581257 Alberta Ltd. v. Aujla, 2011 ABQB 39

• Judge: Topolniski, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 25, 2010
• Citations: 2011 ABQB 39;(2011), 507 A.R. 315 (QB)

581257 Alta. Ltd. v. Aujla (2011), 507 A.R. 315 (QB)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. FE.028

581257 Alberta Ltd. (plaintiff) v. Balwinder Aujla and Harwinder Aujla (defendants)

(0803 04677; 2011 ABQB 39)

Indexed As: 581257 Alberta Ltd. v. Aujla

Alberta Court of Queen's Bench

Judicial District of Edmonton

Topolniski, J.

January 24, 2011.

Summary:

The plaintiff employed the two defendants (the Aujlas) as cashiers and shelf stockers at one of its liquor stores. The plaintiff alleged the Aujlas misappropriated $350,000 from the store's till between 2000 and 2008, and converted those funds to their own use. The plaintiff obtained partial summary judgment for specific conversions occurring on particular dates. The chambers judge directed that the balance of the claim proceed to trial for a determination as to whether the Aujlas had converted other monies and, if so, when and how much. The outcome was heavily dependent on credibility findings and the plaintiff's ability to prove its losses. At the conclusion of the trial, the plaintiff reduced its damages claim to a maximum of $116,000.

The Alberta Court of Queen's Bench determined the issues. The plaintiffs established loss (nominal, compared to that sought) beyond what was admitted to by the defendants.

Damage Awards - Topic 525

Torts - Injury to goods or personalty - Trespass - Conversion - [See Damages - Topic 1814 ].

Damages - Topic 106

General principles - Evidence and proof - Onus of proof - [See Equity - Topic 3607 ].

Damages - Topic 1301

Exemplary or punitive damages - Wrongful seizure, detention or conversion of goods - The defendants (husband and wife) used a common scheme to convert money when they worked in the plaintiff's store - The Alberta Court of Queen's Bench concluded that an award of punitive damages would serve no rational purpose - The defendants' conduct was blameworthy, deliberate, and something from which they profited - However, there were no identified aggravating circumstances that would not be present in almost any case of employee conversion - There should be no automatic entitlement to punitive damages attaching to particular causes of action - "Punitive damages remain very much an exception" - The following consequences were a sufficient deterrent, both general and specific: the defendants might face criminal proceedings; given the plaintiff's position on damages, they had been put to the expense of a longer trial than ordinarily would have been expected; and they had been affected by a pre-judgment attachment order freezing all their assets for a significant period of time - See paragraphs 95 to 101.

Damages - Topic 1814

Torts affecting goods - Conversion - Basis for calculation - The defendants (husband and wife) converted money when they worked in the plaintiff's store - The plaintiff, a numbered company, had not demonstrated a loss other than the misappropriations admitted by the defendants - It asked that damages be inferred by reason of the defendants' failure to offer up reasonable explanations for certain of the funds which they had on deposit in their bank accounts - The Alberta Court of Queen's Bench stated that "[t]he Court must approximate a sum of damages on the material available, even though it may be little better than a guess" - The foundation for making a damages award had to first exist - The plaintiff was obliged to keep its business records for tax purposes for six years - Yet it undertook no review of its records, a step which the defendants' expert suggested and the court accepted was the most appropriate starting point for quantifying its losses - Calculating damages by multiplying the defendants' combined, one-day conversion by the shifts they worked was imperfect - Nevertheless it was, of the options, somewhat fairer to the plaintiff which should receive the benefit of any doubt in respect of the "best efforts" calculation - See paragraphs 59 to 92.

Equity - Topic 3607

Fiduciary or confidential relationships - General principles - Relationships which are not fiduciary - The defendants (the Aujlas) converted money when they worked in the plaintiff's store - The analysis of damages focussed on whether the defendants owed a fiduciary duty to the plaintiff and whether any other factors would alter the typical onus of proof of loss - The Alberta Court of Queen's Bench found that the defendants did not owe fiduciary obligations to the plaintiff - "Like any other employees who owe a duty of good faith and loyalty to their employer, the Aujlas were duty bound not to pilfer from the Plaintiff. Clearly, they breached that duty, but the fact they were entrusted by the Plaintiff with access to its money did not make them fiduciaries of the Plaintiff" - See paragraphs 41 to 58.

Practice - Topic 4500

Discovery - Use of examination in court - Reading of discovery evidence into the record - The Alberta Court of Queen's Bench considered the use and effect of evidence read in from examinations for discovery as canvassed in a number of Alberta authorities -"Examination for discovery evidence adopted by a party at trial is like any other evidence. It may be contradicted or qualified by other evidence led by either of the parties and the court may assess its value in the context of all of the evidence presented on the issue. It does not become conclusive evidence when it is read in and the court is not bound to accept and follow it any more than it would in terms of other evidence" - The evidence in the present case was such that it was open to the court to reject the answers read in by the plaintiff where there was other more reliable evidence to the contrary - See paragraphs 7 to 13.

Practice - Topic 7408

Costs - Solicitor and client costs - General principles - Solicitor and client costs as damages or punishment - [See Practice - Topic 7454 ].

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Improper, irresponsible or unconscionable conduct - The defendants (husband and wife) converted money when they worked in the plaintiff's store - The plaintiff, to support its bid for solicitor-client costs, argued that the defendants' conduct was reprehensible, scandalous or outrageous prior to the litigation - The Alberta Court of Queen's Bench held that the plaintiff was not entitled to solicitor-client costs, despite instances of misconduct by the defendants - The court was not satisfied that the trial would have been obviated or significantly shortened had the defendants been truthful on the material points in question - The plaintiffs established loss (nominal, compared to that sought), beyond what was admitted to by the defendants - While the court did not believe much of the defendants' evidence about their pilfering, that did not entitle the plaintiff to solicitor-client costs - See paragraphs 102 to 111.

Torts - Topic 3107

Trespass - Trespass to goods - Conversion - Damages - General - [See Damages - Topic 1814 ].

Cases Noticed:

Tschritter v. Otto (2007), 422 A.R. 141; 415 W.A.C. 141; 2007 ABCA 415, refd to. [para. 8].

Hayhurst v. Innisfail Motors Ltd., [1935] 1 W.W.R. 385 (Alta. C.A.), refd to. [para. 11].

Michel v. Lafrentz et al. (1999), 232 A.R. 62; 195 W.A.C. 62; 1999 ABCA 21, leave to appeal refused (2000), 253 N.R. 199; 255 A.R. 400; 220 W.A.C. 400 (S.C.C.), refd to. [para. 12].

Mackow v. Sood (1993), 141 A.R. 233; 46 W.A.C. 233 (C.A.), refd to. [para. 12].

Huff v. Price (1990), 76 D.L.R.(4th) 138; 51 B.C.L.R.(2d) 282, additional reasons [1991] B.C.A.C. Uned. 1 (C.A.), leave to appeal refused [1991] 1 S.C.R. vii, appld. [para. 39].

Canadian Aero Service Ltd. v. O'Malley et al., [1974] S.C.R. 592; 40 D.L.R.(3d) 371, consd. [para. 41].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, consd. [para. 42].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57, refd to. [para. 42].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, consd. [para. 43].

Alberts et al. v. Mountjoy et al. (1977), 16 O.R.(2d) 682 (H.C.), consd. [para. 45].

McNabb (Bankrupt), Re (1995), 167 A.R. 209; 27 Alta. L.R.(3d) 420 (Q.B.), dist. [para. 46].

South Nahanni Trading Co. et al. v. Gravel, [2007] O.T.C. Uned. G74; 36 C.B.R.(5th) 115 (Sup. Ct.), dist. [para. 46].

57134 Manitoba Ltd. v. Palmer (1989), 37 B.C.L.R.(2d) 50 (C.A.), consd. [para. 50].

Imperial Sheet Metal Ltd. et al. v. Landry et al. (2007), 315 N.B.R.(2d) 328; 815 A.P.R. 328; 2007 NBCA 51, consd. [para. 51].

Barton Insurance Brokers Ltd. v. Irwin et al. (1999), 119 B.C.A.C. 109; 194 W.A.C. 109; 63 B.C.L.R.(3d) 215; 170 D.L.R.(4th) 69; 1999 BCCA 73, consd. [para. 53].

Allstate Insurance Co. of Canada v. Laroque et al., [2008] O.T.C. Uned. 244; 64 C.C.E.L.(3d) 119 (Sup. Ct.), refd to. [para. 54].

Paso Services Ltd. v. Ratz et al. (2008), 322 Sask.R. 79; 2008 SKQB 356, refd to. [para. 54].

Carson International Inc. v. Biggar et al. (2010), 257 Man.R.(2d) 15; 322 D.L.R.(4th) 668; 2010 MBQB 198, refd to. [para. 54].

Pan Pacific Recycling Inc. et al. v. So et al., [2006] B.C.T.C. 1337; 52 C.C.E.L.(3d) 261; 2006 BCSC 1337, refd to. [para. 54].

Jerrard v. Peacock (1985), 61 A.R. 161; 57 C.B.R.(N.S.) 54 (Q.B. Master), refd to. [para. 55].

Wood v. Grand Valley Railway Co. (1915), 51 S.C.R. 283, refd to. [para. 59].

Armory v. Delamirie, [1558-1774] All E.R. Rep. 121; 1 Stra. 505; 93 E.R. 664 (K.B.), refd to. [para. 59].

Geen's Prescription Pharmacy Ltd. v. Thibault, [1996] O.J. No. 1415 (Gen. Div.), consd. [para. 80].

Eagle Ridge Animal & Bird Hospital v. Sharpe et al., [2009] B.C.T.C. Uned. 1486; 2009 BCSC 1486, consd. [para. 82].

Canada Safeway Ltd. v. Brown, [2007] B.C.T.C. Uned. 904; 2007 BCSC 1619, consd. [para. 83].

Newport Fish Importers Co. v. Botelho, [1995] O.J. No. 3603 (Gen. Div.), consd. [para. 84].

Toronto Transit Commission v. Aqua Taxi Ltd., [1957] O.W.N. 65 (H.C.), refd to. [para. 89].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, refd to. [para. 95].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor (No. 2), [2002] 1 S.C.R. 678; 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201; 2002 SCC 19, consd. [para. 96].

Icare Travel et al. v. Nitambwe et al., [2008] A.R. Uned. 398; 2008 ABQB 303, consd. [para. 97].

Nubury Properties Ltd. v. Gunraj, [2004] O.T.C. Uned. 339; 2004 CanLII 20443 (Sup. Ct.), consd. [para. 98].

Sidorsky et al. v. C.F.C.N. Communications Ltd. et al. (1997), 206 A.R. 382; 156 W.A.C. 382; 53 Alta. L.R.(3d) 255 (C.A.), refd to. [para. 102].

Jackson and Parkview Holdings Ltd. v. Trimac Industries Ltd. et al. (1993), 138 A.R. 161 (Q.B.), refd to. [para. 102].

Polar Ice Express Inc. v. Arctic Glacier Inc. (2009), 446 A.R. 295; 442 W.A.C. 295; 2009 ABCA 20, refd to. [para. 104].

Dallin v. Montgomery et al. (2010), 498 A.R. 287; 2010 ABQB 587, refd to. [para. 105].

Authors and Works Noticed:

D'Andrea, James A., Employee Obligations in Canada (2010 Looseleaf), p. 1-44.7 [para. 49].

Stevenson, William A., and Côté, Jean E., Alberta Civil Procedure Handbook (2002), p. 171 [para. 10].

Waddams, Stephen M., The Law of Damages (2008 Looseleaf Ed.), para. 13.30 [paras. 59, 89].

Counsel:

Shawn Beaver, for the plaintiff;

Brian Doherty, for the defendants.

This matter was heard on October 25, 2010, before Topolniski, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton. Submissions were received on November 17 and 18, 2010. The Court delivered the following reasons for judgment and judgment on January 24, 2011.