February 10, 2023
What just might be worse than losing your case at trial? Winning the case and then having to go back to try it all over again because not only does the Court of Appeal grant the appeal, but they also decide that the factual record from the trial is not sufficient for the Court of Appeal to make the decision they think the judge should have made.
I don’t recall who said it, but it used to be a truism that “the trial is all about building the record for the Court of Appeal.”
This should be especially true in a case like Tar Heel Investments Inc. v. H.L. Staebler Company Limited, in which, as the Court of Appeal points out, the key point of law necessary to resolve the dispute is not settled.
Tar Heel is a case where a trucking broker is suing a former representative and their new employer for the tort of conversion, seeking damages for lost profit after the representative took their book of business with them on departure.
Conversion is a familiar concept in common law. As the Court of Appeal defines conversion it: “involves a wrongful interference with the goods of another, such as taking, using or destroying these goods in a manner inconsistent with the owner’s right of possession”.
The Court goes on to point out that conversion “is a tort of strict liability and it is no defence that the wrongdoer did not intend to convert the goods.”
That much is clearly established by a Supreme Court of Canada decision, Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce.
So, what is the problem?
As the court points out in the very next paragraph:
It is not settled whether intangible property such as the information in a book of business can be the subject of a conversion claim. Some trial courts have held that the tort does not apply to intangible property…Other trial courts have held that it can apply…There is no authoritative guidance from this court on the issue.
That alone would seem fair warning that the case was destined for appeal.
The Court of Appeal judgment does not make it clear where things went wrong, but wrong they certainly went.
The situation is further complicated by the fact that intangible property such as information is different than tangible property like machines, tools, or books. In our increasingly knowledge-based economy, it is now the reality that although the representative took the information, the employer also retained a copy. Since the essence of conversion is depriving the true owner of their property, it is a very new question whether taking a copy and going into competition constitutes conversion or possibly some other improper act, such as breach of confidence.
Breach of confidence is a tort that arises out of an employee’s duty of loyalty and good faith. Yes, such duties do exist.
BUT… the trial judge never addressed the claim. As the Court of Appeal points out, this was an error. The judge did not make the findings of fact required to apply the relatively straightforward test for breach of confidence to the facts – in this case, primarily the history of the development of the book of business, part of which the representative had brought to her employer from a prior job.
The trial judge pointed out that this case is an example of the difficulties that arise when parties work together without finalizing the contract of employment – assuming it was a contract of employment, since the employee claimed that she was an independent contractor. The judge also was critical of the parties’ submissions at trial which were described as being less than helpful.
- Most of these problems could have been avoided if the parties had a clear contract that defined the business relationship, the ownership of the book of business, and mutual obligations at the end of the relationship. It might have still led to a lawsuit, but it would have been less complex, less frustrating, and less costly.
- When you do need to go to trial, it is the job of the parties and their lawyers to make sure that the evidence and submissions are thorough and thoughtful.
- Although it is easy to criticize the judge for not making the necessary findings on the record, it is the job of counsel to assist the judge in understanding the issues and making the appropriate rulings.
- That is only possible with the cooperation of a well informed and involved client.
- Everybody wants to win a trial, but particularly in a case that seems bound to go to the Court of Appeal, you and your lawyer should be aware of the need to build a good record for that appeal, with all of the issues of fact on the table and with submissions that assist the judge in making the findings of fact necessary for the Court of Appeal to make a decision of law. This requires the client and the lawyer working in unison.
- It is part of the lawyer’s job to understand the law which may apply to the case and to communicate to the client what evidence is necessary to prove the facts .
- You as client should be cooperative and attentive and do your best, while always telling the truth, to provide the lawyer with the evidence necessary, assuming it exists.
- If the evidence does not exist to prove a claim, you may need to reconsider your position.
- The more complex and uncertain the case is, the more important making appropriate strategic and tactical decisions becomes. Strategic decisions are typically made jointly by lawyer and client, but tactics are primarily the job of the lawyer.
- This begins with making sure that the proper claims are in your pleadings, but there is always a temptation to try to simplify the case for the trial.
- The Tar Heel case points out that focusing too much on one issue may be a tactical and strategic error.
- It is best if you and your lawyer share sound judgment and communicate well.
- Where, as in the Tar Heel case, the law is unsettled, your lawyer’s job is more difficult, and you may have to prove alternative facts to fit different theories of law.
- That means a more thorough presentation of evidence – and perhaps digging more deeply for witnesses or documents.
- The more complex your case is, the more important it is that you find the right lawyer for you. Not all lawyers are the right lawyer for every client. Not all lawyers are the right lawyer for every case.
- Regardless of whose fault it was, the Court of Appeal had no choice but to order a new trial in this case which will be expensive and involve further significant delays. The problem is compounded by the trial judge not considering the claim for breach of confidence, which was in the Statement of Claim, but it seems was not the focus at trial.
WHAT WEILERS LAW CAN DO TO HELP YOU
Not every law firm has the combination of experience and expertise in employment law and tort law that Weilers law possesses. For a case like the Tar Heel case, this is important.
At Weilers Law we have a long history of taking on the challenge of complex cases. We understand the law, and more importantly understand the art of advocacy necessary to present your case to the court in the best possible manner.
At Weilers Law we are committed to working closely with our clients in employment law and litigation matters to avoid pitfalls wherever possible. Where there are obstacles to success, we work with clients to attempt to navigate a strategic and tactical path to victory wherever possible.
We not only seek success at trial, we also understand that success at trial includes building a solid record in the event of appeal. Having been to the Court of Appeal, our lawyers understand what that requires.
Weilers Law may not be the right law firm for every client, but if you have a complex and challenging case, we may be the right lawyers for you.