SRG Takamiya Co Ltd v Sprung Instant Structures Ltd, 2017 ABQB 668

Court of Queen’s Bench of Alberta Citation: SRG Takamiya Co Ltd v Sprung Instant Structures Ltd, 2017 ABQB 668 Date: 20171103 Docket: 1001 11697 Registry: Calgary Between: SRG Takamiya Co., Ltd. Plaintiff - and - Sprung Instant Structures Ltd. Defendant _______________________________________________________ Memorandum of Decision of A. R. Robertson, Q.C., Master in Chambers _______________________________________________________ Introduction [1] On February 22, 2017, I issued my reasons dealing with a

summary judgment application brought by the plaintiff. Thatdecision is reported at SRG Takamiya Co Ltd v Sprung Instant Structures Ltd, 2017 ABQB 118.

I granted judgment to SRG Takamiya,subject to finalizing the amount, but included terms to preserve the potential of set-off of the counterclaim. [2] In those reasons I dealt with the conversion of the claim from United States currency to Canadian dollars: As discussed by Madam Justice Kenny in Alpine Canada Alpin v Non-Marine Underwriters, 1999 ABQB 454 at para. 27 andfollowing, there is an issue as to whether the conversion date should be done as at the date of the breach of contract or the date of thejudgment.

The result of various cases is that judicial discretion is available to find justice in the particular circumstances. Nosubmissions were made on this point, but the amount to be re-paid is expressed to be paid in US dollars. If Sprung were to pay the award

using Canadian funds it would do so using current conversion rates that would enable the plaintiff to obtain $725,484 in US funds withthose Canadian dollars at the time of payment. Since interest is to run over the intervening period, using the date when the structureshould have been delivered simply makes no economic sense. The payment of damages is to be made now, so the cost of getting whatthe plaintiff is entitled to is the correct approach.

That comes the closest to placing the plaintiff in the position in which it would havebeen in had the contract been performed. [Emphasis added.] [3] Counsel appeared before me on September 27 to deal with the amount of the monetary judgment (as well as some othermatters dealing with undertakings and objections to questions), and counsel for the defendant, Sprung, asked to have the opportunity tomake submissions on the appropriate date of conversion.

As indicated above, no submissions had been made on this point initially. [4] Accordingly, counsel for Sprung as well as counsel for SRG have made some submissions, primarily involving providingme with case law addressing the question of conversion of funds from another currency to Canadian dollars and addressing shippingcosts and other details. [5] Although there are have been examples where judgments have been granted in Alberta in U.S. dollars, they are the exceptionand, in my view, they do not comply with the requirements of the Currency Act, RSC 1985, chap.

C-52 quoted in my earlier decision. [6] Granting a judgment in another currency might work if the judgment is immediately paid by the defendant.

However, ifthere are any enforcement proceedings such as garnishment, seizure and sale, a bankruptcy of the judgment debtor, or other proceedingsthat involve sharing with other creditors on a pari passu basis, dealing with the distribution of funds where there is a judgment in adifferent currency, with ever-fluctuating conversion rates, would involve untying the Gordian knot. [7] Accordingly, in my view it is at least preferable, if not necessary, for all judgments to be expressed in Canadian dollars. Thisis what

section 12 of the Currency Act says. [8] Counsel have referred to the following cases: 1. Gatineau Power Co v Crown Life Insurance Co, (SCC), [1945] S.C.R. 655, [1945] 4 D.L.R. 1; 2. Stevenson Estate v Siewert, 2001 ABCA 180; 3. Brown & Root Services Corp v Aerotech Herman Nelson Inc, 2004 MBCA 63, 2004 CarswellMan 189; 4. Tulsa Heaters Inc v Syncrude Canada Ltd, 2008 ABQB 774; 5. 1081748 Alberta Ltd v Enervest Resource Management Ltd, 2008 CarswellAlta 2122, 2008 ABQB 793; 6. Salna v Awad, 2010 CarswellAlta 1205, 2010 ABQB 419; 7. Evans v Sports Corp, 2011 ABQB 244, 2011 CarswellAlta 569; and 8.

Jin v Ren, 2015 ABQB 115, 2015 CarsellAlta 251. [9] Gatineau Power is a Supreme Court of Canada decision that is said to stand for the proposition that funds should beconverted as at the date of the breach (the “breach date rule”). However, Court noted specifically that even if the court had taken thedate of judgment as controlling, “the amount recoverable would be the same.” The case seems not to be a particularly strong authorityfor the proposition. [10] Furthermore, our Court of Appeal held otherwise in Stevenson Estate.

The Court of Appeal said this, at paragraph 15: The Court’s task is to select the most fair and equitable of the two possible conversion dates. It cannot be expected that either of thesewill allow perfect justice to be rendered.

Given this, if any equities must fall unequally on the parties, they should fall more heavily onthe wrongdoer than on the victim. [11] The Court selected the date of their decision as being the most just date for conversion. [12] Although the Court did not expressly refer to the 1945 Supreme Court of Canada decision in Gatineau Power that is citedabove, it did discuss it in the original decision, reported at 2000 ABCA 222 (the decision referenced above was the result of are-hearing).

In that original decision, the Court of Appeal said at paragraph 74, It appears that courts in Canada no longer feel constrained by the breach date rule adopted in Custodian [Custodian v Blucher, [1927]S,C,R, 420, ] and Gatineau, particularly where to do so would yield an inequitable result for the injured party. [13] The Manitoba Court of Appeal dealt with the matter more extensively in 2004 in Brown & Root.

That Court considered theprior history leading up to Gatineau Power, and reflected on the fact that, “in the past, currency conversion was not a significant issuesince severe currency fluctuations were rare and international trade was not so prevalent a part of everyday business.” They noted thatthat was no longer the case by 2004.

The Canadian “breach date rule” was said to be based on a series of Canadian cases which hadadopted what the Court considered “a now obsolete British rule”. [14] Starting at paragraph 97, the majority decision addressed whether the Court was bound by Gatineau Power and other cases tothe same effect. They noted that the conversion date issue was dealt with very briefly, and that the Court had concluded that it would notmake a difference. At paragraph 103, the Manitoba Court of Appeal concluded that the “breach date rule” was not binding in allsituations.

The Court took into account the Alberta Court of Appeal’s conclusions in Stevenson Estate and also Professor Waddams’

textbook The Law of Damages , wherein he recommended that although Canadian courts should be cautious before departing from the “breach date rule”, (as the Court paraphrased) “any rigid formula should be avoided and courts should have the necessary flexibility to decide on a case-by-case basis, taking into account new arguments and changing circumstances”: para. 96. [ 15 ] At paragraph 110, the Court chose an approach similar to the Alberta Court of Appeal’s: “If we have to choose between equities in this case, we choose the side of the innocent plaintiff and the date of judgment by the trial judge.” [ 16 ] Twaddle, J.

A., dissented on this point, but with some reservation. He felt the Court was bound by precedent, referring to Gatineau Power . [ 17 ] In Tulsa Heaters Inc , Rooke, J. (as he then was) gave judgment in U.S. currency, but he made no reference to the Currency Act .

It appears not to have been argued. [ 18 ] In 2008 Brooker, J. found that Stevenson Estate was binding, and noted that Gatineau Power had been specifically discussed in the original Court of Appeal judgment, as I have set out above. [ 19 ] In 2010 in Salna v Awad , Horner, J. followed Stevenson Estate . [ 20 ] In 2011 in Evans v Sports Corp , Graesser, J. followed Stevenson Estate . He specifically referenced the judgment in U.S. dollars in Tulsa Heaters , but he noted that no currency conversion issues had been raised in that case.

He stated in paragraph 337, “Generally speaking, judgments in Canada should be expressed in Canadian dollars having regard to the Currency and Exchange Act, R.S.C. 1970, c. C-39, s. 11. (The provision to which he was referring is currently

section 12 of the Currency Act , R.S.C. 1985, c C-52.) [ 21 ] In 2015, in Jin v Ren , Michalshyn, J. followed a Saskatchewan decision which cited Stevenson Estate . He said, at paragraph 108, “There is discretion to select either the date of breach/tortious conduct or date of judgment as the conversion date”. [ 22 ] Of course, there is the Alpine Canada decision of Kenny, J. In 1999 that I referenced in my previous reasons, to the same effect.

Her decision was cited with approval by the Alberta Court of Appeal in the original decision in Gatineau Power , at paragraph 73. [ 23 ] Now that I have reviewed these cases, I do not see any reason to vary my previous decision on the date of conversion. [ 24 ] Counsel for the plaintiff has now presented evidence in accordance with my directions given in February, modified slightly in September, and the result is that judgment is granted in the amount of $888,598.08, plus interest pursuant to the Judgment Interest Act , bringing the total award to $982,508.66 as at February 22, 2017, being the date of the release of my original decision. [ 25 ] Enforcement of the judgment remains subject to the terms previously set out.

Heard on the 27 th day of September, 2017. Dated at the City of Calgary, Alberta this 3rd day of November, 2017. A. R. Robertson, Q.C. M.C.C.Q.B.A. Appearances: Curtis E. Marble and Benjamin J. Kormos Walsh LLP for the Applicant (Plaintiff) C. Michael Smith Smith Mack Lamarsh for the Respondent (Defendant)