Alberta – dispute requiring expert evidence and expeditious resolution prompts court to propose arbitration – #505

In Canadian Consulting Engineers Inc v. Brazeau (County), 2021 ABQB 464, Master W. Scott Schlosser declined to proceed by way of summary judgment because “this dispute is not now capable of being resolved in a fair and just way on the existing record” and required the assistance of expert opinion witnesses.  Master Schlosser observed that plaintiff made “no pretense of applying for a summary determination in the course of an ordinary lawsuit” and that its “strategy appears to have been to prepare this case for Summary Judgment directly”.  Having observed plaintiff’s “very ambitious path taken” and desire to “seek expeditious resolution” and having qualified the dispute as unsuitable for summary judgment due to the expert evidence required, Master Schlosser did prompt the parties to engage in the arbitration still available in their contract and, when doing so, to retain “an expert arbitrator”.

Canadian Consulting Engineers Inc. (“CCE”) and Brazeau County (“County”) disputed payment of invoices issued under a series of engineering agreements. CCE sought payment of its invoices, stating that its work met industry standards, whereas County asserted that CCE failed to meet its contractual obligation, arguing repudiation.

In response to a ninety-two (92) item Notice of Default, CCE sued for payment of its invoices and County filed “a somewhat general Statement of Defence”.  At paras 6-9, Master Schlosser sketched the record created by the parties’ respective filings, including affidavits and briefs, a notice to admit and response and CCE’s application for summary judgement and he referred to the adjournment of the hearing initially set for September 2020.

[8] CCE then filed an Affidavit of it’s principal (991 pages in 4 volumes), followed by a Summary Judgment application. The application was originally set for September of last year. The text of their Application Brief was 6 pages.

[9]  The County then filed its Responding Brief (18 pages) and their own Affidavit (203 pages) about a month before the application was to be heard. CCE then filed a Supplementary Affidavit (187 pages). The application was then adjourned. Both affiants were examined on their Affidavits (140 pages each). There were much expanded rebuttal briefs. There has been no questioning for discovery, though the examinations on the Affidavits were fairly wide-ranging and, to a large extent, have taken its place”.

Prior to describing the record before him and the procedure followed to that date, Master Schlosser had observed that CCE could not lien County’s project as it qualified as a public work but “treated this as if it were a lien matter and seek expeditious resolution”. Master Schlosser prefaced that observation with a comment regarding CCE’s decision to apply for summary judgment.

The Plaintiff’s approach is interesting in that it makes no pretense of applying for a summary determination in the course of an ordinary lawsuit. Instead, the strategy appears to have been to prepare this case for Summary Judgment directly. The record reflects this approach”.

Master Schlosser viewed the materials, noted the technical skill of both parties’ witnesses at para. 23 whose opinions were “diametrically opposed” and, absent agreement of the parties, resisted reliance on documents which were merely attached to briefs but not “tendered in any formal way”. Master Schlosser concluded that he could not decide the matter without the assistance of expert opinion witnesses. “It is my view that this dispute is not now capable of being resolved in a fair and just way on the existing record”.

Master Schlosser recognized the “very ambitious path taken” by CCE for summary judgment but remain unsatisfied that he could make a “fair and just resolution” based on the record before him.

[26]  A summary determination is first and foremost a vote of confidence in the record before the Court (Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49, at para 47(d) and Nelson v Grande Prairie (City), 2018 ABQB 537, cited there). The Court must be satisfied that if a case progresses, the record will not become substantially better, or different from the one that is before it now. The Court also has to be satisfied that there are no evidentiary conflicts sufficient to oblige it to see the witnesses to resolve the inconsistencies in the evidence”.

Master Schlosser concluded that “this case really comes down to a battle of the experts” . Expert opinion evidence would assist the court to determine the parties’ respective positions in light of industry standards. “This is not really a factual matrix type of scenario, but more one of an objective determination of an ‘opinion matrix’ and, ultimately, about who’s expectations will prevail”.

In refusing to proceed to a summary disposition based on the record, Master Schlosser proposed to issue a procedural order which “might be helpful in to keep this matter progressing at a swift pace”.  Having noted his own contribution to advancing the resolution in that respect, Master Schlosser concluded his reasons with a prompt to the parties to engage in arbitration, made possible to them in their contract but subject to apparent further agreement.

I also note that the contract provides a mechanism for dispute resolution (general conditions 15.1, 15.2, and 15.3) but contemplate negotiation, mediation and, with the agreement of the parties, arbitration. It may well be that a preferable approach would be to engage an expert arbitrator”.

urbitral notes – First, for other decisions containing court support for those willing to engage in arbitration, see the earlier Arbitration Matters notes:

(i) “Ontario – complex contractual matrix and lack of privity prompts court to propose arbitration – #471” regarding CUSO International v. Pan American Development Foundation, 2021 ONSC 3101. Mr. Justice Calum MacLeod relied on forum non conveniens principles to resolve an application to stay Ontario litigation pending the outcome of litigation in Colombia.  Despite a complex matrix of documents and contracts to which the litigants were not all parties, MacLeod J. urged the litigants to consider a submission agreement to arbitrate.  Though that complexity and lack of privity often serve as lines of first resistance for a litigant objecting to arbitration, MacLeod J. relied on both as his prompts..

(ii) “Ontario – consent order prompts agreement to arbitrate to complete it and fresh litigation over vague term – #326” regarding Lokhandwala v. Khan et. al., 2020 ONSC 3209. Mr. Justice William M. LeMay determined that an offer received for a property qualified as “reasonable” according to a consent order agreed to by the parties in an earlier hearing.  That consent order also included an agreement to arbitrate, if need be, the choice of real estate agent to list the property.  LeMay J.’s reasons illustrate the care needed by parties to disputes when drafting terms to resolve their disputes so that today’s resolution does not inadvertently sow seeds for future, new disputes.  The reasons also include helpful references to case law on judicial notice and the pandemic.

(iii) “Québec – parties prompted to consider consent award, not litigate whether settlement occurred – #297” regarding Syndicat de la copropriété Marché St-Jacques v. 9257-3302 Québec inc., 2020 QCCS 975. Mr. Justice Sylvain Lussier refused to homologate a transaction (settlement agreement) and reminded the parties that their contract contained an agreement to arbitrate further to which they could obtain a consent award recording their settlement.  Lussier J. reviewed the purported settlement and determined that it lacked most of the essentials to qualify as a transaction such as a mention of the exact disputes, the parties’ respective claims made leading up to the settlement, any judicial/arbitral proceeding settled, a release or payment.

(iv) “Ontario – offer by unsuccessful parties to engage in streamlined dispute resolution justifies reduced costs award – #504” regarding Crosslinx v. Ontario Infrastructure, 2021 ONSC 4364. Mr. Justice Markus Koehnen limited costs awarded to successful Applicants due to their failure to accept Respondents’ offer to discontinue Applicants’ court application and return to the parties’ dispute resolution process, thereby skipping certain steps.  While he acknowledged the potential difficulty in comparing non-pecuniary elements in offers to settle against eventual court orders, Koehnen J. limited cost recovery to $92,119.92 rather than the $430,000.00 sought because Respondents’ offer, if accepted, “would have led to both a negotiation and a final determination of the issues in a much faster timeframe than is possible under my order”. 

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