding, the motion judge effectively
    concluded that, in the end, Combined Airs action had no chance of success. The
    motion judge did not err in ordering oral evidence or limiting the oral
    evidence to a discrete and narrow issue.  Moreover, after augmenting the
    written record with oral evidence on this issue, the motion judge did not err
    in granting summary judgment. Having regard to the full appreciation test, it
    was entirely appropriate for the motion judge to use the rule 20.04(2.1) powers
    to make a finding on this limited contentious factual issue.
[112]

For these
    reasons, the appeal is dismissed. The parties may make brief written
    submissions on the costs of the appeal.
Mauldin v. Hryniak
(C52912);
Bruno Appliance and Furniture v. Hryniak
(C52913)
On appeal
          from the order of Justice A. Duncan Grace of the Superior Court of Justice,
  dated October 22, 2010, with reasons reported at 2010 ONSC 5490.
1.

Introduction
[113]

In June
    2001, the respondent, Fred Mauldin, met with the appellant, Robert Hryniak, a
    man named Robert Cranston, and Hryniaks lawyer, Greg Peebles, at the law
    offices of Cassels Brock & Blackwell, where Peebles was a senior partner.
    Mauldin represented a group of investors looking for investment opportunities.
    Following the meeting, the Mauldin group invested U.S.$1.2 million with
    Hryniak. Nearly all of the groups investment was lost.
[7]

[114]

In
    February 2002, Albert Bruno, the principal of the respondent, Bruno Appliance
    and Furniture, Inc., met with Cranston and Peebles, but not Hryniak, at Cassels
    Brock.  Following the meeting, Bruno wired U.S.$1 million to Cassels Brock for
    investment.  His entire investment was lost.
[115]

The
    Mauldin group and Bruno started separate actions to recover their money.  Each
    sued Hryniak in fraud, and Peebles and his law firm in fraud, conspiracy,
    negligence and breach of contract. Although Cranston played a prominent role in
    the events that gave rise to the actions, he was not sued in either action.
[116]

Hryniak
    denied defrauding the respondents. He contended that the Mauldin groups funds
    were stolen by a third party and that he never asked Bruno to invest with him
    and never received Brunos funds.
[117]

In 2008,
    the Mauldin group and Bruno moved for summary judgment against Hryniak, Peebles
    and Cassels Brock. The motions were heard together. Eighteen witnesses filed
    affidavits on the motions. Cross-examinations took three weeks. The motion
    record consisted of 28 volumes of evidence.  Oral argument  which took place
    in 2010  took four days.
[118]

Applying
    the amended Rule 20, the motion judge delivered a 58-page judgment.  He granted
    summary judgment against Hryniak.
[8]
He did not believe Hryniaks evidence and concluded that Hryniak had defrauded
    both the Mauldin group and Bruno.  However, the motion judge dismissed the motions
    against Peebles and Cassels Brock. He concluded that a trial was required to
    determine whether Peebles was guilty of fraud or had been duped by Hryniak, and
    whether Peebles had any liability apart the claim for fraud.
[119]

On this appeal, Hryniak makes three main submissions:
(1)

The motion judge erred in holding that it was in the interest of
    justice to grant summary judgment.
(2)

The motion judge erred by failing to hold that each action raised
    genuine issues requiring a trial.
(3)

The motion judge erred in his application of the rule in
Browne
    v. Dunn
and thus deprived Hryniak of the opportunity to respond to the
    allegations against him.
[9]
[120]

We say at the outset that we see no merit in the third ground of
    appeal. Hryniak knew the case against him and was aware of the allegations
    against him made by both the Mauldin group and Bruno.  He had ample opportunity
    to respond to those allegations, and indeed endeavoured to do so both in his
    lengthy affidavits and in cross-examinations on those affidavits.  The balance
    of these reasons, therefore, will only address the first two grounds of appeal.
2.

Facts
(1)

The Mauldin Group Action
(i)
The investment
[121]

The
    critical meeting that led to the Mauldin groups investment occurred on June
    19, 2001. Mauldin, Hryniak, Peebles and Cranston attended.
[10]
No party has contemporaneous notes of what was said at the meeting, and
    recollections vary.  All parties agree, however, that during the meeting
    Hryniak explained that he had an investment company called Tropos Capital and
    that he wanted to raise at least U.S.$10 million to invest through a joint
    venture called the Tropos Joint Venture.
[122]

Hryniak
    then explained his trading program.  He said that he used an arbitrage strategy
    known as basis trading, or cash and carry trading.  By basis he meant the
    difference between the cost of acquiring an asset and the future value of that
    asset.  For example, if Tropos bought a bond for less than its face value and
    later sold it at face value or a premium, the basis would be the profit or
    the difference between the purchase price (and associated fees and costs,
    called the costs of carry) and the price received on the sale.
[123]

At the
    meeting, Mauldin said that his group was looking for an investment with a high
    rate of return.  He was so taken with Hryniaks presentation that ten days
    after the meeting he wired U.S.$1.2 million on behalf of the group to the
    Cassels Brock trust account.  Later he sent an additional U.S.$50,000 to
    Cranstons holding company, Rhino Holdings.
[124]

The
    parties dispute whether the U.S.$1.2 million was deposited at Cassels Brock
    with one of Hryniaks entities or with a Panamanian company called Frontline
    Investments, then owned by Cranston.  Hryniak said the Mauldin group invested
    with Cranston; the Mauldin group said that it invested directly with Hryniak. 
    That dispute did not need to be resolved because eventually the U.S.$1.25
    million from the Mauldin group found its way to Tropos Capital  Hryniaks
    company.  Between June and December 2001, Tropos Capital raised U.S.$10.2
    million to be invested in the Tropos Joint Venture. This amount included the
    Mauldin groups funds.
(ii)

What happened to the Mauldin groups investment?
[125]

Hryniak
    said that in September 2001, he met Ole Spaten, the owner of Aro Motors, which
    was in the business of importing foreign cars into the United States. 
    According to Hryniak, Aro Motors had Deutsche Bank Finance bonds available for
    sale.  The bonds were on deposit in a bank called the New Savings Bank in
    Montenegro, in the former Yugoslavia.
[126]

Hryniak
    claimed that in December 2001, he decided to acquire the bonds as a test
    trade.  To do so, he set up a brokerage and bank account in the name of Tropos
    at the New Savings Bank.  He sent all the money he had raised, including the
    Mauldin group investment, to this bank.  The joint venture then purchased
    U.S.$5 million in Deutsche Bank bonds from Aro Motors.  Hryniak sold the bonds
    in mid-December and realized a modest profit of three per cent (U.S.$197,000).
[127]

The Tropos Joint Venture did no other trading.  Aside from the
    less than U.S.$10,000 distribution in February 2002, no money was ever returned
    to the Mauldin group.
(iii)

Hryniaks
  explanation
[128]

Hryniak
    claimed that the money he had deposited at the New Savings Bank was stolen by
    Jay Pribble, a senior vice-president with the bank. According to Hryniak,
    Pribble stole the funds by closing client accounts and diverting the monies to
    himself. He then disappeared. The money he misappropriated was never
    recovered.
[129]

Hryniak gave evidence that he first became aware that the funds
    had been taken in May 2002.  However, he put forward no reliable evidence that
    a theft had ever occurred or that he made any serious attempts to recover the
    U.S.$10.2 million.  He did not file a police report, he did not ask for
    Peebles help to trace the theft, and he did not make any efforts himself to
    recover the funds from the bank.  The only two pieces of evidence he filed on
    the motion to support his account were a self-serving letter he sent to the
    Canada Revenue Agency and a perfunctory fax he sent to a person he claimed was
    an FBI agent in Las Vegas some 15 months after the supposed theft.
(iv)

The motion
  judges findings
[130]

The motion
    judge accepted that the New Savings Bank was not a fictitious entity.  However,
    he was skeptical of the test trade.  He questioned why Aro Motors would not
    have sold the bonds for a profit itself, instead of allowing Hryniak to do so.
[131]

The motion
    judge rejected the rest of Hryniaks various explanations.  He did not believe
    that there had been a legitimate trading program or that the loss of the
    Mauldin groups investment was due to Pribbles misappropriation.  He noted
    that Hryniak made no effort to recover the money.  He concluded that Hryniak
    accepted the Mauldin groups money fully intending to use it for his own
    benefit.
[132]

In reaching this conclusion, the motion judge recognized that
    there were no contractual documents between the Mauldin group and Tropos or
    Hryniak, but held that it did not matter because Hryniak had orchestrated the
    entire scheme. He held that since Hryniak had perpetrated a fraud, he could not
    escape personal liability on the basis that he carried out the fraud through
    his company, Tropos Capital.
(2)

The Bruno Action
(i)

The investment
[133]

Albert
    Bruno invested U.S.$1 million after a short meeting with Cranston and Peebles
    at the offices of Cassels Brock on February 22, 2002.  How the meeting came
    about, what was said at the meeting, and with whom Bruno invested were all very
    much in dispute on the motion.  Like the Mauldin meeting, no contemporaneous
    notes of the Bruno meeting were put into evidence.
[134]

Peebles
    testified that Hryniak asked him to attend the meeting with Cranston to meet
    Bruno, a potential investor in the Tropos Joint Venture.  Hryniak denies this
    and says that by early 2002, he was not accepting any more money for
    investment.  Nonetheless, Hryniak directed Tropos to pay Cassels Brocks fees
    for the meeting.
[135]

Whatever
    was said at that meeting, Bruno was induced to invest by the prospect of a
    legitimate investment opportunity.  On March 4, 2002, he wired U.S.$1 million
    to Cassels Brock.  He did so without ever having met or spoken to Hryniak.
[136]

Hryniak
    maintained that Bruno did not invest with the Tropos Joint Venture but instead
    was persuaded by Cranston to invest in a joint venture of Cranstons company, Frontline. 
    Some of the documents appear to bear this out.  On March 20, 2002, Bruno
    received a certificate of investment from Frontline.  Moreover, Hryniak said
    that he first spoke to Bruno in the fall of 2002, many months after the
    investment was made, when, in a telephone conversation, he explained basis
    trading.
[137]

Peebles
    told a different story. He claimed to understand Brunos money was always
    intended to be invested in the Tropos Joint Venture through Frontline.  Again
    some evidence on the motion supports Peebles claim.  Brunos funds were
    deposited in a Cassels Brock U.S. dollar trust account with a Tropos client
    number.  Further, in late March 2002, Peebles received instructions from
    Hryniak to invest U.S.$1 million for the benefit of the Tropos Joint Venture.  And
    Hryniak continued to be actively involved in decisions relating to this
    investment and the disbursement of Brunos funds.
[138]

Also, although Hryniak denied that he was accepting funds for
    investment in early 2002, the record shows that during this period he was
    accepting money from other investors, including a U.S.$2.5 million investment
    from an entity called Southern Equity.
(ii)

What happened to Brunos investment?
[139]

Both sides
    agree that none of Brunos money ended up in the New Savings Bank; however,
    they do not agree on where the funds did end up.
[140]

Bruno said that after his U.S.$1 million was sent to Tropos,
    U.S.$550,000 was transferred back to the Cassels Brock trust account for
    Tropos.  Most of that amount was dispersed to several entities unrelated to
    Bruno, while $66,000 was used to pay a Cassels Brock invoice.  The remaining
    U.S.$450,000 was used by Hryniak for various corporate requirements.  None of
    Brunos U.S.$1 million was ever returned to him.
(iii)

Hryniaks explanation
[141]

Hryniak
    claimed that he never made any representation to Bruno about investing in
    Tropos and that he never received Brunos funds for his own benefit because
    they were taken by Cranston.
[142]

He said that by late June 2002, Cassels Brock was holding over $1
    million in its trust account for Tropos Capital.  Those funds included Brunos
    money.  In July 2002, Cassels Brock sent Brunos money to Rhino Holdings. 
    Peebles offered some support for Hryniaks contention.  In a statement dated
    March 31, 2005, taken in front of a lawyer, Peebles said that in July 2002, he
    inadvertently authorized the transfer of $1 million out of his law firms trust
    account to Cranstons holding company, Rhino Holdings.  In his reasons, the
    motion judge did not refer to Peebles statement.
(iv)

The motion judges findings
[143]

The motion
    judge held that although Hryniak was not at the meeting with Bruno, he knew
    about Brunos investment from the time it was made.  He also held that Hryniak
    never intended to invest Brunos money and did not do so. Instead, Hryniak took
    Brunos money so that he could make payments to other persons. Thus, Hryniak
    defrauded Bruno as he had the Mauldin group.
3.

Analysis
(1)

Did the motion judge err in holding that it was
  in the interest of justice to grant summary judgment?
[144]

Hryniak
    submits that in actions such as these, it is not in the interest of justice for
    the motion judge to exercise the expanded powers under rule 20.04(2.1) for the
    purpose of granting summary judgment. In essence, Hryniak argues that the
    motion judge erred in concluding that a trial was not required to determine his
    liability.
[145]

In our
    discussion of the amended Rule 20, we identified three types of cases that are
    amenable to summary judgment. The first two types of cases existed under the
    former Rule 20. The third type of case recognizes that the expanded powers
    under rule 20.04 permit a motion judge to decide a case summarily where the
    interest of justice does not require a trial.
[146]

We
    emphasized, at para. 50, that cases should not be decided summarily where the
    full appreciation of the evidence and issues that is required to make
    dispositive findings can only be achieved by way of a trial.  And we went on to
    say, at para. 51, an example of such a case is one that calls for multiple
    findings of fact on the basis of conflicting evidence emanating from a number
    of witnesses and found in a voluminous record.
[147]

As the
    motion judge implicitly acknowledged, neither the Mauldin group action nor the
    Bruno action could have been decided summarily under the former Rule 20.   
    Nonetheless, using the expanded powers under rule 20.04(2.1), he concluded,
    citing
Healey v. Lakeridge
, at para. 29, that the forensic machinery of
    a trial was not needed to determine Hryniaks liability.  In the motion
    judges opinion, a very clear picture of Hryniaks liability had emerged from
    the record.
[148]

However, both the Mauldin group action and the Bruno action bear
    all the hallmarks of the type of actions in which, generally speaking, the full
    appreciation of the evidence and issues can only be achieved at trial:
·

The motion record is voluminous  28 volumes of evidence together
    with additional evidence filed on the motions themselves;
·

Many witnesses gave evidence  18 witnesses filed affidavits, and
    cross-examinations on those affidavits took three weeks;
·

Different theories of liability were advanced against each of the
    defendants;
·

Numerous findings of fact were required to decide these motions;
·

Credibility determinations lay at the heart of these disputes,
    and the evidence of the major witnesses  Mauldin, Bruno, Hryniak and Peebles 
    conflicted on key issues; and
·

Assessing credibility was made more difficult by the near absence
    of reliable documentary yardsticks.
[149]

The
    partial resolution of these two actions by way of summary judgment did not
    promote the values underlying the amended Rule 20: better access to justice,
    proportionality and costs savings.  In a real sense the summary disposition had
    the opposite effect, as the length of time taken to bring and argue the motions
    and the plaintiffs bill of costs tellingly illustrate.
[150]

The
    motions, launched in 2008, were argued over four days in May and June 2010 and
    finally decided in October 2010  in short, close to three years from beginning
    to end.  At the conclusion of the motions, the plaintiffs submitted a bill of
    costs for $1.7 million.  Moreover, any efficiency achieved by the summary
    judgments was severely attenuated by the motion judges decision that a trial
    was needed to determine Peebles liability.
[151]

Peebles
    involvement in the events giving rise to this litigation was very much bound up
    in his client Hryniaks involvement.  Indeed, the respondents have sued Peebles
    in conspiracy.  Peebles and Hryniak have cross-claimed against each other. If
    the action against Peebles does go to trial, inevitably many of the issues
    canvassed on the summary judgment motions will have to be canvassed again.
[152]

We
    therefore conclude that, going forward, cases such as the Mauldin group action
    and the Bruno action require a trial.  They should not be decided by summary
    judgment.
[153]

Undoubtedly,
    if the motion judge had had the benefit of these reasons he would have sent
    both actions on to trial. But the motion judge did not have the benefit of
    these reasons, and especially did not have the benefit of the newly-stated full
    appreciation test. Instead, he decided these motions when the jurisprudence
    under the amended Rule 20 was unsettled, and opinions differed on the scope and
    purpose of the powers conferred by rule 20.04(2.1).
[154]

As an
    appellate court, we now have to decide what to do with these two summary
    judgments.  One obvious approach is to set aside the judgments on the simple
    ground that cases of this nature should not be resolved summarily.  However, we
    do not think this is a desirable approach. It is not a desirable approach
    because it fails to give effect to the reality of what is before us  a
    decision reached after a careful scrutiny of an extensive record, written at a
    time when the law was unsettled.  In the light of these particular
    circumstances, we are prepared to look beyond the characteristics of these
    actions that would otherwise preclude summary judgment to determine if the
    motion judge was nonetheless correct in granting partial summary judgment.
[155]

In taking this approach, however
,
we wish to be clear that
    we are
not
creating a new type of case that is amenable to summary
    judgment, nor are we creating an exception to the principles we have laid out
    above. The courts decision to scrutinize the judgments in this case is a
    product of the unusual circumstances in which they arose.
[156]

Having reviewed the extensive evidentiary record, we conclude
    that it firmly supports the motion judges determination that Hryniak committed
    the tort of civil fraud against the Mauldin group. Hryniaks defence to this
    action simply has no credibility. However, we are not prepared to uphold the
    summary judgment against him in the Bruno action because, as we shall explain,
    the motion judge did not address an important element of the legal test for
    civil fraud, nor is it clear that Hryniak received the benefit of all of
    Brunos funds.
(2)

Did the motion judge err by failing to hold that
  each action raised genuine issues requiring a trial?
(i)

The Mauldin group action
[157]

To prove
    civil fraud against Hryniak, the Mauldin group had to show on a balance of
    probabilities that:
·

Hryniak knowingly made a false statement to Fred Mauldin with the
    intent to deceive him;
·

the false statement induced the Mauldin group to invest with
    Hryniak; and
·

as a result of investing with Hryniak, the Mauldin group suffered
    a loss: see
Derry v. Peek
(1889), 14 App. Cas. 337 (H.L.);
Gregory v.
    Jolley
(2001), 54 O.R. (3d) 481 (C.A.), leave to appeal to S.C.C. refused,
    [2001] S.C.C.A. No. 460.
[158]

Unquestionably,
    the Mauldin group was induced to invest with Hryniak because of what Hryniak
    said to Fred Mauldin at the meeting at Cassels Brock on June 19, 2001.  And
    unquestionably, the Mauldin group lost virtually all of its investment. Thus,
    the only question requiring serious consideration is whether the motion judge
    erred in finding that the statements Hryniak made at the meeting were knowingly
    false and were made with intent to deceive Fred Mauldin.
[159]

We are satisfied that the extensive motion record supports the
    motion judges finding on this question. At root, the question turns on whether
    Hryniak had a legitimate trading program that went awry when Pribble stole his
    money, or whether his program was a sham from the outset.
[160]

At the
    meeting on June 19, 2001, Hryniak told Fred Mauldin that the groups investment
    was secure and would be used to engage in basis trading.  In numerous
    conversations after the meeting, Hryniak assured Mauldin and his colleague, Dan
    Myers, that their investment was safe and secure.  In other words, Hryniak
    portrayed to Mauldin and the Mauldin group a legitimate, credible and secure
    investment opportunity.
[161]

The
    Mauldin group argued and the motion judge concluded that Hryniaks so-called
    trading program was a sham.  The motion judge found that Hryniaks statements
    at the meeting were false, that he never intended to and never did legitimately
    invest the Mauldin groups money, that he orchestrated a test trade to
    dissuade the group from demanding the return of its investment, and that his
    claim that Pribble stole the money was utter nonsense.
[162]

Other than
    the so-called test trade, Hryniak never made an investment with the Mauldin
    groups money.  Therefore, to us, the veracity of his contention that he had a
    legitimate trading program turns on whether one could give any credence to his
    claim that Pribble stole the Mauldin groups funds.  We think the motion judge
    was entitled to reject Hryniaks claim of misappropriation.
[163]

It defies
    credulity that faced with a theft of approximately U.S.$10 million, Hryniak
    would not immediately report the theft to the police, ask his lawyer for assistance,
    or at least make some effort to recover the funds.  Yet on the record before
    the motion judge he did nothing other than send a self-serving letter to the
    Canada Revenue Agency and a very brief fax to a purported FBI agent whom he
    knew, some 15 months after the theft occurred.  Even having done that, Hryniak
    took no steps to follow up with either the Canada Revenue Agency or the FBI
    agent about the whereabouts of the money or the supposed thief.
[164]

On all the
    evidence presented on the motion, including the examinations of Hryniak,
    Hryniaks claim that Pribble misappropriated the Mauldin group investment rings
    hollow. The incredulity of his evidence strongly supports the motion judges
    finding that Hryniak never had or intended to have a legitimate trading program
    in place and yet he falsely told Fred Mauldin that he did in order to persuade
    the Mauldin group to invest with him.
[165]

In the
    light of the blatant incredulity of Hryniaks evidence, we are not persuaded
    that we should interfere with the summary judgment granted in favour of the
    Mauldin group. Accordingly, we dismiss Hryniaks appeal from that judgment.
(ii)

The Bruno action
[166]

We take a
    different view of the summary judgment in the Bruno action.  The evidence
    against Hryniak in that action was not nearly as overwhelming and raises at
    least two genuine issues requiring a trial.
[167]

The first and most significant issue is whether Hryniak made a
    false statement that induced Bruno to invest with him.  Again, to prove Hryniak
    defrauded him, Bruno had to establish that:
·

Hryniak knowingly made a false statement to Bruno with the intent
    to deceive him;
·

the false statement induced Bruno to invest with Hryniak; and
·

as a result of investing with Hryniak, Bruno suffered a loss.
[168]

Despite
    Hryniaks protestations to the contrary, we accept for the purpose of this
    appeal that he knew Bruno had invested U.S.$1 million with Tropos, that he did
    not invest this money, and that instead he used at least a portion of it for
    his own corporate requirements.  We are even prepared to accept that Hryniak
    knew about the meeting on February 22, 2002 that led to Brunos investment. 
    And, of course, we also accept that Bruno lost his entire investment.
[169]

What is
    not clear on the record is whether Hryniak made any statement that induced
    Bruno to invest with him.  The motion judge did not address this important
    element of a cause of action in civil fraud.  As we read his reasons, he
    concluded that because Hryniak had dishonestly converted Brunos money to his
    own use, Hryniak was liable to Bruno in fraud.  In other words, fraud was made
    out because Hryniak deprived Bruno of his money and did so in a dishonest way.
[170]

The notion
    of deprivation underlies both the tort of conversion and civil fraud: see
    Philip H. Osborne,
The Law of Torts
, 4th ed. (Toronto: Irwin Law, 2011),
    at pp. 308-309.  But proof of civil fraud requires proof of some additional
    elements; depriving the plaintiff of his goods is not enough. Fraud requires a
    false statement knowingly made that induces the victim to act to the victims detriment. 
    On the record before us, Bruno wired his U.S.$1 million investment to the
    Cassels Brock trust account without ever having met or spoken to Hryniak. He
    sent his investment after a short meeting with Peebles and Cranston, and first
    spoke to Hryniak a month or more later.
[171]

Bruno
    acknowledges that he invested before meeting or talking to Hryniak.  He
    contends, however, that Peebles acted as Hryniaks agent in inducing Bruno to
    invest.  A person may commit fraud through an agent: see G.H.L Fridman,
Canadian
    Agency Law
, (Markham: LexisNexis Canada Inc., 2009), at pp. 190-93. But we
    have no compelling evidence that Peebles acted as Hryniaks agent for the
    purpose of inducing Bruno to invest.  Nor could we make that finding as the
    motion judge left Peebles credibility to be determined at trial.
[172]

Also, we
    do not know what statements persuaded Bruno to invest.  He may have invested
    because of something Peebles said; or, he may have invested because of
    something Cranston said.  Indeed Brunos own affidavit filed on his motion for
    summary judgment strongly suggests that Cranstons representations induced him
    to invest.  Yet Cranston, as we have said, gave no evidence on the motion.  For
    these reasons, whether Hryniak, through Peebles, made a false statement that
    induced Bruno to invest is a genuine issue requiring a trial.
[173]

There is a
    second genuine issue requiring a trial: whether part of Brunos investment was
    misappropriated by Hryniak or by Cranston.  Again, despite Hryniaks denials,
    we accept for the purpose of this appeal that he knowingly took Brunos money and
    used at least U.S.$450,000 of it for his own purposes. The Cassels Brock trust
    ledgers and Hryniaks own instructions to Peebles assistant overwhelmingly
    show this to be so.  However, the Cassels Brock trust ledgers also show that in
    late June 2002, Hryniak redeposited U.S.$550,000 into the Cassels Brock trust
    account for Tropos, with the result that the law firm then held more than
    U.S.$1 million in trust for Hryniaks company.
[174]

In March
    2005, Peebles signed a written statement before a lawyer in which he
    acknowledged that he inadvertently sent U.S.$1 million out of the Cassels Brock
    trust account to Cranstons company, Rhino Holdings.  The motion judge did not
    refer to this statement.  Although Peebles appeared to retract his statement in
    a later affidavit, his credibility remains to be determined.  Thus, whether the
    U.S.$1 million sent to Cranston, included U.S.$550,000 of Brunos money, and
    whether Hryniak eventually got the benefit of that money or whether Cranston
    misappropriated it are questions that require a trial for their resolution.
[175]

Because
    the Bruno action raises at least two genuine issues requiring a trial, his
    summary judgment against Hryniak cannot stand.  We allow Hryniaks appeal from
    this judgment, set aside the judgment and dismiss Brunos motion.
4.

Conclusion
[176]

Hryniaks
    appeal from the summary judgment granted in favour of the Mauldin group is
    dismissed. His appeal from the summary judgment in favour of Bruno is allowed,
    that judgment is set aside, and Brunos motion for summary judgment is
    dismissed.
[177]

Three
    remaining matters need to be addressed: a trial management order under rule
    20.05 for Brunos action against Hryniak, the letter of credit posted by
    Hryniak, and costs.
[178]

Our trial management order will accord with the order made by the
    motion judge in the actions against Peebles and Cassels Brock. Under rule
    20.05(1), we order that the action should proceed to trial expeditiously. 
    In addition, under rule 20.05(2), and subject to any further order by a judge
    of the Superior Court of Justice,  we impose the following terms:
·

The affidavits of the parties and the cross-examinations on the
    affidavits, which were used on the motion for summary judgment, may be used at
    trial in the same manner as examinations for discovery. Further discovery
    should be limited to matters not already covered in those affidavits and the
    cross-examinations.
·

The Bruno action against Hryniak should be heard together with
    the pending actions of Mauldin and Bruno against Peebles and Cassels Brock.
·

As the motion judge noted, Master Glustein is ably case managing the
    actions against Peebles and Cassels Brock. He should also oversee the Bruno
    action against Hryniak.
[179]

On January
    24, 2011, Weiler J.A. ordered Hryniak to post an irrevocable letter of credit
    with the court in the amount of $950,000 as a condition of granting Hryniaks
    motion to extend time to perfect his appeals. Weiler J.A. said that
    imposing this order would be a just balance between Hryniaks right to an
    appeal and the respondents interest in ensuring that they may enforce the
    motion judges court order if Hryniak loses his appeal:  see
Mauldin
    v. Hryniak
, 2011 ONCA 67, 274 O.A.C. 353, at para. 41.  On February
    11, 2011, Doherty J.A. varied the terms of Weiler J.A.s order to facilitate
    Hryniaks ability to finance the letter of credit:  see
Mauldin v.
    Hryniak
, 2011 ONCA 126.
[180]

Considering
    that Hryniaks appeal was dismissed in the Mauldin action and allowed in the
    Bruno action, we must decide how to deal with the proceeds of the letter of
    credit.  The parties to the appeals may file brief written submissions of no
    more than five pages setting out their positions on the order this court should
    make in respect of the proceeds of the letter of credit.
[181]

Finally, the
    parties may make written submissions on the costs of the appeals and on the
    costs of Brunos motion for summary judgment.
394 Lakeshore Oakville Holdings Inc.
    v. Misek
(C53035)
On appeal
          from the order of Justice Paul M. Perell of the Superior Court of Justice,
  dated November 2, 2010, with reasons reported at 2010 ONSC 6007.
1.

Introduction
[182]

This is an
    appeal from an order granting summary judgment in favour of the respondent, 394
    Lakeshore Oakville Holdings Inc. The motion judge declared that the property of
    the appellant, Carol Anne Misek, does not enjoy a prescriptive easement over
    the respondents property.  In so doing, the motion judge exercised the
    enhanced powers under rule 20.04(2.1), which allow a judge on a motion for
    summary judgment to weigh evidence, evaluate credibility, and draw reasonable
    inferences from the evidence.
[183]

The appellant contends that the motion judge erred in concluding
    that a trial was not required to decide the issue whether there was a
    prescriptive easement over the respondents property. For the reasons that
    follow, we do not accept the appellants position.
2.

Facts
[184]

The
    respondent owns 394 Lakeshore Road West in Oakville, which is a 9.5 acre parcel
    of land with shoreline on Lake Ontario.  In December 2009, the respondent applied
    to the Town of Oakville to develop these lands for 23 residential condominium
    lots.
[185]

The
    neighbouring property owners, including Misek and her husband, opposed the
    development. Miseks property is located at 394A Lakeshore Road West (the
    Misek property), which abuts the respondents property to the northwest.  The
    Misek property has no shoreline. Janet Purvis, who was a co-defendant in the
    respondents action, owned 394A Lakeshore Road West from 1975 to 2002.  She and
    her husband sold the property to Misek in 2002.
[186]

On March
    17, 2010, the respondent applied under the
Land Titles Act
, R.S.O. 1990,
    c. L.5, to obtain a designation of Land Titles Absolute for 394 Lakeshore
    Road West. This designation is a prerequisite for registering a condominium plan.
    The respondents property has been designated as Land Titles Conversion
    Qualified since February 1996, when the lands were converted to the land
    titles system.
[187]

Misek, as
    a neighbouring property owner, received notice of the respondents land titles
    application.  She filed a statement of objection under the
Land Titles Act
in which she asserted an easement over the respondents property based on
    continuous use of the lands for more than 20 years.
[188]

In
    addition to the statement of objection, Misek and Purvis each filed a
    supporting statutory declaration. In her declaration, Misek claimed a
    prescriptive easement over, along and across [a] 9.83 metre strip of [the
    respondents property, specifically, over Part 5 of the respondents draft
    reference plan] ... for access to and from the Misek Lands to the pebble beach
    and water [
sic
] edge of Lake Ontario.
[189]

Misek had
    the onus of proving that a prescriptive easement had been established over the
    respondents property by no later than February 26, 1996, when both the
    respondents property and the Misek property were converted from the land
    registry system to the land titles system.  In Ontario, a prescriptive easement
    can only be created over lands governed by the
Registry Act
, R.S.O.
    1990, c. R.20, because s. 51(1) of the
Land Titles Act
prevents the
    maturing of claims for adverse possession and for prescriptive easements once a
    property is transferred into the land titles system. Central to this case is
    what happened on the respondents property in the 20-year period before
    February 26, 1996, the date that the respondents property was converted to the
    land titles system. The relevance of the 20-year period is explained below at
    paras. 206-207.
[190]

In
    Purvis statutory declaration, she deposed that while she and her husband were
    the owners of 394A Lakeshore Road West from 1975 to 2002, their property
    enjoyed the benefit of a registered right of way over a portion of the
    neighbouring lands (shown as Parts 1, 2, 3 and 4 on the respondents draft
    reference plan). She further deposed that their property enjoyed the benefit of
    a prescriptive easement over a 9.83 metre strip of the respondents property,
    extending from the Misek property to the edge of Lake Ontario.  She stated that
    during their ownership, she and her husband used and enjoyed the prescriptive
    easement in a manner that was continuous, uninterrupted, open and peaceful.
[191]

Miseks
    objection to the respondents application was delivered to the Registrar for
    Land Titles in early May 2010.  On May 11, 2010, without abandoning its
Land
    Titles Act
application, the respondent commenced an action against Misek
    and Purvis for $5 million in damages for slander of title and injurious or
    malicious falsehood.
[192]

Misek and
    Purvis moved under Rule 21 for an order staying or dismissing the action on the
    basis that: (1) the action failed to disclose a reasonable cause of action
    against Purvis; (2) there was another proceeding pending in Ontario between the
    same parties in respect of the same subject property, namely, an administrative
    proceeding under the
Land Titles Act
; and (3) the action was frivolous,
    vexatious, and an abuse of process.
[193]

The
    respondent followed with a cross-motion for summary judgment under Rule 20
    before the close of pleadings.
[194]

Miseks
    lawyer requested permission to access the respondents property in order to
    prepare a survey of the claimed easement.  The respondent objected to the need
    for a survey. The respondents lawyer provided a computer-aided design file (an
    AutoCAD file) of the existing survey of the lands for use by Miseks surveyor,
    George Lo.
[195]

On July 6,
    2010, the lawyer for the respondent wrote directly to Lo and said:
You are hereby put on notice that 394 will hold you
    personally responsible, in accordance with subsection 6(2) of the
Surveys
    Act
, and at common law, for any and all damage that results if, under these
    circumstances, you proceed to attend at the 394 Property and prepare, register
    or file a survey that is used by Ms. Misek and/or Ms. Spadafora or otherwise
    place stakes or markers on the 394 Property in the advancement of their
    assertion of the Claimed Easement.
[196]

Lo
    prepared a survey from the drawings supplied to him.  He refused to attend the
    property in person because he did not want to run the risk of being added as a
    defendant to this action.  As a result, he relied on information provided by
    Misek and Purvis and the aforesaid drawings.
[197]

Purvis
    swore two affidavits in which she deposed that she and her late husband
    regularly walked on the respondents property, making their way down to the
    pebble beach at the lake. She also provided video evidence showing the two of
    them walking on the claimed easement lands in 1990.
[198]

When
    Purvis was cross-examined on her affidavit, she acknowledged that the claimed
    easement is narrower than 9.83 metres in certain places.
[199]

The
    respondent issued a summons to a former owner of 394 Lakeshore Road West,
    Russell Little.  Little testified that Purvis and her family frequently walked
    over his lands and across the waterfront of Lake Ontario and that he would wave
    to them when he saw them.  He also testified that he never objected to their
    use of the lands. He said that his understanding was that their use of the
    lands was derived from a right inherited from the previous owners of the Misek
    property and a continuation of a long-established convention that he
    respected.  He did not know if he had an option to consent to Purvis walking on
    his lands but [he] just assumed it was a right.
[200]

Before the
    summary judgment motion was argued, the respondent served an amended statement
    of claim.  In the amended claim, the respondent withdrew its claim for slander
    of title, injurious affection and malicious falsehood.  The respondent sought
    an order deleting the statement of objection filed by Misek, and a permanent
    injunction prohibiting Misek and Purvis from registering any document or plan
    against its title, or otherwise claiming any interest in its lands.
3.

Motion for Summary Judg
ment
[201]

The
    parties competing motions under Rules 20 and 21 were heard together. The
    motion judge observed that the respondents action was unnecessary because of
    the pending proceeding under the
Land Titles Act
. However, he exercised
    his discretion to proceed with the motions so as not to prolong the matter. On
    appeal, no objection was made to this exercise of the motion judges
    discretion.
[202]

The
    motion judge held that a trial was not necessary to determine the question
    whether the Misek property enjoyed an easement over the respondents property. 
    He concluded that Purvis had only held a personal license, which was not
    defined with sufficient certainty to establish a prescriptive easement.  He
    granted summary judgment in favour of the respondent and declared that the
    Misek property did not enjoy a prescriptive easement over the respondents
    property. He also granted Purvis Rule 21 motion and dismissed the respondents
    action against her.  The motion judge observed that there was no basis for
    naming Purvis as a defendant considering that she no longer owned the property
    in favour of which the prescriptive easement was claimed. Finally, he dismissed
    Miseks Rule 21 motion seeking to stay the respondents action.
[203]

In his
    reasons for these orders, the motion judge gave an exhaustive review of the law
    of easements in England and Canada extending back to the mid-19th century.  It
    is unnecessary to repeat that review in detail here.
[204]

The motion judge referred to the four essential characteristics
    of an easement as described by the Master of the Rolls in
Re Ellenborough
    Park
, [1956] 1 Ch. 131 (Eng. C.A.):
(i)        There
    must be a dominant tenement (the property that enjoys the benefit of the
    easement) and a servient tenement (the property that is burdened);
(ii)       The
    easement must accommodate, that is, better or advantage the dominant land and
    not merely the owner of the land.  It is not enough that an advantage has been
    conferred to the owner of the dominant property making his or her ownership
    more valuable or providing a personal benefit to him or her; rather, for there
    to be an easement, the right conferred must serve and be reasonably necessary
    for the enjoyment of the dominant tenement;
(iii)     Both
    tenements cannot be in the hands of the same person; and
(iv)      The
    easement must be capable of forming the subject matter of a grant.  The
    following conditions must be met to fulfill this requirement: the rights
    claimed must not be too vague; the rights claimed must not amount to a good
    claim to joint occupation of the property in question or substantially deprive
    the owner of the servient property of proprietorship or legal possession; and
    the rights claimed must not be ones of mere recreation and amusement. The
    rights in issue must be of utility and benefit.
[205]

The motion
    judge then described the two ways that a prescriptive easement can be acquired
    in Ontario:
(i)

prescription by limitation period statute (the
Real Property
    Limitations Act
, R.S.O. 1990, c. L.15); and
(ii)

prescription by the doctrine of lost modern grant.
[206]

As noted
    by the motion judge, the limitation period statute in Ontario, the
Real
    Property Limitations Act
, provides that the 20-year period for creating a
    prescriptive easement is the period immediately before the commencement of the
    action:  see ss. 31 and 32 of that Act.
[207]

The
    doctrine of the lost modern grant was described by Blair J.A. in
Kaminskas
    v. Storm
, 2009 ONCA 318, 95 O.R. (3d) 387, at para. 22, as follows:
This doctrine was developed in common law
    jurisprudence to overcome the inconvenience of the common law rule (where the
    right could be defeated if it could be proven that the right claimed did not
    exist at any point in time within legal memory).  Under the doctrine of lost
    modern grant, the courts will presume that there must have been a grant made
    sometime, but that the grant had been lost.
Uninterrupted user as of right
    at any point in time will create the prescriptive right under this doctrine,
    provided it was for at least 20 years.
[Emphasis added.]
[208]

In
    addition to considering whether the evidence established the essential
    characteristics of an easement articulated in
Ellenborough Park
, the
    motion judge also considered the following criteria for establishing a
    prescriptive easement. These criteria apply whether the claim for the easement
    is based on a limitations statute or the doctrine of lost modern grant:
(i)

Use by permission or license is insufficient to establish a prescriptive
    easement;
(ii)

The easement claimants use must be open and not secret or clandestine;
(iii)

There must be evidence that the owner of the servient tenement knew or
    ought to have known what was happening on his or her land;
(iv)

Use permitted by neighbourliness is insufficient to establish an
    easement by prescription; and
(v)

The use of the easement must be uninterrupted for the required
    prescription period.
[209]

The motion
    judge next referred to his ability to weigh evidence under the amended Rule 20
    (at para. 101):
I will make this review in the context of the
    courts recently enhanced powers under rule 20.04(2.1) on a motion for summary
    judgment to weigh the evidence, evaluate the credibility of a deponent, and
    draw any reasonable inference from the evidence and on the basis that the
    parties have put their respective best evidentiary cases forward.
[210]

In his
    assessment of the evidence, the motion judge observed, at para. 113, that
    Miseks evidence was unhelpful in deciding the fundamental issue of whether a
    prescriptive easement existed. This was because she and her family were not
    living on the property during the relevant 20-year period prior to the lands
    being registered under the
Land Titles Act
.  Her evidence on the use of
    the lands during this period would thus be hearsay.
[211]

The motion
    judge found that the evidence of the surveyor, Lo, was not dispositive.  He
    observed that it was unfortunate that Lo had been scared off by the somewhat
    aggressive letter of the respondents solicitor.  However, the motion judge concluded
    that even if Lo had accessed the respondents property, it would not have made
    a difference because he would not have discovered a demarked route for the
    claimed easement.
[212]

The real
    focus of the judges assessment was the evidence of Purvis and, to a lesser
    extent, that of Russell Little. The motion judge accepted Purvis evidence that
    she and her husband would walk to the lake from their house along the eastern
    boundary of 394 Lakeshore Road West on a meandering path over the unmarked
    grassy area to a sloped path that led to a slate beach.  These walks took
    place on average two times per week during spring, summer and fall, and less
    frequently during the winter.  No one ever tried to stop Purvis and her husband
    from walking on the neighbouring land.  Occasionally, during their walks,
    Purvis and her husband would stop and chat with the neighbours.
[213]

In
    addition, the motion judge accepted Purvis evidence that neither she nor her
    husband ever asked permission to walk across the respondents property. She
    regarded the walks as a practice that was already in place when she purchased
    the property. She also described the walks as a ritual and a situation that
    went with the property itself.  However, she testified that she did not think
    of the practice as a right.  As well, Purvis testified that she did not think
    her property was more valuable because of her ability to walk on her
    neighbours property. Instead, she saw the ability to do so as having a
    personal value rather than a monetary one.
[214]

In his
    testimony, Little confirmed that he never objected to Purvis and her husband
    walking across the property in issue. While he would not have made an
    objection, he believed that he could not do so because he understood from his
    groundskeeper that there was a tradition or custom that permitted the occupants
    of 394A Lakeshore Road West to walk on the adjoining lands from the time that
    394A was severed from 394.
[215]

After the
    motion judges review of the above evidence, he concluded at paras. 122-25:
I conclude from all this evidence that there is no
    genuine issue requiring a trial. In my opinion, the evidence establishes that
    Mr. and [Mrs.] Purvis had a personal licence and never acquired a prescriptive
    easement over property that they knew belonged to their neighbours.
The evidence shows only that the owners of 394
    Lakeshore Rd. W. tacitly permitted  as neighbours might do  their neighbours
    to pass across their lands without being regarded as trespassers. The owners
    permitted the use because it was the custom to permit this personal use. The
    evidence is insufficient to establish acquiescence of a right to be annexed to
    a dominant tenement.
Further, the licence that was the pre-existing
    practice or custom between the owners of 394 and 394A Lakeshore Rd. W. did not
    have the capacity to become a prescriptive easement. The licence provided only
    a personal benefit that the owners of 394A would not be regarded as trespassers
    by the owners of 394 Lakeshore Rd. W. The licence was not reasonably necessary
    for the enjoyment of the dominant tenement or meant to burden the servient
    tenement.  Further, the licence was not defined with adequate certainty, and it
    was not limited in scope.
A trial is not necessary in the circumstances of
    this case to determine whether a prescriptive easement was created.  There is
    no genuine issue requiring a trial.  The evidence shows only a licence, which
    does not run with the lands.  It is also plain and obvious and no trial is
    necessary to conclude that the Plaintiff never had a claim against Mrs. Purvis.
4.

Issues
[216]

The appellant raises the following four issues:
(1)

Did the motion judge err in deciding whether there was a prescriptive
    easement on a Rule 20 motion?
(2)

Did the motion judge err in deciding that Purvis enjoyed a personal
    license rather than a prescriptive easement?
(3)

Did the motion judge err in deciding that the easement claim was not
    defined with adequate certainty or limited in scope?
(4)

Did the motion judge err in deciding that the easement claim was not
    reasonably necessary to enjoy the Misek property?
5.

Analysis
(1)

Did the motion judge err in deciding whether
  there was a prescriptive easement on a Rule 20 motion?
[217]

Counsel
    for the appellant submits that a claim for a prescriptive easement should not
    be decided on a summary judgment motion. In support of this assertion, counsel
    relies on
Longo v. C.H. Lager Ltd.
(1998), 20 R.P.R. (3d) 128 (Gen.
    Div.).  In
Longo
, there were cross-applications under Rule 14 of the
Rules
    of Civil Procedure
for determining property rights of neighbouring parties
    in respect of a right of way.  The application judge sent the matter on for
    trial and, in doing so, observed that except in the clearest of cases, it would
    be difficult to decide issues of adverse possession on affidavit material.  A
    fair reading of the reasons in
Longo
indicates that the evidentiary
    record was not sufficient to permit the application judge to decide the case. 
    In addition, the application judge noted that conflicts in the evidence
    necessitated credibility findings that required a trial.
[218]

We reject
    the appellants suggestion that certain categories of claims should not be
    decided on a motion for summary judgment. According to the appellant, a claim
    for a prescriptive easement requires findings of credibility concerning the use
    of the claimed easement lands, which should not be made on a summary judgment
    motion. The appellants position ignores the fact-finding powers afforded to
    the motion judge by rule 20.04(2.1), including the express power to make
    credibility findings. As we have said, the test for exercising the powers
    conferred by rule 20.04(2.1) is whether the full appreciation of the evidence
    and issues that is required to make dispositive findings is possible on a
    motion for summary judgment.
[219]

This case is a good example of the type of case that is amenable
    to summary judgment based on the application of the full appreciation test. The
    documentary evidence was limited and not contentious. There were a limited
    number of relevant witnesses. The governing legal principles were not in
    dispute. It was thus entirely appropriate for the motion judge to decide the
    action on a Rule 20 motion.
(2)

Did the motion judge err in deciding that Purvis
  enjoyed a personal license rather than a prescriptive easement?
[220]

Before
    addressing the appellants specific complaints about the motion judges
    findings, we begin by observing that the appellant does not take issue with the
    motion judges articulation of the law on prescriptive easements. The
    appellants point of departure from the motion judge concerns how the motion
    judge applied the law to the facts as he found them. Thus, the appellants
    complaints relate to the motion judges findings of mixed fact and law. These
    findings fall more towards the factual end of the spectrum, and significant
    deference must be accorded:
Bell Canada v. Plan Group
, at para. 27.
[221]

Counsel
    for the appellant submits that there was no evidence to support a finding that
    Purvis had express or implied permission for her use of the lands.  He further
    submits that both Purvis and Littles evidence supports a finding that Purvis
    walked the claimed easement lands in a continuous, uninterrupted, open,
    peaceable manner, and with the knowledge of, and without objection from, the
    owner for 20 years.
[222]

We would not interfere with the motion judges findings on this
    issue. The evidence before him supported the inference that Purvis and her
    husband were permitted to walk on the adjoining land as a neighbourly gesture
    without being treated as trespassers. The motion judge was entitled to draw the
    inference from the evidence before him that Purvis and her husband were simply
    the recipients of neighbourly goodwill. This ground of appeal is dismissed.
(3)

Did the motion judge err in deciding that the
  easement claim was not defined with adequate certainty or limited in scope?
[223]

Counsel
    for the appellant submits that the motion judge misapprehended the evidence
    concerning the boundaries of the easement and effectively held the appellant to
    a higher standard of certainty than the law requires. Counsel submits that the survey
    prepared by Lo was sufficiently particular when taken with Purvis evidence to
    establish the boundaries of the easement over the respondents lands with
    adequate certainty.
[224]

Alternatively,
    counsel submits that if Los survey was deficient, the motion judge failed to
    properly consider that any deficiencies were caused by the interference of the
    lawyer for the respondent. Counsel argues that the motion judge erred in making
    a final determination on the certainty issue in the absence of a proper survey.
    He further argues that the actions of the respondents lawyer hindered the
    appellant from being able to properly defend the Rule 20 motion.
[225]

The
    conduct of the respondent through its solicitor was of concern to the motion
    judge. However, he concluded that even if Lo had been permitted unrestricted
    access to the respondents property, it would not have made a difference. After
    referring to Purvis evidence describing the meandering, unmarked route across
    grassy and treed areas that she and her husband took on their walks, the motion
    judge concluded, at para. 114, that Lo would not have discovered a demarked
    route.
[226]

While the appellant raises a legitimate concern about the
    treatment of the appellants surveyor, the evidence reasonably supports the
    motion judges finding that the surveyor would not have been able to show the
    boundaries of the claimed easement with sufficient certainty, and that the
    easement was not limited in scope. We would not interfere with these findings.
(4)

Did the motion judge err in deciding that the
  easement claim was not reasonably necessary to enjoy the Misek property?
[227]

Counsel
    for the appellant submits that the motion judge erred in determining that the
    claimed easement was not reasonably necessary to enjoy the Misek property.  He
    argues that this finding fails to account for the utility that the easement
    claim provided to the Misek property.  He cites
Ellenborough Park
, at
    pp. 174-75, for the proposition that an easement for recreational and leisure
    purposes is recognized in law.
[228]

In our view, it was reasonable for the motion judge to conclude
    that the advantage conferred on Purvis and her husband was not reasonably
    necessary for the enjoyment of the Misek property, but was rather in the nature
    of a personal benefit.  This is not a case like
Schwark Estate v. Cutting
(2008), 77 R.P.R. (4th) 219 (Ont. S.C.), revd 2010 ONCA 61, 316 D.L.R. (4th)
    105, relied on by the appellant, in which cottagers sought a prescriptive
    easement over neighbouring lands in order to access a beach on Lake Erie that
    was directly in front of their cottages.
[11]

[229]

Unlike a cottage property, where the use of a nearby beach might
    well be closely connected with the use and enjoyment of the cottage, in the
    case at bar, the dominant tenement was not a cottage property adjacent to a
    beach. The video evidence indicates that there were many trees and bushes on
    the claimed easement lands and no clear access from the Misek property to the
    pebble beach along Lake Ontario. It was, therefore, reasonable for the motion
    judge to find that the claimed easement over 394 Lakeshore Road West was a
    benefit that depended on the personal interest of Purvis and her husband in
    taking walks in the area, rather than being reasonably necessary for the
    enjoyment of the Misek property.
6.

Conclusion
[230]

In this case, the motion judge determined that a trial was not
    required to decide the respondents action. He did not err in this conclusion.
    He properly employed the enhanced powers accorded to him by rule 20.04(2.1) to
    weigh the evidence, evaluate credibility, and draw reasonable inferences in
    order to decide the action summarily, and we see no basis upon which to
    interfere with his findings of fact.
[231]

For these
    reasons, the appeal is dismissed. The parties may make brief written
    submissions on the costs of the appeal.
Parker v. Casalese
(C53395)
On appeal from the order of the
          Divisional Court (Justices Emile R. Kruzick, Katherine E. Swinton and Alison
          Harvison Young J.J.), dated October 21, 2010, with reasons reported at 2010
  ONSC 5636.
1.

Introduction
[232]

This is an
    appeal by Marie Parker, Katherine Stiles, and Siamak Khalajabadi (appellants)
    from the Divisional Courts decision affirming the motion judges order
    dismissing their motion for summary judgment. The appellants commenced an
    action against the defendant, Pino Scarfo (respondent Scarfo or Scarfo),
    under the simplified procedure set out in Rule 76 of the
Rules of Civil
    Procedure
. They alleged that the respondent Scarfo constructed two new
    homes in between their existing homes and damaged their properties in the
    process. The appellants also claimed against the owners of the new homes, the
    defendants Eric and Gerarda Casalese and Antonietta and Mauro Di Lauro
    (respondent homeowners), on a theory of vicarious liability.
[233]

The
    appellants motion for summary judgment was heard less than two months after
    the amended Rule 20 came into force. The motion judges reason for dismissing
    the motion was that there were numerous conflicts in the evidence that could
    only be justly resolved after a trial. He did not identify these conflicts or
    explain why the powers under the new rule should not be used to resolve them. 
    Greer J. of the Divisional Court granted leave to appeal on the basis of the
    inadequacy of the motion judges reasons. The Divisional Court acknowledged the
    insufficiency of the motion judges reasons, but agreed with the result based
    on that courts review of the record.
[234]

This appeal raises the novel interpretative issue of how Rule 20
    should be applied in the context of an action under Rule 76.
2.

Facts
[235]

In their
    statement of claim, the appellants allege that in the fall of 2007, the
    respondent Scarfo demolished a semi-detached home that was in between their
    properties on Woburn Avenue in the City of Toronto and began construction of
    two new homes. They claim that their properties were damaged during the
    construction process in various ways.  For example, they say that the
    respondent Scarfo failed to shore up the soil along the sides of the excavation
    site, which resulted in damage to their properties. They complain of sinking
    land, cracked foundation walls, water damage, and cracked and sloping paving.
    They also allege that cement was splattered on parts of their homes during the
    construction. In addition, the appellants claim that the new properties were
    not graded properly, which created a risk of drainage problems affecting their properties.
    They seek joint and several damages totalling almost $90,000 against the
    respondent Scarfo as the builder and the respondent homeowners.
[236]

In the respondent Scarfos statement of defence, he denies that
    he personally performed the demolition and construction work and claims that
    any work was carried on by his corporation. He also denies that the appellants
    properties were damaged during the construction. In their separate statement of
    defence, the respondent homeowners acknowledged that Scarfo demolished the
    existing homes and began construction of the new ones.  However, they deny any
    losses were suffered and also deny liability for Scarfos actions.
3.

Motion for Summary Judgment
[237]

The
    appellants moved for summary judgment. In support of the motion, they each
    filed affidavits describing the alleged damage done to their properties, which
    they attributed to the construction process carried out by the respondent
    Scarfo. They also filed an expert report by an engineering firm detailing the
    damages allegedly caused by the construction. The report explains the causes of
    the observed damages and estimates the cost of repairing the damage to the
    appellant Parkers property at $31,000 and the cost of repairing the property
    owned by the appellants Stiles and Khalajabadi at $55,000, plus an additional 20
    per cent for plans, permit fees and inspections.
[238]

The
    respondents filed affidavits in response to the motion. The respondent Scarfo claimed
    that his company, The Manor Arms Inc., was responsible for the construction. 
    He deposed that Manor Arms had a verbal agreement with the respondent homeowners
    to demolish the existing semi-detached homes and to build the new homes. He
    filed, as an exhibit, documents showing that the respondent homeowners payments
    for the construction work were payable to Greenline, which was a business
    name registered to Manor Arms. In addition, he filed affidavits from various
    sub-contractors indicating that they had been hired and paid by Greenline.
[239]

In their
    affidavits, the respondent homeowners acknowledged that Scarfo demolished the
    existing homes and began construction of the new ones. They denied any
    negligence or damage in the construction process and said that, in any event,
    the appellants recourse was only against Scarfo, not them. The respondent
    homeowners filed as exhibits two applications for building permits to construct
    the new homes, which identified the applicant for the permits as Scarfo personally.
    Although the form includes a section asking for the name of any corporate
    applicant, this section was not filled in.
[240]

The
    respondents did not file an expert report contradicting the appellants expert.
    Rather, in addition to generally denying any damages, the respondent Scarfo
    asserted that the appellants estimate of the cost of repairs was excessive.
[241]

When the motion was first brought, it was governed by rule
    76.07.  Rule 76.07 permitted a party in a simplified procedure action to move
    for summary judgment after the close of pleadings. Rule 76.07(3) stipulated
    that the test for summary judgment was not that in rule 20.04. Instead, rule
    76.07(9) provided the following test:
76.07 (
9) The
    presiding judge shall grant judgment on the motion unless,
(a)       he or she is unable to decide the issues in the action without
    cross-examination; or
(b)       it would be otherwise unjust to decide the issues on the
    motion.
[242]

When the
    motion was heard, rule 76.07 had been revoked (by O. Reg. 438/08, s. 55) and the
    amended Rule 20 governing summary judgments applied.
[243]

No examinations
    for discovery had been held when the motion was brought because under rule
    76.04, as it then read, examinations for oral and written discovery were not
    permitted. The current rule 76.04 now prohibits written examinations for
    discovery under Rule 35, while oral discovery is limited to two hours of
    examination: see rule 76.04(2).  No cross-examinations on the affidavits were
    held because both the former and the amended rule 76.04 prohibit
    cross-examination of deponents on affidavits filed on a motion.
[244]

The motion
    judge dismissed the appellants motion.  His reasons, in their entirety, state:
The motion is dismissed. Submissions regarding
    costs may be exchanged and delivered to me within one month.
There are numerous conflicts in the evidence and I
    am satisfied that they can be justly resolved only after a trial.
[245]

The
    appellants appealed to the Divisional Court with leave. The court made the
    point, at para. 10, that the motion judges reasons were inadequate as he made
    no reference to the test for summary judgment as set out in Rule 20, and there
    is nothing to indicate whether he appreciated the fact that the standard is
    different and more flexible under the new Rules.  However, the Divisional
    Court found that a review of the record supported the motion judges conclusion
    that a trial was required for three reasons, at paras. 12-14.  These reasons
    may be summarized as follows:
(1)

There is conflicting evidence as to whether the work was carried out by
    Scarfo personally or by his company. Scarfos personal liability should not be
    decided without a trial as most of the agreements with the sub-trades and the
    homeowners were verbal. These factors appear to put a premium on
viva voce
evidence and the ability to be cross-examined.
(2)

The new homeowners liability was not clearly established on the record.
    To establish vicarious liability, the appellants must show that the work
    undertaken involved unusual and inherently dangerous risk:
Savage v. Wilby
,
    [1954] S.C.R. 376. The record did not differentiate between damages from
    activities that might have been inherently dangerous, such as excavating, and
    damages from activities that might not be, such as constructing a walkway.
(3)

The expert report filed by the appellants does not break down the damage
    calculation into its components. Further, there is conflicting evidence as to
    whether there was damage that pre-existed the construction.
[246]

Finally,
    the court observed that there was no cross-examination prior to the motion.  The
    court concluded, at para. 15, that despite the new rules, this is a case that
    is more appropriately dealt with by a trial, though perhaps one that is summary
    in nature.
[247]

The
    appellants appealed with leave to this court.
4.

Issues
[248]

The
    overarching issue raised by the appellants is whether the Divisional Court
    erred in the way it applied the test for summary judgment under the amended
    Rule 20.  The appellants say that if the court had properly applied the new
    test, it would have recognized that there was no genuine issue requiring a
    trial and would have granted summary judgment on all issues. Alternatively, had
    the court determined that some issues could not be decided on the motion, the
    court ought to have granted partial summary judgment or ordered the hearing of
    oral evidence to resolve those issues.
[249]

The
    appellants argue that the respondent Scarfos personal liability can and should
    be decided on the existing record. They submit that the evidence of his
    liability is compelling. The respondent homeowners admit they hired Scarfo
    personally. As well, Scarfo personally signed the building permit forms and has
    provided no explanation for why, if his company were in fact the builder, it
    was not named anywhere on the application forms. According to the appellants, any
    conflict in the evidence on this issue cannot survive the courts new powers
    under rule 20.04(2.1) to weigh the evidence, evaluate credibility, and draw
    reasonable inferences from the evidence.
[250]

As for the
    respondent homeowners liability, the appellants submit that they are liable
    for the work carried out by their hired contractor on the legal theory that an
    owner is liable for direct damages caused to an adjacent property where a
    property owner excavates and interferes with the right of natural support of an
    adjacent property.  They rely on
Barber v. Leo Contracting Co. Ltd.
,
    [1970] 2 O.R. 197 (C.A.), for this theory of liability.
[251]

On the issue of damages, the appellants emphasize that there is
    no evidence to contradict their experts report, which states that the failure
    to take precautionary measures during the excavation resulted in damage to
    their properties as described in the report. The appellants also argue that the
    quantum of damages is not seriously challenged and the new Rule 20 does not
    permit the respondents to rest on bald denials.
5.

Analysis
(1)

How should Rule 20 be applied in the context of
  an action under Rule 76?
[252]

As
    indicated, the appellants brought their motion just as significant changes to
    the rules related to simplified procedure and summary judgment were being
    implemented. Under the now-revoked rule 76.07, the motion judge had broader
    powers than did a judge hearing summary judgment motions under the former Rule
    20. Under rule 76.07, a judge was allowed to make determinations of fact including
    determinations of credibility: see
Newcourt Credit Group Inc. v. Hummel
    Pharmacy Ltd.
(1998), 38 O.R. (3d) 82 (Div. Ct.), at p. 86. The motion
    judge was to grant summary judgment unless the judge was unable to decide the
    issues in the action without cross-examination, or if it would be otherwise
    unjust to decide the issues on the motion.
[253]

The test
    for summary judgment in simplified procedure actions is now governed by Rule
    20. Resolving the liability and damages issues in the appellants action would
    require the motion judge to weigh the evidence, evaluate the credibility of
    deponents, and draw reasonable inferences from the evidence. Under the
    principles we have established, the full appreciation test is the governing
    test. It must be asked: can the full appreciation of the evidence and issues
    that is required to make dispositive findings be achieved by way of summary
    judgment, or can this full appreciation only be achieved by way of a trial?
[254]

We wish to
    emphasize a significant additional factor that must also be considered in the
    context of a simplified procedure action. Given that simplified procedure
    claims are generally for amounts of $100,000 or less, the rule is designed to
    get the parties to trial with a minimum of delay and costs. Thus, one of the key
    objectives of the simplified procedure rule is to limit the extent of pre-trial
    proceedings and to bring the parties to an early trial conducted pursuant to
    tailored rules. That is why discovery is restricted, cross-examination on
    affidavits and examination of witnesses on motions are not allowed, and the
    procedure at a summary trial is modified to reduce the length of the trial. No
    doubt, in appropriate cases, a motion for summary judgment in a Rule 76 action
    can be a useful tool to promote the efficient disposition of cases. However, it
    will often be the case that bringing a motion for summary judgment will
    conflict with the efficiency that can be achieved by simply following the
    abridged procedures in Rule 76.
[255]

When a
    judge is faced with a contested motion for summary judgment in a simplified
    procedure action that requires exercising the powers in rule 20.04(2.1), the
    judge will not only have to apply the full appreciation test, but will also
    need to assess whether entertaining the motion is consistent with the
    efficiency rationale reflected in the simplified procedures under Rule 76. We
    make two general observations that will inform this assessment.
[256]

First,
    summary judgment motions in simplified procedure actions should be discouraged
    where there is competing evidence from multiple witnesses, the evaluation of
    which would benefit from cross-examination, or where oral evidence is clearly
    needed to decide certain issues. Given that Rule 76 limits discoveries and
    prohibits cross-examination on affidavits and examinations of witnesses on
    motions, the test for granting summary judgment will generally not be met where
    there is significant conflicting evidence on issues confronting the motion
    judge. While the motion judge could order the hearing of limited oral evidence
    on the summary judgment motion under rule 20.04(2.2), in most cases where oral
    evidence is needed, the efficiency rationale reflected in the rule will
    indicate that the better course is to simply proceed to a speedy trial, whether
    an ordinary trial or a summary one:  see rules 76.10(6) and 76.12.
[257]

Second, we
    are not saying that a motion for summary judgment should never be brought in a
    simplified procedure action. There will be cases where such a motion is
    appropriate and where the claim can be resolved by using the powers set out in
    rule 20.04 in a way that also serves the efficiency rationale in Rule 76.  For
    example, in a document-driven case, or in a case where there is limited
    contested evidence, both the full appreciation test and the efficiency
    rationale may be served by granting summary judgment in a simplified procedure
    action.
[258]

As we
    noted above at para. 58, a responding party faced with an inappropriate motion
    for summary judgment may move for directions under rules 1.04 and 1.05 to request
    that the motion be stayed or dismissed. If a stay or dismissal is granted and
    if a summary trial ultimately ensues, the affidavits prepared for the summary
    judgment motion can serve as affidavits under rule 76.12 in order to salvage
    some of the resources expended on the motion for summary judgment.
[259]

We now illustrate these general observations by applying them to
    the present case. As noted by the respondents, the motion judge was called on
    to resolve a number of disputed issues:
(i)

Should the respondent Scarfo be found personally
    liable given the conflicting evidence as to whether he or his company was
    responsible for the construction?
(ii)

Should the respondent homeowners be held
    vicariously liable for the damage caused?
(iii)

If the respondent homeowners are vicariously
    liable, did their liability extend to the damage that did not naturally flow
    from the excavation, such as damage caused by cement splatter and faulty
    grading?
(iv)

Was there pre-existing damage as alleged by the
    respondent Scarfo?
(v)

Should any weight be given to Scarfos affidavit
    evidence that the cost of any repairs are significantly lower than the experts
    estimates?
(vi)

If the court were to conclude there was
    pre-existing damage or that the respondent homeowners were not vicariously
    liable for all of the alleged damage, how could the court adjust the award in
    the absence of itemized amounts in the expert report?
[260]

The
    appellants argue that the motion judge could have decided the matters that are
    clear and ordered the hearing of oral evidence under rule 20.04(2.2) to resolve
    any of the remaining issues.  However, the full appreciation test and the
    efficiency rationale of Rule 76 tell against resolving this case by way of
    summary judgment. While the full appreciation test could arguably be met in
    relation to the liability issues, it could not be met in relation to the
    causation and quantum of damages issues. The motion judge did not have the
    benefit of any testing of the various assertions of the affiants or the expert.
[261]

Moreover, in the context of a simplified procedure action, a
    summary judgment motion that requires oral evidence from key witnesses offers
    little or no benefit from an efficiency standpoint as compared to the parties
    simply proceeding to trial. Indeed, the presiding justice at triage court offered
    the appellants an early trial date as an alternative to proceeding with their
    motion. Holding an early summary trial would clearly have been the preferred
    procedural route in this case.
6.

Conclusion
[262]

Considering the nature of the issues in dispute, the absence of
    any cross-examinations of the key witnesses, the lack of a detailed damages
    assessment in the appellants expert report, and the absence of any appreciable
    efficiency gain that would be accomplished by the motion, we see no error in
    the Divisional Courts conclusion that a trial was required.
[263]

For these
    reasons, we dismiss the appeal from the Divisional Courts order upholding the
    motion judges order refusing summary judgment.
[264]

Where
    summary judgment is refused, it is open to the court to exercise the case
    management powers found in rule 20.05. The motion judge did not make any order
    under rule 20.05, nor did the Divisional Court.
[265]

In the interests of promoting an efficient and more
    cost-effective resolution of this dispute, we order under rule 20.05(1) that
    the matter should proceed to trial expeditiously on the issues of liability,
    causation and quantum of damages.  In addition, we impose the following terms
    pursuant to rule 20.05(2), subject to further order by the Superior Court of
    Justice:
·

The trial of this action shall proceed by way of a summary trial
    under rule 76.12.
·

Within 60 days of the release of this judgment, the parties are
    to file, from among the affidavits filed on the motion for summary judgment,
    the affidavits they propose to use at the summary trial and, if so advised, an
    additional affidavit addressing the issues of causation and/or quantum of
    damages.
[266]

Given the
    novelty of the issues raised in the context of the changes to Rules 20 and 76,
    we make no order as to costs in the
Parker v. Casalese
appeal.
RELEASED:  December 5, 2011
  WKW
W.K. Winkler C.J.O.
John Laskin J.A.
Robert J. Sharpe J.A.
Robert P. Armstrong J.A.
Paul Rouleau J.A.
Appendix: tHE
    TEXT OF rULE 20
20.01(1)
    A plaintiff may, after the defendant has delivered a statement of defence or
    served a notice of motion, move with supporting affidavit material or other
    evidence for summary judgment on all or part of the claim in the statement of
    claim.
(2) The plaintiff may move, without notice, for leave to serve a
    notice of motion for summary judgment together with the statement of claim, and
    leave may be given where special urgency is shown, subject to such directions
    as are just.
(3)
A defendant may, after delivering a statement of defence,
    move with supporting affidavit material or other evidence for summary judgment
    dismissing all or part of the claim in the statement of claim.
20.02
(1) An affidavit for use on a motion for
    summary judgment may be made on information and belief as provided in subrule
    39.01 (4), but, on the hearing of the motion, the court may, if appropriate,
    draw an adverse inference from the failure of a party to provide the evidence
    of any person having personal knowledge of contested facts.
(2)  In
    response to affidavit material or other evidence supporting a motion for
    summary judgment, a responding party may not rest solely on the allegations or
    denials in the partys pleadings, but must set out, in affidavit material or
    other evidence, specific facts showing that there is a genuine issue requiring
    a trial.
20.03
(1) On
    a motion for summary judgment, each party shall serve on every other party to
    the motion a factum consisting of a concise argument stating the facts and law
    relied on by the party.
(2)  The
    moving partys factum shall be served and filed with proof of service in the
    court office where the motion is to be heard at least seven days before the
    hearing.
(3) The
    responding partys factum shall be served and filed with proof of service in
    the court office where the motion is to be heard at least four days before the
    hearing.
(4) Revoked: O. Reg. 394/09, s. 4.
20.04
(1) Revoked:
    O. Reg. 438/08, s. 13 (1).
(2) The court shall grant summary judgment if,
(a)       the court is satisfied that there is no
    genuine issue requiring a trial with respect to a claim or defence; or
(b)       the parties agree to have all or part of
    the claim determined by a summary judgment and the court is satisfied that it
    is appropriate to grant summary judgment.
(2.1) In
    determining under clause (2) (a) whether there is a genuine issue requiring a
    trial, the court shall consider the evidence submitted by the parties and, if
    the determination is being made by a judge, the judge may exercise any of the
    following powers for the purpose, unless it is in the interest of justice for
    such powers to be exercised only at a trial:
1.          Weighing the evidence.
2.          Evaluating the credibility of a deponent.
3.         Drawing any reasonable inference from the
    evidence.
(2.2) A
    judge may, for the purposes of exercising any of the powers set out in subrule
    (2.1), order that oral evidence be presented by one or more parties, with or
    without time limits on its presentation.
(3) Where
    the court is satisfied that the only genuine issue is the amount to which the
    moving party is entitled, the court may order a trial of that issue or grant
    judgment with a reference to determine the amount.
(4) Where the
    court is satisfied that the only genuine issue is a question of law, the court
    may determine the question and grant judgment accordingly, but where the motion
    is made to a master, it shall be adjourned to be heard by a judge.
(5) Where the
    plaintiff is the moving party and claims an accounting and the defendant fails
    to satisfy the court that there is a preliminary issue to be tried, the court
    may grant judgment on the claim with a reference to take the accounts.
20.05
(1) Where
    summary judgment is refused or is granted only in part, the court may make an
    order specifying what material facts are not in dispute and defining the issues
    to be tried, and order that the action proceed to trial expeditiously.
(2) If
    an action is ordered to proceed to trial under subrule (1), the court may give
    such directions or impose such terms as are just, including an order,
(a)       that each
    party deliver, within a specified time, an affidavit of documents in accordance
    with the courts directions;
(b)       that any motions be brought
    within a specified time;
(c)       that a
    statement setting out what material facts are not in dispute be filed within a
    specified time;
(d)       that
    examinations for discovery be conducted in accordance with a discovery plan
    established by the court, which may set a schedule for examinations and impose
    such limits on the right of discovery as are just, including a limit on the
    scope of discovery to matters not covered by the affidavits or any other
    evidence filed on the motion and any cross-examinations on them;
(e)       that a
    discovery plan agreed to by the parties under Rule 29.1 (discovery plan) be
    amended;
(f)        that the
    affidavits or any other evidence filed on the motion and any cross-examinations
    on them may be used at trial in the same manner as an examination for
    discovery;
(g)       that any
    examination of a person under Rule 36 (taking evidence before trial) be subject
    to a time limit;
(h)       that a
    party deliver, within a specified time, a written summary of the anticipated
    evidence of a witness;
(i)        that any
    oral examination of a witness at trial be subject to a time limit;
(j)        that the
    evidence of a witness be given in whole or in part by affidavit;
(k)       that any
    experts engaged by or on behalf of the parties in relation to the action meet
    on a without prejudice basis in order to identify the issues on which the
    experts agree and the issues on which they do not agree, to attempt to clarify
    and resolve any issues that are the subject of disagreement and to prepare a
    joint statement setting out the areas of agreement and any areas of
    disagreement and the reasons for it if, in the opinion of the court, the cost
    or time savings or other benefits that may be achieved from the meeting are
    proportionate to the amounts at stake or the importance of the issues involved
    in the case and,
(i)        there is a
    reasonable prospect for agreement on some or all of the issues, or
(ii)       the
    rationale for opposing expert opinions is unknown and clarification on areas of
    disagreement would assist the parties or the court;
(l)        that each
    of the parties deliver a concise summary of his or her opening statement;
(m)      that the
    parties appear before the court by a specified date, at which appearance the
    court may make any order that may be made under this subrule;
(n)       that the
    action be set down for trial on a particular date or on a particular trial
    list, subject to the direction of the regional senior judge;
(o)       for payment into court of
    all or part of the claim; and
(p)       for security for costs.
(3)
    At the trial, any facts specified under subrule (1) or clause (2) (c) shall be
    deemed to be established unless the trial judge orders otherwise to prevent
    injustice.
(4) In
    deciding whether to make an order under clause (2) (j), the fact that an
    adverse party may reasonably require the attendance of the deponent at trial
    for cross-examination is a relevant consideration.
(5) If
    an order is made under clause (2) (k), each party shall bear his or her own
    costs.
(6) Where
    a party fails to comply with an order under clause (2) (o) for payment into
    court or under clause (2) (p) for security for costs, the court on motion of
    the opposite party may dismiss the action, strike out the statement of defence
    or make such other order as is just.
(7) Where
    on a motion under subrule (6) the statement of defence is struck out, the
    defendant shall be deemed to be noted in default.
20.06
The court may fix and order payment of the costs of
    a motion for summary judgment by a party on a substantial indemnity basis if,
(a)       the party acted unreasonably by making or
    responding to the motion; or
(b)       the party acted in bad faith for the
    purpose of delay.
20.07
A plaintiff who obtains summary judgment may
    proceed against the same defendant for any other relief.
20.08
Where it appears that the enforcement of a
    summary judgment ought to be stayed pending the determination of any other
    issue in the action or a counterclaim, crossclaim or third party claim, the
    court may so order on such terms as are just.
20.09 Rules
    20.01 to 20.08 apply, with necessary modifications, to counterclaims,
crossclaims and third party claims.

[1]

Typically the power to grant summary judgment would be exercised in favour of the
    party bringing the motion. However, as the Supreme Court of Canada held in
Manulife
    Bank of Canada v. Conlin
, [1996] 3 S.C.R.

415,
    at p. 448,
per
Iacobucci J. dissenting, it is

open to

the court under
    rules 20.04(2) and (4) to grant summary judgment in favour of the responding
    party, even if that party did not bring a motion requesting such relief. The
    majority agreed with Iacobucci J. on this issue, at p. 421.


[2]
The entirety of the amended Rule 20 is included as an appendix to these
    reasons.


[3]
The new wording of the test for summary judgment reflects the language from
Ungerman
    v. Galanis
set out above at para. 14.



[4]
Rules 20.01(1) and (3) also permit motions for partial summary judgment.  The
    following analysis is focused on motions that would dispose of the totality of
    the action.  The same interpretative principles apply to motions for partial
    summary judgment.


[5]

See paras. 50, 73 and 101-111.


[6]

The full text of
    rule 20.05(2) is found in the appendix.


[7]
In February 2002, the Mauldin group received a small distribution of
    approximately U.S.$9,600.


[8]
The motion judge granted judgment in favour of the Mauldin group for
    U.S.$1,190,401.29.  That amount represents the initial U.S.$1.2 million less
    the small distribution in February 2002.  The motion judge also granted summary
    judgment in favour of Bruno for U.S.$1 million.


[9]

The rule in
Browne v. Dunn
requires a
    party to give notice to a witness whose evidence he intends to impeach.


[10]
As noted earlier, Cranston was not sued in either action. Also, he did not give
    evidence on the motions.


[11]
The trial judge denied the claim for a prescriptive easement on the ground that
    the use of the lands in question was by permission of the owners of the lands
    rather than a use as of right. That finding was not appealed.
