United Inc v Canadian National Railway Company, 2021 ABQB 356

Court of Queen’s Bench of Alberta Citation: United Inc v Canadian National Railway Company, 2021 ABQB 356 Date: 20210505 Docket: 0503 17424 Registry: Edmonton Between: United Inc. Plaintiff - and - Canadian National Railway Company, Northern Alberta Railways Company, Alberta and Great Waterways Railway Company, Edmonton, Dunvegan and British Columbia Railway Company, Canadian Pacific Railway Company, Her Majesty the Queen in Right of Alberta, ABC Limited and John Doe Defendants _______________________________________________________ Decision of the Honourable Mr. Justice T.G.

Rothwell _______________________________________________________ I. Introduction [ 1 ] Canadian National Railways Company (CNR), Northern Alberta Railways Company, Alberta and Great Waterways Railway Company, Edmonton, Dunvegan and British Columbia Railway Company, who I will refer to collectively as the CN Defendants, seek an Order pursuant to Rule 8.17 of the Alberta Rules of Court , Alta Reg 124/2010 permitting certain facts to be proven at trial by admitting

an affidavit sworn by Mr. Don Hussey. (Hussey Affidavit). [ 2 ] The CN Defendants rely upon the affidavit of Anita Fleming sworn on October 30, 2020, in support of this application (Fleming Affidavit). [ 3 ] The Plaintiff in this matter, who I will refer to as United, is claiming damages arising from environmental contamination of the Dunvegan railyard lands (Dunvegan Lands) formerly owned by the CN Defendants. [ 4 ] This matter is set to proceed to trial on May 10, 2021, and I am the assigned trial judge. II.

Background and Facts [ 5 ] In November of 2019, United filed an application for an order under s 218 of the Environmental Protection and Enhancement Act , RSA 2000, c E-12 ( EPEA ) seeking to extend the applicable limitation period for its claim in this matter ( EPEA motion). In December of 2019, the CN Defendants filed a cross application seeking to dismiss United’s claim on the basis that it was time barred under the Limitations Act , RSA 2000, c L-12 . [ 6 ] Mr. Hussey, on behalf of the CN Defendants, swore an affidavit dated December 12, 2019, in support of the CN Defendants’

summary dismissal application. [ 7 ] Mr. Hussey unexpectedly died on February 17, 2020. United was scheduled to cross-examine Mr. Hussey on his affidavit in advance of its EPEA motion. [ 8 ] Mr. Hussey was employed by CNR from 1989 to 1995 and by the Canada Land Company CLC Limited from 1995 to 2000. Mr. Hussey was expected to be a key witness for the CN Defendants because he was personally involved in overseeing the re- development of the Dunvegan Lands from railyard to residential/commercial uses. [ 9 ] Mr. Justice Feth heard the application to extend the limitation period and the

summary dismissal application in June of 2020. Feth J released his reasons granting the application to extend the limitation period and dismissed the CN Defendants’

summary dismissal application. His reasons are reported at United Inc v Canadian National Railway Company , 2020 ABQB 413 . [ 10 ] Mr. Hussey was examined by United in discoveries in 2010 and a transcript of that examination exists. [ 11 ] During the EPEA motion, in response to arguments by the CN Defendants regarding prejudice, United consented to the CN Defendants having the right to read in the Hussey discovery transcript during the trial. A Consent Order has been executed and filed in this regard. III.

Issue [ 12 ] This Application raises one primary issue: [ 13 ] Should the Hussey Affidavit be admitted pursuant to Rule 8.17 ? IV. Position of the Parties CN Defendants [ 14 ] The CN Defendants acknowledge that Mr. Hussey’s affidavit is hearsay but argue that it meets the criteria of necessity and reliability and should be admitted under the principled exception to hearsay rule. They further argue that when prejudice is considered the balance favours them and that the affidavit should be entered.

The CN Defendants draw a distinction between threshold reliability and ultimate reliability and argue that this application deals only with the threshold issue. Finally, they argue that the determination regarding which paragraphs should be allowed to be read in should occur once all of the evidence in the trial has been heard. United [ 15 ] United acknowledges that portions of the affidavit are sufficiently necessary and reliable and does not object to their admission but does raises concerns with other portions of the affidavit.

United raises concerns including: some of the evidence is not necessary/relevant, the evidence will be admitted through other sources, it is duplicative of transcript evidence they have consented to being entered by the CN Defendants, the evidence is hearsay, and the evidence consists of Mr. Hussey’s commentary on documents he did not author. United acknowledges that this type of assessment can be left to trial but argues it should be dealt with now in order to conserve valuable court resources. V. Analysis Test for Admissibility

[16] Rule 8.17 provides: 8.17(1) A fact to be proved at trial by the evidence of a witness must be proved by questioning the witness in Court unless (

a) these rules or an enactment otherwise requires or permits, (

b) the parties agree to that fact, or (

c) the Court otherwise orders.

(2) The Court may not order that a fact be proved by affidavit evidence of a witness if (

a) a party, for good reason, wishes to cross-examine the witness, and (

b) the witness may be required to attend the trial.

(3) Evidence taken in any other action may be presented at trial but only if the party proposing to submit the evidence gives each of theother parties written notice of that party’s intention 5 days or more before the trial is scheduled to start and obtains the Court’spermission to submit the evidence. [17] Both parties agree that the Hussey Affidavit is hearsay but that it can potentially be admitted if it meets the principledexception approach to hearsay, in other words, if the Affidavit is necessary and reliable: Canmore Mountain Villas Inc v Alberta(Minister of Seniors and Community Supports), 2010 ABQB 489 (Canmore). [18] Canmore dealt with an application to admit the affidavit evidence of Mr.

Craig, a former mayor of Canmore, who had swornan affidavit and later died. Unlike the present case, Mr. Craig had been examined on his affidavit prior to his death. [19] Canmore considered Rule 261 of the Alberta Rules of Court. Rule 8.17 is the successor to Rule 261. In Canmore, at para 26,Justice Veit held: Although the most recent principled exceptions to the hearsay rule were developed by the Supreme Court of Canada in the context ofcriminal law, a fortiori - that is, with even greater force - the principles apply in civil proceedings where, of course, the onus of proof islower than in criminal proceedings.

Indeed, the application of the principle has been accepted in numerous civil proceedings, includingby the Nova Scotia Court of Appeal: Eric Whebby Ltd.

In that context, I note that the comments in Pierre relating to the criminal contextin which the contemporary Canadian standard of admissibility of hearsay evidence was developed was merely intended to show thatthe Khan, Smith, Khelawon, etc. line of cases was merely intended to enlarge the scope of admissible hearsay, not to narrow it. [20] Justice Graesser also considered Rule 261, and followed a similar analysis, in Brennenstuhl Estate v Trynchy, 2007 ABQB647 (Brennenstuhl Estate). Necessity [21] United does not dispute that Mr. Hussey would have been one of the CN Defendants’ key witnesses.

The Fleming Affidavitdiscloses that he was integrally involved with all aspects relating to the re-development of the Dunvegan Lands. Ms. Fleming wasemployed as CNR’s Manager of Real Estate from 1993 to 1997 and retired from CNR in April of 2019. Ms. Fleming had no directoversight into the re-development of the Dunvegan yard. [22] Ms. Fleming also details unsuccessful efforts made by CN Defendants’ counsel to locate alternate witnesses to act assubstitutes for Mr. Hussey.

However, the necessity inquiry does not focus exclusively on whether there are other sources of evidence. [23] In Brennenstuhl Estate Justice Graesser stated at paragraph 36: ...Necessity does not require that the proponent establish that there is no other way of getting similar evidence before the court. Rather, itrelates to the ability to get this particular evidence before the court. If the proposed evidence is relevant, then necessity suggests thatsuch evidence should be before the court in its search for truth.

Necessity in relation to hearsay evidence is to be considered in thecontext of determining whether the evidence from this witness can be obtained and admitted in some other way. Where the witness hasdied without being examined de bene esse, for example, resort to prior statements or testimony is clearly necessary, as that witness’sevidence cannot be obtained in any other way.

The fact that there is some other witness who may give similar evidence is not an answerto necessity. (Emphasis in original) [24] Justice Veit, in Canmore at para 29, relying on the Supreme Court of Canada’s decision in R v B(KG), (SCC), [1993] 1 SCR 740 noted that the death of a witness will, in most situations, be sufficient to meet the necessity criteria. [25] Mr. Hussey’s death was unexpected.

This is not a situation of the CN Defendants ignoring an unhealthy witness. [26] United has argued that some portions of the Hussey Affidavit should not be admitted because other evidence on the samepoint will be admitted from another source. United may be correct that other evidence will be entered; however, that remains to be seenat this point and the purpose of this application is to focus on the hearsay character of the affidavit evidence: Canmore at para 31.

Iprefer to follow the approach of Justice Veit and defer any triage of the evidence until all of the evidence is entered: Canmore at para 32. [27] I am satisfied that the Hussey Affidavit meets the criteria of necessity. Reliability

[ 28 ] Again both parties agree that at this stage a Court should focus on “threshold reliability” as opposed to “ultimate reliability”. Ultimate reliability will be determined at the conclusion of the trial. [ 29 ] United provided the following list of reliability factors:

a) Existence of an oath;

b) The nature of the affiant;

c) How long after the fact was the affidavit sworn;

d) The nature of the evidence;

e) The context in which the affidavit was sworn;

f) The importance of the evidence;

g) Whether the affiant had a motive to lie;

h) Whether the evidence is corroborated or appears to have a solid foundation;

i) Whether the evidence is internally inconsistent, or conflicts with other evidence; and

j) Whether there was an opportunity to cross-examine the affiant, and if so, whether there is a reasonable explanation for failing to do so. [ 30 ] These factors are drawn from Jans v Jans , 2015 SKQB 226 at para 25 ( Jans ). While Jans is a Saskatchewan case I accept that the above factors, while not comprehensive, are relevant considerations. [ 31 ] The CN Defendants note that the affidavit was sworn under oath and the Mr. Hussey expected to be cross examined on the affidavit and argue that the reasoning in Canmore and Brennenstuhl Estate applies and support a finding of reliability. [ 32 ] Given the contents and purpose (i.e.

summary dismissal) of Mr. Hussey’s affidavit and his past involvement in the litigation I find it reasonable to infer that he would have anticipated being cross examined when he swore the affidavit. [ 33 ] I would be in a better position to assess the reliability of Mr. Hussey’s evidence if he had been cross examined on the affidavit. However, I will have the benefit of all or portions of the examination for discovery transcript of Mr. Hussey to assess the consistency of his evidence. I may also be able to compare it to other related evidence.

I will not be able to assess his demeanour; however, courts should exercise caution when relying upon demeanour evidence. [ 34 ] I have reviewed the affidavit having regard to the pleadings and, subject to the arguments raised by United in relation to paragraphs 46-55 and 57, the contents are prima facie relevant. Having regard to the reliability factors noted by United, Mr. Hussey was heavily involved in this project and had been involved in the litigation for a number of years. There is no suggestion that Mr. Hussey has any motive to be lie. [ 35 ] The Hussey Affidavit, in support of the

summary dismissal application, was sworn many years after the events in question. The passage of time may affect the reliability of evidence; however, that is an issue of ultimate reliability that will be decided at trial. [ 36 ] United argues that some of Mr. Hussey’s affidavit evidence conflicts with evidence from his examination for discovery transcript. By way of example, United specifically argues that Mr. Hussey’s evidence at paragraph 41 concerning clean up and the handling of cinders is contradicted by his earlier discovery transcript evidence.

While the existence of conflicting evidence militates against reliability I do not find the alleged conflicts to be so significant to conclude that the evidence does not meet the threshold test of reliability.

I have reviewed the relevant passages and will benefit from more fulsome argument from counsel in this regard and will be better placed to make a final determination in this regard once I have heard all of the evidence. [ 37 ] Unlike the situation in Jans I do not have concerns with the circumstances under which the affidavit was sworn: Jans at para 28 . [ 38 ] I am satisfied that the evidence meets the threshold test of reliability.

Prejudice [ 39 ] In Brennenstuhl Estate Justice Graesser relied upon the Canned Heat Marketing Inc v CFM International Inc, [1998] BCJ No. 1722 (SC) decision and held that the party opposing the affidavit’s introduction bears the onus of establishing prejudice: para 24. [ 40 ] Justice Graesser adopted Master Bolton’s approach, described at para 25: Master Bolton noted that the fact that disputed evidence would be admitted at trial contrary to the interests of the party opposed was not enough to establish prejudice.

Instead, there must be a weighing of prejudice, because presumably the party seeking to admit the evidence will always be prejudiced if it was not allowed to present its evidence. The court is left to weigh the prejudice to each side. [ 41 ] I adopt Justice Graesser’s approach. [ 42 ] The CN Defendants argue that they will be prejudiced if the Hussey Affidavit is not admitted for three primary reasons:

a) It is a sworn statement made nine years after Mr. Hussey was questioned;

b) The affidavit was sworn in support of

summary dismissal which is a distinct purpose as compared to the examination for discovery transcript;

c) There is evidence in the Affidavit that does not appear in the transcript and vice versa. [ 43 ] The CN Defendants point to Justice Feth’s consideration of prejudice at paragraphs 124-130 of his decision. I agree with Feth J that aspects of Mr. Hussey’s evidence are relevant and material to issues at trial, but note that Feth J did not rule on the admissibility issue. [ 44 ] The duplication of evidence between the discovery transcript and the Hussey Affidavit does not militate in favour of a finding of prejudice.

I will have the benefit of assessing both pieces of evidence and they will assist me in determining what ultimate weight, if any, should be given to the Hussey Affidavit. [ 45 ] United’s inability to cross examine Mr. Hussey on his affidavit creates the most significant prejudice for United. I accept that United will be prejudiced by their inability to cross-examine Mr.

Hussey; however, arguments about conflicting evidence and when it was given will inform which evidence will be preferred and/or the weight that should be assigned to it. [ 46 ] The determination of whether the evidence should be admitted is discretionary. The extension of the limitation period by Justice Feth creates prejudice for the CN Defendants as they are required to defend a matter outside the normal limitation period.

In my view, that prejudice is a factor that weighs in favour of admitting the Hussey Affidavit. [ 47 ] In balancing the prejudices that will be visited upon the parties I conclude that the CN Defendants will be more prejudiced by the affidavit not being admitted than the prejudice that will be visited upon United if it is included. In my view, United must demonstrate greater prejudice than an inability to cross-examine a witness who has provided sworn evidence that is relevant and material to significant trial issues.

As the trier of fact I will be able to assess what weight, if any, should be given to evidence that is untested by cross- examination: Brennenstuhl Estate at para 29 . United’s Other Objections [ 48 ] While the Hussey Affidavit can be admitted under the principled exception to the hearsay rule it still must be reviewed for compliance with the rules of evidence: Canmore at para 47 . United correctly points out that evidence that would not be permitted in viva voce testimony should not be permitted by way of affidavit.

United objects to a number of paragraphs in the Hussey Affidavit on grounds that I set out in the “Positions of the Parties”

section of these Reasons. [ 49 ] During the hearing of this Application the CN Defendants conceded that they would not seek to read in paragraphs 4,5,6,7,59,63,65,66,67,68, and 69. [ 50 ] I have determined that I will be in a better position to provide a ruling on the remaining paragraphs that United objects to once I have heard all of the evidence: R v Khelawon , 2006 SCC 57 at para 50 . VI.

Conclusion [ 51 ] In conclusion I find that the Hussey Affidavit meets the threshold test of necessity and reliability and that when I weigh the competing prejudice to each party the balance favours admitting the Hussey Affidavit. However, my ruling on admissibility is subject to my final determination in relation to the objections raised by United regarding the remaining paragraphs in the Hussey Affidavit. Heard on the 30 th day of April, 2021. Dated at the City of Edmonton, Alberta this 5 th day of May, 2021. T.G. Rothwell J.C.Q.B.A.

Appearances: Larry Olesen, Q.C. and Tim Smythe Bryan & Company LLP for the Plaintiff Gloria Moore and Sarah M. Graham Stikeman Elliott LLP for the CN Defendants