Sep 10, 2015

Nova Scotia Civil Procedure Rules annotation of Rule 10.09

Abbott and Haliburton Company v. WBLI Chartered Accountants, 2013 NSCA 66 (CanLII)
Rule 10.09 – Costs if formal offer not accepted
The appellant building supply companies, collectively Abbott and Haliburton ('Abbott'), incorporated AWARD Wholesalers and Distributors ('AWARD') as their bulk buying agent. WBLI had prepared AWARD's annual financial statements until 2006, when Grant Thornton LLP took over that task. Grant Thornton's 2005 annual report alleged that WBLI had failed to recognize serious problems with AWARD's finances. Abbott sued WBLI for professional negligence. WBLI applied for summary judgment. Abbott defended this motion by submitting an affidavit from O'Hearn, a principal of one of the appellant companies, as well as an expert report by way of affidavit from MacMillan, a forensic accountant with Grant Thornton. WBLI applied successfully to have both affidavits struck.The motions judge found that the O'Hearn affidavit was 'shot through' with inadmissible hearsay, opinion and innuendo. The motions judge further found that, because MacMillan had incorporated data generated by Grant Thornton into her report and Grant Thornton was embroiled in the litigation, it would appear to a reasonable observer that MacMillan lacked objectivity. AWARD appealed. Held, leave to appeal denied with respect to the O'Hearn affidavit; leave to appeal granted and appeal allowed with respect to the MacMillan affidavit. The O'Hearn affidavit was properly struck. The motions judge excluded MacMillan's affidavit solely on the basis that a reasonable observer would not see MacMillan to be independent. That is not the correct test. The admissibility of expert evidence is governed by the test set out in Mohan: the evidence must be relevant; necessary; unaffected by other exclusionary rules; and given by a properly qualified expert. None of these criteria requires expert evidence to be, and be seen to be, independent and impartial. The concern that an expert lacks independence or objectivity typically goes to weight rather than admissibility. A trial judge can exclude expert evidence if the expert is acting as an advocate or is actually biased to the extent that the prejudicial effect of her evidence outweighs its probative value. However, in this case, the motions judge did not carry out such a cost-benefit analysis. Moreover, the motions judge committed a reviewable error in finding that the type of data generated by Grant Thornton and used by MacMillan in her report would ever cause a reasonable observer to believe that MacMillan would be seen to or would in fact lack independence.