Case Name:

Olar v. Laurentian University

 

 

Between

Alvin Olar, appellant, and

Laurentian University, respondent

 

[2002] O.J. No. 3881

 

165 O.A.C. 1

 

23 C.P.C. (5th) 9

 

117 A.C.W.S. (3d) 740

 

Docket No. C37177

 

 

 Ontario Court of Appeal

 Toronto, Ontario

 

O'Connor A.C.J.O., Catzman and Doherty JJ.A.

 

Heard: September 5, 2002.

 Judgment: October 16, 2002.

 

(23 paras.)

 

Fraud and misrepresentation -- Misrepresentation -- Elements of actionable misrepresentation -- Performance of conditions precedent -- Failure to perform, effect of -- Applicability.

 

Appeal by Olar from a decision that dismissed his action against the respondent Laurentian University. Olar enroled as an engineering student at Laurentian. He did so based on a statement in its calendar that students who completed its first and second year programs cold transfer into the third year programs of other Ontario universities if they wished to pursue chemical, civil or mechanical engineering. When Olar tried to transfer after his second year he was unable to find another engineering school that had a similarly-matched program. He enrolled in another university but was required to take an extra year of courses. Olar only completed 11 out of 12 courses during his first two years at Laurentian. Olar sued for misrepresentation contained in Laurentian's promotional materials. The court found that Olar did not successfully complete the two-year course since he only did 11 courses. He could therefore not found a claim on reliance on the alleged misrepresentation. The representations contained a condition precedent that Olar did not satisfy.

HELD: Appeal allowed. The action was reinstated. Olar's claim was complete on proof of the statement, his reliance upon it, the fact that the statement was misrepresentation, and damages, which included an extra year of university expenses. Completion of the first two years was not a condition precedent to Olar's entitlement to sue Laurentian. The lack of the one course was irrelevant to Olar's ability to commence this action. He proved that he would not have been admitted even if he completed all of his courses. It was inappropriate for the court to introduce the concept of condition precedent. Condition precedent applied to contract actions. It did not apply to this type of action. It was therefore an error to dismiss this action.

 

Statutes, Regulations and Rules Cited:

Ontario Rules of Civil Procedure, Rule 20.04(2)(a).

 

Appeal from:

On appeal from the orders of Justice John H. Brockenshire dated October 1, 2001 and February 25, 2002.

 

Counsel:

Raymond Colautti and Owen Thomas, for the appellant.

Philip Spencer and Glenn Zakaib, for the respondent.

 

 

 

 

The judgment of the Court was delivered by

CATZMAN J.A.:--

The background

1     Alvin Olar was an engineering student at Laurentian University in Sudbury for two academic years. He alleges that he enrolled in Laurentian's School of Engineering in response to a misrepresentation in the university calendar that students who successfully completed Laurentian's first and second year programs could transfer into the third year of other Ontario universities if they wished to pursue chemical, civil or mechanical engineering. While Laurentian offered four-year degree programs in extractive metallurgical engineering and mining engineering, it offered only two-year partial programs in chemical, civil and mechanical engineering; hence, the significance of the ability to transfer after Laurentian's two-year program to a degree-granting program elsewhere.

2     But, Olar alleges, when he tried to transfer to other Ontario engineering schools after his second year, he found that no other engineering school had a similarly matched first and second year program. He was accepted for transfer to three universities, but all three required him to complete some first and second year courses, with the result that he was obliged to take three more years, rather than two, to obtain his engineering degree. He chose to attend the University of Windsor, where he spent three years before obtaining his degree.

3     Laurentian required students to complete 12 full course equivalents, a total of 72 credits, during their two years of study. Olar completed only 11 courses, or 66 credits, when he was at Laurentian. He dropped a non-core course in economics in his first year and never made up the resulting shortfall. In his evidence, Olar said that he could have made up the missing course during the summer, though he did not in fact do so.

4     Olar's statement of claim against Laurentian, as amended, alleges that Laurentian made misrepresentations to him and to other students entering its engineering school in and by its university calendar, student guide, promotional materials, website and recruitment officers. The alleged misrepresentations took two forms: first, that students who successfully completed the first and second year programs could transfer into the third year of other Ontario university engineering programs; and second, that such students might take advantage of a transfer agreement with the University of Toronto enabling direct transfer into that university's third year. He alleges that Laurentian made these misrepresentations fraudulently or negligently, that it knew or ought to have known that two years of successful completion of its engineering program were not recognized, portable or transferable to any other Ontario university, and that the transfer agreement with the University of Toronto had lapsed and not been renewed. He seeks declarations that Laurentian made the misrepresentations he alleges; damages for an extra year's tuition, books and living expenses, and loss of a year's professional income; a mandatory order directing Laurentian to stop making the alleged misrepresentations; and costs on a solicitor and client basis. He purports to bring his action as a class proceeding and claims that other class members suffered similar damages as a result of the misrepresentations.

5     Olar moved for an order certifying his action as a class proceeding and appointing him as the representative plaintiff. Laurentian made a cross-motion for summary judgment, or for determination of a question of law, dismissing the action. Brockenshire J. dismissed the action and the motion for certification and for appointment of Olar as the representative plaintiff, and ordered him to pay costs, fixed at $12,000, to Laurentian. His order was made without prejudice to the right of class counsel to reapply in the event that the action was reconstituted with a new proposed representative plaintiff.

6     Brockenshire J.'s reasons are reported at (2001), 17 C.P.C. (5th) 353.

7     Olar appeals from that order. For the reasons that follow, I would allow the appeal.

The reasons of Brockenshire J.

8     Brockenshire J. found that Olar had not successfully completed the university's two-year course and, as a result, could not found a claim based on reliance on the alleged misrepresentations. The basis for the "without prejudice" provision in his order was his suggestion that other students not suffering from Olar's "academic shortfall" might have a tenable cause of action against Laurentian.

9     In his reasons, he found that one of several alternate grounds raised by the university was "sufficient to deal with the matter - that Mr. Olar had not met the terms of the statements upon which he claims to rely". He set out the representations contained in the university calendar (with respect to transfer into the third year of other Ontario universities) and the university student guide (with respect to the agreement with the department of chemical and civil engineering at the University of Toronto), and noted the statement in Olar's affidavit that these representations:

 

                 clearly misled me into believing ... that after successfully completing the first and second year programs at Laurentian University, I had the ability to transfer into the third year of other universities in Ontario.

He reproduced Olar's admissions on cross-examination that "completing the program" and "successfully completing the program" meant that he had to complete successfully all the required courses and earn all the required credits, and a statement taken from the affidavit of the university registrar that, although Olar was required to complete 12 full course equivalents or a total of 72 credits in his first two years of study, he had completed only 11 courses, or 66 credits, because he had dropped a course in economics in his first year and never made up the resulting shortfall. Brockenshire J. then concluded, at para. 12:

 

                 Para. 12 The statements on which Mr. Olar is basing his action, whether or not they are representations, and whether or not they are true, are in my opinion clearly conditional. They contain a clear condition precedent, in that they only apply to students who have successfully completed the first two years of the program.

10     Brockenshire J. then referred to the statement in the university student guide about the eligibility of students "who complete the first two years" of Laurentian's program to take advantage of a transfer agreement with the University of Toronto and concluded, at paras. 14-17:

 

                 Para. 14 This too, in my view, contains a clear condition precedent, namely completion of the first two years of the program.

 

                 Para. 15 Quite simply, on the basis of the affidavit of the registrar, and his academic record, and his own admission, Mr. Olar had not completed the first two years of the program, so that the statements on which he relies do not apply to him.

 

                 Para. 16 The foregoing conclusion does not involve evaluating credibility, weighing evidence, or drawing factual inferences (see Aguonie v. Galion Solid Waste Materials Inc. (1998), 38 O.R. (3d) 161 (Ont. C.A.) at 173). If the foregoing involves any finding at all, it is a finding of law, that each of the foregoing statements contained a condition precedent which the plaintiff would have to meet before he could rely on the statements. Under Rule 20.04(4) a motions judge is clearly entitled to make such a finding.

 

                 Para. 17 My conclusion is that although the materials indicate there may be many areas in Mr. Olar's action in which a trial judge would have to evaluate credibility, weigh evidence, and draw factual inferences, especially in the area of the claim for damages, none of them would be issues for trial unless the condition precedent was met. On the undisputed facts, that condition was not met, so Mr. Olar has no real chance of success with his claim. See Guarantee Co. of North America v. Gordon Capital Corp. [1999] 3 S.C.R. 423 (S.C.C.), at 435. A motion for summary judgment dismissing the claim of the plaintiff is therefore granted.

11     Brockenshire J. then dealt with a number of alternate grounds raised by the university in support of its motion for summary judgment and concluded that they could not be resolved on such a motion but rather that they required viva voce evidence and, in some instances, findings of fact.

12     He then turned to the question of certification. He found that it was not plain and obvious or beyond doubt ("except for Mr. Olar's personal problem with the condition precedent)" that members of the proposed class could not succeed in their proposed action against the university. In his view, the issues whether the various statements alleged were misrepresentations and, if so, whether they were fraudulent or negligent misrepresentations warranting an award of damages outweighed the reasons advanced in opposition to certification. He therefore concluded, at para. 41:

 

                 Para. 41 The foregoing discussion of the certification issues is based, of course, on the materials presently before me. It is, in effect, a theoretical discussion because, as stated at the beginning of these reasons, due to Mr. Olar's academic shortfall, class counsel does not have a suitable representative plaintiff. Because of that, my decision must be that the application for certification is denied. However this denial is without prejudice to the right of class counsel to reapply with new or further materials, should the action be reconstituted with a new proposed representative plaintiff.

 

                 A condition precedent?

13     The argument in this court was directed to the correctness of Brockenshire J.'s conclusion that the alleged misrepresentations contained a condition precedent - the successful completion of two years' study with full course credits - and that, because of Olar's "academic shortfall", his claim had no chance of success and, on the certification question, he was not a suitable representative plaintiff.

14     On behalf of the appellant, Mr. Colautti argued that his client had unequivocally deposed that he had been specifically induced to apply to and to enroll in Laurentian's engineering program in reliance on the statement in the university calendar that read:

 

                 Students having successfully completed the first and second year programs may proceed into the third year in Mining Engineering or Extractive Metallurgical Engineering at Laurentian University, or may transfer into the third year of other universities in Ontario, if they wish to pursue Chemical, Civil or Mechanical Engineering.

15     In his submission, Olar's claim was complete on proof of (1) that statement; (2) his reliance upon it; (3) the fact that the statement was a misrepresentation; and (4) damages, including an extra year of tuition, textbook and living expenses and the loss of a year of professional income. Mr. Colautti argued that the "successful completion" of the first and second year programs was not (as Brockenshire J. held it to be) a condition precedent to Olar's entitlement to bring his action against Laurentian, and that the one course/six credit shortfall did not preclude the assertion of Olar's claim.

16     I agree with that submission. As I see it, the "shortfall" argument does not vitiate Olar's claim for two reasons, one of which is a matter of evidence and the other, a matter of law.

17     The evidentiary reason is this. Olar deposed in his affidavit that the elective economics course he failed to complete could have been made up by him during summer school and would not have necessitated taking an entire extra year of engineering courses. In his words, "it was not the elective course which held me back. ... Even if I had taken all of the courses on the calendar and had A's in every single course, it would not have made any difference". AndrČ Bom, another student who said that he also relied on the alleged misrepresentations, completed his two years with full credits, but was also set back an extra year because universities in Windsor, Ottawa and Hamilton required certain prerequisite courses that were not offered at Laurentian. Greg Spangler, another student who said he relied on the alleged misrepresentations, completed his two years with full credits, but was required by the University of Toronto to make up core courses missing from his first and second years at Laurentian and he, too, spent a total of five years to complete what he had understood to be a four-year program.

18     The legal reason is this. As noted, Brockenshire J. made much of Olar's failure to meet a "clear condition precedent". Indeed, it was the basis of his rejection of Olar's claim. "Condition precedent" is the language of contract. Where a contract is subject to a condition precedent, there is no duty to render the promised performance until the condition has been fulfilled: Chitty on Contracts, 28th ed. (London: Sweet & Maxwell, 1999) at paras. 2-136 and 2-137. But Olar's statement of claim is couched, not in terms of contract, but rather of tort. It sets out representations that are said to have been either false to the knowledge of Laurentian (deceit) or, alternatively, to have been made negligently, for which damages were suffered as a direct or consequential result by Olar and by other members of the class that the pleading defines. The elements of deceit and of negligent misrepresentation have been defined, respectively, by the Supreme Court of Canada in Parna v. G. & S. Properties Ltd., [1971] S.C.R. 306 at 316 and Queen v. Cognos Inc., [1993] 1 S.C.R. 87 at 110. There is no suggestion in the elements of either cause of action of any condition precedent that the representee must meet in order to assert his or her claim. Mr. Olar may face obstacles of proof, some more formidable than others, in establishing his claim: proof that the representations relied upon were untrue; proof that they were made deceitfully or negligently; proof that he relied upon them in deciding to enroll at Laurentian; proof that he would have made up his missing course in time to be considered for admission to another university's third year program; proof that he suffered the damages he seeks, or any other. But these problems go to his eventual success in his action, not to his entitlement to bring it.

19     Brockenshire J. granted summary judgment dismissing Olar's action under rule 20.04(2)(a) of the Rules of Civil Procedure. Summary judgment may only be granted, in the words of that rule, if the court is satisfied that there is no genuine issue for trial. In my opinion, Brockenshire J. erred when he found himself to be so satisfied. As a matter of law, nothing in the appellant's "academic shortfall" precludes his entitlement to allege reliance on the representations he claims were made, and the difficulties of proof recited in the preceding paragraph all raise genuine issues for trial within the meaning of the rule.

The certification motion

20     As noted, Brockenshire J. was of the view that the material before him disclosed a cause of action that might go forward as a class proceeding, although he expressed concern (at para. 36) about the description of the proposed class which, in his view, required amendment. He left open (at para. 41) the possibility of an application for certification should the action be reconstituted with a new proposed representative plaintiff.

21     For the reasons I have given, I propose to set aside the order that granted summary judgment dismissing this action. Both counsel took the position in their submissions that, if this appeal were allowed, the question of certification should be remitted to the Superior Court for reconsideration. I agree, and propose to make such an order.

Disposition

22     I would allow the appeal. I would set aside the order of Brockenshire J., except for paragraph 1, which gave the appellant leave to amend the statement of claim on consent. I would dismiss the respondent's motion to dismiss this action and would remit to the Superior Court of Justice the appellant's motion for an order certifying the action as a class proceeding and appointing him as the representative plaintiff.

23     I would order that the costs of the motions before Brockenshire J. be costs in the cause. I would order that the respondent pay the appellant's costs in this court, in such amount as counsel may agree or, if they cannot agree, in an amount to be fixed following receipt of written submissions from both counsel in the usual manner.

CATZMAN J.A.

 O'CONNOR J.A. -- I agree.

 DOHERTY J.A. -- I agree.

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