Discovery, Questioning and Disclosure of Information Selected Items Regarding Discovery, Questioning and Disclosure of Information
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1 Discovery, Questioning and Disclosure of Information Selected Items Regarding Discovery, Questioning and Disclosure of Information Prepared For: Legal Education Society of Alberta The Rules of Court Interpreted Prepared and Presented by: D.W. McGrath Q.C. Blake, Cassels & Graydon LLP Calgary, Alberta (Calgary Seminar) Prepared and Presented by: D. N. E. de Vere Weir Bowen LLP Edmonton, Alberta (Edmonton Seminar) Prepared by: Michael O'Brien Blake, Cassels & Graydon LLP Calgary, Alberta For Presentation In: Edmonton November 2, 2011 Calgary November 8, 2011
2 Rule Relevancy and Materiality It is trite law that relevancy and materiality are determined by the issues raised in the pleadings. In Liu v. West Edmonton Mall Property Inc., the Court summarized when a question is both relevant and material 1 : What is relevant and material is dependant on the scope of the pleadings: Anderson Preece & Associates Inc. v. Dominium Appraisal Group Inc., 2000 ABQB 254 (Alta. Q.B.). Further, in D'Elia v. Dansereau (2000), 82 Alta. L.R. (3d) 298 (Alta. Q.B. [In Chambers]) Perras J. considered Rule in the context of oral discovery. He found that any analysis to determine the propriety of disputed questions on oral discovery must start with an examination of the pleadings. The pleadings give meaning to what is relevant and material for purposes of discoverability. Rule 5.2 of the Rules of Court codifies the above case law regarding relevancy and materiality 2 : WHEN SOMETHING IS RELEVANT AND MATERIAL 5.2(1) For the purposes of this Part, a question, record or information is relevant and material only if the answer to the question, or the record or information, could reasonably be expected (a) to significantly help determine one or more of the issues raised in the pleadings, or (b) to ascertain evidence that could reasonably be expected to significantly help determine one or more of the issues raised in the pleadings. In Mahamad v. Matthews, 2011 ABQB 187, Veit J. stated that Rule 5.2(1) excluded tertiary evidence and that the materiality or weight of evidence must be addressed with a view to determining whether a record will significantly help to determine one of the issues raised in the pleadings. Rule 5.18 Examining Persons Providing Services to Corporations The Alberta Rules of Court do not provide for questioning of mere witnesses but rather, the person being questioned must have some connection with the corporate party and have first-hand knowledge of events giving rise to the issues in dispute. Rule 5.18 was 1 Liu v. West Edmonton Mall Property Inc. (2000), 279 A.R. 305 at para Alberta Rules of Court, Rule 5.2
3 at least tangentially considered by the Alberta Court of Appeal in Hunka v. Waiward Steel Fabricators Ltd., 2011 ABCA 142. In circumstances where a party sought to question some of the professional advisors of the respondent including its auditor and insurance broker. The Alberta Court of Appeal was reluctant to determine the applicability of Rule 5.18 as the appellant had not proceeded under that Rule however, it did provide some useful commentary as follows: the Rules do not provide for questioning of persons who are merely witnesses. While Rule 5.18 has arguably somewhat expanded or, at least, codified the case law interpreting the prior Rule, it is relevant that the originators of the new Rule did not intend the rule to be used to discover mere witnesses: see the Alberta Law reform Institute s Consultation Memorandum No entitled Document Discovery and Examinations for Discovery, which states at para. 144: the person being examined must have some sort of connection with the corporate party akin to that of an employee or officer and have first hand knowledge of events giving rise to issues in the action. In Cogent Grouping v. Encana Leasehold Limited Partnership, 2011 ABQB 335, the applicant sought an Order under Rule 5.18 allowing it to question a witness. It was uncontroverted that the individuals sought to be questioned provided services at some point however, those services were not related to the information which he possessed which was argued to be relevant to the action. The applicant argued that so long as the individual provided services to the defendant at some point, and could provide the best evidence on the issues in dispute, he should be allowed to be questioned. In reaching her decision, Master Mason acknowledged that old Rule 200 permitted questioning of an individual who did not meet the strict legal definitions of an officer or employee providing that the individual had otherwise relevant and material evidence but by virtue of the services provided. She did note jurisprudence that made it clear that non-party witnesses cannot be subject to questioning simply because they may have something to say on the subject. In denying the applicants request, Master Mason found that it would be inconsistent with Rules 5.17 and 5.18 to conclude that service providers who may have acquired relevant and material knowledge outside of the service relationship, can be questioned prior to trial in the same fashion as an employee of a party. More importantly, she added that it is the provision of services in relation to the matters at issue in the action that transforms a mere witness into a service provider within the meaning of Rule 5.18." Rule 5.18 does provide a useful mechanism for questioning persons who have provided services for a corporation and who can provide the best evidence on the issue. While Rule 5.12(3) provides that an expert engaged by a party for the purposes of the action may not be questioned under Rule 5.18, that Rule may still prove useful for examining 2
4 Experts and Costs The Direction of the Courts on the New Rules of Court: Costs, Experts and Formal Offers of Settlement Prepared For: Legal Education Society of Alberta The Rules of Court Interpreted Prepared and Presented by: K. P. Feehan Q.C. Fraser Milner Casgrain LLP Edmonton, Alberta (Edmonton Seminar) Prepared and Presented by: K. A. Salmon Borden Ladner Gervais LLP Calgary, Alberta (Calgary Seminar) For Presentation In: Edmonton November 2, 2011 Calgary November 8, 2011
5 THE DIRECTION OF THE COURTS ON THE NEW RULES OF COURT: COSTS, EXPERTS AND FORMAL OFFERS OF SETTLEMENT Kevin P. Feehan, Q.C. and Karen A. Salmon 1 Introduction On November 1, 2010, the new Alberta Rules of Court (the New Rules) came into force. The new Rules resulted in changes in a number of areas, some substantive and others, that effectively codified practices that had developed through case law. In the year since coming into force, Courts have had the opportunity to interpret and apply several of the New Rules. This article discusses recent Court decisions that have considered and commented on the New Rules addressing the following three topics: (1) costs; (2) experts; and (3) formal offers of settlement. 1. COSTS Costs are predominantly addressed in Part 10, Division 2, Rules The New Rules involve significant changes to the process for dealing with costs. Gone is the taxation officer who would assess costs between solicitor and client, and between parties. In its place is the assessment officer who determines costs as between parties to an action and the review officer who deals with costs between a lawyer and his/her client. But while some things have changed, others have stayed the same. Schedule C still applies to party and party costs. A successful party is still entitled to costs against an unsuccessful party where the Court does not direct otherwise. Costs are still to be paid forthwith. A party is still entitled to reasonable and proper costs. According to Rule this includes costs incurred to bring an action, and costs to do an assessment. Of note, costs related to the dispute resolution process are not recoverable costs. The reported decisions on costs under the New Rules clarify a number of different matters, including novel issues, thrown-away costs, and the application of considerations under the Old Rules. (a) Grant v. Grant 2 : Rule In Grant the issue before the Court was the award of costs in novel cases. The Applicant submitted that the usual rule should apply and he should be entitled to costs of a Special Chambers application because he was substantially successful. The Respondent opposed a costs award arguing that as this was a novel issue no costs should be awarded to either party. 1 Kevin Feehan Q.C. is a partner with Fraser Milner Casgrain, LLP, Edmonton. Karen Salmon is a partner at Borden Ladner Gervais LLP, Calgary. The authors wish to thank Andrew Harasymiw, a student-at-law at Fraser Milner Casgrain LLP and Adrienne Wong, an associate at Borden Ladner Gervais LLP for their assistance with and contributions to this paper ABQB 735.
6 In analysing the issue, Veit J. noted that Rule provides that the novelty of a case may be a factor in determining the appropriate costs award specifically in the context of class actions. With respect to all other proceedings, the New Rules do not expressly state that the general approach to costs should be different in novel cases. Accordingly, the common law remains the authority in this regard; the novelty of the issue remains a very exceptional basis on which to depart from the usual cost rules. 3 Veit J. set out the general principles regarding the assessment of costs pursuant to the Rules of Court, where it is alleged that the matter is novel: It is well established that: a court has discretion in the matter of costs, although it must act judicially in departing from the general rule respecting costs; the general rule is that costs follow the event, i.e. the winner gets costs and the loser pays them; and, a court can depart from the general costs rule for example in public interest litigation or where the issue is novel. Indeed, the principle relating to novelty is often made explicit in the Rules of Court relating to costs, although there was no such explicit reference to novelty in the [old Rules]. 4 Veit J. cited with approval the following passage from Mahar & Orkin, The Law of Costs, looseleaf (Aurora, Ont.: Canada Law Book Inc., 2001) at 1 15: An action or motion may be disposed of without costs where the question involved is a new one not previously decided by the courts on the theory that there is a public benefit in having the court give a decision; or where it involves the interpretation of a new or ambiguous statute; or a new or uncertain or unsettled point of practice; or where there were no previous authoritative rulings by courts; or decided cases on point; or where the application concerned a matter of public interest and both parties acted in complete good faith. 5 3 Ibid para Ibid at para Ibid at para
7 Appeals From Masters, Drop Dead Rule, Discontinuance and Withdrawal Case Law Summary (Appeals from Masters, "Drop Dead" Rule, Discontinuance) Prepared For: Legal Education Society of Alberta The Rules of Court Interpreted Prepared and Presented By: P. R. Mack Q.C. Mack Meagher LLP Calgary, Alberta (Calgary Seminar) Prepared and Presented By: Vivian R. Stevenson Q.C. Duncan & Craig LLP Edmonton, Alberta (Edmonton Seminar) Prepared By: Anthony Burden Law Student Duncan and Craig LLP For Presentation In: Edmonton November 2, 2011 Calgary November 8, 2011
8 A. Appeal From a Master 6.14(1) If a master makes a judgment or order, the applicant or respondent to the application may appeal the judgment or order to a judge. **************************** (3) An appeal from a master s judgment or order is an appeal on the record of proceedings before the master and may also be based on additional evidence, that is, in the opinion of the judge hearing the appeal, relevant and material. Issues: 1. What is the standard of review on an appeal on the record pursuant to R. 6.14? There are a number of Queen s Bench decisions that conclude the standard of review is the appellate standard of review articulated by the Supreme Court in Housen v. Nikolaisen [2002] 2 S.C.R. 235, and summarized by the Alberta Court of Appeal in Harper v. Canada (Attorney General), 2002 ABCA 301 (rev d [2004] 1 S.C.R. 827 on other grounds): The standard of review on a decision from the master on a question of law is correctness. The standard of review for facts accepted by the master or factual inferences drawn by the master from the evidence is reasonableness. The finding must amount to a palpable and overriding error. The imputed error must be plainly identified and must be shown to have affected the result. On a question of mixed fact and law, if the principle of law cannot be extricated from the question, then the standard of review is again one of reasonableness only to be interfered with if a palpable and overriding error can be shown. If the principle of law can be extricated from the question, then the standard of review on the principle of law is correctness. Royal Bank v. Place, 2010 ABQB; Janvier v Alberta Ltd., 2010 ABQB 800; Ma v. Quinn, 2011 ABQB 103; Gudzinski Estate v. Allianz Global Risks US
9 Insurance Company, 2011 ABQB 283; Elbow River Marketing Limited Partnership v. Canada Clean Fuels Inc., 2011 ABQB 321; ATB v. I, 2011 ABQB 351; David. M. Gottlieb P.C. v. Nahal, 2011 ABQB 355; Home Trust Company v. Robinson, 2011 ABQB 480; Dagher v. Thompson, 2011 ABQB 499; Turner v. DN Developments Ltd., 2011 ABQB 554; Canada (National Revenue) v. Glazer, 2011 ABQB 559. The appellate standard of review for the factual underpinnings of the exercise of discretion is reasonableness, as is the standard of review for an exercise of discretion. The decision can only be interfered with if it is so wrong as to amount to an injustice or if it is based on some improper principle. Balogun v. Pandher, 2010 ABCA 40; R. v. Nicholson, 2003 ABCA 283 referenced in Royal Bank v. Place, supra; Dagher v. Thompson, supra. The appellate standard of review with respect to a costs award is reasonableness (i.e. no palpable or overriding error): Westersund v. Westersund, 1993 ABCA 219 See also the discussion in Lee v. Lepage, 2010 ABQB 819 where the court considers the concept of de novo versus on the record, both from the perspective of the nature of the hearing and the standard of review and concludes that applying either, the result is a deferential record review. The standard of review has not yet been the subject of a written decision from the Court of Appeal. 2. When is additional evidence allowed on an appeal from a master? Prior to July 14 th, R. 6.14(3) provided that an appeal from a master s decision be based on new evidence that is significant enough that it could have affected the master s decision. The wording was changed by OC 322/2011 to indicate that the appeal may also be based on additional evidence, that is, in the opinion of the judge hearing the appeal, relevant and material. Cases decided under the old wording held that the test for admissibility of new evidence on the appeal was the same test governing the admissibility of new evidence before the Court of Appeal adopted from R. v. Palmer, (1979) 50 CCC (2d) 193 (SCC) at p. 205: (1) the evidence should generally not be admitted if, by due diligence, it could have been adduced at trial, (2) the evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial; 2
10 Managing Litigation, Severance, Security for Costs How Are We Managing? Managing Litigation Under The New Rules of Court. Prepared For: Legal Education Society of Alberta The Rules of Court Interpreted Prepared and Presented By: L. A. Goldbach Bennett Jones LLP Calgary, Alberta (Calgary Seminar) Prepared and Presented By: Barbara J. Stratton Bennett Jones LLP Edmonton, Alberta (Edmonton Seminar) Prepared By: Laura Inglis Chubb Bennett Jones LLP Edmonton, Alberta For Presentation In: Edmonton November 2, 2011 Calgary November 8, 2011
11 "You have to learn the rules of the game. And then you have to play better than anyone else." Albert Einstein "It's wise not to violate rules until you know how to observe them." T.S. Eliot "The young man knows the rules, but the old man knows the exceptions." Oliver Wendell Holmes "If you develop rules, never have more than ten." Donald Rumsfeld Myriad opinions, notions, and understandings proliferate about the role and utility of rules. For lawyers, generally, rules are important. For litigators, procedural rules are pivotal to daily practice. While the text of the rules is important, judicial interpretation is crucial in illuminating both practice and procedure. As part of the task of learning the new Alberta Rules of Court, it is essential to become versed in the jurisprudence that is growing up around them. 1 To that end, we will be exploring the judicial interpretation of Part 4 of the Rules (Managing Litigation) and Rule 7.1 (severance). 1. PART 4 OF THE RULES: MANAGING LITIGATION Managing litigation in the context of the New Rules is focused in advancing matters toward trial and promoting early settlement, reflecting the philosophy espoused in the Foundational Rules, and the work of the Early Dispute Resolution Committee 2 : One of the principal goals of the rules is to encourage the parties to resolve their claims fairly and justly in a timely and cost-effective manner (rule 1.2(1)). In order to achieve this goal Part Four makes it the responsibility of the parties to manage their dispute in a timely and costeffective way (rule 4.1). Rule 4.2(b) makes it the responsibility of the parties to respond in a substantial way and within a reasonable time to any proposal for the conduct of an action in a standard case. 3 Rule 4.1 makes clear that the responsibility of managing litigation no longer falls on the shoulders of plaintiffs alone: The New Rules recognize that litigation is not just the plaintiff s problem, but a joint problem that needs to be fairly and justly resolved in a timely and cost-effective way 4 The New Rules, therefore, place the burden of managing litigation on all parties. 1[1] Alberta Rules of Court, Alta Reg 124/2010 (the New Rules ). The former Alberta Rules of Court, Alta Reg. 390/1968 are referred to as the "Old Rules". 2[2] Consultation Memorandum No. 12.6, July Rule 4.2 delineates that Part 4 is to be interpreted in line with Rule Weins v. Dewald, 2011 ABQB 400 at para. 16 ("Weins"). 4] LC v. Alberta (Metis Settlement Child & Family Services Region 10), 2011 ABQB 2 at paras
12 Because the management of litigation in the New Rules is about timely and cost-effective resolution, it is not surprising that the Rules contained in Part 4 target issues which can impact upon the alacrity with which matters proceed to trial, to settlement or to dismissal, including: case designation (with the introduction of two new entities into the procedural taxonomy: complex and standard cases), case management, dispute resolution, offers and dismissal for delay. Not surprisingly, some of the Rules in Part 4 have received more attention than their less controversial counterparts. (a) Security for Costs: Rule Security for costs applications are now addressed by Rules 4.22 and It is evident that the new Rules are more fulsome than their predecessors: Rules 593 and 594. This point was made by Chief Justice Wittman in Attila Dogan Construction v. AMEC Americas Limited who noted: Those Rules did not, in the manner of Rule 4.22, set out a list of factors to be considered in determining whether security should be granted. Rule 594 provided that an application for security for costs should be supported by an affidavit of the defendant or his agent, who can speak positively to the facts, alleging that there is a good defence to the action on the merits and specifying the nature thereof 5 In Attila, Chief Justice Wittman undertook a two-step test. First, he considered the criteria set out in 4.22 (a)-(e). If the Court, after considering the criteria is in favour of granting the application, then it must consider the second part of the test: whether it is just and reasonable to grant the Order. Chief Justice Wittman made it clear that this second part of the test is merely an inquiry into the merits of the action, and not a determination of the matter: What Rule 4.22 requires is an inquiry into the merits. In my view, this suggests that a reasonably meritorious defence, when considered together with the other factors set out in Rule 4.22, is sufficient to weigh in favour of granting security for costs. It is neither possible, nor desirable for the Court at this stage to determine which party's case is stronger. 6 The Court of Appeal has cited Attila with approval and underscored that, as with the Old Rules relating to security for costs, respondents must adduce some evidence of undue 5 Attila Dogan Construction v. AMEC Americas Limited, 2011 ABQB 175 ("Attila") at para. 17. See also Dagher v. Thompson, 2011 ABQB 499 at para. 45: "I note the wording of Rule 4.22 is different than the old Rule 593 under which the Master proceeded. It is different in that it specifically sets out as a factor to be considered by the Court in its discretion, the ability of the respondent to the application to pay the costs award, and further whether an Order to provide a security. for costs award would unduly prejudice the respondent's ability to continue the action." Note that Dagher v. Thompson was an appeal of a Master's decision under the Old Rules, with the decision rendered after the passage of the New Rules. 6 Ibid. at para
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