581257 Alberta Ltd. Plaintiff - v. -, 2016 ABQB 66

Court of Queen ’ s Bench of Alberta Citation: 581257 Alberta Ltd v Aujla, 2016 ABQB 66 Date: 20160216 Docket: 0803 04677 Registry: Edmonton Between: 581257 Alberta Ltd. Plaintiff - and - Balwinder Aujla and Harwinder Aujla Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Don J. Manderscheid _______________________________________________________ I Introduction [ 1 ] 581257 Alberta Ltd. (581257) operated Crown Liquor store at which Balwinder and Harwinder Aujla, husband and wife, were employed.

A store surveillance camera trained on the cash desk revealed both defendants stealing money. 581257 sues Balwinder and Harwinder Aujla for monies stolen by them. II Procedural History [ 2 ] In earlier proceedings, the Aujlas acknowledged some stealing on discrete dates in December 2007 and January 2008, resulting in a

summary judgment in favour of 581257 in the amounts of $2,556 against Balwinder and $221 against Harwinder. [ 3 ] A subsequent trial of this matter on quantum for monies stolen in the remaining periods resulted in decisions filed on December 14, 2011: 581257 Alberta Ltd v Aujla , 2011 ABQB 39 and 2011 ABQB 539 . During the trial, 581257 relied on evidence from accountants who analyzed the Aujlas’ tax returns and found they must have stolen more than $300,000 over the seven-year period during which one or both of them was employed by 581257. The plaintiff reduced the amount it claimed by $116,000, in light of

evidence from the Aujlas’ son that some of the money in their bank accounts was his. 581257 was ultimately awarded $8,124 against Balwinder and $6,434 against Harwinder. The trial judge did not accept 581257’s valuation of its losses, noting that 581257 relied on the Aujlas’ records rather than its own records to quantify its losses. The judge placed the onus on 581257 to prove its losses because it failed to plead fraud and because the Aujlas did not breach a fiduciary duty to 581257. [ 4 ] 581257 appealed.

The Court of Appeal allowed 581257’s appeal and ordered a new trial: 581257 Alberta Ltd v Aujla , 2013 ABCA 16 , 542 AR 123, leave denied [2013] SCCA No 107. The Court held that it was not necessary for 581257 to use the word “fraud” in its statement of claim, as the pleadings made it clear that 581257 was alleging the Aujlas defrauded it. The Court found that the trial judge erred in finding the Aujlas were not in a fiduciary position with respect to 581257; they had been entrusted with the keys to the cash register and worked without supervision.

The Court opined that these errors may have impacted the judge’s assessment of whether or not 581257 took reasonable steps to determine its losses. [ 5 ] The following is the decision following re-trial of the matter before this Court. III Evidence A Agreed Statement of Facts [ 6 ] The parties entered an Agreed Statement of Facts. Harwinder and Balwinder Aujla were both employees of 581257 and worked as retail clerks at the Crown Liquor North store. Balwinder was employed between January 5, 2001 and February 4, 2008. Harwinder was employed between February 2, 2004 and January 21, 2008.

After the conversion of monies by each of them was discovered, both defendants were terminated on February 4, 2008. [ 7 ] Nirmal Longowal is director of 581257. His wife, Jaswinder, borrowed $200,000 from the Aujlas. A cheque in that amount dated August 21, 2007 was negotiated on August 27, 2007. The loan was repaid in full by Ms. Longowal on January 28, 2008. The interest on the loan, $7,500 was repaid in full by Ms. Longowal on February 6, 2008. [ 8 ] 581257 acknowledges satisfaction in full of the amount owing pursuant to Graesser J.’s

summary judgment dated October 21, 2009, reflecting repayment in full by the defendants for conversion of funds on the following dates: Balwinder – January 22, 23, 24, 31, 2007, February 1, 2, 4, 2008; and Harwinder – January 17, 18, 21, 2008. The remaining dates and amounts are a matter of dispute between the parties. B Plaintiff’s Witness [ 9 ] Pritam Longowal testified. He is the son of Nirmal Longowal, the director of 581257 which owned Crown Liquor at the relevant times. Pritam Longowal produced payroll records relating to the Aujlas’ work at Crown Liquor.

Balwinder Aujla began working as a cashier for Crown Liquor in 2001. Her husband, Harwinder, began working as a cashier in 2004. At times they would work alone. They had keys to the store and cash register, and access codes for the cash register. They were both fired effective February 5, 2008. [ 10 ] The video surveillance in evidence is mostly from late 2007 and early 2008. However, there is some footage from June 2007. Pritam Longowol testified that the video system crashed in late 2007, but 581257 was able to salvage some of the earlier video footage. The video footage and the point of sale transactions

summary establish ongoing theft by the Aujlas. They stole money by failing to scan items, scanning only some items, and scanning cheaper items and pocketing the pertinent amounts. They tried to avoid detection by angling the screen away from the customer and strategically stacking boxes. [ 11 ] Based on the store records, Pritam Longowal determined the average amount stolen by each defendant per day. No other employees were caught on the video committing similar acts.

There was no single general ledger for Crown Liquor North. 581257 had more than one liquor store, with joint inventory, and it did not scan in each piece of inventory for each store. C Defendants’ Witnesses [ 12 ] The Aujlas admitted having taken money from Crown Liquor from August or September 2007 up until they were dismissed in February 2008. The defendants testified that Jaswinder Longowal, the wife of the principal of 581257, borrowed money from the defendants for a matter unrelated to the liquor store.

The defendants pointed to loans from the Aujla family to the Longowal family: a $10,000 loan, a $55,000 loan, and a $200,000 loan in 2007 that came about as a result of a line of credit that the Aujlas opened because of the pressure from Jaswinder Longowal. She was a realtor, and was trying to get the Aujlas to buy an empty lot in Sherwood Park. They opened a line of credit and then Ms. Longowal asked to borrow $200,000. The Aujlas say they were supposed to receive interest and some insurance premium money from Mrs.

Longowal, which never came, and so they started to take money from the cash register because they wanted to cover their interest in relation to the $200,000 loan. They say the thefts started in August 2007 to correspond with this loan. The Longowals repaid the $200,000 loan in January 2008. [ 13 ] The defendants adduced read-ins from Mr. Longowal. He stated that the Aujlas gave him a $10,000 interest free loan in 2006 to purchase inventory, and that Ms. Aujla had told him she had a line of credit that he could use.

There was a $55,000 loan in 2005 when the Longowals were short of cash for the purchase of a shopping centre. This was paid back within a short time. There was a third loan of $200,000 on August 21, 2007 between Jaswinder and Balwinder. Mr. Longowal said that he was not aware of any discussions regarding interest or insurance premiums. [ 14 ] Harwinder Aujla testified that he did not have access to the till during the first month he was employed in 2004, but did have access thereafter. He testified that he did not keep records of what he stole and cannot now create records. He identified amounts that he

and his wife circled on bank statements and deposit slips which they believed were monies they had taken from the liquor store. Harwinder stated that he was sometimes paid by Crown Liquor in cash. He testified that he has three children, and from 2001 to 2008 they would give $350 to $500 per month to help their parents. The Aujlas rented a room in 2003 or 2004 for $350 to $500 and to another person in 2008 or 2009. Money was received in relation to trips by others to India: $5,000 in 2006 and $10,000 in 2005.

He agreed that although he took the position that his sister had given him $10,000 at one point, he never attempted to track where that deposit would be shown in his accounts. He had never taken steps to identify deposits relating to RESPs. He testified that the cash deposits he made in 2007 were intermingled Crown Liquor till takings, rent from their children, and cash received from Crown Liquor. He said his wife always took care of the money management.

He bought lottery tickets with some of the stolen money and perhaps paid for gas. [ 15 ] Harwinder testified that the Longowals paid back the $10,000 and $55,000 loans without interest. He had not identified in his banking records the deposits of repayments of the $10,000 and $55,000 loans. He testified in relation to the $200,000 loan that he and his wife ultimately bought a lot in Sherwood Park through Jaswinder using that line of credit. They have tried to sell the property a couple of times.

He was in India when his wife purchased the lot. [ 16 ] Harwinder testified that he started taking money out of the till in September 2007 after the $200,000 loan to Ms. Longowal on their line of credit because Ms. Longowal was delaying repayment. He testified that the $200,000 loan was for Crown Liquor. He agreed that he had never stated this prior to this re-trial. He testified that Ms. Longowal was to pay him interest and insurance costs, however he never went to his bank to determine the amount payable. He said he spoke to Ms.

Longowal once about the interest in the week after the loan, and she agreed to pay, but then he thought she would not and he started taking money from the till. He also said that he made numerous inquiries of Mr. Longowal regarding interest and insurance, but agreed he had never previously said that he had made these inquiries. [ 17 ] Harwinder was challenged with statements in his earlier questioning to the effect that he did not make any demand of the Longowals before stealing money. He said at trial that perhaps he had misunderstood the question during questioning.

He agreed that he took money during every shift he worked from September 2007 to January 2008. He would turn the screen away from the customer to hide what he was doing. At the time he was stealing, he did not calculate any amounts owing to him. He was unable to explain why he was using a calculator on the video and laying it on top of cash. He figured that the amount they took prior to being fired in February 2008 would have been what was owed for interest on the $200,000 loan. In testifying, he appeared to identify till amounts retrospectively by calculating interest on the loan after the fact.

He agreed that the monies deposited to their account on September 25, 2007 bear no relation to interest and insurance on the loan. [ 18 ] Harwinder testified that Ms. Longowal would sometimes come to the store and take cash out of the till. He also testified that Nirmal Longowal told him in August 2007 when they borrowed the $200,000 that Harwinder did not need to ring all sales through the cash register. He said (transcript, January 16, 2014, 413/14-17): A That was after, when I give them money $200,000. That time, he came once; we were -- he was sitting on the chair.

He told me, Harwinder Harry -- they call me Harry too or Kaloo (phonetic). He said, Sometime you can skip that scanner. I said, Why? He said, We have little bit bad situation right now. So that’s why then I skip. [ 19 ] Harwinder testified that he never knew that his wife was also stealing money, however he later agreed that he knew she was taking money. [ 20 ] The defendants’ son, Gurjit Aujla, testified. He lived at home from 2001 to 2008.

He testified that the family policy was that the adult children would contribute when they could to the household expenses by giving their parents cash, buying groceries, gas, etc. There were no regular amounts expected. There was no set time or amount. They were never large amounts. It was most likely less than $200 most of the time, like paying for grocery bills, gas bills, etc. $200 was the largest amount he ever gave. Other months, there was nothing, or he might have given $50 or $100. He said that it was mostly him who deposited amounts into the joint account he shared with his mother.

In May 2001, he was in Calgary. He could not really recall the deposits to that account, other than paycheques. His mother would have made deposits, but he could not identify them. [ 21 ] Balwinder Aujla testified that she initially worked at more than one of the Crown Liquor stores, but after 2005 she worked exclusively on the north side. She said that in 2005, Jas Longowal told her not to put some sales through the cash register: Q And did she give you any reason why you shouldn’t put sales through the cash registers?

A Actually, she borrowed money from us, $55,000, and after that, from our line of credit, and when she gave the money, she said, if we put just the cash money in the till without ringing, that would help her. Q And do you explore what that meant or why she said that? A No, I didn’t ask any questions. [ 22 ] Balwinder said she was paid by Crown Liquor in cheque, cash and liquor; cash especially at the beginning. She testified that cash payments from Crown Liquor never exceeded $1,000. [ 23 ] Balwinder did not know anything about the $10,000 loan to Ms. Longowal; it was Harwinder who made that loan.

Balwinder testified regarding the $55,000 loan by bank draft dated August 22, 2005. It was paid back later in 2005. The Longowols paid interest on that loan, but on a separate cheque. She also testified regarding a cheque dated August 21, 2007 for $200,000 signed by Harwinder. Ms. Longowal, while Harwinder was in India, told Balwinder that she had an acreage in Sherwood Park that she could sell to them, and they would make money on it. She helped them get a line of credit, but then wanted a loan to use for something else. Ms. Longowal said she needed money for something. In November, they had to pay for the lot.

However, Ms. Longowol said they did not have to pay for the lot yet. They had to wait to pay for the lot until Ms. Longowol paid back the $200,000 in January 2008. Balwinder said that Ms. Longowal was to pay interest and insurance on the loan. At the end of January 2008, Ms. Longowal gave her cheques for the $200,000 and a blank cheque for interest, but then told her the next day not to use the blank cheque because they did not have the money for interest. There

was a February 6, 2008 deposit in her account identified as “Jas Longowol” in the amount of $7,500. This was a few days after the confrontation at the store. [ 24 ] Balwinder testified that she started stealing from Crown Liquor because she was not being paid interest and insurance in relation to the $200,000 loan. When asked why she started stealing money right after making the $200,000 loan and before interest had accrued, Balwinder said that she thought at that time somebody came to the store looking for the Longowols. He was looking for money from the Longowols.

They owed him money, so she was worried about how the Longowols were going to pay her back. [ 25 ] Harwinder was asked about her angling of the screen at the till. She stated that the customers could see the screen, but she previously testified that they could not see the screen. She sometimes used boxes to obscure the camera view. She found out that her husband was taking money in December 2007. She said she did not tell her husband what she was doing, but in the previous trial she testified that she did tell him.

She testified that Harwinder always took care of payments at the bank. [ 26 ] Balwinder testified that she and her husband tried to circle on their bank statements amounts they stole. The circled amounts only went up to November 16, 2007. She could not remember what had happened to the money they stole after that date. She said she never personally deposited any stolen monies into any bank accounts.

She gave a number of explanations for various deposits identified on her bank account statements, but could not really recall any with certainty. [ 27 ] Balwinder testified that her children, when they were working either a summer job or a full-time job, paid for their room and board either by giving cash, buying groceries or paying bills. She expected them to pay $200 to $500. Gurjit paid $100 to $150, but more when he was making more: $300 to $500. However, he was at school for a couple of years and in Calgary for some time. He was paying less than the other two children.

Balwinder’s daughter started paying in the fall of 2005: $300 to $400. With this money, they would pay bills, or keep money at home to pay for groceries and gas. She kept no records of what her children paid her over the years. In the previous trial, she testified that her children paid her $500 or $1,000 per month or $200 if they were not working, and that she had a book in which she had written the amounts.

She could not remember how much of the money her children gave to her would be spent on groceries. [ 28 ] Balwinder testified that they had two tenants over the years, one for eight months and one for two years. They paid $500 or $550 cash rent. This was either deposited or used for groceries and gas. She never produced any rental agreements or bank records relating to these tenants. [ 29 ] Balwinder testified that she was involved with her brother in buying her father’s, Piara Singh Sohi’s, property, and she managed her father’s basement rental when he was out of the country.

She testified that her father gave her around $30,000 between 2001 and 2008. She loaned money to her brother twice; once for $28,000 and she could not recall the other amount. She received money from her uncle five or six times, $100 or $500. A few times, people travelling to India would give her $5,000 or $6,000 and would get rupees from her family in India. [ 30 ] Balwinder’s father, Piara Singh Sohi, testified after a significant adjournment in order to facilitate his attendance. He produced volumes of documents which had never previously been produced throughout the various proceedings.

These included documents with respect to four bank accounts of which the plaintiff had never previously been advised, including one in his daughter and son’s name which was set up in order to facilitate the purchase of his residence. He produced a four page

summary of cheques that he gave to Balwinder between 2003 and 2008. He made notations on his account documents in 2008 or 2009 regarding the source of monies. He testified that he goes to India each year and gives Balwinder two cheques: one for Christmas gifts, and another for emergency repairs on his residence. He stated that she cannot deposit monies to his three accounts. He testified he had given her $23,000 between 2001 and 2008. He said $30,000 would be for gifts or other stuff, but he had no records of these amounts. He testified regarding his renter who paid $500 in cash.

Balwinder would do the banking for him in this regard. He did not declare the rent on his income tax return. D Expert Evidence [ 31 ] David Prasad, a Certified General Accountant, testified for 581257. He prepared the financial statements for Crown Liquor. He explained that during the relevant years, there was no perpetual inventory system, but rather a physical count of inventory was done at the end of each fiscal year. [ 32 ] Given the difficulties in establishing Crown Liquor’s loss based on its records, Mr.

Prasad provided three different types of calculations: (a) “unidentified deposits” in the defendants’ banking records; (

b) deposits compared to legitimate income as reported on the Aujlas’ tax returns; and (

c) the average amount of money stolen per shift by each defendant as established in the evidence of observed incidents, multiplied by the number of shifts from the inception of the defendants’ employment. [ 33 ] With respect to the first approach, Mr. Prasad went through all of the Aujlas’ bank statements between 2001 and 2008 and subtracted legitimate income from Canada Post, Crown Liquor, WCB, other identified deposits, and the son’s employment income in relation to the joint account, and identified unexplained deposits of around $334,000. In the second approach, Mr.

Prasad compared the Aujlas’ Canada Revenue tax returns with bank statements. They had average combined annual incomes of around $60,000 during the relevant years. The unexplained income from 2001 to 2008 amounted to $346,000. Finally, Mr. Prasad calculated the number of shifts worked between 2001 and 2008 times the average daily amounts observed stolen from December 2007 to early February 2008, amounting to around $230,000. [ 34 ] On cross-examination, Mr.

Prasad conceded that there could be some double counting in relation to excess deposits given the dearth of available information, and that certain deposits may have been improperly included in excess unidentified deposits. He indicated that further information from the Aujlas would have helped to determine the nature of some of the deposits. He also acknowledged that there were four months during 2005 during which neither defendant worked at the store. [ 35 ] The defendants’ expert, Ron Galagan, was qualified as an expert in forensic accounting. The defendants objected to Mr.

Prasad’s evidence on the basis that he is not qualified as a forensic accountant. He did not review deposit slips to determine which

deposits were cash, and which were cheques. Further, the defendants take the position that excess unexplained deposits in and ofthemselves do not establish theft. Mr. Galagan testified regarding procedures that he thought should have been followed. He testified that581257 must have had useful records, because Mr. Longowal became suspicious in reviewing records that one store was not doing aswell as the other. [36] Justin Thoman was called by 581257 as an expert forensic accountant. He commented on the methodologies used by DavidPrasad and the critique of Mr.

Prasad’s approaches by the defendants’ expert, Ronald Galagan. Mr. Thoman testified that Mr. Prasadapplied accepted and applicable forensic accounting standards. All of his analyses are indirect ways of tracing or establishing illicitfunds. Mr. Thoman testified that at a certain point, the accuracy of the analysis will be affected by the degree to which the individuals inquestion provide information.

He opined that opportunity is usually key in these types of fraud situations, rather than time inemployment, and the unidentified excess deposit analysis would be an indication as to whether the fraud had begun earlier based onwhether there were earlier excess deposits. He opined that the fact that the Revenue Canada analysis results are close to the unidentifiedexcess deposit analysis results constitutes some corroboration. He explained why 591257’s records in this case would not have beenhelpful in establishing the amount stolen. He said that Mr.

Galagan failed to consider the specific circumstances of this matter, and thathe recommended many procedures which would be impossible, ineffective, or prohibitively costly due to the circumstances and methodof analysis. He noted that the estimates would be understated if the Aujlas’ spent some of the cash they stole instead of depositing it. IV Issues [37] The Court must determine: 1. During what period of time did the conversion occur? 2. What is the quantum of compensatory damages? 3. Is the plaintiff entitled to punitive damages? 4. Is the plaintiff entitled to solicitor client costs?

V Positions of the Parties A Plaintiff [38] The plaintiff submits that the onus clearly lies on the defendants, as they were found to have committed fraud on theiremployer, to whom they owed a fiduciary duty. The plaintiff submits that the defendants’ evidence is entirely incredible and unreliable.The manner in which the monies were wrongfully converted effectively precluded the plaintiff from establishing the amount taken. Theplaintiff has made reasonable efforts to determine the amount lost, which shifts the evidentiary burden to the defendants to disprove theamount and the cause of the loss.

The Court need not be exacting in requiring proof of precise loss: Huff v Price, (1990), (BC CA), 51 BCLR (2d) 282, 76 DLR (4th) 138, leave denied [1991] SCCA No 33, [1991] 1 SCR vii. [39] The plaintiff alleges theft in the amount of $230,804 to $346,717, depending on the method of calculation used. The plaintiffhas used three approaches to quantify the loss: (a) “unidentified deposits”; (

b) deposits vs. income approach; and (

c) the average takenper shift by each defendant, multiplied by the number of shifts from the inception of their employment. Using the latter approach, theplaintiff calculates $169,194 for Balwinder, and $61,610 for Harwinder for a total of $230,804.

The plaintiff submits that it is reasonableto assume that the defendants stole, over the time they worked for Crown Liquor, an average amount per shift equivalent to that takenwhen they were caught stealing on video. [40] The plaintiff submits that the defendants’ evidence was unsubstantiated and entirely unreliable on rental income, internationaltransfer of money between Canada and India, money contributed by the son and other children, money from Mr. Sohi, and RESPmonies.

The defendants have produced no evidence whatsoever to establish quanta other than those established by the plaintiff’sevidence. [41] The plaintiff notes that it is only in exceptional cases that fraud attracts punitive damages: Performance Industries Ltd vSylvan Lake Golf & Tennis Club, 2002 SCC 19, [2002] 1 SCR 678. The plaintiff argues that punitive damages in the amount of $50,000are nevertheless warranted in this case. The defendants repeatedly breached the trust given them by the employer.

They denied theirliability, opposed production of relevant documents, failed to produce relevant documents notwithstanding a court order, admitted theirliability only begrudgingly and on a piecemeal basis, spun an outrageous story of their motivation for thievery, and produced bogus andincredulous explanations for sources of deposits to their accounts. The defendants have deliberately concealed their theft, and madequantum difficult to assess. Compensatory damages in this case are nothing more than an educated guess.

The defendants should not beseen to profit in any way from their conduct. [42] Finally, the plaintiff claims solicitor client costs and submits that further cost issues may arise and could be addressed at a

hearing following this decision. B Defendants [43] The defendants submit that they are liable in the total amount of $13,355. They argue that there is no shift of onus withrespect to the dates upon which monies were taken. The June 2007 videos are of poor quality and do not definitively establish that thedefendants were taking money at that time. [44] With respect to quantum, the defendants submit that the plaintiff’s efforts to calculate quantum fall short of reasonableness asit did not do an analysis of its records, it did not obtain deposit slips, and it included accounts in which the son and Mr.

Sohi had interests.The defendants rely on Mr. Galagan’s critique of the plaintiff’s experts, and submit that Mr. Prasad is neither independent nor impartial.

VI Analysis A Witness Credibility and Reliability [45] Nine witnesses testified during this trial: Pritam Longowal, Balwinder Aujla, Harwinder Aujla, Gurjit Aujla, Piara SinghSohi, David Prasad, Justin Thoman, Ron Galagan, and Kamaljit Gill. [46] Rather than recount all of the evidence given by each of these witnesses at trial in assessing their credibility, I will insteadprovide my impressions of each of them generally – providing specific details as appropriate. [47] Evaluating witness credibility requires the consideration of many factors.

Estey J. noted some of the things that are taken intoaccount in the credibility assessment in White v The King, (SCC), [1947] SCR 268 at 272: …It is a matter in which so many human characteristics, both the strong and the weak, must be taken into consideration. The generalintegrity and intelligence of the witness, his powers to observe, his capacity to remember and his accuracy in statement are important. Itis also important to determine whether he is honestly endeavouring to tell the truth, whether he is sincere and frank or whether he isbiased, reticent and evasive.

All these questions and others may be answered from the observation of the witness’ general conduct anddemeanour in determining the question of credibility. 1 Pritam Longowal [48] I find the testimony of Pritam Longowal to be both credible and reliable.

He was forthcoming in his testimony and presented aclear account of what he knew of the operation of the store, and of his involvement in the compilation of 700 viewing hours of cameratape relative to the alleged theft of monies from the plaintiff, during June of 2007 and from December 2007 to February 4, 2008. 2 Balwinder Aujla and Harwinder Aujla [49] I find both Balwinder Aujla and Harwinder Aujla to be lacking in credibility and their respective testimonies to be completelyunreliable. I do accept their evidence where it coincides with independent evidence.

However, their respective testimonies are otherwisefraught with inconsistencies, contradictions, and unsupported statements. Each one had significant internal inconsistencies in his or hertestimony during this trial, as well as contradictions with earlier testimony and answers to questioning. They both obfuscated whenpresented with inconsistent earlier testimony and statements. Simply put, their stories have changed and meandered over the course of theproceedings to the point that it is impossible to discern the truth.

They were unable to testify with any certainty regarding bankingrecords and various alleged sources of income. Some of their testimony was simply outlandish and illogical, for example that they did notknow the other was stealing from the same store in exactly the same manner for the same ostensible reason. 3 Gurjit Aujla [50] I find that Mr. Gurjit Aujla was both credible and for the most part reliable.

He testified as to the facts that he knew regardinghis parents’ finances and banking arrangements, and in particular, as to any amounts which had been deposited to an account by either ofhis parents, and which could be directly traced to him. However, he could give no specific accounting of amounts he paid. 4 Kamaljit Gill [51] Kamaljit Gill, the daughter of Mr. Sohi, testified in regards to her knowledge of her father’s handwriting on certain notes thatallegedly had been prepared by her father.

I found her to be a credible witness, and her testimony to be reliable. 5 Piara Singh Sohi [52] I find that Piara Singh Sohi was a credible witness but that his testimony has its shortcomings in regards to reliability. Mr.Sohi’s testimony was supposed to provide the missing corroborative information regarding how certain monies had come to be depositedinto the defendants’ bank accounts. In this respect, his testimony fell far short of providing such corroboration.

At times he merelyreferenced certain sums of money being paid to his daughter, Balwinder, but without any record or proof as to payment or as tofrequency of payment. In other instances, he appeared to have lapses of memory in regards to his specific involvement in the defendants’finances, especially with respect to his daughter and rental property owned by him and managed by her. In these instances, he failed toprovide reliable evidence that would confirm the facts surrounding the manner in which funds would be exchanged between him and hisdaughter, Balwinder, relative to the management of this property.

6 David Prasad, Justin Thoman and Ron Galagan [ 53 ] All three of these witnesses were q ualified by the Court as experts in their respective capacities. Without exception, all three provided their testimony from an objective perspective and to the best of their ability. The defendants argued that Mr. Prasad’s evidence should be given less weight as he had business ties with the plaintiff. However, because of the nature of his evidence, it was not really subject to manipulation through bias. He simply performed calculations and identified deposits which were not apparently related to legitimate income sources.

Some of those deposits were subsequently explained by the defendants. However, in my view this does not reflect some sort of bias on the part of Mr. Prasad. [ 54 ] I find nothing that would undermine the credibility or reliability of any of the experts’ respective testimonies. B Duration of the Theft [ 55 ] The defendants say they justified the theft in their own minds as some recompense for loaning money to the Longowals. I find that the theft was not related to the $200,000 loan. The defendants had lent Ms.

Longowal money in the past, yet they testified that they had not stolen money prior to being caught on video in August 2007. The previous two loans had been repaid without incident. The defendants’ stories as to why this loan was different simply do not ring true. [ 56 ] Further, there is no evidence that the defendants were tracking amounts stolen, or undertaking any process of reconciliation with respect to any interest or insurance in relation to the loan. It is impossible to reconcile the attempted concealment of the theft with any sincere belief that what they were doing was legal or morally justified.

The defendants were clearly taking the money surreptitiously. Their evidence that they were told not to scan amounts because Crown Liquor was having difficulties makes no sense, and in any event it would not justify the lengths to which the defendants went to conceal their activity. As well, they were pooling sums of cash on their dresser.

Their evidence that they did not know the other was stealing from Crown Liquor at the same time and in exactly the same fashion simply defies belief. [ 57 ] There is surveillance video from June 2007 showing behaviour by Balwinder which is identical to that caught in December 2007 and January 2008. In particular, she strategically places boxes for no apparent reason except to partially block the camera view of the till area. At times she appears to open the till in the absence of customers, and to place paper bills to the side of the till. The screen is angled so that the customers do not see it.

This activity in June 2007 predates the $200,000 loan. As well, there is video evidence of continued theft by Balwinder after Ms. Longowol paid back the principal at the end of January 2008. [ 58 ] I also find that there is no legitimate explanation for certain monies deposited to the defendants’ bank accounts from 2001 to 2008, even considering all of the defendants’ assertions regarding additional income from various sources.

In other words, even if the Court were to accept all of the defendants’ evidence regarding unidentified deposits, that evidence comes nowhere near to explaining the excess amounts over the entire 2001 to 2008 period. [ 59 ] I find that the defendants have raised the issue of the loan because it roughly coincided with the timeframe during which they were clearly caught stealing. [ 60 ] While it is true that the loss was not detected until late 2007, in my view this was as a result of the manner of theft, the shared inventory between the Crown Liquor stores, and 581257’s manner of monitoring inventory. [ 61 ] I find on a balance of probabilities that Balwinder was in fact stealing before the loan was made and continued after it was repaid.

I accept Harwinder’s evidence that he did not have access to the till during his first month of work in February 2004 while he was being trained. This is logical. It is reasonable to infer that Balwinder was similarly trained for some period of time at the beginning of her employment, and that she would not have had exclusive control of the till during that first month. [ 62 ] As for Harwinder, there is video footage of him on only two dates in June 2007.

While Pritam Longowol pointed to various behaviours on the part of Harwinder in the video, and testified regarding point of sale evidence, the June 2007 footage is very grainy. While some of his behaviours may well be suspicious, the video footage from these dates is not compelling. As well, it is not continuous, and therefore I am not satisfied that it permits the Court to draw conclusions based on timing of purchases.

Further, while I have found that there were excess monies deposited to the defendants’ accounts over a period including the 2004 to 2007 timeframe during which Harwinder worked at Crown Liquor, this could be explained solely by Balwinder’s ongoing theft during that period.

While I remain unconvinced that Harwinder’s theft related to the $200,000 loan, I find that the evidence before the Court only establishes that he might have been stealing prior to August 2007, and is insufficient to establish such theft on a balance of probabilities. [ 63 ] I conclude that the evidence establishes on a balance of probabilities that Balwinder commenced stealing money from the plaintiff around the time she started working, unsupervised, for Crown Liquor. Based upon Harwinder's testimony, that would be immediately after her first month of employment.

With respect to Harwinder, I conclude that the evidence establishes on a balance of probabilities that Harwinder stole money starting in August 2007. C Compensatory Damages [ 64 ] The amount stolen by the defendants is difficult to estimate. The Court must do its best based on the evidence. [ 65 ] The Court in Huff v Price held that in assessing damages where fraud or breach of fiduciary duty is established, a court need not be exacting in requiring proof of the precise loss in circumstances where all reasonable efforts have been made by the plaintiff to establish the amount of the loss and the cause of the loss.

Rather, the burden of leading the evidence to disprove the amount of the loss and the cause of the loss is on the defendant. [ 66 ] I accept that 581257 is unable to establish the loss based on its records. As mentioned, the stores had shared inventory and

there was no perpetual inventory system. The inventory was only counted once a year. Further, the evidence established that the defendants stole through the practices of not scanning, partial scanning or scanning cheaper items. This was intended and did conceal the theft of monies.

As noted by the Court of Appeal in its decision in this matter: 56 Where the manner in which monies have been wrongfully converted compromises or effectively precludes a plaintiff's ability to establish the amount taken through the route of reconciling the plaintiff's inventory with funds actually received, a defendant cannot then assert that the plaintiff's inability to establish the amount of its loss in this way means that the plaintiff has failed to take reasonable steps to establish its loss.

That would be tantamount to permitting the converter to take advantage of his or her wrongdoing. [ 67 ] I also accept that the three approaches taken by Mr. Prasad to calculate the loss based on the defendants’ records are reasonable. Based on those methods, the estimated loss is approximately $230,000 to $350,000.

As well, the defendants testified that they spent some of the stolen money on groceries or gas without depositing it to their bank accounts, which would support a finding that the bank accounts only partially reflect the total amount stolen. [ 68 ] The evidentiary burden shifts to the defendants to disprove the amount of the loss and the cause of the loss. [ 69 ] Based on the evidence, I conclude that the Aujlas have no idea how much they stole from Crown Liquor. [ 70 ] The Aujlas testified that they were sometimes paid cash by Crown Liquor but never more than $1,000.

They provided no independent evidence to corroborate this. They also gave evidence that the Longowals would sometimes come into the store and remove cash from the till. However, this would have no effect on the calculations based on the Aujlas’ banking records or the average amount stolen per shift. [ 71 ] The Aujlas did present some evidence of monies coming from other sources. For example, Balwinder’s father testified that he could identify $23,000 which he gave to his daughter. He also testified that he gave her other sums, but did not identify amounts, dates or documentation in support.

The defendants gave evidence that their children contributed $200 to $500 per month for room and board. However, there was also evidence that they contributed significantly less, and that the contributions were sometimes in the form of groceries, gas or payment of bills. The defendants’ own testimony regarding certain other amounts identified in their banking records was often vague and unsupported by any useful documentation. Nevertheless, Mr.

Prasad did acknowledge that his calculations based on the bank account statements could include some double counting and legitimate income due to the lack of records and information. There was some evidence that Gurjit and Mr. Sohi had some interest in portions of certain accounts. [ 72 ] I find that there is uncertainty regarding some of the deposits identified in the banking records.

At the same time, the defendants have admitted that not all of the money stolen was deposited to their bank accounts. [ 73 ] In my view, it is preferable and appropriate in this case for the Court to accept the estimate of the amount stolen based on the third approach employed by Mr. Prasad, being the average taken per shift by each defendant multiplied by the number of shifts in question. I note that a similar method was accepted in Canada Safeway Ltd v Brown , 2007 BCSC 1619 .

Further, in this case the bank deposit evidence, even permitting that certain disputed unidentified deposits are from legitimate sources, lends support to a finding that the third approach reflects a fair estimate of the amount stolen by the defendants. [ 74 ] Mr. Prasad’s data based on the third approach is broken down by month. Given my findings regarding the length of time during which each defendant stole, the total based on this approach is $177,050.

Of that amount, $167,810 is attributable to Balwinder, and $9,240 is attributable to Harwinder. [ 75 ] The plaintiff received $2,777 in satisfaction of the judgment of Graesser J. dated October 21, 2009. This was repayment for conversion on the following dates: $2,556 for Balwinder for January 22, 23, 24, 31, 2007, February 1, 2, 4, 2008; and $221 for Harwinder for January 17, 18, 21, 2008. [ 76 ] Subtracting those amounts already paid, the remaining compensatory damages are $165,254 attributable to Balwinder and $9,019 to Harwinder, for a total of $174,273.

D Punitive Damages [ 77 ] As noted in Performance Industries , torts such as deceit or fraud already incorporate a type of misconduct that offends the court’s sense of decency and representing a marked departure from ordinary standards of decent behaviour. The question is whether more punishment in addition to compensatory damages is required in a given case to promote retribution, deterrence or denunciation. [ 78 ] I am satisfied that the plaintiff will have obtained full compensation as a result of this judgment. The defendants will be required to disgorge their profit.

In my view, a punitive damages award would serve no further rational purpose and I decline to grant such an award. E Solicitor Client Costs [ 79 ] The defendants’ theft, concealment, and very poor personal bookkeeping necessitated the litigation. This trial was protracted for a number of reasons. Topolniski J. addressed a number of the allegations regarding misconduct during the previous trial and declined to award solicitor client costs. I have considered all of the proceedings since the commencement of the litigation.

I find that there has not been misconduct during the lawsuit that would support solicitor client costs, nor is such an order warranted on the basis of pre-litigation conduct. VII Conclusion

[ 80 ] The plaintiff has successfully established its claim against Balwinder in the amount of $165,254, and against Harwinder in the amount of $9,019, for total compensatory damages of $174,273. [ 81 ] Counsel advises that after the previous trial, defendants’ counsel forwarded funds to counsel for the plaintiff. Counsel will be required to determine the amount which remains owing pursuant to this judgment. VIII Costs [ 82 ] If the parties are unable to agree with respect to costs, they may arrange to speak to those further issues within 60 days of the date of this decision.

Heard on the 13 th to 17 th days of January, 2014, the 20 th to 22 nd days of May, 2014, the 11 th and 15 th days of August, 2014, and the 5 th day of October, 2015. Dated at the City of Edmonton, Alberta this 16 th day of February, 2016. Don J. Manderscheid J.C.Q.B.A. Appearances: S.A. Beaver Greg J. Lintz Tarrabain Raponi & Company for the Plaintiff Brian G. Doherty Doherty Schuldhaus LLP for the Defendants