Edited by Amanda Kostek
Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Murray v Windsor Brunello Ltd, 2026 ABCA 275
Negligent Provision of Shoddy Goods | Actions in Contract and Negligence for Constructions defects | Costs Awards- Court of Appeal
SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., 2026 SCC 29
Test for Spoliation | Supreme Court of Canada
Le Prieur v Aviva Insurance Company of Canada, 2026 ABKB 452
E-Scooters | Section B Benefits
Murray v Windsor Brunello Ltd, 2026 ABCA 275
In Murray v Windsor Brunello Ltd, 2026 ABCA 275 the Plaintiff appealed an order finding judgment in their favour of just under $1 Million against Windsor Brunello, but dismissing their claims against various other Defendants. The Plaintiff also appealed the Trial decision dismissing their applications “for a Sanderson order, where the costs of successful defendants are paid directly by the unsuccessful defendants, or a Bullock order, where the costs of the successful defendants are paid by the plaintiff who is entitled to reimbursement from the unsuccessful defendants for those costs”.
At Trial the Court concluded that sliding doors in a high-end home did not function as designed and were not installed in accordance with approved drawings. There was no evidence that the design or manufacture of those was deficient or defective. As a result, Windsor was found liable for breach of contract by failing to ensure the design and construction was coordinated. Key was the Trial finding that the negligence claims “should be interpreted as claims for pure economic loss, and that damages could only be recovered for the cost of repair for defective or shoddy products and structures where an imminent danger arising from a dangerous defect is proven.” On Appeal, the Court of Appeal directed that the doctrine of pure economic loss was not a defense, but a loss unconnected to injury or property damage. As a result, there was no breach of procedural fairness in the Court assessing whether damages claimed amounted to a pure economic loss. The Court of Appeal further directed that recovery for pure economic loss when shoddy goods or structures are supplied only exists if they cause a “real and substantial danger”:
[96] Recovery for pure economic loss caused by the negligent supply of shoddy goods or structures only exists where the defective product or structure causes a “real and substantial danger” with “the capacity to cause serious damage to other persons and property”: Winnipeg Condominium Corporation No 36 v Bird Construction Co, 1995 CanLII 146 (SCC), [1995] 1 SCR 85, paras 21, 36, 38, 121 DLR (4th) 193; Blacklaws v Morrow, 2000 ABCA 175, para 62, 261 AR 28. This is consistent with manufacturers’ obligation to warn of danger inherent in the use of their products: Ding v Canam Super Vacation Inc, 2024 BCCA 102, paras 126-128, 133; St Isidore Co-op Limited v AG Growth International Inc, 2019 ABQB 763, paras 49-54, aff’d 2020 ABCA 447, para 34; Hollis v Dow Corning Corp, 1995 CanLII 55 (SCC), [1995] 4 SCR 634, para 21, 129 DLR (4th) 609.
The Court of Appeal accepted that the cost of repairing non-dangerous defects is better addressed by contract as opposed to suing in negligence:
[97] The cost of repairing non-dangerous defects in building structures and products does not generally implicate rights protected under tort law and is better addressed in the law of contract. Recovery in negligence is limited to the cost to repair or prevent that real and substantial danger: Winnipeg Condominium, para 35; Maple Leaf Foods, para 49. For pure economic loss claims founded in negligent supply of shoddy goods or services “… courts will not lightly impose a duty in tort to insure against pure economic loss, in circumstances where the parties could have but chose not to provide for such insurance in contract”: Maple Leaf Foods, para 70.
The Court of Appeal did set aside the Trial Judge’s dismissal of the claim against the engineer and concluded that it is an error to say that a party cannot recover under negligence principles simply because that party could have protected their interests in allocating the risk by contract. There “is no general prohibition against concurrent liability in tort and contract. The claim in tort, however, may be limited or negated by specific terms in the contract”. In terms of the requested Sanderson order, the Court of Appeal endorsed the 3 part test in considering whether successful defendants should bear the burden of seeking costs from unsuccessful defendants, and concluded that there was no error in the Trial Judge’s approach:
a) the applicant must show it was reasonable for the plaintiff to join the successful defendants;
b) there is no good reason to deprive the successful defendants of their costs; and
c) the unsuccessful defendants were wholly responsible for the action.
Congratulations to CBM’s Damian Shepherd on this successful appeal.
SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., 2026 SCC 29
In SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., 2026 SCC 29 the Supreme Court of Canada characterized spoliation as “the intentional destruction, alteration, mutilation, or concealment of evidence with a view to subverting the truth-finding process during litigation. It is a creature of abuse of process that comes in various degrees and forms.” It directed that the “common thread unifying all findings of spoliation is a manifest disrespect for the trial process, the truth-seeking function of the court, and the justice system generally.” The Supreme Court directed that “once a party proves spoliation, a mandatory presumption arises that the destroyed evidence would be unfavorable to the spoliator’s case. How this presumption is applied is discretionary.” The Supreme Court directed that although the Trial Judge drew negative inferences as a result of the spoliation of evidence, those failed to level the playing field. As a result, the Supreme Court directed that once spoliation is proven, there is no discretion, and a Court is required to draw adverse inferences to the point where the Court can fill the gap left by the destroyed evidence. In this case the damage award was undermined by the Court’s failure to draw complete inferences to calculate damages:
[139] While we do not doubt that this case involved significant issues with respect to assessing damages, the trial judge’s award was simply disconnected from its factual and evidentiary context. Faced with a critical gap in the evidentiary record caused by BNY’s spoliation, and having failed to draw adverse inferences that reflect the scope and impact of the destroyed evidence, the trial judge was left with a factual vacuum concerning the usage of the data. He crafted a damage award that is contrary to his own findings with respect to the unaccounted-for data and that is not rooted in the evidentiary record. These disconnects amount to palpable and overriding errors in addition to the legal errors discussed earlier. For the reasons explained below, the damage award cannot stand.
…
[160] This case has been beset by both the absence of evidence and spoliation. Nonetheless, the trial judge was required to order BNY to properly and adequately compensate SS&C for the data that it improperly shared for its own profit. The trial judge failed to do so by drawing inferences that were weak and incomplete and by awarding damages that were unconnected to the facts of the case. These errors must be rectified.
Le Prieur v Aviva Insurance Company of Canada, 2026 ABKB 452
In Le Prieur v Aviva Insurance Company of Canada, 2026 ABKB 452, the issue was whether the occupant of an e-scooter involved in a collision was entitled to Section B Benefits under the Alberta Standard Auto Policy. The Court concluded that an e-scooter is a “prohibited miniature motor vehicle that was not permitted on the road when the collision occurred” and concluded that there is “no evidence before me that the legislature intended Section B coverage to extend to riders in these circumstances. Even a broad reading of the coverage clause for persons struck cannot overcome the clear exclusion for occupants of automobiles.”