Potash Corp. of Saskatchewan Inc. et al. v. Barton, 2011 SKQB 477

• Judge: Keene, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: December 19, 2011
• Jurisdiction: Saskatchewan
• Citations: 2011 SKQB 477;(2011), 388 Sask.R. 202 (QB)

Potash Corp. v. Barton (2011), 388 Sask.R. 202 (QB)

MLB headnote and full text

Temp. Cite: [2011] Sask.R. TBEd. DE.082

Potash Corporation of Saskatchewan Inc. and Potash Corporation of Saskatchewan Sales Limited (respondents/plaintiffs) v. Keith Barton (applicant/defendant)

(1993 Q.B. No. 3614; 1993 Q.B. No. 3209; 2011 SKQB 477)

Indexed As: Potash Corp. of Saskatchewan Inc. et al. v. Barton

Saskatchewan Court of Queen's Bench

Judicial Centre of Regina

Keene, J.

December 19, 2011.

Summary:

Barton was employed by the Potash Corporation of Saskatchewan Inc. and Potash Corporation of Saskatchewan Sales Ltd. (collectively, "PCS") as general counsel for 10 years. He also served as vice-president and secretary to the board of directors for parts of that time. He resigned in 1988. Five years later, consent interim injunctions were granted against him which, with certain exceptions, restrained him from disclosing information concerning PCS's business or affairs. The injunctions were set aside on September 10, 2003 and PCS discontinued the underlying actions on March 27, 2009. Barton sought orders for $16,000,000 damages, solicitor and client costs against PCS, and an order directing PCS to make a public apology to him. He submitted that by discontinuing the actions, PCS admitted that it had no right to the injunctions, which he claimed destroyed his reputation and health and caused him to lose his life savings.

The Saskatchewan Court of Queen's Bench, in a decision reported at 348 Sask.R. 251, held that Barton was not entitled to an assessment of damages and that he was entitled to only certain taxable costs. Barton appealed.

The Saskatchewan Court of Appeal, in a decision reported at 375 Sask.R. 194; 525 W.A.C. 194, allowed the appeal. The court ordered that the matter be returned to the Court of Queen's Bench for a reference to determine whether or not Barton suffered any damage as a result of obtaining the interlocutory injunction and, if so, fixing the amount of damages that he did suffer, as well as for a determination of whether Barton was entitled to punitive damages and/or costs on a solicitor-client basis.

The Saskatchewan Court of Queen's Bench determined the issues accordingly.

Damage Awards - Topic 205

Injury and death - Psychological injuries - Mental distress (incl. nervous shock) - Barton was employed as general counsel by PCS for 10 years - He also served as vice-president and secretary to the board of directors for parts of that time - He resigned in 1988 - Five years later, consent interim injunctions were granted against him which, with certain exceptions, restrained him from disclosing information concerning PCS's business or affairs - The injunctions were set aside on September 10, 2003 and PCS discontinued the underlying actions on March 27, 2009 - Barton sought damages for, inter alia, mental stress - He alleged that he suffered severe anxiety, frustration, anger and depression as a result of the interlocutory injunctions; lost weight and became suicidal and consumed alcohol to excess; was humiliated and embarrassed at the attacks on his professional reputation; had to borrow money from his son and applied for and received welfare payments - The Saskatchewan Court of Queen's Bench considered the evidence and its level of persuasiveness and set damages for mental distress at $20,000 - See paragraphs 44 to 49.

Damages - Topic 505

Limits of compensatory damages - General - Speculative losses - [See Damages - Topic 558 ].

Damages - Topic 558

Limits of compensatory damages - Remoteness - Contracts - Damages within reasonable contemplation of parties - Barton was employed as general counsel by PCS for 10 years - He also served as vice-president and secretary to the board of directors for parts of that time - He resigned in 1988 - Five years later, consent interim injunctions were granted against him which, with certain exceptions, restrained him from disclosing information concerning PCS's business or affairs - The injunctions were set aside on September 10, 2003 and PCS discontinued the underlying actions on March 27, 2009 - Barton sought damages for depletion of savings resulting from unemployment - The Saskatchewan Court of Queen's Bench rejected the claims - Barton had not proved that the injunction or even some wash-over of the litigation prevented him from obtaining employment after 1993 - He was merely speculating and had no evidence as to why he did not get the jobs he applied for - It was irrelevant what his successor at PCS made - Further, the limiting factors of foreseeability and remoteness came into play - It was not possible to conclude that when the injunction was granted that anyone contemplated that it would result in the lack of employment of the nature Barton complained of - Additionally, it was simply too remote - See paragraphs 22 to 30 - The court rejected loss of income and loss of pension claims for similar reasons - See paragraphs 31 and 32.

Damages - Topic 1296

Exemplary or punitive damages - General - The Saskatchewan Court of Queen's Bench held that the proper approach to measuring damages arising out of injunctions was based on contract principles - In the present case, the court created a pretend contract between the parties and then proceeded on the basis, inter alia, that the pretend contract was breached - The court denied punitive damages - The court stated that "The applicant seems to rely almost exclusively on the fact the respondents obtained an injunction and then many years later, discontinued their claim. This in and of itself does not lead to an unrelenting conclusion that the respondents were malicious in their intent to obtain the injunction." - The court rejected the applicant's claim that the respondents were guilty of abuse of process - Further, it was not proof, as argued by the applicant, that such damages should be paid simply because the respondents were large, wealthy corporations and the applicant was not - See paragraphs 50 to 57.

Injunctions - Topic 7945

Setting aside injunctions - Remedies - Damages - The Saskatchewan Court of Queen's Bench discussed the proper approach to measuring damages arising out of injunctions and held that it was to be based on contract principles - In the case at hand, the court created a pretend contract between the parties and then proceeded on the basis that the pretend contract was breached by the defendant - However, since the proceeding was of an equitable nature, the principle adopted also had to be applied in a fair and reasonable fashion - See paragraphs 6 to 13.

Injunctions - Topic 7945

Setting aside injunctions - Remedies - Damages - Barton was employed as general counsel by PCS for 10 years - He also served as vice-president and secretary to the board of directors for parts of that time - He resigned in 1988 - Five years later, consent interim injunctions were granted against him which, with certain exceptions, restrained him from disclosing information concerning PCS's business or affairs - The injunctions were set aside on September 10, 2003 and PCS discontinued the underlying actions on March 27, 2009 - The Saskatchewan Court of Queen's Bench rejected Barton's claim for the loss of $90,000 U.S. which was due to him in equal installments on October 1, 1993 and January 1, 1994 under a consulting contract with a law firm dated May 1, 1993, and never paid - A U.S. decision by Kyle, J., had resulted in Barton's termination by the law firm - This was a reality that could not be ignored - The court did not know why the law firm did not pay up on October 1, 1993 nor of any efforts made by Barton to get paid - However, it would make no sense and would be fundamentally unfair to grant damages of $90,000 (U.S.), plus interest, to Barton and ignore the reality that regardless of any Canadian injunction, the applicant was not going to get the $90,000 in any event - Further, the Saskatchewan order was granted just 21 days before Kyle, J.'s decision was rendered on December 8, 1993 - See paragraphs 15 to 21.

Injunctions - Topic 7945

Setting aside injunctions - Remedies - Damages - [See Damage Awards - Topic 205 , Damages - Topic 558 and Practice - Topic 7408 ].

Practice - Topic 7408

Costs - Solicitor and client costs - General principles - Solicitor and client costs as damages or punishment - The Saskatchewan Court of Queen's Bench held that the proper approach to measuring damages arising out of injunctions was based on contract principles - In the present case, the court created a pretend contract between the parties and then proceeded on the basis, inter alia, that the pretend contract was breached - The court awarded solicitor-client costs holding that they actually fell under the heading of damages as opposed to the traditional approach for assessment of costs - The breach of the pretend contract would have naturally resulted in the need for legal assistance and the hiring and paying of lawyers - See paragraphs 6 to 8 and 33 to 43.

Cases Noticed:

Village Gate Resorts Ltd. v. Moore et al. (1999), 130 B.C.A.C. 267; 211 W.A.C. 267; 1999 BCCA 626, appld. [para. 6].

642947 Ontario Ltd. v. Fleischer et al. (2001), 152 O.A.C. 313; 56 O.R.(3d) 417 (C.A.), folld. [para. 10].

Air Express Ltd. v. Ansett Transport Industries (Operations) Pty. Ltd. (1979-1981), 146 C.L.R. 249 (Aust. H.C.), refd to. [para. 13].

Canlin Ltd. v. Thiokol Fibres Canada Ltd. (1983), 40 O.R.(2d) 687 (C.A.), refd to. [para. 32].

Stonehocker et al. v. King et al. (1998), 113 O.A.C. 239; 41 O.R.(3d) 389 (C.A.), folld. [para. 35].

Israel Discount Bank of Canada v. Genova (1992), 13 C.P.C.(3d) 112; 1992 CarswellOnt 372 (Gen. Div.), not folld. [para. 36].

Diesler v. U.S. Fidelity Co. (1917), 59 S.C.R. 676, dist. [para. 37].

Young v. Young et al., [1993] 4 S.C.R. 3; 160 N.R. 1; 34 B.C.A.C. 161; 56 W.A.C. 161; 108 D.L.R.(4th) 193, refd to. [para. 40].

Addis v. Gramophone Co., Ltd., [1909] A.C. 488; [1908-10] All E.R. Rep. 1 (H.L.), refd to. [para. 45].

Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1, consd. [para. 46].

Fidler v. Sun Life Assurance Co. of Canada, [2006] 2 S.C.R. 3; 350 N.R. 40; 227 B.C.A.C. 39; 374 W.A.C. 39; 2006 SCC 30, consd. [para. 46].

Jarvis v. Swan's Tours Ltd., [1973] Q.B. 223; [1973] 1 All E.R. 71 (C.A.), consd. [para. 46].

Gulston v. Aldred et al., [2011] B.C.T.C. Uned. 1051; 2011 BCSC 1051, refd to. [para. 49].

Rowe v. Unum Life Insurance Co. of America, [2006] O.T.C. 435 (Sup. Ct.), refd to. [para. 49].

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. 51].

Authors and Works Noticed:

Swan, John, Canadian Contract Law (1st Ed. 2006), §§ 6.2.2, 6.2.6 [para. 22]; 6.2.6.1 [para. 23]; pp. 371, 372 [para. 23]; 375 [paras. 24, 25].

Counsel:

Neil B. Fisher, for the plaintiffs;

Gary G.W. Semenchuk, Q.C., for the defendant.

This matter was heard by Keene, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Regina, who delivered the following decision on December 19, 2011.