Court of Appeal for Ontario

Date: 2017-05-23 Docket: C62618

Judges: Pepall, Lauwers and Huscroft JJ.A.

Between

TMS Lighting Ltd. and Bahra Holdings Inc. Plaintiffs (Respondents)

and

KJS Transport Inc., Kulwant Singh and 1707416 Ontario Inc. Defendants (Appellants)

Counsel

For the Appellants: Thomas Slade and Cory Giordano

For the Respondents: Paul Pape and Joanna Nairn

Heard and Released Orally: May 23, 2017

On Appeal From: The judgment of Justice Tzimas of the Superior Court of Justice, dated August 2, 2016.

Reasons for Decision

[1] This court set aside the damages award from the first trial on the basis that the respondent had failed to establish damages due to lost productivity. A new trial was ordered, limited to assessing damages in trespass and nuisance. The trial judge at the second trial fixed damages in the amount of $532,000.

[2] The appellant submits that respondent has, for the second time, failed to present a reasonable and reliable basis on which to quantify damages, and that the trial judge erred in misapprehending the evidence. The appellant submits that the respondent has not established that its loss was substantial, and so should be awarded only nominal damages as a result.

[3] We disagree.

[4] This court sent the matter of damages back for a retrial on the basis that the respondents had suffered "a real wrong, which caused real loss". The question was, how much of the respondent's diminished productivity was caused by the appellant. In order to establish the quantum of that loss, the respondent produced evidence that it had not provided at the first trial and provided an expert opinion concerning the quantification of damages.

[5] The trial judge found the respondent's representatives to be credible. However, the respondent's records were not ideal; the respondent did not have proper record-keeping systems in place. The business was relatively small and unsophisticated, and the CEO operated it in a hands-on manner. For example, he did not record requests for quotes that the company could not meet, nor did he implement a system to record work hours diverted to mitigating the effect of the dust and sand problem caused by the appellant.

[6] Nonetheless, she accepted the respondent's explanation for its documentary deficiencies and was satisfied that she had sufficient evidence to allow her to rule on damages. The trial judge carefully reviewed the evidence, including expert reports prepared for the appellant and the respondent. She accepted concerns raised by the appellant's expert as to the respondent's expert's treatment of the recession and its impact on revenues. As the trial judge stated in paragraph 54:

As I noted at the beginning of this analysis, I have no difficulty drawing inferences about productivity from an analysis of lost revenues and lost net income. While I accept that it is possible to work backwards from an analysis of lost revenues over a period of time to draw inferences about productivity, lost revenues verify the existence of the loss. They cannot identify of distinguish between the various variables or explanations that might account for the loss. In this context, the best that the lost revenue analysis can do is to allow for the inference that some of the loss was caused by the recession and some by the dust. All of the evidence points to such a conclusion. The task then becomes one of how to estimate or allocate the loss for each of the two variables.

[7] The trial judge considered gaps in the evidence and acknowledged the impossibility of mathematical precision. She factored in the impact of the recession and the differential between Canadian and US markets and the evidence on sales and lost revenues. She reached a figure of $532,000, which she treated as a global award, covering damages for both nuisance and trespass.

[8] In our view, the trial judge did not err. Her decision on damages is entitled to deference. There is no basis for this court to interfere.

[9] The appeal is dismissed.

[10] The respondent is entitled to costs of $15,000 inclusive of taxes and disbursements.

S.E. Pepall J.A. P. Lauwers J.A. Grant Huscroft J.A.