Friday, 24 April 2020

Condo Litigation – Section 67 of the Condominium Property Act

As condo development increases across Canada, especially in urban centers, we can expect an influx of litigation over the interpretation and application of condo legislation and their bylaws. One common trend in Alberta is the reliance on section 67 of Alberta’s Condominium Property Act, (“CPA”) in the litigation process to enforce reasonable behavior.

Section 67 allows the Court, on application by an “interested party”, to impose certain remedies if improper conduct has taken place. Interested parties include condo owners, condo corporations, members of the condo board, or any other persons with a registered interest in a condo unit. Sometimes referred to as the ‘oppression section’, section 67 seeks to restrain unfair conduct. Oppression remedies are also available under the Alberta Business Corporations Act, but the degree of conduct required under section 67 of the CPA may be less onerous than its counterpart, at least for the moment.

Remedies under section 67 include:
·         Directing an investigator to be appointed to review the improper conduct and report to the Court;
·         Directing improper conduct to cease;
·         Giving directions on how matters are to be carried out to avoid recurring issues;
·         Awarding compensation in respect of any losses resulting from improper conduct;
·         Awarding costs; or
·         Providing any other directions that the Court considers appropriate.

Improper Conduct Warranting a Section 67 Remedy

Improper conduct can mean a number of things including non-compliance with the CPA, its regulations or the condo’s bylaws, as well as conducting business affairs of a condo corporation or exercising condo board powers in an oppressive or unfair manner.

In The Owners Condominium Corporation No. 0211096 v Clayton, 2019 ABQB 877, the Court granted a section 67 remedy to a condo corporation who claimed that an owner was not complying with the bylaws. The owners had a dog and the condo corporation subsequently enacted a bylaw prohibiting dogs, which was to be grandfathered in. Despite the enactment of the new bylaw prohibiting dogs, the owners decided to get another dog.

While the Court was sympathetic to the owner’s situation, it held that permitting the owners to keep the dog in these circumstances would be unfair to other residents who follow the bylaws and policies and are entitled and expect the condominium corporation to enforce the bylaws as required under the CPA. Finding otherwise may impair or limit a condo corporation’s ability to enforce their rules in the future. The Court made an order under section 67 for an order to relocate the dog.

In Condominium Corporation No. 0613837 v Tien Ngoc Ho, 2019 ABQB 967, a condo corporation applied for declaratory relief under section 67 that they were absolved from all responsibility and liability with respect to the repairs of a unit. The owner’s unit was damaged as a result of a leak in another owner’s unit. The condo corporation maintained proper insurance but hired a contractor themselves to complete the repairs because the deductible exceeded the cost of repairs. The owners disputed the repairs claiming that their unit was unlawfully entered and the repairs were poor quality.

While the Court held that a trial was necessary to determine the issues (namely the quality of workmanship), it did not dismiss the application suggesting that this situation may properly warrant a section 67 remedy. However, the Court interestingly noted that section 67 is often used as a catch-all to enforce reasonable behavior, which is not its intended purpose.

Improper Use of Section 67

While section 67 is available to ensure enforcement of bylaws and proper exercise of powers by a condo corporation and board, the Court has notably dismissed a number of applications that improperly rely on section 67. For instance, in The Owners Condominium Corporation No. 1710419 v Condominium Corporation No. 1710627, 2019 ABQB 655, a residential condo corporation sought relief against a commercial condo corporation under section 67 after a dispute over shared expenses and nuisances in a mixed development.  

The two condo corporations had entered into a prior agreement, and the Court therefore questioned whether section 67 was an appropriate vehicle for resolution. It appeared that this dispute was contractual and section 67 would not apply. The Court noted that section 67 was designed to deal with issues arising within the administration of a condominium corporation and its relationship with owners.

In Owners: Condominium Plan No 7921815 (Pepperwood Village) v MacMillan, 2019 ABQB 642, a condominium corporation attempted to use section 67 to order an owner to cease and desist from making harassing statements to and about the condo corporation, managers, and legal service providers unless she was on the Board of Directors or had written authorization.
The Court refused to grant a remedy under section 67 since the owner’s communications were not in any sense a “use of her unit in the condominium development” and did not amount to improper conduct under the CPA.


Section 67 remains a useful tool as it is designed to govern the behavior between condo corporations and owners, as well as condo corporations and third parties. Condo corporations may rely on section 67 to ensure enforcement of bylaws, payment of condo fees, and compliance with special assessments. Similarly, unit owners may rely on section 67 to ensure that the condo corporation and board members are adhering to bylaws and ensure that bylaws accord with the CPA.

While section 67 is an important provision in the CPA, there appears to be increased reliance on the provision to enforce any reasonable behavior. Parties should not rely on section 67 as a “catch-all” section for any dispute and should still seek to resolve disputes by applying ordinary principles of contract and tort law where possible.

In instances involving true improper conduct in the context of the CPA, parties should seek to ensure that the evidentiary record allows a court to award the remedy sought under section 67 by way of Originating Application. Complicated findings of fact may require a full trial and further pleadings to be filed.  

With a strong reputation in commercial litigation, McLennan Ross LLP is well-positioned to provide you with exceptional advice and representation. If you have any questions or concerns with respect to the Condominium Property Act, or any other litigation matter, please do not hesitate to contact Madyson Dietrich or Peter Major, Q.C., or any member of our Commercial Litigation Team.

Friday, 3 April 2020

What’s It Worth? A Look at the Types of Damages in Tort Law

by Anna Fitz, Student-at Law & Peter Major, Q.C.

Before you go to court, you should know what relief you want the court to give you. Courts can award a wide variety of damages, or financial remedies, to a party that suffered a wrong. The damages a court will award vary depending on the applicable area of law. This article will focus on the damages a party might receive in a tort dispute. For the types of damages you can receive in contract law, please refer to our earlier blog post here.

Damages in Tort

In tort law, damages are meant to return an injured party to the position it was in before the defendant’s wrong. Two types of damages that frequently appear in tort cases are compensatory and non-compensatory damages.

In order to obtain damages, however, the plaintiff will still have to prove that their injuries were not too remote, were caused by the defendant’s behaviour, and should not be reduced due to a failure to mitigate.

Compensatory Damages

Courts award plaintiffs compensatory damages as recompense for harm the plaintiff suffered. Compensatory damages often fall into two sub-categories: general and special damages.

  • General Damages:

    General damages compensate a plaintiff for non-monetary aspects of their loss, such as pain and suffering. For example, if John is rear-ended and suffers injuries, he is entitled to damages as a result. Courts will calculate his damages by referencing previous, similar case law. If other plaintiffs received $50,000 for injuries like John’s, then John will likely also receive $50,000.
  • Special Damages:

    Special damages compensate a plaintiff for financial aspects of their loss. The simplest way to understand these damages is to think of out of pocket expenses that are incurred as a direct result of the tort. For example, let’s say John has to the pay the expenses up front out of his own pocket for painkillers or massage therapy or perhaps the rental of a car. John is also entitled to recover these financial losses he incurred due to the accident.

Non-Compensatory Damages

Courts might also award non-compensatory damages such as punitive, aggravated, and nominal damages.

  • Punitive Damages:

    Courts award punitive damages when a party has committed egregious behaviour which the court wishes to punish and deter. For example, in one case an insurance company tried to avoid covering a family’s home which burned down by claiming the family committed arson. In that case, the Supreme Court of Canada held that a high punitive damages award was justified.

    Courts will only award punitive damages in extreme circumstances when the defendant’s behaviour was particularly shocking. If compensatory damages will deter the defendant’s wrongful behaviour, then punitive damages are not appropriate.
  • Aggravated Damages:
    Courts award aggravated damages where the defendant’s conduct has caused the plaintiff particular distress, grief, or humiliation. Aggravated damages are therefore easily confused with punitive damages, but the two serve different purposes. Punitive damages punish a wrongdoer, whereas aggravated damages compensate a plaintiff. In some cases, a defendant’s high-handed and unkind behaviour may justify aggravated damages yet fall short of punitive damages.
  • Nominal Damages:
    Courts will award a small, “nominal” damages award when the defendant only slightly infringed the plaintiff’s rights, the plaintiff failed to prove a meaningful loss, or the plaintiff failed to mitigate.

    For example, if Carrie punched Alice, then Carrie would have committed the tort of battery (and the criminal offence of assault). Alice could sue Carrie in tort and seek damages. But if Alice did not suffer a serious injury, she might only receive nominal damages.

    Similarly, let’s say Nick spread rumours about his business competitor Olivia, and she sued him for defamation. Even though Nick defamed her, if Olivia fails to prove that the rumour caused her a loss, she might only receive nominal damages.

When might courts deny an injured plaintiff’s damages? 

Even if a plaintiff suffered an injury, the court may deny damages that prove too remote, were not caused by the defendant’s conduct, or which the plaintiff took no steps to mitigate.
  • Remoteness:
    Sometimes the connection between a plaintiff’s injury and the defendant’s conduct is too far removed. In these situations, ordering the defendant to pay the plaintiff damages would not be fair because the plaintiff’s injury was not reasonably foreseeable.

    For example, in one case a man found a dead fly in a water bottle and developed major depressive disorder as a result. He sued the water supplier in tort. The Supreme Court of Canada found that although the supplier was negligent, the plaintiff’s damages were too remote, as it was not reasonably foreseeable that someone who saw a dead fly in his water bottle would suffer such a severe reaction. The court therefore refused to grant the plaintiff damages.
  • Causation:
    Even if a plaintiff suffered damages, they still need to prove that the defendant caused those damages. Courts generally apply the “but-for” test: but for the defendant’s conduct, would the plaintiff have suffered the injury? The plaintiff must prove on the balances of probabilities (51% certainty or more) that the defendant caused the loss.

    For example, let’s say Mike hired a contractor to renovate his house. During the construction process, the roof caved in. When he sues the contractor, Mike needs to prove that but for the contractor’s actions, his roof would not have caved in. On the other hand, the contractor could show the roof wasn’t strong enough to withstand the average winter snow load. This evidence could convince the court that the snow load, and not the contractor, caused the roof to cave in.

    In this case, the court would refuse to hold the contractor responsible and deny Mike damages.
  • Mitigation:
    Even if the court determines a plaintiff was in the right, and the defendant owes them damages, the plaintiff must mitigate their damages. This means the plaintiff must keep their losses as minimal as possible.

    For example, if Rose is a doctor who bungles Liam’s surgery, and Liam endures pain and suffering as a result, he can sue Rose for the tort of medical malpractice. However, let’s say Liam could have reduced his pain if he regularly attended massage and physiotherapy. The court might reduce Liam’s damages because he failed to mitigate. If treatments could have alleviated his pain entirely, the court might only award Liam nominal damages. Therefore, to protect his interests and his right to full recovery, Liam must properly mitigate what he suffered.


If you have suffered an injury, you can seek a wide variety of damages and other remedies from the court. Consider speaking to a lawyer about your duty to mitigate and how you can recover the full amount of damages to which you are entitled.

McLennan Ross has a broad based commercial litigation practice involving all aspects of tort disputes and damages claims. If you require assistance or wish to know more about any of the concepts referenced above please contact Anna Fitz or Peter Major, Q.C. or any other member of the firm’s commercial litigation group.

Friday, 21 February 2020

What's It Worth? A Look at the Types of Damages in Contract Law

by Anna Fitz, Student-at-Law

Before you go to court, you should know what relief you want the court to give you. Courts can award a wide variety of damages, or financial remedies, to a party that suffered a wrong. The damages a court will award vary depending on the applicable area of law. This article will focus on the typical categories of damages a party might be entitled to receive in a contract dispute.

Damages in contract

In contract law, damages are meant to put the wronged party in the position it would have been in had the other party followed through on its end of the bargain. This requires the court to examine the contract, what it was worth, and what loss the wronged party suffered.

A wronged party must choose which type of remedy it wants: damages, or specific performance. Specific performance is when the court requires a breaching party to fulfil the agreement as promised. If the party chooses money equivalent to its entire loss, it cannot then seek specific performance as well. For example, if Alice contracted to sell her house to Mark and then refused to follow through, Mark could ask the court to award him either the house (specific performance) or damages equivalent to what the house is worth. He cannot seek both the house and the damages; otherwise, he would recover twice the contract’s value.


Reliance damages compensate a plaintiff for expenses they incurred while expecting the other party to honour the contract. For example, let’s say Valerie hires Gary to build her a fence and Gary buys the supplies he needs. If Valerie tells him not to build and refuses to pay, Gary can claim for the supplies he bought while relying on the contract.


If one party provides the other party with a benefit before the breach, it can sue to get that benefit back. For example, say Jolene agreed to pay Lola $1,000 for her motorcycle: $500 up front, and $500 after receiving the motorcycle. She paid the initial $500, but Lola never gave her the motorcycle as promised. Lola can sue to get her $500 back in restitution.

Loss of profits

A plaintiff may lose profits because of the defendant’s breach. Say Emile hired Sharon, a famous singer, to perform at his concert hall, and advertised accordingly. If Sharon then refuses to perform, Emile loses the profit he would have made. He can sue Sharon for that lost profit.

Diminution in value

Sometimes in the interim between breach and trial, the property contracted for decreases in value. For example, one party could contract to buy another party’s stocks. If the buyer refuses to go through with the transaction, and the stocks then fall in value, the seller could claim for the difference in the stocks’ value.

Loss of chance

Sometimes parties sue when, because of someone else’s wrongful behaviour, they lose the opportunity to obtain a benefit. As this area of the law is by definition nebulous, certain requirements apply. The benefit cannot be so remote that imposing liability on the other party would be unfair. Furthermore, the plaintiff must prove the probability that it would have obtained the benefit if not for the other party’s wrongful behaviour. The fact the opportunity existed is not enough; the plaintiff must show (on the balance of probabilities) that it would have earned the benefit.

Punitive Damages

Courts award punitive damages when a party has committed egregious behaviour which the court wishes to punish and deter. For example, in one case an insurance company tried to avoid covering a family’s home which burned down by claiming the family committed arson. In that case, the Supreme Court of Canada held that a high punitive damages award was justified.

Courts will only award punitive damages where a party has committed particularly shocking behaviour; therefore, a common breach of contract is likely not enough to meet this threshold.

Mitigation and nominal damages

Even if the court determines you were in the right, and that the other party owes you damages, you still bear the responsibility to mitigate. This means you must do what you can to keep your losses as minimal as possible.

For example, if Beth contracts to buy Louise’s painting for $1,000 then refuses to go through with the deal, Beth is liable for breach of contract. However, Louise must mitigate her damages by trying to find another buyer for the painting. If she sells the painting for $800, she can then sue Beth for the remaining $200, as she has mitigated the other damages.

If Louise unreasonably refuses to sell the painting, she has failed to mitigate, and a court may then lower her damages accordingly. In some situations, the court may only award her nominal damages—a very low amount which only covers a fraction of her claim. For example, in some cases, courts have awarded nominal damages of a single dollar.

Therefore to protect her interests and her right to full recovery, Louise must properly mitigate what she suffered.


If you have encountered a contractual dispute, it is important to know what damages and other remedies are properly recoverable. With that knowledge you might be in a better position to resolve your dispute, failing which you will be better armed to preserve your position.

McLennan Ross has a broad based commercial litigation practice involving all aspects of contractual complexities and damages claims. If you require assistance or wish to know more about any of the concepts referenced above please contact Anna Fitz or Peter J. Major, Q.C. or any other member of the firm’s commercial litigation group

Tuesday, 11 February 2020

Attacking Expert Preference: Cooperatieve Centrale Raiffeisen-Boerenleenbank BA v Stout & Company LLP, 2019 ABCA 455

By Don Dear, Q.C., Marco Baldasaro, and Michelle Terris

A recent Alberta Court of Appeal decision regarding standard of care, negligent misrepresentation, and auditor’s liability involved a rare successful attack on the trial judge’s reasoning for preferring the evidence of one expert over another.  

Factual Background

Beginning in 2001, Rabobank agreed to finance Agra by purchasing its receivables. By 2004 the parties had entered into an agreement requiring Agra to provide audited financial statements to Rabobank. The respondent here was an accounting firm, Stout & Company LLP, which performed the audits from 2007 to 2010. Agra began to provide false purchase and sale agreements in 2009, distorting their sales and costs of sales for 2009 and 2010 by at least 25 percent and 40 percent respectively. As a result of the fraud, Rabobank suffered a loss of over $36 million.

While performing the audits, Stout assessed the fraud risk as low and the fraud continued undiscovered. Rabobank sued for negligent misrepresentation alleging it had relied on Stout’s audit opinions in continuing to provide financing to Agra. It argued that if the risk had been properly assessed as high, the fraud would have been identified. Rabobank’s expert, Mr. Henry, opined that Stout’s failure to assess Agra’s fraud risk as high was negligent. Both parties agreed that the audit procedures were appropriate if the fraud risk had actually been low.

Queen’s Bench Decision

The initial Statement of Claim named a multi-national accounting firm as a co-defendant. That firm had purchased Stout assets after the Agra audits had been concluded. The multi-national accounting firm, represented by McLennan Ross LLP, successfully applied for summary judgment and had the case against it dismissed.[1]
At trial, the judge preferred the opinion of Stout’s expert, Mr. Muccilli, over Rabobank’s expert based on the belief that Mr. Muccilli had conducted a broader review of the available information, and that Mr. Henry was influenced by his knowledge of the fraud and the benefit of hindsight. Based on this preference, the trial judge found that Stout had met the standard of care expected of an auditor. On a provisional basis only, the trial judge also found that reliance and damages had been proven by Rabobank. 

Court of Appeal

While there were three grounds of appeal, the Court of Appeal focused on the trial judge’s alleged error in preferring Stout’s expert on the standard of care. Stout cross-appealed the trial judge’s assessment of damages and failure to address Rabobank’s contributory negligence.  

The Court of Appeal found that the trial judge erred in concluding that Stout’s expert had conducted a broader review of the available information. After reviewing the evidence, it found there was no justification for inferring a significant difference between the files reviewed by the experts, particularly with respect to the relevant documents. This error was found to be a palpable and overriding error of fact.

As this was the only reason the trial judge gave for rejecting Mr. Henry’s assertion that Stout should have set the risk of fraud at high, the Court of Appeal concluded that there was no rational basis to accept the opinion of one expert over the other. The Court of Appeal was unable to determine on the evidence whether to accept one expert’s opinion over the other and directed a new trial.  

There was a brief discussion of the recent Supreme Court decision of Deloitte & Touche v Livent Inc. (Receiver of), 2017 SCC 63, which expanded the duty of care framework owed by an auditor. Livent was released after the trial judge gave her decision and whether it alters the trial judge’s conclusion that a duty of care exists will be determined in a new trial.


This case provides us with an important lesson in dealing with experts in accountants professional liability cases. Namely, it is extremely important that you control/identify clearly what documents your independent expert is reviewing and which he or she is relying upon for the purposes of his or her expert opinion. Unfortunately both parties are heading towards a new trial, absent settlement.

[1] Cooperatieve Centrale Raiffeisen-BoerenleenBank BA (Rabobank International) v Liebig & Keown LLP, 2016 ABQB 417 (

Friday, 1 November 2019

Write it Down: Revisiting the Rules of Affidavit Evidence

By Katherine Hagan, Student-at-Law

As a litigant, it may seem imperative that every possible document, conversation and e-mail related to your matter is presented before the Court. However, a court’s decision ultimately turns on evidence that is necessary and reliable to prove an issue, not the sheer volume of evidence compiled. Judicial decision-making requires evidence, but litigants must adhere to the rules of civil evidence to ensure that the evidence provided will be considered by the Court.

The recent Alberta decision ANC Timber Ltd. v Alberta (Minister of Agriculture and Forestry) (“ANC Timber”) revisits the basic principles of civil evidence and discusses how these principles apply to a party tendering evidence by affidavit. The Minister of Agriculture and Forestry sought an Order pursuant to Rule 3.68 of the Alberta Rules of Court to strike out portions of ANC Timber Ltd.’s affidavits due to the inclusion of inadmissible evidence. 

The Fundamental Rules of Evidence Apply to Affidavits

The purpose of an affidavit is to bring a litigant’s admissible evidence before the court. Topolniski J. prefaced her decision in ANC Timber by stating, to be admissible, evidence must be both reliable and necessary to prove a fact in the litigation. Further, even admissible evidence may still be excluded if its prejudicial effect outweighs its probative value. Prejudice is not narrowly defined and can include:
  • Evidence that potentially undermines an accurate result, or complicates, frustrates, or degrades the process; and
  • Adverse practical consequences such as the undue consumption of time, unfair surprise, the creation of distracting side issues, and a potential to confuse the trier of fact.
Topolniski J. assessed the evidence in the witness’ filed affidavit and categorised its admissibility on four different evidentiary rules: argument and/or conclusion, relevance, hearsay, and opinion evidence. Ultimately, several portions of ANC Timber Ltd.’s witness’ affidavit were struck out on the basis of being inadmissible, both by the Court’s decision and by ANC Timber Ltd.’s concessions.

Application of Rules to Affidavit Evidence 


1. Argumentative and/or conclusory evidence is impermissible

Simply: an affidavit is written evidence used to state facts, not to provide argument or conclusions. The inclusion of arguments and/or conclusions is a common fallacy of affidavit evidence, and is inadmissible.

2. Irrelevant evidence is impermissible

Topolniski J. cited the Supreme Court of Canada’s definition of relevance stating, the evidence “must have some tendency as a matter of logic and human experience to make the proposition for which it is advanced more likely than the proposition would be in the absence of that evidence". In sum, the evidence must relate to a material issue before the Court. In ANC Timber, the issue before the Court was whether an interim stay or injunction should be granted. Therefore, for evidence to qualify as relevant, it needed to relate to the test for interim relief.

3. Hearsay Evidence

Affidavits must be sworn on the basis of personal information with one exception provided by the Alberta Rule of Court. Rule 13.18 of the Alberta Rules of Court allows hearsay evidence on a motion for interim relief if the evidence is accompanied by the source of the evidence and the party’s belief in the evidence’s truth. Still, a court is not mandated to hold such evidence admissible. Even with this exception, hearsay evidence may be excluded if its probative value is outweighed by its prejudicial effect, or if the Court determines the evidence inadmissible for other reasons.

The seriousness of the case, the importance of the evidence, the consequences to the parties, and costs or efforts to secure the original evidence are all considered in determining the admissibility of the hearsay evidence. Topolniski J. acknowledged that all of these considerations of hearsay evidence result in the Court being granted broad discretion, which may ultimately result in conflicting judicial decisions on the same piece of evidence.

4. Opinion Evidence

Opinion evidence is presumptively inadmissible. One exception to this presumption is expert opinion evidence on issues that require specialised knowledge. The Alberta Court of Appeal in Kon Construction Ltd. v Terranova Developments Ltd defined three categories of ‘witnesses of expertise’, who may provide admissible expert opinion:
  1. Independent experts retained to provide opinions about issues in the litigation, but not otherwise involved in the underlying events;
  2. Witnesses with expertise who were involved in the events underlying the litigation, but are not themselves litigants; and
  3. Litigants who have expertise, and who were actually involved in the events underlying the litigation.

Rule 6.11 of the Alberta Rules of Court allows expert opinion evidence in affidavits for interim motions, however Topolniski J. concluded “the regime for admitting expert evidence should parallel that for trial”. Thus, if admitting expert opinion evidence by way of affidavit, the Court requires the expert’s qualifications, the information and assumptions on which the opinion is based, and a summary of the expert opinion.

Once provided this information, the Court must assess the expert evidence to determine its admissibility. First, it must consider whether the evidence meets the following four criteria: relevance; necessity; absence of an exclusionary rule; and special expertise. Second, the benefits of admitting the expert opinion evidence must outweigh the potential risks. If the evidence does not satisfy both components, the opinion evidence will be inadmissible and struck from the affidavit.

Finally, opinions that qualify as ‘ordinary observations' are admissible through a lay witness.


Alberta courts have acknowledged that affidavits are often filled with impermissible evidence. Rule 3.68 of the Alberta Rules of Court enables a litigant to have impermissible evidence struck from an affidavit. While Topolniski J. acknowledges that a motion under Rule 3.68 may be costly and time-consuming, upholding the rules of civil evidence and acting as gatekeeper is an essential role of the Court. ANC Timber provides a helpful guide in assessing your own or an opposing party’s affidavit evidence, and determining what evidence a court may deem inadmissible.

On a daily basis, the commercial litigation group at McLennan Ross LLP assists clients with the gathering, assessing, presentation and challenging of evidence in a wide variety of disputes. Any member of our group would be pleased to answer questions you might have about the use and value of information being considered in a present dispute.

Condo Litigation – Section 67 of the Condominium Property Act

By Madyson Dietrich, Student-at-Law and Peter Major, Q.C. As condo development increases across Canada, especially in urban centers, ...