Construction disputes (as with any matters in litigation) rarely make it to trial. Matters typically settle or are resolved on a summary basis through written evidence alone. But if a matter proceeds to trial, where evidence via live witnesses is required, which people to call as witnesses is integral.

In construction, it is common that the individuals working on a particular project will no longer be working for the same company by the time a matter reaches trial. Whether to call that former employee as a witness raises potential issues of cooperation, faded memory, and general strategy for how to present a case in the most effective way.

Adverse Inferences and Daily Reports as Evidence

Whether to draw what is known as an “adverse inference” and whether daily logs are admissible as evidence was considered by the Alberta Court of Queen’s Bench in RidgeCrest Developments Ltd v Westcor Construction Ltd, 2019 ABQB 843.

Westcor was hired as the general contractor to perform exterior work at a condominium complex. RidgeCrest was hired as a subcontractor. Disputes arose between the parties. RidgeCrest registered a builders’ lien and sued Westcor, and Westcor counter claimed.

The matter proceeded to a trial with both parties seeking damages from the other. The Court ultimately found that Westcor was entitled to a net damages award from RidgeCrest, but the Court’s analyses of two evidentiary issues leading to this conclusion provide helpful insight on the evidence required.

Adverse Inferences

If a party does not call a witness that the opposing party feels was an essential witness with relevant testimony, the opposing party will ask the Court to draw what is known as an “adverse inference” that the reason the witness was not called is because his/her evidence would adversely affect the other party’s case.

In the case of a former employee, this creates a practical difficulty in obtaining the former witness’ testimony. If an employee did not leave on positive terms, calling that person as a key witness creates obvious risks. Even though witnesses are sworn/affirm to tell the truth, a former employee with an axe to grind is not the type of witness a party wants to base its case on. RidgeCrest’s work in this case was completed in 2010 and 2011, and the matter went to trial in 2018 and 2019.

RidgeCrest did not call its former project manager for the subject project as a witness. He left the company in 2011. RidgeCrest argued that since he had not worked for them since 2011, they had no control over him. Westcor argued that this failure to call a key witness should result in an adverse inference being drawn.

The Court declined to draw an adverse inference for two reasons:

1. RidgeCrest did not have exclusive control over the witness. Westcor also could have taken steps to locate the witness but did not do so.
2. The project manager was not the only person, or the best person, who could provide evidence regarding early dealings between the parties. There was other testimony available to make necessary findings of fact.

Admissibility of Daily Logs

The Court then considered whether Westcor’s daily logs were admissible evidence. They were logs prepared by the site superintendent as part of Westcor’s routine practices. The site superintendent was not called as a witness at trial, but Westcor’s other witnesses were able to speak to the contents of the daily logs.

The basic rule of evidence is that hearsay (second-hand) evidence is inadmissible. So if the author of a document is not called as a witness to authenticate it or speak to its contents, the document is inadmissible. There is an exception to this rule known as the “business records exception”. It provides that records made contemporaneously by someone having a personal knowledge of the matters being recorded and under a duty to make the record, are admissible as prima facie proof of the facts.

The Court held that the daily logs met this test, and they were admitted as evidence.

How does this affect you?

If you are involved in a construction dispute, and have concerns over which individuals may need to give evidence at a potential trial, contact Anthony Burden.