Ontario Court Rules On "Participant Expert" Witnesses

Following up on its historic decision in Moore v. Getahun, the Ontario Court of Appeal has released a second decision relating to expert witnesses.  In the case (indexed as Westerof v. Gee Estate, 2015 ONCA 206 CanLII), the court distinguished between expert witnesses who were retained "by or on behalf of a party" and what the court referred to as “participant experts”, i.e. witnesses with special skill, knowledge, training or experience who were involved in the underlying facts of the case or "non-party experts", i.e. witnesses who had formed a relevant opinion based on personal observations for a purpose other than the litigation.  The Court of Appeal held that such experts do not have to comply with the requirements of rule 53.03 of the Ontario Rules of Civil Procedure, i.e. prepare an expert report and sign an acknowledgement of his or her duty as an expert.   

 

In this case, the plaintiff Westerof was injured in a car accident in 2004 when the car in which he was a passenger was struck from behind by another vehicle travelling at twice the posted speed limit.  Mr. Westerof suffered injuries and was examined by his family doctor and a number of other doctors who he called to testify at the trial. 

 

At trial, the trial judge ruled inadmissible the opinion evidence concerning history, diagnosis and prognosis from the doctors who were either participant experts or non-party experts.  The trial judge ruled that these witnesses were required to comply with rule 53.03 and had not done so.  He dismissed the action.

 

Mr. Westerof appealed to the Divisional Court.  The Divisional Court disagreed with the trial judge but held that the important distinction as to admissibility of the evidence was “not in the role or involvement of the witness but in the type of evidence sought to be admitted”.   The Divisional Court held that if the evidence in issue is opinion evidence, then the witness must comply with rule 53.03.   If the evidence is factual evidence then the witness need not comply. 

 

The Ontario Court of Appeal unanimously overturned the ruling of the Divisional Court.  Justice Simmons writing for the court held that the type of evidence, whether fact or opinion, is not the key factor in determining to whom rule 53.03 applies.  In her opinion, participant experts and non-party experts may give opinion evidence without complying with rule 53.03.  Accordingly she ordered a new trial in the case.

 

In reaching her conclusion for the court, Justice Simmons held that a witness with special skill, knowledge, training or experience who has not been engaged by or on behalf of a party to the litigation may give opinion evidence for the truth of its contents without complying with rule 53.03 where:

1.  the opinion to be given is based on the witness’ observation of or participation in the events at issue; and
2. the witness formed the opinion to be given as part of the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such evidence.

 

The court held that participant experts are those witnesses whose evidence relates to their observations of the underlying facts.  Non-party experts are those experts who have formed a relevant opinion based on personal observations or examinations relating to the subject of the litigation for a purpose other than the litigation. 

If a participant expert or non-party expert gives opinion evidence extending beyond those limits they must comply with rule 53.03 with respect to the portion of their opinions which extend beyond those limits.

 

In reaching its conclusions, the Ontario Court of Appeal made the following observations:

 

1. the jurisprudence prior to 2010, i.e. prior to the Osborne Report on reform of the civil justice system, is relevant and the Divisional Court’s failure to refer to the pre-2010 jurisprudence was a significant oversight.  There is no basis for concluding that the pre-2010 jurisprudence did not continue to apply following the 2010 amendments to the rules relating to expert witnesses;
    
2. the text of the 2010 amendments supports the view the rule 53.03 does not apply to participant experts or non-party experts.  The expert must be engaged "by or on behalf of" a party before the rule applies;
    
3. requiring participant experts and non-party experts to comply with rule 53.03 can only add to the cost of litigation, create the possibility of delay because of potential difficulties in obtaining compliant reports and add unnecessarily to the workload of persons not expecting to have to write such reports.

Regards,

Blair

Supreme Court strikes down provisions of Money Laundering Act as they apply to Lawyers

The Supreme Court of Canada decided last week in the case of Attorney General of Canada v. Federation of Law Societies of Canada 2015 SCC 7, that the government should not interfere with a lawyer’s commitment to his or her client’s cause.  In doing so, the court held that  commitment to the client’s cause, was fundamental to the solicitor-client relationship.  Lawyers across the country welcomed the decision as a victory for the public and in providing clarity to how the legal profession should deal with its clients.

 

The case involved an act cumbersomely entitled “Proceeds of Crime (Money Laundering) and Terrorist Financing Act” (“Money Laundering Act”).  Parts of the Money Laundering Act and certain regulations under the Money Laundering Act sought to require lawyers and law firms to collect confidential information about their clients that could be subject to search and seizure by the government.  Alarmed by the prospect, the Federation of Law Societies of Canada sought to a declaration from the court that such legislation was unconstitutional.  Several lawyers’ associations including The Advocates’ Society, the Canadian Bar Association and the Canadian Civil Liberties Association intervened in the case.

 

The Money Laundering Act requires financial intermediaries (including lawyers) to collect, record and retain material, including information verifying the identity of those on whose behalf lawyers pay or receive money.  It put an agency in place to oversee compliance with the legislation and allowed that agency to search for and seize material.  The Money Laundering Act imposed fines and penal consequences for non-compliance.

 

Sections of the regulations made lawyers subject to the Money Laundering Act when receiving or paying funds or giving instructions to pay funds (other than in respect of professional fees, disbursements, expenses or bail).  Other sections of the regulations imposed record-keeping requirements and yet other sections of the regulations imposed identification requirements.

 

The Federation of Law Societies commenced a constitutional challenge to the Money Laundering Act as it applied to lawyers.  The challenge was brought in British Columbia and matter made its way to the Supreme Court of Canada.

 

The majority of the court struck down the sections of the Money Laundering Act and the regulations that applied to documents in the possession of lawyers and law firms.  The majority held that those provisions had a predominately criminal law character rather than an administrative law character.  They facilitated detecting and deterring criminal offences and investigations in prosecuting criminal offences.  There were penal sanctions for non-compliance.  The provisions authorized sweeping searches of law offices which inherently risked breaching solicitor-client privilege.  The court held that the public's expectation of privacy in solicitor-client privileged communications was high regardless of the context and nothing about the regulatory context of the Money Laundering Act or the fact that a regulatory agency undertook the searches diminished that expectation.

 

In addition, the court found that the impugned provisions wrongly transferred the burden of protecting solicitor-client privilege to lawyers.  Nothing in the legislation required notice to be given to clients and clients may not even be aware that their privilege was threatened.  Unless the search was of a lawyer’s home office, nothing required prior judicial authorization.  Searches were not contingent upon proof that there were no reasonable alternatives.  The court held that the provisions allowing warrantless searches are presumptively unreasonable, examining and copying documents proceeded until privilege was asserted and approached that greatly elevated risk of a breach of privilege.

 

The search powers in the Money Laundering Act as applied to lawyers along with the inadequate protection of solicitor-client privilege constituted a very significant limitation of the right to be free of unreasonable searches and seizures. 

 

The court held that principles of fundamental justice have three characteristics:

 

1. there must be a legal principle;
2. there must be a significant societal consensus that they are fundamental to the way in which the legal system ought to operate; and
3. they must be sufficiently precise so as to yield a manageable standard against which to measure deprivations of life.

 

The court found that the lawyer’s duty of commitment to the client’s cause meets this test.  There was overwhelming evidence of a strong and wide-spread consensus concerning the fundamental importance in democratic states of protection against state interference with the lawyer’s commitment to his or her client’s cause.  That duty was fundamental to the solicitor-client relationship and how the state and the citizen interact in legal matters.  The lawyer’s duty of commitment to his or her client’s cause is essential to maintaining confidence in the integrity of the administration of justice. 

 

The Court concluded that the Money Laundering Act required lawyers to gather and retain considerably more information that the profession thought was needed for ethical and effective client representation.  This coupled with the inadequate protection of a solicitor-client privilege undermined a lawyer’s ability to comply with the duty of commitment to the client’s cause. 

Those offending sections of the legislation were unconstitutional and should be struck.  Other sections that simply authorized the making of regulations were administrative, not criminal, in nature and did not infringe the Charter of Rights and Freedoms.

Regards,

Blair

Supreme Court of Canada Permits Physican-Assisted Suicide

In a landmark ruling, The Supreme Court of Canada overturned its decision from 22 years earlier and found in favour of a dying person's right to die with dignity.

The issue of physician-assisted suicide first came before the Supreme Court of Canada in 1993.  At that time, Sue  Rodriguez, a 42 year old woman suffering from amyotrophic lateral sclerosis (ALS) applied to the Supreme Court of British Columbia for the right to “die with dignity” and to permit a physician to help her end her life.  The matter was eventually appealed to the Supreme Court of Canada which held in a close 5 – 4 decision that the section of the Criminal Code of Canada (“Criminal Code”) which prohibited giving assistance to commit suicide was constitutional.  At that time, the Supreme Court held that the principles of “fundamental justice” in section 7 of the Charter of Rights and Freedoms (“Charter”), requires that a fair balance be struck between the interests of the state and those of the individual. 

The majority of the court held that the respect for human dignity, while one of the underlying principles upon which our society is based is not a principle of fundamental justice within the meaning of section 7.  The long-standing blanket prohibition in the Criminal Code against assisted suicide fulfils the government’s objective of protecting the vulnerable, is grounded in the state interest in protecting life and reflects the policy of the state that human life should not be depreciated by allowing life to be taken.  Such a blanket prohibition also seems to be the norm among Western democracies and such a prohibition has never been adjudged to be unconstitutional or contrary to fundamental human rights.  

 

The court held that Parliament's repeal of the offence of attempted suicide from the Criminal Code was not a recognition that suicide was to be accepted within Canadian society.  Rather, it merely reflected the recognition that the criminal law was an ineffectual and inappropriate tool for dealing with suicide attempts. 

 

The court found that it was preferable not to decide the difficult and important issues raised under section 15 of the Charter (prohibition of discrimination) but rather to assume that the prohibition on assisted suicide in the Criminal Code infringes section 15 since any infringement is clearly justified under section 1 of the Charter.  The impugned section of the Criminal Code has a pressing and substantial legislative objective and meets the proportionality test.  A prohibition on giving assistance to commit suicide is rationally connected to the purpose of the section which is to protect and maintain respect for human life. 

 

The dissenting judges wrote various opinions but essentially held that the particular section of the Criminal Code infringed the right to security of the person.  They ruled that the legislation has an element of personal autonomy which protects the dignity and privacy of individuals with respect to decisions concerning their own body.  A legislative scheme which limits the rights of a person to deal with her body as she chooses may violate the principles of fundamental justice under section 7 if the limit is arbitrary.  A limit will be arbitrary if it bears no relation to or is inconsistent with the objective that lies behind the legislation.  Here, it made no sense to have a legislative scheme which makes suicide lawful but assisted suicide unlawful.  The effect of this distinction was to deny to some people the choice of ending their lives solely because they were physically unable to do so, preventing them from exercising the autonomy over their bodies available to other people.  Such denial amounts to a limit on the right to security of the person which does not comport with the principles of fundamental justice. 

 

The dissenting judges held that section 15 of the Charter had no application in this case because the case was not about discrimination.  What was required was that in all cases that the judge be satisfied that, if and when the assisted suicide takes place, it would be with the full and free consent of the applicant.  Further, the dissenting judges held that section 7 of the Charter which grants Canadians a constitutional right to life, liberty and security of the person, is a provision which emphasises the innate dignity of human existence.  Dying is an integral part of living and, as a part of life, is entitled to the protection of section 7.  It follows that the right to die with dignity should be as well protected as in any other aspect of the right to life.  State prohibitions that would force a dreadful, painful death on a rational but incapacitated terminally ill patient were an affront to human dignity. 

 

In 2014, the matter was back before the Supreme Court of Canada in the case of Carter v. Canada (Attorney General) 2015 SCC 5,.  This time, the Supreme Court unanimously found in favour of the right to die with dignity.  The matter again was on appeal from the courts of British Columbia where the majority of the British Columbia Court of Appeal concluded that they were bound by the conclusion in Rodriguez as a matter of stare decisis. 

 

However, the Supreme Court invalidated the applicable sections of the Criminal Code to the extent that they prohibited physician-assisted suicide for a competent adult person who (1) clearly consents to the termination of life; and (2) has a grievous and irremediable medical condition that causes enduring suffering that is intolerable to the individual in the circumstances of his or her condition.  The court suspended the invalidity of the provisions of the Code for a period of 12 months in order for Parliament to enact legislation to address the court’s ruling.

 

In reaching its unanimous decision this time around, the Supreme Court held that the trial judge was entitled to revisit its decision in Rodriguez.  Trial courts may reconsider settled rulings of higher courts in two situations:  (1)  where a new legal issue is raised; and (2)  where there is a change in the circumstances or evidence that fundamentally shift the parameters of the debate.  Here both conditions were met.  The argument before the trial judge involved a different legal concept of section 7 of the Charter, in particular, the law relating to the principles of over-breadth and gross disproportionality had materially advanced since Rodriguez.  The matrix of legislative and social facts in this case also differed from the evidence before the court in Rodriguez.

 

The court held that the right to life is engaged where the law or state action imposes death or an increased risk of death on a person either directly or indirectly.  Here the prohibition deprives some individuals of life as it had the effect of forcing some individuals to take their own lives prematurely for fear that they would be incapable of doing so when they reached the point where suffering was intolerable.

 

The rights to liberty and security of the person which deal with concerns about autonomy and quality of life were also engaged.  An individual’s response to a grievous and irremediable medical condition is a matter critical to their dignity and autonomy.  Their prohibition denies people in this situation the right to make decisions concerning their bodily integrity and medical care and thus trenches on their liberty.  By leaving them to endear intolerable suffering, it impinges on their security of the person.

 

The prohibition on physician-assisted dying infringes the right to life, liberty and security of the person in a manner that is not in accordance with the principles of fundamental justice.  The object of the prohibition was not to preserve life whatever the circumstances but more specifically to protect to protect vulnerable persons from being induced to commit suicide at a time of weakness. 

 

Having concluded that the prohibition on physician-assisted dying violated section 7 it was unnecessary to consider whether deprived adults who are physically disabled of the right to equal treatment under section 15 of the Charter. 

Regards,

Blair 

Ontario Court Summarizes Criteria for Intervening as a "Friend of the Court" in Trinity Western University case

The Ontario Divisional Court (Justice Nordheimer) recently handed down its decision concerning criteria for parties who apply to intervene in lawsuits as "friends of the court" -  Trinity Western University v. Law Society of Upper Canada 2014 ) ONSC 5541.

 

Trinity Western University (“TWU”) is a Christian university located in Langley, British Columbia.  TWU submitted a proposal to establish a law school to the British Columbia Ministry of Advanced Education and the Federation of Law Societies of Canada in June of 2012.  The new law school is planned to open in September of 2016.

 

All TWU students, faculty and staff are required annually to sign a community covenant agreement which includes a commitment to voluntarily abstain from various conduct  including “sexual intimacy that violates the sacredness of marriage between a man and a woman”. 

 

TWU sought accreditation for its law school from a number of provincial law societies.  The Law Society of Upper Canada (“LSUC”) voted against the accreditation of TWU’s proposed law school.  TWU brought an application for judicial review to the Divisional Court of Ontario.

 

Subsequently, eleven motions were made for leave to intervene in the application on behalf of 14 organization and individuals:

 

1. Canadian Counsel of Christian Charities;
2. The Christian Legal Fellowship;
3. Justice Centre for Constitutional Freedoms;
4. The Association for Reformed Political Action Canada;
5. The Evangelical Fellowship of Canada and Christian Higher Education Canada;
6. Catholic Civil Rights League and Faith and Freedom Alliance;
7. Gerard P. Charette;
8. Canadian Association of Labour Lawyers;
9. Criminal Lawyers’ Association;
10. Out On Bay Street and OUTlaws;
11.  The Advocates' Society.

 

Justice Nordheimer set out the principles upon which a court should grant intervener status. 

Rule 13.02 of the Rules of Civil Procedure provide:  “any person may, with leave of a judge or at the invitation of the presiding judge or master, and without becoming a party to the proceeding, intervene as a friend of the court for the purpose of rendering assistance to the court by way of argument”. 

He then cited two instructive cases:  Peel (Regional Municipality) v. Great Atlantic and Pacific Company of Canada Ltd., where the Chief Justice of Ontario said:  “Although much has been written as to the proper matters to be considered in determining whether an application for intervention should be granted, in the end, in my opinion, the matters to be considered are the nature of the case, the issues which arise and the likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the moving parties”.        

These basic principles were expanded upon as they apply to cases involving the Canadian Charter of Rights and Freedoms by the case of Bedford v. Canada (Attorney General) where the court said:  “Where the intervention is in a Charter case, usually at least one of three criteria is met by the intervener:  It has a real, substantial and identifiable interest in the subject matter of the proceedings; it has an important perspective distinct from the immediate parties; or, it is a well-recognized group with a special expertise and broadly identifiable membership base “.  

 

Having regard to both cases, Justice Nordheimer concluded that even under the principles set out in Bedford, a proposed intervener must still satisfy the basic requirement that their participation will result in them making a useful and distinct contribution not otherwise offered by the parties.  He also referred to the Supreme Court of Canada’s decision in R. v. Finta, where the Chief Justice (as she then was) stated: “The criteria under rule 18 [ now rule 57] require that the applicant establish:  (1) an interest; and (2) submissions which will be useful and different from those of the other parties”.

 

Finally, Justice Nordheimer found it helpful to mention three other principles that governed the granting of intervener status - first as a general principle, the threshold for granting intervener status in a public interest or public policy case is lower than it is for a private case; second, in Charter cases, courts recognize that it is important for the court to receive a diversity of representations reflecting the potential wide ranging impact of its decision; and, third, the fact that the proposed intervener is not indifferent to the outcome of the appeal is not a reason to deny it the right to intervene.  However, the court should take into consideration that there should be some balance between the positions to be advocated when granting intervener status, i.e. the court should not allow piling on.

 

Of the 14 proposed interveners in this case, the first 10 supported the position of TWU.  The final four supported the position of the LSUC.

 

Justice Nordheimer noted that there was some degree of overlap, albeit limited, with the positions of the interveners.   Each of the proposed interveners had a slightly different perspective on the issues raised.  

 

Justice Nordheimer held that the court process is not akin to a public consultative process where every conceivable difference of opinion or view is to be gathered and digested.  The principal focus of the court is to resolve the issues that are in dispute between the parties in accordance with the applicable legal principles but in doing so to be guided by considerations of the broader impacts that the court’s decision may have.  It is to this latter consideration that the interveners can provide assistance. 

 

As a result, he found that it was not necessary for seven organizations to be given intervener status in order to gain an appreciation of the right to freedom of religion and freedom of association.  Accordingly, out of the seven Christian organizations, he granted intervener status to the Christian Legal Fellowship and jointly to The Evangelical Fellowship of Canada and The Christian Higher Education Canada.

 

Justice Nordheimer granted intervener status to the Judicial Centre for Constitutional Freedoms as a non-religious organization.  It brought a different perspective to the issues. 

 

He did not grant intervener status to Mr. Charette who, as both a lawyer and an ordained Roman Catholic deacon, had concerns that appeared to be very much directed towards his own rights which were at that point hypothetical. 

 

As for the rights of gays and lesbians, he granted intervener status jointly to Out on Bay Street and OUTlaws. 

 

Finally, concerning the issue of the protection of the public and how regulator bodies should deal with accreditation decisions, Justice Nordheimer granted intervener status to The Advocates’ Society and the Criminal Lawyers' Association. 

Regards,

Blair

 

Ontario Appeal Court Clarifies Lawyers' Role in Communicating With Experts

In a much anticipated decision, the Ontario Court of Appeal recently released its reasons setting out the parameters of legal counsel’s communication with expert witnesses.  The issue arose in a case called Moore v. Getahun (2015 ONCA 55) in which the plaintiff, Blake Moore seriously injured his right wrist in a motorcycle accident.  As a result of the treatment that he received at the emergency department at Scarborough General Hospital, including the realigning of the bones in his broken wrist and the application of a plaster cast to his wrist and forearm, Moore suffered permanent muscle damage.  He brought an action for negligence against the attending physician and the hospital. 

 

The central issues at trial were whether the doctor had fallen below the standard of care by applying a full circumferential cast on Moore’s wrist and whether the full cast had caused the permanent muscle damage.  The trial ended in a finding of liability.  Before trial the parties had agreed that the appropriate award of damages would be $350,000. 

 

The doctor appealed.

 

During the course of the trial, a number of issues were raised involving the preparation of the written report of the doctor’s expert witnesses.  The trial judge, Justice Janet Wilson, held that it was improper for counsel to assist an expert witness in the preparation of the expert’s report.  She was critical of the doctor’s counsel discussing the expert’s draft report with him during an hour and half telephone call.  She concluded that there had been significant changes to the expert’s report as a result.  Justice Wilson concluded that it had put the expert in a very awkward position as he was “obviously totally unaware that it may be improper to discuss and change a draft report, as a breach of his duty of impartiality”. 

 

Justice Wilson referred to rule 53.03 of the Ontario  Rules of Civil Procedure.  That rule was amended in 2010, as a result of recommendations of the Honourable Coulter Osborne in his review of Ontario's civil justice system and included requiring an expert witness to provide an acknowledgement that his or her opinion evidence was fair, objective and non-partisan and that such duty prevailed over any obligation which the expert may owe to any party on behalf of whom she was engaged.  Justice Wilson concluded the purpose of the rule was to ensure the independence and integrity of the expert witness.   Justice Wilson concluded that the expert's primary duty was to the court and in light of the change of the role of expert witnesses under the “new rule”, she concluded that counsel’s practice of reviewing draft reports should stop.   "There should be full disclosure in writing of any changes to an expert's final report as a result of counsel’s corrections, suggestions or clarifications to ensure transparency in the process and to ensure that the expert witness is neutral."

 

There was significant uproar from the legal profession and in the community of expert witnesses as a result of Justice Wilson's decision   The Advocates' Society and the Canadian Institute of Chartered Business Valuators struck task forces to develop a response.  Both of these organizations intervened in the appeal to provide their perspectives.  The Holland Access to Justice in Malpractice Group, also an intervener, prepared a positon paper that stated that the trial judge’s ruling would have the effect of impairing normal, reasonable and prudent litigation practices, would substantially increase the cost of litigation, would do a disservice to the court in terms of hearing “fulsome, well organized and appropriate evidence, and ultimately would result in a chilling and significantly restrictive effect on access to justice”.

 

The Canadian Defence Lawyers Association submitted that the trial judge’s ruling was “unprecedented, unsupported in law and seriously flawed”.

 

In all, six interveners put forward positions on counsel’s role in helping to shape and prepare expert reports for use at trial.

 

The appeal was heard before Justices Laskin, Sharpe and Simmons of the Ontario Court of Appeal.  Justice Sharpe wrote the decision.

 

Not surprisingly, Justice Sharpe accepted the positions taken by the interveners as to counsel’s role in communicating with expert witnesses. 

 

First, he disagreed with Justice Wilson’s statement that the 2010 amendments to rule 53.03 introduced a “change in the role of expert witnesses”.  He held that the amendments were only intended to clarify and emphasise the existing duties of expert witnesses.  Expert evidence presented should be seen to be the independent product of the expert uninfluenced as to form or content by counsel. Expert witnesses should provide independent assistance to the court by way of objective unbiased evidence and should not assume the role of an advocate.  However, Justice Sharpe found that lawyers have a very important role to play in ensuring that expert reports are appropriately shaped and address the relevant issues to be determined at trial: "The independence and objectivity of expert witnesses is fostered under existing law and practiced in a number of ways including the ethical and professional standards of the legal profession which forbid counsel from engaging in practices likely to interfere with the independence and objectivity of expert witnesses."

 

Justice Sharpe agreed that it would be bad policy to disturb the well-established practice of counsel meeting with expert witnesses to review draft reports.  Expert witnesses need the existence of lawyers in framing the reports in a way that is comprehensible and responsive to the pertinent legal issues in a case. 

 

He further held that consultation and collaboration between counsel and expert witnesses is essential to ensure that the expert understands the duties reflected by the rules and the acknowledgement of the expert’s duty.

 

Justice Sharpe ruled that leaving an expert entirely to his or her own devices or requiring all changes to be documented in a formalized written exchange would result in increased delay and costs in a regime already struggling to deliver justice in a timely and efficient manner. 

 

Justice Sharpe also dealt with the issue of the extent to which consultations between counsel and expert witnesses need to be documented and disclosed to an opposing party.  He found that litigation privilege protects communications with experts but that the litigation privilege was qualified and that disclosure may be required in certain situations. 

 

Absent a factual foundation to support a reasonable suspicion that counsel has improperly influenced the expert, a party should not be allowed to demand production of draft reports or notes of interactions between counsel and an expert witness.

 

In this case, although Justice Sharpe concluded that the trial judge had erred in holding that it was unacceptable for counsel to review and discuss the draft expert report and that she had further erred using the written expert reports that were not entered into evidence or the subject of cross-examination to contradict and discredit aspects of the oral testimony of the experts, those errors did not affect the outcome of the trial and as there was no substantial wrong or miscarriage of justice that flowed from the errors, a new trial would not be justified. 

Regards,

Blair  

 

Duty of Honest Performance of Contracts Recognized in Canadian Common Law

In a landmark decision, released on November 13, 2014,  (Bhasin v. Hrynew 2014 SCC 71), the Supreme Court of Canada recognized a new common law duty for parties to a contact to perform their contractual obligation honestly and in good faith, i.e. a duty of honest performance.   The recognition of this duty represents a change in the law in Canada. 

 

In this case, the plaintiff, Mr. Bhasin, operated a business in Alberta selling registered education savings plans on behalf of Canadian American Financial Corp.  (“Can-Am”).  After almost 10 years, Mr. Bhasin and Can-Am entered into a new agreement governing their relationship featuring a three year term which renewed automatically unless one party gave 6 months’ notice of termination. 

 

The defendant, Mr. Hrynew, a direct competitor of Mr. Bhasin, began working for Can-Am with a view to merging his business with Mr. Bhasin’s business.  Mr. Hrynew was placed in the position of “auditing” Mr. Bhasin’s business.  Can-Am repeatedly misled Mr. Bhasin about Mr. Hrynew’s duties and obligations as an “auditor” as well as the plan to merge Mr. Hrynew’s business with Mr. Bhasin’s.  Ultimately, Can-Am gave notice that it did not intend to renew Mr. Bhasin’s agreement resulting in the loss of value that Mr. Bhasin had built over a period of almost 10 years.  Mr. Bhasin’s sales force was subsequently assumed by Mr. Hrynew.

 

Mr. Bhasin sued Can-Am and Mr. Hrynew in the Alberta Superior Court alleging, among other things, that they had breached an implied duty of good faith.  His claim was successful at trial but was subsequently dismissed by the Alberta Court of Appeal. 

 

In a unanimous decision (the majority decision was written by Mr. Justice Thomas Cromwell), the Supreme Court of Canada held that the common law in Canada should take an incremental step forward to recognize a general doctrine in contract law that imposes a minimum standard of honest contractual performance.

 

The court recognized that Anglo-Canadian common law has resisted acknowledging any generalized, independent doctrine of good faith performance of contracts which is out of step with civil law of Quebec and most jurisdictions in the United States.  Rather, Canadian common law in that respect was piecemeal, unsettled, unclear and inconsistent with the reasonable expectations of commercial parties. 

 

Justice Cromwell identified the Court’s role to develop the common law to keep pace with the “dynamic and evolving fabric of Canadian society” where it can do so in an incremental fashion.  He contemplated not a wholesale change or a reversal of settled law, but a development directed at bringing greater certainty and coherence to the law.

 

The new doctrine of honest performance is characterized by two incremental steps:

 

1.  the first step is to acknowledge that good faith contractual performance is a general organizing principle of common law of contract which informs varies rules in various situations and types of relationships and recognizes obligations of good faith contractual obligations; and
2. the second step is to recognize as a further manifestation of this organizing principle that there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations.

This new duty of honest performance is not an implied term but a general doctrine.  This means that the duty is operative irrespective of the intentions of the parties and is analogous to any other equitable doctrine such as unconscionability.   Justice Cromwell provided some guidance on how the new doctrine would manifest itself in the day to day performance of the commercial parties.  A general duty of honesty in contractual performance means simply that the parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract.  This does not impose a duty of loyalty or of disclosure or require a party to put the other party’s economic interest ahead of its own.

This new principle has the potential to affect the manner in which commercial parties structure agreements, the way that parties to a contract exercise existing rights, negotiate for future rights and generally communicate with each other.

Regards,

Blair

Supreme Court Says Police Wiretaps Can Be Used in Civil Proceedings

The Supreme Court of Canada has ruled that once a private communication has been "intercepted" for use in a criminal investigation, it becomes available to a party in a civil proceeding who may have a claim to it based on relevance. 

In the early summer of 2004, the Competition Bureau of Canada began an investigation (the “Octane Investigation”) into allegations of a conspiracy to fix gasoline pump prices in certain regions of Quebec.   To carry out the investigation, the Competition Bureau obtained from the Superior Court of Quebec, 7 judicial authorizations that enabled it to intercept and record more than 220,000 private communications.  These authorizations for the wiretaps were obtained under Part VI of the Criminal Code of Canada.

 

In 2008 as a result of the Octane Investigation, a series of charges were laid against a number of people alleging that they had conspired to fix pump prices in certain regions of Quebec.  In July 2010 and September 2012, other charges for the same offences were laid bringing the total number of persons charged to 54.

 

Parallel with the criminal proceedings, certain individuals and the Automobile Protection Association, instituted a class action in the Quebec Superior Court against a number of persons, including the accused, alleging that they had breached duties imposed on them under the Civil Code of Quebec and under section 36 of the Competition Act, by engaging in anti-competitive practices.  The class action was subsequently authorized by the Quebec Superior Court. 

 

In support of the class action, the plaintiffs filed a motion for disclosure of documents under the Quebec Code of Civil Procedure and requested that the Federal Director of Public Prosecutions (“DPP”) and the Competition Bureau disclose to them all the private communications/wiretaps that had been intercepted in the course of the Octane Investigation.   Shortly before the motion was heard, the plaintiffs narrowed the scope of their request limiting it to the recordings that had already been disclosed to the accused in the parallel criminal proceedings.  The accused contested the motion.

 

The motions judge granted the plaintiffs’ motion and ordered that the Competition Bureau and the DPP disclose the wiretaps, but only to the lawyers and experts participating in the class action and screen the recordings to protect the privacy of third parties who had nothing to do with the class action.  

 

The accused persons appealed to the Quebec Court of Appeal.  In two separate judgments, the Court of Appeal declined to review the merits of the motion judge’s decision.

 

The accused persons further appealed to the Supreme Court of Canada ( see Imperial Oil v. Jacques, 2014 SCC 66).  The Supreme Court, in a 6–1 decision, dismissed the appeal.  The majority of the court (decision was written by Mr. Justice LeBel) held that a party to a civil proceeding can request the disclosure of recordings of private communications intercepted by the state in the course of a criminal investigation. 

The Supreme Court held that although section 29 of the Competition Act provides for confidentiality of the Competition Bureau’s record of investigation, it does not prohibit the disclosure of private communications intercepted under Part VI of the Criminal Code.  In addition, even though section 193(1) of the Criminal Code lays down the principle that it is unlawful to disclose or use an intercepted private communication without the consent of the originator or the intended recipient of the communication, there are exceptions to this general prohibition.  For example, section 193(2)(a) provides that a disclosure is not an offence if it is made “in the course of or for the purpose of giving evidence in any civil proceedings”.  Nothing in the words of this provision justifies limiting its application to the time when evidence is being given.  The documents requested at the exploratory stage of any civil proceeding may be requested “for the purpose” of testifying at the hearing.  The Court concluded that section 193(2)(a) does not have "facilitating the fight against crime "as its sole purpose; rather its objective is to ensure that courts will have access to all information relevant to the proceedings before them.

 

The Supreme Court held that the Quebec Civil Code of Procedure empowers a judge to order disclosure of documents relating to the issues between the parties that are in possession of a third party.  Judges have great discretion, but should generally favour disclosure.  Nevertheless, the judge must deny a request for disclosure if immunity from disclosure is either provided for in legislation or established by the courts.  Judges must remain sensitive to the duty to protect a person’s privacy.  However, the scope of the protection of the right of the innocent to privacy must always be assessed in light of the various interests at stake.

 

The majority of the Court reasoned that judges have great discretion to control the process of disclosing evidence at the exploratory stage of proceedings and to set conditions for and limits on disclosure.  Where the request of documents results from a criminal investigation, the judge must also consider the impact of disclosure on the efficient conduct of the criminal proceedings and on the right of the accused to a fair trial.

 

Here, the Supreme Court found that the motion judge’s order was consistent with those principles and there was no factual or legal impediment to disclosure of the documents.  The requested evidence was relevant.  Further, the scope of the disclosure order was limited so as to protect the right to privacy of all those whose communications were intercepted.  The disclosure would not hinder the efficient conduct of the criminal proceedings or violate the rights of the parties still facing charges to a fair trial. 

Regards,

Blair