Axis Real Estate Investment Corporation v Fort Saskatchewan (City), 2021 ABQB 763

Court of Queen’s Bench of Alberta Citation: Axis Real Estate Investment Corporation v Fort Saskatchewan (City), 2021 ABQB 763 Date: 20210922 Docket: 0903 10780 Registry: Edmonton Between: Axis Real Estate Investment Corporation Plaintiff - and - City of Fort Saskatchewan, Jim Sheasgreen, Chris Cambridge, Richard Polowaniuk and Curt Boechler Defendants _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice A.W.

Germain _______________________________________________________ Introduction [ 1 ] The Plaintiff [Axis] sued the Defendants [Fort Saskatchewan], for losses arising out of alleged defamation and breach of contract relating to the condition of and occupancy of a commercial building in Fort Saskatchewan, Alberta. The individual defendants were all employees or spokesmen of Fort Saskatchewan and, where necessary, will be identified by surname.

[ 2 ] Axis proposes to use two experts to give a combination of factual evidence and expert opinion about the condition of the building at the relevant time. Fort Saskatchewan opposes the introduction of this evidence. [ 3 ] This ruling permits Axis to call the experts for the reasons set out in this ruling. Timeline [ 4 ] The Statement of Claim was issued July 14, 2009, defended on January 21 2010 and on May 10, 2018 the Court received Form 37, a request to

schedule a trial date. The filing of that form triggered a trial date May 10, 2021. Form 37 constitutes a conformation by counsel that: All expert reports have been exchanged and the process described

Part 5, Division 2 of the Alberta Rules of Court , including questioning of experts, is complete. [ 5 ] One concern on the part of Fort Saskatchewan was that their proposed expert, an engineer [Dr.

Ho], with direct knowledge of the condition of the building was experiencing a terminal illness and an order was obtained [August 21, 2019, the Enabling Order] that he could be examined under oath “to preserve his evidence” [permitted by rule 6.21 (1) (a)] [ 6 ] The Enabling Order provided no amplification about how the evidence might be used or whether qualified as expert evidence or what limitations the trial judge might put on the evidence.

The witness was examined on November 13, 2019 in the presence of Axis’s counsel and died January 12, 2020. [ 7 ] On November 24, 2020, (about 6 months before trial) the law firm of Wheatley Sadownik replaced prior counsel for the Plaintiffs. On February 5, 2021 Mr. Sadownik filed Form 39, a confirmation of trial where again it was expressed that only one expert would give evidence plus 13 non-expert witnesses. Axis’s counsel indicates the identified expert was intended to reflect a plaintiff expert not a defence expert as implied in Form 37. Despite this, it is clear that Mr.

Sadownik took the position that the evidence of Dr. Ho was expert evidence and proceeded to obtain rebuttal reports ultimately serving them on the Defendants on March 8, 2021. [ 8 ] This date is after both Forms 37 and 39 and only 63 days before trial. [ 9 ] With one potential exception, Fort Saskatchewan raised no formal objection to the reports under rule 5.36 (1) until April 30, 2021 (five working days before the trial was to commence).

Counsel explained that they perceived that the application had to be made before the trial judge and the trial judge was not identified until Thursday, April 28, 2021. [ 10 ] This matter was argued on May 5, 2021 on an emergency basis. The Position of the Parties [ 11 ] Fort Saskatchewan asserts that the evidence of Axis’s experts should not be admitted as expert evidence although they are not precluded from giving direct evidence of facts relating to the building in question.

The reasons expressed for this are: • that the trial certificates [ forms 37 and 39] foreclose the use of these experts, • the reports were not received in a timely way, • the reports are contrary to the declarations taken throughout by the Plaintiff that there would be no expert reports, • and finally, as Fort Saskatchewan’s expert is deceased the defence would sustain prejudice that cannot be resolved in any practical way. [ 12 ] The defence asserts based on the legal authorities that they have filed with the Court that any historic generosity for the late filing of expert reports has changed in favour of a more aggressive pursuit of diligence in civil trials. [ 13 ] Axis’s position is that the current Rules of Court do not express clearly defined time limits for filing reply reports but under rule 5.35(1) (the expert report sequencing rule) they had the opportunity to file subsequent in sequence their expert rebuttal reports and they did so.

The fact the prior counsel indicated expert reports would not be utilized does not prejudice the Plaintiff from obtaining these expert reports. As for the death of the Defendants’ witness this was always contemplated and his death over a year before trial could not have ended the Plaintiff’s opportunity to obtain a rebuttal expert. [ 14 ] Finally, a strategic error made in both Form 37 and 39 should not preclude Axis from relying on expert evidence since Dr. Ho evolved in his evidence from fact to opinion.

Legal Analysis [ 15 ] I begin by observing that introducing expert reports in an untimely way should be discouraged. This concern is greater once a certificate in Form 37 admits that all such reports have been exchanged. In Tan v. Swyrd 2013 ABQB 229 it was expressed thusly: [47] Rule 8.4(3)(

c) of the new rules states that a party who files a form 37 request must “certify that any expert reports have been exchanged” and that the process described in

Part 5,Division 2, including questioning of experts, is complete. Form 37 contains a signature block for counsel. [48] This rule is designed to reduce risk that a party will seek an adjournment of a trial because a necessary expert’s report has not been served on another party in a timely manner. A last-minute adjournment prejudices not only the parties in the action directly affected by the adjournment but potentially other litigants whose actions are trial ready. A trial date may never be used. Other actions that had back- up status may settle or the counsel or witnesses may not be able to adjust their schedules on short notice. Rule 8.4(3)(

c) protects all

litigants for whom a trial date is a valuable commodity. The fact that a very small percentage of actions are ever tried does not diminish the harm the court system suffers when a trial date is not used. And further, in Monument Machine Shop Limited v. Calibre Drilling Ltd. 2018 ABQB 857 , in disallowing surrebutal reports served after Form 37 the Justice indicated: [26] In

summary, if a surrebuttal report is to be relied upon at trial, rules 8.4(3)(

c) and 8.5(1)(

c) apply to such a report, and this must be taken into consideration when a Form 37, Form 38, and/or Form 39 is filed.

Otherwise, to allow a late surrebuttal expert report may negate some of the intent behind the timelines set out in the Rules, including to discourage surprise and encourage settlement. [27] In view of all the circumstances, balancing the costs of a further adjournment to the potential of prejudice to the recipients of the recently served surrebuttal report, I do not grant the adjournment of the trial, and direct that the surrebuttal report cannot be tendered at trial and shall be struck from the court record.

I find this is the most expedient and fair result, as it will allow the parties to proceed with the set trial dates as anticipated and without further delay,... [ 16 ] The above cases both reflect a strict reliance on the Rules and what might be considered a limited exercise of judicial discretion but they must be considered in the context of their facts. In Tan the Court was only concerned about whether costs should be awarded for two experts who were not identified in the trial setting process.

In Monument Machine Shop , the experts were already scheduled to participate in the trial and it was simply whether potentially extension material, in the guise of a surrebuttal report could be introduced. There was recognition in that case that the expert would still be giving evidence and could tailor some issues into his overarching evidence. [ 17 ] However, Axis is an extremely unusual case.

If I disallow this application it will mean that individuals who have first-hand knowledge of the building in question will not be able to build on that knowledge by expressing their opinions of what it means in the context of public safety. This would then leave a plaintiff with no opportunity to rebut on an expert basis the statements of the Fort Saskatchewan’s expert. The issue here is not one of limiting evidence or limiting costs but is a fundamental issue that one litigant can rely on expertise while the other who has recently changed counsel cannot.

I accept the statement from learned counsel for Axis that he only lately received the file and after reviewing the transcript of Dr. Ho’s evidence, he immediately sought out the two witnesses who he now asks to be cloaked in the apparel of an expert. [ 18 ] One understands that Dr. Ho’s evidence was never presented in strict compliance with Rule 5.34 as Fort Saskatchewan did not obtain a formal expert report in compliance with form 25. Axis makes much of this but it is a trivial irregularity.

Fort Saskatchewan felt they had reasonably complied with the Alberta Rules of Court relating to experts and that it was clear that they intended to introduce de Benne Esse evidence both for its factual content and where indicated as opinion evidence. Otherwise, there would be no reason to introduce Dr. Ho’s CV and their questioning may have been different. [ 19 ] So, if we accept as a basic proposition that the de Benne Esse evidence was an expert opinion then the Plaintiff (the party opposed to that evidence) clearly had the ability to file a rebuttal report.

Further, in the absence of any time limits the fact that the expert for the Defendants is now deceased could not prejudice the Plaintiff when the Rules of Court do not require any set time for rebuttal reports. The Alberta Civil Procedure Handbook 2021 at page 5-81 make this clear when they indicate: “the rules no longer provide a detailed timeline for serving expert reports before trial”. Conversely, this makes the certification process contained in Fort 37 much more critical.

The Alberta Civil Procedure Handbook (Stevenson and Côté) discuss the intersection of rule 5.35 (1) and rule 8.4 (3) by indicating that: “the parties cannot request a trial date until expert reports have been exchanged. That is serious, and refers to all expert reports contemplated not merely those existing. If they are not ready, the lawyers are guilty of misconduct and may well lose costs”. [ 20 ] Of potentially more concern is the late objection to the Axis experts by Fort Saskatchewan. Rule 5.36 sets out a procedural roadmap to object to the introduction of a report.

Counsel concede that they had a brief telephone conversation before the reports were supplied when Axis’s counsel indicated reports were coming and Fort Saskatchewan’s counsel indicating that it was too late. A better practice would have been for counsel to respond in writing immediately upon receipt of the reports as contemplated in Rule 5.36 (2). The potential, to immediately reach out to the Chief Justice or the Associate Chief Justice in Edmonton for the appointment of a trial Justice or case management justice to deal with this issue earlier than the last week before trial would also have been helpful.

I recognize counsel’s lament that they anticipated that a chamber’s appearance would have invited a direction to the trial judge but every case is different and given that the parties waited three years for this trial date a more expeditious objection may have been helpful. [ 21 ] The exercise of judicial discretion is always an issue of balance and ensuring fairness to both sides.

In this case, a decision preventing the introduction of these expert reports could be justified on the face of the Rules; however, this must be trumped by the reality that current counsel for Axis has acted promptly and diligently to shore up what he believes was a weakness in the approach taken by previous counsel. Further, if I accept his assertion as an officer of the Court that when he completed form 39 he felt that he was calling at least one expert he identified that reality. Form 39, unlike form 37 does not break down the witnesses by side.

Counsel for the Plaintiff is a respected senior member of the bar, and while some might view his assertion as disingenuous, I am obliged to accept it as the word of an officer of the Court. An application of the Rules on a strict basis would allow the application; however, I will not do this.

Overarching all of the procedural irregularities on the part of both sides looms the compelling reality that if I prevent the introduction of these experts I have greatly limited the Plaintiff’s opportunity to present their case as they now wish to. [ 22 ] I have thus concluded that the appropriate approach would be to allow the introduction of the rebuttal reports prepared by representatives of Cascade Environmental Consulting Ltd. and Five Star Engineering, but with terms and conditions that would ameliorate some of the prejudice of the defence.

These amelioration’s include the ability to speak to costs about this issue at the conclusion of the trial irrespective of the outcome, and to permit a trial adjournment or extension for the Defendants to obtain a new rebuttal witness as their expert has now died. However, as we were arguing this application on the morning of May 5, 2021 the Premier of Alberta was addressing the province on the dangerous increase of third wave Covid-19 cases. On that day (May 5, 2021), Alberta had an infection rate greater than anywhere else in North America.

It was significantly higher than in Ontario, the next most heavily threatened province. The finger-pointing and the blame for this will go on for years but the reality is that as of May 5, 2021 we are worse off in Alberta due to Covid-19 infections then we were when the province first went into lockdown in March 2020. [ 23 ] In result, no sooner had I concluded discussing these issues with counsel, the Courts announced that civil trials would be

adjourned. This means that as the trial is being adjourned anyway for COVID rather than procedural reasons the impact of the late filing of the reports is significantly muted and the Defendants can reasonably respond to these reports without seeking any further trial delays beyond those caused by the Covid-19 pandemic.

Conclusion [ 24 ] The Plaintiff is granted leave to call the experts Albert Beil and Chris Dawn at the trial of this matter and the Defendants are granted a reasonable time to supply a rebuttal report to the opinions of the Plaintiff’s experts. [ 25 ] The trial judge (I am not seized with this matter) will decide whether any other cost relief is necessary due to the eclipsing of the procedural adjournment potential, with the Covid-19 adjournment reality. Heard on the 5th day of May, 2021. Dated at the City of Edmonton, Alberta this 22 nd day of September, 2021. A.W. Germain J.C.Q.B.A.

Appearances: Rostyk Sadownik, Wheatley Sadownik for the Plaintiff Jonathan McCully, Sharek Logan & Van Leenen LLP for the Defendants