Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.
Sobeys Capital Incorporated v Whitecourt Shopping Centre (GP) Ltd, 2019 ABCA 367
Summary Judgment | Affidavit based on Personal Knowledge
Song v Alberta, 2019 ABQB 789
Inordinate Delay | Plaintiff with Diminished Capacity | Difficulty Locating Expert
Duraguard Fence Ltd v Badry, 2019 ABQB 783
Insurance Broker | Duty of Care
This was an application for Summary Judgment. Sobeys brought the application based on terms of their lease, and in support of their damages claim, they attached a valuation report to an Affidavit sworn in support of their application. However, person swearing the Affidavit was not the author of the report. Sobeys was successful on their application, but on appeal, the Court of Appeal concluded that the damages award was partly based on hearsay, which is inadmissible in Summary Judgment Applications. The Court said:
 Damages are the usual remedy for breach of contract. The fact that the head lease refers to other remedies does not exclude a remedy in damages for breach of the lease. However, damages must be proven by admissible evidence. An affidavit in support of summary judgment must be sworn on the basis of personal knowledge of the affiant: Rule 13.18(3). Hearsay evidence of damages calculations is not admissible, regardless of whether or not the opposing party has led contradicting evidence. The rules of evidence apply with equal force to proof of facts in summary judgment applications.
 The evidence in support of the respondent’s damages claim of $761,811 was a loss memo prepared by FM Global, the respondent’s insurer, and various schedules prepared by an accounting consultant retained by FM Global. The people who prepared the loss memo and schedules did not swear an affidavit or provide sworn evidence in any other form. Rather, the loss memo and schedules were simply attached as an exhibit to the affidavit of the respondent’s officer, Earl Brown.
 The chambers judge concluded that the calculation of damages prepared by FM Global’s accounting consultant was fair and reasonable and awarded damages in the amount of $761,811. The chambers judge did not address the admissibility of that hearsay evidence.
 The respondent says the damages calculation should not be disturbed because the amount was paid to the respondent, it was an adjusted loss through its insurer and the appellant chose not to lead contradicting evidence. One of the reasons for excluding hearsay evidence is the fact that the author of the evidence cannot be cross-examined on the evidence. That was clearly the case here because Mr Brown was not the author of either the loss memo or the schedules. Mr Brown’s questioning on his affidavit demonstrated that he had no knowledge of how the documents were created or how the amounts were calculated. A party has no obligation to rebut inadmissible evidence. Accordingly, the chambers judge erred in relying on the loss memo and schedules and his damages award of $761,811 must be set aside. The chambers judge also awarded loss of rental profit in the sum of $16,980, which was not contested on appeal. The chambers judge’s award of damages against Whitecourt Valley Centre Limited Partnership in the subrogation action was an error as that entity was not a party to the lease documents.
Damages were then remitted back to the Trial Court for further disposition.
This was an unsuccessful application for dismissal for inordinate delay on a 13 year old matter that was almost ready for Trial. The Plaintiff was attacked by a rival gang member in the Remand Centre and left in a near vegetative state for which he was not expected to survive. He did survive, but with severe deficits. The Court noted that litigation involving an individual with diminished capacity can be more time consuming, and that the Plaintiff had difficulty locating an expert:
 I acknowledge, however, that litigation on behalf of someone who has diminished capacity can be more cumbersome, challenging and time-consuming than a regular lawsuit. In my view, this should be kept in mind especially for those lawsuits where a defendant’s conduct is alleged to have caused the plaintiff’s disability in the first place. It is like asking for security for costs from a plaintiff allegedly rendered insolvent by the actions of a defendant.
 There are two steps left before this matter can be set for trial. The first is the (again) mandatory JDR and the second is expert response to the Plaintiff’s expert reports.
 The topic of the expert analysis is something that is worth mentioning in the context of delay. The Plaintiff’s counsel had significant difficulties in finding an expert with the expertise necessary to give an opinion about the Defendant’s liability. An expert that had been retained earlier suffered a series of personal and medical issues that initially postponed provision of an expert report between the fall of 2015 and the end of 2017. This first expert was unable to complete the job and a new expert had to be found and retained.
The Court ultimately concluded that the delay was inordinate, but it was a borderline case that should not be dismissed. At Trial the Court could deal with the delay by addressing it in costs or interest. Further, this was an unusual case that should have its day in Court:
 If we put all of this into context, it is my view that the delay in this lawsuit, if viewed objectively, is inordinate. This matter has not reached the point on the litigation spectrum it should have achieved by now. However, if we take all the other factors into account, it is, to my mind, excusable. I acknowledge this is very much a borderline case and the default position for borderline cases should be to let them proceed, on terms, if necessary. The trial judge can deal with some of the incidents of delay such as interest and costs.
 The facts of this case provide a compelling reason why this matter should have its day in Court. This is not a typical personal injury case. As a gang member, Mr. Song was a high-profile offender, perhaps inviting greater care on the part of his gaoler.
This was a Trial decision in which a client was successful in its claim against an insurance broker for failing to provide adequate coverage for employee dishonestly. The Court accepted that a broker’s duty of care is set out as follows:
 In essence, the broker’s duty is to assess the client’s risks, give advice and recommendations on appropriate coverages for each of the relevant risks and, after taking instructions, implement those coverages.
In this case the broker knew that there was a prior loss that would exceed the coverage available:
 In looking at Exhibit 1, Tab 2, the Commercial Lines Application, there is a notation in Mr. Farnell’s own handwriting that Duraguard had a post pounder worth $7297.43 stolen from its yard on November 22, 2000. He therefore knew that a previous loss already exceeded the limits for the crime coverage that he had placed. Further, if he had asked the question about previous employee dishonesty, he would have been told by Mr. Champigny that an employee had forged two cheques totaling $8000, again exceeding the limit he had put in place.
 In light of this, as an experienced broker he should have known that slavish reliance on a preset package with a $5000 crime limit was inappropriate, given the loss history. He would have known, as Ms. MacWilliam herself says at pages 4 and 5 of her report:
The standard limits of coverage provided by insurers on package policy enhancements have neither a relationship to the annual revenues of the policyholder nor the specific risk profile regarding predisposition to crime or employee dishonesty losses.
 Thus, I conclude that Duraguard’s two previous incidents, one of theft of property and one of employee dishonesty, both incidents exceeding the limit of $5000, would have and should have been relevant in determining Duraguard’s risk for crime loss. However, the inquiry was never made and the discussion was never held.
The Court concluded that coverage should have been discussed upon taking over the account, and upon renewal:
 It does not seem onerous to me that an insurance broker would, at the time of taking over a commercial account and at each renewal, discuss specifically with the customer each coverage that is proposed to determine whether it is sufficient to meet the company’s risks, which of course would continue to evolve. For example, the executive summary for 2005 at Exhibit 1, Tab 2 lists some forty areas of coverage. Surely it is not too much to ask the insurance broker to review each area with the customer before placing the insurance. After all, the customer is paying for the coverage, even if some are “throw-ins”.
The Court concluded that the failure to discuss theft coverage caused the Plaintiff’s loss, and found in favour of the Plaintiff.