Docket: CACV2213 Keith Barton Appellant (Respondent by Cross-Appeal) (Defendant) - v. -, 2013 SKCA 141

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 141 Date: 2013-12-20 Between: Docket: CACV2213 Keith Barton Appellant (Respondent by Cross-Appeal) (Defendant) - and - Potash Corporation of Saskatchewan Inc. and Potash Corporation of Saskatchewan Sales Limited Respondents (Appellants by Cross-Appeal) (Plaintiffs) Coram: Jackson, Klebuc & Ottenbreit JJ.A. Counsel: James Ehmann for the appellant Gordon Kuski, Q.C., and Kent Thomson for the respondents Appeal: From: 2011 SKQB 477

Heard: March 12, 2013 Disposition: Appeal allowed in

part Cross-appeal dismissed Written Reasons: December 20, 2013 By: The Honourable Madam Justice Jackson In Concurrence: The Honourable Mr. Justice Klebuc In Dissent The Honourable Mr. Justice Ottenbreit Jackson J.A. I. Introduction [ 1 ] This appeal raises important questions about the enforcement of an undertaking granted in exchange for an interlocutory injunction. [ 2 ] The interlocutory injunction was maintained for 10 years, without the plaintiff seeking to obtain a permanent injunction.

Six years after the injunction was discharged, the plaintiff discontinued its action against the defendant never having sought to move the litigation along in any meaningful way—other than to oppose every attempt by the defendant to bring the matter to an end. A further four years have passed since the defendant applied to assess damages for the breach of the undertaking. [ 3 ] In the within appeal, Keith Barton is the person against whom the injunction was obtained. Mr. Barton had been employed by PCS Crown in a variety of capacities, including General Counsel and Vice-President.

Before this litigation began, he would have been considered a well-respected lawyer. After the injunction was obtained, he did not work as a lawyer again. [ 4 ] Potash Corporation of Saskatchewan Inc. and Potash Corporation of Saskatchewan Sales Limited are the successors in interest to PCS Crown. They obtained the interlocutory injunction against Mr. Barton. For ease of reference, I will refer to them, collectively, as PCS. [ 5 ] On March 27, 2009, PCS wholly discontinued its action against Mr. Barton. On June 30, 2009, Mr.

Barton applied for an order assessing damages against PCS, including aggravated and punitive damages and costs on a solicitor-client basis. Mr. Barton claimed: (

i) damages for loss of income and pension benefits during the 10-year period of the injunction; (ii) damages for mental distress; (iii) reimbursement of solicitor and client fees; and (iv) punitive damages. [ 6 ] The Chambers judge did not order any damages for loss of income or pension and did not award punitive damages, but he did order PCS to pay damages for mental distress in the amount of $20,000 and to reimburse Mr. Barton his solicitor and client fees (see: 2011 SKQB 477 , 345 D.L.R. (4 th ) 713). [ 7 ] Mr. Barton appeals these aspects of the decision: (

i) the failure to order any damages for loss of income or pension benefits; (ii) the failure to award punitive damages; and (iii) the amount of the award ordered for damages for mental distress. PCS cross-appeals these aspects: (

i) the decision to award any damages at all for mental distress; and (ii) the decision ordering that solicitor and client fees be reimbursed. [ 8 ] I agree with Ottenbreit J.A. that: (

i) the award for mental distress should be increased; and (ii) the cross-appeal from the decision awarding solicitor and client fees should be dismissed. I also agree that the appeal from the refusal to award punitive damages should be dismissed, but for somewhat different reasons than Ottenbreit J.A. I would grant Mr. Barton damages for loss of income and pension benefits. II. Overview [ 9 ] I adopt Ottenbreit J.A.’s overview of the evidence. I would add a few additional comments. [ 10 ] The parties have been locked in litigation for over 20 years. The reported litigation in Saskatchewan alone is as follows: 1.

Potash Corp. of Saskatchewan Inc. v. Barton , [1993] S.J. No. 677 (QL) ―sealing file, ordering production of certain documents and continuance of cross-examination; 2. Potash Corp. of Saskatchewan Inc. v. Barton , 2000 SKQB 569 , 201 Sask. R. 56 ―finding Mr. Barton not guilty of contempt ; 3. Potash Corp. of Saskatchewan Inc. v. Barton , 2001 SKCA 75 - directing re-examination of whether the file should continue to be sealed (allowing an appeal from unreported decision of Malone J.); 4. Potash Corp. of Saskatchewan Inc. v. Barton , 2002 SKQB 301 , 219 D.L.R. (4th) 513―unsealing file;

5. Potash Corp. of Saskatchewan Inc . v. Barton , (2007), QB No. 3614 of 1993 & QB No. 3209 of―dismissing Mr. Barton’s application to strike the action for want of prosecution; 6. Potash Corp. of Saskatchewan Inc. v. Barton , 2009 SKCA 7 , [2009] 3 W.W.R. 1―upholding the decision to dismiss application to strike for want of prosecution; 7. Potash Corp. of Saskatchewan Inc. v. Barton , 2010 SKQB 35 , 348 Sask. R. 251―dismissing Mr. Barton’s application for an assessment of damages and for solicitor-client costs; 8. Potash Corp. of Saskatchewan Inc. v.

Barton , 2011 SKCA 96 , 336 D.L.R. (4th) 248 (“ Barton 2011 SKCA ”)―overturning assessment of damages dismissal and ordering that the matter be referred back to the Court of Queen’s Bench to determine whether or not Mr. Barton suffered any damage; 9. Potash Corp. of Saskatchewan Inc. v. Barton , 2011 SKQB 477 , 345 D.L.R. (4 th ) 713, being the decision appealed from. These decisions represent only a part of the relevant court files, which include miscellaneous orders, appearances and adjournments. [ 11 ] In the instant case, the Court granted a civil order punishable by contempt to restrain Mr.

Barton because PCS persuaded it that he had seriously infringed his employment obligations. The undertaking was the means by which the Court ensured that, if PCS acted in error, Mr. Barton would be compensated for the harm caused to him by the injunction. As in every case of this nature, the Court relied on the applicant for the injunction that it would act in accordance with the undertaking. [ 12 ] In Mr. Barton’s case, little has followed an appropriate or expected path.

And, it is only at the end of the process that the courts can assess the harm that has been caused by its orders. [ 13 ] Indeed, some of the courts’ past orders must be assessed and understood in light of the fact that two months after this Court sustained a decision of the Court of Queen’s Bench refusing to strike PCS’s statement of claim against Mr. Barton, PCS discontinued its action against him. [ 14 ] I acknowledge the arguments that have been made against Mr. Barton. He left PCS Crown, seemingly on good terms, and then sued for constructive dismissal.

After he accepted that settlement, he pursued PCS in a variety of ways. He made allegations against a senior officer of PCS Crown, and then when the government changed, he sought that officer’s job. The allegations that Mr. Barton made, or some form of them, were tested by the competition bureaus of Canada and the United States and by a grand jury in the United States, without further process. [ 15 ] This Court, however, must be careful not to react to these or other matters raised by PCS, because no evidentiary base exists against which they can be weighed. Moreover, no one against whom Mr.

Barton has made allegations has ever testified in any Court or sworn any affidavit upon which he could be cross-examined. [ 16 ] This Court must assess whether damages are available based on the known facts and the evidence. Those bare-bones facts are that PCS obtained a broad interlocutory injunction that significantly affected Mr. Barton’s ability to earn a livelihood. PCS vigorously defended the interlocutory injunction, but never obtained a permanent injunction. Mr. Barton could not move to assess damages until the litigation against him took place.

PCS dragged out that process, at least in part to protect it from suits someone might bring as a result of whatever information Mr. Barton might disclose. PCS resisted Mr. Barton’s attempt to have the statement of claim struck out and requested costs in that proceeding, which it received, and two months later, discontinued that litigation. III. Framework of these Reasons [ 17 ] I approach the analysis of the issues raised in these reasons under the following headings: 1. Did the Chambers judge err when he found that Mr. Barton had not proven that injunction caused his loss of income and pension benefits? 2.

If the Chambers judge erred with respect to causation, should this Court quantify that loss or remit the matter to the Court of Queen’s Bench? 3. Did the Chambers judge err by refusing to award punitive damages? IV. Analysis 1. Did the Chambers judge err when he found that Mr. Barton had not proven that injunction caused his loss of income and pension benefits? [ 18 ] Mr. Barton claimed damages for loss of income and pension benefits caused by the injunction. As a means to quantify that loss, Mr. Barton submitted to the Chambers judge a report prepared by KPMG, which put forward two scenarios.

One scenario was based on the amount of money PCS Crown paid him by way of salary and pension benefits in the year before he resigned from the company. The second scenario was based on what PCS paid Mr. Barton’s successor. [ 19 ] Mr. Barton’s argument before the Chambers judge was that the injunction denied him employment opportunities associated with the anti-trust litigation in the United States and he was unable to obtain alternative work. The Chambers judge rejected this argument, holding that Mr.

Barton had failed to prove his losses were caused by the injunction. [ 20 ] A court enforcing an undertaking for damages must keep firmly in mind that the undertaking was obtained as the price for the injunction. The undertaking is a promise to the Court that will be enforced absent proof of special circumstances. In that regard, the

words of Zuber J.A. in Nelson Burns & Co. v.

Gratham Industries Ltd. (1987), 23 C.P.C. (2d) 279 at 288 bear repeating: “[i]n theordinary course the unsuccessful plaintiff must understand that he is obliged to pay damages in accordance with his undertaking withoutquibble, and Courts generally will be unsympathetic towards those who seek to resile from such an obligation (emphasis added).” WhilePCS is only entitled “to pay damages in accordance with its undertaking,” it has clearly resiled from its obligation at every turn. [21] In Barton 2011 SKCA, this Court found that no special circumstances existed disentitling Mr.

Barton to relief includingspecifically that PCS could not rely upon its claim the injunction had been properly obtained. Much of the materials filed by PCS in theCourt of Queen’s Bench and this Court is directed not to whether Mr. Barton suffered damages for which it should be liable, but whetherPCS was justified in obtaining the injunction in the first place. These arguments continue to depict Mr. Barton as being guilty ofwrongdoing.

In light of Barton 2011 SKCA, such arguments have no place at this stage of the proceedings. [22] I appreciate that principles of contract law apply, but the precise nature of how they apply has not yet been fully determined. Most decisions cite as a starting point F Hoffmann-La Roche & Co. AG and others v.

Secretary of State for Trade and Industry, [1974] 2All E.R. 1128 (H.L.) at p. 1150 where Diplock L.J. states “[t]he assessment is made on the same basis as damages for breach of contractwould be assessed if the undertaking had been a contract between the plaintiff and the defendant, that the plaintiff would not prevent thedefendant from doing that which he was restrained from doing by the terms of the injunction” (emphasis in original). [23] More recent decisions refer also to Air Express Ltd. v. Ansett Transportation Industries (Operations) Pty. Ltd. (1979 to 1981),146 C.L.R. 249 at 261 (Aust.

H.C.) where the Court stresses the equitable nature of the proceedings and cautions against a slavishapplication of the rules to be applied, opting instead for an assessment of damages based on what is equitable and reasonable. Somecases citing Ansett, however, go on to deny relief based specifically on principles of contract law, notably the applicant’s failure to prove causation: 642947 Ontario Ltd. v.

Fleischer (2001), (ON CA), 209 D.L.R. (4th) 182 (C.A.) at para. 56. [24] The picture as to the proper state of the law may be distorted in that few cases address the question of what damages areactually assessed in favour of a successful defendant. Many of the reported decisions address the question of whether an inquiry as todamages should be undertaken and not what damages were actually ordered.

Nelson Burns is an example of a case ordering that theassessment be undertaken, but the ultimate decision concerning the assessment is not reported. [25] I am content, however, to apply the law as suggested by PCS, which is that Mr. Barton was required to prove the causal linkbetween the injunction and his loss of income (see: Robert J. Sharpe, Injunctions and Specific Performance, looseleaf (Toronto, Ont.:Canada Law Book, 2012) at para. 2.513 and International Pediatric Products Ltd. et al. v. Lambert et al. (1967), (BCCA), 66 D.L.R. (2d) 157 (B.C.C.A).

I am content to do so, because even on the strictest application of the principle of causation, Mr.Barton should have succeeded before the Chambers judge in the within appeal. [26] In my respectful view, the Chambers judge made some discrete errors that affect the result, including misstating theconstructive contract and failing to appreciate at several key junctures the legal and factual context at play. If necessary to do so, I wouldbe prepared to hold that his conclusion on causation, regarding the loss of income sustained by Mr.

Barton after the contract with Cohen,Milstein, Hausfeld & Toll came to an end, also represents a palpable and overriding error of fact. [27] The first error of the Chambers judge pertains to the construction of the notional contract. The injunction that ultimately issuedreads as follows: (

a) The Defendant, Keith Barton, is hereby restrained until further order of this Court from disclosing or continuing to disclose anyinformation concerning the business or affairs of the Plaintiffs, their subsidiaries and predecessors in title to the Plaintiff and theirsubsidiaries, to any person including without limitation the complainants or their counsel in certain pending or prospective United Statesanti-trust litigation all as referred to in the Affidavit of John L.M. Hampton filed here in termed the “U.S.

Litigants” and restraining theDefendant from any contact or employment with the U.S .Litigants in any way related to potash. (Consent Order, Appeal Book, File1901, Vol. III, pp. 1001a-1002a) [28] As will be noted, this injunction refers to a definition of the “U.S. Litigants” referred to in the affidavit of John L.M. Hampton. At the time, Mr. Hampton was Vice-President, General Counsel and Secretary of Potash Corporation of Saskatchewan Inc. The affidavitto which the injunction refers is dated November 16, 1993, and was sworn for the purposes of obtaining the injunction.

It appends anearlier affidavit, dated July 20, 1993, sworn for the purposes of obtaining a similar injunction against Mr. Barton in British Columbia. Inthe July 20, 1993 affidavit, Mr. Hampton attested to the following: 8. … a number of actions were initiated in the United States District Courts in Minnesota, Illinois and California against all but twoNorth American potash producers including PCS (which actions, as well as any actions commenced or to be commenced subsequently,are collectively referred to as the “U.S. Litigants”). (Supplementary Appeal Book, File 2213, Vol.

III, pp. 800 and 801) [29] The full purport of the phrase “U.S. Litigants” is not understood unless one reviews the U.S. litigation, which turns out to be aclass action brought on behalf of virtually anyone who had conducted potash business with “all but two North American potashproducers including PCS.” [30] Thus, the injunction against Mr.

Barton restrains him from: 1. disclosing or continuing to disclose any information concerning the business or affairs of [PCS], to any person involved in the anti-trust litigation or any actions to be commenced subsequently including their counsel; and 2. [obtaining] any contact or employment with any person who was involved in the anti-trust litigation or any actions to be commencedsubsequently in any way related to potash. [31] The Chambers judge, however, fixed the notional contract created upon the granting of the injunction as follows: This is a contract between PCS and Barton whereby PCS agrees not to prevent Barton from disclosing information about the business or

affairs of PCS to any person (or to prevent Barton from being employed by such person) who is involved in United States antitrust litigation in any way related to potash. [2011 SKQB 477 at para. 7] [ 32 ] In my respectful view, blending the two arms of the injunction omits three aspects of the injunction. First, the injunction does not simply preclude Mr. Barton from disclosing information to those involved in United States anti-trust litigation in any way related to potash. He is precluded from disclosing any information concerning the business or affairs of PCS.

Second, the injunction not only restrains employment, it restrains contact . Third, the phrase “U.S. Litigants” extends not only to those involved in the present litigation but in prospective litigation. [ 33 ] Counsel for PCS acknowledges the errors, but downplays them by stating they are of no consequence because Mr.

Barton “failed to adduce proper evidence to establish that any damage would have flowed from a breach of a constructive contract stated even in his terms” and “there is no evidence that Barton lost access to employment prospects of any kind, including in the potash industry, by virtue of his inability to disclose to others confidential information about the business and affairs of PCS in the period after November 1993” (Respondents’ Factum, paras. 80 and 81).

In my respectful view, these submissions miss the mark. [ 34 ] In my view, the Chambers judge’s error in minimizing the breadth of the constructive contract means that he did not fully appreciate the impact of this injunction on this defendant. [ 35 ] Having found that error, however, I can find no reversible error with respect to the Chambers judge’s conclusion pertaining to the contract with Cohen, Milstein, Hausfeld & Toll. The Chambers judge found that “regardless of any Canadian injunction, the applicant was not going to get the $90,000.00 in any event” (at para. 21).

This is a finding of fact that is unassailable. [ 36 ] As a result of the knowledge that Cohen, Milstein, Hausfeld & Toll had gleaned from Mr. Barton, Judge Richard Kyle of the United States District Court disqualified that law firm from participating in the anti-trust potash cases in the United States. I recognize that Mr. Barton was not a party to the application that resulted in the disqualification of the Cohen law firm and that he challenges the resulting decision, but the fact is the firm was not going to pay Mr. Barton for advice and information that they themselves were barred from using.

In my view, however, nothing much turns on this conclusion. [ 37 ] The real issue is whether Mr. Barton proved that the injunction prevented him from obtaining work in relation to other aspects of the anti-trust litigation and from the “U.S. Litigants,” according to the definition of that term. Since by its very terms the injunction was intended to have that effect, I find that the Chambers judge erred on this point as well. [ 38 ] While it is true that the statement of claim supporting the injunction also made serious allegations against Mr.

Barton, the injunction gave full effect to those allegations and, by its terms, called into question Mr. Barton’s integrity by restraining even “contact” with the U.S. Litigants. Even more importantly, the litigation did not cause his direct loss of the American work—only the injunction can be said to have had that result. [ 39 ] By virtue of the injunction the Court of Queen’s Bench granted, Mr. Barton could not be trusted to disclose “any” information to the U.S. Litigants about PCS and he could not even have “contact” with them, in any way relating to potash. And, it is not just the present U.S.

Litigants, but prospective ones as well. [ 40 ] Mr. Barton consented to the issuance of the injunction but it was a consent to the inevitable. An injunction had been granted in British Columbia. Indeed, it was his counsel, Mr. Semenchuck, who contacted PCS to tell them he was moving to Saskatchewan. Mr. Barton also stated the consent was premised on the understanding that matters would proceed quickly and he would have his day in Court. As is well documented in the proceedings leading up to this one, matters did not proceed at any acceptable rate and indeed Mr.

Barton has not had and will never have his day in Court. [ 41 ] Counsel for PCS asked him how he could say that he was not hired because of the injunction, if no one told him that was the reason. The Chambers judge quoted much of that exchange: 1325 Q Did you advise those law firms of the injunction? A I think I probably did. 1326 Q So do you recall any legal position that you were advised you were not being considered for because of the injunction? A Specifically because of the injunction? 1327 Q Yes.

A I’m not sure whether the discussion was because there would be limitations on what I could do, et cetera, et cetera. It’s quite conceivable that that was a factor. 1328 Q Well, I’d like to know who told you that. A Well, I can’t remember whether it was Gordon Anderson or who it would have been, Ed Odishaw or who. 1329 Q But you think somebody did? A Yeah, I think it was – it was not – I don’t think it was hidden.

1330 Q You say it’s conceivable? A Yeah. 1331 Q So you told these people about the injunction then? A Yeah, that there were limitations in what I could do at that time and I would have told them that, you know, there was an action going and we were defending it, but the fact was there was an interim injunction against me at that time which limited what I could– which limited the expertise I gained at PCS from being utilized. 1332 Q And you believe that somebody said, well we can’t hire you because of that? A I would think that that was a factor. 1333 Q Well, I’m not asking if it was a factor.

A I don't know what was in their minds, quite frankly. 1334 Q Well, I'm asking if they told you that. A And I don't remember that anybody specifically stated– . . . 1341 Q And you were making application to various law firms to– A Among others. 1342 Q Among others. Well, I’m only dealing with the law firms now. You were making applications for a position at various law firms in two provinces at least? A At least. 1343 Q And you felt that this injunction was completely inappropriate and wrongful?

A Yes, I did. 1344 Q And you can’t recall if anybody that you applied to a legal job for ever said, we can't hire you because of the injunction? A No, I can’t. 1345 Q All right. What about any other position that you may have applied for, the non-legal, did anybody ever say, we’re not hiring because of the – A I can't recall. 1346 Q You say in your affidavit that you believe that prospective applicants may have [contacted] Mr. Hampton and that played a role in your being unable to gain employment? A Which paragraph? Yes, I do believe that. 1347 Q Do you have any evidence of your own knowledge whatsoever of that?

A From my own experience, yes, because the first thing I would have done was contact my former employer. 1348 Q Do you have any evidence that anyone contacted Mr. Hampton except for your assumption? A No, my assumption and my experience. [Supp. Appeal Book, Vol. III, pp. A000119-120] [ 42 ] Based on this exchange and his overall review of the evidence, the Chambers judge wrote: [29] I cannot conclude the applicant has proven that it was the injunction or even some wash-over of the litigation that prevented him from obtaining employment after 1993.

The bare bones allegation that he did not receive employment because of the injunction is not adequate . The cross-examination points out that he really has no evidence to go on at all. He is merely speculating and has no evidence why he did not get the jobs . It is irrelevant what Mr. Hampton made. Therefore, the applicant has not met the burden of proof to establish this head of damages . Nor is it this Court’s duty to act so “fairly” to simply go along with this. Therefore, whether he has hired KPMG LLP to put some numbers together (see Tab B, brief of applicant) or not, is not the issue.

Adequate proof is the issue. (emphasis added)

[ 43 ] In my respectful view, the Chambers judge asked himself the wrong question. The question is not whether the injunction prevented him from getting one of the jobs for which he applied after the date of the Saskatchewan injunction, but whether it was the injunction that caused the loss claimed. The first question is one of mitigation and the second requires the Court to construe the injunction—what did it actually restrain Mr. Barton from doing. It is the latter question, which is the most important for the within appeal. [ 44 ] Immediately before Mr.

Barton decided to work with Cohen and Milstein, he had just been “headhunted” by Weyerhaeuser to act as its general counsel for their Canadian operations (Appeal Book, Vol. II, p. 677a). [ 45 ] According to his affidavit, in June of 1992, Mr. Barton decided that he would offer his assistance to the small fertilizer dealers and farmers in the United States, who he believed, rightly or wrongly, had been the victims of price-fixing: 49.

In view of my apparent inability to interest anyone with influence at PCS Inc. to deal with concerns I had about Childers’ conduct and its consequences I concluded that, if there was a proper way to do so, I would offer my assistance to the small fertilizer dealers and farmers in the United States who I knew to be the principal victims of Childers’ Price Fixing Agreements. I expected, if advised that it was proper to do so, that I would be compensated for such consulting services. I did not contact any fertilizer dealers or farmers but made contact only with senior lawyers at respected law firms.

I did not propose or agree at any time to disclose to any of the lawyers with whom I was in contact any information that I knew to be privileged or confidential. I disclosed only information that I learned of Childers’ Price Fixing Agreements and matters related to the potash industry generally that were in the public domain. (Appeal Book, Vol. I, p. 57a) [ 46 ] He decided to contact a major law firm in Seattle, Washington, which ultimately led him to other law firms in Washington, D.C. and then to the Cohen firm (Appeal Book, Vol. I, pp. 57a-58a).

In June, 1993, clients of the Cohen firm, and others, commenced a law suit in Minnesota alleging anti-trust violations by the named defendants including PCS Inc., and its subsidiary PCS Sales Ltd. (Appeal Book, Vol. I, p. 58a). [ 47 ] The Cohen firm was prepared to pay Mr. Barton approximately $180,000 over a two-year period for his services. As noted previously, Judge Richard Kyle put an end to the involvement of that law firm and any firms associated with it in the anti-trust file—and also put an end to Mr. Barton’s contract with that law firm.

Judge Richard Kyle’s order, however, did not put an end to the anti-trust litigation against PCS or to the American interest in what Mr. Barton had to say. [ 48 ] The evidence shows that the anti-trust litigation against PCS continued in one form or another in the United States until the Supreme Court of the United States refused certification in relation to the Minnesota action in 2001. The injunction, however, prevented Mr. Barton from having any part of that litigation.

It restrained him from “having any contact or employment ” with a group of American companies or their lawyers “in any way relating to potash.” The injunction prevented him from doing the work that he had just contracted to do―with the Cohen firm and for which he would have been paid―for anyone at all in that litigation or any anti-trust litigation against PCS. He could not even “contact” any of these entities or their lawyers in any way related to potash—and his area of particular legal expertise had been most recently potash. [ 49 ] When Mr.

Barton cast his lot with the potash buyers, he made the deliberate choice to align himself against the potash sellers. The injunction then took away the possibility of employment with the potash buyers. Thus, we can say with absolute certainty that the injunction prevented Mr. Barton from getting the work that prompted him to decline to work for Weyerhaeuser. Simply put, Mr.

Barton could earn no income consulting on the potash industry—for either side. [ 50 ] From my review of the case law, injunctions restraining employment are cautiously granted and on occasion refused because of the potential harm to the individual. See: Imperial Sheet Metal Ltd. v. Landry , 2007 NBCA 51 , 315 N.B.R. (2d) 328.

In this case, the injunction restrained a 57-year old lawyer from working in his field of expertise for 10 years. [ 51 ] No authority was cited to the Court where a former employer obtained an injunction preventing a former employee from obtaining employment and then the employer was permitted to resile from the obligation to pay damages on the basis that the employee could not show the injunction was the reason why he was prevented from getting other employment. Mr.

Barton’s evidence, showing his efforts to obtain other employment should have been considered as his efforts to mitigate the losses caused by the breach of the constructive contract, and should not have been tested against whether the injunction prevented him obtaining the employment in question. [ 52 ] That mitigation is a principle applicable in the circumstances cannot be contested. See: for example, Triodos Bank v. Dobbs [2005] EWHC 108 (Ch). In Triodos , the undertaking prevented receivers from selling certain shares. Due to the undertaking, a valuable sale was lost.

Lightman J., the judge in Triodos , found that it was quite clear the undertaking caused the loss of the only prospect of sale of the shares. While Lightman J. easily found causation, the principle of mitigation caused him “serious anxiety” (para. 42). He noted a strong argument could be made that the receivers failed to properly mitigate their loss by taking insufficient steps to secure an expeditious release from the undertaking. However, in the end, he found that mitigation was not possible due to the lack of cooperation from the company’s principal.

It is significant that Lightman J. did not consider evidence about the possibility of a sale to anyone else, which would be the argument most analogous to that put forward by PCS, i.e. , that Mr. Barton had not proven the injunction had caused his loss. [ 53 ] If I am wrong on this, and it was necessary for Mr. Barton to prove that the injunction prevented him from obtaining other employment, the ruling of the Chambers judge that Mr.

Barton has no evidence to prove why he did not get the jobs he had applied for places an impossible burden on him, made even more so by the 10-year life of the injunction. [ 54 ] The only evidence before the Chambers judge on the question of what damages, if any, were incurred by Mr. Barton is contained in his affidavit dated June 30, 2009 upon which he was cross-examined on July 28 and 29, 2009 before this Court rendered its decision in Barton 2011 SKCA . [ 55 ] The Chambers judge heard no viva voce testimony, which limits the deference owed by this Court to his decision. See: Valley

Beef Producers Co-operative Ltd., et al. v. Farm Credit Corporation , 2002 SKCA 100 at paras. 116 to 118 , 218 D.L.R. (4th) 86. [ 56 ] The evidence considered by the Chambers judge stands largely un-contradicted. This does not mean that the evidence need not be weighed. A finding that the evidence is insufficient to prove Mr. Barton’s claim for damages is not precluded, but it does mean the trier of fact cannot reject the evidence that is there in favour of the evidence that might have been produced on the other side. [ 57 ] According to Mr.

Barton’s 2009 affidavit, he earned the following employment income from 1993 until 2001, when he turned 65: 1994 $ 2,724 1995 $ 30,868 1996 $ 36,000 1997 $107,000 1998 $0 1999 $0 2000 $0 2001 $30,812 (Appeal Book, Vol. I, p. 67a). [ 58 ] Mr. Barton attested to his attempts to obtain employment once he was barred from participating in any way in the U.S. anti- trust litigation or having any “contact or employment” relating to potash with the U.S. Litigants: 87. Between August, 1993 and July, 1994 I made over 60 inquiries seeking employment in Canada and I did not get a single offer.

I believe that any potential employer on reviewing my CV would first have contacted John Hampton, my successor at PCS Inc., and would have been told of the PCS Inc. interim injunction against me, and I would have been given a negative rating. 88. In September, 1994 an acquaintance offered me a position as a Consultant/Manager at a trailer park resort he owned located at Donna in south Texas, USA.

I stayed in that position until October, 1997 at which time my contract was terminated so that, as I was told by the owner, he could hire his former local bank manager who apparently had been promised the job whenever he should choose to retire. 89. When I returned to Canada in October, 1997 I again made employment inquiries, but I received no offers. (Appeal Book, Vol. I, pp. 66a-67a) [ 59 ] In 2009, Mr.

Barton was cross-examined with respect to “the 60 inquiries seeking employment in Canada.” He produced a file folder that contained, among other applications, letters directed to his law school classmates who were working in private law firms and in universities—the tone of which suggests desperation. For each request he received no response or a negative one. In total, the file contains proof of between 14 and 19 applications, depending on how the file is interpreted (Appeal Book, Vol. III, pp. 1029a-1154a). [ 60 ] When Mr.

Barton was cross-examined on his affidavit in 2009, almost 15 years had passed since he had been legitimately in the legal job market. Many legal skirmishes had taken place between PCS and him. He testified that someone had told him he would not be hired as long as the injunction was hanging over his head, but he simply could not remember whether it was “Anderson or Odishaw.” [ 61 ] The fact of the matter is that after the injunction was obtained, Mr. Barton, a 57-year-old well-known and respected lawyer, never worked again—except in a trailer park in Donna, Texas for about three years.

This is the description of that work: I lived in a motel unit on the property and I was on call 24 hours a day seven days a week. I found myself required to fix toilets, water lines and sewers, remove snakes from units, stand knee-deep in water trying to unplug street drains in downpours and all manner of other tasks totally unrelated to my previous professional career and responsibilities. While I was pleased to have work of any kind, I was very depressed by my circumstances and lonely at being so far away from my family.

My depression, frustration and anxiety continued, as I had no certainty as to the time even this position would last. I found that I was consuming alcohol to excess as a means of coping. (Reply to Undertaking of June 30th, 2009, Appeal Book, Vol. IV, p. 1472a). It is improbable that Mr. Barton would have chosen to work in the above circumstances, if he could have obtained other work. [ 62 ] Counsel for PCS submits the litigation caused the loss, not the injunction. According to PCS, Mr.

Barton’s reputation was so tainted by the allegations in the litigation that he never worked again as a lawyer—not because of the injunction. I have two difficulties with that submission. [ 63 ] First, the Chambers judge did not find that the litigation caused the loss—the most that can be said is that he was not prepared to say what prevented Mr. Barton from obtaining employment—thus, his judgment cannot be sustained on the basis that the litigation

caused the loss. Second, PCS did not proceed with the litigation. As Angela Swan and Jakub Adamski, the authors of Canadian Contract Law , 3 rd ed. (Markham: Lexis Nexis Canada, 2012) state at para. 6.325: …Injunctions are often sought as tactical weapons in an action; if the plaintiff can get an interlocutory injunction, it may well pre-empt the litigation and give the plaintiff as effective a remedy as it could reasonably desire.

An interlocutory injunction, preventing the defendant from breaching a non-competition clause or his or her fiduciary duty, may last long enough to make the question whether the plaintiff can get a permanent injunction irrelevant . (emphasis added) That is precisely what happened here. PCS commenced its action claiming damages and a permanent injunction, and for 10 years resisted every attempt by Mr. Barton to move the matter along.

The interlocutory injunction, maintaining it, and enforcing it, became the litigation. [ 64 ] The Chambers judge would also have denied relief on the basis of foreseeability and remoteness: [30] Further, even if some considerable latitude was to be afforded the applicant in this regard, the limiting factors of foreseeability and remoteness come into play. It is not possible to conclude that when the injunction was granted that anyone was contemplating it would result in the lack of employment of the nature complained of by the applicant. Additionally, it is simply too remote .

I believe this is part of the “cascade of misfortune falling on the plaintiff” that the author refers to in Canadian Contract Law, supra . Accordingly, I dismiss this specific request for damages. (emphasis added) [ 65 ] Again, I have some difficulty with the reasoning and the conclusion of the Chambers judge. Any analysis of foreseeability and remoteness begins with the words of Baron Alderson in Hadley v. Baxendale (1854), 156 E.R. 145, 9 Exch. 341 (Eng. Ex.

Div.) at 151 : … Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e ., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract , as the probable result of the breach of it. (emphasis added) [ 66 ] As Mr.

Barton’s counsel points out, the parties must be taken to have contemplated that it would have an effect on Mr. Barton’s employability, as the very purpose of the injunction was to prevent him from seeking work or continuing to work for the U.S. Litigants in any way relating to potash. [ 67 ] Further, the breadth of the injunction forbade him from having any contact with any of the U.S. Litigants relating to potash and from disclosing anything to anyone about the business or affairs of PCS; thus Mr.

Barton was not only precluded from using a particular field of his expertise to earn a living, he was stigmatized as unethical as well―and this as a direct consequence of the injunction—not as a consequence of the claims made in the statement of claim.

Viewed in this light, the finding of the Chambers judge that “[i]t is not possible to conclude that when the injunction was granted that anyone was contemplating it would result in the lack of employment of the nature complained of” (para. 30) must be considered a palpable and overriding error of fact. [ 68 ] In this regard, it is particularly apt to refer to I.C.F. Spry, The Principles of Equitable Remedies , 6th ed. (Toronto: Carswell, 2001) at pp. 660-61 where the authors allude to the need to define “damages” in terms of real harm, rather than to have any strictly defined meaning.

As support for this more attenuated view of damages, reference is made to Ansett . The authors of Spry then state (at p. 661): … Thus generally the amount of damages that is recoverable is the same as the amount that might be determined by applying common law rules that have been adapted for similar purposes; but this is not necessarily the case, since circumstances may arise that render it equitable that the amount so payable be different from that which would have been obtained in an analogous proceeding in contract or tort at law . [emphasis added] [ 69 ] PCS insists that Mr.

Barton must bear the burden of his loss of income and pension benefits, because he did not continue with his application to set aside the injunction in 1994. This is an important point that must be addressed. [ 70 ] According to Mr. Barton, he concluded that PCS would resist every attempt he would make to bring the matter to a close sooner. By the end of 1994, he was financially incapable of maintaining a sustained legal conflict. He had sold his home to pay the initial aspects of the litigation.

He was living in his son’s basement and had applied for welfare (see: for example, para. 81 of his 2009 Affidavit and the letter of G. Semenchuck, Q.C. dated June. 1995). The offer to work in Texas came from a law school classmate. He decided it was the only offer he was going to get and took it.

His statement that he was without resources is uncontradicted. [ 71 ] It is a reasonable inference from the whole of the file, including all of the applications, the adjournments, the reported decisions and PCS’s opposition to assess damages for the breach of the undertaking, that PCS would vigorously oppose every attempt that Mr. Barton might make to get out from under the injunction. [ 72 ] For example, on November 24, 1993, Barton applied for an Order setting aside the injunction. PCS responded with a motion of its own for the following: (

i) to seal the file; (ii) to compel Mr. Barton to produce further documents; (iii) to continue his cross- examination. On December 30, 1993, MacPherson C.J.Q.B. granted all that PCS requested. He adjourned Mr. Barton’s application to have the injunction set aside. Mr. Barton testified that he lacked the resources to continue with the application, and as I have indicated, the evidence bears out his assertion. The injunction had its intended effect. [ 73 ] In 2000—seven years after the injunction had been obtained—Mr. Barton applied for an order vacating the sealing order. PCS

opposed this application and it was initially successful (unreported fiat of Malone J.). Mr. Barton appealed that decision and this Courtremitted the matter to the Court of Queen’s Bench for a further hearing (2001 SKCA 75). That application was also opposed, but this time Hunter J. of the Court of Queen’s Bench ordered the file unsealed (2002 SKQB 301, 219 D.L.R. (4th) 513). [74] Also in 2000, PCS applied in the Court of Queen’s Bench to cite Mr. Barton for contempt for breaching the undertaking bytalking to a lawyer involved in an aspect of the anti-trust litigation. Gerein C.J. (as he then was) found Mr.

Barton not guilty ofcontempt, but refused him costs because he believed that Mr. Barton had not been sufficiently diligent about complying with theinjunction (2000 SKQB 569, 201 Sask. R. 56). [75] Having regard for this, it is simply not possible to allow PCS to rely upon the principles of foreseeability and remoteness todeny a claim for the whole of the injunction period. We are not dealing with a claim of loss that is different in kind from that which theinjunction restrained.

It is a matter of duration only—a time period that was almost exclusively controlled by PCS. [76] Thus, I conclude that the Chambers judge erred by finding that Mr. Barton’s loss of income and pension benefits during thewhole of the injunction was not a loss that flowed directly from the imposition of the injunction. 2.

If the Chambers judge erred with respect to causation, should this Court quantify that loss or remit the matter to the Courtof Queen’s Bench? [77] In a usual case, an appellate court would arrive at this point in the analysis and might well remit the matter to the Court ofQueen’s Bench for the purposes of quantifying the loss. In this case, however, it would be inappropriate to do so. [78] Every legal step that Mr. Barton has taken appears to have resulted in a minimum of a two-year delay.

It has now been over 20years since the injunction was imposed and it has been over two years since this Court determined that PSC could not rely upon specialcircumstances to resist the assessment of damages. Mr. Barton is now 77 years old, and should not have to wait to receive compensationany longer. [79] As I indicated earlier, Mr. Barton submitted to the Chambers judge a report prepared by KPMG, which put forward twoscenarios. One scenario was based on what he had been paid by PCS Crown in the year before his departure. The second scenario wasbased on what Mr.

Hampton earned during that period. [80] In my view, the second scenario is wholly unreasonable. Mr. Barton left PCS Crown in 1988. He subsequently secured asettlement based on his having been constructively dismissed. He cannot now assert that if he had stayed he would have enjoyed thesame benefits as Mr. Hampton. [81] The first scenario also appears somewhat arbitrary, but it approximates what Mr. Barton would have earned under the contractwith the Cohen law firm. Under that contract, Mr. Barton was to have been paid US$180,000 in total (see p. 180a).

In his affidavit, heexplained how he had arrived at that amount: [56] …I arrived at the fee amount by concluding that the project would probably take two years of my time and US$90,000.00/yearwas approximately the value of my annual compensation at PCS (Crown) at the time of my resignation. Between March and July of 1993I performed contracted services as required. (Appeal Book, Vol. I, p. 58a) [82] I agree with the Chambers judge that Mr. Barton has not shown a causal connection between the loss of the Cohen contract andhis lack of income after the injunction issued.

This does not mean, however, that the figures used in the Cohen contract are not fairlyrepresentative of what Mr. Barton would have been paid for other work, either in some other aspect of the anti-trust litigation or for oneor more of the buyers who bought product from the potash company sellers. [83] This scenario also has the benefit of addressing the question of Mr. Barton’s pension benefits, as his annual compensation withPCS Crown included an amount for pension purposes. [84] The injunction was in force from November 18, 1993 until September 10, 2003. An argument could be made that Mr.

Barton isentitled to damages for the whole of the injunction period. The better view is that PCS’s obligation should come to end when Mr.Barton turned 65 on December 31, 2001, and would become entitled to receive some pension benefits. The Cohen contract was set toexpire on March 1, 1994. Thus, Mr. Barton becomes entitled to damages for a period of six years and nine months. [85] Based on this scenario, I order that Mr. Barton be paid an amount to be calculated according to the following principles: (

i) thebase amount for the year commencing March 1, 1994 is $109,143 per annum; (ii) the monies that Mr. Barton earned during the period inquestion should be deducted from the years in which they were earned; and (iii) he is entitled to pre-judgment interest to be calculated inthe usual way. With these principles in mind, counsel are directed to settle the resulting order. If any difficulties are encountered, eitherside may apply to this panel of the Court. 3. Did the Chambers judge err by refusing to award punitive damages? [86] Mr.

Barton asserts that the Chambers judge erred by requiring him to prove the existence of an actionable wrong, but that if itis necessary for him to do so, he argues that the conduct of PCS throughout the whole of the injunction and, particularly latterly, amountsto an abuse of process. [87] PCS resists this ground of appeal. First, PCS asserts that punitive damages are not available for a breach of an undertaking. Second, relying on Vorvis v. Insurance Corp. of British Columbia, (SCC), [1989] 1 S.C.R. 1085 at 1105-06 and Whitenv.

Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 at paras. 78-82, PCS submits if punitive damages are available for a breach ofan undertaking that they may only be awarded for a breach of contract where the conduct at issue is itself an “actionable wrong”,whether an independent tort or a breach of a different contractual duty. And, PCS submits that Mr. Barton failed to prove an independentactionable wrong.

[ 88 ] I agree with PCS that an independent actionable wrong is necessary to ground a claim for punitive damages for breach of contract and I agree that Mr. Barton failed to prove an independent actionable wrong, which is what the Chambers judge decided on this point. The only possible independent actionable wrong that conceivably might exist in this case is “the tort of an abuse of process.” [ 89 ] The evidence Mr. Barton relies upon to constitute the tort of an abuse of process is as follows. PCS invoked the Court’s equitable jurisdiction and obtained significant orders and judgments in its favour.

Most notably, in relation to the order sealing the file, maintaining the injunction for 10 years and maintaining the litigation even in the face of an application to strike for want of prosecution at the 14-year point, the Court acted so as to allow PCS to prove its claim in Court. Seventeen years later PCS chose not to exercise its right to litigate its claim. As long as PCS maintained that it had a case to make against Mr. Barton, the Courts of this Province were prepared to preserve PCS’s right to make that case. [ 90 ] Notwithstanding having discontinued its claim against Mr.

Barton, PCS continues to resile from any obligation under the undertaking and, as I have indicated, perpetuates arguments it is no longer entitled to make. As part of the Court’s decision-making process in relation to this question, PCS invited the Court to again consider Mr. Barton’s conduct. PCS writes: 10. In his application, Barton claimed both punitive damages and solicitor-client costs against PCS. In asserting these claims, Barton impugned PCS’s conduct in seeking and enforcing the Injunction Order. In the circumstances, it is appropriate to consider the conduct by Barton that PCS sought to enjoin. 11.

Although PCS’s action against Barton was discontinued prior to trial, this Court has sufficient evidence before it concerning Barton’s conduct for the purposes of: (

i) assessing the reasonableness of PCS’s conduct in seeking and enforcing the Injunction Order… [ 91 ] PCS asked this Court to consider the following: (

i) the Cohen agreement constituted a breach of Mr. Barton’s duties as a solicitor; (ii) the Cohen agreement permitted “and indeed required” a breach of Mr. Barton's duties of confidence; (iii) the Cohen agreement constituted a breach of Mr. Barton’s fiduciary duties to PCS; (iv) the Cohen agreement was a breach of Mr. Barton’s obligation to preserve PCS’s solicitor-client privilege. PCS expanded at length on these points and variations on them in the factum on the appeal and the cross-appeal. All of these comments, taken together, serve to paint Mr.

Barton in the most damaging light possible. [ 92 ] In the “Respondents’ Written Submissions” filed on Mr. Barton’s first attempt to assess damages, PCS argued that the Court should exercise its discretion to refuse to enforce the undertaking or award damages in any amount to Mr. Barton. In support of that submission, counsel for PCS wrote the following: 23. The simple fact is that there was no longer any reason, from the Plaintiff's perspective, to proceed with the litigation and seek the relief sought in the statement of claim: (

i) On his own evidence, Mr. Barton was essentially judgment proof; (ii) If anyone was inclined to commence proceedings based on information provided by Mr. Barton after the lifting of the consent order, or after reviewing the court file, they had six years to do so and, as was the case previously, absolutely no one was prepared to do so . (iii) With the unsealing of the court file and the setting aside of the consent order, the whole purpose of the action―to prevent a fiduciary from disclosing and making available to the public, information said to be privileged and confidential was gutted. 24.

In these circumstances, any relief which PCS might obtain as a result of proceeding with the actions had been rendered moot. The rational thing to do was to discontinue the actions and not incur further expense or utilize court time and resources when no effective result could be achieved. (See: Respondent’s Written Submissions, dated November 24, 2009, and filed November 25, 2009 in Q.B. No. 3614 of A.D. 1993 and Q.B. No. 3209 of A.D. 1993, J.C. of Regina, emphasis added) [ 93 ] The consequences of all this for Mr. Barton have been nothing short of devastating.

The allegations against him in the statement of claim, which called into question his professional integrity, and which were used to obtain the interim injunction, will never now be tested in court. Moreover, it is a reasonable inference that it was never PCS’s intention to pursue those allegations—at least

latterly. [94] Broadly speaking, Mr. Barton asserts he is entitled to punitive damages because of the effect on his reputation and for what hecalls PCS’s abuse of the process of the Courts. In

summary, he points to the following to support his claim: (

i) the statement of claim contains damaging allegations against Mr. Barton, which have never been proven; (ii) the statement of claim was used to obtain the injunction, which carried the allegations of breach of fidelity further by not trustingMr. Barton to even “contact” the U.S. Litigants or their solicitors; (iii) the protracted nature of the proceedings, which were vigorously and relentlessly pursued by PCS; (iv) the superior economic power of PCS meant that Mr. Barton would be rendered impecunious in any protracted legal battle; (

v) the disastrous effect on his family, his health, his career and his reputation of the unproven allegations against him for which noamount of pecuniary damages could compensate. [95] In my opinion, however, this evidence falls short of demonstrating the tort of an abuse of process. I rely upon this

summary ofthe requirements to establish the tort of abuse of process: So the cause of action is alive, both in England and in Canada. Its essential requirements, if we may reiterate them, appear to be: (

a) The defendant must have used the legal process (whether with or without reasonable probable cause, the viability of his casebeing irrelevant); (

b) He must have done so for a purpose other than that which the process in question is designed to serve, that is, for a collateral andillicit purpose; (

c) He must have done some definite act or made some definite threat in furtherance of the purpose; and, (

d) Some measure of special damage must be shown. (See: John Irvine, “The Resurrection of Tortious Abuse of Process” (1989) 47C.C.L.T. 217 at 219-20)). [96] Some courts collapse this four-part test into two: (

i) a collateral and improper purpose; and (ii) an overt and definite act orthreat in furtherance of an illegitimate purpose (see: Canadian Pacific International Freight Services Ltd. v. Starber International Inc.(1992), 12 C.C.L.T. (2d) 321 at 324-25, 44 C.P.R. (3d) 17 (Ont. Ct. J. (Gen Div.)); Metrick v. Deeb (2003), (ON CA),172 O.A.C. 229 at 230-31, 16 C.C.L.T. (3d) 298 (Ont. C.A.); and Apotex Inc. v. Ontario (Minister of Health and Long-Term Care)(2005), (ON CA), 204 O.A.C. 275, 42 C.P.R. (4th) 392 at 399 (Ont. C.A.)).

It is usually upon the requirement of an“overt act” that claims for abuse of process fail. (See also: Beckingham v. Sparrow (1977), 2 C.C.L.T. 214 (Ont. H. Ct. J.)). [97] In the within appeal, Mr. Barton’s claim fails on the basis that the evidence does not disclose any clear overt act that wouldsustain an abuse of process claim. While PCS’s actions may be considered high-handed and vindictive, the evidence does not discloseany overt action, extraneous to the legal proceedings, to support an abuse of process claim.

PCS’s actions, which I have outlined above,support the decision of the Chambers judge to award legal fees as damages and to grant damages for mental distress, but fall short ofproving the tort of abuse of process. [98] Since I have concluded that the Chambers judge did not err by finding that PCS’s conduct does not rise to the level of anactionable wrong, it is not strictly necessary for me to consider whether punitive damages are available for a breach of an undertaking. Imust say, however, that I question the proposition that they may not be available in light of the comments made by Spry (at p. 661).

Thecases the author cites in support of the proposition that punitive damages are available when assessing damages for breach of anundertaking are: Digital Equipment Corp. v. Darkcrest Ltd., [1984] Ch. 512; Columbia Pictures Inc. v. Robinson, [1987] Ch. 38. Whileno punitive damages were awarded in these cases, each supports the proposition that punitive damages should be available whenassessing damages under an undertaking in damages. See also: United States v. Yemec, 2013 ONSC 50 where the Court would haveawarded damages if the Rules of Court had permitted this to occur and A.A.S.

Zuckerman, “The Undertaking in Damages―Substantiveand Procedural Dimensions” (1994) 53 Cambridge L.J. 546 for a further discussion of the issue. V. Conclusion [99] The appeal is allowed in part and the cross-appeal is dismissed. The Chambers judge ordered that Mr. Barton be awardeddamages as an actual reimbursement of legal bills paid or due and owing (at para. 43). For greater certainty, that award extends to thepayment of his legal bills in relation to this appeal. DATED at the City of Regina, in the Province of Saskatchewan, this 20th day of December, A.D. 2013.

“Jackson J.A.” Jackson J.A. I concur “Richards C.J.S. for” Klebuc J.A. (as per authorization) OTTENBREIT J.A. I. introduction [ 100 ] Potash Corporation of Saskatchewan Inc. and Potash Corporation of Saskatchewan Sales Limited (collectively referred to as “PCS”) commenced two actions against Keith Barton on October 8 and November 18, 1993, pursuant to which PCS obtained an order and a consent interim injunction respectively against Mr. Barton restraining him from disclosing any information about the business and affairs of PCS.

Thus began a legal saga which has lasted some twenty years. [ 101 ] The end of this saga began in March 2009 when PCS discontinued both its actions on which the interim injunction was based. Mr. Barton had successfully applied in September 2003 to set aside the interim injunction. In response to the discontinuance, he applied to have damages assessed against PCS based on the undertaking as to damages filed by PCS on the granting of the injunction in November 1993. He was unsuccessful. Mr. Barton appealed and this Court granted the appeal and ordered a new assessment.

This was eventually heard and determined by the Court of Queen’s Bench in a decision found at 2011 SKQB 477 . [ 102 ] The Court determined that Mr. Barton was entitled to recover from PCS all of the solicitor-client costs incurred with respect to proceedings taken in Saskatchewan and related to the injunctions, and additionally $20,000 for damages for mental distress together with pre-judgment interest thereon. All his other claims against PCS for damages were dismissed. Mr. Barton now appeals the dismissal of those other claims for damages and the quantum of damages for mental distress.

PCS cross-appeals the award of solicitor-client costs and the award of damages for mental distress. II. Facts and background [ 103 ] The facts and background respecting this matter have been variously set forth in decisions of this Court, as well as the Court of Queen’s Bench, including Potash Corp. of Saskatchewan Inc. v. Barton , 2010 SKQB 35 , 348 Sask. R. 251; Potash Corp. of Saskatchewan Inc . v. Barton , 2011 SKCA 96 , 336 D.L.R. (4 th ) 248; and Potash Corp of Saskatchewan Inc. v. Barton , 2011 SKQB 477 , 345 D.L.R. (4 th ) 713. [ 104 ] Detailed facts as they pertain to Mr.

Barton’s grounds of appeal will be dealt with as part of the analysis. However, to provide some context to this matter a good general overview of the facts and background was succinctly set out by Vancise J.A. at 2011 SKCA 96 on the appeal of Mr. Barton’s first attempt at a damage assessment based on the undertaking: [5] Barton was a Vice-President and General Counsel for PCS (Crown) for some 10 years from 1979 to 1988.

He resigned from his employment in 1988 citing lack of enough work to justify the continuation of the positions of General Counsel and a Senior Executive Officer. [6] He later contended that the reason he resigned was his concern about the activities of PCS Crown’s President, Charles Childers, in certain dealings with the price of potash which he (Barton) believed violated the Sherman antitrust laws. [7] After leaving PCS, Barton actively sought employment and consultancy work in large part based on his asserted knowledge of what he contended were Childers’ and other senior executives’ illegal acts of price fixing.

Notwithstanding his resignation, Barton threatened to make it known that concerns about antitrust disclosure were the reason for his constructive dismissal and indeed commenced an action claiming damages for denial of severance pursuant to company policy or constructive dismissal. That action was settled and Barton received $167,500 and executed a release of claims against PCS. [8] After the settlement of the action for wrongful dismissal, Barton renewed his allegations against PCS and its senior executives.

He wrote to members of the Board of PCS alleging certain wrongdoings by senior management but no action was taken. He contacted private law firms in the United States who were engaged in litigation against certain members of the potash industry, including PCS, and

agreed to provide certain information of these alleged antitrust pricing activities. [9] PCS became concerned about Barton’s activities by reason that, in its opinion, such activities and disclosure related to information received by him in his capacity as General Counsel and Vice-President would be a breach of solicitor-client privilege and/or a breach of his fiduciary duties and obligations. [10] In 1993, PCS sued Barton in Canada first in British Columbia and later in Saskatchewan after Barton moved back to the province.

PCS obtained an interlocutory injunction in British Columbia which was later ordered by the Court of Queen’s Bench to be effective in Saskatchewan (see Potash Corp. of Saskatchewan Inc. v. Barton , 2009 SKCA 7 , [2009] 3 W.W.R. 1 at paras. 6 and 7 ). In November 2003 [ sic - 1993 ], a consent interim injunction was granted in Saskatchewan (see Q.B. 3614 of 1993 at para. (a)).

Barton filed a statement of defence in which he denied that all communications made to him during his employment at PCS were made in his capacity as a lawyer and that he breached solicitor-client privilege. [11] Barton brought an application to set aside the interim injunction in December of 1993. That matter was adjourned and the then Chief Justice of the Court of Queen’s Bench ordered the entire file sealed until a motion was heard. That motion was never heard although a renewed motion was brought seven years later to set aside the injunction but was dismissed.

In the interval, the U.S. antitrust class action proceeded in the U.S. and Kyle J. of the United States District Court made certain findings concerning Barton’s ethical duties and responsibilities. In short, he found him to be unethical and disqualified certain counsel who had been dealing with Barton from continuing in the action. [12] A number of other legal skirmishes between Barton and PCS took place in the U.S. between 1994 and 2000. In 2001, this Court set aside the decision refusing the application to unseal the file and returned the matter to the Court of Queen’s Bench.

Again, in 2002, Madam Justice Hunter set aside the order sealing the file and, in 2003, Barton applied for and was granted an order setting aside the interim injunction which had been granted against him 10 years earlier. [13] Barton moved to dismiss the action for want of prosecution in 2007. That application was dismissed and confirmed by this Court in 2009. [14] Finally, PCS discontinued the action in March of 2009 and Barton almost immediately filed this application in July of 2009. The application was dismissed save with respect to certain issues pertaining to costs.

It is from that decision that this appeal is taken. [ 105 ] Some further background respecting the U.S. antitrust action mentioned in the factual

summary of Vancise J.A. is warranted. In March of 1993 Mr. Barton entered into an agreement with Cohen Milstein, a U.S. plaintiff’s law firm, to “assist in the examination of issues concerning whether certain U.S. and Canadian potash producers may have fixed prices or otherwise restrained trade” in the pursuit of antitrust civil claims by their clients (the “Cohen Milstein Agreement”). In return for assisting the Cohen Milstein firm, Mr. Barton was to receive payments totaling $180,000 USD from March 1993 to January 1994.

The Cohen Milstein Agreement, in part, read as follows: I will not be expected to provide you with information with respect to the activities of my former employer, CIC Mineral Interests Corporation, except that which relates to price-fixing or other anti-competitive activity or which is currently in the public domain. … This contract may be terminated at any time the project is abandoned other than as a result of the settlement of claims. … [emphasis added] [ 106 ] Included in the Cohen Milstein Agreement was a hand-written notation made prior to execution which read as follows: In the event the project is abandoned before the end of the one year period of Feb. 28, 1994, no further payments under this agreement shall be due and no further services will be rendered. [ 107 ] In June of 1993 Cohen Milstein commenced class action proceedings in Minnesota alleging antitrust violations by various producers of potash including PCS.

Mr. Barton provided his services pursuant to the Cohen Milstein Agreement in respect of these proceedings. [ 108 ] At the time the U.S. antitrust action was commenced, Mr. Barton lived in British Columbia. Once PCS became aware of Mr. Barton’s connection to the action, PCS applied to the Supreme Court of British Columbia on July 22, 1993, for an injunction to prevent further disclosures by Mr. Barton with respect to the litigation. Mr. Barton ultimately consented to an injunction issued by that Court on July 30, 1993. [ 109 ] On September 14, 1993, Mr. Barton moved from Vancouver to Saskatchewan.

As a result, PCS brought proceedings on October 8, 1993, in Saskatchewan in QB 3209/93 for the same relief it had sought and obtained in British Columbia, and on October 14, 1993, was granted an order that the injunction by the Supreme Court of British Columbia was binding on Mr. Barton in Saskatchewan. On November 18, 1993, PCS commenced QB 3614/93, a similar action against Mr. Barton pursuant to which, according to Mr. Barton, an interim injunction was issued on November 18, 1993, with Mr. Barton’s consent as follows:

The Defendant, Keith Barton, is hereby restrained until further order of this Court from disclosing or continuing to disclose any information concerning the business or affairs of the Plaintiffs, their subsidiaries and predecessors in title to the Plaintiff and their subsidiaries, to any person including without limitation the complainants or their counsel in certain pending or prospective United States anti-trust litigation all as referred to in the Affidavit of John L.M. Hampton filed herein and termed the “U.S. Litigants” and restraining the Defendant from any contact or employment with the U.S.

Litigants in any way related to potash. [emphasis added] [ 110 ] In support of the application in QB 3209/93, PCS gave an undertaking as to damages dated October 14, 1993, (the “undertaking”) in the following terms: The plaintiffs Potash Corporation of Saskatchewan Inc. and Corporation Of Saskatchewan Sales Limited, hereby undertake to abide by any order the court may make as to damages in case it is later shown that the Respondent, Defendant, has by reason of the injunction granted in these proceedings , sustained any damages which the plaintiffs ought to pay .

It appears that this undertaking was made applicable to QB 3614/93 since there is no evidence of a second undertaking. [ 111 ] After learning about the particulars of Mr. Barton’s relationship with Cohen Milstein, PCS had moved to disqualify Cohen Milstein in the antitrust action on the ground that the proceedings had been tainted by Mr. Barton’s involvement and misconduct. On December 9, 1993, three weeks after the injunction was granted in Saskatchewan, Kyle J. of the U.S. District Court, Minnesota, disqualified Cohen Milstein and firms associated with it from pursuing claims against PCS on the basis that Mr.

Barton would not avail himself of the crime/fraud exception to solicitor-client privilege and that Mr. Barton had breached his duty of confidence and his duty to avoid acting in a matter detrimental to his former client under Chapters IV and V of the Code of Professional Conduct of the Law Society of Saskatchewan. [ 112 ] It is common ground that Mr. Barton did not receive the payment of $59,616 CDN on October 1, 1993, nor his payment of $59,292 CDN due on January 1, 1994, pursuant to the Cohen Milstein Agreement. III.

Judicial History and Decision of the Chambers judge [ 113 ] On the appeal of the first damage assessment application Vancise J.A. ordered a rehearing in these terms: [65] There will therefore be an order that the matter be returned to the Court of Queen’s Bench for the holding of a reference to determine whether or not Barton suffered any damage as a result of the obtainment of the interlocutory injunction and, if so, fixing the amount of damages that he did suffer.

Included in that reference would be the determination of whether Barton is, as he claims, entitled to punitive damages and whether he is entitled to his costs on a solicitor-client basis. [ 114 ] On the rehearing, the Chambers judge first determined that the proper approach to measuring damages arising from an interim injunction was based on contract principles and pursuant to the germane jurisprudence constructed a pretend or notional contract with the following terms as a starting point for the assessment: This is a contract between PCS and Barton whereby PCS agrees not to prevent Barton from disclosing information about the business or affairs of PCS to any person (or to prevent Barton from being employed by such person) who is involved in United States antitrust litigation in any way related to potash.

He proceeded on the basis that this contract had been breached by virtue of the injunction. He qualified the application of contract principles by the proviso again based on the germane jurisprudence that such application must be fair and reasonable and that he was exercising an equitable jurisdiction. [ 115 ] On the assessment Mr.

Barton claimed several heads of damage including loss of income from the Cohen Milstein Agreement, loss of employment opportunity generally from the date of the injunction going forward, solicitor-client costs, damages for mental distress and punitive damages. [ 116 ] The Chambers judge determined the following with respect to the Cohen Milstein Agreement: [20] I understand the Kyle decision is not determinative of anything in this motion. However, it resulted in the termination of the applicant’s services with the law firm.

This is a reality that cannot be ignored. [21] I do not know why the Cohen law firm did not pay up on October 1, 1993. Nor was I told of any efforts made by the applicant to get paid. However, it would make no sense and would be fundamentally unfair to grant damages of $90,000.00 (U.S.), plus interest, to the applicant and ignore the reality that regardless of any Canadian injunction, the applicant was not going to get the $90,000.00 in any event. I also note that in terms of time, the Saskatchewan order was granted just 21 days before the Minnesota decision was rendered on December 8, 1993.

Therefore, I am not prepared to grant damages arising from the consulting contract. [ 117 ] Respecting loss of employment opportunity, the Chambers judge determined: [29] I cannot conclude the applicant has proven that it was the injunction or even some wash-over of the litigation that prevented himself from obtaining employment after 1993. The bare bones allegation that he did not receive employment because of the injunction is not adequate. The cross-examination points out that he really has no evidence to go on at all. He is merely speculating and has no evidence why he did not get the jobs.

It is irrelevant what Mr. Hampton made. Therefore, the applicant has not met the burden of proof to establish this head of damages. Nor is it this Court’s duty to act so “fairly” to simply go along with this. Therefore, whether he has

hired KPMG LLP to put some numbers together (see Tab B, brief of applicant) or not, is not the issue. Adequate proof is the issue. [30] Further, even if some considerable latitude was to be afforded the applicant in this regard, the limiting factors of foreseeabilityand remoteness come into play. It is not possible to conclude that when the injunction was granted that anyone was contemplating itwould result in the lack of employment of the nature complained of by the applicant. Additionally, it is simply too remote.

I believe thisis part of the “cascade of misfortune falling on the plaintiff” that the Swans refer to in Canadian Contract Law, supra. Accordingly, Idismiss this specific request for damages. [118] Mr. Barton had claimed a prospective income loss of $951,264 from 1994 to 2001 and the lost opportunity to contribute to anypension plan between 1993 and 2001.

The Chambers judge said the following respecting these claims: [31] There does not appear to be any evidence to support either the loss of $118,908.00 (other than that may have been his salarywhen employed at one of the respondents prior to his leaving the company) or pension loss. [32] The loss of income appears to be derived from the lack of employment possibilities I have discussed above. I have alreadyanswered this. The pension (and candidly conceded by the applicant’s counsel during argument) is simply a number.

There is no basis inthe evidence as to any pension loss and certainly nothing to support the KPMG calculations. Further, this also falls prey to theforeseeability and remoteness limitations. I am aware of the line of cases that state that even though it may be difficult to make anaccurate estimate of what the loss is; it is the court’s duty to do the best it can (e.g. Canlin Ltd. v. Thiokal Fibres Canada Ltd. (1983) (ON CA), 40 O.R. (2d) 687 (Ont. C.A.), at p. 691). However, here there is really nothing to go on.

Accordingly, likethe loss of income claim, I dismiss such claims. [119] Respecting solicitor-client costs, the Chambers judge determined: [41] Although not binding, I am prepared to follow Stonehocker, supra. I do so, aware of the risk of appearing to have reached aninconsistent decision in that here I grant damages for solicitor-client costs flowing from the Saskatchewan injunction and yet I haverefused to grant damages for some of the other heads of damages.

However, I do this because of the clear wording of Stonehocker andbecause I believe the damages for solicitor-client costs meet the tests for causation, foreseeability, remoteness and proof. The breach ofthe pretend contract would have naturally resulted in the need for legal assistance and the hiring and paying for lawyers. [120] Respecting mental distress, the Chambers judge said: [49] However, I am satisfied that on the balance of probabilities, the applicant has established that he did suffer damages and shouldreceive compensation under this category.

The extent of all of this, however, is still hard to quantify despite his attempts to set out hissituation. In considering the quantum of damages, I will be guided by the decision in Fidler, supra. In that case, the Supreme Court ofCanada upheld an award of $20,000.00 for compensation for the psychological consequence of an insurer’s breach of contract. (see alsoGulston v. Aldred, 2011 BCSC 1051, [2011] B.C.J. No. 1487 (QL) when court awarded $20,000.00 for mental stress for breach of housesale contract and Rowe v. Unum Life Insurance Co. of America, [2006] O.J.

No. 4937 (QL) where court awarded $30,000.00 for mentalstress arising from breach of insurance contract case.) Considering the evidence provided and the level of persuasiveness of suchevidence; I believe the appropriate level of damages should be set at $20,000.00. I further order that pre-judgment interest shall be paidon the $20,000.00 from and including November 18, 1993 pursuant to The Pre-judgment Interest Act. [121] Respecting punitive damages, the Chambers judge determined: [57] There is nothing to establish that the respondents have acted in such a way as to invoke the sanctions of the court.

It is not proof(as argued by the applicant) that such damages should be paid simply because the respondents are large, wealthy corporations and theapplicant is not. Accordingly, I dismiss the claim for punitive damages. IV. issues [122] Mr. Barton raises nine grounds of appeal and PCS offers six arguments in support of its grounds in the cross-appeal. The groundsand issues raised by each party in their appeal can be combined and conveniently dealt with as follows: (

a) Did the Chambers judge err by misdescribing the notional contract and by failing to find that it should have included covenants byPCS: (

i) not to prevent Mr. Barton from disclosing to anyone (whether or not involved in the U.S. antitrust litigation) information about thebusiness or affairs of PCS; and (ii) not to prevent Mr. Barton from having any contact with the U.S. litigants in any way related to potash? (

b) Did the Chambers judge err in finding that the events giving rise to the damage suffered by Mr. Barton which occurred after thedate of the injunction was an impediment to his recovery? (

c) Did the Chambers judge err in law in finding that it was the litigation, as distinct from the injunction, which was the cause of thelosses suffered by Mr. Barton? (

d) Did the Chambers judge err in relying on the judgment of Kyle J. in Re: Potash Antitrust Litigation, U.S.D.C., Dis

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