Strynadka v. XTC Airport Engineering Ltd., 2013 ABQB 307

Court of Queen ’ s Bench of Alberta Citation: Strynadka v. XTC Airport Engineering Ltd., 2013 ABQB 307 Date: 20130517 Docket: 0303 23941 Registry: Edmonton Between: George N. Strynadka and XTC Engineering Ltd. Plaintiffs/Defendant by Counterclaim - and - XTC Airport Engineering Ltd., Stanley P. Kolomyjec and Paul Ouwerkerk Defendants/Plaintiffs by Counterclaim _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R. Paul Belzil _______________________________________________________ The Claim and Counterclaims [ 1 ] George N.

Strynadka and XTC Engineering Ltd. (XTC) brought an action against XTC Airport Engineering Ltd. (XTC Airport), Stanley P. Kolomyjec and Paul Ouwerkerk for alleged breaches of fiduciary duties in connection with airport upgrading projects in Dawson Creek and Fort Nelson, British Columbia. [ 2 ] Damages are claimed for loss of services from Kolomyjec and Ouwerkerk and as well XTC claims a loss of business opportunities. In addition, there is a claim for punitive damages.

[ 3 ] Kolomyjec has advanced a Counterclaim against Strynadka for recovery of money expended by him to rectify errors committed by Strynadka respecting the Fort Chipewyan airport development project. Ouwerkerk filed a Counterclaim as well but it was not pursued at trial. Evidence of George Strynadka [ 4 ] The Plaintiff Strynadka has a degree in civil engineering and following graduation sought employment with Transport Canada in the field of airport design.

He retired in 1997. [ 5 ] At the time of his retirement, Transport Canada was in the process of devolving airport management and ownership to the private sector. [ 6 ] Strynadka perceived that there was a business opportunity for individuals, like himself, who had airport design experience to market their knowledge to private airport authorities. He decided to focus on Alberta and British Columbia only. [ 7 ] Strynadka knew the Defendant, Kolomyjec, who had retired from Transport Canada one to two years previously.

Kolomyjec had been involved in project management. [ 8 ] They decided to form XTC Engineering Ltd. (XTC) which was incorporated in April 1997 with each being a 50% shareholder and director. [ 9 ] Later, Paul Ouwerkerk was retained as an electrical project manager although he never was a shareholder or director of XTC.

Profits were to be divided one third each. [ 10 ] Although Transport Canada decided to devolve airport ownership to the private sector, it was recognized that small airports would require government funding to upgrade and maintain runways as well as electrical systems, including landing lights. [ 11 ] A programme was established whereby Transport Canada allowed small airports to apply for funding.

This programme was entitled Airport Capital Assistance Programme known by the acronym ACAP. [ 12 ] Under the terms of ACAP proposals had to be submitted by October for funding for the following fiscal year commencing April 1 st . [ 13 ] Strynadka, as a civil engineer, dealt with runway projects, Kolomyjec would be involved in project management whereas Ouwerkerk was an electrical technician although he was not a professional engineer. [ 14 ] The plan was to approach airport managers and prepare ACAP proposals.

If accepted, XTC would then do the work and be paid for designing and supervising the work required. [ 15 ] Between 1999 and 2001 airport managers were approached in Fort Chipewyan, Slave Lake and Fort McMurray, Alberta as well as Dawson Creek and Fort Nelson, British Columbia. [ 16 ] Site visits were undertaken and XTC actually did work at Fort Chipewyan, Slave Lake and Fort McMurray.

[ 17 ] Strynadka acknowledged that he never prepared site condition reports necessary to complete ACAP applications for Dawson Creek or Fort Nelson for the years 1999, 2000 and 2001, notwithstanding that he agreed to do so. [ 18 ] He also acknowledged that payments were made for work done in Alberta and that he received his proper share of the same. [ 19 ] On October 16, 2001, Strynadka received a telephone call from Kolomyjec requesting that they meet at a restaurant and he agreed to attend. [ 20 ] At the meeting, Kolomyjec told Strynadka that he no longer wanted to partner with him and was resigning as a shareholder and director of XTC.

No reason was provided. Strynadka left the meeting not knowing why Kolomyjec was terminating their business relationship although he acknowledged that prior to the meeting communications between the partners had virtually ceased. [ 21 ] In November 2002, the partners met to distribute the remaining corporate assets and close the company ’ s bank account.

XTC was formally dissolved in January 2003. [ 22 ] Strynadka acknowledged that he received one-third of the company ’ s closing bank balance and was provided with a cheque in the amount of $8,173.10. [ 23 ] In cross examination, Strynadka acknowledged that he was not legally authorized to stamp engineering drawings in Alberta or British Columbia although he could have registered to do so. [ 24 ] He acknowledged that after October 16, 2001 he made no efforts to contact clients and pursue business opportunities. [ 25 ] He admitted that he was unaware that a safety audit at the Fort Chipewyan airport determined that runway markings he surveyed were in error and had to be rectified.

Evidence of Stanley Kolomyjec [ 26 ] Kolomyjec was a long time employee of Transport Canada and retired in 1995. His area of expertise was airport project management including preparation of ACAP applications. He is a professional engineer registered in both Alberta and BC. [ 27 ] In 1999 Kolomyjec met with Strynadka a number of times with a view to setting up a business to assist small airport operators in submitting ACAP applications and in doing the work if the ACAP application was successful.

The plan was to split profits after payment of expenses. [ 28 ] Kolomyjec testified that Strynadka promised that he would obtain a professional engineering registration in both Alberta and BC as he only had to write an ethics examination to qualify. [ 29 ] Early on in the arrangement, it became apparent that the assistance of an electrical technician would be required. [ 30 ] Ouwerkerk was retained on a part time basis. Ouwerkerk, who is not a professional engineer, was not a shareholder or director of XTC but was retained to assist with electrical projects as he is qualified in that field.

[ 31 ] Kolomyjec had extensive experience with ACAP applications while employed with Transport Canada. He testified that all ACAP applications had to be submitted by October 1 st with approval to be given the following Spring. [ 32 ] He emphasized that ACAP applications are subject to strict protocols and that there is never any guarantee that an application will be approved as there is intense competition from airports for the available funding.

There are 21 steps involved in completing an ACAP application and subsequent improvement project if funding is approved. [ 33 ] In general terms, the first steps in the process involve an on site review, preparation of a complete condition report followed by preparation of detailed cost estimates. [ 34 ] All proposals are reviewed at the regional level and are only forwarded to Ottawa if all technical requirements are met. [ 35 ] If approval is granted in Ottawa, the project is tendered for construction.

Construction deficiencies are subject to a one year warranty period. [ 36 ] XTC focussed on small airports in Alberta and BC and focussed on runway overlay and electrical upgrades, the latter of which would be handled by Ouwerkerk. [ 37 ] Strynadka was supposed to handle the bulk of the runway overlay work as he had a background in civil engineering.

Kolomyjec was to be the main contact person with clients. [ 38 ] In the spring of 1999 Kolomyjec approached airport authorities in Dawson Creek and Fort Nelson, BC and both expressed interest in pursuing ACAP funding. [ 39 ] Kolomyjec testified that he, Strynadka and Ouwerkerk flew to both airports and then he and Strynadka did a preliminary survey of the runways whereas Ouwerkerk focussed on electrical equipment. [ 40 ] He testified that it was Strynadka ’ s responsibility to prepare site condition reports for both locations. [ 41 ] According to Kolomyjec, Strynadka did only a small part of the field work necessary for the completion of step one but did nothing further.

He also testified that he requested numerous times from Strynadka that he complete his work at both sites but he never did. Kolomyjec stated that a site condition report can be completed in approximately one week. [ 42 ] ACAP applications were not submitted for either location by October 1, 1999, October 1, 2000 or October 1, 2001. [ 43 ] On October 16, 2001 Kolomyjec met with Strynadka at a restaurant and told him that their business relationship was over and that he would be resigning as a shareholder and director of XTC.

He denied ever telling Strynadka not to prepare site conditioning reports and indeed, stated that he wanted these prepared so that the ACAP applications could proceed. Accordingly to Kolomyjec, Strynadka said very little at this meeting. [ 44 ] On November 20, 2001 Kolomyjec told Strynadka that he would be forming a new company. [ 45 ] In November 2002 he met with Strynadka to distribute the remaining corporate assets and close the company ’ s bank account.

Strynadka never submitted expense accounts although requested to do so numerous times. [ 46 ] A significant issue arose respecting the Fort Chipewyan overlay project.

Runway markings were found to be significantly in error and had to be redone. [ 47 ] The airport owner supplied the paint and Kolomyjec agreed to be responsible for the labour which he estimated in the amount of $50,000. [ 48 ] Ultimately, XTC Airport completed ACAP applications for both Dawson Creek and Fort Nelson. [ 49 ] The Dawson Creek overlay ACAP was approved on April 25, 2003 with work being completed by October 27, 2003. [ 50 ] The Dawson Creek electrical ACAP was approved on March 5, 2002 and completed on April 28, 2004. [ 51 ] The Fort Nelson overlay ACAP was initially approved on June 9, 2003 but had to be resubmitted because it was over budget.

The revised ACAP was approved on June 28, 2004 with the project being completed on October 22, 2004. [ 52 ] The Fort Nelson electrical ACAP was approved on August 23, 2004 with work being completed by June 15, 2005. [ 53 ] Kolomyjec testified that Strynadka was only involved in doing some of the work at step one but had no further involvement in the Dawson Creek or Fort Nelson projects. The Evidence of Paul Ouwerkerk [ 54 ] Ouwerkerk was trained as an electrical technician and was employed by Transport Canada where he came to know both Strynadka and Kolomyjec.

He is not an engineer. [ 55 ] Strynadka and Kolomyjec asked Ouwerkerk if he was prepared to work with XTC as an electrical project manager and he agreed. At no time did he become a shareholder or director of the company. The agreement was that profits were to be divided one third each. [ 56 ] Ouwerkerk confirmed the testimony of Strynadka and Kolomyjec that Strynadka was to be responsible for civil engineering duties, Kolomyjec would be the project manager and deal with clients whereas he would be responsible for electrical work. [ 57 ] He attended at Dawson Creek and Fort Nelson for the initial site visit.

He testified that it was Strynadka ’ s responsibility to prepare site condition reports for both locations but he failed to do so despite numerous requests from Kolomyjec. [ 58 ] Ouwerkerk was aware that the Dawson Creek and Fort Nelson airport authorities were becoming increasingly upset over the delay in proceeding with site condition reports and he was becoming increasingly frustrated because the ACAP applications could not proceed until the site condition reports were prepared. [ 59 ] Ouwerkerk testified that Strynadka did virtually nothing respecting the Fort Nelson electrical upgrade project.

[ 60 ] Significant redesign was required at Fort Nelson because Strynadka ’ s initial survey work was defective. Only 25%-30% of the original work at that site could be utilized. [ 61 ] Ouwerkerk did not attend the October 16, 2001 meeting and was not invited to do so. [ 62 ] He was emphatic that he had no contact with Kolomyjec prior to that meeting respecting Kolomyjec ’ s intentions.

He only became aware of Kolomyjec ’ s intention to incorporated XTC Airport three or four weeks later. [ 63 ] After October 16 th five more meetings were held between himself, Strynadka and Kolomyjec. [ 64 ] It became apparent to Ouwerkerk that by October 16, 2001 the business relationship had completely broken down. [ 65 ] He was emphatic that at no time after October 16 th did Strynadka suggest to him that XTC would carry on with the Dawson Creek or Fort Nelson airport projects. Strynadka never requested from him that he complete electrical work at either location.

What Was The Relationship Between Strynadka, Kolomyjec and Ouwerkerk? [ 66 ] As noted, Strynadka and Kolomyjec were shareholders and directors of XTC whereas Ouwerkerk never became a shareholder or a director. [ 67 ] It is uncontroverted that Strynadka, as a civil engineer, would be responsible for the civil engineering components of projects, Kolomyjec would look after project management and client issues whereas Ouwerkerk would be responsible for electrical work. [ 68 ] No written agreement was ever entered into but it is common ground among the parties that revenues, after expenses, were to be divided one third each.

As such, they were profit sharing partners. [ 69 ] I accept the argument of the Plaintiffs that the parties were fiduciaries and owed each other fiduciary duties to use their best efforts to complete ACAP applications and complete development project if funding was approved. [ 70 ] There is no evidence that any of the parties agreed to any term for the agreement thus it was terminable at the option of any party at any time. There is no evidence that there was ever any discussion or agreement about non-competition agreements between these three individuals.

When Did The Agreement Terminate And Why? [ 71 ] It is common ground between the parties that all of the airport development projects were dependent on ACAP funding. There is a complete absence of evidence that any of them had any other source of funding available. [ 72 ] It is also common ground that ACAP funding is subject to strict application protocols including an annual deadline of October 1 st with expected funding the following Spring if the application was approved. [ 73 ] As noted, the evidence before me is that airport project development involves 21 steps.

[ 74 ] Step 1 involves a site condition report and it is uncontroverted that the site condition reports fall squarely within the field of civil engineering and thus were the responsibility of Strynadka. [ 75 ] In his testimony, Strynadka acknowledged visiting both Dawson Creek and Fort Nelson in the Spring of 1999 at which time field data was obtained which would form the basis of site condition reports. [ 76 ] He also admitted that he never prepared site condition reports for either location by October 1, 1999, October 1, 2000 or October 1, 2001.

He offered no explanation for this failure other than he was too busy. [ 77 ] Kolomyjec and Ouwerkerk testified, and I accept, that they requested from Strynadka on a number of occasions that he complete both site condition reports.

I also accept Kolomyjec ’ s testimony that he was being pressured by the airport owner clients who were becoming increasingly frustrated by the delay. [ 78 ] The unexplained and inexplicable delay on Strynadka ’ s part had a profound impact on both Dawson Creek and Fort Nelson airport development projects because it resulted in both ACAP applications being entirely and unnecessarily delayed. [ 79 ] It is uncontroverted that by October 16, 2001 neither ACAP application had been completed, meaning that the next earliest ACAP application deadline would be October 1, 2002. [ 80 ] Moreover, Strynadka failed to register as a professional engineer in BC.

He acknowledged that he was eligible to become a registered professional engineer in both Alberta and BC and only had to write an ethics examination to qualify. He failed to do so, again without explanation.

This is significant because he was not authorized to stamp engineering drawings in BC where both airports under consideration are located. [ 81 ] In my view, Strynadka ’ s failure to complete site condition reports for both Dawson Creek and Fort Nelson airports coupled with his failure to obtain professional engineering status in BC, were fundamental breaches of his fiduciary obligations owed to both Kolomyjec and Ouwerkerk. [ 82 ] His failure to complete site condition reports made it impossible for them to be paid for the work that they had undertaken at both sites. [ 83 ] In the result, I find as a fact that the business relationship between Strynadka, Kolomyjec and Ouwerkerk terminated on October 16, 2001 and that it was Strynadka ’ s conduct which caused the termination of the agreement.

Could XTC And Strynadka Have Carried On The Dawson Creek And Fort Nelson Airport Development Projects? [ 84 ] It is uncontroverted that on October 16, 2001 Kolomyjec advised Strynadka that he was resigning as a director and shareholder of XTC, leaving Strynadka as the sole shareholder and director of the company. [ 85 ] As the sole controlling shareholder and director of the company, Strynadka was free to pursue whatever business opportunities he wanted to through XTC or himself personally. [ 86 ] Specifically, XTC was free to continue the airport development projects at Dawson Creek and Fort Nelson.

There is not a shred of evidence that Strynadka made any effort to do so.

[87] He did not telephone the airport managers to advise that XTC was willing to carry on with the ACAP proposals. He did notcontact Ouwerkerk to inquire if he would continue on doing electrical work at the projects nor did he contact anyone else with expertisein the electrical field. He made no effort to hire a project manager to replace Kolomyjec. [88] Tellingly, he made no effort to register as a professional engineer in BC and made no effort to complete the site conditionreports. [89] In short, he did nothing.

Moreover, there is no evidence that Strynadka did any work on either the Dawson Creek or FortNelson projects for at least two years prior to October 16, 2001. [90] Surely, if XTC argues, as it does, that but for the conduct of the Defendants it would have completed the projects, it mustlead evidence that it was ready, willing and able to do so. No such evidence was lead.

Discussion [91] The Statement of Claim is founded on allegations that the Defendants Kolomyjec and Ouwerkerk breached fiduciary dutiesowed to the Plaintiffs resulting in the loss of services from Kolomyjec and Ouwerkerk as well as a loss of business opportunities. [92] In argument, counsel for the Plaintiffs submitted that this case is analogous to the claim in Canadian Aero Service Ltd. v.O’Malley, (SCC), [1974] SCR 592 wherein the Supreme Court of Canada accepted that a breach of fiduciary duty maygive rise to a claim for lost business opportunities. [93] In Canadian Aero, the evidence established that while serving as directors or officers of the plaintiff pursued a businessopportunity for the plaintiff which they later used for their own benefit.

The court found this to be an actionable breach of fiduciary dutyresulting in an award of damages. [94] Central to the court’s reasoning in Canadian Aero, is that the plaintiff lost a business opportunity which it was activelypursuing. [95] The following passages at pages 606 and 607 are instructive: It follows that O’Malley and Zarzycki stood in a fiduciary relationship to Canaero, which in its generality betokens loyalty, good faithand avoidance of a conflict of duty and self-interest.

Descending from the generality, the fiduciary relationship goes at least this far: adirector or a senior officer like O’Malley or Zarzycki is precluded from obtaining for himself, either secretly or without the approval ofthe company (which would have to be properly manifested upon full disclosure of the facts), any property or business advantage eitherbelonging to the company or for which it has been negotiating; and especially is this so where the director or officer is a participant in thenegotiations on behalf of the company.

An examination of the case law in this Court and in the Courts of other like jurisdictions on the fiduciary duties of directors and seniorofficers shows the pervasiveness of a strict ethic in this area of the law.

In my opinion, this ethic disqualifies a director or senior officerfrom usurping for himself or diverting to another person or company with whom or with which he is associated a maturing businessopportunity which his company is actively pursuing; he is also precluded from so acting even after his resignation where the resignationmay fairly be said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, orwhere it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired.

(my emphasis added) [ 96 ] Implicit in the court ’ s reasoning is that the plaintiff was ready, willing and able to actively pursue the business opportunity. In other words, claims for breach of fiduciary duty do not proceed in an evidentiary vacuum. [ 97 ] The plaintiff must still prove that it suffered a loss of profit resulting from the misconduct of the defendants.

A profit can only be earned if the plaintiff established that it had the means to complete the business opportunity which would give rise to a profit. [ 98 ] The evidentiary record before me in no way establishes that XTC could have completed either the Dawson Creek or Fort Nelson airport projects or that Strynadka expressed any interest in doing so. [ 99 ] As noted, once Kolomyjec resigned as a shareholder and director of XTC, Strynadka was the sole shareholder and director and thus was in complete control of the company. [ 100 ] As further noted, it was Strynadka ’ s failure to complete site condition reports for both locations which halted the ACAP funding request process.

Indeed, there is no evidence that Strynadka had done any work whatsoever on either project for at least two years before October 1, 2001. [ 101 ] After October 16, 2001 Strynadka made no effort whatsoever to further the two ACAP applications. He failed to register as a professional engineer in BC where both airports are located.

He made no attempt to contact either airport authority and made no effort to complete the long overdue site condition reports. [ 102 ] He made no effort to arrange with Ouwerkerk to continue the electrical work or arrange for another qualified person to do so and made no attempt to arrange for a replacement for Kolomyjec as project manager. [ 103 ] By any objective measure, Strynadka had abandoned the Dawson Creek and Fort Nelson projects well before October 16, 2001 and there was no evidence that after that date he said or did anything to re-engage himself or XTC in either project. [ 104 ] Moreover, this is not a case wherein it can be alleged that Kolomyjec or Ouwerkerk misappropriated confidential corporate information. [ 105 ] The great irony of this case is that Kolomyjec and Ouwerkerk had been pleading with Strynadka for years to get the site conditioning reports done in order that the ACAP applications could be finalized with the hope that they would all get paid. [ 106 ] There is no evidence that anything done or not done by Kolomyjec or Ouwerkerk or both, prevented Strynadka and XTC from completing either airport development project. [ 107 ] Notably, it was Strynadka ’ s decision and his alone to allow XTC to be dissolved on January 2, 2003. [ 108 ] I believe the evidence of Kolomyjec and Ouwerkerk that prior to October 16, 2001 there were no discussions whatsoever, nor was there any agreement to somehow remove Strynadka from the profit sharing agreement. [ 109 ] In my view, the evidence clearly establishes that by October 16, 2001 Kolomyjec and Ouwerkerk had become completely exasperated with Strynadka and that it was his failure to carry out his part of the bargain, that is, complete the civil engineering components of the ACAP applications for both airports which resulted in this break down of the business relationship.

[ 110 ] His failure, which he candidly admitted on the witness stand, amounts to a fundamental breach of his fiduciary duty which he owed to Kolomyjec and Ouwerkerk. [ 111 ] In the result, the agreement was terminated on October 16, 2001. [ 112 ] I find as a fact that the breach of Strynadka ’ s fiduciary duty to Kolomyjec and Ouwerkerk justified them in pursuing the ACAP projects outside of XTC as there was no other way for them to be paid for their work. [ 113 ] It necessarily follows that I do not accept that XTC has established any loss of business opportunity claim or a loss of services claim respecting Kolomyjec or Ouwerkerk.

The principles outlined in Canadian Aero have no application to these facts.

Kolomyjec ’ s Counterclaim [ 114 ] Kolomyjec has advanced a Counterclaim against Strynadka relating to the rectification of survey errors for runway markings, which errors were committed by Strynadka at the Fort Chipewyan airport. [ 115 ] Kolomyjec testified that Strynadka did all of the civil engineering work, including runway markings at the Fort Chipewyan airport. [ 116 ] A Transport Canada safety audit determined that the runway markings were significantly in error and had to be redone. [ 117 ] The airport authorities supplied the paint and Kolomyjec agreed to pay for labour which he estimated in the amount of $50,000.

He testified and I accept, that he felt that it was the responsibility of XTC to rectify this work but that Strynadka made no effort to do so thus he undertook it personally. [ 118 ] I believe Kolomyjec ’ s testimony and find as a fact that the amount of $50,000 was expended as a result of Strynadka ’ s errors. The Counterclaim is accordingly allowed in that amount. Assessment of Damages A.

STRYNADKA ’ S EXPENSE CLAIMS [ 119 ] Strynadka is advancing a claim for expenses in the amount of $23,681.65. [ 120 ] The uncontroverted evidence before me is that it was expected that Strynadka, Kolomyjec and Ouwerkerk would submit expenses as they accumulated. [ 121 ] I accept Kolomyjec ’ s evidence that he requested from Strynadka on a number of occasions that he submit expense claims but Strynadka never did so. [ 122 ] I also accept that this topic was raised on October 16, 2001 and thereafter as there was a desire to wrap up all outstanding XTC financial issues but that Strynadka failed to submit his expense claims.

[ 123 ] In particular, they were not submitted by Strynadka at the time that the final distribution was made to him at which time he received a cheque. [ 124 ] His delay in submitting these expense claims however does not invalidate them but may impact the issue of whether or not pre-judgment interest is payable. [ 125 ] I accept that these expense claims would have been paid had they been submitted in a timely fashion, thus the expense claims are allowed in the principal amount of $23,681.65. B.

EXPENSES PAID TO XTC AIRPORT BY THIRD PARTIES [ 126 ] XTC seeks recovery of expenses in the amount of $40,195.78 paid to XTC Airport in amounts originally paid by XTC to third parties. [ 127 ] The defendants concede that these amounts are properly payable to XTC but suggest that the Counterclaim amount be set off against it. [ 128 ] Given that the Counterclaim amount of $50,000 actually exceeds the expense claim this suggestion is more than fair to the plaintiffs. [ 129 ] Accordingly, this claim is dismissed by way of set off of the Counterclaim. C.

FEE CLAIMS FOR DESIGN AND CONSTRUCTION SUPERVISION FOR THE FORT NELSON AIRPORT ELECTRICAL PROJECT [ 130 ] On November 18, 2002 XTC Airport invoiced design fees for this project in the amount of $31,300. [ 131 ] The defendants concede that this invoice covered work done before October 16, 2001 and thus Strynadka is entitled to 1/3 of this amount being $10,422.90 which I have rounded to $10,425. D. FORT NELSON RUNWAY OVERLAY PROJECT [ 132 ] On May 1, 2003 XTC Airport invoiced $120,000 for this project.

The vast majority of the work covered by this invoice relates to work performed after October 16, 2001. [ 133 ] The defendants submitted that work done up to Oct. 16, 2001 had a value of only $7,500. [ 134 ] I accept their submission and accordingly Strynadka is entitled to recovery of 1/3 of this amount being $2,497.50 which I have rounded to $2,500.

E. DAWSON CREEK RUNWAY OVERLAY PROJECT [ 135 ] On May 1, 2003 XTC Airport invoiced the amount of $138,800 for design work for the Dawson Creek Runway Overlay project. [ 136 ] The Defendants concede that Strynadka did do some design work on this project but argued that because his work was faulty all of it had to be redone and thus Strynadka is not entitled to any payment for this project. [ 137 ] I agree with the position of the defendants and award Strynadka no damages for the Dawson Creek Overlay Project. F.

DAWSON CREEK ELECTRICAL PROJECT [ 138 ] On March 21, 2002 XTC Airport invoiced the amount of $135,324.30 for electrical work at the Dawson Creek Airport. [ 139 ] The defendants concede that Strynadka ’ s work on this project amounted to 25-30% of the invoiced amount. [ 140 ] 30% of this amount is $40,597.29 and Strynadka is entitled to 1/3 of this amount being $13,518 which I have rounded to $13,500. G. PUNITIVE DAMAGES [ 141 ] In Witten v.

Pilot Insurance Co. 2002 SCC 18 , the Supreme Court of Canada provided a detailed review of the law of punitive damages. [ 142 ] At para 36, the Court confirmed that punitive damages are awarded against a defendant in exceptional cases for malicious, oppressive and high handed conduct which represents a marked departure from ordinary standards of decent behaviour. [ 143 ] Counsel for the plaintiffs submitted that an award of $25,000 would be appropriate in this case.

I do not agree. [ 144 ] There is no evidence that the defendants acted in a malicious, oppressive or high handed manner. [ 145 ] As noted above, it was Strynadka ’ s persistent failure to complete his civil engineering work which precipitated action by the defendants. [ 146 ] Had Strynadka completed his work the ACAP applications for both Dawson Creek and Fort Nelson would have been submitted years earlier. [ 147 ] Accordingly, the claim for punitive damages is dismissed.

Summary and Conclusion

[ 148 ] In

summary the Plaintiffs are entitled to recover the following amounts: 1. Strynadka ’ s expense claims $23,681.65 2. Expenses paid to XTC Airports by third parties nil 3. Strynadka ’ s share of fee claims for the Fort Nelson electrical project 10,425.00 4. Strynadka ’ s share of Fort Nelson overlay fees 2,500.00 5. Strynadka ’ s share of Dawson Creek overlay project nil 6. Strynadka ’ s share of the Dawson Creek electrical project 13,500.00 7. Punitive damages nil Total $50,106.65 [ 149 ] By agreement of the parties, the issues of pre-judgment interest and costs are deferred for further argument.

Heard on May 6 - 8, 2013. Dated at the City of Edmonton, Alberta this 17 th day of May, 2013. R. Paul Belzil J.C.Q.B.A. Appearances: David B. Yesdresyski Johnson Yesdresyski for the Plaintiffs/Defendant by Counterclaim James G. Thorlakson Miller Thomson LLP for the Defendants/Plaintiffs by Counterclaim