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Monday Morning Case Bites for August 26, 2019

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Amanda Kostek & Christie Dewar

Nahal v Gottlieb, 2019 ABQB 650
Dismissal for delay | Steps taken but not completed

Edgar v Security National Insurance Company, 2019 ABQB 628
Dismissal for Delay | Effect of Unfollowed Litigation Plan

ANC Timber Ltd v Alberta (Minister of Agriculture and Forestry), 2019 ABQB 653
Evidence on Chambers Applications | Use of Hearsay Evidence | Use of Expert Reports

Acden Environment Limited Partnership v Environmental Metal Works Ltd, 2019 ABQB 659
Breach of Contract Damages | Repudiation

Nahal v Gottlieb, 2019 ABQB 650

This was a successful application for dismissal of the claim for long delay for failing to take a significant advance in the action over a 3 year period against a self-represented Plaintiff.  The Court concluded that the following did not constitute a significant advance:

  • an order was granted (April 25, 2016) on application of the defendants setting the trial for a mutually convenient date after September 30, 2016.
  • a consent order was granted (June 16, 2016) permitting the parties to book a trial date before expert reports were exchanged.
  • the trial co-ordinator assigned a 7 day trial date commencing November 19, 2018.
  • correspondence was received from the trial coordinator (August 27, 2018) cancelling the trial as neither party had complied with Rule 8.7 by confirming, using Form 39, that they were ready to proceed and verifying the estimated number of witnesses and estimated duration of the trial. If either party had filed Form 39 then the trial date would have been preserved.
  • counsel for Nahal wrote to counsel for the defendants (October 5, 2018) seeking to schedule new trial date.
  • Counsel for the defendants wrote to counsel for Nahal (October 19, 2018) advising she had no instructions to agree to a new trial date
  • Counsel for Nahal applied (filed April 4, 2019 – returnable April 12, 2019) to set a new trial date. That application did not proceed on April 12th as the defendants applied on April 11, 2019 to dismiss the action for delay

The Court noted that commencing a step that is then not completed is not considered a significant advance.

The Court also considered whether the claim should be dismissed for inordinate delay under Rule 4.31.  this considers were the action is at as a whole.  The events in issue occurred in 2010.  Litigation steps were completed by June, 2016 and a Form 37 setting the matter for Trial was filed.  Trial dates were confirmed July 8, 2016, but  cancelled August, 2018 when the Trial Coordinator noted that the parties failed to confirm Trial readiness.  The court concluded that applying for a new date in 2019 was inordinate, and without excuse.  It was the Defendants that were most active in attempting to set the matter for trial. The Plaintiff did not adduce any positive evidence of the availability of evidence to rebut the presumption of prejudice. As a result, the Court also dismissed the claim under Rule 4.31.

Edgar v Security National Insurance Company, 2019 ABQB 628

This was a successful and unopposed application by Security National to dismiss the Plaintiff’s claim for inordinate delay under Rule 4.31.  This was a first party claim against the Plaintiff’s insurer for a theft that occurred in August, 2011.  Litigation progressed up to the answer of undertakings in April, 2016.  That same month a Litigation Plan was entered into, which required the following:

7. All parties will agree on a date for Questionings on Undertakings, if Questionings on Undertakings are necessary, by August 4, 2017.
8. All parties will complete Questionings on Undertakings by September 30, 2017.
9. Answers to any further Undertakings given by the parties at their Questionings on Undertakings will be provided by November 30th, 2017.
10. The Plaintiff will provide all expert reports that he intends to rely upon at trial by February 28th, 2018.
11. The Defendant will provide rebuttal experts reports, if any, by April 30th, 2018.
12. The parties will agree to participate in a Judicial Dispute Resolution conference or Mediation by May 30th, 2018.

None of the steps in the Litigation Plan were completed.

The Court concluded that the parties were in the best position to determine where on the litigation spectrum the matter should be.  The Court relied on the Litigation Plan timelines to determine that the delay was inordinate.   No excuse was provided:

[7]               The Parties are best able to decide where the matter should be on the litigation spectrum. The complete failure to abide by the agreement together with the lack of any excuse is enough to engage the first two parts of Rule 4.31. Serious prejudice is presumed.

[8]               The Parties agreed to a timeline, which was ignored by the Plaintiff. There has been no variation by agreement, or court Order. No excuse or justification has been offered. Seen through the lens of the timeline agreed to by the parties, the delay is inordinate, un‑excused and un‑explained. This substantially satisfies the two elements of the rule. The Defendant has not contributed to the delay (Transamerica), in fact they have tried in vain to move this matter forward.

[9]               The Applicant enjoys the resulting presumption of prejudice arising from Rule 4.33(2). This presumption can be rebutted: Ravvin Holdings Ltd  v Ghitter, 2008 ABCA 208 (CanLII) at paras 38-39 and Humphreys at para 155.  I note, however, that Ravvin tells us that the presumption can be rebutted with ‘some evidence’. Humphreys requires that the presumption be rebutted on the balance of probability.

The claim was dismissed for inordinate delay.

ANC Timber Ltd v Alberta (Minister of Agriculture and Forestry), 2019 ABQB 653

This was an application to strike portions of an affidavit on an interlocutory application.  The Court outlined the following basic rules on evidence:

[18]           At the most basic level, the rules of evidence require that evidence must be useful in tending to prove a fact relevant to the issues in the case (necessary), and reasonably reliable to be admissible (reliable).  Necessity and reliability are both fluid and interrelated factors. For example, if the evidence is highly reliable, then necessity may be relaxed, and if the necessity factor is high, reliability may be relaxed: Paciocco, David and Stuesser, Lee, The Law of Evidence, 7th ed (Toronto: Irwin Law, 2015) (Paciocco) at 139.  The indicia of reliability do not change whether the case is a civil or criminal case: Jung v Lee Estate, 2006 BCCA 549 (CanLII).

[19]           Even admissible evidence may be excluded if its probative value is outweighed by its prejudicial effect: Mitchell v Canada (MNR), 2001 SCC 33 (CanLII) at para 30.  In this regard, prejudice is not restricted to evidence that works against a party’s interest. It can also arise from evidence that potentially undermines an accurate result, or complicates, frustrates, or degrades the process, and includes adverse practical consequences such as the undue consumption of time, unfair surprise, the creation of distracting side issues, and a potential to confuse the trier of fact: Paciocco at 42-43 citing R v S(DG) (2013), 299 CCC (3rd) 454 at para 25 (MBCA).

[20]           The purpose of affidavit evidence is to place the necessary facts before the court: Alberta Treasury Branches v Leahy, 1999 ABQB 185 (CanLII) at para 84 (ATB v Leahy).  There is, however, some flexibility for contextual purposes in that assertions of fact may be part of the narrative for the purpose of assisting the Court in understanding the relevance of a particular fact and the relationship between facts: ATB v Leahy at para 84; Banff Transportation & Tours Inc v Buchan, 2002 ABQB 423 (CanLII) at para 17.

[21]           Typically, affidavits must be sworn on the basis of personal information. However, the Rules of Court allow hearsay evidence on a motion for interim relief if it is accompanied by a statement providing the source of the evidence and the deponent’s belief in its truth: Rule 13.18(1)(b) and 13.18(2).  Notwithstanding this, the Court is not mandated to accept such evidence: Silver Recovery Systems of Canada Ltd v WMJ Metals Ltd (1989), 103 AR 252, 1989 CanLII 3352 (Master); Schaffhauser Kantonalbank v Chmiel, 1988 ABCA 149 (CanLII).

The Court affirmed that affidavits should not contain argument or conclusions.   The Court may allow evidence that provides the contextual background or narrative for the application.

In terms of hearsay, the Court said the following:

[60]           The defining features of hearsay evidence are the introduction of a statement for the proof of its contents and lack of a contemporaneous opportunity to cross-examine the declarant: R v Khelawon, 2006 SCC 57 (CanLII) at para 35 (Khelawon).  The purpose of the general exclusionary rule for hearsay evidence is to address “the difficulty for a trier of fact to assess what weight, if any, is to be given to a statement made by a person who has not been seen or heard, and who has not been subject to the test of cross-examination”: at para 35.

[61]           The assessment for admitting hearsay evidence is predicated on it being necessary and reliable: R v Khan, 1990 CanLII 77 (SCC), [1990] 2 SCR 531; R v Smith, 1992 CanLII 79 (SCC), [1992] 2 SCR 915. Put another way, if a statement is necessary and there is sufficient trustworthiness, it should be considered regardless of its hearsay form: Paciocco at 135, Khelawon at para 62.

[62]           Threshold reliability can be met if there are adequate substitutes for traditional safeguards relied upon to test the hearsay evidence: R v B(KG)1993 CanLII 116 (SCC), [1993] 1 SCR 740; Khelawon at para 63.

[63]           The context and impact of the hearsay evidence must also be considered in assessing its admissibility. This includes the seriousness of the case, the importance of the evidence, and the consequences to the parties and costs or efforts to secure the original evidence: Paciocco at 130.

[64]           Even if it is admissible, hearsay can be excluded if its probative value is outweighed by its prejudicial effect. Again, prejudice can arise from the evidence potentially complicating, frustrating, or degrading the process, including adverse practical consequences like the undue consumption of time, unfair surprise, the creation of distracting side issues, and potential to confuse the trier of fact

The Court also directed that any expert opinions should be tendered as they would be at Trial:

[124]      The Rules are silent about expert evidence on motions.  (Perhaps they should be amended.)  However, I conclude that any expert evidence ought to be introduced as it would at trial: the proposed expert’s qualifications and scope of opinion should be precisely defined, and the substance of their opinion clearly expressed.  Doing so will not only avoid surprise, it will also avoid any call for judicial sleuthing or intervention.

[125]      There should be no distinction between motions for interim or final relief.

Acden Environment Limited Partnership v Environmental Metal Works Ltd, 2019 ABQB 659

This was an Application for Summary Judgment. The issue was whether the Applicant repudiated the contract, allowing the Respondent to keep the money that had been paid in advance. The Court found that the $996,720 retained by the Defendant was not a pre-estimate or a calculation of damages. It was over three times any evidence of the Defendant’s actual loss, and plainly represented a windfall. The Court canvassed the law on repudiation of the contract, and concluded that there has to be an element of fairness in determining damages so that one party is not granted a windfall as a result of the other parties failure to proceed with the contract. The Applicant was awarded judgment of $996,720 plus costs and interests, and a portion of the judgement, $300,000 was stayed for proof of the Defendant’s damages.