Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff sought leave to file a reply expert report addressing criticisms raised by the defendant’s expert.

• The court considered whether the reply constituted proper rebuttal or an impermissible attempt to split the case.

• A key issue involved the admissibility of new expert evidence under Federal Court Rule 279.

• The court evaluated whether the reply evidence could have been anticipated in the plaintiff’s main case.

• It was necessary to determine whether allowing the reply would unfairly prejudice the defendant.

• The judge applied a flexible, justice-oriented approach favoring proportionality and procedural fairness.

Facts and outcome of the case

Louis Dreyfus Company Canada ULC (LDC) brought an action in the Federal Court against Canadian National Railway Company (CN) for damages related to a prior ruling by the Canadian Transportation Agency. That ruling found CN had breached its statutory service obligations under the Canada Transportation Act by failing to provide ordered grain hopper railcars during the 2013/2014 crop year. As per the Act, the Agency determines whether a breach has occurred, and the Federal Court assesses resulting damages. LDC commenced the damages claim in 2015.

LDC retained expert John De Pape, who estimated over $22 million in lost profits. CN, in response, retained forensic accountant Dean Das, who issued a critique of De Pape’s methodology. LDC then submitted a reply expert report by De Pape, prompting this motion to have it admitted as reply evidence.

CN opposed the motion, arguing the reply improperly introduced new arguments and gave LDC an unfair advantage. The defense characterized the report as advocacy rather than genuine rebuttal.

The Federal Court, presided over by Justice Diner, granted the motion. The Court ruled that the reply evidence was appropriately responsive to the criticisms raised by CN’s expert and could not reasonably have been anticipated earlier. The judge found the report to be new and relevant, not merely repetitive, and proportionate given the complexity and size of the case. Importantly, the Court emphasized that no significant prejudice would result to CN, especially as trial was still months away and CN could respond with sur-reply evidence if necessary.

The Court ordered that the expert reply report could be filed and admitted for trial, subject to objection at trial. Costs for the motion were awarded to the plaintiff, LDC, regardless of the ultimate trial outcome. The issue of damages will be determined at trial beginning in November 2024.