Rudy Hetu Logging Ltd. v. Greyback Logging Ltd., 2012 ABQB 15

Court of Queen ’ s Bench of Alberta Citation: Rudy Hetu Logging Ltd. v. Greyback Logging Ltd., 2012 ABQB 15 Date: 20120110 Docket: 0503 10371 Registry: Edmonton Between: Rudy Hetu Logging Ltd. Appellant/Plaintiff - and - Greyback Logging Ltd. Respondent/Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.A.

Graesser _______________________________________________________ Nature of Application [ 1 ] Rudy Hetu Logging Ltd. applies for an order directing that its appeal from the decision of Ingram P.C.J. dated April 12, 2005 be by way of a trial de novo . The decision followed a small claims trial on March 17, 2005 at which both parties were represented by counsel. Ingram P.C.J. reserved decision and issued written reasons.

The Appellant seeks a trial de novo on the basis that the initial trial turned on the credibility of the parties, and new information has been found which impacts on the credibility of Michael Soukup, the officer of the Defendant Greyback Logging Ltd. [ 2 ] The trial was a joint trial of two small claims brought by the Appellant. One dealt with the rental or purchase of a piece of equipment called a delimber. The other claim involved the rental of a log loader.

[ 3 ] At the trial, Rudy Hetu and Joanne Hetu testified on behalf of the Plaintiff; Mr. Soukup testified on behalf of the Defendant. Statutory Provisions [ 4 ] Under s. 51 of the Provincial Court Act , R.S.A. 2000, Ch. P-20 , “an appeal is to be heard as an appeal on the record unless, on the application of a party, the Court of Queen’s Bench orders the appeal to be heard as a trial de novo .”. [ 5 ] As I noted in Rezources Inc. v. Gift Lake Development Ltd ., 2008 ABQB 254 , the Provincial Court Act gives no guidance as to the basis for the Court of Queen’s Bench to make such an order.

In that case, I concluded that trials de novo should be ordered only in rare circumstances, having regard to the degree of deference owed to the Provincial Court Judge who has presided over the trial and seen and heard the witnesses. As well, cost consequences are significant, and Provincial Court trials should not be viewed as a “trial run” (at para. 34). [ 6 ] The onus is on the plaintiff here to satisfy me that there are good and sufficient reasons to order a trial de novo . The trial in Provincial Court must be demonstrated to be unsatisfactory in some material aspect, which may have affected the outcome.

Where new evidence is the basis for the application, the fresh evidence rule should at a minimum be considered, following Gill v. Sandhu , 1999 ABQB 209 . Fresh Evidence [ 7 ] The fresh evidence rule is set out in Gill v. Sandhu at para. 11 : In this case, the reason that I am asked to do so is that the Defendant says he has new evidence. Kerans, in his book Standards of Review Employed by Appellate Courts, Juriliber 1994, says at page 206 that: The fresh evidence rule is not, strictly speaking, a matter of review.

But most reviewing courts have the power not only to make a fresh assessment of the evidence before the first tribunal but also to hear new evidence. Nevertheless, and in keeping with a strong sense of the proper role of reviewing tribunals, the courts have placed severe limits on the exercise of these powers. In general, fresh evidence is not heard unless it meets these tests: 1. It could not, with the exercise of due diligence, have been produced at trial. 2. It must be relevant. 3. It must be capable of belief. 4.

If believed, it must be said of it that it could reasonably have affected the result of the first hearing if it had then been heard, an assessment that takes into consideration the other evidence at that hearing. [ 8 ] Wilson J. noted at paragraph 12 that the standard of diligence should not be set too high, having regard to the

summary and less formal nature of small claims proceedings, which generally proceed without discovery of documents or parties (at para. 12).

Nature of Dispute [ 9 ] The dispute between the parties relates to two pieces of equipment owned by the Appellant. The Appellant claims that the Defendant agreed to purchase a Halla delimber from it on a rent-to-own basis with payments of $5,000.00 per month, on an “as-is” basis. The purchase price was $125,000.00, which was the amount owed by the Appellant to G.E. Capital. The Defendant was to submit its financial statements to G.E. Capital for their approval. The Appellant’s payment to G.E. Capital on account of the delimber was $5,769.87.

After the Defendant refused to complete the purchase of the delimber, Mr. Hetu testified that the Appellant had sold it at a loss, for $80,000.00 or $85,000.00. Mrs. Hetu testified that the sale price had been $80,000.00. The Defendant denies agreeing to purchase the delimber and testified that it agreed to rent it at $5,000.00 per month. All rent was paid, and the final month’s rent was to be set off against some repair costs incurred by the Defendant to which the Appellant had agreed. [ 10 ] One of the issues between the parties was when the purchase or rental agreement had taken place. Mr.

Hetu had testified the discussions took place in late November or early December, 2002 and the Defendant had possession of the delimber from that time on. Mr. Soukup had testified that the discussions took place at the end of December, 2002 or early January, 2003, and that he had not come into possession of the delimber until early January, 2003. Another issue was the cost of repairs. Mr. Hetu testified that the delimber was purchased “as-is”; Mr. Soukup testified that Mr. Hetu had agreed that a month’s rent could be offset on account of the repair costs. Mr.

Hetu had refused to reimburse the Defendant the $5,750.31 in repair costs, so the Defendant had counter-claimed for that amount in the delimber action. [ 11 ] The Appellant also claimed that the Defendant had agreed to rent its log loader for a month, at $5,000.00 per month, and that the Defendant had not paid anything. The Appellant also claimed for the cost of repairs to the log loader, and for transportation of it. Mr.

Soukup testified that no rent had been agreed; that he had used the log loader for only a week; that he did not feel he was responsible for any repairs to the log loader; and there had been a discussion about the rent being $3,500.00, but no specific agreement had been reached. According to Mr. Soukup, the log loader had moved by the Appellant to a site in Busby, Alberta and was used by his brother, Dan Soukup at that site. Decision [ 12 ] Ingram P.C.J. noted that all of the agreements and dealings between the parties were oral. He ruled that there was no purchase agreement.

He held that the Defendant had agreed to rent the delimber on a monthly basis at $5,000.00 per month. The Defendant had paid $5,000.00 in January, 2003, $5,350.00 in early March, $5,700.00 in late March, and $5,350.00 in April. Ingram P.C.J. dismissed the Appellant’s claim on the delimber, finding that it had been fully paid the rent owed. [ 13 ] He held that there had been no agreement as to the amount of rent on the log loader, and found that rent on a quantum meruit basis was equal to the amount of the repairs effected by the Defendant on the delimber.

He accepted Mike Soukup’s evidence relating to the log loader being delivered by the Appellant to a different site for a different customer’s use. He set off the delimber repair costs against the log loader claim, with the result that the Appellant recovered nothing. Nature of Fresh Evidence Here [ 14 ] The Appellant applied for this relief, relying on the affidavit of Rudy Hetu dated February 5, 2006 in support. Mr.

Hetu deposed that the Defendant had failed to produce all relevant documents before the trial, and had it complied with that requirement, “the weight of evidence would have favoured the Appellant”. [ 15 ] The documents referred to by Mr. Hetu are: 1. A truck log from G. Carlson Trucking for October, 2002 (showing delivery of the delimber to “Burn” on October 15, 2002); 2. Rudy Hetu Logging cell phone logs for December, 2002 (showing calls with the Defendant);

3. G. Carlson Trucking log for November, 2002 (showing delivery of the delimber to the Defendant); 4. Finning International Inc. bill of lading to Al Swanson Trucking dated December 9, 2002 showing Greyback Logging Ltd. as “consignee” of a Caterpillar delimber (described by the Appellant as a “repair bill”); 5. Mills Machine & Welding Inc. invoice dated December 8, 2002 to Greyback Logging for repairs to the delimber; 6. Statement of Theo Goethals of Mills Machine dated May 24, 2005, with respect to the work done on the delimber in December, 2002.; 7. G.E.

Capital loan documentation with Appellant dated April 30, 2002 evidencing monthly loan payments of $5,769.87; 8. E-mails between Mrs. Hetu and G.E. Capital dated March 11, 2005 relating to communications between Mike Soukup and G.E. Capital concerning the delimber (in which Mrs. Hetu refers to Mike Soukup agreeing to purchase the delimber “as soon as he was able to get the machine appraised”); 9.

Bailiff’s report dated March 8, 2003 relating to delimber and conversation with Mike Soukup concerning discussions with the “creditor”; 10. 4 Bills of lading from Double B Logging dated March 22, to April 7, 2003 moving log loader from Gray Back Logging to Double B Logging at various locations; 11. Statement of Margaret and Bruce Blain dated May 23, 2005 that Grey Back Logging was at their property in May and June, 2003 to log it; and 12. Invoices to Greyback Logging Ltd. dated September 19, 2003 and October 8, 2003 from Rudy Hetu Logging Ltd. relating to repairs on log loader and transportation of it. [ 16 ] Mr.

Hetu also deposes in his affidavit that he met with Dan Soukup in September 2005, and after Dan Soukup had reviewed the trial evidence, he called Mike Soukup and told him that he had lied under oath at the trial, and that Dan Soukup would come to a new trial and contradict his brother. [ 17 ] He also deposes that he spoke to Al Swanson on May 8, 2005 and February 5, 2006 and Mr. Swanson had told him that Mike Soukup had discussed the purchase of the delimber with him in mid-December, 2002 and that he represented that “he was buying the delimber and required an appraisal”. [ 18 ] The Appellant also claims that Mr.

Soukup contradicted his testimony at the trial when he was cross-examined on April 4, 2007. Because of the somewhat unusual procedure involved in attempting to obtain a trial de novo , the Appellant filed a notice of motion and supporting affidavit containing the “new” documents and evidence. Mr. Soukup swore an affidavit in response to the application, and was cross-examined on it. At his cross-examination, when shown the various documents referred to in Mr. Hetu’s affidavit, he testified that he was in error at trial when he stated that he did not discuss the delimber with Mr.

Hetu until late December, 2002 or early January, 2003. He acknowledged that he must have had some discussions by mid-December, 2002 at the latest. [ 19 ] Mr. Soukup also acknowledged that he should have testified that he didn’t know when the delimber was delivered to Whitecourt, as opposed to saying it had been delivered in early January. [ 20 ] The trial judge had accepted Mr.

Soukup’s trial evidence on these points. [ 21 ] The Appellant argues that as the trial turned on the trial judge’s assessment of the credibility of the witnesses, a trial de novo should be ordered because of the credibility issues shown by the new documents and the cross-examination of Mr. Soukup after the trial. [ 22 ] Mr. Soukup responded to Mr. Hetu’s affidavit deposing that he was not using the delimber when it was transported by G.

Carlson; the Finning documentation referred to a Caterpillar delimber he owned, and not the Hossa delimber owned by the Appellant; the welding invoice was addressed to him because Al Swanson, who had possession of the delimber at the time, asked Mr. Soukup to have some welding done on it because he had a welder coming to the job site to do some welding on some of his own equipment; and he denied admitting to his brother Dan that he had misrepresented matters relating to the log loader.

Analysis New Documentation [ 23 ] The Appellant argues that the new documentation referred to in Mr. Hetu’s affidavit of February 5, 2006 is relevant and would likely have had the trial judge assess Mr. Soukup’s credibility unfavourably and reject Mr. Soukup’s evidence. [ 24 ] The difficulty with this argument is that the only documentation that may have been in the Defendant’s possession as at the time of trial relating to the delimber was the Mills Machine invoice relating to the welding of lugs on the delimber on December 8, 2002 and the Double B Logging bill of lading dated March 28, 2003.

The Mills documentation shows that the Defendant had something to do with the delimber on December 8, 2002, but it does nothing to confirm or corroborate any rental or purchase arrangements, or the date of any dealings between the Appellant and the Defendant. And Mr. Soukup has an explanation for the invoice. The Double B bill of lading has nothing to do with the nature of the arrangements between the parties. [ 25 ] As for the log loader, the Double B bills of lading show that the log loader was moved for “Gray back” but do not contradict Mr.

Soukup’s evidence as to the Defendant’s use of the equipment and its subsequent use by his brother. [ 26 ] I do not see that this documentation would have had any impact on Ingram P.C.J.’s credibility assessments or fact findings. The rest of the documentation either post-dates the trial, or is documentation obtained by the Appellant after the trial from third parties. There is no indication that it could not have been obtained using due diligence before the trial. Evidence of Dan Soukup [ 27 ] This evidence, if believed, might impact on Mr. Soukup’s credibility.

It does not, by itself, suggest that the Defendant had the log loader in his possession longer than he admitted to. [ 28 ] There are three problems with this evidence. Firstly, it is hearsay and presumptively inadmissible. Secondly, there is no indication that this evidence could not have been adduced at trial. Thirdly, it is disputed by Mr. Soukup.

It is determinative of nothing relating to the rental rate for the log loader, or the duration the Defendant used the log loader for. [ 29 ] I do not see that the Appellant has demonstrated on a balance of probabilities that the trial outcome would have been different had Dan Soukup testified at the trial and contradicted Mr. Soukup. Mr. Soukup was not shaken in his previous testimony that he had only used the log loader for about a week.

There is no indication that Dan Soukup could not have testified at the trial, had the Appellant sought him out. [ 30 ] The possibility that Dan Soukup would contradict his brother at a trial de novo on the basis of information learned after the trial is of itself not a basis to direct a trial de novo . Post-trial Cross-examination of Mr. Soukup [ 31 ] Mr. Soukup acknowledged that he didn’t have the dates right at trial as to when he and Mr. Hetu first discussed the delimber

(mid December instead of late December or early January), and that he should have answered the question at trial, “when was the delimber delivered to you in Whitecourt?” with “I don’t know” rather than the answer he gave, “in January”. [ 32 ] Mr. Soukup was not shaken in his testimony as to the nature and timing of the discussions concerning possible purchase of the delimber, or the duration of the Defendant’s use of the delimber. [ 33 ] This is not a situation where there is fresh evidence or different evidence on a key point.

The so-called fresh evidence relates to matters which might have an effect on a key witness’s credibility. The evidence is not directly relevant or material to the key issues to be determined: what were the discussions concerning purchase of the delimber, and how long did the Defendant use it? [ 34 ] To consider whether this evidence - contradictory testimony some two years after the trial - might have an impact on a new trial, the circumstances of the new testimony must be examined. Mr. Soukup was being cross-examined more than four years after the events, and more than two years after the trial.

The inconsistencies were on the narrative, and not on key issues. [ 35 ] It would be surprising, and perhaps suspicious, if Mr. Soukup’s later testimony had been word-for-word the same as his trial testimony. Counsel are frequently able to find inconsistencies in testimony from honest, credible witnesses. Inconsistencies are only one of many factors that go into a credibility assessment. [ 36 ] I do not see the inconsistencies here as being so great as to lead to the conclusion that the result would likely have been different at the trial had Mr.

Soukup testified there in a manner consistent with his April, 2007 cross-examination testimony. [ 37 ] The Appellant really seeks to have a trial de novo so it can cross-examine Mr. Soukup on his trial testimony and the April 2007 testimony.

That would have the effect of treating the post-Provincial Court trial cross-examination akin to some form of pre-trial questioning or discovery. [ 38 ] It is possible that, with the benefit of the Provincial Court trial transcript and the April, 2007 transcript a judge might come to different credibility findings than did Ingram P.C.J. [ 39 ] However, the test is not one of “possibilities”. The fresh evidence rule requires that the new evidence, if believed, “could reasonably have affected the result of the first hearing if it had then been heard” ( Sandhu at para. 11 ).

The Appellant has not satisfied me here that the fresh evidence meets that standard. [ 40 ] I recognize that the fresh evidence rule is not necessarily determinative in itself of the ordering of a trial de novo . Queen’s Bench has a wide discretion in that regard. But in my view, that discretion needs to be exercised sparingly and only in situations where the trial below has been objectively unsatisfactory in some respect that likely affected the outcome. [ 41 ] The onus of establishing those circumstances is on the party seeking the trial de novo. [ 42 ] As noted by Veit J. in Toralta Construction

(1988) Ltd. v. Hankewich Homes Ltd. , 1992 CarswellAlta 108 (Q.B.) credibility concerns will rarely result in appellate interference with the decisions of trial judges on such issues. Redwater River Ranch Ltd. v. de Weerd , 2004 ABQB 553 and Burkhart v. Popoff , 1983 CarswellSask 186 (Q.B.) , both cited by the Defendant, are to a similar effect. Other Issues

[ 43 ] Even if I were inclined on the Appellant’s submissions to order a trial de novo , the record below appears unsatisfactory as to the existence of a binding contract for the purchase and sale of the delimber. Accepting Mr. And Mrs. Hetu’s evidence entirely suggests that the purchase of the delimber by the Defendant was conditional on the Defendant’s financial statements being accepted by G.E. Capital. The Defendant never submitted its financial statements, so it is mere speculation as to whether it would have been an acceptable purchaser.

Secondly, there was evidence that the Defendant wanted to have the delimber appraised before completing any purchase. [ 44 ] Those factors suggest at best a conditional contract, where the conditions were not met, and may not have been capable of being met. Result [ 45 ] The Appellant’s application for the direction of a trial de novo is dismissed.

It has not met the burden on it of establishing that the trial result would likely have been different taking into account the evidence the Appellant would like to lead on the trial de novo . [ 46 ] Most of the information the Appellant wants to put forward was available at the time of the trial. All of the new information relates to the credibility of Mr. Soukup, and as I have held, none of it is on a key point. [ 47 ] In Janzen v.

Alberta (Minister of Infrastructure) , 2002 ABCA 278 , the Court of Appeal stated at para.16 “there should not be a new trial to let the Appellant reshape her case and find different evidence”. While that case involved an appeal from the Land Compensation Board on an expropriation, the comment is equally applicable to applications for trials de novo on appeals from Provincial Court on small claims matters. [ 48 ] If the Appellant wishes to proceed with an appeal in this matter, it must be “on the record”. [ 49 ] The Defendant is entitled to costs of these proceedings, on Column 1.

Heard on the 25 th day of November, 2011. Dated at the City of Edmonton, Alberta this 9 th day of January, 2012. R.A. Graesser J.C.Q.B.A. Appearances:

Ara L. McKee Stillman LLP for the Appellant/Plaintiff Erin Burton Duncan & Craig LLP for the Respondent/Defendant