Supreme Court

SUPREME COURT OF NOVA SCOTIA

Citation: Municipality of the District of East Hants v. Lively Properties Limited, 2025 NSSC 274

Date: 20250828

Docket: Hfx No. 537199

Registry: Halifax

Between:

The Municipality of the District of East Hants

Applicant

v.

 

Lively Properties Limited

Respondent

 

 

Judge:	The Honourable Justice Glen G. McDougall
Heard:	July 2, 2025, in Halifax, Nova Scotia
Final Written Submissions:	August 22, 2025
Written Decision:	August 28, 2025
Subject:	Ruling
Summary:	Respondents request that certain paragraphs be redacted from Mr. Arni Lively's Affidavit of Evidence. Justice McDougall allowed for redaction of paras: 18-20, 25, 29 - 30, 45 - 48, 51, 62-70, Part of 71, 73, Part of 74 and 76. Costs to be determined when all merits of the Applications have been heard.
Issues:	(1) Redaction of paragraphs (2) Costs
Result:	Not all impugned/objected to paragraphs were redacted.  No costs given at this point.

 

 

SUPREME COURT OF Nova Scotia

Citation: The Municipality of the District of East Hants v.Lively Properties Limited, 2025 NSSC 274

Date: 20250828

Docket: Hfx No.  537199

Registry: Halifax

Between:

The Municipality of the District of East Hants

Applicant

v.

Lively Properties Limited

Respondent

 

 

Judge:	The Honourable Justice Glen G. McDougall
Heard:	July 2, 2025, in Halifax, Nova Scotia
Counsel:	Nathan Sutherland, for the Applicant Gavin Giles, K.C., for the Respondent

 

 

By the Court:

Ruling

[1]             The Municipality of the District of East Hants (the “Municipality”) seeks to enforce the buy-back provisions of a Buy-Back and Right of First Refusal Agreement (the “Buy-Back Agreement”) that forms part of an Agreement of Purchase and Sale it entered into with Lively Properties Holdings Limited (“Lively Properties”) on January 28, 2019.

[2]             The sale of the property known as Block U, Richard John Drive, Mount Uniacke Business Park, Mount Uniacke, Hants County, Nova Scotia (PID No. 45357449) (the “Property”) was conditional on Lively Properties executing the Buy-Back Agreement which it did on February 1, 2019.

[3]             The Municipality filed a Notice of Application in Chambers on October 2, 2024, seeking an order for specific performance and damages for Livley Properties’ alleged breach of the Buy-Back Agreement and its refusal to sell the Property back to the Municipality after being notified that the Municipality was exercising its right to do so.

[4]             Counsel for Lively Properties filed a Notice of Contest (Application in Chambers) on December 6, 2024. This was followed by an Amended Notice of Contest filed on February 19, 2025, which is turn was superseded by a Second Amended Notice of Contest filed on March 12, 2025.

[5]             In support of his client’s position, counsel for Lively Properties filed an Affidavit of Arnie B. Lively (“Mr. Lively”), the sole Director and officer of Lively Properties. The affidavit, consisting of 82 paragraphs, was filed on the 19^th day of February 2025.

[6]             In the Rebuttal Brief of the Applicant filed on February 24 ,2025 by counsel for the Municipality, 29 of the 82 paragraphs were objected to, either in full or in part, based on relevance, hearsay, speculation, submission, or inadmissible opinion evidence or some combination thereof. A summary of objections to Lively’s Affidavit was attached to the Rebuttal Brief and marked Appendix A. It laid out the impugned paragraphs and the nature of the objections(s) in support of why they should be ruled inadmissible.

[7]             Counsel for the Municipality also attached, as Appendix B, a redacted version of the Lively Affidavit with the impugned paragraphs (or portions thereof) removed.

[8]             A copy of Appendix A and Appendix B are attached for ease of reference. I will adopt the same approach in ruling whether, or not, to sustain or over-rule the various objections to admissibility raised by counsel. My analysis will begin with on overview of the Civil Procedure Rules and the rules of evidence and the legal principles that have evolved through case law over the years.

Applicable Civil Procedure Rules & Relevant Case Law:

[9]             Civil Procedure Rule 5.22 states that the rules of evidence, including the rules about hearsay, apply to applications. It reads, as follows:

5.22	Rules of evidence on an application
The rules of evidence, including the rules about hearsay, apply on the hearing of an application and to affidavits filed for the hearing except a judge may, in an ex parte application, accept hearsay presented by affidavit prepared in accordance with Rule 39 - Affidavit.
39.02 (1) states that:
39.02	Affidavit is to provide evidence
(1)	A party may only file an affidavit that contains evidence admissible under the rules of evidence, these Rules, or legislation.
Rule 39.04 permits a judge to strike a part or all of an Affidavit. The relevant provisions of Rule 39.04 read, as follows:
39.04	Striking all or part of an affidavit
(1)	A judge may strike an affidavit containing information that is not admissible evidence, or evidence that is not appropriate to the affidavit.
(2)	A judge must strike a part of an affidavit containing either of the following:
	(a)	information that is not admissible, such as an irrelevant statement or a submission or plea;
	(b)	information that may be admissible but for which the grounds of admission have not been provided in the affidavit, such as hearsay admissible on a motion but not supported by evidence of the source and belief in the truth of the information.
(3)	If the parts of the affidavit to be struck cannot readily be separated from the rest, or if striking the parts leaves the rest difficult to understand, the judge may strike the whole affidavit.
(4)	A judge who orders that the whole of an affidavit be struck may direct the prothonotary to remove the affidavit from the court file and maintain it, for the record, in a sealed envelope kept separate from the file.
(5)	A judge who strikes parts, or the whole, of an affidavit must consider ordering the party who filed the affidavit to indemnify another party for the expense of the motion to strike and any adjournment caused by it.

[10]         Any discussions regarding the proper drafting and permissible contents of the affidavits must begin with the oft-quoted decision of the Honourable Justice John M. (“Jack”) Davison (a, now deceased, former member of this Court) in the case of Waverley (Village Commissioners) v. Nova Scotia (Minister of Municipal Affairs), 1993 NSSC 71 (“Waverley”). Waverley, supra, pre-dates the implementation of the Nova Scotia Civil Procedure Rules on January 1, 2009, but the revamped rules did nothing to diminish the impact of Justice Davison’s seminal decision. If anything, the new rules served to reinforce and enhance the value of what Justice Davison had to say. Further evidence of this can be found in the Honourable Justice Scott C. Norton’s decision in King v. Gary Shaw Alter Ego Trust, 2020 NSSC 288 where, at paragraph 9, he wrote:

[9]	The leading decision in this province on the appropriate contents of affidavits is Waverly (Village) v. Nova Scotia (Municipal Affairs), 1993 NSSC 71. Therein, Justice Davison made the following observation and set out in summary form the guidelines for admissible affidavit evidence (I note here that his reference to “application” was to a Chambers Application in the former Rules, now a Motion in Chambers in our present Rules):
	14	Too often affidavits are submitted before the court which consist of rambling narratives. Some are opinions and inadmissible as evidence to determine the issues before the court. In my respectful view the type of affidavits which are being attacked in this proceeding are all too common in proceedings before our court and it would appear the concerns I express are shared by judges in other provinces…
	20	It would [be] helpful to segregate principles which are apparent from consideration of the foregoing authorities and I would enumerate these principles as follows:
			1.	Affidavits should be confined to facts. There is no place in affidavits for speculation or inadmissible material. An affidavit should not take on the flavour of a plea or a summation
			2.	The facts should be, for the most part, based on the personal knowledge of the affiant with the exception being an affidavit used in an application [a motion under the present Rules]. Affidavits should stipulate at the outset that the affiant has personal knowledge of the matters deposed to except where stated to be based on information and belief.
			3.	Affidavits used in applications [motions] may refer to facts based on information and belief, but the source of the information should be referred to in the affidavit. It is insufficient to say simply that "I am advised".
			4.	The information as to the source must be sufficient to permit the court to conclude that the information comes from a sound source and preferably the original source.
			5.	The affidavit must state that the affiant believes the information received from the source.

[11]         Prior to hearing counsel’s arguments regarding the impugned paragraphs or parts of paragraphs in the Lively Affidavit, the Court was briefed by the Municipality’s legal counsel in his Rebuttal Brief as previously mentioned. Counsel for Lively Properties did not present a brief in advance of the hearing relying on oral submissions only. While acknowledging that Waverley, supra, is still considered the leading authority on what proper affidavit evidence should consist of, he suggested that more recent cases have emphasized the importance of proportionality on motions to strike affidavit evidence. He cited the cases of McDonald v. Hue, 2024 NSSC 24 and Colbourne Chrysler Dodge Ram Limited v. MacDonald, 2023 NSSC 309 in support of his argument that litigants have been cautioned against indiscriminately attacking affidavit evidence and “nit picking” every evidentiary issue thereby rendering proceedings inefficient and cost ineffective.

[12]         With the Court’s permission, counsel for the Municipality was given time to prepare and file post-hearing rebuttal submissions in response to the arguments advanced by Lively Properties’ counsel. In his rebuttal submissions filed on July 17, 2025 counsel for the Municipality pointed out that  “ The Municipality’s objections are proportionate and in keeping with Justice Keith’s directive in Colbourne Chrysler, supra, that parties should “bring a reasonable degree of judgment to bear, having regard to the promise of Civil Procedure Rule 1.01 for the “ just, speedy and inexpensive determination of every proceeding”.” He further points out that “The Municipality’s objections focus on material, rather than trivial, evidentiary issues in the Lively affidavit.” Which …” go to the heart of the parties’ dispute concerning the Buy-Back Agreement.”  Indeed, he argues that the approach taken by the Municipality is in accord with what Justice Keith stated, at paragraph 25 of Colbourne Chrysler, supra:

[25]         Obviously, litigants should not file affidavits containing inadmissible evidence. Moreover, a properly functioning adversarial system requires opposing parties to identify and confront inadmissible evidence. Thus, the Civil Procedure Rules properly provide a mechanism for parties to challenge inadmissible affidavit evidence.

[13]         In his Rebuttal submissions, counsel for the Municipality also provided a succinct and cogent response to the remaining oral arguments advanced by Lively Properties’ counsel regarding the affiant’s evidence concerning “market prices” as well as his suggestion that Mr. Lively’s evidence in this regard is not expert opinion evidence but rather admissible lay opinion. He also addressed opposing counsel’s suggestion that his client’s evidence regarding the pandemic, the “Suez Canal Crisis”, and the “Texas Freeze” effects on the construction industry are admissible because the are things “generally known to mankind” which, using the words of United States Supreme Court Associate Justice Felix Frankfurter in Watts v. Indiana, 338 U.S. 49 (1949)

“…there comes a point where this Court should not be ignorant as judges of what we know as men.”

[14]         Counsel for the Municipality correctly points out that the Municipality is not asking this Court to close its mind to facts that are “so notoriously or generally accepted as not to be the subject of debate among reasonable persons” nor to ignore that which is “capable of immediate and accurate demonstration by resort to readily accessible sources of disputable accuracy.” [ See Colts Foot Publishing Ltd. v. Foster-Jacques, 2012 NSCA 83 at para. 42, citing R. v. Find, 2001 SCC 32]. As proof of this, counsel for the Municipality notes that his client does not object to the effects, including shutdowns of the Covid-19 pandemic on the construction industry generally. What the Municipality objects to, based on its counsel’s submissions, is “Mr. Lively’s efforts to provide opinion evidence regarding the more specific impacts of COVID-19 in support of his opinion that these things made it impossible for Lively to develop the property at issue.” [ See page 5 of the post-hearing Rebuttal submissions of Mr. Nathan Sutherland, counsel for the Municipality, filed on July 17, 2025.]

[15]         Counsel for the Municipality submits that this opinion evidence is particularly objectionable “because it is proffered in service of a submission…that goes to the heart of Lively’s argument on the merits.” [ Page 5 of counsel’s Rebuttal Submissions]

[16]         He asks that they be struck. In deciding what should or should not be struck from Mr. Lively’s affidavit I will take into consideration the arguments advanced by counsel for each of the parties. While doing so, I will not lose sight of the continuing importance of the Waverley, supra decision as well as more recent decisions of this Court that similarly rely on its direction and advice.

[17]         I should add that the reference made by Lively Properties’ counsel to the decision of Justice Frankfurter in Watts v. Indiana, although interesting, is not of any appreciable assistance in helping me decide what is now before me. The case could possibly be of some use should the Court  be called upon to take judicial notice of certain facts “ that are either “ so notorious or generally accepted as not to be the subject of debate among reasonable persons; or (2) capable of immediate and accurate demonstration by resort to readily accessible sources of indisputable accuracy” : R v. Find, [2001] 1 S.C.R 863, 2001 SCC 32, at para. 48. [As quoted by Charron, J. in R. v. Krymowski, [2005] 1 S.C.R. 101 (SCC)]. That is not what the Court is being asked to do in making this ruling.

Counsel’s Objections:

[18]         Counsel for the Municipality bases his objections either on relevance, hearsay, speculation, submission, or inadmissible opinion evidence or some combination thereof. In the context of this ruling, relevance pertains to threshold relevance. In Sopinka, Lederman & Bryant: The Law of Evidence in Canada, Fifth Edition, at para. 11.42, the authors wrote:

“…Relevance is a rational method of fact-finding based on logic, common sense and experience. The term “relevance” is concerned with the relationship between the proffered evidence and the issues in the case the proponent of the evidence is advancing. As Doherty, J.A. stated in R. v. Watson (1996), 50 C.R. (4^th) 245, [1996] O.J. No. 2695, at para 33 (Ont. C.A.) Relevance…requires a determination of whether as a matter of human experience and logic the existence of “Fact A” makes the existence or non-existence of “Fact B” more probable than it would be without the existence of “Fact A”. If it does then Fact A is relevant to “Fact B”.

[19]         At para. 11.45, the authors of this authoritative text, added the following:

A Simple test to determine if the proffered evidence is relevant is to ask “what inference is sought to be made from the proposed evidence and whether it has some tendency to advance the inquiry before the court”. [See R. v. B. (L.); R. v. G. (M.A) (1997), 35 O.R. (3^d) 35, [1997] O.J. No. 3042, at para. 17 (Ont. C. A.)]

[20]         Counsel for the Municipality also relied on hearsay to support some of his objections to admissibility of portions of the Lively affidavit. A recent statement of the law on hearsay was provided by Karakatsanis, J. in R. v. Bradshaw, 2017 SCC 35 (S.C.C.), at para. 1:

1 Hearsay is an out-of-court statement tendered for the truth of its contents. It is presumptively inadmissible because -- in the absence of the opportunity to cross-examine the declarant at the time the statement is made -- it is often difficult for the trier of fact to assess its truth. Thus hearsay can threaten the integrity of the trial's truth-seeking process and trial fairness. However, hearsay may exceptionally be admitted into evidence under the principled exception when it meets the criteria of necessity and threshold reliability.

[21]         Although presumptively inadmissible, the law surrounding hearsay is subject to various categories of exceptions and as noted by various jurists and legal scholars in the past there are exceptions to the exceptions which taken together has led to the contemporary rule which adopts a more flexible approach to hearsay based upon necessity and reliability. [ See R. v. Khan, [1990] 2 S.C.R. 531 (S.C.C.); R. v. Smith, [1992] 2 S.C.R. 915 (S.C.C.); and R. v. Khelawon, [2006] 2 S.C.R. 787] Generally speaking, hearsay can oftentimes be relatively easy to identify but determining its admissibility or inadmissibility can be fraught with difficulty.

[22]         The three remaining bases for objection raise concerns about speculation, submissions and in admissible opinion. I do not think it is necessary to provide an expanded or detailed explanation of either speculation or submissions other than to say neither category should be included in affidavits. As stated by Davison, J. in Waverley, supra, and as quoted by Norton, J. in King v. Gary Shaw Alter Ego, supra:

“…There is no place in affidavits for speculation or inadmissible material. An affidavit should not take on the flavour of a plea or a summation.”

[23]         In regard to the exclusion of opinion evidence, the generally accepted rule was noted by Major, J. for the majority in R. v. D. (D.), [2000] 2 S.C.R. 275, as follows:

A basic tenet of our law is that the usual witness may not give opinion evidence, but testify only to facts within his knowledge, observation and experience. This is a commendable principle since it is the task of the fact finder, whether a jury or judge alone, to decide what secondary inferences are to be drawn from the facts proved.

[24]         This, however, does not preclude the acceptance of lay opinion evidence for example. In R. v. Graat, [1982] 2 S.C.R. 819 (S.C.C.), Dickson, J. (as he then was), at pp. 836-7, put it this way:

I agree with Professor Cross (at p. 443) that "The exclusion of opinion evidence on the ultimate issue can easily become something of a fetish". I can see no reason in principle or in common sense why a lay witness should not be permitted to testify in the form of an opinion if, by doing so, he is able more accurately to express the facts he perceived.

I accept the following passage from Cross as a good statement of the law as to the cases in which non-expert opinion is admissible.

When, in the words of an American judge, "the facts from which a witness received an impression were too evanescent in their nature to be recollected, or too complicated to be separately and distinctly narrated", a witness may state his opinion or impression. He was better equipped than the jury to form it, and it is impossible for him to convey an adequate idea of the premises on which he acted to the jury:

"Unless opinions, estimates and inferences which men in their daily lives reach without conscious ratiocination as a result of what they have perceived with their physical senses were treated in the law of evidence as if they were mere statements of fact, witnesses would find themselves unable to communicate to the judge an accurate impression of the events they were seeking to describe."

[25]         The framework by which to determine the admissibility of expert opinion evidence was set out in R. v. Mohan, [1994] 2 S.C.R. 9 (S.C.C.) and further explained in SCC White Burgess Langille Inman v. Abbottt and Haliburton Co., 2015 23 (S.C.C.). In Mohan, supra, Sopinka, J. for the court wrote the following, at p.20:

Admission of expert evidence depends on the application of the following criteria: (a) relevance;

(b) necessity in assisting the trier of fact;

(c) the absence of any exclusionary rule; and

(d) a properly qualified expert.

[26]         This is the first stage of a two-stage process. At the second stage, the judge must balance the potential benefits and risks of admitting the evidence and then decide whether the potential benefits outweigh the risks.

Application of the Rules of Procedure Based on Existing Case Law:

[27]         Armed with this information regarding the rules of procedure along with the assistance of relevant caselaw, I will look at each of counsel’s objections and decide if they should be upheld or over-ruled (either in whole or in part). I will use the Appendix A prepared by counsel for the Municipality to guide my analysis in reaching my decisions on each of the objections:

Comments:

[28]         As part of Lively Property’s defence to the Application, particularly paragraphs 3d.(a) to (e) and 38a. to 38f (inclusive) of the Second Amended Notice of Contest (Application in Chambers), the company alleges that the Municipality failed to conduct itself in a business-like manner and instead conducted itself in a manner which reasonably led Lively Properties to believe that the Municipality would not be pursuing  its rights pursuant to the terms and conditions of the Buy-Back Agreement. The company further alleges that based on the careless and cavalier manner in which the Municipality conducted its business in its dealings with Lively Properties that it left the company with the impression that the buy-back of the property had been waived by the Municipality and that it should be estopped from exercising its buy-back rights which would result in an unjust enrichment should the Court rule in the Municipality’s favour.

[29]         The merits of the Municipality’s claim and the defence advanced on behalf of Lively are yet to be determined. At this point of the proceeding, I cannot rule out the relevance of these impugned paragraphs and, as such, I am not persuaded that paras. 13 to 17 should be struck from the Arni Lively Affidavit. As such, they will remain as drafted.

[30]         I agree with the Municipality’s objection based on speculation. Mr. Lively can speak to his own and his company’s business practices (subject, of course, to relevance) but clearly, he could only speculate on what purpose other businesses might have for sending out follow-up statements. The paragraph should be struck.

[31]         In each of these paragraphs, the affiant is offering an opinion on what he suggests are normal business practices. No doubt, Mr. Lively, has probably achieved considerable business acumen based on running his own business but that does not make him an expert. Nor can what he is stating be considered admissible lay opinion. Both paragraphs should be struck.

[32]         All three paragraphs “take on the flavour of a plea or a summation” [Waverley, supra, at p.11] and should not be included in an affidavit. All three paragraphs should be struck.

[33]         The affiant has not provided any evidence to support his knowledge and understanding of market prices nor has he been qualified to offer such an opinion. As such, all of these paragraphs should be struck.

[34]         I agree with the objection. This is clearly a submission and, so, should be struck.

[35]         Paragraph 63 is “textbook” hearsay and should be struck. The remaining three paragraphs offer opinions that, too, should be struck.

[36]         Paragraph 67 speaks about unspecified media reports which is not only vague but is clearly hearsay. It should be struck for this reason. As to paras. 66 and 68, the affiant provides no basis for his knowledge of any unprecedented up-swings in housing purchases, housing renovations and new house construction commencing roughly at the end of the first quarter of 2021 and how they might have resulted from the Covid-19 pandemic. Nor does he support his contention that these unprecedented up-swings resulted in pressure on the building and construction trades and on the availability of building materials. This would require expert opinion evidence which the affiant has not been qualified to offer. As with para.67, they should also be struck.

[37]         These two paragraphs are premised on the inadmissible contents of paras. 66 to 68. They attempt to offer opinion evidence and take on the flavour of submission. On both counts, they, too, are inadmissible and are struck from the affidavit.

[38]         This represents one more attempt by the affiant to offer opinion evidence that he is not qualified to give. Nor does he offer any acceptable evidence to tie the “Suez Canal Crisis”, so-called, to his company’s ability to source supplies and other building materials. Consequently, its relevance is not simply questionable, it is non-existent. The challenged words are, therefore, struck.

[39]         The affiant offers no authority or source for this statement. It is a bald assertion without any attribution that might be capable of verification. It is hearsay and hence, inadmissible. It should be struck from the affidavit.

[40]         Again, the affiant is asking the reader to accept his opinion on the impact of the “Texas Freeze or Freeze-Up” on “the manufacture of the raw materials used in manufacturing of many types of building materials, including, without limitation, plastics, polymers, and resins.” The affiant does not even purport to establish any direct knowledge he might have of the effects of the “Texas Freeze or Freeze-up” on manufacturing. It offers inadmissible opinion evidence. I also share the concern with relevance raised by counsel for the Municipality.

[41]         The beginning words in the first line of para.74 and the words “Freeze or Freeze-Up” in the second line are not being challenged. They can stay but the remainder of the paragraph should be struck.

[42]         So flagrantly hearsay, nothing really needs to be said other than the full paragraph 76 should be struck.

Conclusion:   

[43]         Following counsel’s method of presenting what the redacted affidavit should consist of, I have attached a redacted version labelled “Appendix C” that incorporates my ruling.

[44]         Regarding costs, this will be addressed in due course after the merits of the application have been argued and after I render my final decision.

Glen G. McDougall, J.