Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.
Edited by Steven Graham
Schlichter v Pearce 2022 ABQB 434
Motor Vehicle Accident | Severing Liability and Quantum
The Appellant, Plaintiffs in a motor vehicle injury action, successfully appealed a master’s order severing the issues of liability and quantum for trial.
The Court emphasized that severance is governed by rule 7.1, and as long as there is a real likelihood one of the prerequisites is satisfied, the application can be considered:
[5] Rule 7.1(1) states:
7.1(1) On application the Court may,
(a) order a question or an issue to be heard or tried before, at or after a trial for the purpose of
(i) disposing of all or part of a claim,
(ii) substantially shortening a trial, or
(iii) saving expense.
The Court maintained that the foundational rules, which prioritize speed and economy of litigation, are considerations in any severance application, but are not a mandatory aspect of the analysis:
[9] In Gallant v Farries, the Court of Appeal held that the provisions of r 1.2 changed nothing from the prior regime, where speed and economy were already important objectives in civil litigation: (para 18 and 24). The test remains a review of the criteria in r 7.1 and an assessment of whether a split trial is likely to achieve the aims of the section, and not to thwart them: (at para 25). Although I am entitled to consider r 1.2 in applying r 7.1, there is no required second step to the analysis: NEP Canada ULC v MEC Op LLC, 2016 ABCA 201.
The Appellant argued that he had a right to a single trial and that severing liability from quantum would create an added burden in terms of stress and time spent. The Respondent countered that, on the evidence available, there was a real possibility of a full absolution of liability, such that putting the Respondent through the cost of a full trial was an unfair burden. It was agreed that the quantum portion of the trial would exceed liability by several weeks. The Chambers Judge concluded that in granting the severance, the Master erred.
The Chambers Judge found errors in the Master’s conclusion that the likelihood of the Respondent being absolved of liability (therefore resulting in the saving of time and litigation expense) had been demonstrated. The only expert evidence before the Master was a report which focused solely on the actions of the Appellant, which the Chambers Judge noted typically goes to any finding of contributory negligence, rather than the negligence of the Defendant/Respondent. The Chambers Judge emphasized that the ‘last clear chance’ doctrine, which could absolve a Defendant of liability entirely, was no longer relevant law in Alberta:
[31] Since Wickberg was decided, the Legislature has clarified that the last clear chance rule no longer applies in Alberta: Contributory Negligence Act, RSA c C-27, s 3.1. Instead, liability for damages should be apportioned based on the degree to which each person was at fault: ibid, s 1.
Given the above, the Chambers Judge clarified that a severed liability trial would not likely obviate the need for a quantum trial. In such a case, the prerequisite for Rule 7.1(a)(I) that all or part of a claim be disposed cannot be satisfied:
[35] However, a finding of split liability would not be captured by prerequisite 7.1(a)(i), which requires the disposal of all or a part of the claim to justify severance. In the circumstances of this litigation, any finding of liability by the Respondent would not have the effect of disposing of all of the claim, as the quantum portion would then proceed. Likewise, a finding that the Respondent was liable at any level would not dispose of part of the claim since a finding of split liability would require a full trial on quantum.
On the question of whether the trial could be substantially shortened by severing liability from quantum, counsel disputed the length of time for a liability trial and the number of witnesses. The Chambers Judge noted that the credibility of the parties would be relevant to both the liability and quantum trials, which is a factor mitigating against severance:
[46] Given that I have found that splitting the trial is unlikely to dispose of the claim, I find it is also unlikely that severing it would save time, since the quantum portion of the trial will still likely need to take place.
On the question of whether severance could save expense, the parties took opposite positions – the Appellant arguing that severance would increase its costs, while the Respondent argued that failing to sever would increase its costs. The Chambers Judge concluded that, given the finding that severance is unlikely to dispose of the claim entirely at the liability stage, severance would unlikely save expenses for the Respondent.
The Chambers Judge also considered the costs of duplicating expert fees for those who would have to attend both a liability and quantum trial, noting that a single trial would help mitigate against the escalation of the same.
One final concern was that severance offered additional opportunities to appeal, which could also lead to increased time and expenses.
The Chambers Judge concluded that on balance, there was little prospect that severance would result in saving of costs to either party, and as such granted the appeal, directing the matter to proceed to a single trial.