MEDICINE HAT (CITY) v FIELDCORE SERVICE SOLUTIONS CANADA COMPANY

The Plaintiff, the City of Medicine Hat (the “City”), sought to appeal an Arbitration Award and related Costs Award (collectively, the “Award”) pursuant to sections 44 and 45 of the Arbitration Act, RSA 2000, c A-43.

The underlying Arbitration arose from a negligence claim by the City against the Defendant, Fieldcore Service Solutions Canada Company (“Fieldcore”), related to inspections Fieldcore conducted on a turbine. On Appeal, the City challenged, among other things, the Arbitrator’s treatment of the City’s expert evidence (the “Report”) and the evidence of Fieldcore’s corporate representatives.

During the Arbitration, the City sought to admit the Report pursuant to Rules 5.39 and 5.40, without calling its author or reviewer as witnesses. Instead, the City relied on Steve Caldwell (“Caldwell”), a Vice President of the company that prepared the Report, to defend its contents. Although the Arbitrator admitted the Report into evidence, it was afforded little weight because Fieldcore was prejudiced by its inability to cross-examine the author and reviewer or assess their qualifications. The Arbitrator also rejected the City’s submission that Caldwell qualified as a “Category 2 Witness” under Kon Construction Ltd. v Terranova Developments Ltd., 2015 ABCA 249, because of his involvement and expertise. The City argued that this limitation to the use of the Report prevented it from being able to fully present its case.

The City further argued that it had been denied the opportunity to cross-examine Fieldcore’s first corporate representative, who provided some evidence prior to being replaced by a second corporate representative. Neither the City nor the Arbitrator objected at the time to the substitution or the second corporate representative’s adoption of the first representative’s evidence. The City subsequently cross-examined the second corporate representative.

Justice Froese upheld the Award and rejected both grounds of Appeal. With respect to Rules 5.39 and 5.40, Froese J. held that the Arbitrator appropriately admitted the Report, permitted submissions regarding its admissibility and weight, and accordingly determined the weight to be afforded to the Report. The Court held that any resulting prejudice arose from the City’s own litigation decisions rather than any procedural unfairness. With respect to the corporate representatives, Justice Froese held that Rule 5.4 does not entitle a party to cross-examine a particular individual and that the City had, in fact, cross-examined Fieldcore through its second corporate representative.

In the result, the Court dismissed the Appeal and granted the parties leave to provide written submissions on the costs of the Appeal.