Ratch v. Macleod, 2011 ABQB 820

Court of Queen ’ s Bench of Alberta Citation: Ratch v. Macleod, 2011 ABQB 820 Date: 20111223 Docket: 0812 00116 Registry: Wetaskiwin Between: Noel Ratch and Sandi Ratch Plaintiffs - and - Barry Lloyd Macleod and Janet Marie Macleod Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.A. Graesser _______________________________________________________ Nature of Application [ 1 ] The plaintiffs Noel and Sandi Ratch seek

summary judgment or an assessment of damages against the defendant Barry Lloyd Macleod, relating to the plaintiffs’ purchase of a home from Mr. Macleod and his former wife, Janet Marie Macleod. Background [ 2 ] The plaintiffs purchased a home from the Macleods in August, 2006. Their statement of claim, issued on April 8, 2008,

alleges that the Macleods breached the contract of purchase and sale in that renovations to the home were not done properly, and were not in compliance with the relevant municipal Land Use Bylaw. [ 3 ] By the time the action was commenced, Mr. and Mrs. Macleod had separated, and they were represented by different counsel. They have exchanged third party notices against the other. [ 4 ] As a result of non-attendance at an examination for discovery, on September 14, 2010, Bast J. ordered that Mr. Macleod pay the plaintiffs thrown away costs of $300.00 plus disbursements and that he pay Mrs. Macleod’s thrown away costs of $350.00 plus disbursements, all by October 15, 2010, failing which: (

a) Mr. Macleod was to be held in civil contempt; (

b) Mr. Macleod’s third party notice against Mrs. Macleod be struck; (

c) Mr. Macleod’s statement of defence be struck; and (

d) Mr. Macleod be noted in default with respect to Mrs. Macleod’s third party notice. [ 5 ] According to affidavits filed on behalf of the plaintiffs and Mrs. Macleod, Mr. Macleod failed to make the required payments by October 15, 2010 as had been ordered by Bast J. [ 6 ] Mr. Macleod was accordingly noted in default. [ 7 ] On September 13, 2011, Mr. Macleod was served with a Notice to Admit Written Opinions. The opinion attached was the opinion of an estimator with Rescom Inc., an Edmonton-based general contractor, that the cost of demolishing various parts of the home was $2,593.00 plus GST.

The entire cost of demolition and repairs was estimated to be $70,746.00 plus GST. [ 8 ] Mr. Macleod did not respond to the Notice to Admit. [ 9 ] On November 14, after the time for responding to the Notice to Admit Written Opinions had expired, the plaintiffs brought this application for

summary judgment. [ 10 ] No relief is sought at this time with respect to Mrs. Macleod. [ 11 ] Mr. Macleod appeared on the

summary judgment application on December 6, 2011. Plaintiffs ’ Position [ 12 ] The plaintiffs argue that since Mr. Macleod has been noted in default, they are entitled to bring this

summary judgment application and have damages assessed against him. [ 13 ] There is no question that the plaintiffs’ claim is in damages. There is no liquidated amount so an assessment is necessary.

[ 14 ] They also argue that the report of Mr. Quinn of Rescom is essentially conclusive on the issue of damages, as Mr. Macleod was served with a Notice to Admit Written Opinions pursuant to Rule 6.37. [ 15 ] That rule provides:

(1) A party may, by notice in Form 33, call on any other party to admit for the purposes of an application, originating application,

summary trial or trial, either or both of the following: (

a) any fact stated in the notice, including any fact in respect of a record; (

b) any written opinion included in or attached to the notice, which must state the facts on which the opinion is based.

(2) A copy of the notice must be served on each of the other parties.

(3) Each of the matters for which an admission is requested is presumed to be admitted unless, within 20 days after the date of service of the notice to admit, the party to whom the notice is addressed serves on the party requesting the admission a statement that (

a) denies the fact or the opinion, or both, for which an admission is requested and sets out in detail the reasons why the fact cannot be admitted or the opinion cannot be admitted, as the case requires, or (

b) sets out an objection on the ground that some or all of the matters for which admissions are requested are, in whole or in part, (

i) privileged, or (ii) irrelevant, improper or unnecessary. [ 16 ] Mr. Macleod failed to respond to the notice in the time permitted by the rule (20 days) and indeed has not responded since. As such, he is deemed to have accepted the opinion. [ 17 ] Mr. Klause, on behalf of the plaintiffs, very fairly pointed out that the statement of claim sought damages of $60,000.00 plus special damages of $2,431.61 for demolition costs. Mr.

Quinn’s report estimates the damages including demolition costs at $70,946.00. [ 18 ] There is no application to amend the statement of claim, so the plaintiffs are limited to an award of $62,434.61, being $60,000.00 in damages and $2,431.61 for demolition costs. [ 19 ] It is not significant that the demolition costs were described in the statement of claim as special damages, even though they have not been incurred and required an assessment. Mr.

Macleod could have had no doubt as to the extent of his jeopardy notwithstanding any technical inaccuracy in the precise description of the damages being claimed by the plaintiffs. Mr. Macleod ’s Position [ 20 ] Mr. Macleod has been representing himself since before Bast J.’s order. He acknowledges that he was aware of Bast J.’s order. He maintains that he made the required payments. However, there was no evidence submitted to that effect, and there was no application on Mr. Macleod’s part to open up the noting in default.

[ 21 ] He acknowledged that he received the Notice to Admit Written Opinions, and he did not respond. Again, there was no evidence submitted on his behalf, but he represented that he did not want to engage an expert to rebut Mr. Quinn’s report, and felt that the cost estimate likely represented a reasonable estimate of the repair costs as of the present time. [ 22 ] His concerns related to the fact that costs have increased since the time of the purchase and sale agreement, and the amount of $50,000.00 had been discussed between the parties after the closing. Essentially, without describing it as such, Mr.

Macleod suggests that the plaintiffs have not mitigated their damages because they have not made any necessary repairs and instead have waited until some years later, when construction costs have risen substantially. [ 23 ] Mr. Macleod’s second concern is his claim over against Mrs. Macleod. He represented to the court that the divorce between them had been finalized, although nothing was resolved regarding any division of responsibility for the plaintiffs’ claim. He believes that Mrs. Macleod should bear some share of any damages awarded to the plaintiffs. Analysis [ 24 ] Rule 7.2 dealing with

summary judgment provides that a party can apply for

summary judgment at any time. There is no impediment to a plaintiff seeking

summary judgment, or an assessment of damages, against one defendant, leaving claims against another defendant unresolved. Indeed, when one of two or more defendants has been noted in default, a plaintiff may well want to proceed swiftly against the party in default and litigate against the defending party later (if at all). [ 25 ] This claim goes back to 2006. The plaintiffs have yet to effect the repairs to the home. In some circumstances, parties who do not take prompt steps to repair something damaged or defective may be found to have failed to mitigate.

A lack of funds is not usually an excuse for not expending monies to mitigate damages. However, the onus is on the defendant to prove a failure to mitigate. A plaintiff does not have to prove that he or she took reasonable steps to mitigate. And a party’s efforts to mitigate will not normally be judged with the benefit of perfect hindsight. [ 26 ] Any failure to mitigate here may be answered by the fact that the amount claimed in the statement of claim is less than the amount Mr. Quinn now estimates to be required to effect the necessary repairs. Mr.

Macleod has put forward no evidence as to repair costs at any earlier time; he merely refers to discussions around $50,000.00. Such discussions are not evidence, and they do not satisfy any burden on Mr. Macleod to prove that the plaintiffs have not mitigated their damages. [ 27 ] In addition, Mr. Macleod has the benefit of the fact that repairs have not been effected, so there is no pre-judgment interest component to the claim the plaintiffs now seek to prove. [ 28 ] As to Mr. Macleod’s concerns about contribution and indemnity from Mrs. Macleod, that is a matter between him and her.

The plaintiffs are entitled to proceed against either or both defendants as they choose. On the face of the pleadings, and from a review of the purchase and sale agreement, the defendants would appear to be jointly and severally liable to the plaintiffs. [ 29 ] It is up to the defendants to pursue third party claims against each other, and not the plaintiffs’ responsibility. In any event, it appears from the court file that Mr. Macleod’s third party notice against Mrs. Macleod has been struck, as she filed an affidavit swearing that the costs ordered to be paid by Mr.

Macleod by Bast J. had not been paid by October 15, 2010. Mr. Macleod’s ability to pursue contribution and indemnity from Mrs. Macleod may have been extinguished by the striking of his third party notice. [ 30 ] In any event, that is a matter between the Macleods, and is no reason to deny the plaintiffs

summary judgment against Mr. Macleod. [ 31 ] Mr. Macleod is the author of his own misfortune here. He failed to attend discoveries when required to do so. According to

the evidence in this matter, he failed to pay court-ordered costs to the plaintiffs, resulting in his statement of defence being struck. Despite his submission that payment was in fact made, he put no evidence of that forward, and has taken no steps to open up the noting in default, or address the consequences of Bast J.’s order. And he neglected to respond to the Notice to Admit Written Opinions. He has not put himself in a position where he is entitled to any relaxation of the consequences of his non-compliance with the rules of court.

Result [ 32 ] The plaintiffs have proven their damages in the amount of $70,946.00 plus G.S.T. However, because their statement of claim seeks only $60,000.00 in damages for repair costs plus $2,434.61 for demolition costs, they are limited to those amounts. [ 33 ] They are entitled to judgment against Mr. Macleod in the amount of $62,434.61. They are entitled to costs, taxed on column 2, including the cost of obtaining Mr. Quinn’s expert report. [ 34 ] This decision is not intended to affect any rights Mr. Macleod may have for contribution and indemnity from Mrs.

Macleod, to the extent that any such rights exist and may still be pursued. Heard on the 06 th day of December, 2011. Dated at the City of Wetaskiwin, Alberta this 23 rd day of December, 2011. R.A. Graesser J.C.Q.B.A. Appearances: Michael D. Klause McDonald Street Law Office for the Plaintiffs Barry Lloyd Macleod Appeared on his own behalf for the Defendants