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Monday Morning Case Bites for February 4, 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

Domenic Construction Ltd v Primewest Capital Corp, 2019 ABQB 58
Amendment of Claim l Add Defendants l Same Controlling Mind

O’Chiese Energy Limited Partnership v Bellatrix Exploration Ltd, 2019 ABQB 53
Summary Judgment l Standard of Proof l Divergence in Case Law

Entwhistle v Wells, 2019 ABPC 15
Vehicle Damage l Out of Pocket Expenses l Remoteness and Foreseeability

Rahall v Intact Insurance Company, 2019 ABPC 11
Section B l Mattress l IME without a videographer

Dale’s Liquor Store Inc. v Routhier, 2019 ABPC 19
Set Aside their own Default Judgment l Election against Alternative Debtors

Domenic Construction Ltd v Primewest Capital Corp, 2019 ABQB 58

This was a successful application by a Plaintiff to amend a claim, which was an action for enforcement of a Judgment. The Court confirmed the following test for amendments:

[4] The “classic” rule for amendments sets a low bar (Balm v 3512061 Canada Ltd, 2003 ABCA 98, 327 A.R. 149 at para. 43.) However, there are four major exceptions when an amendment should not be allowed set out in Dow Chemical Canada Inc v Nova Chemicals Corp, 2010 ABQB 524 (CanLII), 35 Alta LR (5th) 51, 495 AR 338 at paras 20-21:

1. the amendment would cause serious prejudice to the opposing party, not compensable in costs;

2. the amendment requested is “hopeless” (an amendment that, if were in the original pleadings, would have been struck);

3. unless permitted by statute, the amendment seeks to add a new party or a new cause of action after the expiry of a limitation period; and

4. there is an element of bad faith associated with the failure to plead the amendment in the first instance.

In this case, assets were shifted between the proposed defendants and the existing defendants, all of whom had the same controlling mind. The Court allowed some amendments on this basis.

The case also discusses limitations at length and notes that if the identity of an at fault party is unknown, the limitation does not run until the identification:

[90] There is no express exception that applies to a debt claim against an undisclosed principal, or against the beneficiary of a secret trust. The provision that effectively extends the time for suing unknown principals or secret beneficiaries, or the person behind a corporate structure who should be the subject of a lifted corporate veil, is section 3(1)(a)(ii). If the person whose conduct led to the injury was not identified until after the injury was known, the limitation does not start to run until that identification.

The Court also commented that pleadings should be succinct:

[167] Overall, I remind counsel for the plaintiff that a pleading is required to be succinct: rule 13.6(1)(b). Setting out too much detail is not helpful to a pleading. As I said in Stanfield v Schneider, 2017 ABQB 381 (CanLII) at paragraph 38, the thrust of a claim gets lost when too much detail is recited.

O’Chiese Energy Limited Partnership v Bellatrix Exploration Ltd, 2019 ABQB 53

This was an application by the Plaintiff for summary judgment, and an application by the defendant for partial summary dismissal. The applications were successful in part. The Court noted that there are presently two different tests for summary judgment handed down by the Court of Appeal:

[16] There is a divergence in the recent cases emerging from the Court of Appeal on the standard of proof necessary in summary judgment applications.

[17] In Stefanyk v Sobeys Capital Incorporated, 2018 ABCA 125 (CanLII), the Court of Appeal held at paragraph 14:

First of all, it is now established that there is only one civil standard of proof, and it is proof on a balance of probabilities. The rule was definitively stated in F.H. v McDougall, 2008 SCC 53 (CanLII) at para. 40, [2008] 3 SCR 41: “. . . I think it is time to say, once and for all in Canada, that there is only one civil standard of proof at common law and that is proof on a balance of probabilities”. That is the standard the summary judgment rule engages when it talks about “merit”: proof on a balance of probabilities. “Unassailable” and “very high likelihood” are not recognized standards of proof.

[18] Subsequent to Stefanyk, the Court of Appeal held in Rotzang v. CIBC World Markets Inc., 2018 ABCA 153 (CanLII) at paragraph 15:

Summary dismissal is appropriate “if the moving party’s position is unassailable or so compelling that its likelihood of success is very high and the nonmoving party’s likelihood of success is very low” (Composite Technologies Inc. v. Shawcor Ltd., 2017 ABCA 160 (CanLII) at para 2).

[19] The Court of Appeal held similarly in Whissell Contracting Ltd. v Calgary (City), 2018 ABCA 204 (CanLII) at paragraph 2:

Summary judgment may be appropriate “if the moving party’s position is unassailable or so compelling that its likelihood of success is very high and the nonmoving party’s likelihood of success is very low”.[3] This is an onerous standard and rightly so. A grant of summary judgment ends a dispute without affording the litigants full access to the civil procedure spectrum.[4]

[20] There continue to be cases citing both lines of authority. The test will no doubt be sorted out in due course by the Court of Appeal. Two decisions by a five member panel are presently under reserve. In the meantime, both lines of authority are there, and I must decide this case. I certainly defer in due course to whatever line of authority eventually emerges and look forward to the direction it will provide.

The Court favoured the higher standard for the following reasons:

[26] Uncertainty in the precision of predicting an outcome is a largely unacknowledged variable. Different witnesses may give their evidence differently on different days. Different trial judges may perceive that evidence differently. We often assume that all trial judges would reach the same conclusion every time in a particular matter, but there are variables inherent in trial processes. While in a perfect system all judges would decide all cases the same way, there is some variability, although all judges do their utmost to decide similar matters similarly.

[27] For an illustration of the uncertainties inherent in the litigation process one need look no further than the regular occurrence of dissenting reasons in appellate courts. Different eminent and learned jurists reach different conclusions based upon identical records. Reasonable minds can disagree. Because summary judgment serves a different purpose and is in itself not a trial, it ought to reflect the possibility for divergence in the ultimate result.

[28] Granting summary judgment predicts the final result of an action. It forecasts likely trial outcomes, and in appropriate cases it decides that a trial is not appropriate. In granting summary judgment, the Court makes a decision that regardless of the variables and the inherent unpredictable nature and risks of trials, the likely result is the same, and a trial is not appropriate or worthwhile. I wrote on that point in Coffey v. Nine Energy Canada Inc, 2017 ABQB 417 (CanLII) (affirmed in Coffey v Nine Energy Canada Inc, 2018 ABQB 898 (CanLII) although for different reasons in part).

[29] In my view, the “unassailable” standard as described in Rotzang and Whissell best captures these concepts and the nature and purpose of a summary judgment application. Perhaps another way to describe such a standard is that there should be an “obvious” result.

Entwhistle v Wells, 2019 ABPC 15

This was a claim for vehicle damage against a tortfeasor. As the cost of repairs exceeded the value of the vehicle, the vehicle value less salvage was awarded. The claim was also for out of pocket expenses incidental to obtaining another vehicle, including gas and meals for travel to Edmonton from Lethbridge to purchase a new vehicle. The Court noted that when property is damaged, a Plaintiff is entitled to full restitution as well as consequential losses:

[9] When property is damaged or destroyed, the Plaintiff is entitled to full restitution (Restitutio in Integrum). The Plaintiff is to be put back into the position he was in before the accident happened. The owner is entitled to be made whole by repairing or replacement of the property and as well is entitled to any consequential losses arising from the damage to the property, subject to the rules of remoteness and mitigation. If damaged property can be immediately repaired or replaced damages would be limited to the cost of doing so, as there would be no loss of use and thus loss of profit; although in some cases even if the property is not used for profit, but the owner was deprived of use, there may be a claim for the same.

The Court concluded that the Plaintiff’s claim was reasonable, and dismissed the argument that the Plaintiff did not need to go to Edmonton to find a new vehicle when he lived in Lethbridge:

[10] In this case it is noted that the Plaintiff did not lose the use of his vehicle either in the context of for profit or personal use. The Plaintiff asserts that his time expended in locating and acquiring a replacement vehicle and the time of the person who accompanied him to Edmonton for that purpose should be paid for at the hourly rate, of $50.00/per hour, per person. By this method he claims the amount of $1,400.00 as described in Exhibit 6. He also claims a per diem meal expense of $120.00 for two people over the course of one and a half days at the rate of $40.00/per person, per day; accommodation costs of $87.20 and fuel costs relating to one vehicle on the way to Edmonton and two vehicles returning from Edmonton for a total of $155.31; storage costs for the vehicle of $50.00 per year commencing 2017.

[11] The Defendant asserts that all these expenses or damages are too remote to be compensable; however, just as it is foreseeable that property may be destroyed by negligent operation of a motor vehicle which could result in loss of use and consequential loss of income to the owner thereof, it is also foreseeable that destroyed goods, particularly those necessary to a business, would have to be replaced and that some time may be expended in finding a replacement; and that expenses may be incurred in finding such a replacement. Having regard to the social and economic conditions prevailing in our society today and the reasonable expectations of members of our society, it is my conclusion that is reasonably foreseeable that the wronged party would expend time and effort to locate a replacement vehicle, and that expense may be reasonably incurred with respect to so doing. The claims of the Plaintiff are not too remote.

[12] With respect to the Defendants’ assertion that it was not reasonable for the Plaintiff to go to Edmonton to acquire a replacement vehicle rather but he should have done so in Lethbridge or a closer venue and therefore he has not properly mitigated his loss. It is my conclusion, in the circumstances of this case that the Plaintiff’s actions with respect to replacement of the vehicle were reasonable and that the Defendant has provided no evidence that would support the position that a suitable replacement could have been found in Lethbridge such that the Plaintiff ought to have followed that course.

Rahall v Intact Insurance Company, 2019 ABPC 11

This case involved multiple applications, including a summary dismissal application by the insurer which was successful. The insured Plaintiff was seeking to have an Intellibed Mattress covered by his Section B insurer. The cost of the mattress ranged from USD$3,800.00 to USD$9,000.00. The Section B insurer sent the Plaintiff for an IME, which concluded that the mattress was not medically necessary. This was disputed by the Plaintiff’s physician:

[29] Dr. Greidanus’ opinion was that Mr. Rahall sustained a “neck sprain resolved” and “probable low back sprain resolved”. He addressed Dr. Salem’s note dated February 19, 2018 recommending an “intelliBED”, and opined “that Mr. Rahall would not need such a mattress as his neck injury and low back injury have both resolved and there were no impairments as a result of my physical examination”. He did confirm that Mr. Rahall’s injuries were as a result of the Accident.

[30] Dr. Salem submitted a further letter dated December 2, 2018 setting forth that Mr. Rahall “is recommended an IntelliBED to reduce pressure points in Mr. Rahall’s back”, and in his view, “this continues to remain essential for Mr. Rahall’s continued rehabilitation”.

The Court accepted that the terms of the policy were unambiguous:

[65] The language of the wording in question is clear and unambiguous, and requires that “other services and supplies” be supported by both the opinion of the “insured person’s attending physician” and “the Insurer’s medical advisor” to be “essential for the treatment or rehabilitation of the injured person”.

[73] These authorities confirm my view that the Policy would only cover the Mattress recommended as “essential for rehabilitation” by Dr. Salem if Dr. Greidanus agreed with that recommendation. Dr. Greidanus did not agree with Dr. Salem that the Mattress was “essential” for Mr. Rahall’s “rehabilitation”.

As a result, the mattress was not covered:

[74] In my view, there is no issue of merit requiring a Trial. The record permits me to make the necessary findings of fact to resolve the issue of coverage for the Mattress under the Policy. The Mattress is not covered as Dr. Greidanus does not agree with Dr. Salem that the Mattress is “essential” for Mr. Rahall’s “rehabilitation”. The Policy clearly requires both Dr. Greidanus and Dr. Salem to agree on this point for the Mattress to be covered.

The Plaintiff’s application to amend the Civil Claim to include a claim for bad faith was denied on the basis that it would be an abuse of process to allow the amendment given the Court’s finding that the mattress was not medically necessary.

The Court also considered whether an IME had to be excluded given the Plaintiff’s request for a videographer was denied by the IME physician:

[99] The first basis of the Mr. Rahall’s complaint is that he requested that the examination take place in the presence of a videographer pursuant to Rule 5.42 of the Alberta Rules of Court. Dr. Greidanus would not agree to conduct an examination of Mr. Rahall with a videographer present. The examination of Mr. Rahall proceeded, nonetheless, on August 16, 2018. As the examination proceeded without the requested videographer, Mr. Rahall’s lawyer argues that Dr. Greidanus’ report is inadmissible.

[100] Rule 5.42(1)(b) sets forth that a person who is to be subject to a medical examination by a health care professional may elect to videotape the medical examination, unless otherwise ordered by the Court. I have carefully reviewed Rules 5.41, 5.42, 5.43 and 5.44. Only Rule 5.44(4) speaks expressly to the possibility of exclusion of a health care professional’s evidence at trial, and that is in circumstances where either a party refuses to provide a report as required in subrule (3), or where the health care professional refuses to make the report in writing. The Rules do not contemplate exclusion of a health care professional’s report solely on the basis that the examination proceeded without a videographer present.

[101] Mr. Rahall’s lawyer did not provide any authority supporting his argument that Dr. Greidanus’ evidence ought to be excluded on the basis that Dr. Greidanus would not conduct the examination in the presence of a videographer. I was not able to locate any authority supporting Mr. Rahall’s argument. In the absence of such authority and based on my review of the Rules of Court, I see no substantiation of Mr. Rahall’s position.

The Court found that the IME should not be excluded on this basis:

[110] My view is that Dr. Greidanus’ opinion can be relied upon by the Court, and must appropriately be relied upon to determine the very issues that are before the Court on Intact’s Summary Dismissal Application. Mr. Rahall has not established any basis on which Dr. Greidanus’ opinion should be declared inadmissible for the purpose of determining the issues in dispute on Intact’s Summary Dismissal Application, and Mr. Rahall has further not established any basis on which this Court ought to exclude Dr. Greidanus’ opinion as inadmissible in this Action.

[111] I have, therefore, relied on Dr. Griedanus’ opinion in coming to a decision on Intact’s Summary Dismissal Application.

Dale’s Liquor Store Inc. v Routhier, 2019 ABPC 19

The Plaintiff successfully applied to set aside their own default judgment to pursue a different debtor. The Court confirmed that a Plaintiff must make an election on which debtor to pursue, but that election does not have to be made until judgment is available against both:

[15] In Edwards v Ferris, Slatter J. held that the Plaintiff cannot hold a judgment against alternative debtors, and must make an election. However, that election need not be made until judgment is available against both of them. At paragraph 27 Slatter, J. states:

[27] The two Alberta Appellate decisions are binding in cases involving inconsistent judgments. They appear to say that if the plaintiff deliberately takes default judgment against one of the two alternative defendants, that will be deemed to be an unequivocal election, but the default judgment can be set aside thereby opening up the election. If default judgment is taken against both defendants, there is no election at that time, and the election can be made a (sic) trial when judgment is available against both defendants. The decisions imply that the plaintiff has a right to select the ultimate judgment debtor; no mention is made of a discretion in the Court or prejudice to the defendant.

There is no hard and fast test for setting aside default judgment:

[17] What factors should this Court consider when determining whether to set aside the Default Judgment? As noted by counsel for Chambers, no clear test has evolved that governs Plaintiff applications to set aside Default Judgments, and on an ad hoc basis the courts have considered mistake, preserving vested rights, prejudice and fairness: Edwards v Ferris at paragraph 38.

However, the Court adopted the test set out in Edwards v Ferris:

[24] The applicable test from Edwards v Ferris is found at paragraphs 56-57:

[56] There must be some cases where the importance of the finality of judgments overrides the interests of the plaintiff in setting aside a default judgment, whether the plaintiff’s interests are viewed based on mistake, prejudice, fairness or the vesting of rights. Two of those situations are:

(a) Where an attempt has been made to take some advantage from the default judgment, for example by way of execution, suspension of driver’s licenses, or the commencement of bankruptcy proceedings, and

(b) where the judgment has been wholly satisfied.

It is not necessary for me to decide whether one alone of these factors would be sufficient to deny the plaintiff his relief, because they are both present in this case.

[57] Where neither of these factors are present, it is probably appropriate to balance the prejudice to both parties in deciding whether or not to set aside the default judgment. However, in that balancing process the prejudice to the administration of justice by undermining the finality of judgments and allowing the fragmentation of litigation must always be considered as well. Even if the test is always a balancing of prejudice, I believe that the Appellant wins that contest in this case. Even if not conclusive, the garnishee proceedings against him, and his satisfaction of the judgment are significant items of prejudice. The mere fact that a judgment was entered against him weighs in the balance because of the importance of finality of judgments. The fact that the Respondent might have a remedy against his previous solicitor is also something that weighs in the balance. I would not place much weight on the fact that the Appellant is uninsured, because his being in that situation is a breach of statute on his part.

This test was recently endorsed by the Court of Appeal in Toronto-Dominion Bank v. Currie.

Given that the Plaintiff had not filed the Judgment in Queen’s Bench and took no steps to enforce it, the Court allowed the application.