Legal Blog:

Evidence – Hearsay

Pfizer Canada Inc. v. Teva Canada Ltd. 2016 FCA

The plaintiff drug company had established liability. A trial was held to determine damages. The measure of damages was what would have occurred, but for the defendant’s conduct. The damages were to place the plaintiff in the position it would have been had the wrong not been committed. The plaintiff had to prove that it would have and could have ordered and supplied material. It bore the burden of doing so. In essence, the plaintiff had to prove that it would have been able to obtain a sufficient supply of the drugs and sell that supply. The major question in that regard was whether the plaintiff’s supplier was able and willing to supply the required quantity.

The plaintiff’s vice-president testified that the supplier was willing and able. He said that he had received positive oral representations from a site visit to the supplier and, by way of emails between his subordinates and the supplier, provided testimony of the supplier’s willingness and ability to supply. Nobody testified on behalf of the supplier. The makers of the emails did not testify Notwithstanding protestations from the defendant relating to the hearsay nature of the evidence, the trial judge allowed the evidence and found it to be reliable on the supply issue.

Damages – Proof

Kenora Flooring Centre Inc. v. Degagne 2016 Ont SCJ

General contractor sued for money due on contract. The owner counterclaimed for deficiencies in the flooring, claiming in essence that because of the deficiencies all of the vinyl flooring had to be replaced at a cost far in excess of the amount owing. The owner provided evidence of the cost to replace all of the flooring and evidence of the deficiencies. The owner did not provide evidence of the cost to fix the deficiencies, taking the position that the flooring had to be replaced in full. The court concluded that there were deficiencies but that all of the flooring need not be replaced. The court denied both the claim and the counterclaim. The court denied the counterclaim because the owner had put forward no evidence of the cost to repair the deficiencies. It denied the contractor’s claim because there were deficiencies, but no evidence of the repair cost and therefore no means to determine exactly how much the contractor was owed on contract. As an aside, we do not agree with this portion of the decision. It was up to the owner to prove the quantum of deficiency repair, not the contractor.

Quantum Meruit

Hugh’s Contracting Ltd. v. Stevens 2015 BCCA

Quantum meruit applies when contracting parties have agreed to provide goods or services, for which payment is to be made, but failed to provide the terms of the remuneration. It is then presumed that the parties intended a reasonable price to apply. (See paragraph 26 of the decision). The owner was contractually obliged to pay the general contractor for work that it had performed, even though the court held that the general contractor repudiated the contract by refusing to continue its work unless its disputed conditions relating to extras were met. The contract had not set out how the extras were to be valued and therefore the judge held that quantum meruit should apply. The contractor attempted to demonstrate the hours of extra work and then claimed 20% for profit and overhead on top of that cost. The judge refused to allow for that overhead, holding that the overhead specified in the contract should not be applied to the quantum meruit claim. The court also refused to allow a supervision fee for the extras or for work completed after the scheduled completion date.

Security for Costs

Norseman Construction & Development Ltd. v. Evdemon Ont SCJ (MC)

Owner moved for lien claimant to post security for costs. The Master granted leave to bring the motion to achieve procedural fairness as set out in the Biotechnic decision of Master Sandler. However, the Master held that the owner did not satisfy the initial test that the defendant had insufficient assets to pay costs. The owner had to provide enough information to raise a belief of insufficiency going beyond mere conjecture, hunch, or speculation. Evidence that the defendant owned no land and had PPSA registrations against was not evidence of an insufficiency of assets. A credit rating of “fair” was certainly not evidence of insolvency. Even if the Master had found that the owner had met the the onus, the Master indicated that he would probably not have granted the order simply because the owner waited far too long to bring the motion, over a year after the owner had first contemplated doing so.

Limitations

Haunert-Faga v. Caprara 2015 Ont SCJ, affirmed 2016 Ont CA

Wife obtained a judgment against husband who then did everything that he could to stymie her collection efforts. Even though wife’s accountants knew something was wrong with corporate transfers, they were not able to get their proof until wife obtained an order appointing a receiver, who then obtained the appropriate documentation to make a conclusive determination. The limitations period for the fraudulent conveyances did not begin to run until that final determination.

Costs Against a Non-Party

Deep Foundations Contractors Inc. v. B. Gottardo Construction Ltd 2016 Ont SCJ

Claim had been allowed. Counterclaim for delay was dismissed because defendant continued to refuse to provide appropriate documentation to support claim. Trial had been adjourned 4 to 5 times because of defendant’s refusals. Court allowed costs for the dismissal motion against the sole director of the defendant, even though the director was not a party to the action, because the director directed the defendant to ignore a court order to produce the documents. Court awarded full indemnity costs of $36,400.

Limitations – Acknowledgement

Lev v. Serebrennikov 2016 Ont SCJ

An acknowledgement of a debt will extend the limitation period if the acknowledgement is in writing and signed by the maker or the maker’s agent. Part payment is the equivalent of an acknowledgement. In this case, the promissory note was signed by a corporation and its individual owner. The corporation made the partial payment, not the owner. However, the court held that payment on the note was an acknowledgement by both the corporation and the individual because (i) all of the creditor’s dealings were with the individual and there was no indication that the corporation was owned by anyone other than the individual; and (ii) the individual signed the corporate cheque. The court also held that an email from the individual was enough to extend the limitation period even though the email was not signed. The email was sent by the individual from his own email address and his name was on the email.

Causation – Contract and Tort

Dobara Properties Ltd. v. Arnone 2016 Ont SCJ

Client had a claim against his real estate lawyers. The real estate he purchased was contaminated and he spent $57,000 to remediate it. His action was dismissed against the real estate lawyers because his trial lawyers commenced the action after the expiry of the limitation period. The client sued the trial lawyers for negligence. The client claimed the remediation costs; loss of the value of the property of $82,000; commission of $30,000 on a failed sale; excess mortgage interest of $29,000; and mental distress of $150,000. The client claimed that he would not have purchased the real estate had he known that it had been used as a former gasoline station. The trial lawyers admitted that they were negligent, but claimed that there were no compensable damages. The trial lawyers argued that since the plaintiff did not prove that the property was worth less than the amount the client paid for it, the client had no damages. The court noted that consequential damages were also payable, but found that the only foreseeable consequential damages were the remediation costs.

Corporate Dissolution

Sickinger v. Krek 2016 Ont C.A

The case discusses section 242 of the Ontario Business Corporations Act. The defendant had commenced a third party claim against a corporation that was voluntarily dissolved sometime later. The corporation moved to dismiss the third party claim against it because of the defendant’s delay in prosecuting the third party claim. The Court of Appeal held that the corporation did not need to be revived to be allowed to bring the motion because although ss (1)(a) proscribed the bringing of an action by a dissolved corporation, a motion was not an action.

Spoilation

“Spoliation is ‘the destruction or material alteration of evidence or…the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation’.” It is the law’s response to the age-old excuse that “the dog ate my homework.”

A party to an action is under a duty to preserve documents and information that the party knows, or reasonably ought to know, are relevant to a legal action. Accordingly, “where a party fails in this duty, the doctrine of spoliation imposes ‘a rebuttable presumption of fact that the lost or destroyed evidence would not assist the spoliator. The presumption can be rebutted by evidence showing the spoliator did not intend, by destroying the evidence, to affect the litigation, or by other evidence to prove or repel the case‘.”