581257 Alberta Ltd. Plaintiff - v. -, 2011 ABQB 39

Court of Queen ’ s Bench of Alberta Citation: 581257 Alberta Ltd. v. Aujla, 2011 ABQB 39 Date: 20110124 Docket: 0803 04677 Registry: Edmonton Between: 581257 Alberta Ltd. Plaintiff - and - ` Balwinder Aujla and Harwinder Aujla Defendants Corrected judgment: A corrigendum was issued on February 16, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J.E. Topolniski _______________________________________________________ I.

Introduction [ 1 ] The Plaintiff, 581257 Alberta Ltd., employed the Defendants (the “Aujlas”) as cashiers and shelf stockers at its north Edmonton liquor store, which operated under the banner “Crown Liquor North.” Alleging the Aujlas misappropriated $350,000.00 from

the store’s till between 2000 and 2008 and converted those funds to their own use, the Plaintiff obtained partial

summary judgment for specific conversions occurring on particular dates, together with pre-judgment interest. [1] The chambers judge directed that the balance of the claim proceed to trial for a determination as to whether the Defendants had converted other monies from the Plaintiff and, if so, when and how much. [ 2 ] The Plaintiff believes that the Aujlas’ pilfering began when they started their employment and continued every day they worked thereafter.

Given the Plaintiff’s unsophisticated inventory and other business systems, the only “hard evidence” it has to establish its losses is surveillance camera film footage captured in June 2007 and between December 2007 and February 4, 2008. However, it argues that because the Aujlas are fiduciaries subject to a reverse onus of proof, the Court can infer that all of the monies on deposit in the Aujlas’ several bank accounts for which they have failed to account were pilfered from the Plaintiff.

It contends that to require more would force it to prove facts solely within the Aujlas’ knowledge and control. [ 3 ] At the conclusion of the trial, the Plaintiff conceded that money on deposit in two of the bank accounts initially thought to belong to the Aujlas in fact belongs to other persons and reduced its damages claim to a maximum of $116,000.00 and a minimum of $12,714.42. [ 4 ] Acknowledging that their actions are legally unjustifiable, the Aujlas admit to converting $7,650.75 between August 2007 and February 4, 2008, a figure arrived at by reviewing their bank statements and which includes conversions covered by the partial

summary judgment awards and some of their own money intermingled with the converted funds. (The Aujlas agree with the Plaintiff that their intermingled funds should be credited to the Plaintiff’s benefit). [ 5 ] The Aujlas rationalized their actions based on their perceived entitlement to receive interest on a loan made to the wife of the principal of the Plaintiff company in late August 2007. As Harwinder Aujla (“Harwinder”) explained it, “[w]e took their money as they took ours.” [ 6 ] The outcome of this case is heavily dependent on credibility findings and the Plaintiff’s ability to prove its losses. II.

Procedural Issue [ 7 ] A procedural issue arose concerning the effect of the extensive read-ins by the Plaintiff from the examinations for discovery of the Aujlas, including their admissions to having pilfered only on certain dates, the particulars of which need not be addressed in the context of this discussion. [ 8 ] The Aujlas argue that having read in that evidence, the Plaintiff is now bound by their answers and cannot rely on contradictory evidence elicited at the trial to establish other dates on which conversions occurred.

The Aujlas rely on a brief passage in Alberta Court of Appeal’s memorandum of judgment in Tschritter v. Otto , 2007 ABCA 415 , in which the court commented (at para. 5) that it is well settled that reading in a discovery answer makes it part of the evidence at trial of the truth of its contents. [ 9 ] Pointing to the Alberta Court of Appeal’s Notice to the Profession dated March 27, 2000, the Plaintiff urges that Tschritter v.

Otto is not binding because it is simply a memorandum of judgment from the bench. [ 10 ] The use and effect of evidence read in from examinations for discovery has been canvassed in a number of Alberta authorities. The law concerning the effect of evidence read in from an opposing party's examination for discovery is concisely stated in Stevenson & Côté, Alberta Civil Procedure Handbook 2002 (Edmonton: Juriliber, 2002) at p. 171: The utmost caution is needed in selecting questions to read in at trial. They do not fully bind the party reading them in; he or she can lead

evidence which contradicts them. But when read in, they become evidence for and against all parties (according to their content), so theymight even lose the suit for the party reading them in. [11] As stated in Hayhurst v. Innisfail Motors Ltd., (AB CA), [1935] 1 W.W.R. 385 at 389 (Alta.

S.C.A.D.): Under the Rule a party need not put in more of the examination than he wishes and subject to the right of the Judge to have read anyother part so connected with what is put in as being necessary to make its meaning clear he need not be affected by any part of theexamination other than serves his purpose, but when he puts in evidence any portion of such examination it becomes evidence and itrequires no rule to make it tell against him if it has that effect.

He must take the burden, if any there be, with the benefit he receives. [12] Examination for discovery evidence adopted by a party at trial is like any other evidence. It may be contradicted or qualifiedby other evidence led by either of the parties and the court may assess its value in the context of all of the evidence presented on theissue. It does not become conclusive evidence when it is read in and the court is not bound to accept and follow it any more than it wouldin terms of other evidence (Michel v.

Lafrentz, 1999 ABCA 21, 232 A.R. 62 at para. 14, leave to appeal to the S.C.C. denied (2000), 255A.R. 400 (note)). In Mackow v. Sood, (1993), 1993 ABCA 152 , 141 A.R. 233 at para. 15 (C.A.), the court explained that: ... when a party reads in extracts from an examination for discovery of an opponent, that becomes evidence which he adopts but he musttake both the benefit and the burden, if any, of that evidence ...

However, where, as here, the parties also give evidence at trial, the trialjudge is free, as he was here, to exercise his normal function of assessing credibility, finding facts, and reaching conclusions from all theevidence, and is not bound to accept those discovery extracts read in (Ure v. Fagnan (1957), (AB CA), 22 W.W.R.(N.S.) 289 (Alta. C.A.) at 308-309; affirmed (SCC), [1958] S.C.R. 377). [13] The evidence in the present case is such that it is open to me to reject the answers read in by the Plaintiff where there is othermore reliable evidence to the contrary.

For the reasons discussed, I have done so concerning the examination for discovery evidenceabout admitted dates of conversions, which I do not find to determinative. III. The Actors and the Alleged Conversions [14] The Plaintiff presently operates two liquor stores in Edmonton, Alberta, including Crown Liquor North (the “Store”) andCrown Liquor South. It previously operated a third liquor store, which was closed at some unspecified date. The Plaintiff’s annual grosssales average between $3,000,000.00 and $5,000,000.00. [15] Nirmal Longowal (“Nirmal”) is the principal and operating mind of the Plaintiff.

He and his wife Jaswinder Longowal(“Jaswinder”) met the Aujlas as a result of their employment with the Plaintiff. Neither Nirmal nor Jaswinder (the “Longowals”) testifiedat the trial. [16] Prior to August 2007, the Longowals had twice borrowed money from the Aujlas pursuant to unwritten agreements. Theloans, which were interest free, were repaid without incident. [17] Harwinder and Balwinder Aujla (“Balwinder”) are husband and wife. Balwinder started working at the Store as a cashier in2001. She worked there part-time except in 2002, when she worked full-time.

She was fired on February 4, 2008 after being confrontedwith surveillance film showing her pilfering money. Harwinder started work at the Store in 2004. He typically worked about 30 hours aweek, spread out over six days. He was fired in absentia on February 4, 2008. His last actual day of work was on January 21, 2007. [18] From 2001 until early December 2007, the Store’s surveillance cameras were focused mainly on customer areas as thePlaintiff’s concern was spotting customer theft. One of the cameras also captured images of the till area. All of the cameras were in plainview.

The Plaintiff maintained surveillance film taken during that period until it such time as it required hard drive space. Today, all thatremains of that film is what was taken in June 2007 (the “June Surveillance Film”).

[ 19 ] The June Surveillance Film shows two separate incidents where Balwinder looked surreptitiously and carefully about the store before stacking empty liquor boxes on the counter beside the till. She then moved about and under the till area and finally removed the boxes from the counter. The film does not reveal any apparent reason for her recognizance of the Store or for her stacking the boxes on the counter. The effect of that action, however, was to partially block the camera’s view of the till area.

Balwinder’s explanation for this action was that she was leaving the boxes for customer use or for collection by Nirmal. [ 20 ] The Plaintiff installed a new surveillance system at the Store in December 2007 to address Nirmal’s suspicion of employee theft. As he said to David Prasad (“Prasad”), the Plaintiff’s longtime accountant, “I have no money or inventory at the north store.” The new surveillance system included an overhead hidden camera trained on the till area.

The Aujlas did not know about the new hidden camera. [ 21 ] Film taken between December 2007 and February 4, 2008 on the hidden camera (“New Surveillance Film”) shows the Aujlas, while working at the till, sometimes failing to scan items presented by customers for payment (“No Scans”), scanning only some of the items presented (“Partial Scans”) or scanning items of a lesser value (“Replacement Scans”). On each of these occasions, they put the actual purchase amount in the till.

The consequence of No Scans, Partial Scans and Replacement Scans was that there was more cash in the till than was recorded in the computer system as having been sold. [ 22 ] The New Surveillance Film also shows the Aujlas using the error correction key on the till when no apparent error had been made. The result of using the error correction key was to remove an entry in the computer system altogether. [ 23 ] In addition, the New Surveillance Film shows Harwinder using a calculator before palming or pocketing money, ranging from loonies and toonies to bills of multiple denominations.

It also shows Balwinder pocketing money of varying denominations and making false “cash drops” by pretending to put money in the safe located under the till and then putting the money in her pocket or purse.

As in the June Surveillance Film, Balwinder is seen at times stacking empty liquor boxes on the counter before looking about the store, taking money from the till and putting it in her pocket or her purse, which is stowed under the till, and then removing the boxes from the counter. [ 24 ] The Plaintiff’s analysis of the New Surveillance Film establishes that Harwinder pilfered an average of $70.00 a day while Balwinder pilfered $172.86 a day. On her termination date, February 4, 2008, Balwinder admitted to having$140.00 in her pocket.

Her explanation for that is, in my view, completely implausible. [ 25 ] Balwinder claims to have first taken money in late August 2007, when she believed that Jaswinder ought to have paid interest on a $200,000.00 loan made to her by the Aujlas pursuant to an unwritten agreement (the “Loan”). She testified that Jaswinder had convinced her that she should obtain a line of credit (“LOC”) from her bank to fund the Loan as it would be a money-making opportunity.

Harwinder had opposed the Loan and Balwinder’s decision to forge ahead with it caused the Aujlas some marital strife. [ 26 ] Balwinder’s expectation was that interest would be paid on the Loan monthly. There was no evidence about the express terms of the Loan and what the interest rate was, but it is evident that interest was ultimately by Jaswinder in early 2008.

The Aujlas’ bank records show that the first interest payable on the LOC was in September 2007. [ 27 ] At one point in his evidence, Harwinder admitted to pilfering ten to twenty dollars each shift that he worked alone between September 2007 and January 2008. Balwinder stated that she only pilfered when she was alone in the Store and that while her pilfering was not a daily event, there were no long gaps in between her occasions of pilfering. Her evidence was that in December 2007 and the first week of January 2008, there were two to three staff on each shift.

She worked only during the first week of December while Harwinder worked the entire month. They both worked in January 2008, Balwinder for the entire month and Harwinder for three weeks. Balwinder also worked the first week of February 2008. [ 28 ] The Aujlas claim that, until September 2007 it was simply coincidental that they both were pilfering from the Store and using similar pilfering techniques. Their evidence is that in late September 2007, Balwinder informed Harwinder that she was taking money to reimburse them for interest that she felt was due on the Loan.

The Aujlas maintain that, prior to this conversation, Balwinder would stack pilfered money on their bedroom dresser at the end of her workday and Harwinder would deposit the money in one of his bank accounts

without asking her about the source of the money. The Aujlas admit to having used some of the other pilfered money to buy gas, groceries and other items. They could not recall how much of the pilfered money they spent in this manner. [ 29 ] While I accept certain aspects of the Aujlas’ evidence, I find much of their testimony about their pilfering to be incredible.

In my view, it is highly improbable that they independently devised and employed many of the same techniques for taking money, such as No Scans, Partial Scans, Replacement Scans, use of the error correction key and turning the till screen from the customer’s view to conceal their actions. I consider Harwinder’s evidence far fetched that he repeatedly deposited to his bank accounts sums of money that mystically had appeared on his bedroom dresser without questioning his wife about the source of that money.

I reject the Ajulas evidence about ‘coincidental’ pilfering and pilfering styles. [ 30 ] There is no evidence that Harwinder began pilfering before early September 2007. From then on he continued to pilfer whenever he felt that he could do so undetected up until January 21, 2008, when he left on a trip. [ 31 ] I accept Harwinder’s evidence that Balwinder told him that she only started pilfering in August 2007 to “pay back” interest on the Loan.

However, I do not believe that her statement to him was true in terms of the start date or explanation for her pilfering. [ 32 ] The June Surveillance Film does not show Balwinder removing money from the till. However, it does show her employing a strikingly similar routine as in the New Surveillance Film – placing boxes on the counter by the till, moving about the till drawer area, bending below the till and then removing the boxes.

Balwinder’s explanation that she stacked the boxes on the counter for customer convenience or for collection by Nirmal is not credible given that she herself took the boxes off the counter after moving about the till area. The Longowal’s son Pritam (“Pritam”), who worked at the Store in the past, testified that he could think of no reason for an employee stacking boxes on the counter, explaining that boxes for customer use were kept in a different place. Harwinder agreed with this.

In the New Surveillance Film, Balwinder, who was unaware of the hidden camera, repeatedly employed the same technique to shield the till from view. The similarity in actions and lack of credible excuse for stacking the cartons on the counter in June 2007 lead me to conclude that Balwinder also was pilfering then. [ 33 ] Balwinder claimed that she was trying to recover interest owed on the Loan. She asserted that she only began pilfering in August 2007. However, her evidence was that she expected interest payments would be made by the Longowals at month end after they were told of the actual LOC interest due.

It was not until after August 2007 that Balwinder first received notice from her lender of interest owing on the LOC. Further, the Aujlas previously had loaned money to the Longowals without incident and the Aujlas knew of the Longowals’ financial means. Also, Balwinder continued pilfering after the principal amount of the Loan was repaid in January 2008. [ 34 ] Having watched the Aujlas in action in the New Surveillance Film, I am satisfied that they only pilfered when they worked alone and not when other employees were on shift with either of them.

I saw no surveillance evidence of them working together nor did I hear evidence to that effect. [ 35 ] The Plaintiff has proven that the Aujlas used a common scheme to convert money when they worked alone in the Store, they spent an undetermined amount of the fruits of their wrongdoing and deposited other converted monies to their bank accounts, at times commingling those monies with funds of their own. [ 36 ] The evidence establishes that Balwinder pilfered between June 2007 and February 4, 2008 and that Harwinder pilfered from early September 2007 until January 21, 2008, when he left on a trip to India.

The Plaintiff made the unfortunate business decision of overwriting its computer drives. As a result of this loss of information, it was unable to adduce evidence to prove its allegation that the Aujlas engaged in pilfering prior to those dates. IV. Damages A. The Onus of Proof [ 37 ] As noted at the outset, the Plaintiff conceded that two of the bank accounts believed to belong to the Aujlas belonged, in fact, to others and reduced its claim for damages to a maximum of $116,000.00 at the conclusion of the trial.

[38] Typically, the onus is on the plaintiff to prove its damages on a preponderance of credible evidence. [39] According to the British Columbia Court of Appeal in Huff v. Price (1990), (BC CA), 51 B.C.L.R. (2d) 282, 76 D.L.R. (4th) 138 (C.A.), leave to appeal to S.C.C. ref’d [1991] 1 S.C.R. vii, in assessing damages where fraud or breach offiduciary duty is established, the court need not be exacting in requiring proof of the precise loss in circumstances where all reasonableefforts have been made by the plaintiff to establish the amount of the loss and the cause of the loss.

The burden of leading the evidenceto disprove the amount of the loss and the cause of the loss will then fall on the defendant who has been found to have been fraudulent orin breach of their fiduciary duty. [40] It is trite that fraud must be pleaded and argued clearly and with particularity. As the Plaintiff did neither in this case, fraud isnot in issue. The analysis, therefore, focuses on whether the Aujlas owed a fiduciary duty to the Plaintiff and whether any other factorswould alter the typical onus of proof of loss. B. Was there a Fiduciary Relationship? [41] In Canadian Aero Service Ltd. v.

O’Malley, (SCC), [1974] S.C.R. 592 at 610 [”Canaero”], the SupremeCourt of Canada recognized that senior officials of a company, like directors, may be in a fiduciary relationship with the company giventhe degree of control which they have.

Laskin J. commented that the defendants in that case were “‘top management’ and not mereemployees whose duty to their employer, unless enlarged by contract, consisted only of respect for trade secrets and for confidentiality ofcustomer lists.” He also stated at p. 620 that: The general standards of loyalty, good faith and avoidance of a conflict of duty and self-interest to which the conduct of a director orsenior officer must conform, must be tested in each case by many factors which it would be reckless to attempt to enumerateexhaustively.

Among them are the factor of position or office held, the nature of the corporate opportunity, its ripeness, its specificnessand the director's or managerial officer's relation to it, the amount of knowledge possessed, the circumstances in which it was obtainedand whether it was special or, indeed, even private, the factor of time in the continuation of fiduciary duty where the alleged breachoccurs after termination of the relationship with the company, and the circumstances under which the relationship was terminated, that iswhether by retirement or resignation or discharge. [42] Smith v.

Frame, (SCC), [1987] 2 S.C.R. 99 concerned an action grounded in both tort and breach offiduciary duty by a former spouse who alleged that his ex-wife and her husband were preventing him access to his child. The majority ofthe court dismissed his claim. In her dissenting opinion (at p. 136), Wilson J. referred to the following three-pronged test for determiningwhether a fiduciary relationship exists, a test later adopted by the majority in Lac Minerals Ltd. v. International Corona Resources Ltd., (SCC), [1989] 2 S.C.R. 574 at para. 148:

(1) The fiduciary has scope for the exercise of some discretion or power. (2) the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests.

(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power. [43] Hodgkinson v. Simms, (SCC), [1994] 3 S.C.R. 377 also applied this three-step test, La Forest J. (L'Heureux-Dubé and Gonthier JJ. concurring) adding at para. 33 that, “... outside the established categories, what is required is evidence of a mutualunderstanding that one party has relinquished its own self-interest and agreed to act solely on behalf of the other party.” [44] Many of the reported cases concerning the issue of fiduciary obligations in employment relationships address circumstanceswhere the employee competes with his or her former employer.

[45] Alberts v. Mountjoy (1977), (ON SC), 16 O.R. (2d) 682 (H.C.J.) was the starting point for the expansionof fiduciary relationships to include lower level employees. The defendant Butt, a salesperson, joined a firm started by Mountjoy, whohad been the directing mind of the plaintiff company, their former employer. The firm competed with and solicited clients of theplaintiff. Estey C.J. concluded at para. 27 that Butt must be identified with Mountjoy because he had joined Mountjoy’s services and, ineffect, was his agent.

Therefore, he owed the same fiduciary duty to the former employer as Mountjoy. [46] The Plaintiff relies on Re McNabb (1995), (AB KB), 27 Alta. L.R. (3d) 420 (Q.B.) and South Nahanni Trading Company Ltd. v. Gravel (2007), (ON SC), 36 C.B.R. (5th) 115 (Ont. S.C.J.) as authority for the propositionthat any employee who handles his or her employer’s money is a fiduciary. [47] The issue in Re McNabb was whether a debt owed by a bankrupt bank teller who had stolen from her employer survived bankruptcy pursuant to what is now s. 178(1)(

d) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”)[i][2]. In finding afiduciary relationship, Registrar Funduk noted (at para. 19) the trend “to expand the law and find fiduciary obligations where equity hadnot tread in the past” and observed that “[i]t is not a giant step to conclude that an employee has a fiduciary duty (created by a trustposition where the employee handles the employer’s money) to deal properly with that money.” [48] South Nahanni Trading Company Ltd. also concerned s. 178(1)(

d) of the BIA. There, a bankrupt with signing authority overher employer’s bank account converted money by making cheques payable to herself. The court found a fiduciary duty, concluding thatwhen the employer gave the defendant cheque signing authority, it reposed trust and confidence in her to perform her duties in an honestand forthright manner. [49] A review of the authorities suggests that while the fiduciary duties originally described in Canaero subsequently wereextended to non-senior employees, there has been a retrenchment from that position. As James A.

D’Andrea stated in his text, EmployeeObligations in Canada, looseleaf (Aurora: Canada Law Book, 2010) at p. 1-44.7, “... the pendulum appears to be swinging back towardthe principles espoused in Canaero as many courts have found that too many employees of ‘humble origin’ are being classified asfiduciaries.” [50] In 57134 Manitoba Ltd. v.

Palmer (1989), (BC CA), 37 B.C.L.R. (2d) 50 (C.A.), the British ColumbiaCourt of Appeal declined to rule on whether a former general manager of one of the plaintiff’s branches who copied the plaintiff’s clientlist and solicited its clients after leaving the plaintiff’s employ owed a fiduciary duty to the plaintiff, relying instead on the defendant’sgeneral duty of good faith to its former employer to find liability. [51] The New Brunswick Court of Appeal in Imperial Sheet Metal Ltd. v.

Landry, 2007 NBCA 51 at paras. 5 and 6, 315 N.B.R.(2d) 328 grappled with whether it should adopt the narrow or broad approach for classifying employees as fiduciaries; the narrowapproach being the “key” employee test articulated in Canaero, and the broad approach the “vulnerability” test adopted in the SupremeCourt of Canada trilogy of Frame, Lac Minerals Ltd. and Hodgkinson, which dealt with fiduciary obligations outside of theemployment context. The court (at para. 6) rejected the broad approach for the following reasons: ... First, that approach is incompatible with Canaero.

Second, as the British Columbia Court of Appeal has adroitly observed [in 57134Manitoba Ltd.], too many employees of “humble origin” are being swept into the fiduciary net. Thus, I am unable to accept, forexample, that the manager of the hearing-aid department of a national chain is subject to the same fiduciary duties that are imposed on itsexecutive officers. Indeed, there are far too many reported decisions in which employers have succeeded in persuading a court that aformer sales person or manager is a fiduciary.

Courts should not be reading restrictive terms into employment contracts that could havebeen negotiated sometime prior to the dissolution of the employment relationship. In the global world, the titans of finance and industrypay millions in exchange for their executives executing non-competition clauses.

Why should courts be handing them out for free when itcomes to employees of lesser stature? [52] Ultimately, the court in Imperial Sheet Metal Ltd. determined (at para. 48) that Alberts remained good law insofar as itreflected the principle in Canaero, but otherwise agreed with the obiter view expressed by the British Columbia Court of Appeal in57134 Manitoba Ltd. that “[t]oo many employees of ‘humble degree’ are being swept into the fiduciary net.” It rejected (at para. 58) useof the “vulnerability test” in the employment context.

The court went on (at para. 63) to identify the following as some of thecharacteristics of a “key employee:”

A “key” employee is: (1) an integral and indispensable component of the management team that is responsible for guiding the businessaffairs of the employer; (2) necessarily involved in the decision-making process; and (3), therefore, has broad access to confidentialinformation that if disclosed would significantly impair the competitive advantages that the former employer enjoyed. These employeesfall within the categories: “top management,” “senior management” or “key management.” [53] In Barton Insurance Brokers Ltd. v.

Irwin et al. (1999), 1999 BCCA 73 , 63 B.C.L.R. (3d) 215, 170 D.L.R. (4th) 69(C.A.), the British Columbia Court of Appeal agreed (at para. 40) that a “key employee” might have a fiduciary duty, but expressed theview that courts should not be easily persuaded to find that ordinary employees are subject to such a continuing duty. [54] Other cases where courts refused to extend fiduciary obligations to ordinary employees include Allstate Insurance Co. ofCanada v. Laroque (2008), (ON SC), 64 C.C.E.L. (3d) 119 (Ont. S.C.J.), involving an insurance agent; Paso ServicesLtd. v.

Ratz, 2008 SKQB 356, 322 Sask.R. 79 and Carson International Inc. v. Biggar, 2010 MBQB 198, 322 D.L.R. (4th) 668,concerning salespersons; and Pan Pacific Recycling Inc. v. So, 2006 BCSC 1337, 52 C.C.E.L. (3d) 261, concerning a manager and aprocurer of shipping containers. [55] In my view, Re McNabb and South Nahanni Trading Company Ltd. are distinguishable, both on their facts and becausethey were decided in the context of a provision of the BIA that embodies the morality concept that a bankrupt will not be rewarded byreleasing him or her from liability for conduct considered unacceptable to society (Jerrard v.

Peacock (1985), (ABKB), 57 C.B.R. (N.S.) 54 at 62-63). [56] Even using the “vulnerability test,” the vulnerability required to found a fiduciary relationship is not general in nature butrather is dependent on one parties’ inability to prevent the other from wrongfully exercising power or discretion (Smith v Frame at p.137). The Aujlas’ relationship with the Plaintiff created no such vulnerability.

They were ordinary employees who had no authority overthe Plaintiff’s business. [57] Like any other employees who owe a duty of good faith and loyalty to their employer, the Aujlas were duty bound not topilfer from the Plaintiff. Clearly, they breached that duty, but the fact they were entrusted by the Plaintiff with access to its money didnot make them fiduciaries of the Plaintiff. [58] Having found that the Aujlas did not owe fiduciary obligations to the Plaintiff, the principle regarding proof of loss set out inHuff does not apply. C.

Proof of the Loss [59] The following principles are relevant to the Plaintiff’s proof of its loss: (

a) The degree of certainty and particularity in proof of damage is that which is reasonable, having regard to the circumstances andto the nature of the acts themselves by which the damage is done (Wood v. Grand Valley Railway Co., (1915) (SCC),51 S.C.R. 283 at 301). (

b) The difficulty of assessment of damages cannot relieve the wrongdoer of the necessity of paying damages (Wood at p. 289). Ifthe amount is difficult to estimate, the tribunal must simply do its best on the material available (S.M. Waddams, The Law of Damages,looseleaf (Toronto: Canada Law Book, 2008) at para. 13.30). (

c) Where a wrongdoer refuses to reveal facts within his or her knowledge, the court may presume against the wrongdoer facts thatare adverse (Armory v. Delamirie (1772), 1 Strange 505, 93 E.R. 664).

[ 60 ] Prasad, the Plaintiff’s longtime accountant, conducted a review of the Aujlas’ bank records and tax filings as a means of ascertaining the losses suffered by the Plaintiff at the Store as a result of the Aujlas’ pilfering. Prasad is a certified general accountant who was instructed to assume in conducting his review that the Aujlas had pilfered from their first day of work. Based on extrapolations he concluded that over a seven years they had converted $70,000.00. He expressed the view that such loss would be undetectable by the Plaintiff given its consolidated annual gross sales.

He opined that a review of the Plaintiff’s sales, inventory, and cash would not aide in quantifying the Plaintiff’s losses since the Plaintiff conducts a consolidated annual inventory; its consolidated general ledger and inventory systems preclude tracking the particular profits and losses for the Store; it had lost floppy discs recording daily sales information; and a common password to log onto the till at the Store precluded tracking daily sales information to any particular employee. [ 61 ] Prasad’s review of the Aujlas’ bank records led him to conclude that there was $346,717.00 for which they could not account, consisting of monies on deposit since 2001 ($697,603.00), minus traceable income ($350,886.00) either from readily identifiable sources (employment income, WCB payments, and inter-account transfers) or for which the Aujlas had a ready explanation (money brought into Canada from India and rental income). [ 62 ] Prasad explained that, ideally, in conducting his analysis he would have wanted to see the Aujlas’ bank deposit slips.

I note that while the Plaintiff sought the deposit slips from the Aujlas’ banker, it took no further steps to require production after the banker failed to provide them. [ 63 ] Prasad conducted a second analysis that he developed by modifying the Canada Revenue Agency’s (“CRA”) “net asset assessment” approach whereby the CRA compares a taxpayer’s declared income and net assets.

Rather than focusing on the Aujlas’ net assets as the CRA would do, Prasad compared their declared net income for tax purposes and their monies on deposit, concluding that there was a $346,717.00 surplus after deduction for tax refunds, income, and monies from India. [ 64 ] In Prasad’s view, the modified net asset assessment approach was the more reliable of the two approaches he used.

He was quick to add that the CRA requires taxpayers to prove the source of their money and that the Aujlas could have done likewise for him. [ 65 ] Prasad conceded that he did not know whether all of the bank accounts he reviewed belonged to the Aujlas or if all of their income was deposited to bank accounts. [ 66 ] Prasad’s approaches and conclusions were the subject of comment by two other accountants: Colin Presizniuk (“Presizniuk”) and Roman Gallegan (“Gallegan”), both veterans in their respective fields.

Presizniuk, a certified general accountant with 20 years experience servicing mainly small business clients, was retained by the Plaintiff. Presziniuk worked on 30 matters involving financial statement fraud or pilfering in his career. The Plaintiff’s bid to have Presizniuk qualified as an expert in forensic accounting was denied. He was qualified as a certified general account. Gallegan is a chartered accountant whose career has focused solely on forensic accounting and litigation support since 1983.

The Aujlas’ application to qualify him as an expert in those fields succeeded. [ 67 ] Presizniuk reviewed Prasad’s calculations, which he found had no mistakes in the calculations, noting that Prasad’s two approaches yielded similar results. Presizniuk offered that in his experience a family the Aujlas’ size could not sustain their reported lifestyle with their reported income. [ 68 ] Presizniuk defended Prasad’s impartiality, which was questioned by Gallegan.

He also defended the methodology used by Prasad, commenting that while Prasad’s approach may have been “unusual,” it was the only means to quantify the Plaintiff’s loss given the circumstances and nature of the Aujlas’ conversions. [ 69 ] Presizniuk testified that he was not surprised by the business and accounting systems used by the Plaintiff, which he described as a “mom and pop shop.” He said that he did not know whether records documenting the Plaintiff’s purchase of inventory from its only vendor, ALCB, had been sought or obtained by the Plaintiff or Prasad. [ 70 ] He expressed the view that none of the following approaches to ascertaining loss would have been useful:

(

a) examining cash register receipts (because accurate inventory was missing); (

b) examining cash counts or deposit revenue receipts (because not all sales were scanned); (

c) reconciling inventory and sales records (because the particular information pertaining to the Store was not available); (

d) conducting an analysis of receipts and unexpected loss (because the general ledger and inventory were consolidated); or (

e) analysing the Plaintiff’s tax returns (because this would not disclose small losses). [ 71 ] He thought that the most reasonable approach to the calculation of loss in the circumstances was to review the Aujlas’ documentation. Like Prasad, he commented on the absence of bank deposit slips.

Without more, he offered that in his experience as a CGA, analyzing payroll records to determine the number of shifts the Aujlas worked would not have been of assistance. [ 72 ] Presizniuk commented that the Aujlas had a disproportionately high number of bank accounts, noting that they had three in 2001 when Balwinder started work with the Plaintiff, four accounts in 2002, and nine accounts in 2008. He thought that two to three accounts would be normal for income earners like the Aujlas.

He was unaware that the Plaintiff had obtained a pre-judgment attachment order that froze their bank accounts early in the proceedings or that an account in Balwinder’s name actually belonged to the Aujlas’ son, Gurjit. It is unclear whether he knew that another account in the Aujlas’ name belonged to Balwinder’s father. [ 73 ] Gallegan’s retainer was limited to reviewing Prasad’s reports. He expressed the view that “... the only thing that Mr. Prasad confirmed was that the unidentified [bank] deposits are “unidentified.”’ [ 74 ] Gallegan found Prasad’s approach unusual and illogical.

He pointed to generally accepted standards of accounting practice, which require record keeping, independence and objectivity, and the preparation of reports with a view to a reviewer objectively testing the conclusions. [ 75 ] Gallegan questioned Prasad’s independence and objectivity. Prasad has had a longstanding business and personal relationship with the Longawals. Recently, he became their business partner in a real estate investment. In spite of these relationships, I am satisfied that Prasad conducted his work without influence or partiality.

He struck me as a forthright witness and his answers on the issue were given in a fair and direct manner. I believed him when he said that his relationship with the Longawalls did not interfere with his professionalism. More importantly, Prasad’s business relationship with the Longawalls post dated his reports. Finally, his retainer was a limited one and the assumptions he relied on in conducting his analysis were provided to him by others. [ 76 ] Gallegan acknowledged that proving damages in cases of fraud (and presumably conversion of the nature undertaken by the Aujlas) is not an easy task.

He described the following as the minimal steps in an investigation that should be carried out in a case such as this: (

a) interviewing the owner or manager; (

b) learning about the business, including the controls that were in place; (

c) ascertaining if there was police involvement and, if possible, interviewing the suspect ;

(

d) examining the business records; (

e) preparing a casebook, which would include daily cash register/computer printouts of revenue receipts, evidence of cash counts and deposits of revenue receipts, an analysis of inventory/point of sales data from the cash register, inventory records, an analysis of interim financial statements, corporate tax returns, payroll records and, given the Plaintiff’s access to the Aujlas’ records, evidence to show trace cash conversions; and (

f) relating and isolating the alleged fraudsters’ duties in order to confirm opportunity, and assessing internal controls. [ 77 ] Gallegan stated that a forensic investigator should “follow their nose, not a program.” He spoke of the importance of business records and information gleaned from the owner or manager in making assumptions, and expressed the opinion that reviewing the employees’ records is merely a secondary process for quantifying loss. [ 78 ] Gallegan commented that calculating the Plaintiff’s loss or “shrinkage” would not be an easy matter but, with effort, was an achievable task.

In this vein, he suggested assessing invoices for liquor purchases, annual inventory counts, and cash register records, as well as comparing inventory turns in the Plaintiff’s two stores. [ 79 ] Gallegan considered it remarkable that the Plaintiff made no effort whatsoever to establish what amounts the Aujlas converted by examining its own records, since that is a task which, although challenging, might have provided evidence to support a finding of additional defalcation and could have assisted in quantifying the loss. [ 80 ] There are several instructive cases involving proof of conversion by employees.

The employer in Geen's Prescription Pharmacy Ltd. v. Thibault , [1996] O.J. No. 1415 (Ct. Just. (Gen.

Div.)) (QL) proved its loss by showing that the amounts written on daily cash balance sheets over an extensive period of time did not equal the actual amounts shown on the cash register or transaction tapes for the same time period; by showing that the discrepancies between the daily cash sheets and cash register tapes occurred only when the employee prepared the cash sheets; and by establishing the difference between the amounts shown on the daily cash sheets and cash register tapes. [ 81 ] In a twist on the approach taken in the present case, the defendant employee in Geen's Prescription Pharmacy Ltd. hired a forensic accountant to review her records to show that she was living within her means at the relevant times.

The court rejected the employee’s evidence concerning her actions at work as being untrue. Similarly, her evidence regarding her bank accounts and lifestyle was rejected, the court noting that the employee was in financial trouble for a period and there were discrepancies between her money on deposit and her family income. The court also noted the employee’s extensive use of cash to fund expenses. The forensic accountant’s evidence was rejected as being too narrow in scope. [ 82 ] The plaintiff in Eagle Ridge Animal & Bird Hospital v.

Sharpe , 2009 BCSC 1486 was concerned about missing cash and concluded that an employee had misappropriated funds by taking cash paid by customers for grooming services and remitting intentionally inflated compensation invoices. The employee, who had been the manager of the plaintiff’s grooming salon for five years, had told a co-worker that she had taken money and planned to repay it. There was evidence that gross revenues and deposits were higher (20-23 percent) both before and after the employee’s tenure. In assessing damages, the court accepted the evidence of a forensic accountant retained by the plaintiff.

The accountant prepared two analyses. The first quantified the difference between revenues implied by the employee’s remuneration (50 percent of receipts) and the actual monies deposited to the employer’s bank accounts over a given period; while the second aggregated the value of bank deposits (excluding GST) and assumed that they were representative of net revenue in the same period. [ 83 ] Canada Safeway Ltd. v. Brown , 2007 BCSC 1619 also included an assessment of damages. There, a cashier with access to cash and accounting records had pleaded guilty to theft under $5,000.00.

Given the manner of the thefts, the employer could not determine precisely how much money had been stolen. Surveillance cameras showed the employee making fraudulent refunds averaging about $100.00 a day, while refund summaries showed the employee as being consistently high in terms of processing refunds. Admissions made by the employee established that she had stolen for three months, stepping up her activity in the last month. She waffled on the amount, but at one point accepted that it was one hundred dollars a day.

The Court accepted the employer’s manner of calculating its loss ($100.00 per day x twenty shifts x three months = $6,000.00), noting that it was a reasonable and fair approach consistent with the employee’s admissions.

[84] In Newport Fish Importers Co. v. Botelho, [1995] O.J. 3603 (Ct. Just. (Gen. Div.)) (QL), the court was presented withsurveillance evidence showing that the defendant bookkeeper, who had started work in 1986, pilfered by tearing up or replacing invoicesand by taking cash over the counter and placing it in receptacles other than the cash box. The evidence also showed that “... in 1987 therewas a tremendous drop in the true net cash position of the company from the preceding years” and startling profits after the bookkeeper’sdismissal (at para. 4). The employee did not testify.

In ruling in favour of the employer, the court commented on the employer’ssignificant loss over six years (estimated as $225,820.00) and the employee’s sizeable assets at the end of that period. [85] In contrast to the plaintiffs in Geen's Prescription Pharmacy Ltd., Eagle Ridge Animal & Bird Hospital, Canada SafewayLtd., and Newport Fish Importers Co., the Plaintiff in the present case has not demonstrated a loss other than the misappropriationsadmitted by the Aujlas and depicted on the surveillance film.

Instead, it asks that damages be inferred by reason of the Aujlas’ failure tooffer up reasonable explanations for certain of the funds which they had on deposit. [86] While difficulty in determining the amount of damages does not excuse a wrongdoer from paying damages, the foundationfor making a damages award must first exist. [87] Gallegan impressed me as a highly skilled practitioner in his field and a forthright witness. His sometimes curt responses tocross-examination questions did not detract from that. Like Gallegan, I am puzzled by the approach taken by the Plaintiff to establishingits loss.

The Plaintiff was obliged to keep its business records for tax purposes for six years, yet it undertook no review of its records, astep which Gallegan suggested and I accept was the most appropriate starting point for quantifying its losses. I am mindful of Prasad andPresizniuk’s view that this would have been a fruitless exercise.

However, I accept Gallegan’s evidence that a proper forensicinvestigation should have included such a review despite the Plaintiff’s peculiar business systems and practices. [88] I note that the trigger for Nirmal’s concern of employee theft was cash and inventory shortages at the Store. Also, I ammindful of Nirmal’s examination for discovery evidence that when his concern arose, he looked at financial records for the Plaintiff’stwo stores, a matter neither mentioned nor investigated by the professionals retained on the Plaintiff’s behalf.

Finally, I note thatinformation concerning employee schedules was available to the Plaintiff, but was not provided to any of the accountants who testified atthe trial, nor was it otherwise addressed in evidence. D. Conclusion on Compensatory Damages [89] The Court must approximate a sum of damages on the material available, even though it may be little better than a guess(Toronto Transit Commission v. Aqua Taxi Limited, (ON SC), [1957] O.W.N. 65 at 67; S.M.

Waddams, The Law ofDamages, looseleaf (Toronto: Canada Law Book, 2008) at para. 13.30). [90] The Aujlas made some attempt before the trial to identify bank deposits between September 2007 and January 2008 whichwere comprised wholly or partly of converted monies. The amount they then identified was $6,150.00. At the end of the trial theyincreased the amount to $7,650.75 between August 2007 and February 4, 2008. At trial, Balwinder admitted to making two furtherdeposits of converted money in January 2008 that totaled $585.00.

Perhaps not surprisingly, given the conversions captured on thesurveillance cameras, the Aujlas also admitted at trial to further conversions of $2,700.74, for a total of $10,270.74. The Plaintiffreceived partial

summary judgment for $2,600.00 which has apparently paid. [91] In my view, reliance solely on the Aujlas’ bank records to estimate the amount of their conversions is a flawed approach asthey admitted to having sometimes spent converted monies. Further, they were unclear as to all of the deposits they made involvingconverted money.

Finally, this approach does not account for money found on Balwinder the day that she was fired, money that I amsatisfied she had pilfered. [92] Calculating the Plaintiff’s damages by multiplying the Aujlas’combined, one-day conversion by the shifts they worked is alsoimperfect as this encompasses occasions when (as I have found from watching the Ajulas in action), the presence of other employees atthe Store would have deterred their misconduct.

Nevertheless, it is of the options somewhat fairer to the Plaintiff, which in my view,should receive the benefit of any doubt in respect of this “best efforts” calculation. In assessing damages on this basis, I note that thisapproach was also used in Canada Safeway Ltd. v. Brown, which is at least somewhat similar on its facts. [93] The New Surveillance establishes that Harwinder converted an average of $70.00 every day that he worked between

September 2007 and January 21, 2008. Based on his typical work week of six days per week, I find that he misappropriated andconverted the sum of $8,610.00, from which must be deducted the partial

summary judgment of $260.00 awarded against him, which hasbeen paid. In the result, Harwinder is liable for damages in the sum of $8,350.00 (123 shifts x $70.00 - $260.00), plus pre-judgmentinterest. [94] Although a bit fuzzy in her evidence, Balwinder admitted to working two days per week. She claimed that she did not engagein daily conversion, but agreed that there were no long gaps between her conversions. Even if I were to accept her evidence in this regard,there is nothing to guide me as to what the intervals were. In my view, this gap in the evidence should be resolved in favour of thePlaintiff.

Accordingly, I assess damages against her based on the evidence, which I have accepted, that she converted a daily average of$172.86. For the period August 1, 2007 until February 4, 2008, this equates to $8,124.42 (47 shifts x $172.86). Balwinder alsomisappropriated and converted the Plaintiff’s money in June 2007 on at least two occasions. I assess those damages at $720.00, which is the value of unaccounted for, round number bank deposits made on June 8th and 25, 2007. In the result, Balwinder’s total liability, aftercredit for the partial

summary judgment award against her, which has been paid, is $6,434.42 ($8,2124.42 + $720.00 - $2,410.00), pluspre-judgment interest. E. Punitive Damages [95] According to the Supreme Court of Canada in Whiten v. Pilot Insurance Co., 2002 SCC 18 at para. 36, [2002] 1 S.C.R. 595: Punitive damages are awarded against a defendant in exceptional cases for “malicious, oppressive and high-handed” misconduct that“offends the court’s sense of decency”: Hill v. Church of Scientology of Toronto, (SCC), [1995] 2 S.C.R. 1130(S.C.C.), at para. 196.

The test thus limits the award to misconduct that represents a marked departure from ordinary standards of decentbehaviour. Because their objective is to punish the defendant rather than compensate a plaintiff (whose just compensation will alreadyhave been assessed), punitive damages straddle the frontier between civil law (compensation) and criminal law (punishment). [96] In Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, 2002 SCC 19 , [2002] 1 S.C.R. 678, the Supreme Court of Canada confirmed (at para. 79) that only in exceptional cases doesfraud attract punitive damages.

The trial judge in that case considered that punitive damages were justified in order for the award to standas an example to others and to assure that the defendant would not unduly profit from his conduct. The Supreme Court of Canadaconsidered both of these to be legitimate objectives for the award of punitive damages.

However, it cautioned (at para. 79) that “... anaward of punitive damages is rational ‘if, but only if’ compensatory damages do not adequately achieve the objectives of retribution,deterrence and denunciation.” [97] In brief reasons on the point, Belzil J. awarded $15,000 in punitive damages to the plaintiff in ICare Travel v. Nitambwe,2008 ABQB 303. In that case, an employee with cheque writing authority absconded from the Democratic Republic of the Congo wherehe worked and made his way to Edmonton.

En route, he contacted his employer to say that he was at the grave site in Brussels where herpartner was buried and that he had taken a $50,000.00 payment from a client because she had "abused him." He was found to haveconverted more than $140,000.00 over time. [98] In Nubury Properties Ltd v. Gunraj, (Ont. S.C.J.), an employee wrote herself unauthorized chequestotaling $234,650.70 over five years.

Declining to impose punitive damages, Wilton-Siegel J. explained (at para.15): …First, while the defendant’s conduct is highly reprehensible, instances of employee theft are not unusual in business and are often thesubject of insurance. As in Performance Industries, the plaintiff in this action has failed to identify any aggravating circumstances thatwould not be present in almost any case of employee fraud.

Second, as a related matter, I think that the Court should be satisfied thatinadequate accounting controls of the plaintiff did not, as is often the case, contribute to the fraud before making such an award.However, there is no evidence in the materials before the Court as to how Ms. Gunraj was able to perpetuate this fraud for so long.Third, there is no evidence that the defendant is able to pay any such amount awarded against her. Lastly, the plaintiff acknowledges thatit seeks the award principally as compensation for the time spent investigating the fraud and prosecuting its claim.

This is really acompensatory damage claim, for the costs of doing business, albeit out of the ordinary course of business, rather than a claim forpunitive damages. It also seeks damages as a contingency fund in case further fraudulent cheques are subsequently found for the pre-1997 period. This is purely speculative and must be disregarded.

[99] The court in Eagleridge Animal & Bird Hospital v. Sharpe also refused to award punitive damages, noting (at para. 103) thatany claim for conversion involves a person who is guilty of blameworthy conduct. [100] Punitive damages may only be awarded if they serve a rational purpose and if compensatory damages do not adequatelyachieve the objectives of retribution, deterrence and denunciation, which may be addressed in both the civil and criminal context. TheAujlas’ conduct clearly is blameworthy, deliberate, and something from which they profited.

However, there are no identifiedaggravating circumstances that would not be present in almost any case of employee conversion and, in my view, there should be noautomatic entitlement to punitive damages attaching to particular causes of action. Punitive damages remain very much an exception. Punitive damages are intended to deter wrongdoers and others as well as to express outrage at egregious conduct.

The Aujlas have notyet been subjected to criminal proceedings in respect of their actions, but it is a very real possibility that they may face such proceedings.Given the Plaintiff’s position on damages, they have been put to the expense of a longer trial than ordinarily would have been expected.They have been affected by a pre-judgment attachment order freezing all of their assets for a significant period of time. Theseconsequences are, in my view, a sufficient deterrent, both general and specific.

These considerations, coupled with my view that thereshould be no automatic entitlement to punitive damages attaching to a particular cause of action, result in my conclusion that an award ofpunitive damages would serve no rational purpose here. F. Solicitor Client Costs [101] Costs are discretionary, but as a general rule a departure from party and party costs occurs only in rare and exceptionalcircumstances (Sidorsky v. CFCN Communications Ltd. (1997), 1997 ABCA 280 , 53 Alta.

L.R. (3d) 255 (C.A.); Jackson v.Trimac Industries Ltd. (1993), (AB KB), 138 A.R. 161 ( Q.B.)). [102] The Plaintiff relies on ICare Travel v. Nitambwe to support its bid for solicitor-client costs. In making an award for solicitor-client costs in that case, Belzil J. observed that such costs may be granted where there was reprehensible, scandalous or outrageousconduct prior to the litigation. [103] ICare pre-dates the Alberta Court of Appeal’s decision in Polar Ice Express Inc. v. Arctic Glacier Inc., 2009 ABCA 20, 446A.R. 295.

The court stressed in that case that as a general proposition, solicitor-client costs for misconduct must relate to conduct duringthe suit, not the pre-suit conduct sued over, although trusts or fiduciary relationships might be an exception. The court also consideredmisconduct during the litigation. It ruled that an employee’s lying under oath at discovery had unnecessarily lengthened and complicatedthe trial, and may have necessitated the trial since the misconduct impeded settlement.

In the result, the court awarded party-party coststo the end of the day before trial and solicitor-client costs thereafter. [104] In Dallin v. Montgomery, 2010 ABQB 587 at paras. 11-12, Lee J. preferred the evidence of one witness over another, makingno finding that the witness gave false testimony to deceive the Court. Solicitor-client costs were refused as there was no misconduct. [105] Despite my having found clear instances of misconduct by the Aujlas, I am not satisfied that this trial would have been obviatedor significantly shortened had the Aujlas been truthful on the material points mentioned.

Trying this case based on the Plaintiff’sunwavering view that the Aujlas pilfered each and every day that they worked was by definition a time consuming process. There is noevidence that the Aujlas failed, in any significant way to give full discovery, nor is there evidence of unnecessary adjournments or theDefendants otherwise dragging out the process. Given my findings concerning proof of loss, the Aujlas’ failure to produce a book whichthey say had a record of rents received from their children and other tenants does not qualify as the type of non-disclosure that affectscosts.

Balwinder's lack of candour about pilfering in June 2007, and both of the Aujlas’ misplaced focus on interest allegedly due on theLoan to justify their conversions, resulted in a marginally longer trial than otherwise would have been required. [106] The Plaintiff established loss (nominal as it may be compared to that sought at the outset of the trial) beyond what wasadmitted to by the Aujlas.

While I did not believe much of the Ajulas’ evidence about their pilfering and found their justification for theiractions to be untenable, that does not entitle the Plaintiff to solicitor-client costs. [107] The parties each served Notices to Admit Facts on the other. The Plaintiff called on Balwinder to admit that she took money

from the Plaintiff that was not properly due her by removing money from the till, by taking it directly from customers without first placing it in the till, by using No Scans, Partial Scans and by scanning a lower priced item than that presented for purchase by the customer. The Notice also called on Balwinder to admit that she took money in this fashion on more than 10, more than 15, more than 50, or more than 100 occasions.

The Aujlas’ Reply sets out a simple denial and alleges that the matters called on for admission are mixed fact and law. [ 108 ] The Aujlas’ Notice to Admit Facts called on the Plaintiff to admit that they did not take money that they were not entitled to prior to August 1, 2007. They now argue that the parties’ competing Notices to Admit Facts cancel one another out as both parties were required to prove facts that ought to have been admitted given the result. [ 109 ] I do not endorse the Plaintiff’s crafting its Notice to Admit on the basis of “ascending occasions”.

To do otherwise could lead to absurd, lengthy multiple-choice style Notices to Admit designed to cover off any eventuality that might be proven at trial. [ 110 ] The Plaintiff is entitled to its costs in the appropriate column. V. Conclusion i. Balwinder is liable for damages for conversion in the sum of $6,434.42 ($8,2124.42 + $720.00 - $2,410.00), plus pre-judgment interest. ii. Harwinder is liable for damages for conversion in the sum of $8,350.00 (123 shifts x $70.00 - $260.00), plus pre-judgment interest. iii. The Plaintiff is entitled to costs. Heard on the 25 th day of October, 2010.

Submissions received on the 17 th and 18 th days of November, 2010. Dated at the City of Edmonton, Alberta this 24 th day of January, 2011. J.E. Topolniski J.C.Q.B.A. Appearances:

Shawn Beaver for the Plaintiff Brian Doherty for the Defendants _______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Mr. Justice J.E. Topolniski _______________________________________________________ The Conclusion [V. iii.] has been corrected to read as follows: The Plaintiff is entitled to costs. [1] The partial

summary judgment awarded against the Defendant Balwinder Aujla was $2,410.00 for conversions occurring on January 22, 23 and 31, 2007 and February 1, 2 and 4, 2008. The partial

summary judgment awarded against the Defendant Harwinder Aujla was $210.00 for conversions occurring on January 17, 18 and 21, 2008. Pre-judgment interest of $156.91 was also granted. The issue of costs was deferred. [2] Section 178(1)(

d) provides that an order of discharge does not release a bankrupt from any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity . [i]