Date: 20050511
Docket: T-2012-01
Citation: 2005 FC 670
BETWEEN:
SOUTH YUKON FOREST CORPORATION
Plaintiff
and
HER MAJESTY THE QUEEN
Defendant
REASONS FOR ORDER
HARGRAVE P.
[1] These reasons arise out of a motion in writing to separate the trial of this matter into an initial determination of liability followed, if necessary, by a determination of damages.
APPROPRIATENESS OF BIFURCATION WHERE
STATEMENT OF CLAIM IN A STATE OF FLUX
[2] One of my concerns is that the issues of liability and damages may, to a degree, be intertwined. Thus, as a preliminary matter, there is the question of whether a Rule 107 bifurcation is appropriate when the form of the Statement of Claim is not completely settled. Here I note that the form of the Statement of Claim authorized by Madam Justice Heneghan in her 23 November 2004 and 11 January 2005 orders is, at the instigation of the Plaintiff, under appeal. As set out in Markesteyn v. Canada (2001) 208 F.T.R. 284 at 287, "... fundamental to Rule 107 is a clearly defined issue that must or should be determined before the Court can dispose of the case." (p. 287). The danger in the present instance arises out of an intertwining of issues of liability and accounting, both as presently set out in the Statement of Claim and as apparent from the proposed Statement of Claim, should the Plaintiff be successful on its appeal, in adding Liard Plywood and Lumber Manufacturing Inc. For example, there is a reference to Liard Plywood having some form of long-term agreement with or understanding from the Defendant as to a timber supply for the economic operation of a sawmill, which may well bring in or impinge upon the subject of damages. However, on the balance, the second amended Statement of Claim, as allowed by Madam Justice Heneghan, is relatively complete as to clearly defined issues, including as to contract. Thus it is appropriate to make a determination as to bifurcation at this point. I therefore turn to the considerations which must go into bifurcation.
CONSIDERATION OF BIFURCATION
[3] A starting point in considering bifurcation is the principle that a litigant has a basic right to have all the issues in dispute resolved at one trial hearing: see Apotex Inc. v. Bristol-Myers Squibb Co. (2003) 308 N.R. 152 (F.C.A.) at 155 where the Federal Court of Appeal espouses "... a basic right of a litigant to have all issues in dispute resolved in one trial", referring to Elcano Acceptance Ltd. v. Richmond, Stambler & Mills (1986) 55 O.R. (2d) 56 (Ont. C.A.) at page 59. There is also the premise one starts from, that "... normally it is more efficient if all issues are determined together, rather than separately.": Markesteyn, supra, at page 288, referring to Value Village Market (1990) Ltd. v. Value Village Stores Inc., paragraph 6 of an unreported 29 October 1999 decision of Madam Justice Reed in file T-2707-92. From this principle and premise one moves to the burden of proof and persuasion: it is on the moving party, here the Plaintiff, to demonstrate that a departure from the above principle and premise, that is a departure from the general rule, is justified: see for example Illva Saronno S.p.A. v. Privilegiata Fabbrica (1998) 157 F.T.R. 217 at 221, a decision of Mr. Justice Evans, as he then was.
[4] The test to satisfy in order to justify a Rule 107 bifurcation, is whether "... severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits.": Illva Saronno, supra, at page 221 where Mr. Justice Evans also concluded that the Court must be satisfied, as to these elements, on the balance of probabilities, taking into account the evidence and all of the circumstances of the case. However the test set out in Illva Saronno is the end result of the consideration, which may include a number of elements, for example those which were adopted by Madam Justice Reed in Value Village (supra), from an unreported Ontario Supreme Court decision, General Refractories Co. of Canada v. Venturedyne Ltd. [2001] O.T.C. Uned. 209 and which are set out at 288-289 of Markesteyn (supra):
16. Extrapolating the principles from the case law in this area, the following issues are among those the court should consider in deciding whether severance of a trial is just and expeditious:
1) Whether issues for the first trial are relatively straightforward;
2) The extent to which the issues proposed for the first trial are interwoven with those remaining for the second;
3) Whether a decision at the first trial is likely to put an end to the action altogether, significantly narrow the issues for the second trial or significantly increase the likelihood of settlement;
4) The extent to which the parties have already devoted resources to all of the issues;
5) The timing of the motion and the possibility of delay;
6) Any advantage or prejudice the parties are likely to experience; and
7) Whether the motion is brought on consent or over the objection of one or more of the parties.
17. This is not a checklist, but rather a number of factors likely to have a bearing on the justice and expediency of the process. That there are a greater number of factors pertaining to expediency does not suggest this issue is more important. As Wilkins J. stated in Royal Bank v. Kilmer, [1994] O.J. No. 1476, supra, fairness and justice are the dominant consideration.
These issues, put forward in General Refractories, are not necessarily all required elements, but rather various factors, which I take to constitute an open-ended checklist. For example, in the present instance the Plaintiff points out that it is neither an operating concern nor a profitable concern and that the cost aspect of being able to split the trial, assuming for the moment that there would be a reasonably substantial cost saving in determining liability separately from damages, is a factor to consider, for bifurcation would make the lawsuit more affordable for the Plaintiff.
[5] As to the economic circumstances of the Plaintiff, Madam Justice Heneghan found, in her reasons and order of 23 November 2004 in this matter, dealing with security for costs from the Plaintiff, at paragraph 16, that the Plaintiff had substantial debts and insufficient exigible assets to pay costs. Indeed, the arguments of the Plaintiff for bifurcation, reduced to basics, is the need for eliminating or postponing the financial burden on the Plaintiff respecting discovery and hearing of the damages portion of the claim.
[6] The Defendant points out that the case, as pleaded to date, is fairly complex, involving negligence, negligent misrepresentation, breach of duty of care, breach of fiduciary duty, abuse of public office, liability in contact, malice and an intent to cause harm on the part of the Crown and the allegation that as a result of the actions of the Defendant the Plaintiff established a substantial sawmill at Watson Lake in British Columbia, but was not given a supply of timber by the Crown. These various pleas raise issues as to the efficiency, capacity and viability of the sawmill and go not only to liability, but also to damages and to the expert reports that will be required in any event.
[7] I would also add that I have the same concern in this instance as Madam Prothonotary Aronovitch had in Rowat v. Information Commissioner (Canada) (2000) 189 F.T.R. 166 at 181-182:
In any application under rule 107, at a minimum, there must be a clear delineation and distinction of the legal and evidentiary issues sought to be severed from the ultimate matters for disposition in the application.
In that instance Prothonotary Aronovitch found that the issues permeated one another. That is also the result here.
[8] That the Plaintiff, whom I note has engaged in and instigated substantial interlocutory skirmishing, including at the appeal level, may have concerns about being able to afford the full hearing of the case at one time is important, but does not outweigh the goal of a most expeditious, least expensive and a just determination of the proceeding on its merits. In addition, if the proceeding were bifurcated and the same judge did not hear both portions, the Defendant would suffer a further injustice. If the bifurcation were allowed, such could well lead to duplication of procedural steps and costs resulting from separate but overlapping discovery proceedings, the potential for two separate hearings and the possibility of two separate appeals.
CONCLUSION
[9] On the basis of the material before me I am not convinced, on the balance of probabilities and taking into account the circumstances of the case, including the nature of the claim, the conduct of the litigation to date and the issues and the remedies sought, that severance would more likely than not bring about a more just, expeditious and less expensive determination of the proceeding on its merits.
[10] The request for bifurcation is denied. The Plaintiff having sought costs on the motion it is only proper that costs follow the event and go to the Defendant. Being guided by the Tariff set out in the Federal Court Rules, costs will be in the lump sum of $1,200, payable forthwith.
(Sgd.) "John A. Hargrave"
Prothonotary
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2012-01
STYLE OF CAUSE: South Yukon Forest Corporation v. HMQ
MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES
REASONS FOR ORDER BY: Hargrave P.
DATED: May 11, 2005
WRITTEN REPRESENTATIONS BY:
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Timothy S. Preston, QC
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FOR THE PLAINTIFF
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Gary W. Whittle
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FOR THE DEFENDANT
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SOLICITORS OF RECORD:
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