Lenko v. Manitoba et al., 2016 MBCA 52

• Judge: Beard, Cameron and Pfuetzner, JJ.A.
• Court: Court of Appeal (Manitoba)
• Case Date: December 03, 2015
• Jurisdiction: Manitoba
• Citations: 2016 MBCA 52;(2016), 330 Man.R.(2d) 48 (CA)

Lenko v. Man. (2016), 330 Man.R.(2d) 48 (CA);

      675 W.A.C. 48

MLB headnote and full text

Temp. Cite: [2016] Man.R.(2d) TBEd. JN.001

Gary D. Lenko (plaintiff/appellant) v. The Government of Manitoba, The Manitoba Housing and Renewal Corporation, The City of Winnipeg and The Canada Mortgage and Housing Corporation (defendants/respondents)

(AI 15-30-08397; AI 15-30-08407; 2016 MBCA 52)

Indexed As: Lenko v. Manitoba et al.

Manitoba Court of Appeal

Beard, Cameron and Pfuetzner, JJ.A.

May 25, 2016.

Summary:

Lenko applied for financial assistance under the Residential Rehabilitation Assistance Program (RRAP). RRAP was delivered under an agreement between the Canada Mortgage and Housing Corporation (CMHC) and the Manitoba Housing and Renewal Corporation (MHRC), which jointly funded the program. MHRC was responsible to evaluate and approve or dispose of applications, and it could enter into agreements to delegate the program's delivery and administration. When Lenko made his application, the City of Winnipeg (Winnipeg) was administering RRAP for properties in Winnipeg on behalf of MHRC. Thus, Winnipeg was responsible to receive the applications, meet the applicants, inspect the properties, determine whether to recommend the applications and send them to MHRC to make a decision on whether to approve them. Lenko sued the Government of Manitoba, the MHRC, Winnipeg and the CMHC. He sought damages for negligent misrepresentation arising from statements and misrepresentations allegedly made by a Winnipeg inspector in the context of his RRAP application. The defendants applied for summary judgment.

The Manitoba Court of Queen's Bench granted summary judgment dismissing Lenko's claim for damages for negligent misrepresentation. Lenko appealed.

The Manitoba Court of Appeal allowed Lenko's appeal of the summary judgment dismissing his negligent misrepresentation claim against Winnipeg. The court dismissed Lenko's appeal of the summary judgment dismissing his negligent misrepresentation claim against Manitoba, MHRC and CMHC. The court awarded costs accordingly.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepresentation - Lenko applied for financial assistance under the Residential Rehabilitation Assistance Program (RRAP) - RRAP was delivered under an agreement between the Canada Mortgage and Housing Corporation (CMHC) and the Manitoba Housing and Renewal Corporation (MHRC), which jointly funded the program - MHRC was responsible to evaluate and approve or dispose of applications, and it could enter into agreements to delegate the program's delivery and administration - When Lenko made his application, the City of Winnipeg was administering RRAP for properties in Winnipeg on behalf of MHRC - Thus, Winnipeg was responsible to receive the applications, meet the applicants, inspect the properties, determine whether to recommend the applications and send them to MHRC to make a decision on whether to approve them - Lenko sued the Government of Manitoba, the MHRC, Winnipeg and the CMHC - He sought damages for negligent misrepresentation arising from statements and misrepresentations allegedly made by a Winnipeg inspector in the context of his RRAP application - A motion judge granted summary judgment dismissing Lenko's claim for damages for negligent misrepresentation - The Manitoba Court of Appeal allowed Lenko's appeal of the summary judgment dismissing his negligent misrepresentation claim against Winnipeg - The motion judge erred in not determining whether Winnipeg had proved, on a prima facie basis, that Lenko's claim had to fail regarding the requirement that there be reasonable reliance on the inspector's statements and, if so, whether Lenko had satisfied the burden of establishing that there was a genuine issue for trial - Rather, the motion judge considered the evidence as if he were deciding the matter at trial - Lenko's position was that the inspector told him that he had been approved for RRAP, that he should obtain a structural report from an engineer, that he could remove the furnace to facilitate the inspection by the engineer and that the cost of the new furnace would be covered by the RRAP loan - As Lenko pointed out in his affidavit, RRAP was a program to help people who did not have the resources to do the repairs on their own - If he had had the resources to do this work, he would not have applied for the program - Lenko had led evidence that showed that there was a genuine issue for trial regarding the reasonableness of his reliance on the representations - The representations, if made, confirmed that Lenko could proceed to remove the furnace and that it would be replaced within RRAP - He believed that it would facilitate the engineer's inspection to remove it at that point in time - While he could not afford to replace the furnace himself, that was the reason for the application for the RRAP loan - See paragraphs 51 to 56.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepresentation - [See second Practice - Topic 5702 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - Lenko applied for financial assistance under the Residential Rehabilitation Assistance Program (RRAP) - RRAP was delivered under an agreement between the Canada Mortgage and Housing Corporation (CMHC) and the Manitoba Housing and Renewal Corporation (MHRC), which jointly funded the program - MHRC was responsible to evaluate and approve or dispose of applications, and it could enter into agreements to delegate the program's delivery and administration - When Lenko made his application, the City of Winnipeg was administering RRAP for properties in Winnipeg on behalf of MHRC - Thus, Winnipeg was responsible to receive the applications, meet the applicants, inspect the properties, determine whether to recommend the applications and send them to MHRC to make a decision on whether to approve them - Lenko sued the Government of Manitoba, the MHRC, Winnipeg and the CMHC - He sought damages for negligent misrepresentation arising from statements and misrepresentaions allegedly made by a Winnipeg inspector in the context of his RRAP application - A motion judge granted summary judgment dismissing Lenko's claim for damages for negligent misrepresentation - The Manitoba Court of Appeal allowed Lenko's appeal of the summary judgment dismissing his negligent misrepresentation claim against Winnipeg - The motion judge found, inter alia, that there was no duty of care on Winnipeg's part - The motion judge did not appear to have considered this issue through the lens of the test for summary judgment - Rather, his decision was written as one following a trial - If the correct test for a summary judgment motion was applied and asked whether Winnipeg had proved on a prima facie basis that the claim had to fail as it related to the duty of care, the only reasonable conclusion was that the test had not been met - The evidence indicated that the inspector did much more than just inspect the property - There was at least a genuine issue for trial as to whether the inspector, in making those statements to Lenko in the course of exercising his duties in relation to RRAP, had a duty of care to Lenko - The motion judge erred in finding that there was no duty of care - Further, Lenko had proved that there was a genuine issue for trial as to whether the inspector, and, therefore, Winnipeg, owed him a duty of care - See paragraphs 57 to 62.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - Lenko applied for financial assistance under the Residential Rehabilitation Assistance Program (RRAP) - RRAP was delivered under an agreement between the Canada Mortgage and Housing Corporation (CMHC) and the Manitoba Housing and Renewal Corporation (MHRC), which jointly funded the program - MHRC was responsible to evaluate and approve or dispose of applications, and it could enter into agreements to delegate the program's delivery and administration - When Lenko made his application, the City of Winnipeg was administering RRAP for properties in Winnipeg on behalf of MHRC - Thus, Winnipeg was responsible to receive the applications, meet the applicants, inspect the properties, determine whether to recommend the applications and send them to MHRC to make a decision on whether to approve them - Lenko sued the Government of Manitoba, the MHRC, Winnipeg and the CMHC - He sought damages for negligent misrepresentation arising from statements and misrepresentaions allegedly made by a Winnipeg inspector in the context of his RRAP application - The defendants applied for summary judgment - A motion judge granted summary judgment dismissing Lenko's claim for damages for negligent misrepresentation - Lenko appealed - The Manitoba Court of Appeal allowed Lenko's appeal regarding Winnipeg - The court dismissed the appeal respecting Manitoba, MHRC and CMHC - Lenko's amended statement of claim and his affidavit evidence confirmed that there was no contact between Lenko and CMHC, MHRC or Manitoba - It was the inspector who had contact with Lenko - The inspector did not: (a) report to CMHC or MHRC; (b) take directions from CMHC or MHRC; and (c) have any contact with CMHC or MHRC - The motion judge found that "As stated by Winnipeg, if any defendant is responsible to Mr. Lenko it would have to be Winnipeg. Mr. Lenko applied to Winnipeg for a loan. The responsibility to approve or deny his application was Winnipeg's" - The court held that the motion judge did not misdirect himself in granting summary judgment dismissing Lenko's claim against these defendants for the inspector's negligent misstatements, nor was his decision so clearly wrong as to amount to an injustice - See paragraphs 63 to 69.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - On a motion for summary judgment to dismiss an action, the defendants all relied upon the Supreme Court of Canada's decision in Hryniak v. Mauldin to argue that the courts should be more liberal in granting summary judgment motions - On apppeal, the Manitoba Court of Appeal held that the Hryniak decision did not change the test to be applied on a motion for summary judgment in Manitoba - The court stated that "The test remains whether the claim or defence raises a genuine issue for trial (rule 20.03(1)). If there is a genuine issue for trial, it is not for the motion court to resolve that issue; rather, the motion should be dismissed and the matter should proceed to trial. The situation is different in Ontario, where the summary judgment rules have been substantially amended to expand the role of the court in resolving claims without a trial." - In Manitoba, "While a motion judge is required to take a 'hard look' at the evidence to ensure that what appears to be a credibility issue is, in fact, a genuine issue and not merely a simple denial by the responding party, once that threshold is met, it is not for the motion judge to go on and resolve those credibility issues. Those are issues for trial." - See paragraphs 71 to 75.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - [See first Fraud and Misrepresentation - Topic 2508 , all Practice - Topic 5702 and Practice - Topic 5710 ].

Practice - Topic 5710

Judgments and orders - Summary judgments - Evidence - Lenko applied for financial assistance under the Residential Rehabilitation Assistance Program (RRAP) - RRAP was delivered under an agreement between the Canada Mortgage and Housing Corporation (CMHC) and the Manitoba Housing and Renewal Corporation (MHRC), which jointly funded the program - MHRC was responsible to evaluate and approve or dispose of applications, and it could enter into agreements to delegate the program's delivery and administration - When Lenko made his application, the City of Winnipeg was administering RRAP for properties in Winnipeg on behalf of MHRC - Thus, Winnipeg was responsible to receive the applications, meet the applicants, inspect the properties, determine whether to recommend the applications and send them to MHRC to make a decision on whether to approve them - Lenko sued the Government of Manitoba, the MHRC, Winnipeg and the CMHC - He sought damages for negligent misrepresentation arising from statements and misrepresentations allegedly made by a Winnipeg inspector in the context of his RRAP application - A motion judge granted the defendants summary judgment dismissing Lenko's claim for damages for negligent misrepresentation - Lenko appealed - The Manitoba Court of Appeal allowed the appeal as it related to Winnipeg - Winnipeg's evidence was found in an affidavit sworn by Watts, who was employed by Winnipeg as the program co-ordinator for RRAP when Lenko's RRAP application was processed - In his affidavit, he stated that the inspector was no longer employed by Winnipeg, having retired some 11 weeks earlier, and Winnipeg had been unable to obtain an affidavit from him - As a result, Watts relied on the file documents and his recollection of his conversations with the inspector to provide the evidence in his affidavit - The motion judge found that Winnipeg had met its burden on a prima facie basis because Lenko was never approved for a RRAP loan and there was no information on his file to indicate that the inspector had advised Lenko that he could remove the furnace - These findings did not address Winnipeg's failure to bring forward any evidence as to whether the inspector made the alleged oral statements and representations to Lenko without making a notation in the file - Further, given that there was no evidence by Winnipeg that the inspector did not make the statements and representations attributed to him, the finding that Winnipeg had met its burden was unreasonable and amounted to an injustice - After finding that Winnipeg had met its burden, the motion judge stated, "As there is conflicting evidence before me as to what was or was not said by [the inspector] to Mr. Lenko, I am required to make credibility findings as to the evidence of the parties" - In fact, there was no such conflicting evidence - Lenko's unchallenged evidence was that the inspector made the statements and representations at issue - This was sufficient to meet Lenko's burden of establishing that there was a genuine issue for trial as to whether the inspector made the statements and representations alleged by Lenko - See paragraphs 10 and 37 to 50.

Practice - Topic 8825.6

Appeals - General principles - Duty of appellate court on reviewing summary judgment decisions - The Manitoba Court of Appeal discussed the standard of review on an appeal of a summary judgment order - See paragraphs 34 to 36.

Counsel:

G.D. Lenko, on his own behalf;

A.J. Ladyka, for the respondents, The Government of Manitoba and The Manitoba Housing and Renewal Corp.;

M. Muller, for the respondent, The City of Winnipeg;

W.M. Onchulenko, for the respondent, The Canada Mortgage and Housing Corp.

These appeals were heard on December 3, 2015, by Beard, Cameron and Pfuetzner, JJ.A., of the Manitoba Court of Appeal. Beard, J.A., delivered the following judgment for the court on May 25, 2016.