HAGGART CONSTRUCTION LTD. v. DAVID HAGGART, 1999 ABCA 180

Haggart Construction Ltd. v. Canadian Imperial Bank of Commerce, 1999 ABCA 180 Date: 1999 06 10 Docket: 9803-0402-AC IN THE COURT OF APPEAL OF ALBERTA ____________________________________________________ THE COURT: THE HONOURABLE MR. JUSTICE IRVING THE HONOURABLE MADAM JUSTICE PICARD THE HONOURABLE MR. JUSTICE SULATYCKY ____________________________________________________ BETWEEN: HAGGART CONSTRUCTION LTD. and DAVID HAGGART ( Appellants on Cross Appeal) Respondents(Plaintiffs) - and - THE CANADIAN IMPERIAL BANK OF COMMERCE, MARVIN BEHIEL, A.A. HIGGINSON, A.N. GRANT, A.J.

INGLE, HERBERT SMITH and BOB SANDER (Respondents on Cross Appeal) Appellants(Defendants) [Note: An erratum was filed on June 17, 1999; the correction has been made to the text and the erratum is appended to this judgment.]

APPEAL FROM JUDGMENT OF THE HONOURABLE MR. JUSTICE M.A. BINDER DATED JANUARY 8, 1998 AND ENTERED THE 14 TH DAY OF AUGUST, 1998 ____________________________________________________ MEMORANDUM OF JUDGMENT DELIVERED FROM THE BENCH ____________________________________________________ COUNSEL: A.H. Lefever, Q.C. C.N. Dzenick For the (Appellants on Cross Appeal) Respondents(Plaintiffs) K.D. Wakefield D.R. Sommerfeldt K.

Burt For the (Respondents on Cross Appeal) Appellants(Defendants) ____________________________________________________ MEMORANDUM OF JUDGMENT DELIVERED FROM THE BENCH ____________________________________________________ PICARD J.A. (for the Court): [ 1 ] The decision in this case is unanimous and I will give the decision of the panel.

[ 2 ] The appellants abandoned their appeal and thus the appeal that we have heard today was the cross-appeal of Haggart Construction Ltd. and David Haggart, who were plaintiffs at the trial. [ 3 ] The cross-appellants challenge the quantum of damages awarded to them by the trial judge. While they accept his analysis and did not appeal it, (which was to use the financial information from a comparable company as a starting point in assessing damages), they do say that the quantum of damages is too low.

They base their argument on two grounds: firstly, that the trial judge wrongly deducted income tax before coming to his final figure and, secondly, that the trial judge did not include, for certain years, management and bonus fees in the base figure which he used from the comparable company. [ 4 ] Regarding the income tax issue, the cross-appellants are concerned that, as it stands, this judgment may be subject to income tax.

But they also argue on principle and on the authorities that the trial judge ought not to have deducted income tax. [ 5 ] Taking the judgment as a whole, including the nature of the loss suffered, the fact that one sum was awarded as the loss for both the corporate and individual plaintiffs and considering the model of analysis and the fact that the trial judge did adjust for income tax as well as other contingencies, it is clear to us that he did not intend that this award be subject to income tax.

Although the award was labelled “loss of income” in parts of his judgment and also by the parties in the judgment roll, it was clearly compensation for the destruction of the entire business and the resultant loss of earning capacity. We say it ought not to be taxable. [ 6 ] Regarding the second issue, the issue of management and bonus fees, the cross-appellants have pointed to what they see as an inconsistency in that the trial judge included management fees and bonuses in the base figure he used in his calculation for some years but not others.

But the trial judge was not an accountant setting up a balance sheet, he was exercising a discretion to award such damages that, in the end, would place the plaintiffs in his own words, “in as good a position as they would have been but for the Bank’s failure to fulfill its duties and obligations.” To assist him in coming to his decision he had a considerable amount of evidence, written argument, and he was alive to the facts and figures that had to be considered.

Also, he had evidence before him as to the business climate in Fort McMurray during the critical years of the business. [ 7 ] Given the standard of review, we cannot interfere with his decision. We find the trial judge made no error. We are of the view that on a global basis the award of damages was reasonable. [ 8 ] In the result, we dismiss the cross-appeal. APPEAL HEARD on June 7, 1999 MEMORANDUM FILED at EDMONTON , Alberta, this 10th day of June , 1999 ___________________________________ PICARD J.A. ________________________________________________________

ERRATUM OF THE MEMORANDUM OF JUDGMENT DELIVERED FROM THE BENCH _________________________________________________________ On the cover page the date of Justice Binder’s judgment “July 28, 1998" has been replaced with the corrected date of “January 8, 1998".