Robinson v. Cragg, 2010 ABQB 743

Court of Queen ’ s Bench of Alberta Citation: Robinson v. Cragg, 2010 ABQB 743 Date: 20101126 Docket: 1001 02206 Registry: Calgary Between: Murray S. Robinson and Acacia Investments Ltd. Plaintiffs - and - Richard L. Cragg and Richard L. Cragg Professional Corporation Defendants - and - Jason Jakubec Third Party _______________________________________________________ Memorandum of Decision of K.R. Laycock, Master in Chambers _______________________________________________________

[ 1 ] The plaintiffs made loans to a developer of a condominium project in Calgary commencing in August 2005. The plaintiffs’ loan was secured by a mortgage against the development lands. Richard L. Cragg and his professional corporation are alleged to be counsel for the plaintiffs with respect to a refinancing of the project in 2007. [ 2 ] The plaintiffs allege that the defendants were negligent in failing to protect their interest in discharging and re-registering their mortgage security.

It is alleged that, at the conclusion of the refinancing, the prior approved mortgagees substantially increased their mortgage advances and an unapproved new mortgage was registered in priority to the plaintiffs’ security. The plaintiffs allege that the substantial increase in prior encumbrances was unknown to the them. The plaintiffs claim that as a result of the defendant’s negligence, they lost their entire investment. [ 3 ] The claim is defended and the parties have proceeded with document and oral discovery.

The defendants have applied for a declaration that, a certain letter written by the defendant Cragg on March 4, 2009 is inadmissible in evidence as it constitutes an apology pursuant to the Alberta Evidence Act R.S.A. 2000, c. A-18, s. 26.1. The

section states:

(1) In this section, “apology” means an expression of sympathy or regret, a statement that one is sorry or other words or actions indicating contrition or commiseration, whether or not the words or actions admit or imply an admission of fault in connection with the matter to which the words or actions relate.

(2) An apology made by or on behalf of a person in connection with any matter (

a) does not constitute an expression or implied admission of fault or liability by the person in connection with that matter, (

b) does not constitute a confirmation or acknowledgment of a claim in relation to that matter for the purpose of the Limitations Act, © does not, notwithstanding any wording to the contrary in any contract of insurance and notwithstanding any other enactment, void, impair or otherwise affect any insurance coverage that is available, or that would, but for the apology, be available, to the person in connection with that matter, and (

d) shall not be taken into account in any determination of fault or liability in connection with that matter.

(3) Notwithstanding any other enactment, evidence of an apology made by or on behalf of a person in connection with any matter is not admissible in any court as evidence of the fault or liability of the person in connection with that matter. Judicial Treatment of Apology Legislation: [ 4 ] During the initial argument counsel advised that they could not find any Canadian case dealing with apology legislation. Subsection (1) is identical to the British Columbia version and subsection (2) is substantially the same.

The briefs submitted after the initial argument have provided me with academic articles and a decision from the High Court of Australia Dovuro Pty Ltd. v. Wilkins (2003), 201 ALR 39, [2003] HCA 51, (2003) 215 CLR 317 . [ 5 ] The Dovuro case deals principally with a challenge to a finding of negligence on the part of a producer and distributor of canola seed. Statements were made in writing by an employee of the defendant acknowledging that the seed should not have been released. The court dealt with the letter as an admission of liability rather than as an apology.

The issue was whether the statement would be admitted as evidence of liability. The court concluded that the apology could not be construed as an admission of legal liability. There was no mention of apology legislation by the court and does not assist in determining this issue. [ 6 ] Counsel for the plaintiff has also provided a transcript of the oral decision of Justice Stevens in Rathwell v. Duncan McCachen Code Action No. 0301 17599 delivered February 11, 2010. In the Rathwell decision Mr. Duncan wrote a letter to his clients explaining his actions. Justice Stevens concluded that

section 26.1 is a rule of evidence and the fact that Mr. Duncan’s letter was written prior to its coming into effect was irrelevant. He further concluded that s. 26.1 had no application in that case because the letter did not offer an apology for allowing the claim to collapse. Mr. Duncan’s only expression of regret relates to his failure to report on the status of

the proceedings in a timely fashion. In reaching his conclusion, Justice Stevens stated: “Mr. Duncan is sorry that it has taken him so long to report to his clients but not about what he has done or has not done on their behalf.” The Letter: [ 7 ] Counsel for the plaintiff and counsel for the third party submit that statements made in the March 4, 2009 letter did not amount to an apology. The content of the letter is as follows: I have forwarded your correspondence of February 27, 2009 on to Mr. Eden. It only came to my attention that we have mistakenly filed Discharges of Mr.

Robinson’s security when I received an e-mail from Mr. Jaeger in late February wishing to confirm the registration order of the Jaeger et al mortgage and Mr. Robinson’s mortgage at Land Titles. I assure you that our registration of the Discharges was through inadvertence and I apologize for doing so. As you are aware, Mr. Robinson’s original security was registered in August of 2005 and June of 2006. The Jaeger et al security was registered in August of 2007. Clearly the Jaeger et al mortgage was behind Mr. Robinson security and it was only through the inadvertence of my office that the situation has now changed.

I sent the postponement of the Jaeger et al mortgage to Mr. Eden in September of 2007 to be executed by Jaeger et al and returned to my office for registration. The document was never returned to us. I am preparing another postponement and forwarding same to Mr. Jaeger with a request to sign and return. (Emphasis added) [ 8 ] The defendant argues that the letter contains an expression of sympathy or regret or a statement that one is sorry, and that it contains an admission of fault.

I agree. “I apologize for doing so” is a statement that one is sorry and indicates contrition. “We have mistakenly filed” is an admission of fault in connection with the matter. In my view the letter contains an apology. The effect of making an apology according to s. 26.1 (

a) is that the apology does not constitute an express or implied admission of liability and pursuant to (

d) should not be taken into account in determining liability. Pursuant to subsection (3), evidence of the apology is not admissible in court as evidence of liability. [ 9 ] Having established that the letter contains an apology, the defendant asks for an order declaring the entire letter to be inadmissible in court. The plaintiffs and third-party argue that only the words “and I apologize for doing so”should be excluded. Redacting Apology Language: [ 10 ] Counsel for the defendants argue that simply redacting the apology language would be contrary to the fair, large and liberal

interpretation rule found in

Interpretation Act

section 10 which states: An enactment shall be construed as being remedial, and shall be given the fair, large and liberal construction and

interpretation that best insurers the attainment of its objects. [ 11 ] By analogy, counsel argues that redacting a small portion of the letter would be analogous to saying that a without prejudice settlement letter becomes admissible by merely redacting the proposed settlement amount.

Counsel argues that the overriding purpose of apology legislation is to encourage people to apologize without fear that their explanation for why they are apologizing will be used against them in a civil proceeding. [ 12 ] Articles referred to by counsel in their brief include Prue Vines, Apologies and Civil Liability in the UK: A View from Elsewhere (2008) 12 Edinburgh L. Rev. 200; Prue Vines, The Power of Apology: Mercy, Forgiveness or Corrective Justice in the Civil Liability Arena?

(2007) University of New South Wales Faculty of Law Research Series, Paper 30; John Kleefeld, thinking Like a Human: British Columbia’s Apology Act (2007) 40 U.B.C. L. Rev. 769; Steven J. Scher & John M. Darley, How Effective Are the Things People Say to Apologize? Effects of the Realization of the Apology Speech Act (1997) 26 J. Psycholinguistic Research 127. [ 13 ] In his

article Vines reviews the history of apology legislation and reviews legislation in various common law jurisdictions. He

concludes that the British Columbia legislation contains the broadest provision in existence and is modelled on legislation in New South Wales. As noted above the Alberta apology legislation is substantially similar to the British Columbia legislation. [ 14 ] Vines distinguishes in his

article between

definitions used for apology. A partial apology is defined by him as a statement of regret or benevolent gesture which stops short of admitting fault, such as, “I am sorry you were hurt”. The full apology includes an admission of fault, such as, “I am sorry, that was all my fault”. [ 15 ] The defendant argues that the Alberta legislation contemplates full apologies. The purpose of this type of legislation is to firstly, encourage the person to utter expressions of sympathy or regret and secondly, prevent the statement being used in evidence at a subsequent court proceeding as evidence. In most cases it would be used as evidence in a negligence claim. [ 16 ] Vines concludes in his

article at page 205 that apology legislation “is based on the assumption that any expression of regret is better than nothing and would reduce litigation, and that making an apology inadmissible as evidence will reduce its prejudicial effect and thereby reduce liability and costs to both defendants and insurers”. Comments to this effect were stated in the Alberta Legislature by Kenneth Kowalski who introduced the legislation on October 23, 2008. (Hansard 1530) [ 17 ] Vines further notes at page 217 that apologies mixed with statements of fact are problematic.

He states: At least in negligence law, the courts recognize that an apology may reflect other matters than the liability of the apologiser. Legal fault remains to be proved and that determination is for the court to make a not for the parties. However, admissions of fact may well go to the question of liability at common law. Thus an apology which is an admission of law will not amount to a determination of negligence and by implication it should not make void an insurance contract (but that is a matter of

interpretation). However, an apology which includes in it an admission of fact may well be problematic because the court will consider it as evidence relevant to the determination of liability; and such an admission probably would make void an insurance contract. [ 18 ] The author goes on to give an example of the application of the English apologies legislation (section 2): Suppose that a car accident occurred where car A has run into car B. The driver of car A pops out and says, “I’m so sorry, it’s all my fault. I was looking at my mobile phone instead of the road.” Presumably

section 2 would say that the apology, including “it’s all my fault”, does not create liability “of itself”. However, presumably also the statement about the mobile phone goes to liability or at least would be likely to be held to be relevant to liability, even though it cannot amount to an admission of negligence. Thus what

section 2 really says is that an apologetic admission cannot decide liability determinedly and by itself. [ 19 ] Vines implies that the factual content is not part of an apology and therefore does not have to be excluded. Vines discusses how apologies affect those that hear them and argues that if evidence of an apology is before the court, it might make it easier for the fact-finder to determine that the apologiser is guilty or liable. (P. 218) [ 20 ] An apology is therefore prejudicial and should be kept away from the trier of fact.

Factual statements will be admitted as evidence in court unless excluded by other rules of evidence. Therefore the factual content of the letter, stripped of apology words may be admissible in court. It is the expression of sympathy or regret combined with the admission of fault that the legislature has determined is unfairly prejudicial. Conclusion: [ 21 ] In reference to the words in the correspondence, the underlined portion of the letter contains an expression of sympathy or regret and an admission of fault. The underlined portion should be redacted from the letter.

The balance of the letter contains factual admissions relating to liability and should not be excluded. Costs may be spoken to.

Heard on the 03 rd day of November, 2010. Dated at the City of Calgary, Alberta this 26 th day of November, 2010. K.R. Laycock M.C.C.Q.B.A. Appearances: James L. Lebo Q.C. McLennan Ross LLP for the Plaintiffs Randal Van De Mosselaer Lara B. Mason Macleod Dixon LLP for the Defendants Richard Van Dorp Peacock, Linder & Halt LLP for the Third Party