Howalta Electrical Services Inc. v. CDI Career Development Institutes Ltd., 2011 ABCA 234

In this case, the Alberta Court of Appeal considers whether a defendant in a tort suit may seek contribution from an alleged co-defendant under the Alberta Tort-Feasors Act, when the original plaintiff is barred from bringing suit against this co-defendant for reasons which do not negate fault. The issue arises from a fire that destroyed a building occupied by the tenant. The insurance company paid out the owner of the building and brought a subrogated suit against contractors who were working in the building (defendant) and the tenant of the building (co-defendant). The contractors allegedly caused the fire through negligence, while the tenants allegedly failed to notify the landlord when the smoke/fire was discovered, in violation of the lease. The subrogated suit against the tenant was discontinued upon discovery that the tenant contributed to payment of the insurance in accordance with the lease and so the suit was barred. The contractors issued notices seeking contribution and indemnity from the tenant under the Tort-Feasors Act.

The section of the Tort-Feasors Act at issue in this appeal is s. 3(1)(c), which allows a tort-feasor to “recover contribution from any other tort-feasor who is or would, if sued, have been liable in respect of the same damage, whether as a joint tort-feasor or otherwise…” The majority opinion of the court, delivered by Côté J., interpreted the pre-condition to recovery as requiring that the co- defendant (or “other tort-feasor”) be liable to the original plaintiff. This interpretation was based on an understanding of the world “liable” as including an element of enforceability and requirement of performance. Côté J. also looked to case law, and instances where procedural bars to bringing suit against the tort- feasor directly barred indemnity claims. Finally, Côté J. noted that “this bar to indemnity claims makes the law consistent. Someone not directly liable to the plaintiff should not be liable in a suit brought by the plaintiff, and so indirectly have to pay the plaintiff on the forbidden claim. The plaintiff and the defendant claiming contribution cannot do indirectly what is forbidden directly.” The court thus allowed the appeal, dismissing the claim for contribution.

O’Ferrall J. provided separate reasons, concurring in the result. O'Ferrall J. first noted that the Act at issue was enacted for the purpose of removing the common law 'rule' preventing tort-feasors from seeking contribution from other tort-feasors. As such, interpreting the legislation so that it likewise prevents proper sharing of liability is contrary to legislative intent. Additionally, O’Ferrall J. pointed to the words “whether as a joint tort-feasor or otherwise” in the section, and concluded that the “otherwise” refers to situations when the party from whom contribution is sought is not a joint tort-feasor, but nevertheless may be liable for all or part of the same damage/ harm. Consequently, O’Ferrall J. interpreted s. 3(1)(c) as permitting contribution from the co-defendant tort-feasor provided that the co- defendant is liable to either the plaintiff or to the defendant seeking contribution, so long as harm to the plaintiff is the same. The claim for contribution was dismissed because there was no pleadings or evidence suggesting that the tenant would have been liable to the contractors.

November 15, 2011
Link to Decision

Rebecca Crangle
*

Ahousaht Indian Band and Nation v. Canada (Attorney General), 2011 BCCA 425

In Ahousaht Indian Band and Nation v. Canada, the British Columbia Court of Appeal considered whether an award of special costs to the respondent First Nations groups was justified in a case concerning the adjudication of their Aboriginal rights over commercial fisheries. Reasoning that the case did not raise sufficiently exceptional matters of public importance and that the litigation was, at least indirectly, in the respondents' economic interest to pursue, the Court held that special costs were not justified.

The underlying case concerned the aboriginal rights of the respondent First Nations groups to commercially fish for any species of fish within certain territories. At trial, the respondents won a declaratory judgment as to the existence of those rights. They were awarded costs, and also special costs because of the public significance of the constitutional litigation they had undertaken. Canada appealed the award of special costs.

The framework for the awarding of special costs in Victoria (City) v. Adams, 2009 BCCA 563, was the focus of the Court's analysis. Noting that it was not disputed by the parties that at least two of the four Adams factors (appellant's superior capacity to bear the costs, and the absence of abusive, vexatious or frivolous conduct) weighed in favour of special costs, the Court proceeded to analyze the remaining two factors: whether "The case involves matters of public importance that transcend the immediate interests of the named parties, and which have not been previously resolved," and whether "The successful party has no personal, proprietary or pecuniary interest in the outcome of the litigation that would justify the proceeding economically."

 In regards to the "public importance" factor, the Court held that an award of special costs requires exceptional circumstances beyond merely being "difficult cases" that are of "general interest". The Court reasoned that such cases can already give rise to elevated costs under the British Columbia Rules of Court s.2(3), and that an award of special costs must therefore require something more. In this case, while the proper resolution of aboriginal fishing claims was "significant," it was "questionable" whether the litigation established principles that may well be applicable to other aboriginal rights cases because the case did not "break novel ground in establishing legal principles". The Court reached this conclusion despite noting that the trial judge developed certain points of aboriginal law, including modifying the test for the existence of an aboriginal right from R. v. Van der Peet, [1996] 2 SCR 507, and reconciling into a single analysis the test for infringement of an aboriginal right from R. v. Sparrow, [1990] 1 SCR 107, and R. v. Gladstone, [1996] 2 SCR 723. Contrasting this case to an earlier case on Aboriginal fishing rights, Lax Kw'alaams Indian Band v. Canada (Attorney General), 2009 BCCA 593, the Court argued that the different outcome in this case was largely fact-driven, and that it did not rise to the exceptional level of public importance required for an award of special costs.

 In regards to the "pecuniary interest" factor, the Court held that any pecuniary interest, whether direct or indirect, weighed against the awarding of special costs. Reasoning that the "pecuniary interest" factor derives from a concern that, in the absence of funding, an issue of public interest will not be considered judicially, the Court held that the respondents in this case had an indirect but "significant" interest in seeking a right to fish commercially. In the Court's view, it was relevant, but not determinitive, that the matter had gone to trial in the absence of pro bono representation. The Court also noted that both the claim for aboriginal rights and the evidence concerning infringement concerned economic interests.

 In concluding that special costs were not justified in this case, overturning the decision of the trial judge, the Court noted that there was "some force" to the notion "that an award of special costs in this case would open the door to such an award in all aboriginal rights cases."

October 31, 2011
Link to Decision

Mary Phan & Kai Sheffield
*

Waterman v. IBM Canada Limited, 2011 BCCA 337

In this case, the British Columbia Court of Appeal considered the issue of the deductibility of pension benefits from an award of damages for wrongful dismissal. Mr. Waterman, upon being wrongfully dismissed from IBM, automatically began receiving pension benefits because of his age upon dismissal. Madam Justice Prowse ruled that these pension benefits should not be deducted from the damages awarded for wrongful dismissal and accordingly dismissed the appeal.

Mr. Waterman, at the age of 65, was dismissed without cause and notice from IBM. Upon termination, he began receiving pension benefits from IBM’s defined benefit pension plan (which was wholly funded by IBM). He sued IBM for wrongful dismissal and was awarded damages. IBM argued that the pension benefits should be deducted from the damage award, as disability benefits were in Sylvester v. British Columbia, but the trial judge came to the opposite conclusion. The Court of Appeal concurred, distinguishing this case from Sylvester because of the nature of the benefits. The Court noted that disability benefits and pension benefits have historically been distinguished: pension benefits are not substitute for wages but a benefit earned by being an employee for a specified period of time. It is also clear from the contractual relationship between the parties that they did not consider the pension to be a substitute for salary. Madam Justice Prowse therefore came to the conclusion that pension benefits should not be deducted from an award of damages and dismissed the appeal.

August 2, 2011
Link to Decision

Sam Golder & Dominik Swierad

Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460

In Agribrands Purina Canada Inc. v. Kasamekas, Goudge J.A. ruled that
breach of contract does not qualify as "unlawful conduct" necessary for the
tort of unlawful conduct conspiracy, and deceitful actions are sufficient
grounds for punitive damages.


Following a series of agreements, Purina supplied feed to two distributors
in the same area, violating its exclusivity agreement with one of the
distributors.  The trial judge found Purina liable for the tort of unlawful
conduct conspiracy. In an attempt to define what qualified as "unlawful
conduct," the trial judge applied jurisprudence relating to the tort of
intentional interference with economic relations, under which conduct making
the defendant liable can include conduct prohibited by law, contract,
convention, or understanding. The Court disagreed with this analysis,
holding that for an action to constitute "unlawful conduct" for the tort of
intentional interference, the conduct must be actionable; it must be wrong
in law. Breach of contract, convention, or understanding, on the other hand,
are not "unlawful" for purposes of unlawful conduct conspiracy. Goudge J.A.
also noted that the two torts have evolved separately and judges should
avoid ignoring the different historical paths torts have travelled in an
attempt to create a "unified theory of economic torts."


This case also deals with the matter of punitive damages. The Court
disagreed with the trial court's reason for allowing punitive damages that
breach of contract should be discouraged. Instead, they allowed
the punitive damages by finding that Agribrands Purina's deceitful action of
supplying a competitor with merchandise when it had expressly said it would
not do so constituted a marked departure from ordinary standards of decency
and an "independently actionable" claim.

June 20, 2011
http://www.ontariocourts.on.ca/decisions/2011/2011ONCA0460.htm

Leonard Elias & Dominik Swierad

Doucet and Dauphinee v. Spielo Manufacturing Incorporated and Manship, 2011 NBCA 44

In Doucet and Dauphinee v. Spielo Manufacturing Incorporated and Manship, the New Brunswick Court of Appeal provided an overview of jurisprudence and principles related to the award of costs according to the New Brunswick Tariff "A", under Rule 59 of the Rules of Court.  Robertson J.A., writing for the Court, held that, although the purpose of awarding party-and-party costs in New Brunswick is not to provide substantial indemnification, but to foster access to justice, actions of one party that cause proceedings to be "unnecessarily complex" may justify awarding costs based on a higher scale of compensation.

The case under appeal involves a complex series of arguments on the part of the appellants, who claimed wrongful termination resulting from oppressive conduct designed to deprive appellant of the full value of shares held in Spielio Inc.. After termination of employment with notice and severance pay, the appellants' shares were surrendered for compensation at net book value, as per the employment contract. One year later, the shares were worth significantly more as a result of a sale of the company. Robertson J.A. affirmed the trial judge's factual findings that there was little or no evidence to support the appellant's "conspiracy theory" that an impending sale motivated termination of employment in order to force appellants to return shares at a lower value that that to be received at sale.

Justice Robertson found that the appellant's repeated "fishing expeditions" during discovery caused the case to be "unnecessarily complex", which justified the trial judge's award based on the highest Tariff scale available. He agreed with the trial judge in NB Power v. Westinghouse, released a few weeks after the lower court's decision in this case, that the purpose of awarding party-and-party costs is not to provide substantial indemnification, but dismissed the appellant's request for a lowered costs award. Robertson J.A. found that an award that provides substantial indemnity is still possible through the proper exercise of judicial discretion and the application of the Tariff. He concluded that "Rule 59.01 has been drafted in the broadest of terms to preserve the discretion of trial judges when it comes to the task of fixing costs, so long as that discretion is exercised in a principled manner."  He overruled Westinghouse for failing to follow Tariff guidelines and providing a lump sum award without sufficient reasons.  He reduced the award from $838,490.62 to $745,325, removing costs awarded against the appellant for refusing a settlement offer that was substantially low in comparison to the claims that warranted consideration. This is the largest cost award to have issued out of the Court of Queen's Bench of New Brunswick to date.

May 12, 2011
http://www.gnb.ca/cour/03COA1/Decisions/2011/May/20110512Spielo2011NBCA%2044.pdf

Webnesh Haile & Minsuk Kim