WESTERN WEEKLY REPORTS

WESTERN WEEKLYREPORTSReports of Cases Decided in

the Courts of Western Canadaand Certain Decisions of the

Supreme Court of Canada

2014-VOLUME 10(Cited [2014] 10 W.W.R.)

All cases of value from the courts ofWestern Canada and appeals therefrom

to the Supreme Court of Canada

SELECTION EDITORWalter J. Watson, B.A., LL.B.

ASSOCIATE EDITORS(Alberta) E. Mirth, Q.C.

(British Columbia) Darrell E. Burns, LL.B., LL.M.

(Manitoba) E. Arthur Braid, Q.C.

(Saskatchewan) Greg Fingas, B.A., LL.B.

CARSWELL EDITORIAL STAFFCheryl L. McPherson, B.A. (HONS.)

Director, Primary Content Operations

Audrey Wineberg, B.A. (HONS.), LL.B.

Product Development Manager

Nicole Ross, B.A., LL.B.

Supervisor, Legal Writing

Jennifer Weinberger, B.A. (HONS.), J.D.

Supervisor, Legal Writing

Michael Johnson, B.A. (HONS.), LL.B.

Lead Legal Writer

Ryann Watt, B.A. (HONS.)

Content Editor

WESTERN WEEKLY REPORTS is published 48 times per year. Subscrip- Western Weekly Reports est publie 48 fois par annee. L’abonnement est de

tion rate $438.00 per bound volume including parts. Indexed: Carswell’s In- 438 $ par volume relie incluant les fascicules. Indexation: Index a la docu-

dex to Canadian Legal Literature. mentation juridique au Canada de Carswell.

Editorial Offices are also located at the following address: 430 rue St. Pierre, Le bureau de la redaction est situe a Montreal — 430, rue St. Pierre, Mon-

Montreal, Quebec, H2Y 2M5. treal, Quebec, H2Y 2M5.

________ ________

© 2014 Thomson Reuters Canada Limited © 2014 Thomson Reuters Canada Limitee

NOTICE AND DISCLAIMER: All rights reserved. No part of this publica- MISE EN GARDE ET AVIS D’EXONERATION DE RESPON-

tion may be reproduced, stored in a retrieval system, or transmitted, in any SABILITE : Tous droits reserves. Il est interdit de reproduire, memoriser sur

form or by any means, electronic, mechanical, photocopying, recording or un systeme d’extraction de donnees ou de transmettre, sous quelque forme ou

otherwise, without the prior written consent of the publisher (Carswell). par quelque moyen que ce soit, electronique ou mecanique, photocopie, enre-

gistrement ou autre, tout ou partie de la presente publication, a moins d’en

avoir prealablement obtenu l’autorisation ecrite de l’editeur, Carswell.A licence, however, is hereby given by the publisher:

Cependant, l’editeur concede, par le present document, une licence :

(a) to a lawyer to make a copy of any part of this publication to give to a a) a un avocat, pour reproduire quelque partie de cette publication pour

judge or other presiding officer or to other parties in making legal submis- remettre a un juge ou un autre officier-president ou aux autres parties dans

sions in judicial proceedings; une instance judiciaire;

b) a un juge ou un autre officier-president, pour produire quelque partie de

(b) to a judge or other presiding officer to produce any part of this publication cette publication dans une instance judiciaire; ou

in judicial proceedings; orc) a quiconque, pour reproduire quelque partie de cette publication dans le

cadre de deliberations parlementaires.

(c) to anyone to reproduce any part of this publication for the purposes of« Instance judiciaire » comprend une instance devant une cour, un tribunal ou

parliamentary proceedings.une personne ayant l’autorite de decider sur toute chose affectant les droits ou

les responsabilities d’une personne.

“Judicial proceedings” include proceedings before any court, tribunal or per-Ni Carswell ni aucune des autres personnes ayant participe a la realisation et

son having authority to decide any matter affecting a person’s legal rights ora la distribution de la presente publication ne fournissent quelque garantie

liabilities.que ce soit relativement a l’exactitude ou au caractere actuel de celle-ci. Il est

entendu que la presente publication est offerte sous la reserve expresse que ni

Carswell and all persons involved in the preparation and sale of this publica- Carswell, ni le ou les auteurs de cette publication, ni aucune des autres per-

tion disclaim any warranty as to accuracy or currency of the publication. This sonnes ayant participe a son elaboration n’assument quelque responsabilite

publication is provided on the understanding and basis that none of Carswell, que ce soit relativement a l’exactitude ou au caractere actuel de son contenu

the author/s or other persons involved in the creation of this publication shall ou au resultat de toute action prise sur la foi de l’information qu’elle

be responsible for the accuracy or currency of the contents, or for the results renferme, ou ne peuvent etre tenus responsables de toute erreur qui pourrait

of any action taken on the basis of the information contained in this publica- s’y etre glissee ou de toute omission.

tion, or for any errors or omissions contained herein.La participation d’une personne a la presente publication ne peut en aucun

cas etre consideree comme constituant la formulation, par celle-ci, d’un avis

No one involved in this publication is attempting herein to render legal, ac- juridique ou comptable ou de tout autre avis professionnel. Si vous avez

counting, or other professional advice. If legal advice or other expert assis- besoin d’un avis juridique ou d’un autre avis professionnel, vous devez

tance is required, the services of a competent professional should be sought. retenir les services d’un avocat ou d’un autre professionnel. Les analyses

The analysis contained herein should in no way be construed as being either comprises dans les presentes ne doivent etre interpretees d’aucune facon

official or unofficial policy of any governmental body. comme etant des politiques officielles ou non officielles de quelque organ-

isme gouvernemental que ce soit.

8 The paper used in this publication meets the minimum requirements of 8 Le papier utilise dans cette publication satisfait aux exigences minimales

American National Standard for Information Sciences — Permanence of Pa- de l’American National Standard for Information Sciences — Permanence of

per for Printed Library Materials, ANSI Z39.48-1984. Paper for Printed Library Materials, ANSI Z39.48-1984.

ISSN 0049-7525 ISBN 978-0-7798-6050-0

Printed in Canada by Thomson Reuters

CARSWELL, A DIVISION OF THOMSON REUTERS CANADA LIMITED

One Corporate Plaza Customer Relations2075 Kennedy Road Toronto 1-416-609-3800Toronto, Ontario Elsewhere in Canada/U.S. 1-800-387-5164M1T 3V4 Fax 1-416-298-5082

www.carswell.comContact www.carswell.com/contact

Ackerman v. Ackerman 429

[Indexed as: Ackerman v. Ackerman]

Angela Beth Ackerman, (Petitioner) Appellant and BrettChristopher Ackerman, (Respondent) Respondent

Saskatchewan Court of Appeal

Docket: CACV2442

2014 SKCA 86

Ottenbreit, Caldwell, Ryan-Froslie JJ.A.

Heard: June 27, 2014

Judgment: August 21, 2014

Family law –––– Custody and access — Joint custody — Factors to be con-sidered — Multiple factors considered –––– Parties married in January 2008and separated in March 2011 — Parties had two children, P, born in September2008, and H, born in September 2010 — In November 2011, interim order wasmade which provided children’s primary residence would be with mother — Attrial, parties were awarded joint custody and shared parenting of children —Mother appealed — Appeal dismissed — Trial judge did not err in law with re-spect to his handling of “status quo” — Trial judge found that it was in chil-dren’s best interests for both parties to take active role in their lives — Trialjudge did not misapprehend evidence or make material error in ordering sharedparenting — There was evidence that parties were capable of cooperating —Trial judge did not err by changing children’s residence — Shared parentingwould allow children opportunity to have meaningful relationship with father.

Family law –––– Custody and access — Joint custody — Shared parent-ing –––– Parties married in January 2008 and separated in March 2011 — Partieshad two children, P, born in September 2008, and H, born in September 2010 —In November 2011, interim order was made which provided children’s primaryresidence would be with mother — At trial, parties were awarded joint custodyand shared parenting of children — Mother appealed — Appeal dismissed —Trial judge did not err in law with respect to his handling of “status quo” —Trial judge found that it was in children’s best interests for both parties to takeactive role in their lives — Trial judge did not misapprehend evidence or makematerial error in ordering shared parenting — There was evidence that partieswere capable of cooperating — Trial judge did not err by changing children’sresidence — Shared parenting would allow children opportunity to have mean-ingful relationship with father.

Cases considered by Ryan-Froslie J.A.:

Gilles v. Gilles (2008), 2008 SKCA 97, 2008 CarswellSask 502, 428 W.A.C.223, 311 Sask. R. 223, [2008] 10 W.W.R. 610, 54 R.F.L. (6th) 55, [2008]S.J. No. 469 (Sask. C.A.) — considered

WESTERN WEEKLY REPORTS [2014] 10 W.W.R.430

Gordon v. Goertz (1996), 1996 CarswellSask 199, [1996] 5 W.W.R. 457, 19R.F.L. (4th) 177, 196 N.R. 321, 134 D.L.R. (4th) 321, 141 Sask. R. 241, 114W.A.C. 241, [1996] 2 S.C.R. 27, (sub nom. Goertz c. Gordon) [1996] R.D.F.209, 1996 CarswellSask 199F, [1996] S.C.J. No. 52 (S.C.C.) — considered

H. (C.R.) v. G. (D.) (2010), 362 Sask. R. 261, 500 W.A.C. 261, 2010 SKCA127, 2010 CarswellSask 684 (Sask. C.A.) — considered

Haider v. Malach (1999), 177 Sask. R. 285, 199 W.A.C. 285, 1999 Carswell-Sask 310, 48 R.F.L. (4th) 314, [1999] S.J. No. 315 (Sask. C.A.) —distinguished

K. (H.A.) v. W. (T.J.) (2010), (sub nom. W. (H.A.K.) v. W. (T.J.)) 351 Sask. R.69, 2010 CarswellSask 191, 2010 SKQB 128 (Sask. Q.B.) — distinguished

L. (C.R.) v. L. (R.E.) (1998), 1998 CarswellSask 42, [1998] S.J. No. 20 (Sask.Q.B.) — distinguished

Poirier v. Poirier (2011), 2011 SKQB 298, 2011 CarswellSask 532, 381 Sask.R. 111, [2011] S.J. No. 499 (Sask. Q.B.) — distinguished

Wal-Mart Canada Corp. v. Saskatchewan (Labour Relations Board) (2006),2006 CarswellSask 810, 2006 SKCA 142, 382 W.A.C. 20, 289 Sask. R. 20,[2006] S.J. No. 788 (Sask. C.A.) — followed

Statutes considered:

Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.)Generally — referred tos. 16(1) — considereds. 16(4) — considereds. 16(8) — considereds. 16(9) — considereds. 16(10) — considereds. 21 — referred to

Rules considered:

Court of Appeal Rules, Sask. C.A. RulesR. 59 — considered

APPEAL by mother from judgment reported at Ackerman v. Ackerman (2013),2013 SKQB 247, 2013 CarswellSask 456, 424 Sask. R. 187 (Sask. Q.B.), award-ing parties joint custody and shared parenting of children.

James J. Vogel, for AppellantR. Bradley Hunter, Q.C., for Respondent

Ackerman v. Ackerman Ryan-Froslie J.A. 431

Ryan-Froslie J.A.:

I. Introduction1 Angela Ackerman appeals a decision of the Court of Queen’s Bench

with respect to both custody and the division of family property (see:2013 SKQB 247 (Sask. Q.B.)). An order was made bifurcating the ap-peal to enable Mr. Ackerman to file a cross-appeal with respect to thedivision of property. Accordingly, this judgment deals only with the is-sue of custody.

2 For the reasons set out below, Ms. Ackerman’s appeal is dismissed.

II. Background3 Angela and Brett Ackerman began living together in December 2006

and were married on January 12, 2008. They have two children of theirrelationship: Peytin, born September 13, 2008 and Harlo, born Septem-ber 8, 2010. When the parties separated on March 12, 2011 Peytin wasthree years of age while Harlo was just six months.

4 Ms. Ackerman was employed throughout the parties’ relationship, buttook maternity leave after the birth of both Peytin and Harlo. FollowingPeytin’s birth she returned to work part-time (Monday through Thurs-day). Mr. Ackerman, who often worked from home, looked after PeytinMondays and took him to daycare Tuesdays, Wednesdays and Thur-sdays. On Friday Peytin was in the care of Ms. Ackerman.

5 When the parties separated Ms. Ackerman was still on maternityleave with Harlo. By the time of trial, she had returned to work, Peytinwas attending Montesorri School and Harlo was registered there as well.The parties, who live in close proximity to one another, agreed that whenPeytin entered grade one he would go to a school located approximatelymid-way between their two homes.

6 Following the Ackerman’s separation they were unable to reach anagreement with respect to a parenting plan for the children. On Novem-ber 2, 2011 an interim order was made which provided the children’sprimary residence would be with Ms. Ackerman and that Mr. Ackermanwould have parenting time as follows:

Week 1: Both Peytin and Harlo, Monday and Wednesday 12:00 p.m. to6:00 p.m.

Peytin: Friday from 12:00 p.m. to Sunday at 6:00 p.m.

Harlo: Friday and Sunday 12:00 p.m. to 6:00 p.m.


Week 2: Both Peytin and Harlo, Tuesdays and Thursdays from 12:00p.m. to 6:00 p.m.

Based on this order, Mr. Ackerman had parenting time with Peytin sevenout of 14 days and Harlo six out of 14 days. This parenting regime hadbeen in place for approximately 18 months by the time of trial.

7 There was no evidence of any type of abuse during the Ackermans’relationship. However, post-separation conflict arose between them cen-tered around their respective roles in the children’s lives. Both Mr. andMs. Ackerman videotaped each other and engaged in inappropriate com-munications and behaviours. By the time of trial, communication be-tween them had been reduced to emails.

8 In 2012 Mr. Ackerman began living with Shayla Fitch. They haveone child of their relationship, a son, who was born in 2012.

9 At trial Mr. and Ms. Ackerman agreed an order for joint custody wasappropriate. They differed, however, on the way their parenting regimeshould be structured. Mr. Ackerman wanted a shared parenting arrange-ment whereby Peytin and Harlo would alternate between his and Ms.Ackerman’s residence on a weekly basis. Ms. Ackerman, on the otherhand, wanted the children to reside primarily with her, with specifiedaccess to Mr. Ackerman, alternating weekends from Friday evening toSunday evening to be extended by 24 hours in the event of a long week-end. In addition, the week prior to Mr. Ackerman’s weekend, he wouldhave the children one weekday evening from 4:00 p.m. to 7:30 p.m. andthe week following his access weekend, he would have the children twoevenings from 4:00 p.m. to 7:30 p.m. Under Ms. Ackerman’s parentingplan, Christmas and Easter holidays would be shared equally. Ms. Acker-man suggested that in 2014 Mr. Ackerman could have the children forthree non-consecutive weeks during the summer and, in 2015 and there-after, she proposed that this would be increased to four weeks or one-halfthe summer school vacation. Ms. Ackerman wanted sole decision-mak-ing power with respect to all aspects of the children’s lives.

III. The Trial Judge’s Decision10 The trial judge found that both the Ackermans were capable of

parenting their children. He acknowledged Ms. Ackerman was the chil-dren’s primary caregiver and that conflict had arisen between the Ack-ermans following their separation. He found, however, that Ms. Acker-man had “exaggerated the conflict” so that shared parenting would not beconsidered. The trial judge ordered “joint custody” as requested by both


the Ackermans. He also ordered a shared parenting arrangement in whichthe children would alternate between their parents’ residence on a weeklybasis. The Christmas and Easter school holidays were to be sharedequally and both parents would have the children for four weeks duringthe summer school vacation. He gave Mr. Ackerman authority to deter-mine who the children’s doctor would be and Ms. Ackerman authority todetermine who their dentist would be. Both Mr. and Ms. Ackerman couldchoose up to two activities for the children to participate in. Any addi-tional activities had to be agreed to by both of them.

IV. The Issues11 While Ms. Ackerman agrees with the order for joint custody, she ap-

peals the trial judge’s decision granting shared parenting. Her notice ofappeal sets out five grounds, but there are really only three issues fordetermination:

(i) Did the trial judge err in law by varying the status quo?

(ii) Did the trial judge err in law by ordering a shared parenting ar-rangement? and

(iii) Did the trial judge err by changing the children’s primary resi-dence from the home of Ms. Ackerman, their primary caregiver?

12 Following the filing of Ms. Ackerman’s appeal, Mr. Ackerman ap-plied to lift the stay with respect to the parenting order. On August 30,2013 the stay was lifted. Since that time (a period of almost one year) theshared parenting regime ordered by the trial judge has been in effect.

V. Jurisdiction and Standard of Review13 Ms. Ackerman appeals the trial judge’s decision pursuant to s. 21 of

the Divorce Act, R.S.C. 1985, c. 3 (2nd sup.), which allows appeals from“any judgment” of a court.

14 In H. (C.R.) v. G. (D.), 2010 SKCA 127 (Sask. C.A.) at para. 3,(2010), 362 Sask. R. 261 (Sask. C.A.), this Court set out the standard ofreview in custody matters as follows:

The Supreme Court of Canada articulated the standard of appellatereview applicable to custody and access appeals in Van de Perre v.Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014. Speaking for theCourt, Bastarache J. stated at para 11:

[11] In reviewing the decisions of trial judges in all cases,including family law cases involving custody, it is impor-


tant that the appellate court remind itself of the narrowscope of appellate review. L’Heureux-Dube J. stated inHickey v. Hickey, [1999] 2 S.C.R. 518, at paras. 10 and12:

[Trial judges] must balance the objectives andfactors set out in the Divorce Act or in provin-cial support statutes with an appreciation ofthe particular facts of the case. It is a difficultbut important determination, which is criticalto the lives of the parties and to their children.Because of its fact-based and discretionary na-ture, trial judges must be given considerabledeference by appellate courts when such deci-sions are reviewed.

. . .

There are strong reasons for the significantdeference that must be given to trial judges inrelation to support orders. This standard of ap-pellate review recognizes that the discretioninvolved in making a support order is best ex-ercised by the judge who has heard the partiesdirectly. It avoids giving parties an incentive toappeal judgments and incur added expenses inthe hope that the appeal court will have a dif-ferent appreciation of the relevant factors andevidence. This approach promotes finality infamily law litigation and recognizes the impor-tance of the appreciation of the facts by thetrial judge. Though an appeal court must inter-vene when there is a material error, a seriousmisapprehension of the evidence, or an error inlaw, it is not entitled to overturn a support or-der simply because it would have made a dif-ferent decision or balanced the factors differ-ently. [Emphasis added by SCC.]

As pointed out in H. (C.R.) v. G. (D.), supra, the scope of appellate re-view in custody cases is a narrow one. An appellate court should onlyintervene where there is a material error, a serious misapprehension ofthe evidence, or an error in law. It is not entitled to intervene simplybecause it would have made a different decision.


VI. Preliminary Matter15 At the commencement of the appeal, Ms. Ackerman applied to ad-

duce fresh evidence. That evidence consisted of an affidavit with twoundertakings attached — one relating to Ms. Ackerman and one relatingto Mr. Ackerman. The undertakings arose as a result of alleged criminalactivity by both the Ackermans post-trial. The purpose of the fresh evi-dence was to establish that the Ackermans continue to have an acrimoni-ous relationship.

16 Counsel for Mr. Ackerman opposed the admission of the evidence,arguing it was of no use in deciding the issues relating to parenting and,if it had been available to the trial judge, that it would not have beendeterminative of that issue. In the event the evidence was allowed, Mr.Ackerman’s legal counsel requested that an affidavit of his client also beadmitted. That affidavit contained Mr. Ackerman’s assertion that thecriminal charges laid against him are not well-founded.

17 Neither the affidavit sought to be adduced by Ms. Ackerman, nor theaffidavit of Mr. Ackerman set out the events leading to the undertakings,nor did they discuss the impact of those events on their children or howthey were faring under the shared parenting arrangement.

18 Both applications to adduce fresh evidence were dismissed by thisCourt at the time the appeal was heard. What follows are brief writtenreasons for that decision.

19 Rule 59 of the Court of Appeal Rules requires applications to admitfresh evidence be served and filed no later than ten days before the datefixed for the hearing of the appeal. That date is when such applicationsare to be heard. Neither party in this case complied with Rule 59, but asboth parties were prepared to argue the applications, they were allowedto proceed.

20 The test for admitting fresh evidence was set out by Vancise J.A. inWal-Mart Canada Corp. v. Saskatchewan (Labour Relations Board),2006 SKCA 142 (Sask. C.A.) at para. 4, (2006), 289 Sask. R. 20 (Sask.C.A.) as follows:

The test for the admission of fresh evidence is well known and wasarticulated by this Court in Maitland v. Drozda (1983), 22 Sask. R. 1(C.A.). The Court identified four factors which must be satisfiedbefore fresh evidence would be accepted. Those factors are:

(a) The evidence will not be admitted, if by due diligence it couldhave been used at trial;


(b) The evidence must be relevant in the sense that it bears upona decisive or potentially decisive issue in the action;

(c) The evidence must be credible in the sense that it is reasona-bly capable of belief; and,

(d) It must be such that if believed could reasonably, when takenwith the other evidence adduced at trial, be expected to haveaffected the result.

21 The fresh evidence sought to be adduced by Ms. Ackerman was notin existence at the time of trial. It relates to post-trial conduct of the par-ties. While such evidence may be relevant to a variation application, it isnot relevant to this appeal, as the trial judge’s decision was dependent onthe circumstances that existed as of the date of trial. While the evidencemay be relevant to the issue of custody and is credible, it is of little or noassistance in determining the issue of an appropriate parenting plan forthe children. This is so because individuals charged with criminal of-fences are presumed innocent until proven guilty. The laying of criminalcharges and/or the entering of a peace bond without knowing the factsgiving rise to those events, the role each of the Ackermans played in theincidents, and how their children may have been affected by them is oflittle value. There is a real question what, if any weight, the trial judgewould have given such evidence and, thus, it cannot be said that evi-dence, when taken with the other evidence adduced at trial, would haveaffected the result. Accordingly, Ms. Ackerman’s application to adducefresh evidence was dismised.

22 Mr. Ackerman’s application was dependent on Ms. Ackerman ob-taining a positive outcome on her application. Accordingly, his applica-tion was also dismissed.

VII. Analysis23 The governing legislation with respect to this appeal is the Divorce

Act (hereinafter referred to as “the Act”). The portions of that Act rele-vant to this appeal read as follows:

16.(1) A court of competent jurisdiction may, on application by ei-ther or both spouses or by any other person, make an order respectingthe custody of or the access to, or the custody of and access to, any orall children of the marriage.

. . .

(8) In making an order under this section, the court shall take intoconsideration only the best interests of the child of the marriage as


determined by reference to the condition, means, needs and other cir-cumstances of the child.

(9) In making an order under this section, the court shall not take intoconsideration the past conduct of any person unless the conduct isrelevant to the ability of that person to act as a parent of a child.

(10) In making an order under this section, the court shall give effectto the principle that a child of the marriage should have as much con-tact with each spouse as is consistent with the best interests of thechild and, for that purpose, shall take into consideration the willing-ness of the person for whom custody is sought to facilitate suchcontact.

24 Based on these provisions, a Court, in determining custody and ac-cess, is to consider only the best interests of the child, having regard tothe child’s condition, means, needs and other circumstances. The legisla-tion makes it clear that a parent’s past conduct is not to be considered,unless that conduct is relevant to their ability to act as a parent. In addi-tion, Parliament included in s. 16(10) of the Act what has become knownas the principle of maximum contact, i.e. that a child should have asmuch contact with each parent as is consistent with his or her best inter-ests. For that purpose, the willingness of each parent to facilitate contactwith the other parent is important. (See: Gordon v. Goertz, [1996] 2S.C.R. 27 (S.C.C.) at paras 21 and 24.)

25 Section 16(4) of the Divorce Act permits courts to award custody toone or more persons. It is from this provision that courts derive theirlegislative authority to order joint and/or shared custody.

26 While the terms “joint” and “shared” custody have been used to de-scribe many different parenting arrangements, it is clear that at a mini-mum those terms envisage a parenting regime that generally includesjoint decision-making with respect to all major matters affecting a child’slife.

(i) Did the Trial Judge Err in Law by Varying the Status Quo?27 Counsel for Ms. Ackerman argued there is a presumption in favour of

the “status quo” and that absent a compelling reason for doing so the trialjudge should not have varied from the parenting arrangement that was inplace at the time of trial. In support of his position he relied heavily onthis Court’s decision in Haider v. Malach (1999), 177 Sask. R. 285(Sask. C.A.).


28 I note that at trial Ms. Ackerman was not suggesting the parentingplan in existence up to that point should be maintained. Rather, she wasadvancing a plan that would in fact have decreased Mr. Ackerman’sparenting time and role in the children’s lives. I also note that the facts inHaider v. Malach are significantly different from the facts which exist inthis case.

29 In Haider v. Malach, the Court was dealing with a parenting arrange-ment that had been in place by agreement of the parties for one and ahalf years prior to any dispute arising. That agreement which providedsole custody to the mother was confirmed by an interim custody ordermade pending trial. The trial judge found the mother had not made suffi-cient efforts to correct her daughter’s bedwetting and soiling problems.In doing so he relied on a court ordered custody/access report and con-cluded that the father should have sole custody of the parties’ daughterwith access to the mother, a complete reversal of what had been in placeprior to trial.

30 The Court of Appeal overturned the trial judge’s decision on the basishis findings of fact relating to the bedwetting and soiling were not sup-ported by the evidence and that the trial judge failed to consider the im-pact of a complete change in custody on the child. Given the circum-stances, the Court of Appeal reversed the trial judge’s decision andgranted the mother sole custody. I note that in that case, the father hadbeen physically and verbally abusive to the mother during the parties’relationship.

31 The Ackermans’ situation bears no resemblance to the situation thatexisted in Haider v. Malach. The Ackermans had no post-separationagreement with respect to custody and/or access. There was no evidenceeither parent failed to provide appropriate care for the children and therewas no evidence of physical or verbal abuse during their relationship.Moreover, the Ackermans’ interim order provided Mr. Ackerman withconsiderably more parenting time than Mr. Haider enjoyed prior to trial.Finally, the trial judge did not change custody of the Ackermans’ chil-dren. The Ackermans had joint custody prior to trial and it was agreedthat should continue. What the trial judge did change was the amount oftime each parent would have the children in their care.

32 Counsel for Ms. Ackerman misinterpreted the ratio in Haider v.Malach. That case is not authority for the proposition that a presumptionin favour of the “status quo” exists in custody disputes. There is no suchpresumption. The status quo is a factor to be considered when determin-


ing the best interests of the child. It is encompassed in the phrase “condi-tion, means, needs and other circumstances of the child” as set out in s.16(8) of the Divorce Act. Thus, the status quo should be weighed, alongwith all the other factors that might affect the best interests of the child.

33 While the trial judge in this case did not address the impact of achange in the parenting plan on the children as a discrete issue, I amsatisfied he nevertheless took that into consideration in making his deci-sion. The trial judge found as a fact that it was in the children’s bestinterests for both parents to take an active role in their lives. He consid-ered the age of the children and that Harlo could now tolerate overnights.Given the amount of time Mr. Ackerman had been spending with thechildren, the trial judge concluded “shared parenting” was the next logi-cal step. He also concluded that reducing the number of times the chil-dren travelled between their parents’ homes would reduce the conflictwhich occurred during exchanges.

34 Ms. Ackerman argued strenuously that maintaining the status quowas important as it ensured structure and stability for the children. Achange in the parenting arrangement does not necessarily equate to eithera lack of structure or stability. In fact, a parenting arrangement that de-creases the number of exchanges may be conducive to establishing struc-ture and stability in a child’s life.

35 The trial judge found the Ackermans have very different parentingstyles. Ms. Ackerman is very rigid and structured in her approach, whileMr. Ackerman is more relaxed. That does not mean, however, that thechildren spending more time with their father will lead to instability or alack of structure. Children, by necessity, must adapt to a variety ofparenting styles. What happens in their parents’ homes, the types of foodthey eat, their rules and approaches to discipline may be very differentfrom what exists at their daycare provider’s, school, or the homes ofother important people in their lives such as grandparents. What mattersmost is that children have a clear understanding of what is expected ineach household or institution that they attend.

36 In the circumstances, I cannot find that the trial judge erred in lawwith respect to his handling of the “status quo”.

(ii) Did the Trial Judge Err in Law by Ordering Shared Parenting?37 Ms. Ackerman argues the trial judge erred in law by ordering shared

parenting given the parties’ inability to communicate and their acrimoni-ous relationship. She relied on the cases of L. (C.R.) v. L. (R.E.), [1998]


S.J. No. 20 (Sask. Q.B.); K. (H.A.) v. W. (T.J.), 2010 SKQB 128, 351Sask. R. 69 (Sask. Q.B.) and Poirier v. Poirier, 2011 SKQB 298, 381Sask. R. 111 (Sask. Q.B.).

38 Mr. Ackerman, on the other hand, argued that s. 16(10) of the Di-vorce Act, creates a presumption in favour of shared parenting which Ms.Ackerman did not rebut.

39 Subsection 16(10) of the Divorce Act sets out the principle of maxi-mum contact. McLachlin J. (as she then was), speaking for the SupremeCourt of Canada in Gordon v. Goertz, supra, at para. 24, discussed theapplication of that section as follows:

The second factor which Parliament specifically chose to mention inassessing the best interests of the child is maximum contact betweenthe child and both parents. Both ss. 16(10) and 17(9) of the Act re-quire that “the court shall give effect to the principle that a child ofthe marriage should have as much contact with each former spouseas is consistent with the best interests of the child”. The sections goon to say that for this purpose, the court “shall take into considerationthe willingness of [the applicant] to facilitate” the child’s contactwith the non-custodial parent. The “maximum contact” principle, asit has been called, is mandatory, but not absolute. The Act onlyobliges the judge to respect it to the extent that such contact is con-sistent with the child’s best interests; if other factors show that itwould not be in the child’s best interests, the court can and shouldrestrict contact: Young v. Young, [1993] 4 S.C.R. 3, at pp. 117-18,per McLachlin J.

40 I conclude s. 16(10) of the Divorce Act does not create a presumptionin favour of shared parenting. Rather, it establishes the principle thatmaximum contact between a child and each of his or her parents is desir-able. What that “maximum contact” should be in any particular case de-pends on the best interests of the child.

41 The fact parents have an acrimonious relationship is a factor to beconsidered in determining an appropriate parenting plan. Conflict, do-mestic violence and/or abuse, whether it be physical, psychological orverbal, is relevant to a person’s ability to parent. Children learn whatthey live and it is well documented that children who live with conflict,domestic violence and/or abuse are significantly impacted by such exper-iences. How the existence of such experiences will affect the outcome ofa custody or access hearing depends on a number of factors including,but not limited to, who was involved, when and where the incidents oc-curred, the context in which they arose, the number and severity of such


incidents, the parties’ reactions to the event, including the taking of re-medial steps, whether the children were present during the incidentsand/or their knowledge of such events and their reaction to them.

42 In this case, there was no evidence of domestic violence or abuse dur-ing the Ackermans’ relationship. Following their separation, however,conflict arose. This was clearly established by the various emails filed asevidence, the taped telephone conversation of March 28, 2011, the factthat both Ackermans videotaped exchanges, and other inappropriate con-duct by both the Ackermans including Ms. Ackerman “tailing” Mr. Ack-erman and his new spouse. The trial judge, however, found Ms. Acker-man “exaggerated the conflict between the parties so she could argue thatshared parenting would not work.”

43 The trial judge enumerated a number of situations where Ms. Acker-man fuelled the conflict between herself and Mr. Ackerman. He foundMs. Ackerman did not feel it was “necessary” to share any school infor-mation with Mr. Ackerman. She opposed Mr. Ackerman picking thechildren up at school. She refused to allow Mr. Ackerman’s new com-mon law spouse to transport the children for scheduled parenting timewith their father when Mr. Ackerman was undergoing a medical proce-dure and when he was “stuck” in his vehicle. When Mr. Ackerman’scommon law spouse made a “gracious attempt” to communicate withher, Ms. Ackerman refused to reply. Ms. Ackerman would not let Peytinand Harlo attend a birthday party for the children of one of Mr. Acker-man’s friends. The trial judge found as a fact that Ms. Ackerman “...desires to retain control over all aspects of the children’s lives anddesires to retain this as control over the respondent” (i.e., Mr. Acker-man). In the words of the trial judge, “She has allowed her dislike of therespondent and her mistrust of him to permeate all her opinions and deci-sions ...” regarding the children’s relationship with their father. Facedwith this situation, knowing Ms. Ackerman was the children’s primaryparent, the trial judge found the only way “joint custody” could be mean-ingful was to have a shared parenting regime. This was premised on hisfinding that it was in the best interests of Peytin and Harlo that both theirparents be active and present in their lives on a regular basis. There wasample evidence to support the trial judge’s findings of fact and theyshould be given deference.

44 Counsel for Ms. Ackerman argued strenuously that shared parentingcannot be “imposed” and should not be “imposed” where the parties areunable to communicate effectively.


45 The cases cited by legal counsel for Ms. Ackerman in support of thisproposition are all easily distinguishable on their facts from the Ack-ermans’ situation. In none of those cases did the trial judge find one par-ent was “ratcheting up the conflict” to prevent a shared parentingarrangement.

46 In L. (C.R.) v. L. (R.E.), the trial focused on the mother’s request tolimit the father’s access to their child because of past spousal and childabuse. In Poirier, the trial judge found that the father had physicallyabused the mother and used excessive discipline on one of the children.No such abuse exists in the Ackermans’ case.

47 In K. (H.A.) v. W. (T.J.), there was a post-separation agreement of theparties whereby the mother was allowed to move with the children foreducational purposes. The agreement provided for a “review” after themother obtained her university degree. Almost four years post-separationthe trial judge found certain conduct of the father to be inappropriate andthat he displayed characteristics including “stubbornness” and “inappro-priate methods of resolving conflict”. Most troublesome to the trial judgewas the father’s “inability” to see the other side.

48 While it stands to reason that generally, shared parenting requires amodicum of cooperation and communication, there can be no hard andfast rules. Every case must turn on its own facts with the focus alwaysbeing the best interests of the child. Sometimes trial judges are facedwith impossible situations and they must craft a parenting regime thatthey know will not be perfect but best addresses the child’s needs andinterests. In exercising their discretion they should not be arbitrarily lim-ited to certain types of orders because in other cases judges have foundthe presence or absence of certain things, such as effective communica-tion, was a deciding factor for them. Resolving custody issues requires abalancing of factors to determine the best interests of the child. Whatthose factors are and how they will be weighed will vary greatly depend-ing on the circumstances of each case. It is for this reason that trying todetermine custody based on a review of “similar” cases is a questionablepractice.

49 In this case, there was evidence that the parties were capable of coop-erating. On one occasion when Mr. Ackerman was working near Ms.Ackerman’s home, she spontaneously let Peytin visit him. When Mr.Ackerman and Ms. Fitch’s son was born, Ms. Ackerman had the childrentake flowers to the hospital. Mr. Ackerman had the children make craftsas a gift for Ms. Ackerman. The Ackermans were able to agree on what


school Peytin would attend for grade one and they have communicatedby email.

50 Finally, Ms. Ackerman complains that the trial judge erred in divid-ing decision-making power by allowing Mr. Ackerman to choose thechildren’s doctor and her to choose their dentist. This type of order waswithin the power of the trial judge to make and I can find no error in himdoing so. The evidence establishes Ms. Ackerman took the children towalk-in medical clinics while Mr. Ackerman took them to his familyphysician. Dividing the decision-making authority as the trial judge didprovides balance to the parenting arrangement.

51 In the circumstances I cannot find the trial judge misapprehended theevidence or made a material error or error in law in ordering sharedparenting.

(iii) Did the Trial Judge err in Law by Changing the Children’sResidence from that of their Primary Caregiver?

52 Ms. Ackerman argues that she has been the children’s primarycaregiver since birth and, as such, the children’s primary residenceshould be with her. It is her contention that residence should not havebeen changed without a compelling reason to do so. In effect, her argu-ment is based on the presumption that a child’s “primary caregiver”should be given pre-eminence in custody disputes. That is not the law.

53 In Gordon v. Goertz, supra, the Supreme Court of Canada addressedthe issue of whether there is a presumption in favour of a child remainingwith their custodial parent in relocation cases. McLachlin J. (as she thenwas), writing for the majority, concluded no such presumption exists. Ifind her reasoning at para. 44 of that judgment particularly apropos to theassertion that in initial applications for custody a presumption exists thata child should remain with their primary caregiver.

Fifthly and most importantly, a presumption in favour of the custo-dial parent has the potential to impair the inquiry into the best inter-ests of the child. This inquiry should not be undertaken with a mind-set that defaults in favour of a preordained outcome absentpersuasion to the contrary. It may be that in most cases the opinion ofthe custodial parent will reflect the best interests of the child. In suchcases, the presumption might do no harm. But Parliament did not en-trust the court with the best interests of most children; it entrusted thecourt with the best interests of the particular child whose custody ar-rangements fall to be determined. Each child is unique, as is its rela-


tionship with parents, siblings, friends and community. Any rule oflaw which diminishes the capacity of the court to safeguard the bestinterests of each child is inconsistent with the requirement of the Di-vorce Act for a contextually sensitive inquiry into the needs, means,condition and other circumstances of “the child” whose best intereststhe court is charged with determining. “[G]eneral rules that do notadmit of frequent exceptions can[not] evenly and fairly accommodateall of the varying circumstances that can present themselves”: perMorden A.J.C.O. in Carter v. Brooks, [(1990), 30 R.F.L. (3d) 53], atp. 62. The inquiry is an individual one. Every child is entitled to thejudge’s decision on what is in its best interests; to the extent thatpresumptions in favour of one parent or the other predetermine thisinquiry, they should be rejected: “No matter what test or axiom oneadopts from the many and varied reported decisions on this subject,each case must, in the final analysis, fall to be determined on its par-ticular facts and, on those facts, in which way are the best interests ofthe children met” (Appleby v. Appleby, [ (1989), 21 R.F.L. (3d) 307,at p. 315).

54 I find that pursuant to the Divorce Act, the sole consideration in cus-tody disputes is the best interests of the child. There is no presumption infavour of either parent. Nevertheless, the role each parent plays in the lifeof their child and the bond between the child and each of its parents areimportant factors to be weighed in determining a child’s best interests. Iam satisfied the trial judge in this case took both those factors into con-sideration when making his decision.

55 The trial judge found Ms. Ackerman was the children’s primary par-ent. He also found, however, that she had “ratcheted up” the conflict be-tween her and Mr. Ackerman as an excuse not to participate in sharedparenting.

56 As pointed out by Justice Wilkinson of this Court in Gilles v. Gilles,2008 SKCA 97 (Sask. C.A.) at para. 24, [2008] 10 W.W.R. 610 (Sask.C.A.), the “... characterization of a parent as a child’s ‘primary caregiver’is not, ipso facto, a judicial endorsement ...”, that they are in fact the “...‘best caregiver’. A parent can be the dominant physical and emotionalpresence in a child’s life in a less positive sense as well. ...” Such is thesituation here. The trial judge outlined some of Ms. Ackerman’s conductin fuelling the conflict between herself and Mr. Ackerman which directlyaffected the children. A review of the trial transcript identifies manyother incidents. Most telling is the trial judge’s conclusion that Ms. Ack-erman has allowed her dislike and mistrust of Mr. Ackerman to “...per-

Ackerman v. Ackerman Caldwell J.A. 445

meate all her opinions and decisions regarding the children’s relationship...” with their father. The shared parenting arrangement established bythe trial judge maintains Ms. Ackerman as an integral part of the chil-dren’s lives. It also allows them an opportunity to have a meaningfulrelationship with their father, something the trial judge was concernedwould not happen under any other parenting regime. In the circum-stances, I cannot find the trial judge erred in law in making his decision.

VIII. Conclusion57 Ms. Ackerman’s appeal with respect to the trial judge’s custody deci-

sion is dismissed. The issue of costs for this part of the appeal, and forthe applications to adduce fresh evidence, will be dealt with when thisCourt renders its decision on the appeal relating to division of the familyproperty.

Ottenbreit J.A.:

I concur.

Caldwell J.A.:

I concur.

Appeal dismissed.


[Indexed as: Yellow Cab Co. v. British Columbia (PassengerTransportation Board)]

Yellow Cab Company Ltd., Black Top Cabs Ltd., MacLure’sCabs (1984) Ltd. and Vancouver Taxi Ltd., Appellants(Petitioners) and Passenger Transportation Board, Delta

Sunshine Taxi (1972) Ltd., Kimber Cabs. Ltd., Guildford Cab(1993) Ltd., Tsawwassen Taxi Ltd., Newton Whalley HiwayTaxi Ltd., North Shore Taxi (1996) Ltd., and Sunshine Cabs

Ltd., Respondents (Respondents)

British Columbia Court of Appeal

Docket: Vancouver CA041365

2014 BCCA 329

Chiasson, Groberman, Goepel JJ.A.

Heard: April 9, 2014


Municipal law –––– Licensing and regulation — Licensing of businesses —Miscellaneous –––– There was shortage of taxis on Friday and Saturday nightsin downtown Vancouver entertainment district — Suburban taxi companies ap-plied to operate 15% of fleets in Vancouver during peak weekend hours and onspecial days — Vancouver taxi companies applied to operate 99 additional taxisduring weekends and peak periods — Board considered application pursuant tos. 28(1) of Transportation Act (B.C.), and took into account public need, fitnessof applicants and sound economic conditions — Board approved licences for 38suburban taxis to operate in downtown Vancouver entertainment district on Fri-day and Saturday nights — Board approved 99 additional taxis for Vancouvertaxi companies to operate from on Friday and Saturday nights plus other peakperiods — Vancouver taxi companies applied for reconsideration of board’s de-cision but application for was dismissed — Suburban taxi companies thensought temporary operating permits — Board found that less than one-half ofneed for additional taxis recognized in earlier decision was being met and thatthere was urgent and temporary need for additional taxis — Board granted tem-porary operating permits to suburban taxi companies for period — Vancouvertax companies’ request for reconsideration of decision was denied — Board ap-proved second temporary operating permits for suburban taxi companies —There were three petitions for judicial review of board’s decisions — Petitionswere granted in part — Board’s decisions granting first temporary operating per-mits and reconsideration were found to be moot because permits expired —Court also found it was reasonable for board to hear applications of suburban

Yellow Cab Co. v. British Columbia 447

taxi companies and Vancouver taxi companies together — Court held that boardexercised power under s. 12(1) of Act in manner that was fair to all parties andthat board did not act unfairly when it decided to conduct written hearing —Court concluded that exercise of board’s discretion not to hold oral hearing wasnot patently unreasonable and that board’s decision respecting boundaries ofdowntown Vancouver entertainment district was within its jurisdiction to makeand it deserved deference — However, court did hold that, when board deniedVancouver taxi companies right to make submissions on further temporary oper-ating permit applications, it acted arbitrarily and exercise of discretion was pa-tently unreasonable — Second temporary operating permit application was re-mitted to board for consideration — Petitioners appealed — Appealdismissed — Judicial review of board’s original decision was available —Board was also entitled to use expert evidence and its findings were supportedby evidence — Studies tendered by petitioners did not meet requirements foradducement of fresh evidence.

Administrative law –––– Requirements of natural justice — Right to hear-ing — Duty of fairness –––– There was shortage of taxis on Friday and Satur-day nights in downtown Vancouver entertainment district — Suburban taxicompanies applied to operate 15% of fleets in Vancouver during peak weekendhours and on special days — Vancouver taxi companies applied to operate 99additional taxis during weekends and peak periods — Board considered applica-tion pursuant to s. 28(1) of Transportation Act (B.C.), and took into accountpublic need, fitness of applicants and sound economic conditions — Board ap-proved licences for 38 suburban taxis to operate in downtown Vancouver en-tertainment district on Friday and Saturday nights — Board approved 99 addi-tional taxis for Vancouver taxi companies to operate from on Friday andSaturday nights plus other peak periods — Vancouver taxi companies appliedfor reconsideration of board’s decision but application for was dismissed —Suburban taxi companies then sought temporary operating permits — Boardfound that less than one-half of need for additional taxis recognized in earlierdecision was being met and that there was urgent and temporary need for addi-tional taxis — Board granted temporary operating permits to suburban taxi com-panies for period — Vancouver tax companies’ request for reconsideration ofdecision was denied — Board approved second temporary operating permits forsuburban taxi companies — There were three petitions for judicial review ofboard’s decisions — Petitions were granted in part — Board’s decisions grant-ing first temporary operating permits and reconsideration were found to be mootbecause permits expired — Court also found it was reasonable for board to hearapplications of suburban taxi companies and Vancouver taxi companies to-gether — Court held that board exercised power under s. 12(1) of Act in mannerthat was fair to all parties and that board did not act unfairly when it decided toconduct written hearing — Court concluded that exercise of board’s discretion


not to hold oral hearing was not patently unreasonable and that board’s decisionrespecting boundaries of downtown Vancouver entertainment district was withinits jurisdiction to make and it deserved deference — However, court did holdthat, when board denied Vancouver taxi companies right to make submissionson further temporary operating permit applications, it acted arbitrarily and exer-cise of discretion was patently unreasonable — Second temporary operating per-mit application was remitted to board for consideration — Petitioners ap-pealed — Appeal dismissed — Judicial review of board’s original decision wasavailable, nowithstanding that board denied leave on reconsideration — Boardwas also entitled to use expert evidence and its findings were supported by evi-dence — Findings were not patently unreasonable.

Cases considered by Groberman J.A.:

BC Ferry Services Inc. and BCFMWU (Exclusions/Inclusions), Re (2013), (subnom. British Columbia Ferry and Marine Workers’ Union v. BritishColumbia Ferry Services Inc.) 346 B.C.A.C. 265, (sub nom. BritishColumbia Ferry and Marine Workers’ Union v. British Columbia FerryServices Inc.) 592 W.A.C. 284, 2013 BCCA 497, 2013 CarswellBC 3485,(sub nom. B.C. Ferry and Marine Workers’ Union v. British Columbia FerryServices Inc.) 2014 C.L.L.C. 220-005, 55 B.C.L.R. (5th) 91 (B.C. C.A.) —considered

British Columbia Lottery Corp. v. Vancouver (City) (1999), 1999 CarswellBC72, 169 D.L.R. (4th) 141, 118 B.C.A.C. 129, 192 W.A.C. 129, 1999 BCCA18, 61 B.C.L.R. (3d) 207, 1 M.P.L.R. (3d) 1 (B.C. C.A.) — referred to

Canadian Pacific Ltd. v. Matsqui Indian Band (1995), 1995 CarswellNat 264,1995 CarswellNat 700, 26 Admin. L.R. (2d) 1, (sub nom. Matsqui IndianBand v. Canadian Pacific Ltd.) [1995] 2 C.N.L.R. 92, 122 D.L.R. (4th) 129,85 F.T.R. 79 (note), [1995] 1 S.C.R. 3, 177 N.R. 325, [1995] S.C.J. No. 1(S.C.C.) — referred to

Gichuru v. Law Society (British Columbia) (2010), 297 B.C.A.C. 115, 504W.A.C. 115, 2010 BCCA 543, 2010 CarswellBC 3258 (B.C. C.A.) — re-ferred to

Harelkin v. University of Regina (1979), 1979 CarswellSask 79, [1979] 3W.W.R. 676, 26 N.R. 364, 96 D.L.R. (3d) 14, [1979] 2 S.C.R. 561, 1979CarswellSask 162, [1979] S.C.J. No. 59 (S.C.C.) — referred to

Jozipovic v. British Columbia (Workers’ Compensation Appeal Tribunal)(2012), 32 B.C.L.R. (5th) 241, 2012 BCCA 174, 2012 CarswellBC 1156, 36Admin. L.R. (5th) 336, 320 B.C.A.C. 114, 543 W.A.C. 114, 349 D.L.R.(4th) 347, [2012] B.C.J. No. 801 (B.C. C.A.) — referred to

Mavi v. Canada (Attorney General) (2011), 2011 CarswellOnt 4429, 2011 Cars-wellOnt 4430, 2011 SCC 30, 332 D.L.R. (4th) 577, 417 N.R. 126, 97 Imm.L.R. (3d) 173, (sub nom. Canada (Attorney General) v. Mavi) [2011] 2

Yellow Cab Co. v. British Columbia 449

S.C.R. 504, 19 Admin. L.R. (5th) 1, 279 O.A.C. 63, 108 O.R. (3d) 240,[2011] S.C.J. No. 30 (S.C.C.) — considered

Public School Boards’ Assn. (Alberta) v. Alberta (Attorney General) (2000), 9C.P.C. (5th) 36, 82 Alta. L.R. (3d) 211, [2000] 10 W.W.R. 187, 2000 SCC 2,[2000] 1 S.C.R. 44, 182 D.L.R. (4th) 561, 251 N.R. 1, 250 A.R. 314, 213W.A.C. 314, 2000 CarswellAlta 678, 2000 CarswellAlta 679, [2000] S.C.J.No. 2 (S.C.C.) — followed

R. v. Palmer (1979), 1979 CarswellBC 533, 1979 CarswellBC 541, [1980] 1S.C.R. 759, 30 N.R. 181, 14 C.R. (3d) 22, 17 C.R. (3d) 34 (Fr.), 50 C.C.C.(2d) 193, 106 D.L.R. (3d) 212, [1979] S.C.J. No. 126 (S.C.C.) — followed

U.S.W. v. Auyeung (2011), 2011 CarswellBC 3531, 2011 BCCA 527, 345D.L.R. (4th) 630, (sub nom. United Steelworkers, Paper and Forestry,Rubber, Manufacturing, Energy, Allied Industrial and Service WorkersInternational Union, Local 2009 v. Auyeung) 314 B.C.A.C. 172, (sub nom.United Steelworkers, Paper and Forestry, Rubber, Manufacturing, Energy,Allied Industrial and Service Workers International Union, Local 2009 v.Auyeung) 534 W.A.C. 172, 40 Admin. L.R. (5th) 86, (sub nom. U.S.W.,Local 2009 v. Auyeung) 216 C.L.R.B.R. (2d) 48 (B.C. C.A.) — considered

114957 Canada Ltee (Spray-Tech, Societe d’arrosage) c. Hudson (Ville) (2001),(sub nom. 114957 Canada Ltee (Spraytech, Societe d’arrosage) v. Hudson(Town)) 200 D.L.R. (4th) 419, 19 M.P.L.R. (3d) 1, 40 C.E.L.R. (N.S.) 1, 271N.R. 201, 2001 SCC 40, 2001 CarswellQue 1268, 2001 CarswellQue 1269,(sub nom. 114957 Canada Ltee (Spraytech, Societe d’arrosage) v. Hudson(Town)) [2001] 2 S.C.R. 241, [2001] S.C.J. No. 42, REJB 2001-24833(S.C.C.) — referred to


Administrative Tribunals Act, S.B.C. 2004, c. 45s. 58 — considereds. 58(2)(b) — considered

Labour Relations Code, R.S.B.C. 1996, c. 244s. 141(1) — considereds. 141(2) — considered

Passenger Transportation Act, S.B.C. 2004, c. 39Generally — referred tos. 1 “passenger directed vehicle” — referred tos. 6 — considereds. 7(1)(b)(i) — considereds. 7(1)(c) — considereds. 7(1)(d) — considereds. 7(4) — considereds. 12(1) — considereds. 14 — considered


s. 15(1) — considereds. 17 — considereds. 21 — considereds. 21(4) — considereds. 22 — considereds. 28(1) — considereds. 38(2) — considered

Vancouver Charter, S.B.C. 1953, c. 55s. 317(1)(l) — considereds. 317(1)(m) — considered

APPEAL by petitioners from judgment reported at Yellow Cab Co. v. BritishColumbia (Passenger Transportation Board) (2013), 2013 BCSC 1930, 2013CarswellBC 3196 (B.C. S.C.).

P.A. Gall, Q.C., B. Elwood, M.A.G. Elliot, for AppellantsN.E. Brown, for Respondent BoardW.A. McLachlan, for Respondent Companies

Groberman J.A.:

1 In a decision issued on October 2, 2012, the Passenger TransportationBoard granted the respondents — seven suburban taxi companies — au-thorizations to operate a total of 38 taxis in certain areas of downtownVancouver between 10:00 p.m. Friday and Saturday nights and 5:00 a.m.the following mornings. The decision was a departure from historicaltaxi licencing practices. With few exceptions, taxi companies in theLower Mainland have been authorized to originate trips and pick up pas-sengers only within their own municipalities. Suburban companies gen-erally have not been authorized to originate trips or pick up passengers inthe City of Vancouver.

2 The appellants — the four taxi companies licenced to operate in theCity of Vancouver — object to the granting of the 38 authorizations.They brought a judicial review application to quash the Board’s decision.The application was dismissed, and they appeal to this Court.

3 On appeal, the appellants advance two of the arguments they ad-vanced in the Supreme Court. They contend that the Board violated prin-ciples of procedural fairness when it used evidence tendered by the Van-couver taxi companies to support its decision to grant authorizations tothe suburban taxi companies. They also say that the Board reached a pa-

Yellow Cab Co. v. British Columbia Groberman J.A. 451

tently unreasonable conclusion in finding that there was a public need forthe services that will be provided under the new authorizations.

4 The appellants also raise a third argument on appeal that was not pre-sented in the Supreme Court. They say that the Board’s decision waspatently unreasonable because it failed to recognize the powers of theCity of Vancouver to control the number of taxis permitted to operate inthe City.

5 For reasons that follow, I am of the view that the appeal must bedismissed.

I. The Legislative Scheme6 The Board is established under the Passenger Transportation Act,

S.B.C. 2004 c. 39. Among its functions is the granting of licences andauthorizations for the operations of “passenger directed vehicles”, a de-fined term that includes taxicabs.

7 To operate a vehicle as a taxicab, a person must apply to the Boardfor a licence that includes what is referred to in the Act as a “specialauthorization”. The special authorization sets out the particular servicesthat the taxi operator is allowed to provide. The requirements for thegranting of a special authorization are set out in s. 28 of the Act:

28 (1) The board may approve an application [for a special authoriza-tion] if the board considers that

(a) there is a public need for the service the applicant proposes toprovide under [it],

(b) the applicant is a fit and proper person to provide that serviceand is capable of providing that service, and

(c) the application, if granted, would promote sound economicconditions in the passenger transportation business in BritishColumbia.

8 The Board is given broad powers to establish procedures, hold hear-ings and conduct investigations:

7 (1) ... [T]he board may do any or all of the following:

. . .

(b) conduct investigations into

(i) any matter related to the operation or li-censing of ... passenger directed vehicles,

. . .

(c) arrange and conduct hearings;


(d) make rules respecting practice and procedure for allapplications, appeals, submissions and hearings comingbefore the board and for all investigations under para-graph (b);

. . .

. . .

(4) The board may retain consultants, investigators, expert witnessesor other persons as may be necessary for the board to discharge itsfunctions under this Act ....

. . .

12(1) The board has the power to control its own process.

. . .

14. If 2 or more proceedings involve the same or similar questions offact, law or policy, the board may

(a) combine those proceedings or any part of them,

(b) conduct those proceedings at the same time,

(c) conduct those proceedings one immediately after the other, or

(d) stay one or more of those proceedings until after the determi-nation of another one of them.

15. ... [T]he board may receive and accept evidence and information,on oath, by affidavit or otherwise, that the board considers relevant,necessary and appropriate to a proceeding, whether or not the evi-dence or information would be admissible in a court of law ....

. . .

17. Despite any other provision of this Act, in any circumstance inwhich, under this Act, a hearing may or must be held, the board mayconduct a written, electronic or oral hearing, or any combination ofthem, as the board, in its sole discretion, considers appropriate.

. . .

21 (4)The board may reconsider, vary or rescind any decision madeby it if the board is satisfied that

(a) information has become available that was not available atthe time the decision was made, or

(b) there has been an error in procedure.

9 The Board’s decisions are protected by a strong privative clause: 22 (1) The board has exclusive jurisdiction to inquire into, hear anddetermine all those matters and questions of fact, law and discretion


arising or required to be determined under this Act and to make anyorder permitted to be made.

(2) A decision or order of the board under this Act on a matter inrespect of which the board has exclusive jurisdiction is final and con-clusive and is not open to question or review in any court.

10 Section 6 of the Act makes certain provisions of the AdministrativeTribunals Act, S.B.C. 2004, c. 45 applicable to the Board, including s.58, which establishes the standard of review to be applied to Board deci-sions on judicial review.

II. The Applications and the Board’s Omnibus Decision11 For several years, there has been concern that the number of taxis

operating in Vancouver’s downtown entertainment district on Friday andSaturday nights is inadequate to meet demand. In February 2011, thefour Vancouver taxi companies applied for temporary operating permitsto allow them to operate 65 additional taxis during the Friday and Satur-day night peak hours. In its decisions on each of the applications, givenin March 2011, the Board described the situation as follows:

Over the past few years, there have been concerns expressed at vari-ous times by Vancouver Police, Vancouver City Council, citizensand businesses with respect to a lack of available taxis within theCity of Vancouver at certain peak times. These taxi shortages havebeen particularly tied to weekend bar closing times in the entertain-ment district, peak cruise ship schedules and special events withinthe City.

. . .

The issue of the “urgency” of public need relating to the taxi serviceat peak periods in the City of Vancouver is not a recent phenomenon.The issue reached near crisis proportions prior to the granting of 111new full time taxi authorizations in 2007. The infusion of additionalcapacity brought some relief, but taxi supply still appears to fall shortof demand for a few hours most weeks. From time to time, temporaryactions, unsanctioned by the Board, have been taken such as allowingsuburban taxis to pick up at peak times. These temporary actions cre-ate ongoing enforcement issues, but have been deemed necessary inthe interest of public safety. Currently, the size of the issue, and last-ing solutions that clearly solve the problem without creating newproblems, are still not sufficiently defined.

Re Yellow Cab Company Ltd., Board Decision No. 26-11 at 2 and 6

Re Vancouver Taxi Ltd., Board Decision No. 28-11 at 2 and 6


Re Black Top Cabs Ltd. Board Decision No. 29-11 at 2 and 6

Re MacLure’s Cabs (1984) Ltd., Board Decision No. 30-11 at 2 and6

12 The Board granted the applications for the temporary permits under s.38(2) of the Act, which allows it to increase the number of vehicles thatmay be operated under a licence where there is an “urgent and temporaryneed”. The Board’s procedures allow such authorizations to be grantedvery quickly. The temporary permits were initially to be in place fromMarch to November 2011, but were subsequently extended from time totime.

13 A few days after the Vancouver taxi companies submitted their appli-cations for temporary permits, and before the Board granted them, 16suburban taxi companies (including all of the respondent companiesother than North Shore Taxi (1996) Ltd.) submitted applications to theBoard’s registrar, seeking authorization to operate 15% of their taxifleets in the downtown Vancouver entertainment district on Friday andSaturday nights. These applications were for ordinary, rather than tempo-rary permits, and they were dealt with under the Board’s usualprocedures.

14 The registrar required the applicants to provide additional informationbefore transmitting the files to the Board for consideration. The informa-tion was provided, and the application files were transmitted from theBoard’s registrar to the Board at the end of June 2011. Thereafter, Boardapplication summaries were prepared by the applicants for publication inthe Board’s Bulletin. Notice of the applications was published on July27, 2011.

15 On August 4, 2011, the Board received a submission from the CityManager of the City of Vancouver asking that the applications by thesuburban taxi companies be held in abeyance:

The Board’s decision on the four Vancouver taxi company applica-tions went on to summarize the work undertaken by the City of Van-couver through the Taxi Round Table and the Taxi Peak Period Ser-vice Working Group, as well as Vancouver City Council’s March 3,2011 request that the PTB require appropriate metrics to evaluate thetrial of temporary permits. The board concluded that “the carefulmonitoring and assessment of the pilot project should provide valua-ble information with respect to the size of the problem and the eco-nomics of this potential solution.” Results of the trial will be assessedby Prof. Garland Chow of the UBC Sauder School of Business.


Given that the temporary permit trial does not conclude until Nov. 1,2011, it seems premature to consider the applications of the 16 subur-ban firms and impossible to make a meaningful submission on theirproposal.

For these reasons, I respectfully request that you suspend the applica-tions of the 16 suburban firms until the assessment of the Vancouvertemporary operating permits pilot project is complete.

16 Between August and October 2011, the Board also received writtensubmissions from the Vancouver taxi companies and the 16 suburbantaxi company applicants. On October 26, 2011, the Director and Secre-tary of the Board wrote to counsel for the applicants requesting a sub-stantial amount of additional information. It set a deadline of January 16,2012. The letter also addressed the concerns raised by the City’s submis-sion:

In its decisions on the TOPs [temporary operating permits] the Boardhas described the period from April to November as a “pilot project”.The decisions noted that the Vancouver taxi companies had engageda UBC Sauder School of Business professor to measure the impact ofthe TOPs on taxi service at peak periods. All decisions on the TOPSnoted that the pilot project data has the potential to provide valuableinformation with respect to the issue of peak period taxi service inthe City of Vancouver. The panel concurs and feels that if the reportis made public it will contribute to a better understanding of peakperiod taxi service and be of value in its assessment of the applica-tions from the 16 suburban taxi cabs.

The panel notes that the most recent set of decisions on the TOP ap-plications indicated that, while the report on the pilot project maycontribute to a better understanding of taxi supply in the entertain-ment district of the City of Vancouver, the Board also is committedto processing applications in a timely manner.

The panel is prepared to provide an opportunity for the report fromthe pilot project to be released publicly. However, the panel will notunduly delay its processing of these applications pending the releaseof a report from the pilot project.

17 On November 8, 2011, the Mayor of the City of Vancouver wrote tothe Board to express opposition to the suburban taxi companies’ applica-tions:

[T]he City of Vancouver is working with the [Vancouver taxi compa-nies] to monitor the impact of the temporary licencing system pilotprogram to address service issues within the city. It is my view and


Council’s that any move to allow the [suburban taxi companies] tooperate within Vancouver boundaries would be very destructive tocustomer service quality and the stability of our established firms. Itwould amount to a wholesale reorganization of the taxi industry withunpredictable consequences, including for municipalities neighbour-ing Vancouver.

For all these reasons, I urge you to reject the application of the lowermainland firms and to work with Vancouver to improve service bybuilding on the results of the current temporary licensing program.

18 The Board responded to the Mayor’s letter on December 1, 2011, ac-knowledging receipt, and pointing out that it operates as an independenttribunal. It continued:

The Board must consider all applications it receives pursuant to itsmandate. The Board makes its decisions based on information sup-plied by applicants and submitters or the results of any investigationsundertaken with respect to the application. The Board seeks informa-tion that is factual and objective.

19 Dr. Chow’s report on the pilot project was provided, in draft form, tothe Vancouver taxi companies by January 2012, and a final version waspublished in February 2012. The report, entitled “Peak Demand and Sup-ply of Taxis in Vancouver’s Downtown Entertainment District” consid-ered the effects of the increase in the number of taxis resulting from theissuance of temporary operating permits. Because the data provided byYellow Cab Company Ltd. was more complete than that provided byother companies, Dr. Chow was able to analyze it more thoroughly.Among his findings, were that the temporary operating permit pilot pro-ject served to improve taxi service in the downtown entertainment areaon weekend nights. There was an overall increase in trip volume of 10%,corresponding to the 10% increase in fleet size. The report concludedthat the increased supply was completely absorbed by market demand,with no appreciable decline in the average productivity of each taxi.

20 The report noted that “taxis not licenced to make pickups in Vancou-ver” had a significant share of the weekend night market. Dr. Chow com-mented:

When considering the optimum number of weekend taxis needed inVancouver, a confounding factor is the participation of non Vancou-ver licensed taxis in the passenger market. The percentage of tripsmade by these suppliers as reported in the Taxi Patron Service surveywas 12% in the October survey. This is close to the midpoint of therange observed in the screen line count survey where it was observed


that slightly over 16% of the taxis on the street were non-Vancouvertaxis and almost 9% of the taxis with service lights on were non-Vancouver taxis.

21 The report did not, itself, make any recommendations as to the num-ber of additional taxi licences that should be issued for weekend nightoperations. The Vancouver taxi companies, however, asked Dr. Chow toprovide them with a recommendation as to how many licences theyshould apply for. He provided such a recommendation in a letter datedJanuary 10, 2012.

22 Dr. Chow’s view was that the total fleet of taxis on the street in Van-couver during the pilot project was approximately 742. This number wasmade up of 588 taxis operating under permanent licences, 65 operatingunder temporary operating permits, and approximately 89 taxis that werenot licenced to operate in Vancouver, but did so anyway. As his reportdid not detect any drop in productivity as a result of the issuance of thetemporary operating permits, Dr. Chow concluded that the market couldsupport 742 taxis on Vancouver streets on Friday and Saturday nights.

23 Dr. Chow did not, however, recommend that the Vancouver taxi com-panies attempt to increase their licence fleets to 742 taxis; instead, herecommended that they increase their fleets by 100 cars, to 688 vehicles.While it is not clear exactly how he settled on that number, his reasonsfor not recommending an increase to 742 vehicles were clearly stated:

It would be risky for the Vancouver taxi industry to commit to ad-ding the full extra 89 taxis over the existing fleet plus the TOP vehi-cles of 653 unless the industry could be assured that an equivalentnumber of non-Vancouver licensed taxis will be taken off the road.Accordingly, I recommend that before more weekend evening carsare added by the 4 [Vancouver] taxi companies beyond the 100 that Iadvocate, that the [Vancouver companies] suggest to the PTB thatanother performance evaluation be made within one year using theWITH TOP taxi patron survey and the November 2011 screen linecount survey as benchmarks to determine the service and productiv-ity of the 100 vehicles, as well as the effectiveness of licencingenforcement.

24 Based on Dr. Chow’s recommendation, the four Vancouver taxi com-panies submitted applications in January 2012, seeking a total of 99 addi-tional weekend taxi authorizations. They included Dr. Chow’s January10, 2012, letter in their application materials.


25 City of Vancouver staff prepared a report on March 16, 2012, inwhich they recommended that City Council support the Vancouver taxicompanies’ applications. The report observed:

In light of the pilot project’s success, staff support the continuation ofadditional peak period taxis. While the pilot with 65 taxis was suc-cessful, the data indicates that the additional supply was absorbed byadditional demand indicating that there is room for further improve-ment in service with more taxis. Additionally, the Police note thatservice is inconsistent at times. While it is difficult to make a recom-mendation on a specific number of taxis that are needed, staff supportthe application for 99 permanent part-time cabs to improve taxi ser-vice on weekend evenings and other peak days on an ongoing basiswith further metrics on service impact to be collected.

26 On March 27, 2012, Vancouver City Council approved a resolutionsupporting the Vancouver taxi companies’ applications.

27 Meanwhile, in February 2012, a seventeenth suburban taxi company,North Shore Taxi (1996) Ltd., made an application to operate 15% of itsfleet in downtown Vancouver on weekend nights.

28 On March 30, 2012, the Board advised the parties that it intended toconduct hearings into all of the applications of the Vancouver and subur-ban taxi companies at the same time. Its letter concluded by advising theparties that it had not yet decided what form the hearing would take:

The Board seeks to proceed in an efficient, fair and timely mannerwith respect to its decisions on these applications. The Board has notyet determined whether it will make its decisions based on writtenevidence alone, oral evidence or a combination thereof. The Boardwill notify participants of its procedures once the Board has receivedall the information pertinent to these applications.

29 The hearing that was eventually conducted was in writing. It is notclear when the Board made a decision not to hold an oral hearing, but theparties filed their written submissions on July 3, 2012, and their replysubmissions on July 10, 2012. The submissions are comprehensive, andthere is no request or suggestion in them that the parties wanted or ex-pected an oral hearing to be held.

30 The Board issued its decision on all of the applications on October 2,2012. In the decision, it summarized the evidence and the positions of theparties, and considered whether there was a need for additional licensedtaxis in the downtown Vancouver entertainment area on Friday and Sat-


urday nights, the magnitude of that need, the fitness of the various appli-cants to supply the service, and the economic soundness of the proposals.

31 The Board concluded that there was a need for additional licences,and found that demand in the downtown entertainment district was suffi-cient to accommodate 137 additional licenced vehicles during peak hourson Friday and Saturday nights. It found all of the applicants to be fit tooperate such vehicles, but found that of the suburban taxi companies,only the seven respondents had excess capacity such that granting themlicences would promote sound economic conditions in the passengertransportation business in B.C.

32 After considering the level of the respondents’ excess capacity, theBoard granted the Vancouver taxi companies the licences they wereseeking, and also granted some licences to suburban taxi companies. Thelicences granted were as follows:

Taxi Company No. of Licences

Yellow Cab Company Ltd. 36

Black Top Cabs Ltd. 30

MacLure’s Cabs (1984) Ltd. 16

Vancouver Taxi Ltd. 17

Delta Sunshine Taxi (1972) Ltd. 5

Kimber Cabs. Ltd. 3

Guildford Cab (1993) Ltd. 2

Tsawwassen Taxi Ltd. 2

Newton Whalley Hiway Taxi Ltd. 2

North Shore Taxi (1996) Ltd. 14

Sunshine Cabs Ltd. 10

Total 137

33 The Vancouver taxi companies applied to the Board for reconsidera-tion, but the Board denied the request, finding that the application did notmeet the requirements of s. 21 of the Passenger Transportation Act.


III. Preliminary Issues

A. Availability of Judicial Review of the Board’s Initial Decision34 While not directly addressed by the parties, a preliminary issue arises

on this appeal as to whether a judicial review application directed at theBoard’s initial decision was properly brought, given that the chairman ofthe Board dismissed an application for reconsideration.

35 In U.S.W. v. Auyeung, 2011 BCCA 527 (B.C. C.A.) this Court heldthat, where the Labour Relations Board refused an application for leaveto have a decision reconsidered, judicial review was only available inrespect of the decision not to reconsider, and not with respect to the orig-inal decision of the Board. The judgment in Auyeung carefully consid-ered the statutory scheme in issue and the practices of the Labour Rela-tions Board. It noted:

[52] The legislation prescribes the grounds on which leave for recon-sideration may be granted, which in practice translates into thegrounds on which generally it is refused. In Brinco [Brinco CoalMining Corporation and United Steelworkers of America, Local No.1037, [1993] B.C.L.R.B.D. No. 29], the Board stated clearly the cri-teria that must be met by an applicant seeking leave. Since RGProperties [RG Properties Ltd. (Re), [2003] B.C.L.R.B.D. No. 378],the Board has sometimes given very terse reasons and on other occa-sions very detailed reasons. This variability likely flows from theBoard’s view of the exigencies applicable to individual cases. As ageneral rule, I see no reason for a detailed examination of the meritsin reasons refusing leave. In cases where leave is refused because anoriginal decision is not inconsistent with the principles of the Code, acourt on judicial review will be apprized fully of the bases for anapplicant’s assertion that the Board’s conclusion is unreasonable. Inaddition, a court’s consideration of the Board’s refusal to grant leavelikely will be informed by the original decision, as well as by otherrelevant surrounding circumstances.

. . .

[88] Generally, where the Board refuses leave to reconsider an origi-nal decision, judicial review should be taken only of the decision re-fusing leave. It is likely that the original decision will inform thecourt’s review. It is desirable that sufficient reasons, which need notbe extensive, be given to inform the parties why leave has been re-fused and to enable sufficient consideration for an application for ju-dicial review.


36 In BC Ferry Services Inc. and BCFMWU (Exclusions/Inclusions), Re,2013 BCCA 497 (B.C. C.A.), this court further considered Auyeung. Af-ter quoting the two paragraphs cited above, the Court continued:

[41] From these comments I draw the following observations. First,in Auyeung the court did not foreclose judicial review of the originaldecision in appropriate circumstances, which no doubt will be rare;rather, Auyeung simply affirms the longstanding approach by thiscourt to engaging internal processes. Second, this court has not saidthat the practice taken by the Board described in RG Properties Ltd.,in the interests of prompt resolution of disputes and the general bet-terment of labour relations, provides an insufficient basis for judicialreview. Third, a reviewing court will look to the original decision,any fresh reasoning provided by the Board, and such other circum-stances as may be found in the record, when reviewing a decisionunder s. 141 to deny leave to apply for reconsideration. I would addfurther, given the authority of the court under the Judicial ReviewProcedure Act, R.S.B.C. 1996 c. 241 in relation to remedies, in ap-propriate circumstances, to be engaged with high deference to the au-thority of the Board, including review decisions, the original decisionis open to remedy where it is the source of identified unsoundness.

37 The decision in Auyeung was based on considerations of deference toa specialized tribunal, and on a desire not to encourage unnecessary orunnecessarily complex applications for judicial review.

38 I do not read Auyeung as standing for the broad proposition thatwhenever a statute provides a tribunal with power to reconsider its deci-sions, the courts will refuse to entertain judicial review of the tribunal’sinitial decisions. Auyeung is more nuanced. In applying it, a court mustconsider the scope of the reconsideration power and whether an attempthas been made to invoke it. Where a party has attempted to invoke thereconsideration power, the court must also consider whether the tribu-nal — either in undertaking reconsideration or in deciding that it will notdo so — has made a determination that the allegation of error lacks foun-dation. I will discuss the various possible scenarios and the considera-tions that apply to them.

39 There is a general principle that a party must exhaust statutory admin-istrative review procedures before bringing a judicial review application:Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3(S.C.C.); Harelkin v. University of Regina, [1979] 2 S.C.R. 561 (S.C.C.).For that reason, where an alleged error comes within a tribunal’s statu-tory power of reconsideration, a court may refuse to entertain judicial


review if the party has not made an attempt to take advantage of thereconsideration provision. Of course, where the power of reconsiderationis not wide enough to encompass the alleged error, reconsideration can-not be considered an adequate alternative remedy to judicial review, andthe existence of the limited power of reconsideration will not be an im-pediment to judicial review.

40 Where a party has taken advantage of a tribunal’s reconsiderationpower, and the tribunal has undertaken the reconsideration, it is the re-consideration decision that represents the final decision of the tribunal. Insuch a situation, it is only the reconsideration decision that may be judi-cially reviewed, since it is the final decision of the tribunal.

41 A final common scenario arises where a tribunal has jurisdiction toreconsider a decision, but that power is discretionary. This situationarises where leave is required for reconsideration. A denial of leave willusually represent a considered decision by the tribunal that the allegationof error lacks substance or is so inconsequential as to be vexatious.

42 Auyeung was such a case. The broad power of the Labour RelationsBoard to reconsider decisions was set out in Section 141 of the LabourRelations Code:

141 (1) On application by any party affected by a decision of theboard, the board may grant leave to that party to apply for reconsid-eration of the decision.

(2) Leave to apply for reconsideration of a decision of the board maybe granted if the party applying for leave satisfies the board that

(a) evidence not available at the time of the original decision hasbecome available, or

(b) the decision of the board is inconsistent with the principlesexpressed or implied in this Code or in any other Act dealingwith labour relations.

43 In Auyeung, the applicant contended that the Board had failed toproperly consider and apply its own jurisprudence. In denying leave forreconsideration, the Board rejected that assertion. This Court recognizedthat the Board, in denying leave, had effectively determined that the ap-plication was not meritorious. In the result, it held that any judicial re-view application had to challenge the denial of leave rather than the ini-tial decision.

44 Where a denial of leave does not constitute a determination that therequest for reconsideration lacks merit, it is my view that the initial ad-


ministrative decision, and not the denial of leave, will be the appropriatetarget for judicial review. To hold otherwise would be to allow a tribunal,through procedural machinations, to oust the inherent, constitutionally-protected supervisory jurisdiction of the superior courts. In Jozipovic v.British Columbia (Workers’ Compensation Appeal Tribunal), 2012BCCA 174 (B.C. C.A.), this Court emphasized that a tribunal cannot, byblocking access to administrative review of a decision, bar the courtsfrom passing on the merits of judicial review.

45 Turning to the case before us, s. 21 of the Passenger TransportationAct gives the Board only limited jurisdiction to reconsider its decisions.Reconsideration may only be undertaken where new information thatwas not available at the time of the initial decision has become available,or where there has been an error of procedure. The Board’s chair was notsatisfied that either of these bases for reconsideration was applicable, sohe denied leave. In doing so, he did not address the merits of the originaldecision, nor did he consider the issues that were later raised on judicialreview. In the circumstances, it was open to the Vancouver taxi compa-nies to seek judicial review of the initial Board decision. They were notrequired to review the denial of leave.

B. Application to Adduce Fresh Evidence46 A second preliminary issue is whether to admit fresh evidence ten-

dered by the appellants. The evidence consists of two papers. The first,“A Study of the Taxi Industry in British Columbia”, by Stan Lanyon,Q.C. was prepared in 1999 for the Minister of Transportation and High-ways. The second, “An Examination of the Taxi Supply in the LowerMainland”, was prepared in 2001 by Bonnie Evans for the Motor CarrierCommission of British Columbia, the predecessor of the PassengerTransportation Board. Both papers were influential in the development oftaxicab regulation in British Columbia, and are well-known within theindustry. The appellants tender the papers as useful pieces of legislativehistory, in the view that they might assist the Court in interpreting theintent of the regulatory regime, particularly in respect of their new, thirdground of appeal.

47 The fact that the papers deal with “legislative” as opposed to “adjudi-cative” facts does not mean that they can be freely introduced into evi-dence on appeal. In Public School Boards’ Assn. (Alberta) v. Alberta(Attorney General), 2000 SCC 2 (S.C.C.), Binnie J. held that the test


enunciated in R. v. Palmer (1979), [1980] 1 S.C.R. 759 (S.C.C.) appliesto evidence of legislative facts:

[10] The requirements of due diligence, relevance, credibility and de-cisiveness are also pertinent to an application to adduce fresh evi-dence of legislative fact. While, as pointed out by Sopinka J. in Dan-son [Danson v. Ontario (Attorney General), [1990] 2 S.C.R. 1086],at p. 1099, proof of legislative fact is “subject to less stringent admis-sibility requirements”, this does not mean that the Palmer require-ments are altogether dispensed with. The Palmer principles reflect abroader judicial policy to achieve finality on the factual record at thetrial level, with very limited exceptions. The matters in issue shouldnarrow rather than expand as the case proceeds up the appellate lad-der. The present application would, if allowed, broaden the field ofcombat.

48 In an administrative law context, where the tribunal whose decision isunder review is entitled to deference on its interpretation of its statutoryregime, these concerns are magnified.

49 The fresh evidence tendered by the appellants fails the Palmer test.There is no suggestion that the papers could not, through due diligence,have been included in the materials provided to the Board. They are onlytangentially relevant to the issues before the court, and cannot be said tobe decisive of any issue.

50 Accordingly, I would dismiss the motion to adduce fresh evidence.51 It might be argued that some portions of the papers should be seen as

academic commentary, and that they can be referred to as authoritiesbefore this court, rather than as evidence. While there might be merit tothat proposition, the papers are, in my view, of such limited relevance tothe issues before the court that reference to them is not of assistance. Inthe result, I will not make further reference to the papers in these reasons.

IV. Analysis of the Merits of the Appeal

A. Procedural Fairness52 I turn, then, to the merits of the appeal. The appellant’s first argument

is that the Board adopted procedures that failed to respect the require-ments of procedural fairness.

53 It is common ground that the standard of review applicable to theprocedural fairness issues is the “fairness” standard established in s.58(2)(b) of the Administrative Tribunals Act. This Court has indicatedthat that standard is the same as the “correctness” standard that applies to


procedural fairness issues in the absence of a statutory standard of re-view: see Gichuru v. Law Society (British Columbia), 2010 BCCA 543(B.C. C.A.) at para. 29.

54 What procedures are “fair” depends very much on context. The Su-preme Court of Canada has indicated that assessing the requirements ofprocedural fairness in any given situation requires a consideration ofmyriad factors. In Mavi v. Canada (Attorney General), 2011 SCC 30(S.C.C.), the Court said:

[41] Once the duty of procedural fairness has been found to exist, theparticular legislative and administrative context is crucial to deter-mining its content....

[42] A number of factors help to determine the content of proceduralfairness in a particular legislative and administrative context. Someof these were discussed in Cardinal [Cardinal v. Director of KentInstitution, [1985] 2 S.C.R. 643], a case involving an inmate’s chal-lenge to prison discipline which stressed the need to respect the re-quirements of effective and sound public administration while givingeffect to the overarching requirement of fairness. The duty of fairnessis not a “one-size-fits-all” doctrine. Some of the elements to be con-sidered were set out in a non-exhaustive list in Baker [Baker v. Can-ada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817]to include (i) “the nature of the decision being made and the processfollowed in making it” (para. 23); (ii) “the nature of the statutoryscheme and the ‘terms of the statute pursuant to which the body oper-ates’” (para. 24); (iii) “the importance of the decision to the indivi-dual or individuals affected” (para. 25); (iv) “the legitimate expecta-tions of the person challenging the decision” (para. 26); and (v) “thechoices of procedure made by the agency itself, particularly when thestatute leaves to the decision-maker the ability to choose its own pro-cedures, or when the agency has an expertise in determining whatprocedures are appropriate in the circumstances” (para. 27). Othercases helpfully provide additional elements for courts to consider butthe obvious point is that the requirements of the duty in particularcases are driven by their particular circumstances. The simple over-arching requirement is fairness, and this “central” notion of the “justexercise of power” should not be diluted or obscured by jurispruden-tial lists developed to be helpful but not exhaustive.

55 The appellants were parties before the Board, both as applicants fortaxi authorizations, and as objectors to the applications made by the sub-urban taxi companies. Their interests were commercial. The number of


licences at issue was substantial. There is no doubt that they were enti-tled to procedural fairness.

56 At the same time, it must be recognized that the proceedings wereconcerned with the allocation of new privileges, and not with deprivingparties of vested rights. While the Vancouver taxi companies appear tobelieve they have an inherent right to receive any new licences issued foroperations in the City of Vancouver, that view enjoys no support in thestatutory regime. While I acknowledge that the Vancouver taxi compa-nies had certain practical advantages in their applications — in particu-lar, knowledge and experience with the Vancouver market and an ex-isting infrastructure — they did not occupy a privileged position in theirquest for licences. They were not, in my view, entitled to any greaterprocedural rights than were other applicants.

57 The goals of procedural fairness within this administrative regimewere to ensure that each party had a full opportunity to present evidencein support of its applications, and an opportunity to respond to the posi-tions of the other parties.

58 On the face of it, the procedures adopted by the Board accomplishedthese goals. They were clearly articulated and well-structured. Each partyhad an opportunity to submit evidence and argument and to respond tothe submissions of the other parties. Subject to certain limits to protectcommercial confidentiality, the Board ensured that the evidence it wasconsidering was disclosed to all applicants.

59 The appellants take issue with certain specific aspects of the proce-dure. They contend that the Board ought not to have heard the licencingapplications together. By hearing the various applications together, theBoard allowed evidence adduced by the Vancouver taxi companies —including the report by Dr. Chow — to be used to support the applica-tions of the suburban taxi companies. The appellants say that allowingthat to happen was unfair. In their factum, they make the following asser-tion:

[T]he Vancouver Taxi Companies had a legitimate expectation thatthe evidence they obtained and submitted in support of their applica-tion would not be used against their interest, at least not without afull opportunity to challenge any inference the Board might considerdrawing against their interests based on that evidence.

60 I find it difficult to understand how the Vancouver taxi companiescould have had any such expectations. The Board had before it 21 sepa-rate applications for taxi licences to meet the demand in the Vancouver


downtown entertainment district on Friday and Saturday nights. It wasincumbent on the Board to determine both the existence and magnitudeof the unmet need. It was desirable that the Board consider all of theavailable evidence at once, both so that its decisions would be as in-formed as possible and to avoid the possibility of inconsistent findingson the applications.

61 In the circumstances, it is difficult to see how the Board could havecome to any conclusion but that a joint hearing was required. The Boardwas expressly given the power, under s. 14 of the Act, to combine theproceedings, and it gave notice that it was going to do so. There is norecord of the appellants having objected to that manner of proceeding.

62 I agree entirely with the chambers judge’s assessment of this issue: [113] It was entirely reasonable for the Board to hear these matterstogether. The alternative would have been impractical. After all, bothsets of applicants were applying for license amendments to permitthem to meet the demand for cabs in the Downtown Vancouver En-tertainment District late at night on the weekend.

[114] Tactically, the joint hearing did not assist the Vancouver TaxiCompanies; however, the Board’s mandate does not include assistinga party with its tactics.

[115] I am satisfied that the Board exercised its power under s. 12(1)in a manner that was fair to all parties concerned. There was no error.

63 The appellants seem to believe that by tendering Dr. Chow’s report,they had a right to determine how it would be used, and what inferencesmight be drawn from it. They cite no legal authority to support their posi-tion, and it appears to be contrary to principle. Once the appellants sub-mitted Dr. Chow’s evidence to the joint hearing, they were not entitled tobe insulated from its effects.

64 I am also unconvinced that there was any right, in the context of thiscase, to an oral hearing. Section 17 of the Act expressly gives the Boardbroad discretion to hold hearings in writing. There was nothing about thehearing in this case that demanded an oral hearing or cross-examinationof witnesses. There were no issues of credibility, and the evidence wasrelatively straightforward. The procedures that were adopted providedthe appellants with all necessary opportunities to address the inferencesthat could be drawn from Dr. Chow’s report and from other evidence.None of the parties objected to the hearing being in writing.

65 The appellants also say that the Board had a duty to advise them thatit intended to find that there was a need for 137 new licences to be is-


sued, and to give them an opportunity to increase the number of licencesthat they were seeking to that number. In their factum, they say:

[T]here was no evidence that the Vancouver Taxi Companies wereunwilling or unable to fully meet any demand in downtown Vancou-ver that the Board might find, only that they followed the advice ofProfessor Chow and the preference of City staff, and adopted a care-ful, incremental approach to increasing the size of their fleets.

It was therefore incumbent on the Board, before it made a finding onthe “totality of the evidence” of a public need for the service the Sub-urban Taxi Companies proposed to provide, to advise the VancouverTaxi Companies that the Board intended to find that 137 additionalvehicles were required to address the public demand for taxis at peakhours, and determine whether the Vancouver Taxi Companies wereprepared to increase their application from 99 additional vehicles to137 additional vehicles.

66 As I have noted, it is evident that the Vancouver taxi companies con-sider themselves to be entitled to a first right of refusal on any taxilicences for trips originating in the City of Vancouver. It is equally evi-dent that the statutory regime does not confer such a right on them. TheBoard concluded that, given the existing excess capacity of the suburbantaxi companies, it was desirable to issue some licences to them. Thatfinding was open to the Board, and it was not incumbent on it to firstoffer the licences to the Vancouver taxi companies, particularly as theyhad not applied for them.

67 In my view, the procedures adopted by the Board were open to it, andwere fair to the Vancouver taxi companies, as well as to the suburbanapplicants. I would not give effect to the appellants’ first ground ofappeal.

B. Patently Unreasonable Finding of Fact68 The appellants’ second ground of appeal alleges that the Board made

a patently unreasonable finding of fact in determining the magnitude ofthe need for taxi services in downtown Vancouver on Friday and Satur-day nights. They contend that the evidence did not support a finding thatthe market was sufficient to require the licencing of 137 additionalvehicles.

69 The Board, of course, had a great deal of evidence before it on thequestion of the public need for additional licences to be granted. In itsdecision, the Board noted, in particular, the evidence set out in the Chow


report, the fleet utilization data provided by the Vancouver taxi compa-nies, the report prepared by the City of Vancouver staff, and the anecdo-tal information provided by various applicants. The Board commented:

These highlight that in the entertainment district at peak periods onweekends there is limited public transportation, insufficient taxi ca-pacity, and the need to clear patrons, who have been drinking alco-hol, from the area as quickly as possible.

70 As all of the applicants agreed that there was a need for new authori-zations to be issued, it is not at all surprising that the Board concludedthat the requirement to show public need had been satisfied.

71 The Board recognized that assessing the magnitude of the need wasdifficult. In reaching the conclusion that 137 licences should be issued, itsaid:

As the Board has noted previously with additional vehicle applica-tions, especially those seeking numerous vehicles, it is difficult todetermine the precise extent of the unmet public need. This is exacer-bated when dealing with a public need that focuses on a weekendspike in demand in a specific “entertainment district” of the City ofVancouver and the need for taxi service outside of this entertainmentdistrict. The Board finds that the evidence overall supports the ap-proval of 137 vehicles that would be authorized to provide taxi ser-vice in the Downtown Vancouver Entertainment District onweekends....

Further, the Board considered the Chow Report and Dr. Chow’s ob-servation that the peak period weekend taxi market in Vancouver canabsorb, incrementally, the addition of 154 vehicles. It also consideredexcess capacity available to the suburban taxi applicants. Dr. Chowfound the non-Vancouver licensed taxis serve this peak period mar-ket by between 9% and 16%. There was a risk to the Vancouver taxiapplicants if they applied for a total of 154 vehicles before a furtherassessment was made of the service and productivity impact of 100vehicles as well as the effectiveness of enforcement.

The Board is confident that approving 137 vehicles will address pub-lic demand for taxis at peak periods on weekends, increase publicconfidence in a reliable peak period taxi service and maintain theoverall taxi industry’s health and viability.

72 The appellants argue that the Board misapprehended Dr. Chow’s re-port and his opinions on the capacity of the Vancouver market to absorbmore taxis.


73 I am not persuaded that the Board was under any misapprehensionswith respect to the evidence. Its report fully explores the available statis-tics and fully analyses Dr. Chow’s report. The Board understood the sig-nificance and limitations of the evidence concerning the “pilot project”.In particular, it understood that during the pilot project, only 65 addi-tional taxis had been authorized to operate. The Board also understoodthat while the addition of 65 taxis had improved the situation, there con-tinued to be an under-supply problem, and there continued to be in-stances in which customers were refused service from downtown Van-couver to suburban locations. The Board noted that the demand forservice had not been met during the pilot project:

As the 65 TOPS were absorbed during the peak periods, the Boardhas determined that demand still exceeds supply. The reality is thateven with the TOPS, the public need was not met.

74 The evidence before the Board clearly supported the issuance of asubstantial number of new licences. That number was clearly more thanthe 65 temporary operating permits that were in existence during the pi-lot project. It was also clear that part of the existing demand was beingmet by vehicles that were not licenced to operate in Vancouver — prima-rily by suburban taxis. Elimination of such unlicensed taxis would raisethe need for new licences to a number greater than 154.

75 I do not read the Board’s statement that it “considered the Chow Re-port and Dr. Chow’s observation that the peak period weekend taxi mar-ket in Vancouver can absorb, incrementally, the addition of 154 vehi-cles” as suggesting that there was a proven demand for 154 morevehicles than were actually operating in the market. Rather, it was anobservation that the number of licenced taxis fell short of fulfilling thedemand by at least 154 vehicles.

76 The Board had some evidence before it that if licences were providedto suburban taxi companies, they would increase their efforts to ensurethat their vehicles were not operated in Vancouver except where author-ized to do so. Further, the Board took into account the excess capacity ofthe suburban taxi companies in determining how many licences eachwould receive.

77 In short, the Board fully understood the statistics that were before it,as well as the limitations of the data. There was no mathematical formulaavailable to determine the precise number of licences that should be is-sued. Dr. Chow’s suggestion that 100 licences be issued appears to havebeen deliberately conservative. It is also noteworthy that the recommen-


dation was not part of his rigorous report, but rather advice to the Van-couver taxi companies, and provided to reflect their best interests.

78 The Board’s finding that public demand was sufficient for the issu-ance of 137 licences in total was supportable on the evidence, and was afinding open to it. I would not accede to the appellants’ contention thatthe finding was patently unreasonable.

C. Deference to the City’s Licencing Program79 The third ground of appeal presented by the appellants is, in essence,

an argument that the Board is required to defer to the views of the City ofVancouver in respect of taxi licences for operations in Vancouver. Theappellants describe this ground of appeal as follows:

The Board’s decision to grant the Suburban Taxi Companies author-ity to operate taxis within the City in excess of the number permittedby City by-law, without any evidence that the City would amend theby-law and license the new vehicles, was patently unreasonable.

80 As I have indicated, this argument was not raised in the court below,and the respondents object to the argument being advanced for the firsttime on appeal. I agree with the respondents that if the appellants wishedto raise this argument, they should have done so in the Supreme Court,and, indeed, before the Board. That said, there does not appear to be anyreal prejudice to the respondents in allowing the matter to be raised onappeal. As the issue has been fully canvassed in the argument before thisCourt, and as I am not persuaded that it is meritorious, I am prepared toassume, for the purposes of this appeal, that it is properly before thecourt. I will, therefore, proceed with an analysis of the issue.

81 Section 317(1)(l) and (m) of the Vancouver Charter, S.B.C. 1953, c.55 are as follows:

317(1) [Vancouver City] Council may make by-laws

. . .

(l) for regulating chauffeurs and other drivers of vehiclesused by carriers on a street in connection with theirbusiness;

(m) for regulating the number of vehicles with respect towhich persons may be licensed in any class of carriers ....

82 Under the authority of those provisions, Vancouver City Council hasenacted provisions of the city’s “Vehicles for Hire By-law no. 6066”. Itcontains the following provisions (while there are some very minor


amendment in the wording of the bylaw since the date of the Board’shearings, none represent material changes):

7.(1) No person shall own, operate or engage in a business involvinga vehicle for hire without holding a valid and subsisting City licensetherefor.

(2) Every person applying for a license pursuant to this By-law shallmake application to the Inspector on the form provided for that pur-pose, and at the time of making the application shall pay to the Citythe license fee specified in Schedule “A” of this By-law.

(3) On receipt of an application for a license and before issuing thelicense, the Inspector must ascertain whether the applicant has at anytime within the preceding five years been convicted of any offenceunder any statute of Canada or the Province of British Columbia orunder any city by-law, and the Inspector, if of the belief that the na-ture of the offence relates to the business, trade, profession, or otheroccupation for which the application has been made, must refuse toissue the license. The Inspector shall also refuse to issue such licenseunless satisfied that:

(a) the applicant is 19 years of age or older; can speak,read and write the English language; possesses a workingknowledge of city streets; and is willing and able to main-tain a satisfactory service to the public during the cur-rency of the license;

. . .

(c) the vehicle with respect to the operation of which alicense has been applied for is suitable for the use in-tended, is equipped as required by this By-law, and com-plies in all respects with applicable provisions of the Mo-tor Vehicle Act and the Highway Act;

. . .

(e) each of the applicant and any motor vehicle the appli-cant intends to use or will use in the business, trade, pro-fession, or other occupation for which the applicant is ap-plying for the license complies with the requirements ofthis By-law; and

(f) the number of licenses the applicant will hold underthis section 7 does not exceed the number of vehicle iden-tifiers held by the applicant for passenger directed vehi-cles that are for use as taxicabs and dual taxicabs under alicence or licences approved by the Passenger Transporta-tion Board.


. . .

(5) Subject to the provisions of this section, the Inspector shall issuea license to an applicant.

. . .

23. (1) The number of taxicabs owned or operated by persons li-censed under this by-law must not exceed 475 taxicabs and 113 dualtaxicabs, except that this subsection does not apply to taxicabs oper-ating under a temporary permit approved by the Passenger Transpor-tation Board.

(2) Every person to whom a taxicab license has been granted shallkeep an established place of business within the City of Vancouverand shall notify the Chief Constable and Inspector in writing of theaddress of the premises where such person keeps books and recordsof operation of the business, and such license shall be kept conspicu-ously posted up in such premises. Such person shall immediately no-tify the Chief Constable and the Inspector in writing of any change insuch address, and no license shall be issued for the operation of ataxicab unless the applicant has a business telephone and is listed inthe telephone directory under a trade name. The place of businessherein referred to may be the business premises of anyone open dur-ing regular business hours.

. . .

83 The Passenger Transportation Board and the City of Vancouver have,to some degree, overlapping jurisdiction in the licencing of taxis. In or-der to operate a taxi within the City, a person must comply with both thePassenger Transportation Act, and the Vehicles for Hire By-law. This isnot an unusual situation. Many areas that may be regulated under munici-pal bylaws are also regulated by provincial or federal statutes. Where thatis the case, both can subsist (assuming they were lawfully enacted), andwill have force unless there is an actual conflict in operation betweenthem: 114957 Canada Ltee (Spray-Tech, Societe d’arrosage) c. Hudson(Ville), 2001 SCC 40 (S.C.C.). An actual operational conflict will onlyexist where it is impossible to comply with both the statute and the by-law, such as where a bylaw prohibits activities that a statute requires.

84 In the case of taxi licencing in Vancouver, a person must have both alicence issued by the Passenger Transportation Board and a taxi licenceissued by the City of Vancouver. The City bylaw, in s. 23, limits the totalnumber of taxi licences to 588 (475 taxicabs and 113 dual taxicabs). Un-less the City amends that section, the new licences issued by the Board(including both the 99 licences issued to the appellants and the 38 issued


to the respondents) will be not be of any value. That, however, does notamount to an operational conflict between the bylaw and the Board’sdecision.

85 A municipality, acting within its jurisdiction, may, in some instances,be able to frustrate the intentions of a provincially-constituted body, alsoacting within its jurisdiction: see, for example, British Columbia LotteryCorp. v. Vancouver (City), 1999 BCCA 18 (B.C. C.A.). Such a situationdoes not raise issues of jurisdiction. Both the provincially-constitutedbody and the municipality may exercise their authority and neither iscompelled to conform to the will of the other.

86 The Passenger Transportation Act fully sets out the jurisdiction ofthe Board, and it is required to act in compliance with the statute. Noth-ing in the statute requires it to predict what legislative actions the City ofVancouver might take. Further, it is required to make its own licencingdecisions based on statutory criteria. It cannot either defer to or delegateits functions to the City of Vancouver.

87 In short, both the Passenger Transportation Board and the municipalgovernment of the City of Vancouver are subordinate authorities whosepowers derive from Provincial statutes. Neither is required to defer to theother, and both are required to operate as independent authorities withintheir statutory spheres. As the Supreme Court of Canada’s decision inSpraytech illustrates, mere differences in the ways that two competentbodies choose to regulate a field will not require a court to find one orthe other to have paramount or dominant authority.

88 I would therefore reject the appellants’ final ground of appeal.89 In rejecting the argument, I acknowledge that, at some point in the

future, a situation may arise in which a person is unable to comply withboth the Board’s decision and the City’s bylaw. For instance, the licencesissued by the Board do not allow persons to operate taxis except duringcertain hours on Friday and Saturday nights. Section 23(10) of the Vehi-cles for Hire By-law, on the other hand, requires that the holder of alicense for operating a taxicab “be available for hire for a period of notless than 10 hours in each 24 hours, and for not less than 6 days in eachcalendar week”. If the City does, eventually, issue taxicab licences to theoperators who have obtained the new licences from the Board, those per-sons might face a genuine operational conflict in deciding whether toabide by the terms of the licences issued by the Board or the terms of theCity of Vancouver bylaw. The bylaw would compel them to operate in amanner prohibited by the Board.

Yellow Cab Co. v. British Columbia Goepel J.A. 475

90 If such a situation arises, and cannot be resolved by interpreting thelimits of the authority of either the Board or the City, the courts may becalled upon to declare one licencing regime or the other to be paramount.We are not, at present, in such a situation of operational conflict, how-ever, and I would therefore decline the appellants’ invitation to addressthe issue of which body is the paramount authority in respect of taxicablicencing.

V. Conclusion91 For these reasons, I would dismiss the appeal.

Chiasson J.A.:

I Agree:

Goepel J.A.:

I Agree:

Appeal dismissed.


[Indexed as: United States of America v. ’Isa]

The Attorney General of Canada on Behalf of the United Statesof America, Respondent/Respondent and Faruq Khalil

Muhammad ’Isa also known as Khalil Muhammad ’Isa,Sayfildin Tahir Sharif and Tahir Sharif Sayfildin,

Appellant/Applicant

Alberta Court of Appeal

Docket: Edmonton Appeal 1203-0265-A, 1303-0175-A

2014 ABCA 256

Jack Watson, Myra Bielby, Russell Brown JJ.A.

Heard: May 1, 2014


Criminal law –––– Extradition proceedings — Extradition from Canada —Evidence at hearing — General principles –––– Accused’s extradition wassought by United States on charge that accused was member of a terrorist facili-tation network operating in Iraq, Libya, Tunisia and Syria — Network was al-leged to be responsible for suicide bombings which killed U.S. and allied per-sonnel — Hearing judge rejected accused’s claim that evidence was obtained bytorture and was inadmissible — Extradition judge refused application to adduceDVD recording of appellant’s statement to U.S. investigator to support conten-tion that interview did not conform to U.S. law — Accused appealed — Appealdismissed — Extradition judge found that most of evidence was obtained fromstatements given by appellant upon arrest and from computer searches and wire-tap surveillance — Appellant’s statements were made voluntarily and there wasno breach of Charter rights — Accuracy of requesting state’s certification as tocompliance with U.S. law is not relevant issue at extradition hearing — Extradi-tion judge did not err in refusing to admit evidence.

Criminal law –––– Extradition proceedings — Extradition from Canada —Remedies following disposition — Judicial review –––– Accused’s extraditionwas sought by United States on charge that he was member of terrorist facilita-tion network in Libya, Iraq, Tunisia and Syria responsible for two suicide bomb-ing attacks in which U.S. and allied personnel were killed — Minister orderedextradition — Accused sought judicial review on ground extraditon unjust oroppressive as he faced possibility of being sentenced to life imprisonment with-out parole — Accused also alleged Minister failed to recognize paramountcy ofCharter, surrendered accused on charge of aiding and abetting in murder notbefore extradition judge, and failed to seek assurances on use of evidence ob-

United States of America v. ’Isa 477

tained by torture — Application dismissed — Surrender not unjust or oppressivemerely because potential sentence in requesting state more severe than that inCanada — Life sentence would not shock conscience of Canadians — Min-ister’s surrender decision took into account Charter — Record clearly disclosedevidence of aiding and abetting in murder — Applicant did not submit to Min-ister that his extradition would be contrary to s. 7 of Charter because evidenceobtained from torture nor did he argue that assurances should be sought — Min-ister therefore not called upon to assess whether plausible connection had beenmade — Decision of Minister entitled to high level of deference.

Criminal law –––– Charter of Rights and Freedoms — Arrest or detention[s. 10] — Right to counsel [s. 10(b)] — General principles –––– Accused’s ex-tradition was sought by United States arising from facilitation of suicide attacksby terrorist group — Accused appealed decision of extradition judge on groundthat his Charter rights to counsel had been breached — Appeal dismissed — Ap-pellant had indicated he understood his right to remain silent — Appellant had45 minute consultation with experienced criminal defence counsel who had beenbriefed by RCMP as to nature of charges — No Charter right to have counselpresent during interview — No indication that consultation was incomplete —Counsel specifically advised appellant might be interviewed by U.S. officials —Interview did not give rise to new right to counsel — No change in jeopardyrequiring second consultation — Circumstances had not changed such that ini-tial advice which appellant received inadequate — Police did not intentionallymislead counsel.

Cases considered:

Canada (Attorney General) v. ’Isa (2012), 72 Alta. L.R. (5th) 120, (sub nom.United States of America v. Sharif) 548 A.R. 286, 2012 ABQB 641, 2012CarswellAlta 1824 (Alta. Q.B.) — referred to

Canada (Minister of Justice) v. Fischbacher (2009), 198 C.R.R. (2d) 168, 69C.R. (6th) 21, [2009] 3 S.C.R. 170, 255 O.A.C. 288, 2009 SCC 46, 2009CarswellOnt 6153, 2009 CarswellOnt 6154, (sub nom. Fischbacher v.Canada (Minister of Justice)) 248 C.C.C. (3d) 419, 394 N.R. 139, 312D.L.R. (4th) 1, [2009] S.C.J. No. 46, [2009] A.C.S. No. 46 (S.C.C.) —considered

Doyle Fowler v. Canada (Minister of Justice) (2013), 2013 CarswellQue 5330,2013 QCCA 1001, EYB 2013-222821 (C.A. Que.) — referred to

Doyle Fowler v. Canada (Minister of Justice) (2013), 2013 CarswellQue 9118,2013 CarswellQue 9119, [2013] S.C.C.A. No. 264 (S.C.C.) — referred to

Doyle Fowler c. Canada (Ministre de la Justice) (2011), 2011 QCCA 1076,2011 CarswellQue 8095, 2011 CarswellQue 11976, [2011] R.J.Q. 1230, 96C.R. (6th) 200, EYB 2011-191713 (C.A. Que.) — considered


France (Republic) v. Diab (2014), 2014 ONCA 374, 2014 CarswellOnt 6372,(sub nom. France v. Diab) 120 O.R. (3d) 174, [2014] O.J. No. 2305 (Ont.C.A.) — considered

Idziak v. Canada (Minister of Justice) (1992), 144 N.R. 327, 17 C.R. (4th) 161,9 Admin. L.R. (2d) 1, 12 C.R.R. (2d) 77, [1992] 3 S.C.R. 631, 59 O.A.C.241, 77 C.C.C. (3d) 65, 97 D.L.R. (4th) 577, 1992 CarswellOnt 1000, 1992CarswellOnt 113, [1992] S.C.J. No. 97, EYB 1992-67555 (S.C.C.) — re-ferred to

Kindler v. Canada (Minister of Justice) (1991), 8 C.R. (4th) 1, [1991] 2 S.C.R.779, 67 C.C.C. (3d) 1, 84 D.L.R. (4th) 438, 129 N.R. 81, 6 C.R.R. (2d) 193,1991 CarswellNat 3, 45 F.T.R. 160 (note), 1991 CarswellNat 831, [1991]S.C.J. No. 63, EYB 1991-67266 (S.C.C.) — considered

Lai v. Canada (Minister of Citizenship & Immigration) (2005), 253 D.L.R. (4th)606, 332 N.R. 344, 2005 CarswellNat 886, 2005 FCA 125, 2005 Car-swellNat 7390, 2005 CAF 125, [2005] F.C.J. No. 584, [2005] A.C.F. No.584 (F.C.A.) — referred to

Lai v. Canada (Minister of Citizenship & Immigration) (2005), 2005 Car-swellNat 2454, 2005 CarswellNat 2455, (sub nom. Sing v. Canada (Ministerof Citizenship & Immigration) 346 N.R. 399 (note), [2005] S.C.C.A. No.298 (S.C.C.) — referred to

Miranda v. Arizona (1966), 10 A.L.R.3d 974, 384 U.S. 436, 16 L.Ed.2d 694, 86S.Ct. 1602 (U.S. Sup. Ct.) — referred to

R. v. Edmonton (2014), 2014 CarswellAlta 869, 2014 ABCA 186, [2014] A.J.No. 567 (Alta. C.A.) — referred to

R. v. Evans (1991), 4 C.R. (4th) 144, [1991] 1 S.C.R. 869, 63 C.C.C. (3d) 289,124 N.R. 278, 3 C.R.R. (2d) 315, 1991 CarswellBC 918, 1991 CarswellBC417, [1991] S.C.J. No. 31, EYB 1991-67049 (S.C.C.) — considered

R. v. Khawaja (2012), 97 C.R. (6th) 223, 356 D.L.R. (4th) 1, [2012] 3 S.C.R.555, 118 O.R. (3d) 797 (note), 2012 CarswellOnt 15515, 2012 CarswellOnt15516, 2012 SCC 69, 290 C.C.C. (3d) 361, 437 N.R. 42, 301 O.A.C. 200,[2012] S.C.J. No. 69 (S.C.C.) — referred to

R. v. Larosa (2002), 163 O.A.C. 108, 98 C.R.R. (2d) 210, 2002 CarswellOnt2787, 166 C.C.C. (3d) 449, [2002] O.J. No. 3219 (Ont. C.A.) — considered

R. v. Sinclair (2010), 324 D.L.R. (4th) 385, 406 N.R. 1, 2010 SCC 35, 2010CarswellBC 2664, 2010 CarswellBC 2679, [2010] 2 S.C.R. 310, 77 C.R.(6th) 203, 259 C.C.C. (3d) 443, 293 B.C.A.C. 36, 218 C.R.R. (2d) 1, 496W.A.C. 36, [2010] A.C.S. No. 35, [2010] S.C.J. No. 35 (S.C.C.) —considered

R. v. V. (S.E.) (2009), 2009 ABCA 108, 2009 CarswellAlta 400, 448 A.R. 351,447 W.A.C. 351, 2 Alta. L.R. (5th) 157, [2009] A.J. No. 311 (Alta. C.A.) —referred to

Suresh v. Canada (Minister of Citizenship & Immigration) (2002), 2002 SCC 1,37 Admin. L.R. (3d) 159, [2002] 1 S.C.R. 3, 2002 CarswellNat 7, 2002 Car-

United States of America v. ’Isa 479

swellNat 8, 18 Imm. L.R. (3d) 1, 208 D.L.R. (4th) 1, 281 N.R. 1, 90 C.R.R.(2d) 1, [2002] S.C.J. No. 3, REJB 2002-27423 (S.C.C.) — considered

United States v. Anekwu (2009), 69 C.R. (6th) 48, [2009] 11 W.W.R. 383, 2009SCC 41, 2009 CarswellBC 2516, 2009 CarswellBC 2517, (sub nom. UnitedStates of America v. Anekwu) 393 N.R. 77, (sub nom. United States ofAmerica v. Anekwu) 275 B.C.A.C. 282, (sub nom. United States of Americav. Anekwu) 465 W.A.C. 282, 197 C.R.R. (2d) 315, [2009] 3 S.C.R. 3, (subnom. United States of America v. Anekwu) 247 C.C.C. (3d) 99, 96 B.C.L.R.(4th) 1, 310 D.L.R. (4th) 1, [2009] S.C.J. No. 41, [2009] A.C.S. No. 41(S.C.C.) — referred to

United States v. Burns (2001), 39 C.R. (5th) 205, 265 N.R. 212, [2001] 3W.W.R. 193, [2001] 1 S.C.R. 283, 85 B.C.L.R. (3d) 1, 2001 SCC 7, 2001CarswellBC 272, 2001 CarswellBC 273, 151 C.C.C. (3d) 97, 195 D.L.R.(4th) 1, 81 C.R.R. (2d) 1, 148 B.C.A.C. 1, 243 W.A.C. 1, REJB 2001-22580,[2001] S.C.J. No. 8 (S.C.C.) — considered

United States v. Cail (2009), 199 C.R.R. (2d) 362, 254 C.C.C. (3d) 205, 470W.A.C. 303, 469 A.R. 303, 15 Alta. L.R. (5th) 46, 2009 CarswellAlta 1679,2009 ABCA 345 (Alta. C.A.) — referred to

United States v. Earles (2003), (sub nom. United States of America v. Earles)171 C.C.C. (3d) 116, 2003 BCCA 20, 2003 CarswellBC 28, 176 B.C.A.C.231, 290 W.A.C. 231, [2003] B.C.J. No. 46 (B.C. C.A.) — considered

United States v. Francis (2010), 36 Alta. L.R. (5th) 352, [2011] 4 W.W.R. 666,(sub nom. United States of America v. Francis) 265 C.C.C. (3d) 11, (subnom. Canada (Attorney General) v. Francis) 493 A.R. 215, (sub nom.Canada (Attorney General) v. Francis) 502 W.A.C. 215, 2010 ABCA 353,2010 CarswellAlta 2319, [2010] A.J. No. 1364 (Alta. C.A.) — referred to

United States v. Kwok (2001), 152 C.C.C. (3d) 225, 197 D.L.R. (4th) 1, 145O.A.C. 36, 267 N.R. 310, [2001] 1 S.C.R. 532, 81 C.R.R. (2d) 189, 2001SCC 18, 2001 CarswellOnt 966, 2001 CarswellOnt 967, 41 C.R. (5th) 44,[2001] S.C.J. No. 19, REJB 2001-23416 (S.C.C.) — referred to

United States v. Lake (2008), 72 Admin. L.R. (4th) 30, (sub nom. Lake v.Canada (Minister of Justice)) 236 O.A.C. 371, (sub nom. Lake v. Canada(Minister of Justice)) 171 C.R.R. (2d) 280, 2008 SCC 23, 2008 CarswellOnt2574, 2008 CarswellOnt 2575, (sub nom. Lake v. Canada (Minister of Jus-tice)) 373 N.R. 339, 56 C.R. (6th) 336, 230 C.C.C. (3d) 449, (sub nom.United States of America v. Lake) 292 D.L.R. (4th) 193, (sub nom. Lake v.Canada (Minister of Justice)) [2008] 1 S.C.R. 761, [2008] S.C.J. No. 23(S.C.C.) — considered

United States v. Latty (2004), 185 O.A.C. 1, 183 C.C.C. (3d) 126, 237 D.L.R.(4th) 652, 2004 CarswellOnt 981, (sub nom. United States of America v.Latty) 116 C.R.R. (2d) 368, [2004] O.J. No. 1076 (Ont. C.A.) — referred to


United States v. Ranga (2012), 2012 CarswellBC 491, 2012 BCCA 82, 317B.C.A.C. 219, 540 W.A.C. 219, [2012] B.C.J. No. 329 (B.C. C.A.) — re-ferred to

United States v. Saad (2004), 184 O.A.C. 282, 183 C.C.C. (3d) 97, 237 D.L.R.(4th) 623, 21 C.R. (6th) 317, 2004 CarswellOnt 1106, [2004] O.J. No. 1148(Ont. C.A.) — considered

United States v. Turenne (2004), 2004 MBCA 79, 2004 CarswellMan 216, 184Man. R. (2d) 228, 318 W.A.C. 228, [2004] M.J. No. 190 (Man. C.A.) —referred to

United States of America v. Aneja (2014), 2014 ONCA 423, 2014 CarswellOnt6913, [2014] O.J. No. 2500 (Ont. C.A.) — referred to

United States of America v. Goodyer (2014), 2014 ABCA 164, 2014 Carswell-Alta 756, [2014] A.J. No. 489 (Alta. C.A.) — referred to

United States of America v. Mathurin (2013), 2013 ONSC 2575, 2013 Carswell-Ont 5183, 281 C.R.R. (2d) 177, [2013] O.J. No. 1957 (Ont. S.C.J.) — re-ferred to

United States of America v. Odale (2014), 2014 ABCA 12, 2014 CarswellAlta31, 566 A.R. 298, 597 W.A.C. 298, [2014] A.J. No. 15 (Alta. C.A.) — re-ferred to

United States of America v. Sharif (2012), 541 A.R. 176, 2012 ABQB 344, 2012CarswellAlta 1939, (sub nom. United States of America v. ’Isa) 263 C.R.R.(2d) 60, [2012] A.J. No. 544 (Alta. Q.B.) — referred to

United States of America v. Sriskandarajah (2012), 97 C.R. (6th) 267, 356D.L.R. (4th) 43, (sub nom. Sriskandarajah v. United States of America)[2012] 3 S.C.R. 609, 2012 SCC 70, 2012 CarswellOnt 15585, 2012 Cars-wellOnt 15586, 290 C.C.C. (3d) 349, 45 Admin. L.R. (5th) 1, (sub nom.United States of America v. Nadarajah) 437 N.R. 107, (sub nom. UnitedStates of America v. Nadarajah) 301 O.A.C. 264, [2012] S.C.J. No. 70,[2012] A.C.S. No. 70 (S.C.C.) — referred to


Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982,being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11

Generally — referred tos. 1 — considereds. 6 — considereds. 7 — considereds. 10(b) — considereds. 14 — considereds. 24(2) — considered

Criminal Code, R.S.C. 1985, c. C-46s. 83.19 [en. 2001, c. 41, s. 4] — referred tos. 269.1(4) [en. R.S.C. 1985, c. 10 (3rd Supp.), s. 2] — considered

United States of America v. ’Isa The Court 481

s. 465 — referred tos. 745 — referred to

Extradition Act, S.C. 1999, c. 18Generally — referred tos. 3(1) — considereds. 15 — referred tos. 15(3)(c) — considereds. 29(1) — considereds. 29(1)(a) — considereds. 32(2) — considereds. 33 — considereds. 33(1)(b)(ii) — referred tos. 44(1) — referred tos. 44(1)(a) — considereds. 49(a) — referred tos. 53 — considereds. 53(b) — considereds. 53(b)(ii) — considereds. 58 — referred tos. 58(b) — considered

Treaties considered:

Convention against Torture and other Cruel, Inhuman or Degrading Treatmentor Punishment, 1984, C.T.S. 1987/36; 23 I.L.M. 1027; 1465 U.N.T.S. 85; U.N.Doc. A/39/51

Article 15 — referred to

APPEAL from a decision reported at United States of America v. ’Isa (2012),2012 ABQB 645, 2012 CarswellAlta 1822, 83 Alta. L.R. (5th) 397, 550 A.R.243 (Alta. Q.B.) issuing committal order; APPLICATION for judicial review ofdecision of Minister of Justice to surrender applicant to the United States.

S.A. Dej, for Respondent/RespondentP.J. Royal, Q.C., B.H. Aloneissi, Q.C., N.J. Whitling, for Appellant/Applicant

The Court:

I. Introduction1 The appellant Faruq Khalil Muhammad ’Isa, also known as Khalil

Muhammad ’Isa, Saylfildin Tahir Sharif and Tahir Sharif Saylfildin, ap-peals a committal order issued by a justice of the Court of Queen’sBench (the “extradition judge”) under section 29(1) of the Extradition


Act, SC 1999, c 18 (the “Act”).1 He also seeks judicial review of thedecision of the Minister of Justice (the “Minister”) to surrender him tothe United States of America to answer to charges against him there. Forthe reasons which follow, we dismiss both the appeal and the applicationfor judicial review.

II. Background

A. Facts2 By a diplomatic note dated March 17, 2011, the United States re-

quested extradition of the appellant, a naturalized Canadian citizen, tostand trial at the United States District Court for the Eastern District ofNew York on charges of conspiracy to murder Americans abroad andprovision of material support to terrorist conduct. An amended diplo-matic note from the United States dated January 30, 2012 restated thesecharges but added five counts of aiding and abetting the murder of USnationals abroad.

3 The United States alleges the appellant was a member of a “terrorist‘facilitation’ network” operating in Iraq, Libya, Tunisia and Syria, whosemembers recruited “Jihadist” so-called “fighters” in Tunisia and trans-ported them into Iraq to execute attacks against US and coalition forcesthere. It further alleges that this network is responsible for two suicidebombings committed by these fighters: the first, on March 31, 2009 at anIraqi police station in Mosul, Iraq killed seven Iraqi police officers; andthe second, on April 10, 2009 at a US military base in Mosul killed fiveUS soldiers and an unspecified number of Iraqis.

4 The appellant was arrested in Edmonton by RCMP officers on Janu-ary 19, 2011 after a lengthy investigation involving Canadian and USlaw enforcement officials.

5 On April 18, 2011, the Minister issued an Authority to Proceed undersection 15 of the Act, authorizing the Attorney General of Canada to seekan order for the appellant’s committal. As required by section 15(3)(c),the Authority to Proceed identified two Canadian offences corresponding

1Section 29(1) provides that a judge shall order the committal of the persontaken into custody to await surrender for prosecution abroad if (inter alia) thereis evidence admissible under the Act of conduct that, had it occurred in Canada,would justify committal for trial in Canada on the offence set out in the authorityto proceed issued by the Minister of Justice.


to the conduct alleged in the United States’ request, being: (1) conspiracyto commit murder, contrary to section 465 of the Criminal Code; and (2)facilitating terrorist activity, contrary to section 83.19 of the CriminalCode. It is common ground among the parties that the Authority to Pro-ceed responded to the first diplomatic note received from the UnitedStates dated March 17, 2011, which cited charges of conspiracy to mur-der and provision of material support to terrorist conduct. No substitutedor amended Authority to Proceed was issued prior to the committal hear-ing in response to the amended diplomatic note dated January 30, 2012setting out five counts of aiding and abetting murder, nor did the Attor-ney General apply to amend the Authority to Proceed in the course of thecommittal hearing.

6 The evidence tendered at the committal hearing comprised, in sub-stantial part, the certified record of the case filed by the United Statesunder section 33 of the Act.2 The record reproduces the appellant’s com-munications with so-called fighters and other “facilitators” by email andrecorded telephone conversations.3 The Attorney General argued thatthese communications show the appellant assisted members of the terror-ist facilitation network, attempted to persuade several unidentified indi-viduals as well as members of the appellant’s family to join the network,took steps to send money to the network and offered to conduct attackson behalf of the network.

7 The record of the case also refers to: (1) statements allegedly made byan individual identified as “Fighter 1” in the course of interviews (or“debriefings”) with US Justice Department investigators in Mosul; (2)statements allegedly made by the appellant during an interview with asingle US Justice Department Investigator, John Mazzella, following theappellant’s arrest in Edmonton on January 19, 2011; and (3) InvestigatorMazzella’s own evidence regarding materials obtained from computer

2Section 33 provides that the record of the case must include, in the case of aperson sought for the purpose of prosecution, a document summarizing the evi-dence available to the extradition partner for use in the prosecution. It may alsoinclude other relevant documents, including documents respecting the identifica-tion of the person sought for extradition.3These were obtained pursuant to an order obtained from the Court of Queen’sBench authorizing data-mining of the appellant’s computer hard-drive and wire-tapping of his telephone.


searches and regarding code words and terminology used by the networkmembers in the recorded communications.

8 Prior to his interview with Investigator Mazzella on the day of hisarrest, the appellant was also interviewed by members of the RCMP.While statements from this interview do not form part of the record ofthe case, they did form part of the record at the committal hearing and, aswe will discuss below, are pertinent to several grounds of appeal.

9 On October 19, 2012, the extradition judge ordered the appellant’scommittal into custody to await extradition on the offences listed in theAuthority to Proceed. This followed his dismissal of the appellant’s ap-plication for further disclosure of information about, inter alia, whetherany of the witnesses were tortured before providing those statements; anda voir dire into the admissibility under sections 7, 10(b) and 24(2) of theCharter of Rights and Freedoms of statements made by the appellant tothe RCMP and to Investigator Mazzella during his post-arrest interviews,which the Crown had applied to have included in the record of the case.

10 On June 25, 2013, the Minister ordered the appellant’s surrender tothe United States.

B. The Decisions Below11 The extradition judge issued three decisions: a decision on the appel-

lant’s request for an order directing the Minister to seek additional dis-closure from the United States (2012 ABQB 344 (Alta. Q.B.)); a decisionon the admissibility of evidence obtained in the course of interviews ofthe appellant on the day of his arrest by members of the RCMP and In-vestigator Mazzella (2012 ABQB 641 (Alta. Q.B.)); and a decision tocommit the appellant into custody to await surrender (2012 ABQB 645(Alta. Q.B.)).

12 In his reasons on disclosure, the extradition judge recounted the ap-pellant’s allegations that US investigative or enforcement personnel, ortheir Iraqi agents, inflicted torture upon the appellant’s brother, and thatsome of the individuals who provided information to the investigationwere tortured. The extradition judge found that most of evidence referredto in the record of the case was obtained from the statements given by theappellant upon his arrest and from the computer searches and wiretapsurveillance. That evidence, he further found, did not come from personswho were said to have been tortured. He also concluded that the allega-tions of torture did not warrant further disclosure because they lacked an


air of reality and because they would not be relevant to issues properlyraised in the extradition hearing.

13 In his reasons on the voir dire, the extradition judge found that theappellant’s statements were made voluntarily, and that neither the rightto silence protected by section 7 of the Charter nor the common lawconfessions rule was breached. The appellant had argued that membersof the RCMP had denied him an opportunity to consult meaningfullywith counsel and to have an interpreter, thereby breaching his rightsunder sections 10(b) and 14 of the Charter. The extradition judge foundthat the appellant had spoken to experienced counsel, controlled thelength of the call, and was informed of the jeopardy confronting himboth in Canada and the US. He also found the appellant’s capacity inEnglish was sufficiently fluent and fluid, and that the lack of an inter-preter did not amount to a breach of his Charter rights.

14 In his ruling on committal, the extradition judge found that the appel-lant was the same person sought by the United States, and that the evi-dence in the record of the case established a prima facie case against theappellant — that is, that the evidence, assuming it to be true, was suffi-cient to convict the appellant — on both counts listed in the Authority toProceed. He held that the record of the case, much of which comprisedthe appellant’s own words obtained directly through wiretaps on his tele-phone and data-mines on his computer, established two suicide bombingsin Iraq in 2009, which detonated two trucks filled with explosives result-ing in the deaths of five US soldiers, several police officers and otherIraqis. He noted a subsequent investigation which uncovered facilitatorsand fighters (eg suicide bombers); that one of the fighters identified theappellant as his facilitator; and that the appellant had direct contact withother facilitators and one fighter with respect to the bombings. The extra-dition judge therefore held that the Crown had made out a prima faciecase that the appellant had communicated with other individuals to assistin preparations for suicide bombings by promoting contacts betweenpeople, sending money, counselling on anti-detection techniques, encour-aging others to join the network and by counselling them on how to doso.

C. The Minister’s Decision15 The appellant made written submissions to the Minister opposing sur-

render and arguing that it would be contrary to sections 6 and 7 of theCharter. In detailed reasons, the Minister rejected the appellant’s sub-


missions, and ordered the appellant’s surrender to the United States onthe US offences listed in the request to surrender. The only conditionwhich the Minister imposed upon the surrender was that the death pen-alty is not to be imposed upon the appellant, which assurance is constitu-tionally required in all but “exceptional” cases: United States v. Burns,2001 SCC 7, [2001] 1 S.C.R. 283 (S.C.C.) [Burns].

III. Grounds of Appeal and of Judicial Review16 The appellant appeals the extradition judge’s decisions on disclosure,

the voir dire and committal, and says the extradition judge erred in:

(1) finding no air of reality to the allegation that information inthe ROC had been obtained through the use of torture; fail-ing to exclude evidence derived from torture; and failing toapply section 269.1(4) of the Criminal Code, which makesinadmissible any statement obtained by the use of torture;

(2) finding the appellant’s statements to be voluntary undersection 7 of the Charter;

(3) finding that the appellant’s rights under section 10(b) of theCharter were not breached;

(4) refusing to admit into evidence the DVD recording of theappellant’s statement to US authorities to show that the re-cord of the case contained unreliable statements; and

(5) finding that the appellant had facilitated terrorist activityand was involved in a conspiracy to kill US soldiers.

17 We note that ground (5) misapprehends the extradition judge’s find-ing in this regard. The extradition judge did not find that the appellanthad committed the crimes of facilitating terrorist activity and conspiracyto commit murder. He found that there was sufficient admissible evi-dence to warrant committing the appellant for trial on these offencesunder section 29(1) of the Act. Properly put, this ground of appeal is thatthe extradition judge erred in so finding. The argument is that the recordof the case contained information from torture or in breach of the appel-lant’s section 7 and section 10(b) Charter rights, which ought to havebeen excluded by the extradition judge and that, shorn of that inadmissi-ble information, the record of the case was insufficient to justify commit-tal. So understood, ground (5) is not an independent ground of appeal,but rather builds on grounds (1), (2) and (3).


18 By his application for judicial review of the Minister’s decision tosurrender the appellant to the United States, the appellant submits:

(1) surrender would be unjust or oppressive having regard toall the relevant circumstances within the meaning of section44(1) of the Act because the appellant faces the possibility,if convicted, of being sentenced to life imprisonment with-out parole; and

(2) the Minister’s decision is unreasonable, because:

a. he failed to recognize the paramountcy of Charterrights over other laws or treaties that might be incon-sistent with the Charter;

b. he surrendered the appellant on an additional UScharge which was not considered nor contemplatedby the extradition judge, as the charge was added byUS authorities after the committal order; and

c. he declined to seek assurances respecting the allegedpossibility of the use of torture.

19 We note that the appellant’s factum had also advanced the argumentthat his surrender to the United States was unjust or oppressive becausehe faces the possibility of indefinite pre-trial detention in military cus-tody. Before us, however, the appellant withdrew this submission in lightof an assurance which the Minister’s department received on April 8,2014 from the Acting Deputy Director of the Criminal Division of theUS Department of Justice that “upon extradition, the United States willnot detain [the appellant] in military custody of any kind.”

IV. Standard of Review20 The standard of appellate review under section 49(a) of the Act of an

order of committal is that of correctness on questions of law, and of pal-pable and overriding error on questions of mixed fact and law: UnitedStates v. Francis, 2010 ABCA 353 (Alta. C.A.) at para 7, (2010), 493A.R. 215 (Alta. C.A.).

21 The Minister’s decision to surrender a person sought by a requestingstate is reviewed on a standard of reasonableness: United States v. Lake,2008 SCC 23 (S.C.C.) at para 34, [2008] 1 S.C.R. 761 (S.C.C.) [Lake];United States of America v. Odale, 2014 ABCA 12 (Alta. C.A.) at para 5,(2014), 566 A.R. 298 (Alta. C.A.). His decision falls “at the extreme leg-islative end of the continuum of administrative decision-making” and is


viewed as being largely political in nature: Idziak v. Canada (Minister ofJustice), [1992] 3 S.C.R. 631 (S.C.C.), at 659; Lake at para 22. As theSupreme Court said in Lake (at para 34):

The assertion that interference with the Minister’s decision will belimited to exceptional cases of “real substance” reflects the breadthof the Minister’s discretion; the decision should not be interferedwith unless it is unreasonable ....

22 So long, therefore, as the Minister’s decision conforms to the require-ments of the Act and the Charter and falls within a range of reasonableoutcomes, and so long as the Minister considered the relevant facts andreached a defensible conclusion based on those facts, his decision to sur-render is entitled to deference. And, in ensuring compliance with theCharter, a reviewing court must be mindful that the Minister’s role callsfor a fact-driven inquiry involving the weighing of various factors pos-sessing “a negligible legal dimension”: Suresh v. Canada (Minister ofCitizenship & Immigration), 2002 SCC 1 (S.C.C.) at para 39, [2002] 1S.C.R. 3 (S.C.C.). These factors include his responsibility to ensure thatCanada fulfills its international obligations to treaty partners.

V. The Extradition Judge’s Decision to Commit

A. Allegations of Torture23 The appellant had applied for disclosure of the circumstances in

which various individuals identified in the record of the case had beeninterrogated, with the aim of making a further application to excludesuch portions of the record of the case derived from their statements onthe ground that those statements resulted from torture: 2012 ABQB 344(Alta. Q.B.) at para 28. The extradition judge concluded that any evi-dence allegedly obtained by torture was irrelevant, since it post-dated theappellant’s arrest and there was sufficient evidence in any event. He alsofound that the evidence of torture put before him did not have an “air ofreality” warranting additional disclosure of the circumstances in whichthe underlying evidence was obtained.

24 The evidence before the extradition judge regarding the alleged use oftorture in this matter comprised:

(1) an affidavit sworn by the appellant on February 27, 2012,stating his belief that the allegations against him are based


on statements from individuals who have been tortured,comprising:

a. an individual he believes to be identified in the re-cord of the case as “Facilitator 4”, who told the ap-pellant that “he had provided a statement against meto the authorities but the statement was false becausethey had tortured him”, and whose family had re-layed to the appellant details of this person’s torture;

b. an individual he believes to be identified in the re-cord of the case as “Facilitator 2”, and whom the ap-pellant believes was tortured into making allegationsagainst the appellant; and

c. the appellant’s brother, whom the appellant believesto be identified in the record of the case as“Facilitator 3”, and whom the appellant believes wastortured during a term of imprisonment in Iraq. Theappellant also deposes to his “experience while liv-ing in Iraq, and from people that I have spoken to,and from general knowledge that a number of torturetechniques are used in Iraq ....”;

(2) an affidavit sworn by Shaykh Sheikh on March 13, 2012.He deposes that, on February 26, 2012, he served as atranslator for the appellant’s counsel on two telephonecalls. The first was with a woman who identified herself asthe lawyer for the appellant’s brother (whom, again, the ap-pellant believes to be referred to in the record as“Facilitator 3”), who expressed “reluctance and fear” aboutproviding an affidavit to present at the appellant’s extradi-tion hearing. The second telephone call was with the appel-lant’s brother (that is, “Facilitator 3”). That individual ad-vised that he was arrested on January 22, 2011 and beatenby Iraqi and US forces for about seven days, during someof which period of time he was unconscious, perhaps by apill that was given to him by an American officer. MrSheikh further deposes that the appellant’s brother also saidthat he remained imprisoned until February 26, 2012. (Thisdate may be an error, since it was the same date as the tele-phone conversation and since the same affidavit references


the brother’s release as having occurred on February 6,2012);

(3) an affidavit sworn by Shaykh Sheikh on March 22, 2012,attaching and translating what is said to be report of a med-ical examination of the appellant’s brother dated June 20,2011, documenting “five old bruises” of “over two weeks”in age; and

(4) a 2009 US Department of Justice report and a 2010 Am-nesty International report on torture in Iraq, both of whichstate that state torture — especially of persons opposed tothe Iraqi government — is widespread.

25 In addition to this evidence, the appellant also posits that Fighter 1may have been tortured, since he is known to have been “debriefed” byUS authorities at a time when torture is known to have been used in Iraq.We propose to address that suggestion first. The record of the case in-cludes evidence obtained from statements made by Fighter 1 in thecourse of “debriefings” conducted by the FBI’s Joint Terrorism TaskForce following his arrest in Mosul, around April 26, 2009. These state-ments connect the appellant to Fighter 1 and to Fighter 1’s plans to travelto Iraq to engage in violent jihad against US forces.

26 We discuss below the substance of what is required to show an “air ofreality” to an allegation that certain evidence was obtained as a result oftorture. It suffices here to observe that, while Fighter 1 is clearly an im-portant source of the information contained in the record of the case, andquite apart from this argument not having been advanced before the ex-tradition judge, there is no evidence of the nature of Fighter 1’s “debrief-ings” that might lend an air of reality to the appellant’s allegation regard-ing torture. We therefore see no error in the trial judge’s conclusions inthis respect.

27 The statements which the appellant says Facilitators 2 and 4 gave tounspecified “authorities” do not appear in the record of the case putbefore the extradition judge. In our view, this is a complete answer to theappellant’s concerns arising from their alleged statements and to the ap-pellant’s allegations of torture made in respect of those statements. Itmust be remembered that, at the committal stage of extradition proceed-ings, the person sought’s right to disclosure is limited to materials thatare relevant to the issues properly raised in the record of the case. Sincethe United States was not relying upon evidence obtained from


Facilitators 2 and 4, there was no basis for the extradition judge to orderfurther disclosure in respect of their alleged mistreatment.

28 While — as the trial judge noted — the arrests and interview ofFacilitator 3 took place after the arrest of the appellant and the compilingof the record of the case, the interviews of Facilitator 3 in Iraq do appearto have contributed to the record of the case. In a footnote to that record(Appellant’s EKE, Vol 2, A212), it is recounted that, because Investiga-tor Mazzella had interviewed Facilitator 3 on two occasions in April2011, he was able to recognize Facilitator 3’s voice on wiretap record-ings, thereby allowing Investigator Mazzella to identify him as the appel-lant’s interlocutor. Another footnote (Appellant’s EKE, Vol 2, A219)states that Investigator Mazzella will testify that, during their interview,Facilitator 3 acknowledged that certain emails recovered from data-min-ing of the appellant’s computer contained an email address belonging tohim. It therefore cannot be said that the record of the case did not, in part,rely upon interviews of Facilitator 3.

29 It bears emphasizing that evidence obtained by torture is unreliable,offensive to the rule of law and the product of an abhorrent practiceagainst which, not later than the 15th century, “the common law ... ada-mantly set its face”: Tom Bingham, The Rule of Law (London: Penguin,2011) at 15. Use of such evidence is prohibited (except as against per-sons accused of torture) by Article 15 of the United Nations Conventionagainst Torture and Other Cruel, Inhuman or Degrading Treatment orPunishment,4 which Canada ratified in 1987. This prohibition was re-cently invoked in the extradition context by the Ontario Court of Appealin France (Republic) v. Diab, 2014 ONCA 374 (Ont. C.A.) at para 234,(2014), 120 O.R. (3d) 174 (Ont. C.A.) [Diab]:

... [I]t is beyond debate that torture-derived evidence may not be usedin legal proceedings and cannot be relied upon by a state seekingextradition or being asked to extradite. Article 15 of the Conventionagainst Torture — to which both Canada and France are signato-ries — makes this clear. It provides that parties are obliged “to en-sure that any statement which is established to have been made as aresult of torture shall not be invoked as evidence in any proceedings,except against a person accused of torture as evidence that the state-ment was made.”

4United Nations General Assembly Resolution 39/46, December 10, 1984, entryinto force June 26, 1987.


The court in Diab goes on to observe that Section 269.1(4) of the Crimi-nal Code5 incorporates this prohibition into Canadian domestic law.

30 The extradition judge was therefore obliged to consider, as he did,whether there was an “air of reality” to the allegations of torture ofFacilitator 3 justifying further disclosure of the circumstances underwhich he was interviewed: United States v. Kwok, 2001 SCC 18 (S.C.C.)at para 100, [2001] 1 S.C.R. 532 (S.C.C.); R. v. Larosa (2002), 166C.C.C. (3d) 449 (Ont. C.A.) at para 76, (2002), 163 O.A.C. 108 (Ont.C.A.) [Larosa].

31 Judicial statements on what is required to show an “air of reality” toallegations of torture have tended to state a low standard of proof: Larosaat para 78: a “realistic possibility that the allegations can be substantiatedif the orders requested are made”; United States v. Earles, 2003 BCCA20 (B.C. C.A.) at para 37, (2003), 176 B.C.A.C. 231 (B.C. C.A.): theremust be “some evidentiary foundation to the allegations”. This makessense. To require more than a realistic possibility, based upon some evi-dentiary foundation to the allegations, that the allegations can be substan-tiated if further disclosure is made would be to set the bar for furtherdisclosure at a level which will nearly always exceed the capacity of theperson sought to meet.

32 A standard which errs on the side of over-exclusion rather than under-exclusion is particularly appropriate where, as here, the allegation is ofstate torture, since the ability of a person to provide evidence that it hap-pened is likely to be even more limited than it would be in the case ofnon-state torture: Larosa at para 74. Prohibitions against admitting suchevidence will be undermined if the rules for admission set the bar forfurther disclosure at a level that is generally beyond the abilities of theperson sought to meet.

33 In our respectful view, the extradition judge erred in finding no air ofreality to the allegation that Facilitator 3 was tortured and that the infor-mation obtained from him which appears in the record of the case was

5Section 269.1(4) of the Criminal Code makes inadmissible in evidence anystatement obtained as the result of the infliction of torture at the instigation of orwith the consent or acquiescence of a peace officer, a public officer, a memberof the armed forces, or any person who may exercise powers, pursuant to a lawin force in a foreign state, that would in Canada, be exercised by a peace officer,a public officer or a member of the armed forces.


derived from torture. This was not the sort of bald allegation (in the senseof lacking any evidentiary foundation) or a cryptic, vague or otherwiseimprecise allegation of misconduct that (for example) characterized theappellant’s argument regarding Fighter 1, and that courts are rightly con-cerned might undermine for no good reason the statutory process forextradition: Larosa at para 85; United States v. Turenne, 2004 MBCA 79(Man. C.A.) at para 4, (2004), 184 Man. R. (2d) 228 (Man. C.A.); UnitedStates of America v. Mathurin, 2013 ONSC 2575 (Ont. S.C.J.) at para 34,[2013] O.J. No. 1957 (Ont. S.C.J.). The allegation regarding Facilitator 3was supported by affidavit evidence setting out, with a reasonable degreeof precision, the timing and circumstances of the alleged torture, supple-mented by evidence of medically documented physical injury.

34 In finding this insufficient, the extradition judge in our view set thestandard for establishing an air of reality to the allegations of torture toohigh. He said that the allegation was based on “speculative and hearsayevidence from ill-defined sources that the brother of the person soughtwas tortured in Iraq, and that either Americans or Iraqis sympathetic toAmerican interests were behind the torture.” (2012 ABQB 344 (Alta.Q.B.) at para 64.) Although the hearsay quality of evidence is relevant tothe standard of proof, nothing in the air of reality test or in the Act barshearsay evidence. And, evidence adduced to support a disclosure requestwill always be “speculative” in the sense that it does not prove that thealleged event occurred. That very inability to prove the event withoutdisclosure is, after all, precisely why our law provides a mechanism forobtaining further disclosure. We are satisfied that, in these circum-stances, to require more than what the appellant provided here would im-pose an unrealistic evidentiary burden upon him, with the result that forhim and for others similarly situated, it would render hollow the remedialmechanism of obtaining further disclosure where an “air of reality” ismade out.

35 We also observe that the extradition judge did not appear to considerall the evidence in drawing his conclusion on whether the appellant haddemonstrated an air of reality to the allegations of torture of Facilitator 3:“... [I]t is a great stretch to infer that torture was applied to collect theevidence advanced by the Crown simply because an individual identifiedas ‘the brother’s lawyer’ expresses ‘fear of involvement’.” (2012 ABQB344 (Alta. Q.B.) at para 61.) (Emphasis added.) As is apparent from ourreview of the allegations regarding torture of Facilitator 3, this was notthe only evidence.


36 We are also of the respectful view that the extradition judge erred inconcluding that the allegations about the torture of Facilitator 3 were ir-relevant to any issue properly before him, on the basis that Facilitator 3was allegedly tortured after the appellant’s arrest. While it is true that theCrown had already arrested the appellant (signifying that it believed thatit already had enough evidence to commit him), that does not automati-cally mean that an allegation that information in the record of the casewas derived from torture is irrelevant if the Crown does not need to usethe information to establish that the evidence is sufficient to warrantcommittal. Both section 269.1(4) of the Criminal Code and section 7 ofthe Charter affirm its ongoing relevance — irrespective of whether theAttorney General needs that information to make his case — so long asthe information is nonetheless being introduced into the proceeding.

37 Simply put, when a party alleges that evidence in a proceeding wasobtained as the result of torture, the presiding judge must considerwhether there is an air of reality to the allegation. The centrality or neces-sity of the impugned evidence is irrelevant to the nexus between that evi-dence and the practice of torture. The point is that the air of reality test istriggered, without exception, by the requesting state having elected toinclude in the record of the case evidence which the person sought al-leges is the product of torture.

38 In our view, and applying the proper test in the context of allegationsof torture respecting information in a record of the case filed under theAct, the air of reality threshold was met here. We appreciate that none ofthat allegations regarding torture comprised an assertion that the state-ments Facilitator 3 gave to Investigator Mazzella appearing in the recordof the case were themselves made under torture. We also appreciate thatthe appellant’s interview with Investigator Mazzella occurred in April2011 — that is, after the seven days of torture which Facilitator 3 is saidto have suffered following his arrest in January 2011. The evidentiaryfoundation for the allegation that Facilitator 3 was tortured over sevendays in January 2011, however, satisfies us that a realistic possibility isestablished that his statement to Investigator Mazzella in April 2011was — in the language of section 269.1(4) of the Criminal Code — “ob-tained as the result of [torture]”. If, after all, Facilitator 3 had been tor-tured for over seven days — and we reiterate that there is an air of realityto the allegation that he was — it is hardly unsurprising that he wouldprovide information later on to Investigator Mazzella.


39 It follows that the extradition judge ought to have done one of twothings: (1) order the Attorney General to make disclosure of all materialsin his possession related to the circumstances of Facilitator 3’s originalarrest in January 2011 and resulting captivity, and the circumstances ofFacilitator 3’s interview with Investigator Mazzella in April 2011; or (2)ask the Attorney General whether he would proceed to the committalhearing with the information in the record of the case obtained fromFacilitator 3 during his interview with Investigator Mazzella struck (and,if so, then dismiss the disclosure request on the basis that it was nolonger relevant).

40 Given that neither of these courses of action was pursued, it remainsto consider whether this Court may apply the curative proviso under Sec-tion 53(b) of the Act,6 on the ground that no substantial wrong or miscar-riage of justice has occurred and that the order of committal should beupheld.

6Section 53 provides:

On the hearing of an appeal against an order of committal of a per-son, the court of appeal may

(a) allow the appeal, in respect of any offence in respect of whichthe person has been committed, if it is of the opinion

(i) that the order of committal should be set aside on theground that it is unreasonable or cannot be supportedby the evidence,

(ii) that the order of committal should be set aside on theground of a wrong decision on a question of law, or

(iii) that, on any ground, there was a miscarriage of jus-tice; or

(b) dismiss the appeal

(i) if it does not allow the appeal on any ground referredto in paragraph (a), or

(ii) even though the court of appeal is of the opinion thaton the ground referred to in subparagraph (a)(ii) theappeal may be decided in favour of the appellant, if itis of the opinion that no substantial wrong or miscar-riage of justice has occurred and the order of commit-tal should be upheld.


41 Having carefully reviewed the record of the case, we are satisfiedthat, even if the information obtained during Investigator Mazzella’s in-terview of Facilitator 3 had been removed, what remained would havejustified the order committing the appellant on the charges of conspiracyto murder and facilitating terrorist activity. The information obtainedfrom that interview constituted a minute part of the information con-tained in the record of the case, leaving a considerable body of evidenceto support the extradition judge’s decision to commit. In this regard, theextradition judge reasonably held (at 2012 ABQB 645 (Alta. Q.B.) atpara 38) that the evidence summarized in the record of the case of inter-cepted communications between the appellant and Facilitator 2,Facilitator 4 and Fighter 1 in themselves warranted committal on theconspiracy charge. It is true that the extradition judge later referred to anemail communication between the appellant and Facilitator 3 (referringto it as a “religious verification of a successful post-conspiracy event de-briefing” — 2012 ABQB 645 (Alta. Q.B.) at para 39). It is also possiblethat only Facilitator 3’s acknowledgment to Investigator Mazzella of hisemail address enabled Investigator Mazzella to identify some of the ap-pellant’s communications as being with Facilitator 3. We are, however,satisfied that, even if this information had been excluded from the recordof the case (which is the very most that the appellant could haveachieved), the remaining evidence for committing on the conspiracycharge was overwhelming.

42 As to the charge of facilitating terrorist activity, the extradition judgefound support in the record of the case to conclude that the appellant hadfacilitated the network in two principal ways (apart from generally beingpart of the conspiracy to commit suicide bombings): (1) counsellingothers to engage in violent “jihad” activities (and, in the case of Fighter5, assisting him in doing so: 2012 ABQB 645 (Alta. Q.B.) at paras 39-44,55); and (2) sending money to Facilitator 3 to buy weapons for the net-work’s operations: 2012 ABQB 645 (Alta. Q.B.) at para 58. Either formof conduct, as the extradition judge correctly noted (at 2012 ABQB 645(Alta. Q.B.) at paras 58, 61), suffices to establish the actus reus of facili-tating terrorist activity. The evidence concerning this conduct was ob-tained from the appellant’s own statements during his interview with In-vestigator Mazzella after his arrest, and from various interceptedcommunications (much of which the appellant himself said or wrote: Ap-pellant’s EKE, Vol 2, A207-215). More to the point, none of it camefrom, or was made more intelligible or significant by, the interview be-


tween Facilitator 3 and Investigator Mazzella. The extradition judge wassatisfied that, taken together, this evidence was sufficient to warrantcommittal on the facilitation charge. We agree.

43 In sum, we are satisfied that the extradition judge’s error in holdingthat the legal basis for further disclosure arising from the allegations oftorture of Facilitator 3 had not been met did not occasion a miscarriageof justice or a substantial wrong. This is, therefore, an appropriate case toexercise our power under section 53(b)(ii) of the Act to dismiss thisground of appeal and uphold the order of committal.

B. Voluntariness44 Section 29(1)(a) of the Act conditions an order of committal upon

“evidence admissible under this Act”, and section 32(2) of the Act pro-vides that “[e]vidence gathered in Canada must satisfy the rules of evi-dence under Canadian law in order to be admitted.” For this reason, thevoluntariness of statements relied upon by the requesting state in the re-cord of the case must, where it is raised as an issue, be considered by theextradition judge.7 Here, the appellant says that the extradition judgeerred in finding that his statements to the RCMP and to InvestigatorMazzella were voluntary, in light of what he says was his inability tounderstand his right to silence, the repeated denial by authorities of hisright to counsel, the “atmosphere of oppression” created by authorities inthe course of those interviews, and what he characterizes as the “uncon-scionable trickery” of members of the RCMP.

45 All these arguments allege errors of fact or, at best, errors of mixedfact and law. We find no error warranting reversal of the committal orderon any of these grounds.

46 It is clear from our review of the record that the appellant was awarethroughout of his right to silence, and that it signified that he did nothave to talk to police. He knew this from the time his rights were ex-

7This is a distinct question, we note, from cases where foreign investigators in aforeign jurisdiction are said to have procured an involuntary statement. In thosecases, the determination of voluntariness is left to the requesting state’s courts:United States of America v. Goodyer, 2014 ABCA 164 (Alta. C.A.) at para 11,[2014] A.J. No. 489 (Alta. C.A.); Lai v. Canada (Minister of Citizenship & Im-migration), 2005 FCA 125 (F.C.A.) at paras 35-36, (2005), 253 D.L.R. (4th) 606(F.C.A.), leave to appeal refused [2005] S.C.C.A. No. 298 (S.C.C.) (SCC No30988).


plained to him upon arrest (Appellant’s EKE, Vol 4, A526: “I shouldkeeping quiet, like not to talk anything, you know. And whatever I saycan be maybe against me.”). We agree with the extradition judge that theRCMP reminded the appellant on multiple occasions thereafter of hisright to silence. While the appellant occasionally maintained to theRCMP that he did not “understand”, having reviewed the transcript andthe DVD recording of the interviews we also share the extraditionjudge’s conclusion that the appellant’s professed inability to understandwas in reference not to the substance of his rights, but to why the policewere bothering him. As the extradition judge put it (2012 ABQB 641(Alta. Q.B.) at para 54), “[h]is confusion did not relate to his legal rightsbut was either sincere bewilderment, or contrived bewilderment, at howhe, as a Canadian living in Edmonton could be a suspect in terrorist ac-tivity in another country.”

47 We discuss below whether the police breached the appellant’s rightsunder section 10(b) of the Charter by denying his requests to consult alawyer after his initial legal consultation which occurred prior to his in-terview by RCMP. For present purposes, however, we note here the ap-pellant’s submission that the RCMP undermined the voluntariness of hisstatements by holding out the possibility that he could consult with alawyer after his initial legal consultation, if he continued to talk toRCMP members. The extradition judge found as a fact that RCMP mem-bers made no such promises. Our review of the evidence satisfies us thatthe extradition judge was not clearly and palpably wrong to make thatfinding.

48 Similarly, we find no palpable and overriding error in the extraditionjudge’s conclusion that the interviews of the appellant by the RCMP andDetective Mazzella created no “atmosphere of oppression”. Indeed, ourreview of the evidence satisfies us that the appellant was reasonably ac-commodated with breaks, and maintained throughout an even compo-sure. While he professed to be afraid, it is obvious from the context ofthe interviews that his fear was not generated by the interviews or theinterviewers, but by his realization of the information they had abouthim.

C. Right to Counsel49 The appellant raises several objections which fall generally under his

right to counsel: that he did not understand his rights; that he did nothave a proper opportunity to consult with legal counsel; and that, even if


the initial consultation was sufficient, his interview by Investigator Maz-zella triggered a right to a second consultation with counsel in accor-dance with R. v. Sinclair, 2010 SCC 35, [2010] 2 S.C.R. 310 (S.C.C.)[Sinclair].

50 As to the appellant’s first submission (that he did not understand hisrights), we note that there is no submission that the RCMP failed to prop-erly convey the required information, such that they could not assumethat the appellant understood it. There is, however, one aspect of the lim-its to his rights which the appellant appears not to have understood,which is that he does not have the right under Canadian law to have alawyer present during his interview (although the record shows that Cor-poral Ross told him clearly some hours into the interview that he did nothave that right). We do not, however, see this misunderstanding on theappellant’s part to be consequential. Sinclair makes clear that demandsfor a lawyer, in the absence of a change in circumstances after there hasbeen an initial consultation, are insufficient to give rise to a right to fur-ther consultation with legal counsel. Here, as the extradition judge ob-served, the appellant had the benefit of a lengthy consultation runningover 45 minutes (and interrupted only by Corporal Ross taking a fewminutes to speak directly with the lawyer) with an experienced criminaldefence lawyer who spoke the appellant’s first language, and who hadbeen briefed by the RCMP as to the nature of his jeopardy in Canada andin the United States. Not only did the RCMP have no objectively evidentcause for concern that the appellant did not understand his rights, but theappellant went so far at several points in his interview by RCMP mem-bers to make clear to them that he understood his right to silence. Therewas therefore no reason for the RCMP to take further steps to facilitatethe appellant’s understanding of his rights.

51 As to the sufficiency of the appellant’s initial consultation, the appel-lant also takes the position that this consultation was incomplete. Thereis, however, nothing on the record or in the evidence of the appellant’scounsel’s interaction with police to suggest this was the case. Rather, theevidence supports the conclusion that the consultation was complete atthe time the appellant concluded his telephone call, having told CorporalRoss “I’m done”. (See, for example, R. v. Edmonton, 2014 ABCA 186,[2014] A.J. No. 567 (Alta. C.A.).) While he added that his counselwanted him to call back at 2 pm (which would have been approximatelythree hours later), the record does not support the inference that this wasbecause his consultation with counsel was, for the purposes of section


10(b), incomplete. Nor, for that matter, did the appellant’s counsel, dur-ing either of their two later conversations with RCMP members, eversuggest that the initial consultation had been incomplete such that a sec-ond or further consultation was necessary (which, presumably, wouldhave been accompanied by the demand that all interviews cease until thatconsultation occurred).

52 In light of the foregoing, we agree with the extradition judge that theappellant had a reasonable opportunity to consult with counsel prior tobeing interviewed.

53 As to the interview with Investigator Mazzella constituting a “changein circumstance” triggering a right to further consultation with counsel,the Supreme Court of Canada held in R. v. Evans, [1991] 1 S.C.R. 869(S.C.C.), at 893, (1991), 63 C.C.C. (3d) 289 (S.C.C.) that police mustoffer a second chance to consult with counsel when there is a fundamen-tal and discrete change in the purpose of the investigation, one involvinga different and unrelated offence or a significantly more serious offencethan that contemplated at the time of the warning. In Sinclair (at paras50-51), the Supreme Court set out a non-exhaustive list of situations trig-gering a right to a second consultation with counsel:

New Procedures Involving the Detainee

The initial advice of legal counsel will be geared to the expectationthat the police will seek to question the detainee. Non-routine proce-dures, like participation in a line-up or submitting to a polygraph,will not generally fall within the expectation of the advising lawyerat the time of the initial consultation. It follows that to fulfill the pur-pose of s. 10(b) of providing the detainee with the information neces-sary to making a meaningful choice about whether to cooperate inthese new procedures, further advice from counsel is necessary: R. v.Ross, [1989] 1 S.C.R. 3.

Change in Jeopardy

The detainee is advised upon detention of the reasons for the deten-tion: s. 10(a). The s. 10(b) advice and opportunity to consult counselfollows this. The advice given will be tailored to the situation as thedetainee and his lawyer then understand [page338] it. If the investi-gation takes a new and more serious turn as events unfold, that ad-vice may no longer be adequate to the actual situation, or jeopardy,the detainee faces. In order to fulfill the purpose of s. 10(b), the de-tainee must be given a further opportunity to consult with counseland obtain advice on the new situation.


. . .

54 The questioning of the appellant by Investigator Mazzella was not “anon-routine procedure” that would “not generally fall within the expecta-tion of the advising lawyer at the time of the initial consultation.” Indeed,an interview with US authorities would in this case have fallen within theadvising lawyer’s expectation at the time of the initial consultation be-cause, in the course of his discussion with the appellant’s counsel, Cor-poral Ross specifically advised him that the appellant might be inter-viewed by US authorities (“the American authorities may want to talk tohim later but ... he’ll have to be fully consenting of that ... . Not now, no,no. But they ... will be later.”)

55 Similarly, the appellant’s interview with US authorities did not com-prise a change in jeopardy, involving a fundamental and discrete changein the purpose of the investigation or an investigation for another or sig-nificantly more serious offence than was contemplated at the time of theearlier consultation: R. v. V. (S.E.), 2009 ABCA 108 (Alta. C.A.) at para27, (2009), 448 A.R. 351 (Alta. C.A.). His jeopardy, as both the appel-lant and his counsel understood it, contemplated from the beginning thepossibility of an interview with US authorities to answer US charges.That the contemplated interview actually transpired did not present achange in jeopardy requiring an opportunity for a second consultationwith counsel.

56 Nor are we of the view that the appellant’s circumstances present anew category of cases triggering a right to a second consultation withcounsel. Whatever the new basis for a second consultation might be saidto be, its underlying concern ought to be that circumstances havechanged such that the initial advice which the appellant received mayhave been inadequate for him to have the information relevant to choos-ing whether to cooperate with the police investigation or not. Whether aninterview with US authorities would have amounted to such a changedcircumstance absent Corporal Ross’s communication of that possibilityto the appellant’s counsel need not be decided here; the fact of that com-munication on these facts satisfies us that the appellant was not constitu-tionally entitled to a second consultation.

57 In a related vein, we note that the appellant says in his factum that,during the course of his interview of the appellant, Corporal Ross heldout the possibility that he could in fact have a second consultation withhis lawyer. As noted above, having reviewed the relevant portions of thetranscript of the interview, we are satisfied that the extradition judge


committed no reviewable error in finding that Corporal Ross did notpromise a second consultation.

58 In another related submission, the appellant challenges the committalorder on the basis that the extradition judge refused his application toadduce the DVD recording of his statement to Investigator Mazzella. Theappellant’s purpose in having that recording admitted appears (on appeal,if not before the extradition judge) to have been to support a submissionthat his statement was obtained in breach of his rights under US law (andspecifically under Miranda v. Arizona, 384 U.S. 436 (U.S. Sup. Ct.1966)) and that, as a consequence, the reliability of the record of the caseis undermined. The appellant does not say how the record of the case isundermined, although the point is presumably that it is compromised in-asmuch as what the appellant told Investigator Mazzella would be inad-missible under US law at his trial. As this would obviously contradict theUnited States’ certification in the record of the case (Appellant’s EKE,Vol 2, A201) that “[t]he interview was conducted in compliance withUnited States law”, the appellant’s argument would be that this evidenceought not to have been considered by the extradition judge.

59 In our view, the accuracy of the requesting state’s certification as tocompliance with US law is not a relevant issue at an extradition hearing.Further, the extradition judge, like this Court, lacks the institutional com-petence to determine whether the appellant’s statement to InvestigatorMazzella is admissible as a matter of US constitutional law: UnitedStates v. Cail, 2009 ABCA 345 (Alta. C.A.) at para 15, (2009), 254C.C.C. (3d) 205 (Alta. C.A.). That question, and its implications for thatportion (or other portions) of the record of the case are better consideredand decided by the US District Court. It follows that the extraditionjudge did not err in refusing to admit this evidence.

60 The appellant also advances several submissions regarding what hecharacterizes as instances of “unconscionable trickery” on the part of theRCMP which, he says, undermined his right to counsel: (1) that, whenthe appellant’s counsel telephoned the police station and asked them totell the appellant that they had called for him, the RCMP “lied” by assur-ing counsel they would do so, but deliberately refrained from doing so;(2) that, when the appellant’s counsel later personally attended at the po-lice station, the RCMP officer Corporal Greene “lied or very carelesslymisled counsel” when he stated that the appellant had not asked to speakwith them again; (3) that Corporal Greene had misled counsel by tellingthem the appellant was being interviewed, when he was not; and (4) that,


while the RCMP advised the appellant’s counsel as to the possibility thatthe appellant would be interviewed by authorities from the United States,“there is a world of difference between the possibility of an interview byAmerican authorities and an actual interview ....” The suggestion hereappears to be that the RCMP deliberately allowed the appellant’s counselto be misled as to whether the appellant would actually be interviewed byInvestigator Mazzella.

61 The extradition judge found as a fact that the RCMP, and CorporalGreene in particular, did not deliberately mislead the appellant’s counselin the ways alleged. Having reviewed the record, and mindful that theonus of proving a Charter breach rested with the appellant (United Statesv. Anekwu, 2009 SCC 41 (S.C.C.) at para 29, [2009] 3 S.C.R. 3 (S.C.C.)),we are satisfied that the extradition judge did not commit a reviewableerror in so finding.

62 As to the first concern, the evidence of Corporal Greene — whom theextradition judge found as a witness to be “an experienced officer withintegrity” — was that he had asked his colleague Corporal Ross to con-vey that message to the appellant. The second concern was canvassedwith Corporal Greene under cross-examination. He acknowledged hav-ing told counsel that the appellant had not been asking to speak withthem (which was, we observe from the record, clearly erroneous), addingthat he simply could not recall whether that statement was based on hisintermittent observations of the interview of the appellant or whether itwas just his belief based upon some other unidentified source. The extra-dition judge, having heard Corporal Greene, found that he had not inten-tionally misled counsel. That finding is entitled to deference.

63 The third concern requires some background explanation. The extra-dition judge recounted that, on January 19, 2011, Corporal Ross inter-viewed the appellant from 10:58 am to 2:01 pm, then from 5:16 pm to7:03 pm, and from 9:31 pm to 9:44 pm. There is, however, nothing in therecord to suggest that the interview which began at 5:16 pm ended at7:03 pm. Rather, the record (and specifically Corporal Ross’s evidence)shows that it ended at 9:03 pm. The impugned statement by CorporalGreene to the appellant’s counsel (that the appellant was still being inter-viewed) occurred at 7:04 pm, meaning that the appellant was indeed stillbeing interviewed, as Corporal Greene said.

64 As for the final concern that the RCMP did not advise the appellant’scounsel of the definite prospect (as opposed to the possibility) that theappellant would be interviewed by US authorities, again we see no merit


to the appellant’s submission here. The information relayed by CorporalRoss to the appellant’s counsel, which we have already canvassed, wassufficient to inform counsel of the appellant’s legal peril so that he couldadvise the appellant appropriately.

65 In the result, the appeal from the decision of the extradition judge tocommit the appellant is dismissed.

VI. The Minister’s Decision to Surrender66 The appellant also seeks judicial review of the Minister’s decision to

surrender him to the United States. Several grounds are advanced.

A. Life Imprisonment Without Parole67 The appellant argues, first, that the Minister’s decision to surrender

him to the United States violates his right to liberty and security of theperson under section 7 of the Charter and as such would be “unjust oroppressive” within the meaning of section 44(1)(a) of the Act,8 by reasonof the possibility that he might receive a sentence of life imprisonmentwithout parole if he is convicted of any of the US offences.

68 We note that this argument was not raised in the appellant’s submis-sions to the Minister.

69 That aside, the test for whether the surrender of the person soughtoffends section 7 on account of the penalty which might be imposed inthe requesting state is whether the imposition of that penalty “sufficientlyshocks” the Canadian conscience: Kindler v. Canada (Minister of Jus-tice), [1991] 2 S.C.R. 779 (S.C.C.), at 849, (1991), 67 C.C.C. (3d) 1(S.C.C.) [Kindler]. And, even where that threshold is met, the Ministermust, in applying section 1 of the Charter, balance it against counter-vailing considerations of reciprocity, comity and security. Further, theMinister’s determination as to whether the balance weighs in favour of,or in opposition to, surrendering the person sought is owed a high degreeof deference: United States of America v. Sriskandarajah, 2012 SCC 70(S.C.C.) at para 11, [2012] 3 S.C.R. 609 (S.C.C.).

70 This test, the balancing to be undertaken and the high degree of defer-ence owed to the Minister in doing so, have informed the law on section

8Section 44(1)(a) of the Act provides that the Minister shall refuse to make asurrender order if the Minister is satisfied that the surrender would be unjust oroppressive having regard to all the relevant circumstances.


44 such that courts have on many occasions stated that surrender of aperson sought is not unjust or oppressive merely because the potentialsentence available to courts in the requesting state is more severe thanthat which the person sought might face in Canada: United States v.Ranga, 2012 BCCA 82 (B.C. C.A.) at para 9, (2012), 317 B.C.A.C. 219(B.C. C.A.); Earles at para 61; and United States v. Latty, [2004] O.J.No. 1076 (Ont. C.A.) at para 15, (2004), 237 D.L.R. (4th) 652 (Ont.C.A.). Differentiation in sentencing between Canada and a treaty part-ner — whether it be the United States, or any other treaty partner — isundoubtedly presumed at the time states enter into extradition treaties.For that reason, an inherent characteristic of the law of extradition is thatit must accommodate “many factors foreign to our internal criminallaw”: Kindler at 844. As the Supreme Court observed in Kindler (at 845),“we require a limited but not absolute degree of similarity between ourlaws and those of the reciprocating state.”

71 In our view, a sentence of life imprisonment without parole, while nota sentence available in Canada for the charges upon which the Ministerhas ordered the appellant’s surrender, would not sufficiently shock theconscience of Canadians such that his surrender to face those chargeswould be unjust or oppressive.

72 Life sentences are known to Canadian law. Indeed, the SupremeCourt has affirmed the fitness of such a sentence for similar terrorist ac-tivity prosecuted in Canada: R. v. Khawaja, 2012 SCC 69 (S.C.C.), at127 -31, [2012] 3 S.C.R. 555 (S.C.C.). While it is true that, by operationof section 745 of the Criminal Code, such sentences stipulate parole eli-gibility after the passage of a period of time (ie 25 years for first degreemurder), we do not accept this distinction as bringing the appellant’s cir-cumstances within the scope of what the Supreme Court described inBurns (at para 69) as “a particular treatment or punishment [which] maysufficiently violate our sense of fundamental justice as to tilt the balanceagainst extradition.” The Supreme Court gave examples of stoning adul-terers or amputating the hands of thieves, where “the punishment is soextreme that it becomes the controlling issue in the extradition and over-whelms the rest of the analysis.” Life imprisonment without parole inthese circumstances falls short of this threshold.

73 Indeed, Burns itself serves as an instance of extradition of Canadianfugitives, albeit on the assurance that they would not face death by exe-cution in a US prison, to answer charges that might nevertheless lead totheir death by natural causes in a US prison after serving a sentence of


life imprisonment without possibility of parole. (Burns at para 28: “Anindividual convicted of aggravated first degree murder in WashingtonState ... will either die in prison by execution or will die in prison eventu-ally by other causes. Those are the possibilities. Apart from executiveclemency, the State of Washington does not hold out the possibility (oreven the ‘faint hope’) of eventual freedom.”)

74 We acknowledge that the Court of Appeal of Quebec came to a dif-ferent conclusion in Doyle Fowler c. Canada (Ministre de la Justice),2011 QCCA 1076 (C.A. Que.), 96 C.R. (6th) 200 [Doyle Fowler]. Thatcase, however, involved the Minister’s decision to surrender to theUnited States a 16-year old to answer charges of second-degree murderin Florida, whose law allowed for life imprisonment without possibilityof parole for a youth convicted of murder. (Doyle Fowler, para 46: “Ensomme, il est possible qu’en Floride il n’y ait pas de liberation condition-nelle pour un adolescent reconnu coupable de meurtre.” (Emphasis ad-ded.) In light of the fugitive’s youth, the prospect for a life sentencewithout the possibility of parole was seen as extreme and in violation ofCanadians’ sense of fundamental justice, leading the court to concludethat surrendering him without appropriate assurances would shock theconscience of Canadians. The same concern does not, however, applyhere.9 This ground of judicial review is therefore without merit.

B. Presumption of Surrender75 The second ground of judicial review relied upon by the appellant is

that the Minister is said to have presumed a responsibility to surrender

9We also note that the Court of Appeal of Quebec later re-pronounced in DoyleFowler, after the Minister had received an explanation from the United States tothe effect that the young person sought in that case could expect to serve be-tween 201/2 and 40 years in prison, as opposed to life without parole. The courtaffirmed the Minister’s decision to surrender, noting “our extradition processdoes not require that there be conformity between the requesting partner’s lawsand applicable Canadian norms and standards”, leaving “those seeking a judg-ment that the Minister’s assessment in this regard is unreasonable hav[ing], inmost cases, an extremely demanding burden to satisfy.” (Doyle Fowler v.Canada (Minister of Justice), 2013 QCCA 1001 (C.A. Que.) at paras 36, 42),leave to appeal refused [2013] S.C.C.A. No. 264 (S.C.C.).) See also UnitedStates of America v. Aneja, 2014 ONCA 423 (Ont. C.A.) at paras 63-68, [2014]O.J. No. 2500 (Ont. C.A.).


the appellant — that is, he started from a standpoint favouring surren-der — contrary to the provisions of the Act and the Charter. The appel-lant points to the Minister’s statement in his reasons for surrender that“[m]y decision to refuse surrender is justifiable only on compellinggrounds related to specific provisions set out in the Act, the ExtraditionTreaty between the Government of Canada and the Government of theUnited States of America ..., or where surrender would be contrary to therights guaranteed by the Charter.” (Emphasis added.)

76 The Minister’s having conditioned his “refus[al]” to surrender uponcompliance with the Act and the Charter is sufficient to rebut the appel-lant’s suggestion that the protections of the Act and the Charter did notgovern the Minister’s deliberations. Further, a review of the Minister’sdecision in totality reveals that he considered the pertinent provisions ofboth the Act and the Charter in determining not that refusal to surrenderthe appellant is not warranted, but that his surrender is warranted.

C. The Offences Identified by the Minister77 The appellant’s third ground of judicial review relates to the Cana-

dian offences identified in the Authority to Proceed. As we have noted,the Authority to Proceed denotes the Canadian offences corresponding tothe conduct alleged in the United States’ request to surrender as beingconspiracy to commit murder and facilitating terrorist activity. Thosewere the offences upon which the extradition judge ordered the appel-lant’s committal. Yet, the appellant points out, the Minister also orderedhis surrender on the additional offences of five counts of aiding and abet-ting murder. This, the appellant says, was an error.

78 By way of explanation, section 58(b) of the Act requires that an orderof surrender “describe the offence in respect of which the extradition isrequested, the offence for which the committal was ordered or the con-duct for which the person is to be surrendered.” The appellant, however,draws our attention to a passage from the decision of the Ontario Courtof Appeal in United States v. Saad (2004), 237 D.L.R. (4th) 623 (Ont.C.A.) at para 40, (2004), 183 C.C.C. (3d) 97 (Ont. C.A.) [Saad], whichwas also cited by the Supreme Court of Canada in Canada (Minister ofJustice) v. Fischbacher, 2009 SCC 46 (S.C.C.) at para 41, [2009] 3S.C.R. 170 (S.C.C.) [Fischbacher]: “It is for the Minister to determinewhether the offences for which extradition is sought falls within thescope of the Authority to Proceed and the committal order.”


79 Saad arose from a request from the United States to surrender theperson sought, which triggered an Authority to Proceed on (among otheroffences) two drug offences. The person sought was committed on thoseoffences, but the Minister then surrendered him on six counts (corre-sponding to the counts with which the person sought had been charged inthe United States). The issue then arose whether the surrender order wasrequired to conform to the committal order. For the Court, Rosenberg JAheld (at para 40) that the Minister was within his jurisdiction to surrenderon the six counts, since section 58 of the Act “contemplates that thewording of the surrender can differ from the wording of the Authority toProceed.” This preceded his statement, relied upon by the appellant,which refers to the Minister determining whether the offences fall withinthe scope of the Authority to Proceed and the committal order.

80 The appellant stresses that the only issue in Saad was the number ofcounts stated in the surrender order of an offence which was alreadystated in the Authority to Proceed and committal order. This, he says,distinguishes the outcome in Saad from this case, where the surrenderorder included a different offence altogether from those set out in theAuthority to Proceed and committal order, thereby signifying that thecounts of aiding and abetting murder do not “fall[...] within the scope ofthe Authority to Proceed and the committal order.” While he concedesthat the Act grants the Minister a degree of latitude in crafting a surrenderorder, that latitude is, he says, limited, such that the offences in the sur-render order must conform to those set out in the Authority to Proceedand the committal order. Where, therefore, the Authority to Proceed doesnot include the offence upon which the Minister proposes to include in asurrender order, the Authority to Proceed must, the appellant submits, beamended and the matter must be put back before the extradition judge.Here, he points to Charron J’s decision for the majority in Fischbacher(at paras 32-34):

An ATP is akin to an information or indictment in a domestic prose-cution in that the corresponding Canadian offence or offences listedin an ATP provide the focus of the determination to be made at thejudicial stage. Accordingly, care must be taken to ensure that an ATPaccurately identifies the Canadian offence that most closely resem-bles the alleged conduct underlying the foreign offence. This willnecessarily require the Minister, in drafting the ATP, to undertakesome limited interpretation of the domestic law.

If an ATP does not identify the most appropriate Canadian offence, s.23(2) of the Act authorizes a committal judge, upon application by


the Attorney General, to amend an ATP to accord with the evidenceproduced by the requesting state in the course of the extraditionhearing.

With an ATP in hand, counsel for the Attorney General may thenproceed to bring the matter before an extradition judge who conductsan extradition hearing in accordance with the Act.

81 In our view, Fischbacher itself furnishes the answer to the appellant’ssubmissions. In her reasons for the majority, Charron J observed (at para29) that, because Canada has adopted the conduct-based approach todouble criminality (which requires that the conduct forming the basis ofthe extradition request be criminal under the law of both the requestingand the requested states), it is not necessary that the Canadian offencesdescribed in the Authority to Proceed or the committal order match theforeign offences for which the Minister orders the surrender of the per-son sought. Continuing, she added (at para 41):

Nothing in s. 58 (b) requires that the Minister match or “align” thesurrender offence with that listed in the ATP or the committal order,nor with the evidence adduced at the hearing. In fact, quite the con-trary: s. 58 (b) provides the Minister with flexibility in crafting anorder of surrender, and clearly contemplates that the wording of thesurrender order may differ from that of the ATP and the order ofcommittal: see, e.g., United States of America v. Saad (2004), 183C.C.C. (3d) 97 (Ont. C.A.), at para. 40.

(Emphasis added.)

82 That Charron J cited Saad for this proposition does not, in our view,have the effect that the appellant suggests or otherwise narrow the scopeof the Minister’s discretion under the Act to order the appellant’s surren-der. While it is true that “it is for the Minister to determine whether theoffences for which extradition is sought falls within the scope of the Au-thority to Proceed and the committal order”, nothing in Saad requires theMinister to match the specific offences within the Authority to Proceed,as opposed to the conduct which is set out in the record of the case underthe authority of section 33(1)(b)(ii) of the Act. This flexibility is the natu-ral upshot of section 3(1) (which permits the extradition from Canadaunder the Act and under extradition agreements if, inter alia, “the con-duct of the person, had it occurred in Canada, would have constituted anoffence that is punishable in Canada ....”) and section 58(b) of the Act(which, it bears reiterating, is satisfied where an order of surrender men-tions no Canadian or foreign offences whatsoever, but instead describes


“the conduct for which the person is to be surrendered.”) (Emphasisadded.)

83 Here, the record of the case clearly discloses evidence of aiding andabetting in murder (Appellant’s EKE, Vol 2, A201; A216) and identifiesthe alleged victims (Appellant’s EKE, Vol 2, A218), whose names matchthose contained in the charges for which the United States issued theamended diplomatic note. And, that aside, the Minister is entitled to relyon US assurances — and, indeed, principles of reciprocity and comitypreclude his second-guessing those assurances — that the conduct al-leged will make out the US offences identified in its request to surrender:Fischbacher at para 51. Mindful of the highly deferential standpoint wemust adopt toward the Minister’s decision about whether to surrender aperson sought who has been committed for extradition, and toward theMinister’s interpretation of statutory provisions such as sections 3(1) and58(b) of the Act (with which he would be particularly familiar and inwhose application he would have particular expertise), we see no basis inthe appellant’s objection for appellate intervention.

D. Assurances Regarding Evidence Obtained by Torture84 The appellant also says that it was unreasonable for the Minister to

refrain from seeking an assurance from the United States that it will notrely at his trial upon evidence obtained by torture.

85 We note that the Ontario Court of Appeal, in Diab, has recently stateda two-part test that the Minister must apply when the person sought al-leges that the foreign state will use evidence obtained from torture in theforeign prosecution. First, the person sought must establish a plausibleconnection between the evidence and the use of torture: Diab, paras 227,241. This standard is said to fall between a “mere suspicion” and a bal-ance of probabilities, but closer to the former than the latter, sensitive tothe inherent difficulties, to which we have already referred, which a per-son sought faces in showing that information obtained by authorities ofthe state was obtained by the use of torture. Secondly, where a plausibleconnection is made out, the Minister must make further inquiries to de-termine whether there is a “real risk” that torture-derived evidence willbe used in the proposed foreign proceeding. A “real risk” is said to besimilar to a “substantial risk”, falling short of a balance of probabilities.

86 The difficulty here is that the test in Diab is premised on the personsought submitting to the Minister that evidence obtained from torturewill or may be used in the prosecution in the requesting state. Here, the


appellant did not submit to the Minister that his extradition would beunjust, oppressive or otherwise contrary to section 7 of the Charter be-cause evidence obtained from torture will be used in the US prosecution.Nor did he argue that assurances should be sought. The Minister wastherefore not called upon to assess whether a plausible connection hadbeen made or to make further inquiries based upon that plausible connec-tion. In these circumstances, the Minister did not act unreasonably in re-fraining to seek this assurance, and there is no basis for judicial review.

VII. Conclusion87 The appeal, and the application for judicial review, are dismissed.

Appeal and application dismissed.


[Indexed as: Mammoet 13220-33 Street NE Ltd. v. Edmonton(City)]

Mammoet 13220 - 33 Street NE Limited Hustle Holding Ltd.Kiewit Energy Canada Corp., Respondents (Applicants) and TheCity of Edmonton and Focus Equities Alberta Inc., Appellants

(Respondents) and The Minister of Justice and Solicitor Generalof Alberta, Intervener

Alberta Court of Appeal

Docket: Edmonton Appeal 1403-0011-AC, 1403-0014-AC

2014 ABCA 229

Jean Cote, Clifton O’Brien, Barbara Lea Veldhuis JJ.A.

Heard: May 26, 2014

Judgment: July 10, 2014

Municipal law –––– Attacks on by-laws and resolutions — Practice and pro-cedure — On quashing by-laws or resolutions — Miscellaneous –––– Appealfrom dismissal of application for summary judgment of by-law challenge — De-veloper K Corp. purchased property in 2005 and obtained development permitthat same year — Municipality passed by-law in October 2006 permitting le-vies — Developer M Ltd. was granted development permit in December 2006before acquiring its property in 2007 — Developers were informed about signif-icant levies in 2012 — Developers brought application challenging validity ofby-law — Municipality contended six-month limitation period in R. 3.15(2) ofAlberta Rules of Court applied to challenges to validity of by-laws — Munici-pality brought application for summary judgment dismissing developers’ appli-cation — Application was dismissed — First Alberta Court of Appeal authorityindicated jurisdictional challenge to validity of by-law was not subject to limita-tion period that was currently found in R. 3.15(2) — Second appellate-level Al-berta authority finding to contrary had not specifically overruled first author-ity — Chambers judge held that developers should have been allowed to arguetheir lack of reasonable opportunity to challenge validity of by-law before limi-tation period expired — Municipality appealed — Appeal dismissed — Cham-bers judge was correct to follow first appellate decision — Chambers judge’sdecision upheld on basis that second appellate decision could be distinguishedfrom first appellate decision and from line of Supreme Court of Canada (SCC)authorities that it followed — Province had developed process for reconsideringCourt of Appeal decision in later appeals — Underlying this process is principlethat unless reconsideration process is appropriately invoked, court is bound tofollow its own previous precedents as well as applicable SCC authority.

Mammoet 13220-33 Street NE Ltd. v. Edmonton (City) 513

Civil practice and procedure –––– Summary judgment — General princi-ples –––– Appeal from dismissal of application for summary judgment of by-lawchallenge — Developer K Corp. purchased property in 2005 and obtained devel-opment permit that same year — Municipality passed by-law in October 2006permitting levies — Developer M Ltd. was granted development permit in De-cember 2006 before acquiring its property in 2007 — Developers were informedabout significant levies in 2012 — Developers brought application challengingvalidity of by-law — Municipality contended six-month limitation period in R.3.15(2) of Alberta Rules of Court applied to challenges to validity of by-laws —Municipality brought application for summary judgment dismissing developers’application — Application was dismissed — First Alberta Court of Appeal au-thority indicated jurisdictional challenge to validity of by-law was not subject tolimitation period that was currently found in R. 3.15(2) — Second appellate-level Alberta authority finding to contrary had not specifically overruled firstauthority — Chambers judge held that developers should have been allowed toargue their lack of reasonable opportunity to challenge validity of by-law beforelimitation period expired — Municipality appealed — Appeal dismissed — Re-spondents argued that by-law did not meet certain statutory pre-conditions thatwould render it void. It followed that respondents could make this argumentwithout concern for limitation period found in R. 3.15(2), although any issue ofdelay may go to exercise of discretion in grant of remedy — Limitation argu-ment, which was foundation of application for summary judgment, was re-jected — Therefore, summary judgment was not available.

Judges and courts –––– Provincial courts of appeal –––– Appeal from dismis-sal of application for summary judgment of by-law challenge — Developer KCorp. purchased property in 2005 and obtained development permit that sameyear — Municipality passed by-law in October 2006 permitting levies — Devel-oper M Ltd. was granted development permit in December 2006 before acquir-ing its property in 2007 — Developers were informed about significant levies in2012 — Developers brought application challenging validity of by-law — Mu-nicipality contended six-month limitation period in R. 3.15(2) of Alberta Rulesof Court applied to challenges to validity of by-laws — Municipality broughtapplication for summary judgment dismissing developers’ application — Appli-cation was dismissed — First Alberta Court of Appeal authority indicated juris-dictional challenge to validity of by-law was not subject to limitation period thatwas currently found in R. 3.15(2) — Second appellate-level Alberta authorityfinding to contrary had not specifically overruled first authority — Chambersjudge held that developers should have been allowed to argue their lack of rea-sonable opportunity to challenge validity of by-law before limitation period ex-pired — Municipality appealed — Appeal dismissed — Chambers judge’s deci-sion upheld on basis that second appellate decision could be distinguished fromfirst appellate decision and from line of Supreme Court of Canada (SCC) author-


ities that it followed — Modern approach to changing precedent allows courts toreconsider and overrule past precedent in accordance with defined reconsidera-tion process — Thus, when it is alleged that decision of this court has effectivelyoverruled previous decision, it is necessary to consider whether case now citedas precedent followed reconsideration process — It was significant that appel-lant court did not say that chambers judge either incorrectly, or unnecessarily,distinguished earlier case on basis that he was dealing with by-law that was al-leged to be voidable rather than void, nor did court say that earlier decision wasno longer good — Court neither examined nor distinguished SCC cases thatwere considered in that decision — Thus, to extent that latter decision containedbinding principle, it could only be that limitation period in R. 3.15(2) wouldapply to applicant challenging validity of municipal by-law, provided applicantonly alleged that by-law was voidable rather than void.

Cases considered:

Athabasca Chipewyan First Nation v. Alberta (Minister of Energy) (2011), 21Admin. L.R. (5th) 173, [2011] 2 C.N.L.R. 71, 62 C.E.L.R. (3d) 175, [2012]1 W.W.R. 211, 45 Alta. L.R. (5th) 217, 505 A.R. 72, 522 W.A.C. 72, 2011ABCA 29, 2011 CarswellAlta 317 (Alta. C.A.) — considered

Immeubles Port Louis Ltee c. Lafontaine (Village) (1991), 38 Q.A.C. 253, 5M.P.L.R. (2d) 1, 78 D.L.R. (4th) 175, [1991] 1 S.C.R. 326, 121 N.R. 323,1991 CarswellQue 44, 1991 CarswellQue 100, EYB 1991-67741, [1991]S.C.J. No. 14 (S.C.C.) — considered

Kiewit Energy Canada Corp. v. Edmonton (Subdivision and DevelopmentAppeal Board) (2013), 2013 ABCA 407, 2013 CarswellAlta 2327, 16M.P.L.R. (5th) 25, 87 Alta. L.R. (5th) 287 (Alta. C.A.) — referred to

Kiewit Energy Canada Corp. v. Edmonton (Subdivision and DevelopmentAppeal Board) (2014), 2014 CarswellAlta 607, 2014 CarswellAlta 608,[2014] S.C.C.A. No. 27 (S.C.C.) — referred to

Mammoet 13220-33 Street NE Ltd. v. Edmonton (City) (2014), 2014 Carswell-Alta 711, 2014 ABCA 155, [2014] A.J. No. 459 (Alta. C.A.) — considered

Okotoks (Town) v. Foothills (Municipal District) No. 31 (2012), 2012 ABQB53, 2012 CarswellAlta 189, 532 A.R. 237, [2012] A.J. No. 100 (Alta.Q.B.) — considered

Okotoks (Town) v. Foothills (Municipal District) No. 31 (2013), 81 Alta. L.R.(5th) 421, 2013 ABCA 222, 2013 CarswellAlta 994, 10 M.P.L.R. (5th) 229,363 D.L.R. (4th) 629, 553 A.R. 309, 583 W.A.C. 309, 53 Admin. L.R. (5th)74, [2013] A.J. No. 629 (Alta. C.A.) — distinguished

Okotoks (Town) v. Foothills (Municipal District) No. 31 (2013), 2013 Carswell-Alta 2606, 2013 CarswellAlta 2607, [2013] S.C.C.A. No. 355 (S.C.C.) —referred to

Osborne v. Rowlett (1880), 13 Ch. D. 774 (Eng. Ch. Div.) — referred to

Mammoet 13220-33 Street NE Ltd. v. Edmonton (City) 515

Papaschase Indian Band No. 136 v. Canada (Attorney General) (2004), 2004ABQB 655, 2004 CarswellAlta 1170, 43 Alta. L.R. (4th) 41, [2004] 4C.N.L.R. 110, [2005] 8 W.W.R. 442, (sub nom. Lameman v. Canada(Attorney General)) 365 A.R. 1, [2004] A.J. No. 999 (Alta. Q.B.) —considered

R. v. Arcand (2010), 264 C.C.C. (3d) 134, (sub nom. R. v. A. (J.L.M.)) 499 A.R.1, (sub nom. R. v. A. (J.L.M.)) 514 W.A.C. 1, 83 C.R. (6th) 199, 40 Alta.L.R. (5th) 199, [2011] 7 W.W.R. 209, 2010 ABCA 363, 2010 CarswellAlta2364, [2010] A.J. No. 1383 (Alta. C.A.) — followed

Reid v. York (Township) (1966), 59 D.L.R. (2d) 310, [1967] S.C.R. 81, 1966CarswellOnt 65 (S.C.C.) — considered

United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City) (2002),2002 ABCA 131, 2002 CarswellAlta 724, 303 A.R. 249, 273 W.A.C. 249, 3Alta. L.R. (4th) 211, [2002] 8 W.W.R. 51, 94 C.R.R. (2d) 290, 101 C.R.R.(2d) 187 (note), 30 M.P.L.R. (3d) 155, [2002] A.J. No. 694 (Alta. C.A.) —considered

United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City) (2004),46 M.P.L.R. (3d) 1, 236 D.L.R. (4th) 385, [2004] 7 W.W.R. 603, 346 A.R.4, 320 W.A.C. 4, 318 N.R. 170, 18 R.P.R. (4th) 1, [2004] 1 S.C.R. 485, 2004CarswellAlta 355, 2004 CarswellAlta 356, 2004 SCC 19, 26 Alta. L.R. (4th)1, 12 Admin. L.R. (4th) 1, 50 M.V.R. (4th) 1, [2004] S.C.J. No. 19, REJB2004-55539 (S.C.C.) — considered

Urban Development Institute v. Rocky View (Municipal District No. 44) (2002),2002 ABQB 651, 2002 CarswellAlta 873, 8 Alta. L.R. (4th) 273, [2003] 2W.W.R. 140, 321 A.R. 253, 30 M.P.L.R. (3d) 287, [2002] A.J. No. 885(Alta. Q.B.) — referred to

Wiswell v. Greater Winnipeg (Metropolitan) (1965), [1965] S.C.R. 512, 1965CarswellMan 24, 51 W.W.R. 513, 51 D.L.R. (2d) 754 (S.C.C.) —considered


Municipal Government Act, R.S.A. 2000, c. M-26s. 648 — referred tos. 648(1)(a) — considereds. 648(2)(c.1) [en. 2003, c. 43, s. 3(a)(i)] — considereds. 648(4) — considered

Rules considered:

Alberta Rules of Court, Alta. Reg. 124/2010R. 3.15(2) — considered


Regulations considered:

Municipal Government Act, R.S.A. 2000, c. M-26Principles and Criteria for Off-site Levies Regulation, Alta. Reg. 48/2004

Generally — referred to

Words and phrases considered:

ratio decidendi

. . . points of law that are essential to a decision . . .

APPEAL from judgment reported at Mammoet 13220-33 Street NE Ltd. v.Edmonton (City) (2013), 2013 ABQB 663, 2013 CarswellAlta 2228, 17M.P.L.R. (5th) 158, 90 Alta. L.R. (5th) 64, [2014] 5 W.W.R. 765 (Alta. Q.B.),dismissing application for summary judgment.

F.R. Haldane, Q.C., A.M. Simmonds, for Respondent, Mammoet 13220 - 33Street NE Limited

K.F. Bailey, Q.C., for Respondent, Kiewit Energy Canada Corp.J.A. Agrios, Q.C., for Appellant, Focus Equities Alberta Inc.B.R. Alloway, M.S. Gunther, for Appellant, City of Edmonton

Per curiam:

I. Introduction1 The appellants, Focus Equities Alberta Inc. (Focus), and the City of

Edmonton (City) appeal the decision of a chambers judge dismissingtheir applications for summary judgment. For the reasons that follow, wedismiss their appeals.

II. Facts2 On September 26, 2006, the City adopted Bylaw 14380 entitled Arte-

rial Roads for Development (Bylaw). The Bylaw provides a means bywhich the City can impose costs on developers for the construction ofarterial roads. The Bylaw was passed pursuant, in part, to section 648 theMunicipal Government Act, RSA 2000 c M-26 (MGA) which allows amunicipality to “provide for the imposition and payment of a levy, to beknown as an off-site levy” (648(1)(a)) for the recovery of the capitalcosts of “new or expanded roads required for or impacted by a subdivi-sion or development” (648(2)(c.1)).

3 The respondent, Mammoet 12330-33 Street NE Limited (Mammoet)was granted a development permit on December 18, 2006, and on March14, 2007 it acquired lands that were subject to the Bylaw. On December

Mammoet 13220-33 Street NE Ltd. v. Edmonton (City) Per curiam 517

23, 2010, the City approved a tentative plan of subdivision to create anadditional industrial lot from the lands owned by Mammoet and the re-spondent Hustle Holding Ltd (hereinafter described collectively as Mam-moet). It was a condition of the subdivision approval that Mammoetenter into a servicing agreement providing, inter alia, for the payment ofthe Arterial Roadway Assessment made pursuant to the Bylaw. OnMarch 16, 2012, following negotiation between the parties, the City in-formed Mammoet that the amount of the assessment was $2,927,892.00.

4 The respondent, Kiewit Energy Canada Corp. (Kiewit), acquiredlands subject to the Bylaw in 2005, and obtained its first developmentpermit on May 19, 2005. On March 21, 2012, the City issued a thirddevelopment permit to Kiewit which contained a condition that Kiewitenter into a servicing agreement for the payment of the Arterial RoadwayAssessment. On April 25, 2012, the city sent Kiewit the servicing agree-ment which required payment of an off-site levy in the amount of$984,383.00.

5 Kiewit appealed the imposition of the levy to the Subdivision and De-velopment Appeal Board. This appeal was dismissed but a subsequentappeal to this Court was successful. This Court found the City was pre-cluded from imposing the off-site levy because Kiewit had already paidan off-site levy with respect to the property in question, and section648(4) of the MGA prohibited the City from imposing a second levy onthe property: Kiewit Energy Canada Corp. v. Edmonton (Subdivision andDevelopment Appeal Board), 2013 ABCA 407, 87 Alta. L.R. (5th) 287(Alta. C.A.). The City’s application for leave was denied by the SupremeCourt of Canada on April 17, 2014: Kiewit Energy Canada Corp. v.Edmonton (Subdivision and Development Appeal Board), [2014]S.C.C.A. No. 27 (S.C.C.), SCC No 35697.

6 On October 25, 2012, Mammoet and Kiewit jointly filed an Originat-ing Application in the Court of Queen’s Bench seeking the followingrelief:

(i) A declaration that the Offsite Levies imposed upon the Applicantsbear no relationship or correlation to the impact, if any, of the de-velopment or subdivision of the Applicants’ lands may have uponthe improvements for which the levy is imposed.

(ii) A declaration that the levies sought to be imposed upon the Appli-cants as a condition of subdivision approval or development ap-proval are inequitable having regard to the degree of benefit real-ized by the Applicants.


(iii) A declaration that it is improper to assess 100% of the cost of theArterial Roadways to a defined area denying others who benefitby the Arterials Roadways the opportunity to contribute to the costof such infrastructure.

(iv) A declaration that the ARA Bylaw fails to satisfy the requirementsof the Regulations by failing to identify all beneficiaries or thedegree to which they benefit or the impact of development or sub-division upon the offsite infrastructure.

(v) An order severing the Applicants’ lands from Schedule 1 of ARABylaw.

(vi) Alternatively, an order quashing the ARA Bylaw in its entirety.7 The grounds of the respondents’ application were that the off-site le-

vies sought to be charged by the City were not assessed in accordancewith the Principles and Criteria for Off-Site Levies Regulation, AR 48/2004 (Regulation) and that the Bylaw itself was invalid for non-compli-ance with the Regulation.

8 Focus and the City applied for summary judgment on the ground thatthe originating application was barred by the six month limitation foundin rule 3.15 (2) of the Alberta Rules of Court (Rules), which provides that“...an originating application for judicial review to set aside a decision oract of a person or body, must be filed and served within 6 months afterthe date of the decision or act”. The appellants relied upon this Court’sdecision in Okotoks (Town) v. Foothills (Municipal District) No. 31,2013 ABCA 222, 553 A.R. 309 (Alta. C.A.), leave to appeal to the Su-preme Court of Canada denied: [2013] S.C.C.A. No. 355 (S.C.C.), SCCNo 35515. In that case, this Court held, amongst other things, that thepassing of a municipal bylaw “was a decision or act of a person or body”and was thus subject to Rule 3.15 (2).

9 It is significant that while the Originating Application alleges that theoff-site levies do not comply with the Regulation, the applications forsummary judgment appear to be directed only at the attack upon the va-lidity of the Bylaw. Thus, the applications provide no express groundsfor dismissing those portions of the originating application seeking dec-larations concerning the levies assessed under the Bylaw.


III. The Chambers Judge’s Decision: Mammoet 13220-33 Street NELtd. v. Edmonton (City), 2013 ABQB 663, 90 Alta. L.R. (5th) 64(Alta. Q.B.)

10 Given the narrow scope of the application for summary judgment, thechambers judge dealt only with the attack upon the Bylaw. He summa-rized the position of the respondents in that regard at para 5 of his rea-sons:

Mammoet/Kiewit contend the ARA Bylaw is invalid on its face inpart because it fails to comply with the requirements of the Regula-tion. They say for example that nothing in the bylaw requiresEdmonton to “negotiate” the levy as mandated in the Regulation, orat all; nothing in the bylaw requires that Edmonton take into accountthe “degree of benefit” to the party upon which a levy is assessed, orthe cost of providing and installing infrastructure on an equitable ba-sis; nothing in the bylaw requires that all beneficiaries of that infra-structure be given the “opportunity to participate” in those costs; andnothing in the bylaw requires that there “be a correlation between thelevy and the impacts of new development”.

11 Both Focus and the City conceded there was an arguable case that theBylaw did not comply with the Regulation. The central issue in the appli-cation for summary judgment, therefore, was whether the six-month timelimit found in rule 3.15(2) applied, because it was obvious that theOriginating Application had not been filed within six months of the By-law’s passage in 2006. In the chambers judge’s view, the answer to thisquestion required him to decide which of two precedents from this Courtgoverned: Okotoks 2013, as Focus and the City contended, or UnitedTaxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2002ABCA 131, 3 Alta. L.R. (4th) 211 (Alta. C.A.), rev’d on other grounds2004 SCC 19, [2004] 1 S.C.R. 485 (S.C.C.). In United Taxi, this Courtheld that the limitation period under the then existing Rule did “not affectthe ability of a court to decide the municipality lacked the jurisdictionunder its constituent legislation”, (para 162).

12 The chambers judge reviewed both decisions in detail and concludedthey were in direct conflict. He decided it was preferable to followUnited Taxi as the Court in that case had relied on authority from theSupreme Court of Canada — specifically, the Supreme Court’s decisionin Wiswell v. Greater Winnipeg (Metropolitan), [1965] S.C.R. 512(S.C.C.). He noted that subsequent decisions from the Supreme Courthad applied Wiswell. In the end, the chambers judge dismissed the sum-mary judgment application relying on this point.


13 Having come to this conclusion, however, the chambers judge consid-ered alternative arguments in the event he was wrong in applying UnitedTaxi. He noted that unlike the situation in Okotoks 2013, it was arguablethat neither Mammoet nor Kiewit had notice of the Bylaw at the time itwas passed. In his view, therefore, the parties were entitled to the oppor-tunity to litigate this point further. As well, he considered whether theLegislature, as a constitutional matter, could limit the power of the supe-rior courts to review municipal decisions for vires. This too he found wasan arguable point, and he held that Mammoet and Kiewit should be al-lowed to advance this argument on the merits.

IV. The Grounds of Appeal14 The appellants advance three grounds of appeal which we paraphrase

as follows:

1. The chambers justice erred by not following Okotoks 2013;

2. The chambers judge erred in finding the issue of notice wasrelevant;

3. The chambers judge erred in finding the constitutional issue wasrelevant.

V. Analysis15 We are satisfied the appeal can be disposed of on the first ground. As

this ground deals with questions of precedent and stare decisis, which arematters of law, the standard of review is correctness.

16 The chambers judge found “an irreconcilable conflict” betweenUnited Taxi and Okotoks 2013 (para 71). Notwithstanding that Okotoks2013 was the Court’s later pronouncement, he followed United Taxi onthe basis that there is no “authoritative statement in Okotoks 2013 statingthat United Taxi is no longer the law in this province” (para 82). In ourview, the chambers judge was correct to follow United Taxi. However,we would uphold his decision on the basis that Okotoks 2013 can be dis-tinguished from United Taxi and the line of Supreme Court of Canadaauthorities which it follows.

17 We begin our analysis with an examination of certain underlyingprinciples. First, the authoritative value of a case depends upon what itrules. It is only those points of law that are essential to a decision, theratio decidendi, that are binding. Non-essential statements are obiterdicta and although they may have persuasive value in certain circum-


stances they do not govern. In RWM Dias, Jurisprudence, 4 ed (London:Butterworth, 1976) at 162 the author cites Osborne v. Rowlett (1880), 13Ch. D. 774 (Eng. Ch. Div.), at 785 for the proposition that “the onlything in a Judge’s decision binding as an authority upon a subsequentJudge is the principle upon which the case was decided”.

18 Second, Alberta has developed a process for reconsidering Court ofAppeal decision in later appeals. This Court commented both on the pol-icy, and requisite procedures for its implementation, in R. v. Arcand,2010 ABCA 363, 40 Alta. L.R. (5th) 199 (Alta. C.A.). The Court stated,at para 187, that “the modern approach to changing precedent allowscourts to reconsider and overrule past precedent in accordance with adefined reconsideration process.” Thus, when it is alleged that a decisionof this court has effectively overruled a previous decision it is necessaryto consider whether the case now cited as precedent followed the recon-sideration process. If it did not, its precedential value may be fatallyflawed: Arcand, at para 200. Underlying this process is the principle thatunless the reconsideration process is appropriately invoked, the Court isbound to follow its own previous precedents as well as applicable Su-preme Court authority.

19 With these principles in mind we turn to whether Okotoks 2013 over-ruled this Court’s previous decision in United Taxi.

(a) United Taxi20 In United Taxi, the majority held certain provisions of the City’s taxi

bylaw to be “void for lack of jurisdiction when the City exceeded itsstatutory powers” (para 165). The judgment discussed the distinction be-tween void and voidable bylaws and concluded that “limitation periodsmay not bar actions if the impugned bylaw is void, rather than voidable”(para 164).

21 The majority relied upon the Supreme Court’s decision in Wiswell v.Winnipeg. Hall, J., speaking for the majority, stated at paras 39-40:

Having arrived at the conclusion that the bylaw was void, there re-mains for determination the question whether the appellants’ actionwas barred by the provisions of sec. 206 (as amended 1962, ch. 97)of The Metropolitan Winnipeg Act, which reads as follows:

206. (4) Any resident of the metropolitan area may applyto a judge of the Court of Queen’s Bench in chambers toquash a by-law of which the metropolitan council in themanner in which, and for the reasons for which, a by-law


of a municipal council may be quashed under sections390 to 391 and 393 to 395 of The Municipal Act andthose sections and subsection (2) of section 290 of thatAct apply, mutatis mutandis, to an application made underthis subsection and in particular, substituting the expres-sion ‘metropolitan corporation’ for ‘municipal corpora-tion’ and ‘secretary’ for ‘clerk’.

(5) No application under subsection (4) shall be enter-tained unless it is made within three months from thepassing of the by-law.

This section cannot be invoked as a bar to the action. The law in thisregard is stated by Rogers in The law of Canadian Municipal Corpo-rations, vol. 2, p. 893, as follows:

... if a by-law is within the power of the council and re-mains unimpeached within the time limited, it is validatedby the effluxion of time.

It must be stressed, however, that the curative effect ofa failure to quash a by-law is limited to by-laws whichare merely voidable and not void. The courts havemade a distinction between these two classes of illegalby-laws. A voidable by-law is one that is defective fornon-observance or want of compliance with a statu-tory formality or an irregularity in the proceedings re-lating to its passing and is therefore liable to bequashed whereas a void by-law is one that is beyondthe competence to enact either because of completelack of power to legislate upon the subject matter orbecause of a non-compliance with a prerequisite to itspassing.

[emphasis added]

22 It is worth noting, as the chambers judge did, that the above passagefrom Wiswell was quoted with apparent approval by the Supreme Courtin its subsequent decision in Immeubles Port Louis Ltee c. Lafontaine(Village), [1991] 1 S.C.R. 326 (S.C.C.) at para 65. That decision pointsout that in cases where there has been considerable delay in making anapplication for judicial review, the court has a residual discretion to de-cide not to grant the remedy.

23 In yet another case, Reid v. York (Township) (1966), [1967] S.C.R.81, 59 D.L.R. (2d) 310 (S.C.C.), also relied upon by this Court in UnitedTaxi, at para 163, the Supreme Court held that a bylaw passed by a muni-


cipal council authorizing a sale in breach of its governing statute, wasvoid and therefore not subject to a limitation period that would otherwisebe applicable. Judson, J. speaking for the Court, stated at 85:

I agree with the judgment of the Court of Appeal that if the provi-sions of s. 477 of The Municipal Act are not observed, the council iswithout authority and a by-law authorizing sale is void and is open toattack notwithstanding that more than a year has elapsed from thedate of its passing.

24 The Supreme Court reversed the majority’s decision in United Taxi,with respect to the bylaw’s validity, but it did not take issue with thisCourt’s findings on the limitations issue. That decision, therefore, re-mains binding until overruled by the Supreme Court, or reconsidered,and it is notable that the decision has been followed subsequently insofaras it relates to the issue of whether a void bylaw can be challengedoutside a limitation period: Urban Development Institute v. Rocky View(Municipal District No. 44), 2002 ABQB 651, 8 Alta. L.R. (4th) 273(Alta. Q.B.).

(b) Okotoks 201325 In this case, the Town of Okotoks applied for a declaration that a

bylaw passed by its neighboring municipality, the Municipal District ofFoothills No. 31 (“MD”), was invalid. The Town alleged that an AreaStructure Plan (ASP), adopted by the MD’s bylaw, conflicted with aninter-municipal development agreement, and a joint planning agreement,between the two municipalities. The chambers judge hearing the Town’sapplication pointed out that the objection to the bylaw was “not that theMD has no authority to pass an ASP bylaw but that the planning detailsof this particular ASP may conflict with the other statutory plan”:Okotoks (Town) v. Foothills (Municipal District) No. 31, 2012 ABQB53, 532 A.R. 237 (Alta. Q.B.), at para 32. Thus, there was no issue aboutwhether the MD had the jurisdiction to enact the bylaw, or whether theMD had failed to comply with any pre-conditions to the bylaw’s enact-ment. The question, instead, was whether the bylaw containing the ASPwas voidable because it conflicted with the agreements between the twomunicipalities. It was in this context that the chambers judge distin-guished United Taxi and Urban Development because it was not beingalleged before him that the impugned bylaw was void. Thus, the limita-tion period in Rule 3.15 (2) was applicable.


26 This Court dismissed the Town’s appeal. In upholding the decision,the panel quoted from a decision of Slatter, J. (as he then was) inPapaschase Indian Band No. 136 v. Canada (Attorney General), 2004ABQB 655, 365 A.R. 1 (Alta. Q.B.), in which his Lordship expressed theview that the limitation period found in rule 753.11, the predecessor torule 3.15(2), applied to decisions that were void and voidable alike. ThisCourt noted further that Slatter, J.’s view in Papaschase was cited withapproval by this Court in Athabasca Chipewyan First Nation v. Alberta(Minister of Energy), 2011 ABCA 29, 505 A.R. 72 (Alta. C.A.), at para23, in the context of determining that the limitation period ran withoutregard to a potential applicant’s knowledge.

27 Despite these comments, we think it significant that the Court did notsay that the chambers judge either incorrectly, or unnecessarily, distin-guished United Taxi on the basis that he was dealing with a bylaw whichwas alleged to be voidable rather than void. Nor did the Court say thatUnited Taxi was no longer good law. Furthermore, it is important that theCourt neither examined nor distinguished the cases from the SupremeCourt which were considered in that decision. Thus, to the extentOkotoks 2013 contains a binding principle it can only be that the limita-tion period in rule 3.15(2) will apply to an applicant challenging the va-lidity of a municipal bylaw, provided the applicant is only alleging thatthe bylaw is voidable rather than void. The Court’s broader remarks areobiter dicta.

28 It is also significant that there was no application before the Court inOkotoks 2013 to reconsider the decision in United Taxi. Given its knowl-edge of the existing process available, we find it unlikely that the panelintended to overrule United Taxi and its interpretation and application ofcases such as Wiswell without first invoking the reconsideration process.This thinking is confirmed by a panel of this court that recently dis-missed an application by Mammoet, in these proceedings, to reconsiderOkotoks 2013 in light of its apparent conflict with United Taxi (see:Mammoet 13220-33 Street NE Ltd. v. Edmonton (City), 2014 ABCA 155,[2014] A.J. No. 459 (Alta. C.A.)). As the panel hearing the applicationfor reconsideration stated at para 3:

It is important to remember the key ingredients of the Okotoks deci-sion, which counsel for the applicants concedes may be distinguisha-ble on the facts of this case.

29 In our view, the key ingredient of Okotoks 2013 is the Queen’s BenchJudge’s finding that the impugned bylaw was not being challenged be-


cause it was enacted without jurisdiction, and was therefore void. It wasbeing attacked, instead, because it was alleged to conflict with an inter-municipal agreement, rendering it, at best, voidable. The finding that thelimitation period in Rule 3.15(2) applied was based upon this conclusion.This finding was not disturbed by the appeal panel with the result that itdefines the ratio of the case. It follows, therefore, that in this vital respectOkotoks 2013 is distinguishable from the case before us because here, asthe cited passage from the chambers judge’s reasons indicates, the re-spondents are arguing that the Bylaw does not meet certain statutory pre-conditions which would render it void. It follows that the respondentscan make this argument without concern for the limitation period foundin Rule 3.15(2), although any issue of delay may go to the exercise ofdiscretion in the grant of a remedy.

30 The test for summary judgment is not in issue before us. The partieshave acknowledged from the start that summary judgment is not availa-ble unless the limitation period in Rule 3.15(2) applies. The issue ofwhether or not the Bylaw is void goes to the merits of the application.We were not asked to deal with that point — indeed counsel for the Cityadvised that if the application proceeded on its merits, he would submitthat the Bylaw complies with the governing legislation and is not other-wise void.

31 As we have rejected the limitation argument, which was the founda-tion of the application for summary judgment, it follows that summaryjudgment is not available.

32 Given this conclusion, and the fact that the judge’s other findingswere made in the alternative, we do not need to examine the othergrounds of appeal.

VI. Conclusion33 The appeal is dismissed.

Appeal dismissed.


[Indexed as: Bilfinger Berger (Canada) Inc. v. GreaterVancouver Water District]

Bilfinger Berger (Canada) Inc., Bilfinger Berger AG, Fru-ConConstruction Corporation and Bilfinger Berger/Fru-Con, a Joint

Venture, Plaintiffs and Greater Vancouver Water District,Greater Vancouver Regional District, Greater Vancouver

Sewerage and Drainage District, Hatch Mott Macdonald Ltd.,and The Corporation of the District of North Vancouver,

Defendants

The Greater Vancouver Water District, Plaintiff and BilfingerBerger AG, Bilfinger Berger (Canada) Inc., Fru-Con

Construction Corporation and Bilfinger Berger/Fru-Con, a jointventure, Travelers Guarantee Company of Canada La

Compagnie Travelers Garantie Du Canada, Chubb InsuranceCompany of Canada Chubb Du Canada Compagnie

D’Assurance and Zurich Insurance Company Zurich CompagnieD’Assurance, Defendants

British Columbia Supreme Court

Docket: Vancouver S084599, S083856

2014 BCSC 1560

Susan A. Griffin J., In Chambers

Heard: June 16, 18, 2014


Civil practice and procedure –––– Discovery — Discovery of documents —Privileged document — Miscellaneous –––– Two actions in issue were orderedto be heard at same time — Applicants brought application seeking to strike re-spondents’ pleadings on basis that they were abuse of process of court — Appli-cation dismissed — Applicants’ claim for what was often referred to as draco-nian relief was based on alleged failure of respondents to immediately disclosecooperation and reservation of rights agreement between them — Respondentstook position that agreement and any discussions between them and their respec-tive counsel pursuant to it was properly subject to common interest privilege andthey were under no obligation to disclose it — Entering into agreement was notabuse of process — Where there would be common interest privilege overagreement between parties to litigation, that privilege should give way to someextent when necessary for just disposition of pending litigation — Generally thiswould include circumstances where agreement’s existence could cast light on

Bilfinger Berger v. Greater Vancouver 527

quality of evidence or motivation of witness or could affect weight court mightgive evidence, where agreement’s existence could be relevant to decisions re-garding conduct of trial, or where court or opposing party could otherwise bemisled about position of parties in adversarial process — Respondents shouldhave disclosed fact that they had cooperation agreement dealing with exchangeof information under common interest privilege, and fact that they had agreed toreserve rights to sue one another, soon after question was asked of witness forcertain respondents on examination for discovery — Disclosing actual agree-ment when certain respondents did, so that opposing party and court would beaware of it, was sufficiently in advance of planning conduct of trial so as not tocause any prejudice to decisions regarding trial itself — Miscarriage of justice orabuse of process justifying relief sought by applicants was not found — Sinceagreement had now been produced, no remedy was required.

Civil practice and procedure –––– Costs — Particular orders as to costs —Miscellaneous –––– Two actions in issue were ordered to be heard at sametime — Applicants brought application seeking to strike respondents’ pleadingson basis that they were abuse of process of court — Application dismissed —While both sides sought special costs, it was appropriate to simply order costs incause — Both sides were partially successful and partially unsuccessful in re-sult — Applicants did not succeed in obtaining relief sought, but were success-ful in principle in part based on conclusion that fact that respondents had coop-eration and reservation of rights agreement ought to have been disclosed earlierthan it was — Respondents did not succeed in their position that agreement didnot need to be disclosed at all, but agreement had already been disclosed andthey succeeded in their position that no remedy was necessary — Argument thatconduct of respondents warranted special costs was not accepted — There wasno basis for suggestion that lawyers were acting other than in good faith in con-sidering agreement privileged — Delay by respondents in producing agreementdid not justify special costs against them — While there was concern about ap-plicants’ position on application being overstated, it was not found that appli-cants’ conduct in bringing application was so egregious as to warrant specialcosts against it.

Cases considered by Susan A. Griffin J., In Chambers:

Aecon Buildings v. Brampton (City) (2010), (sub nom. Aecon Buildings v.Stephenson Engineering Ltd.) 328 D.L.R. (4th) 488, 98 C.L.R. (3d) 1, 2010ONCA 898, 2010 CarswellOnt 9749, [2010] O.J. No. 5630 (Ont. C.A.) —considered

Aecon Buildings v. Brampton (City) (2011), 2011 CarswellOnt 1431, [2011]S.C.C.A. No. 84 (S.C.C.) — referred to

Aecon Buildings v. Brampton (City) (2011), 2011 SCC 33, (sub nom. AeconBuildings, a Division of Aecon Construction Group Inc. v. StephensonEngineering Ltd.) 333 D.L.R. (4th) 193, 100 C.L.R. (3d) 1, 2011 Carswell-


Ont 5046, 2011 CarswellOnt 5047, (sub nom. Aecon Buildings v. StephensonEngineering Lt.d) [2011] 2 S.C.R. 560 (S.C.C.) — referred to

Aviaco International Leasing Inc. v. Boeing Canada Inc. (2000), 48 C.P.C. (4th)44, 9 B.L.R. (3d) 99, 2000 CarswellOnt 2194, [2000] O.J. No. 2420 (Ont.S.C.J.) — considered

Bilfinger Berger (Canada) Inc. v. Greater Vancouver Water District (2013),2013 BCSC 1892, 2013 CarswellBC 3108, 30 C.L.R. (4th) 298 (B.C.S.C.) — referred to

Blank v. Canada (Department of Justice) (2006), 2006 CarswellNat 2704, 2006CarswellNat 2705, 47 Admin. L.R. (4th) 84, 40 C.R. (6th) 1, 2006 SCC 39,(sub nom. Blank v. Canada (Minister of Justice)) 352 N.R. 201, 270 D.L.R.(4th) 257, 51 C.P.R. (4th) 1, (sub nom. Blank v. Canada (Minister of Jus-tice)) [2006] 2 S.C.R. 319, [2006] S.C.J. No. 39 (S.C.C.) — considered

Bodnar v. Home Insurance Co. (1987), 25 C.P.C. (2d) 152, 1987 CarswellOnt560, [1987] O.J. No. 2365 (Ont. Master) — considered

British Columbia Children’s Hospital v. Air Products Canada Ltd./ProdairCanada Ltee (2003), 11 B.C.L.R. (4th) 28, 29 C.P.C. (5th) 15, 224 D.L.R.(4th) 23, 24 C.P.R. (4th) 16, 2003 BCCA 177, 2003 CarswellBC 614, 180B.C.A.C. 129, 297 W.A.C. 129, [2003] B.C.J. No. 591 (B.C. C.A.) —followed

British Columbia (Director of Civil Forfeiture) v. “Property Owners” (2011),2011 BCSC 1199, 2011 CarswellBC 2365, (sub nom. Director of CivilForfeiture v. Shoquist) 242 C.R.R. (2d) 85 (B.C. S.C.) — considered

Buttes Gas & Oil v. Hammer (No. 3) (1980), [1980] 3 All E.R. 475, [1981] Q.B.223, [1980] 3 W.L.R. 668 (Eng. C.A.) — considered

Danicek v. Alexander Holburn Beaudin & Lang (2010), 8 B.C.L.R. (5th) 316,88 C.C.L.I. (4th) 191, 2010 BCSC 1111, 2010 CarswellBC 2097, [2010]B.C.J. No. 1575 (B.C. S.C.) — considered

Dos Santos (Committee of) v. Sun Life Assurance Co. of Canada (2005), 249D.L.R. (4th) 416, 40 B.C.L.R. (4th) 245, [2005] 7 W.W.R. 1, (sub nom. DosSantos Estate v. Sun Life Assurance Co. of Canada) 207 B.C.A.C. 54, (subnom. Dos Santos Estate v. Sun Life Assurance Co. of Canada) 341 W.A.C.54, 2005 BCCA 4, 2005 CarswellBC 5, 17 C.C.L.I. (4th) 180, 5 C.P.C. (6th)278, [2005] B.C.J. No. 5 (B.C. C.A.) — considered

Edmonton (City) v. Lovat Tunnel Equipment Inc. (2000), 76 Alta. L.R. (3d) 389,[2000] 4 W.W.R. 714, 2000 CarswellAlta 199, 260 A.R. 140, 2000 ABQB133, [2000] A.J. No. 238 (Alta. Q.B.) — considered

FBI Foods Ltd. - Aliments FBI Ltee v. Glassner (2001), 86 B.C.L.R. (3d) 136,2001 BCSC 151, 2001 CarswellBC 182, (sub nom. FBI Foods Ltd. v.Glassner) 11 C.P.R. (4th) 176 (B.C. S.C.) — referred to

Fortin c. Chretien (2001), (sub nom. Fortin v. Chretien) 201 D.L.R. (4th) 223,(sub nom. Fortin v. Barreau du Quebec) 272 N.R. 359, 2001 CarswellQue

Bilfinger Berger v. Greater Vancouver 529

1395, 2001 CarswellQue 1396, 2001 SCC 45, [2001] 2 S.C.R. 500, REJB2001-25001 (S.C.C.) — considered

Fraser Milner Casgrain LLP v. Minister of National Revenue (2002), 6B.C.L.R. (4th) 135, 2002 BCSC 1344, [2002] 11 W.W.R. 682, 2003 D.T.C.5048, 2002 CarswellBC 2208, [2002] B.C.J. No. 2146 (B.C. S.C.) —considered

Glasjam Investments Ltd. v. Freedman (2014), 2014 CarswellOnt 9009, 2014ONSC 3878 (Ont. S.C.J.) — considered

Laudon v. Roberts (2009), 2009 CarswellOnt 2377, 77 M.V.R. (5th) 165, 2009ONCA 383, 308 D.L.R. (4th) 422, 66 C.C.L.T. (3d) 207, 249 O.A.C. 72,[2009] O.J. No. 1824 (Ont. C.A.) — considered

Law Society of Upper Canada v. Ernst & Young (2007), 2007 CarswellOnt6664, [2007] O.J. No. 3984 (Ont. Master) — considered

Maximum Ventures Inc. v. de Graaf (2007), 2007 BCCA 510, 2007 CarswellBC3231, (sub nom. Maximum Ventures Inc. v. De Graaf) 247 B.C.A.C. 215,(sub nom. Maximum Ventures Inc. v. De Graaf) 409 W.A.C. 215, [2007]B.C.J. No. 2355 (B.C. C.A.) — considered

Middelkamp v. Fraser Valley Real Estate Board (1992), 1992 CarswellBC 267,71 B.C.L.R. (2d) 276, 10 C.P.C. (3d) 109, 96 D.L.R. (4th) 227, 17 B.C.A.C.134, 29 W.A.C. 134, 45 C.P.R. (3d) 213, [1992] B.C.J. No. 1947 (B.C.C.A.) — considered

Moore v. Bertuzzi (2012), 2012 CarswellOnt 6962, 2012 ONSC 3248, 110 O.R.(3d) 611, 32 C.P.C. (7th) 376, [2012] O.J. No. 2485 (Ont. S.C.J.) —followed

Moore v. Bertuzzi (2012), 2012 CarswellOnt 11371, 2012 ONSC 5008, 39C.P.C. (7th) 70, [2012] O.J. No. 4342 (Ont. S.C.J.) — considered

No Limits Sportswear Inc. v. 0912139 B.C. Ltd. (2014), 2014 BCSC 999, 2014CarswellBC 1584 (B.C. S.C.) — considered

Pritchard v. Ontario (Human Rights Commission) (2004), 2004 SCC 31, 2004CarswellOnt 1885, 2004 CarswellOnt 1886, 12 Admin. L.R. (4th) 171, 47C.P.C. (5th) 203, 72 O.R. (3d) 160 (note), 49 C.H.R.R. D/120, 2004C.L.L.C. 230-021, [2004] 1 S.C.R. 809, 19 C.R. (6th) 203, 33 C.C.E.L. (3d)1, [2004] S.C.J. No. 16, REJB 2004-61849 (S.C.C.) — referred to

Sable Offshore Energy Inc. v. Ameron International Corp. (2013), 37 C.P.C.(7th) 225, 22 C.L.R. (4th) 1, 2013 SCC 37, 2013 CarswellNS 428, 2013CarswellNS 429, 359 D.L.R. (4th) 381, [2013] 2 S.C.R. 623, 446 N.R. 35,1052 A.P.R. 1, 332 N.B.R. (2d) 1, [2013] S.C.J. No. 37 (S.C.C.) —considered

Toronto (City) v. C.U.P.E., Local 79 (2003), 232 D.L.R. (4th) 385, 9 Admin.L.R. (4th) 161, [2003] 3 S.C.R. 77, 17 C.R. (6th) 276, 2003 SCC 63, 2003CarswellOnt 4328, 2003 CarswellOnt 4329, 311 N.R. 201, 2003 C.L.L.C.220-071, 179 O.A.C. 291, 120 L.A.C. (4th) 225, 31 C.C.E.L. (3d) 216,[2003] S.C.J. No. 64, REJB 2003-49439 (S.C.C.) — followed


Trillium Motor World Ltd. v. General Motors of Canada Ltd. (2014), 2014ONSC 1338, 2014 CarswellOnt 2571, [2014] O.J. No. 1004 (Ont. S.C.J.) —considered

YBM Magnex International Inc., Re (1999), 1999 CarswellAlta 983, 75 Alta.L.R. (3d) 99, 15 C.B.R. (4th) 140, 1999 ABQB 793, (sub nom. YBM MagnexInternational Inc. (Receivership), Re) 252 A.R. 165 (Alta. Q.B.) — referredto

Zwaniga v. Johnvince Foods Distribution L.P. (2012), 2012 CarswellOnt 8259,2012 ONSC 3848, 41 C.P.C. (7th) 322 (Ont. S.C.J.) — followed

Rules considered:

Rules of Court, 1990, B.C. Reg. 221/90Generally — referred to

Supreme Court Civil Rules, B.C. Reg. 168/2009Generally — referred toR. 1-2(3) — considered

APPLICATION seeking to strike respondents’ pleadings.

C.J. O’Connor, Q.C., Krista Johanson, for Plaintiffs in Action No. S084599 and,for the Defendants in Action No. S083856 (the “Bilfinger Berger parties”)

John R. Singleton, Q.C., C. Immega, Stephen J. Berezowskyj, for GRWD,GVRD, GVS&DD, and Corporation of North Vancouver (the “Metro Van-couver parties”)

Frank G. Potts, Timothy D. Goepel, for Hatch Mott Macdonald Ltd

Susan A. Griffin J., In Chambers:

Introduction1 This application, which arises in the context of complicated construc-

tion litigation, raises questions about whether co-defendants have a dutyto disclose a cooperation and reservation of rights agreement betweenthem. The defendants say that they do not and that such an agreement issubject to common interest privilege. The opposite party says once theagreement was reached there was a duty to disclose it immediately andthe failure to do so amounts to an abuse of process.

2 Bilfinger Berger (Canada) Inc., Bilfinger Berger AG, Fru-Con Con-struction Corporation and Bilfinger Berger/Fru-Con, a Joint Venture(collectively referred to by these parties as “Bilfinger”) bring an applica-tion in Action S084599 seeking to strike the Amended Statement of De-fence of the Greater Vancouver Water District (“GVWD”), the GreaterVancouver Regional District and the Greater Vancouver Sewerage and

Bilfinger Berger v. Greater Vancouver Susan A. Griffin J., In Chambers 531

Drainage District filed 16 March 2009 (original filed 17 July 2008) andthe Amended Statement of Defence of the Corporation of the District ofNorth Vancouver filed 8 May 2009 (original filed 10 September 2008)(collectively the municipalities will be referred to as “Metro Vancou-ver”) and to strike the Statement of Defence of Hatch Mott MacdonaldLtd (“HMM”) filed 30 July 2008 (collectively, the “Defendants’ Plead-ings”) on the basis that they are an abuse of process of the Court.

3 Bilfinger also seeks an award of judgment in its favour with damagesto be assessed, and asks for costs of the application and the proceedingsto date to be paid forthwith as special costs.

4 Bilfinger seeks similar relief in Action S083856 in which it is a de-fendant to claims by GVWD, namely, that the claim of GVWD be struckand that Bilfinger be awarded special costs. HMM is not a party in thatproceeding.

5 Bilfinger’s claim for what is often referred to as draconian relief isbased on the alleged failure of Metro Vancouver and HMM to immedi-ately disclose an agreement between them dated February 26, 2009 (the“Agreement”).

6 Bilfinger relies on the reasoning of the Ontario Court of Appeal inAecon Buildings v. Brampton (City), 2010 ONCA 898 (Ont. C.A.)[Aecon]. In Aecon the Ontario Court of Appeal found that the failure ofthe plaintiff and one defendant to disclose immediately the fact of a MaryCarter agreement between them was an abuse of process and justifiedstriking out the Third Party proceedings commenced by that defendantand striking out the consequential Fourth Party proceedings.

7 The Supreme Court of Canada refused leave to appeal from Aecon:Aecon Buildings v. Brampton (City), [2011] S.C.C.A. No. 84 (S.C.C.)[Aecon (SCC)].

8 Metro Vancouver and HMM say that the Aecon case is distinguisha-ble and the reasoning inapplicable to the facts here. They say theirAgreement is simply a cooperation agreement between them regardingthe conduct of this litigation, and normally subject to common interestprivilege, and regardless, it has since been produced.

9 Metro Vancouver and HMM submit that not only should Bilfinger’sapplications be dismissed, the allegations advanced by Bilfinger justifyan award of special costs against it.


Background10 The background to this litigation was summarized in a ruling made on

September 19, 2013 indexed as 2013 BCSC 1892 (B.C. S.C.) at paras. 7-9:

This litigation arises out of a construction contract between Bilfingerand Metro Vancouver for a contract price in excess of $100 million.The contract related to the construction by Bilfinger of, amongstother things, two underground tunnels, one for treated water and onefor raw water, and two vertical shafts. This was known as the Sey-mour-Capilano Twin Tunnels Project.

After Bilfinger began work tunneling, it says it encountered unex-pected and dangerous failures of the rock. The parties took variouspositions with each other regarding responsibility for unsafe condi-tions, disclosure of conditions, and design. Disputes between the par-ties culminated in Bilfinger stopping work and, ultimately, MetroVancouver terminating the contract. Metro Vancouver then enteredinto contracts with new parties to complete the work. Metro Vancou-ver asserted a right to take over Bilfinger’s tunnel boring equipmentthat was on site and to use it to complete the work.

Tunnel planning and design appears to reach as far back as 2002.Bilfinger and Metro Vancouver entered into the contract in 2004.Bilfinger’s tunneling work began in 2006. The work stoppage byBilfinger occurred in early 2008. Metro Vancouver’s notice of termi-nation of the contract occurred in May 2008. This litigation ensued,and the continued construction work on the twin tunnels has beenongoing since. The many facts that may be at issue in this proceedingthus cover a time period from 2002 to the present.

11 Hatch Mott MacDonald Ltd. (“HMM”) is an engineering consultantcontracted by Metro Vancouver for the Project. HMM was responsiblefor the project design as well as engineering services during construction.

12 After Metro Vancouver terminated Bilfinger’s contract, GVWD suedBilfinger for breach of contract in the first of the proceedings herein,Action No. S-083846 (the “Metro Action”). It did not sue HMM. HMMhas continued to provide engineering services for Metro Vancouver inrespect of the completion of the project.

13 Bilfinger started its own action against Metro Vancouver, the secondof the proceedings herein, Action No. S-084599 (the “Bilfinger Action”).Bilfinger sued both Metro Vancouver and HMM.

14 Bilfinger alleges in the Bilfinger Action that Metro Vancouverbreached the construction contract by failing to pay amounts owed to


Bilfinger and by wrongfully terminating the contract after having failedto provide a safe, viable design. It also alleges that Metro Vancouver andHMM were negligent and made actionable misrepresentations in the de-sign, specification, tender, and during construction of the Project.

15 The District of North Vancouver is also named as a defendant be-cause it owns some of the relevant lands and the relief sought includesclaims of builder’s lien against the lands.

16 On June 27, 2013, this Court ordered that the Metro Action and theBilfinger Action be heard at the same time. The two actions were notconsolidated for all purposes.

17 The parties have been engaged in the discovery process pending trialset to commence in 2015. Discovery has been a massive undertaking.

18 I have been assigned to case manage the two proceedings and as thetrial judge.

19 On December 1, 2008 a deadline of March 1, 2009 was set for closingpleadings and adding parties. Metro Vancouver did not add HMM as adefendant to the Metro Action or as a third party to the Bilfinger Actionwithin that deadline or at all.

20 The Agreement between Bilfinger and Metro Vancouver has an effec-tive date of February 26, 2009.

21 Since then there have been numerous pre-trial applications, manydays of examination for discovery and thousands of documentsdisclosed.

22 In June 2012 Bilfinger asked a Metro Vancouver witness on examina-tion for discovery if Metro Vancouver and HMM had entered into anykind of agreement with respect to this proceeding. No answer was pro-vided to this question or to several follow-up requests.

23 In preparation for a case management hearing to take place on June27, 2013, Metro Vancouver circulated to Bilfinger a draft agenda whichrevealed the following information, which was shared with the Court atthe case management conference:

a) “Up until recently, there has been an agreement in place that post-poned the time limit for Metro Vancouver to pursue any residualclaim that it may have against HMM until after a resolution ofthese actions”;

b) “This agreement has been terminated”;


c) “Metro Vancouver intends to add HMM as a defendant to its ac-tion and add it as a third party in the Bilfinger action so that anyand all issues are resolved in a single trial”;

d) “The allegations against HMM will mirror those advanced byBilfinger, as an alternative pleading”; and

e) “HMM consents to being added, subject to reviewing Metro Van-couver’s proposed pleadings”.

24 This was the first time the defendants disclosed the general nature andterms of their Agreement.

25 The privileged portion of HMM’s lists of documents had obliquelyidentified the Agreement by listing an agreement and its parties and thedate, but nothing about the nature of the agreement. HMM’s position isthat it was not required to disclose more than this brief reference to aprivileged document.

26 On June 27, 2013, Metro Vancouver gave Bilfinger a copy of theAgreement.

27 Despite declaring its intention to do so, Metro Vancouver did notseek to add HMM as a defendant in the Metro Action or as third party inthe Bilfinger Action. At another interlocutory hearing in these proceed-ings on December 4, 2012, counsel for HMM advised the Court thatthere were ongoing discussions between the parties.

28 During the hearing of the present applications, Metro Vancouver saidit no longer intends to make HMM a party to these proceedings.

29 Also by way of background, these proceedings were commencedprior to the new Supreme Court Civil Rules, B.C. Reg. 168/2009 [Rules],coming into force on July 1, 2010. Pursuant to Rule 1-2(3), by agreementof the parties and by consent order made January 4, 2010, the new Rulesdo not apply to the pretrial discovery process, which remains governedby the predecessor Supreme Court Rules, B.C. Reg. 221/90 [FormerRules]. However, the parties do not argue the issues on the present appli-cation on the basis of the wording in any particular Rule of Court, butrather, on the basis of the common law.

The Agreement30 The terms of the Agreement require scrutiny given the submissions of

the parties. The entire Agreement is therefore attached as Appendix “A”to these reasons.


31 In summary, the Agreement provides as follows: a) Metro Vancouver and HMM agree to share and exchange in-

formation but do not agree to share documentation that is sub-ject to solicitor-client privilege (s. 1);

b) Metro Vancouver and HMM will make their witnesses availa-ble to each other (s. 2);

c) Metro Vancouver and HMM will cooperate and work to-gether in defending the Bilfinger Action, including develop-ing a joint defence strategy (s. 3);

d) Metro Vancouver and HMM shall each be independently rep-resented by legal counsel (s. 7);

e) All information exchanged between Metro Vancouver andHMM shall be subject to a “common claim of solicitor-clientprivilege by each” (s. 4);

f) All information shared between Metro Vancouver and HMM“shall be deemed to have been shared on a without prejudicebasis” (s. 5);

g) Metro Vancouver and HMM agree not to cross-examine eachother on the basis of information obtained solely as a result ofthe Agreement (s. 5);

h) In the event a dispute between Metro Vancouver and HMM isreferred to the courts, “the parties shall not be bound by theevidence given or any findings of the Court in the [BilfingerAction or Metro Action], but shall be free to call such evi-dence and take such positions as if there had been no [Bilf-inger Action or Metro Action].” (s. 6);

i) The running of time pursuant to the Limitation Act is post-poned to 60 days following the conclusion of the BilfingerAction and the Metro Action (s. 9); and

j) Either Metro Vancouver or HMM may terminate the firstthree obligations above on 30 days’ written notice but the re-maining obligations survive termination (s. 10).

[Emphasis added.]

Issues32 The dominant issue on this application is whether the fact or terms of

the Agreement between HMM and Metro Vancouver should have beendisclosed promptly to Bilfinger.

33 I will approach this issue by examining the following matters:


a) the Aecon decisions;

b) the nature of the agreement;

c) common interest privilege;

d) whether there is anything objectionable about the fact of such anagreement;

e) other legal authority bearing on disclosure of agreements betweenparties to litigation;

f) whether the fact or terms of the Agreement ought to have beendisclosed immediately;

g) if so, whether the failure to disclose the agreement promptlyshould result in any remedy.

34 Lastly, each party seeks special costs if the party is successful in itsposition on these applications.

The Aecon Decision35 The Aecon case is central to Bilfinger’s application.36 That case involved a claim by Aecon, a contractor, against the City of

Brampton alleging that the City breached a $46 million construction con-tract. Before the proceeding was commenced, Aecon and the Cityreached an agreement, described at para. 8,9 and 11 of the Ontario Courtof Appeal decision, as follows:

At its core, the agreement provides that:

1. Aecon would issue a statement of claim against Bramptonand that within five days Brampton would file a cross-claim,Third Party Claim or other appropriate procedural mechanismagainst Page + Steele to make them a party to the action.

2. Brampton would prosecute the Third Party Claim againstPage + Steele.

3. Aecon waived its right to collect any damages from Bramp-ton in relation to the claims against Page + Steele — except tothe extent that Brampton was awarded damages or otherwiserecovered any sum from a party other than Aecon.

Essentially, Brampton agreed to advance claims against Page +Steele on Aecon’s behalf and Aecon agreed to cap its damage claimsagainst Brampton to any amounts Brampton recovered from Page +Steele and its subconsultants (the “consultants”).

. . .


In our view, the crux of the agreement between Brampton and Aeconis merely to cap the damages for which Brampton may be liable toAecon and nothing more.

37 The Ontario Court of Appeal in Aecon found nothing improper aboutthe agreement itself. However, the Court did find something very wrongwith the timing of its disclosure. The Court found there was an obligationto immediately inform the other parties and the Court of the agreementand that failure to do so was an abuse of process without proof of anyprejudice to the opposite party. In the result, the Court stayed the thirdand fourth party proceedings.

38 The Court in Aecon stated at paras. 12-16: The Statement of Claim was issued before the agreement betweenAecon and Brampton was reduced to writing. The agreement was,however, disclosed to the appellant before it was required to deliverits pleading. The motion judge found on that basis that there was noprejudice caused to anyone from the delay in disclosing the agree-ment. We agree that there was no prejudice. However, in our viewthe matter does not end there.

We do not endorse the practice whereby such agreements are con-cluded between or among various parties to the litigation and are notimmediately disclosed. While it is open to parties to enter into suchagreements, the obligation upon entering such an agreement is to im-mediately inform all other parties to the litigation as well as to thecourt. As this court said in Laudon v. Roberts (2009), 308 D.L.R.(4th) 422, at para. 39:

The existence of a [“Mary Carter” agreement] signifi-cantly alters the relationship among the parties to the liti-gation. Usually the position of the parties will havechanged from those set out in their pleadings. It is for thisreason that the existence of such an agreement is to bedisclosed, as soon as it is concluded, to the court and tothe other parties to the litigation.

The reason for this is obvious. Such agreements change entirely thelandscape of the litigation.

In this case, the agreement was not voluntarily produced immediatelyupon its completion. It was only produced several months after itsexistence was discovered by the appellant and it was specificallyrequested.


Other parties to the litigation are not required to make inquiries toseek out such agreements. The obligation is that of the parties whoenter such agreements to immediately disclose the fact.

Here, the absence of prejudice does not excuse the late disclosure ofthis agreement. The obligation of immediate disclosure is clear andunequivocal. It is not optional. Any failure of compliance amounts toabuse of process and must result in consequences of the most seriousnature for the defaulting party. Where, as here, the failure amounts toabuse of process, the only remedy to redress the wrong is to stay theThird Party proceedings and of course, by necessary implication, theFourth Party proceedings commenced at the instance of the ThirdParty. Only by imposing consequences of the most serious nature onthe defaulting party is the court able to enforce and control its ownprocess and ensure that justice is done between and among the par-ties. To permit the litigation to proceed without disclosure of agree-ments such as the one in issue renders the process a sham andamounts to a failure of justice.

[Emphasis added.]

39 The reference to the process being rendered a sham reflected an argu-ment by the third party that the pleadings suggested Aecon and the Cityof Brampton were adverse but their undisclosed agreement belied anyactual adversity between them. In other words, the agreement changedthe litigation landscape from that which was suggested by the pleadings.

40 The Supreme Court of Canada picked up on this important point indismissing a motion by Aecon to adduce fresh evidence on an applica-tion for leave to appeal: 2011 SCC 33, [2011] 2 S.C.R. 560 (S.C.C.). Mr.Justice Binnie described the issue as follows at para. 2:

The leave application concerns a “Mary Carter-type agreement”, i.e.a settlement agreement in multiparty litigation between a plaintiffand defendant wherein the defendant in question ostensibly remainsan active party to the litigation while the plaintiff’s claim in facttargets the other parties. The appearance is conveyed that the defen-dant is defending the cause but the appearance is misleading becauseof the existence of the partial settlement.

[Emphasis added.]

41 The Supreme Court of Canada dismissed the subsequent leave to ap-peal application: Aecon (SCC).

42 I pause to note that the agreement at issue in Aecon was not on allfours with some settlement agreements described as Mary Carter agree-ments, because the contracting defendant, the City of Brampton, had not


guaranteed to pay any amount to the plaintiff regardless of the outcomeof the third party proceedings.

43 A Mary Carter agreement was described in Danicek v. AlexanderHolburn Beaudin & Lang, 2010 BCSC 1111 (B.C. S.C.) as follows:

[6] A Mary Carter agreement takes its name from the first case inwhich it was raised, Booth v. Mary Carter Paint Co., 202 So.2d 8(Fla. Dist. Ct. App., 1967). These agreements were described by Fer-rier J. in Pettey v. Avis Car Inc. (1993), 103 D.L.R. (4th) 298 at 304(Ont. Gen. Div.), as having these characteristics:

The contracting defendant guarantees the plaintiff a cer-tain monetary recovery and the exposure of that defendantis “capped” at that amount.

The contracting defendant remains in the lawsuit.

The contracting defendant’s liability is decreased in directproportion to the increase in the non-contracting defen-dant’s liability.

The agreement is kept secret.

[7] This definition was adopted by Huddart J.A. in her dissent inBritish Columbia Children’s Hospital v. Air Products Canada Ltd.,2003 BCCA 177, 224 D.L.R. (4th) 23, appeal discontinued, [2003]S.C.C.A. No. 240.

44 Likewise in Edmonton (City) v. Lovat Tunnel Equipment Inc., 2000ABQB 133 (Alta. Q.B.) [Lovat], at para. 9, the Court described MaryCarter agreements as follows:

In a typical “Mary Carter” agreement the plaintiff is guaranteed acertain recovery by the contracting defendant whose exposure in thelawsuit is capped at that amount. The contracting defendant remainsin the lawsuit, however. In a true “Mary Carter” arrangement thecontracting defendant has an interest in the outcome of the litigationas the liability of that defendant decreases in direct proportion to anyincrease in the non-contracting defendant’s liability (Pettey v. AvisCar Inc., 1993 CanLII 8669 (ON SC), (1993), 13 O.R. (3d) 725 at732, [1993] O.J. No. 1454 (Gen. Div.), online: QL (OJ); Newell v.McIvor (1998), 17 C.P.C. (4th) 347, [1998] S.J. No. 38 at para 14(Q.B.), online: QL (SJ).

45 There is a difference between a settlement agreement where the de-fendant pays the plaintiff versus one where the two agree that any recov-ery will be capped. As I read the description of the agreement in Aecon,the plaintiff still had to prove that the City was liable to it. It appearstherefore that there was still some adversity between the plaintiff and the


defendant City in Aecon, which was consistent with the pleadings. Onemust not make the mistake therefore of overstating the distinction be-tween the true positions of the parties and the position revealed by thepleadings in Aecon.

46 The fact that the agreement changed the nature of the relationship be-tween the agreeing parties was sufficient for the Ontario Court of Appealin Aecon to conclude that it should have been disclosed immediately. Thepleadings, on which other parties and the Court were entitled to rely, re-vealed only adversity as between the plaintiff and defendant City. In factthey also had some commonality of interest, in that they had agreed tocap the defendant’s liability at that which the City could recover from itsthird party claim.

47 I have been directed to two cases in British Columbia which havereferred to Aecon.

48 In British Columbia (Director of Civil Forfeiture) v. “Property Own-ers”, 2011 BCSC 1199 (B.C. S.C.) [Shoquist], Wilson J. stated at para.47:

Aecon appears to me to be unique to Ontario civil procedure. UnderOntario practise, a failure to immediately disclose the concluding ofa “Mary Carter” agreement is the necessary and sufficient conditionfor an abuse of process conclusion. That failure to disclose appears tobe equivalent to an offence of absolute liability. The abuse is selfevident from the failure. I am aware of no authority in this provincewhich recognizes that proposition.

49 The above observation was obiter and the facts of Shoquist were notat all similar to the case at bar.

50 The above passage was quoted by Loo J. as the basis of one party’ssubmission in No Limits Sportswear Inc. v. 0912139 B.C. Ltd., 2014BCSC 999 (B.C. S.C.) [No Limits] at para. 55. That case did not decidethe applicability of Aecon in British Columbia to support an applicationto strike out a party’s pleading.

51 The primary issue in No Limits had to do with documents gathered byone set of defendants by accessing the email accounts of other defend-ants, which documents were then provided to counsel for the plaintiff (atpara. 1). Importantly the Court found that any agreement relating to thelitigation made between the plaintiff and the defendants who providedthe documents had to be produced and was not subject to litigation privi-lege: paras. 76-77.


52 The present applications appear to be the first in British Columbia torely on Aecon to strike out a party’s pleading for failure to immediatelydisclose an agreement between parties to the litigation and more specifi-cally between co-defendants.

Nature of the Agreement53 As I view the substance of the Agreement at issue here, it seeks to

accomplish two goals:

a) to carve out a basis for the parties to jointly cooperate in defeatingBilfinger’s position in the Metro Vancouver Action and BilfingerAction under the protection of common interest privilege, andsubject to a right to terminate the cooperation (a “cooperationagreement”); and,

b) to preserve the right to claim against each other in the future (a“reservation of rights agreement”). In this regard, there were twoaspects of the Agreement:

i. an agreement that they would try to resolve any residualissues between them by negotiation and mediation, and ifthey could not resolve them, to submit them to the SupremeCourt of British Columbia; and if that happened, theywould not to be bound by the evidence or findings of fact inthe existing proceedings and could call any evidence in anysubsequent proceedings against each other; and

ii. an agreement to postpone the running of time of any limita-tion period in respect of any claim that one may haveagainst the other arising out of the issues raised in thepleadings in these proceedings. The postponement wouldbe until the conclusion of the Bilfinger Action and theMetro Vancouver Action.

54 The Agreement did not involve full or partial settlement of any claimsbetween the parties.

Common Interest Privilege55 In response to this application, Metro Vancouver and HMM say the

Agreement and any discussions between them and their respective coun-sel pursuant to it was properly subject to common interest privilege andtherefore they were under no obligation to disclose it. They do not arguethat solicitor-client or settlement privilege applies.


56 The law is well-established that two parties on the same side in multi-party litigation may agree to cooperate and share information to furthertheir common interest in the litigation and may claim common interestprivilege to resist disclosure of their communications.

57 The oft-cited source of common interest privilege is the case of ButtesGas & Oil v. Hammer (No. 3), [1980] 3 All E.R. 475 (Eng. C.A.) at 483in which Lord Denning said:

There is a privilege which may be called a “common interest” privi-lege. That is a privilege in aid of anticipated litigation in which sev-eral persons have a common interest. It often happens in litigationthat a plaintiff or defendant has other persons standing alongsidehim — who have the self-same interest as he — and who have con-sulted lawyers on the self-same points as he — but these others havenot been made parties to the action. Maybe for economy or for sim-plicity or what you will. All exchange counsel’s opinions. All collectinformation for the purpose of litigation. All make copies. All awaitthe outcome with the same anxious anticipation — because it affectseach as much as it does the others. Instances come readily to mind.Owners of adjoining houses complain of a nuisance which affectsthem both equally. Both take legal advice. Both exchange relevantdocuments. But only one is a plaintiff. An author writes a book andgets it published. It is said to contain a libel or to be an infringementof copyright. Both author and publisher take legal advice. Both ex-change documents. But only one is made a defendant.

In all such cases I think the courts should — for the purposes of dis-covery — treat all the persons interested as if they were partners in asingle firm or departments in a single company. Each can avail him-self of the privilege in aid of litigation. Each can collect informationfor the use of his or the other’s legal adviser. Each can hold originalsand each make copies. And so forth. All are the subject of the privi-lege in aid of anticipated litigation, even though it should transpirethat, when the litigation is afterwards commenced, only one of themis made a party to it. No matter that one has the originals and theother has the copies. All are privileged.

[Emphasis added.]

58 As described by Lord Denning above, common interest privilege is atype of litigation privilege.

59 People who jointly consult a solicitor will also be covered by solici-tor-client privilege, even though the shared communications with the so-


licitor are not confidential as between them: Pritchard v. Ontario(Human Rights Commission), [2004] 1 S.C.R. 809 (S.C.C.) at para. 23.

60 This is explained on the basis that the common interest privilege ap-plies as between parties with a common interest so as to defeat the argu-ment that by sharing solicitor-client advice, the confidentiality and henceprivilege over that advice is waived, as discussed in Maximum VenturesInc. v. de Graaf, 2007 BCCA 510 (B.C. C.A.) [Maximum Ventures];Fraser Milner Casgrain LLP v. Minister of National Revenue, [2002]B.C.J. No. 2146 (B.C. S.C.) [Fraser Milner Casgrain] at para. 14 - 16;Trillium Motor World Ltd. v. General Motors of Canada Ltd., 2014ONSC 1338 (Ont. S.C.J.) [Trillium Motor World] at para. 113.

61 Here, the parties’ Agreement expressly provided in clause 1 that theinformation they agreed to share would not include documentation thatmay be subject to solicitor-client privilege. This would support the con-clusion that the common interest privilege being asserted by HMM andMetro Vancouver is simply an aspect of litigation privilege.

62 Yet clause 4 of the Agreement stated such information “shallbe...subject to a common claim of solicitor client privilege by each”. Par-ties cannot by agreement deem information to be a communication be-tween a lawyer and client if it is not. Presumably in light of clause 1 whatclause 4 was intended to say was that the information shared would besubject to common interest privilege.

63 I do not need to decide this issue now, but in some cases it will beimportant to consider the distinction between common interest privilegewhich is an aspect of litigation privilege, where information is shared incontemplation of litigation, and solicitor-client privilege in a situationwhere people jointly consult a solicitor.

64 As explained by the Supreme Court of Canada in Blank v. Canada(Department of Justice), 2006 SCC 39 (S.C.C.) [Blank] at para. 7, solici-tor-client privilege and litigation privilege are “distinct conceptual ani-mals and not two branches of the same tree”. The former is permanentwhile the latter is temporary. The policy rationale for each privilege isdistinct as are the legal consequences: at para. 33. As held at paras. 27-28:

Litigation privilege, on the other hand, is not directed at, still less,restricted to, communications between solicitor and client. It contem-plates, as well, communications between a solicitor and third partiesor, in the case of an unrepresented litigant, between the litigant andthird parties. Its object is to ensure the efficacy of the adversarial


process and not to promote the solicitor-client relationship. And toachieve this purpose, parties to litigation, represented or not, must beleft to prepare their contending positions in private, without adver-sarial interference and without fear of premature disclosure.

R. J. Sharpe (now Sharpe J.A.) has explained particularly well thedifferences between litigation privilege and solicitor-client privilege:

It is crucially important to distinguish litigation privilegefrom solicitor-client privilege. There are, I suggest, atleast three important differences between the two. First,solicitor-client privilege applies only to confidential com-munications between the client and his solicitor. Litiga-tion privilege, on the other hand, applies to communica-tions of a non-confidential nature between the solicitorand third parties and even includes material of a non-com-municative nature. Secondly, solicitor-client privilege ex-ists any time a client seeks legal advice from his solicitorwhether or not litigation is involved. Litigation privilege,on the other hand, applies only in the context of litigationitself. Thirdly, and most important, the rationale for solic-itor-client privilege is very different from that which un-derlies litigation privilege. This difference merits close at-tention. The interest which underlies the protectionaccorded communications between a client and a solicitorfrom disclosure is the interest of all citizens to have fulland ready access to legal advice. If an individual cannotconfide in a solicitor knowing that what is said will not berevealed, it will be difficult, if not impossible, for that in-dividual to obtain proper candid legal advice.

Litigation privilege, on the other hand, is geared directlyto the process of litigation. Its purpose is not explainedadequately by the protection afforded lawyer-client com-munications deemed necessary to allow clients to obtainlegal advice, the interest protected by solicitor-client priv-ilege. Its purpose is more particularly related to the needsof the adversarial trial process. Litigation privilege isbased upon the need for a protected area to facilitate in-vestigation and preparation of a case for trial by the ad-versarial advocate. In other words, litigation privilegeaims to facilitate a process (namely, the adversary pro-cess), while solicitor-client privilege aims to protect a re-lationship (namely, the confidential relationship betweena lawyer and a client).


(“Claiming Privilege in the Discovery Process”, in Spe-cial Lectures of the Law Society of Upper Canada (1984),163, at pp. 164-65)

[Emphasis added.]

65 A common interest privilege may attach to documents shared by par-ties with a common interest even though they may potentially also beadverse in some respects: YBM Magnex International Inc., Re, 1999ABQB 793 (Alta. Q.B.) at paras. 14, 16.

66 Bilfinger does not assert that common interest privilege cannot applyto some communications between co-defendants.

67 There was nothing inappropriate about Metro Vancouver and HMMdocumenting their agreement to cooperate in pursuit of their commoninterest in this litigation with the intention that their communications indoing so would be kept confidential and subject to common interestprivilege.

68 I will come back to the issue of whether or not they needed to dis-close either the fact that they had such an agreement or the actual termsof the Agreement itself.

Is There Anything Objectionable About the Agreement?69 As for reserving rights to sue one another, Metro Vancouver and

HMM argue that it has always been an available option to them, and notan abuse of process, to await the outcome of this litigation before decid-ing whether they would advance claims against each other.

70 Bilfinger concedes that a subsequent proceeding for contribution andindemnity can be brought by one defendant against another, see forexample FBI Foods Ltd. - Aliments FBI Ltee v. Glassner, 2001 BCSC151 (B.C. S.C.).

71 There is nothing improper about the parties agreeing to toll any appli-cable limitation period and to preserve the right to claim against eachother subsequent to the present proceedings.

72 What raises a question is the wording of clause 6: what is intended bystating that the parties are not “bound by the evidence given or any find-ings of the Court” in these proceedings, and that the parties “shall be freeto call such evidence and take such positions as if there had been noProceedings”?

73 There is an innocent interpretation and a more troubling interpretationof clause 6.


74 The innocent interpretation is based on the premise that since MetroVancouver and HMM advance no claims against each other in the cur-rent proceedings but have reserved the right to bring such claims later,there may be some evidence relevant to future claims against one anotherwhich is not produced in the present proceedings. For example, a witnessmight have oral evidence of a conversation or meeting relevant to a con-tractual dispute between those two parties, but the witness is not askedabout it in the course of the present proceedings and so it is not evidencein these proceedings. Thus, the intent of the clause is for the two partiesto make it clear that they will not be limited to the evidence in theseproceedings if they bring claims against each other afterwards.

75 As for not being bound by the findings of the Court, the innocentinterpretation is that the parties are attempting to preclude any future ar-gument by one another that the judgment in this court makes all the is-sues between them res judicata. Since they have not yet litigated anyclaims between them, and HMM is only a named party in the BilfingerAction, they wish not to be seen as waiving their rights as against eachother. They appear to intend that a new court will be free to make its ownfindings in relation to the claims between them.

76 I do not consider this latter aspect is something within the parties’power to control by agreement.

77 The extent to which parties to one legal proceeding, or their privies,are bound by the results of that proceeding in subsequent proceedings isa legal question. It lies at the heart of the administration of justice:Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77(S.C.C.) [Toronto v. C.U.P.E.] at p. 91.

78 In Toronto (City) v. C.U.P.E., Local 79 the Supreme Court of Canadareviewed the doctrines of issue estoppel, collateral attack, and abuse ofprocess. The facts of that case are not comparable to the facts here, asthey dealt with the conclusiveness of a criminal conviction in subsequentarbitration proceedings under a collective agreement. However, theCourt’s discussion of the legal concepts involved in the relitigation ofissues is very informative.

79 In Toronto (City) v. C.U.P.E., Local 79 McLachlin C.J.C. held atpara. 15:

The body of law dealing with the relitigation of issues finally decidedin previous judicial proceedings is not only complex; it is also at theheart of the administration of justice. Properly understood and ap-plied, the doctrines of res judicata and abuse of process govern the


interplay between different judicial decision makers. These rules andprinciples call for a judicial balance between finality, fairness, effi-ciency and authority of judicial decisions.

[Emphasis added.]

80 The doctrine of issue estoppel was discussed in Toronto (City) v.C.U.P.E., Local 79 at para. 23:

Issue estoppel is a branch of res judicata (the other branch beingcause of action estoppel), which precludes the relitigation of issuespreviously decided [page95] in court in another proceeding. For issueestoppel to be successfully invoked, three preconditions must be met:(1) the issue must be the same as the one decided in the prior deci-sion; (2) the prior judicial decision must have been final; and (3) theparties to both proceedings must be the same, or their privies (Dany-luk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, 2001 SCC44, at para. 25, per Binnie J.). The final requirement, known as “mu-tuality”, has been largely abandoned in the United States and hasbeen the subject of much academic and judicial debate there as wellas in the United Kingdom and, to some extent, in this country. (SeeG. D. Watson, “Duplicative Litigation: Issue Estoppel, Abuse of Pro-cess and the Death of Mutuality” (1990), 69 Can. Bar Rev. 623, atpp. 648-51.) In light of the different conclusions reached by thecourts below on the applicability of issue estoppel, I think it is usefulto examine that debate more closely.

[Emphasis added.]

81 HMM and Metro Vancouver are both parties in the Bilfinger Action,and may be subject to issue estoppel in subsequent litigation. HMM isnot a party in the Metro Action, but it is an open question whether itmight be found to be Metro Vancouver’s “privy” for purposes of the ap-plication of issue estoppel in subsequent litigation.

82 In any event the Supreme Court of Canada in Toronto (City) v.C.U.P.E., Local 79 went on to question the necessity of mutuality andsuggested that situations involving relitigation by different parties canalso be addressed under the doctrine of abuse of process. The Court heldat paras. 35 and 37:

Judges have an inherent and residual discretion to prevent an abuseof the court’s process. This concept of abuse of process was de-scribed at common law as proceedings “unfair to the point that theyare contrary to the interest of justice” (R. v. Power, [1994] 1 S.C.R.601, at p. 616), and as “oppressive treatment” (R. v. Conway, [1989]


1 S.C.R. 1659, at p. 1667). McLachlin J. (as she then was) expressedit this way in R. v. Scott, [1990] 3 S.C.R. 979, at p. 1007:

... abuse of process may be established where: (1) the pro-ceedings are oppressive or vexatious; and, (2) violate thefundamental principles of justice underlying the commu-nity’s sense of fair play and decency. The concepts of[page102] oppressiveness and vexatiousness underline theinterest of the accused in a fair trial. But the doctrineevokes as well the public interest in a fair and just trialprocess and the proper administration of justice.

. . .

In the context that interests us here, the doctrine of abuse of processengages “the inherent power of the court to prevent the misuse of itsprocedure, in a way that would ... bring the administration of justiceinto disrepute” (Canam Enterprises Inc. v. Coles (2000), 51 O.R.(3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting (approved[2002] 3 S.C.R. 307, 2002 SCC 63)). Goudge J.A. expanded on thatconcept in the following terms at paras. 55-56:

The doctrine of abuse of process engages the inherentpower of the court to prevent the misuse of its procedure,in a way that would be manifestly unfair to a party to thelitigation before it or would in some other way bring theadministration of justice into disrepute. It is a flexibledoctrine unencumbered by the specific requirements ofconcepts such as issue estoppel. See House of Spring Gar-dens Ltd. v. Waite, [1990] 3 W.L.R. 347 at p. 358, [1990]2 All E.R. 990 (C.A.).

One circumstance in which abuse of process has been ap-plied is where the litigation before the court is found to bein essence an attempt to relitigate a claim which the courthas already determined.

[Emphasis added.]

As Goudge J.A.’s comments indicate, Canadian courts have appliedthe doctrine of abuse of process to preclude relitigation in circum-stances where the strict requirements of issue estoppel (typically theprivity/mutuality requirements) are not met, but where allowing thelitigation to proceed would nonetheless violate such principles as ju-dicial economy, consistency, finality and the integrity of the adminis-tration of justice. (See, for example, Franco v. White (2001), 53 O.R.(3d) 391 (C.A.); Bomac Construction Ltd. v. Stevenson, [1986] 5W.W.R. 21 (Sask. C.A.); and Bjarnarson v. Government of Manitoba


(1987), 38 D.L.R. (4th) 32 (Man. Q.B.), aff’d (1987), 21 C.P.C. (2d)302 (Man. C.A.).) This has resulted in some criticism, on the groundthat the doctrine of abuse of process by relitigation is in effect non-mutual issue estoppel by another name without the important qualifi-cations recognized by the American courts as part and parcel of thegeneral doctrine of non-mutual issue estoppel (Watson, supra, at pp.624-25).

It is true that the doctrine of abuse of process has been extended be-yond the strict parameters of res judicata while borrowing much ofits rationales and some of its constraints. It is said to be more of anadjunct doctrine, defined in reaction to the settled rules of issue es-toppel and cause of action estoppel, than an independent one (Lange,supra, at p. 344). The policy grounds supporting abuse of process byrelitigation are the same as the essential policy grounds supportingissue estoppel (Lange, supra, at pp. 347-48):

The two policy grounds, namely, that there be an end tolitigation and that no one should be twice vexed by thesame cause, have been cited as policies in the application[page104] of abuse of process by relitigation. Other pol-icy grounds have also been cited, namely, to preserve thecourts’ and the litigants’ resources, to uphold the integrityof the legal system in order to avoid inconsistent results,and to protect the principle of finality so crucial to theproper administration of justice.

[Emphasis added.]

83 A troubling interpretation of clause 6 of the Agreement is that theparties intended to give themselves permission to relitigate all the issueswhich are litigated in the present proceedings, regardless of the negativeeffect this would have on the administration of justice. Further, that theyintended to give each other permission to allow their witnesses to giveevidence in the current proceedings knowing it is untrue or less than thefull truth, which, if later proceedings unfold, they reserve the right tocontradict.

84 This interpretation, which Bilfinger raises as the possible effect or in-tention of the Agreement, suggests the parties were acting improperly byentering into the Agreement. While Bilfinger’s application did not sug-gest the fact of entering into the Agreement was an abuse of process, thiswas implied in Bilfinger’s submissions. I have difficulty interpreting theAgreement in this way.


85 Clause 6 is qualified by the first sentence, “[s]hould there be residualissues between and amongst Metro Vancouver and HMM following afinal determination or settlement of one or both of the Proceedings...”. Itis clear clause 6 is attempting to reserve the parties’ rights to addressissues between them that are “residual” and were not dealt with in thepresent proceedings.

86 The trial of this complex case is expected to take months of hearingtime. From my perspective as trial judge, it would have been preferablefor the drafters of clause 6 of the Agreement to have omitted the sentencestating that “[i]n the event of a reference to the Supreme Court, the par-ties shall not be bound...” by the evidence or findings in theseproceedings.

87 Nevertheless the Agreement does not expressly provide that wit-nesses can tell less than the full truth when they testify or can suppressevidence or can freely change their evidence in a subsequent proceedingand I do not infer that this was intended. The Agreement does not ex-pressly provide that parties can fail to fulfill their obligations in the pre-sent proceedings, in terms of production of relevant documents or otherobligations, and I do not infer this was intended either.

88 The parties drafted the Agreement with the assistance of experiencedlegal counsel who signed it on their behalf.

89 The Code of Professional Conduct for lawyers in British Columbiaprovides:

5.1-2 When acting as an advocate, a lawyer must not:

. . .

(b) knowingly assist or permit a client to do anything thatthe lawyer considers to be dishonest or dishonourable;

. . .

(e) knowingly attempt to deceive a tribunal or influencethe course of justice by offering false evidence, misstatingfacts or law, presenting or relying upon a false or decep-tive affidavit, suppressing what ought to be disclosed orotherwise assisting in any fraud, crime or illegal conduct;

. . .

(j) improperly dissuade a witness from giving evidence oradvise a witness to be absent;

. . .


(l) knowingly misrepresent the client’s position in the liti-gation or the issues to be determined in the litigation....

90 There is no basis to infer the lawyers involved in drafting this Agree-ment were anything but mindful of their professional obligations. Indeed,while the language in clause 6 caused me initial concern, the parties re-ceive the benefit of the doubt in my analysis precisely because they wererepresented by lawyers. Lawyers carry special status because of theirprofessional training and regulation. They owe professional duties ofhonesty as well as duties to the court. The smooth functioning of litiga-tion is premised on lawyers fulfilling their professional obligations.

91 As noted by the Supreme Court of Canada in Fortin c. Chretien, 2001SCC 45 (S.C.C.) at para. 49:

Accordingly, the essential role that the advocate is called upon toplay in our society cannot be overemphasized. Advocates are officersof the court. By their oath of office, they solemnly affirm that theywill fulfill the duties of their profession with honesty, integrity andjustice and will comply with the various statutory provisions gov-erning the practice of that profession.

92 As I interpret clause 6 of the Agreement, the parties were simply at-tempting to document that in subsequent litigation between them of is-sues not resolved in the present proceedings, neither one could defendthe other’s claim by arguing that the one had given up rights against theother in the present proceedings or was limited to arguments, evidenceand findings in the present proceedings.

93 I conclude that entering into the Agreement was not an abuse ofprocess.

Other Legal Authority Bearing on Disclosure of Similar Agreements94 I will now review additional legal authority bearing on the question of

whether or not there is an obligation to disclose agreements between co-defendants in the litigation.

95 As we have seen in Aecon, the Ontario Court of Appeal has held thatif an agreement between a plaintiff and defendant changes the litigationlandscape from that reflected in the pleadings, it must be producedimmediately.

96 There is also some guidance from the British Columbia Court of Ap-peal. In Middelkamp v. Fraser Valley Real Estate Board (1992), 96D.L.R. (4th) 227 (B.C. C.A.) [“Middelkamp”] and in British ColumbiaChildren’s Hospital v. Air Products Canada Ltd./Prodair Canada Ltee,


2003 BCCA 177, 224 D.L.R. (4th) 23 (B.C. C.A.) [“BC Children’s”], theCourt held that settlement negotiations and concluded settlement agree-ments between parties otherwise adverse in the litigation did not need tobe produced to the remaining parties.

97 In Middelkamp, McEachern C.J.B.C. upheld settlement privilege asapplying to settlement negotiations, regardless if a settlement isconcluded.

98 The Supreme Court of Canada recently affirmed Middelkamp and theimportance of settlement privilege in Sable Offshore Energy Inc. v.Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623 (S.C.C.)[Sable Offshore]. The Court held that settlement privilege applied to set-tlement negotiations, even if no settlement was reached, as well as tosettlement agreements.

99 In Sable Offshore the fact that there was a settlement between theplaintiff and some of several defendants was disclosed as was the factthat the type of agreement was what was known as a “Pierringer Agree-ment”, releasing the remaining defendants from any liability for the losscaused by the settling defendants. The non-settling defendants soughtproduction of the actual amount of the settlement. The trial judge refusedproduction of these terms, a decision with which the Supreme Court ofCanada agreed.

100 In deciding whether or not the settlement privilege must give way todisclosure of the terms of the settlement agreement, the Supreme Courtof Canada in Sable Offshore held that there must be a competing publicinterest which outweighs the public interest in encouraging settlement.The Court found no competing interest which necessitated disclosure, re-jecting the argument that the non-settling defendants needed to know theinformation to conduct their litigation (at paras. 20, 27). The non-settlingdefendants had received all non-financial terms of the settlement and hadaccess to all relevant documents in the settling defendants’ possession (atpara. 25). Also, at the end of trial the settlement amounts would be dis-closed should it become necessary in the event liability had beenestablished.

101 Sable Offshore did not address an important exception to settlementprivilege noted at para. 20 of Middelkamp:

I recognize that there must be exceptions to this general rule. An ob-vious exception would be where the parties to a settlement agree thatevidence will be furnished in connection with the litigation in whichthe application is made. In such cases, the public interest in the


proper disposition of litigation assumes paramountcy and oppositeparties are entitled to know about any arrangements which are madeabout evidence. Other exceptions could arise out of such matters asfraud, or where production may be required to meet a defence oflaches, want of notice, passage of a limitation period or other similarmatters which might displace the privilege. As we did not have argu-ment on these matters I prefer to say nothing further about them.

[Emphasis added.]

102 There was no need in Middelkamp for a lengthy exposition on whyarrangements about evidence need to be disclosed in litigation. The de-gree of alliance or adversity between witnesses and parties will alwaysbe of interest to the opposing party and the court. This is so regardless oftheir being anything untoward about an evidence arrangement and re-gardless of the fact that the parties could be suspected to be cooperating.The Court in Middelkamp was of the view that settlement privilege mustgive way when such arrangements are involved. This places the impor-tance of knowing the true positions of the parties in the litigation, as partof a fair litigation process and in order for the proper administration ofjustice, above the public interest in promoting settlements.

103 In British Columbia Children’s Hospital the plaintiff had settled withsome defendants in multi-party litigation. This fact was known becausethe plaintiff discontinued the claim against those defendants andamended its Statement of Claim to expressly waive the right to recoverfrom the remaining defendants any portion of the loss attributable to thesettling defendants. The remaining defendants applied for production ofthe settlement agreement. A central issue in the Court of Appeal judg-ment was whether or not settlement privilege extended beyond negotia-tions and information exchanged in furtherance of settlement, to alsoprotect a concluded settlement agreement.

104 The Chambers Judge in British Columbia Children’s Hospital, Niel-sen J. as she then was, refused to order production of that portion of theconcluded settlement agreement dealing with the terms of settlement.The Court of Appeal upheld Neilsen J.’s ruling as consistent with thepolicy interests that underlie settlement privilege.

105 However, as set out at para. 44 of her Reasons, the Chambers Judgein British Columbia Children’s Hospital ordered production of parts ofthe settlement agreement:

(a) any provision which may be construed as a release, covenantnot to sue, or reservation of rights;


(b) any provision containing admissions made by the ALC de-fendants or the plaintiffs with respect to the issues raised bythe pleadings;

(c) any provisions dealing with evidentiary arrangements.

[Emphasis added.]

106 In considering the above exceptions, the Court of Appeal in BritishColumbia Children’s Hospital noted the significance of the exceptionmentioned in Middelkamp, at para. 36:

Chief Justice McEachern noted in Middelkamp that evidentiary ar-rangements arrived at concurrently with a settlement agreementcould be the proper subject of an order for disclosure. It seems to methat this is so because such arrangements could cast light on the qual-ity of the evidence or the motivation of the witness giving the evi-dence. The nature of the arrangements could therefore affect theweight a court might give to the evidence. See Vancouver Commu-nity College v. Phillips, Barratt (1987), 20 B.C.L.R. (2d) 289 (S.C.).However, I think it would be premature to make any such order inthese proceedings at this stage of the litigation. That sort of disclo-sure would appear to me more appropriately ordered either at trial orshortly before trial when the evidence is in immediate prospect. Iwould therefore not sustain the direction contained in subparagraph(c) of para. 44 of the reasons of Neilson J.

[Emphasis added.]

107 In British Columbia Children’s Hospital the Court of Appeal heldthat it was an error for the Chambers Judge to order immediate disclosureof that part of the agreement dealing with evidence arrangements; but atthe same time did find it was relevant information that could impact onthe assessment of evidence and should be disclosed at or shortly beforetrial “when the evidence is in immediate prospect”. Presumably those ev-idence arrangements did not affect discovery.

108 The Court of Appeal in British Columbia Children’s Hospital alsoheld that it was an error for the Chambers Judge to order production ofany admissions made as part of the settlement agreement, finding theseirrelevant essentially because admissions by one party are not probativeas against another and the relief sought against the remaining parties wasentirely separate from the relief sought against the settling defendants (atpara. 37). I take it from the logic of the judgment that the admissionswere not “evidentiary arrangements” that could affect the ongoinglitigation.


109 The Court of Appeal in British Columbia Children’s Hospital agreedwith the Chambers Judge that provisions of the settlement agreement thatcould be construed as a release, covenant not to sue, or reservation ofrights, ought to be disclosed.

110 Typically a release or covenant not to sue one party is disclosed be-cause the settling party is immediately let out of the lawsuit, even if theother terms of the settlement are not disclosed.

111 The rationale expressed by the Chambers Judge in British ColumbiaChildren’s Hospital for the production of terms that may be construed asrelating to a release, covenant not to sue or reservation of rights was thepossibility that release of one joint tortfeasor might release all. This ratio-nale potentially does not apply to a reservation of rights which does notinvolve a release. The Court of Appeal questioned the rationale given bythe Chambers Judge because it questioned the applicability of the oldprinciple regarding release of joint tortfeasors. The Court of Appeal nev-ertheless found that such information may be of interest to the other par-ties to make “use of...as they may be advised” (para. 38).

112 The reasoning in British Columbia Children’s Hospital is an ac-knowledgement by the Court of Appeal that there may be other reasonsthe other parties may be interested in knowing when parties have enteredan agreement to release, not sue, or to reserve rights to sue one another,which are important enough to override settlement privilege in thisinformation.

113 In my view a reason for requiring disclosure of any arrangements in-volving a reservation of rights to sue is because knowledge of these ar-rangements is relevant to understanding where the parties stand in rela-tion to each other in the litigation process, which is relevant in weighingtheir testimony and submissions. Leaving aside the timing of disclosureof these types of arrangements, this is similar to the reason for requiringdisclosure of evidentiary arrangements between the parties. It is impor-tant information that can impact the approach to cross-examination andthe assessment of the evidence.

114 In Dos Santos (Committee of) v. Sun Life Assurance Co. of Canada,2005 BCCA 4 (B.C. C.A.) [Dos Santos] the British Columbia Court ofAppeal noted that Middelkamp did not close the door on what might bean exception to settlement privilege. The Court said that the public policybehind settlement privilege is compelling and to justify an exception onemust show another compelling or overriding interest of justice (at para.20). The Court summarized the privilege exception in Middelkamp as be-


ing what is necessary for “the proper disposition of litigation” (at para.17). The Court found that the authorities gave significant weight to the“just disposition of pending litigation” in determining exceptions to set-tlement privilege (para. 34).

115 Neither Middelkamp or British Columbia Children’s Hospital gaveexamples of what might be considered “evidentiary arrangements” in set-tlement agreements between parties, requiring disclosure.

116 The Ontario Superior Court of Justice case of Zwaniga v. JohnvinceFoods Distribution L.P., 2012 ONSC 3848 (Ont. S.C.J.) [Zwaniga] pro-vides an example of evidentiary arrangements made by parties who, de-spite being adverse on the pleadings, agree to cooperate in some way.

117 Zwaniga involved a cooperation agreement between the plaintiffs anddirectors of a corporate defendant. The plaintiffs alleged two corporatedefendants were in a joint venture, partnership or franchisor’s associa-tion. Both corporate defendants in their pleadings denied any such rela-tionship, but one of the two brought an application for summary judg-ment to this effect.

118 There was a parallel action by the plaintiffs in Zwaniga against direc-tors of one of the two corporate defendants.

119 Under the cooperation agreement in Zwaniga the directors of one ofthe two corporate defendants agreed to assist the plaintiff in confirmingthat the other corporate defendant was a partner and/or franchisor’s asso-ciate; agreed to give evidence that confirmed this; agreed not to disputethe allegations in the statement of claim; and agreed to consent to certifi-cation of the class action. In return, the plaintiff agreed that if the corpo-rate defendant’s summary judgment application was successfully resistedby the plaintiff (armed with this helpful evidence from the cooperatingdefendants), the plaintiff would dismiss its action against the directors.

120 Since the agreement was disclosed immediately after it was enteredinto, the Court’s observations in Zwaniga on when the cooperationagreement should be disclosed were obiter. Neverthless, the Court’sanalysis is helpful.

121 Justice Perell in Zwaniga held it mandatory to disclose the coopera-tion agreement immediately because it affected the “adversarial orienta-tion of the lawsuit”. It must be kept in mind that the cooperation agree-


ment was between parties who otherwise would appear adverse on thepleadings, not between co-defendants. Perell J. held at para. 31:

As noted above, the Zwanigas promptly disclosed the CooperationAgreement. This is mandatory. The Cooperation Agreement is simi-lar to a Mary Carter agreement or a Pierringer Agreement that af-fects the adversarial orientation of the lawsuit and such agreementsare not privileged and must immediately be disclosed to the oppo-nents and the court. See Moore v. Bertuzzi, 2012 ONSC 3248.

122 In Zwaniga the Court was also concerned that the language of thecooperation agreement left the impression that the one party waspurchasing tailored evidence. However, given that the agreement wasdisclosed promptly, and the nature of the evidence was determinedbefore the Agreement was negotiated, the Court set these concerns aside(at paras. 35 and 36).

123 Another case in which the agreement at issue included evidentiaryarrangements and was ordered disclosed is Laudon v. Roberts, 2009ONCA 383 (Ont. C.A.) [Laudon].

124 In Laudon, the plaintiff entered into a settlement agreement with oneof two defendants by way of what the court described as a “Mary Carter”agreement. The settlement was for an amount of money paid by that de-fendant to the plaintiff, in return for which the plaintiff agreed not toclaim against that defendant any amount in excess of that sum that mightbe awarded at trial. The fact of the settlement, but not the amount of thesettlement, was disclosed to the jury at the start of trial. The jury verdictat the end of trial apportioned liability as between the two defendants andthe plaintiff.

125 The agreement in Laudon contained terms that the settling defendantwould not cross-examine witnesses to contest the damages claimed bythe plaintiff; would not cross-examine witnesses or call any evidence tosuggest the plaintiff was contributorily negligent; and would affirma-tively state in their submissions at trial that liability ought to be foundequally between the defendants, with no finding of contributory negli-gence on the part of the plaintiff. These terms in my view would consti-tute “evidentiary arrangements”, requiring disclosure at least prior to thestart of trial under the authority of British Columbia Children’s Hospitaland Middelkamp.

126 The decision in Laudon has more to do with preventing double recov-ery where a plaintiff settles with one defendant and proceeds to trialagainst the other. The fact of the settlement had been disclosed before


evidence was called, but not the amount. The Court noted that full disclo-sure of the agreement, except the monetary amount of the settlement,was required immediately.

127 The cases reviewed above all deal with agreements between parties tothe litigation who are adverse on the pleadings. The agreements in all thecases are either in some respects settlement agreements, or agreementsinfluencing the positions the parties will take in the litigation.

128 There is less case law on the disclosure obligations associated withagreements between co-defendants to cooperate in the litigation.

129 The Ontario Court of Appeal in Laudon cited with approval Bodnarv. Home Insurance Co., [1987] O.J. No. 2365 (Ont. Master) [Bodnar].There the plaintiff sought to subpoena a solicitor for one defendant as awitness, to find out if the defendants had an agreement between themthat may affect the conduct of the action. Master Quinn rejected the so-licitor’s submission that the agreement was subject to solicitor-clientprivilege. Master Quinn noted that while the agreement was not a MaryCarter agreement, it could affect the proceedings and so should be re-vealed to the Court and all parties.

130 The question of whether or not co-defendants must produce an agree-ment between them to cooperate in the litigation was discussed morefully in in Aviaco International Leasing Inc. v. Boeing Canada Inc.,[2000] O.J. No. 2420 (Ont. S.C.J.) [Aviaco], which preceded Aecon.Both Metro Vancouver and HMM rely on Aviaco in support of the argu-ment that a cooperation agreement between co-defendants need not beproduced.

131 In Aviaco, the plaintiffs learned that defendants were exchangingdrafts of what was described as a standstill agreement. The plaintiffs’counsel learned of this by reading the otherwise privileged correspon-dence of defendant’s counsel which had been accidentally faxed to him,which correspondence was then relied upon when the plaintiffs broughtan application for production of the standstill agreement. The Courtfound this conduct contrary to the ethical and professional standards oflawyers and an abuse of process.

132 In any event, in the course of the plaintiffs’ application in Aviaco, thesought-after agreement was produced to Nordheimer J. who described itin this way, at para. 16:

Without, I trust, revealing the actual contents of the agreement, I willsay for the purposes of these reasons that the standstill agreement is


an agreement between the defendants to share information in further-ance of their common interest to defend the plaintiffs’ claim. Theagreement does not prohibit any defendant from advancing a crossc-laim against any of the other defendants. Finally, it provides that con-fidentiality will be maintained with respect to all information ex-changed pursuant to the agreement. It is not, in my experience, anuncommon type of agreement to be reached among co-defendants incircumstances such as this.

133 As it was described in Aviaco, the agreement at issue was similar insome ways to the first aspect of the agreement at issue here: a joint coop-eration agreement, by which the parties agreed to share information infurtherance of their common interest in defeating the plaintiff’s claim.The Court rejected the plaintiffs’ argument that the agreement must beproduced immediately because it could affect the outcome of thelitigation.

134 Rather, the Court in Aviaco found that the agreement at issue wasprotected by common interest privilege.

135 The decision in Aviaco does not reveal why the agreement was calleda “standstill agreement” but this commonly implies that it contained aclause reserving the right of the agreeing parties to sue one another in thefuture. The Court held that the terms of the defence cooperation agree-ment did not prohibit a defendant from claiming against another defen-dant (para. 16).

136 Despite finding that the terms of the cooperation agreement did notneed to be produced the Court in Aviaco did describe the general natureof the agreement and further, accepted that in some circumstances theterms of agreements between parties to litigation must be immediatelydisclosed. As Nordheimer J. explained at para. 20:

There are obviously situations where agreements or arrangements,which otherwise would be protected by common interest privilege,must still be disclosed and produced. “Mary Carter” agreements arethe principle example of such situations. The issue is really to whatextent or in what circumstances should the common interest privilegeyield to a more important principle and that is the need for full dis-closure to promote the objective of a fair trial.

137 In Aviaco, Nordheimer J. went on to describe the issue this way atpara. 23:

... I would put the issue as follows: Do the terms of the agreementalter the apparent relationships between any parties to the litigation


that would otherwise be assumed from the pleadings or expected inthe conduct of the litigation? The reason why “Mary Carter” agree-ments have to be produced is because such agreements fundamen-tally alter what otherwise would be the expected relationship be-tween two parties to the litigation — normally the plaintiff and oneof the defendants. It changes that relationship from an adversarialone to a cooperative one and it is consequently important that boththe court and the other parties know of that change. Otherwise thecourt and the other parties might be misled. If, however, as is thecase here, the agreement entered into between co-defendants is sim-ply directed at sharing information and otherwise concentrating onthe defence of the plaintiffs’ claim, which all defendants wouldplainly have an interest in achieving and which the court would ex-pect the defendants to pursue, then I see no reason to override thecommon interest privilege that would otherwise apply to it. I note inthis regard that counsel remain under their professional responsibil-ity, referred to in commentary 4 to rule 10 of the Rules of Profes-sional Conduct, not to mislead the court as to the position of theirclients in the adversarial process. If there was any aspect of such anagreement that could lead at any point to a misleading of the courtand other parties, the counsel whose clients were parties to the agree-ment would then be under an absolute obligation to immediately dis-close the agreement.

[Emphasis added.]

138 In Moore v. Bertuzzi, 2012 ONSC 3248 (Ont. S.C.J.) [Moore] PerellJ. upheld a Master’s decision to order disclosure to the plaintiff of a set-tlement agreement between the defendants and third party. The agree-ment had resulted in a consent dismissal of the defendant’s third partyclaim and of the co-defendants’ cross-claims. The settling parties arguedthat the agreement was unlike a Mary Carter agreement and did not“change the litigation landscape” because before it was entered into theywere already united in a defence of the amount being claimed by theplaintiffs.

139 In Moore, Perell J. rejected the argument that the agreement in issuedid not change the litigation landscape. He held that the court and theparties need to immediately know the “genuine state of adversity” be-tween the parties, as follows, at paras. 76-79:

The court needs to understand the precise nature of the adversarialorientation of the litigation in order to maintain the integrity of itsprocess, which is based on a genuine not a sham adversarial systemand which maintenance of integrity may require the court to have an


issue-by-issue understanding of the positions of the parties. The ad-versarial orientation of a lawsuit is complex because parties may beadverse about some issues and not others. In these regards, it is worthnoting from the above passage from Pettey v. Avis Car Inc. that Jus-tice Ferrier explained the need for disclosure of the settlement agree-ment because of its “impact on the strategy” but he said: “most im-portantly, the court must be informed immediately so that it canproperly fulfil its role in controlling its process in the interests of fair-ness and justice to all parties.”

As a matter of ensuring procedural fairness, as an element of its as-sessment of evidence, as a factor in determining the truth of the facts,and as a factor in administering justice, the court needs to know thereality of the adversity between the parties. The court’s interest inknowing the genuine state of adversity explains why so much atten-tion is paid by the court: (a) to standing and status; (b) to whether aperson is a proper or necessary party; (c) to whether a person is af-fected by a proceeding and entitled to notice and an opportunity to beheard; (d) to the order of openings, the presentation of evidence,closings, and argument; (e) to the right to cross-examine; (f) towhether a party or affected person consents, does not oppose, or op-poses the relief sought in a proceeding, be it interlocutory relief or afinal order; (g) to the doctrines of res judicata, issue estoppel, andabuse of process, and (h) to the avoidance of a multiplicity ofproceedings.

I accept that the structure of a Mary Carter agreement creates an alli-ance between plaintiff and co-defendant and that the structure of theso-called conditional or provisional proportional sharing settlementin the case at bar creates no alliances but just settles the crossclaims.However, in the case at bar, practically speaking, a strategic alliancehas ended and the dynamics of the litigation have been changed bythe settlement agreement. The settlement of the crossclaims ends thecommon cause and informal alliance that the Moores and Bertuzzihad to show that Orca Bay was the instigator and substitutes a mutualnon-aggression pact between Bertuzzi and Orca Bay.

It is beside the point that the Moores are not entitled to rely on Ber-tuzzi pointing an adversarial sword at Orca Bay, the point is that thecourt administering and overseeing the adversary system needs toknow that the adversarial orientation has changed. As I read the au-thority of Pettey v. Avis Car Inc., the court needs information about achange in the adversarial orientation from the moment the changeoccurs and that need is not limited to the circumstances of a Mary


Carter agreement or to the circumstances that the trial has not yetbegun.

[Emphasis added.]

140 The concerns mentioned by Perell J. in both Moore and Zwaniga mir-ror the concerns expressed by the British Columbia Court of Appeal inBritish Columbia Children’s Hospital as to the exceptions to settlementprivilege that require production of terms, namely evidentiary arrange-ments and terms having to do with releases, covenants not to sue andreservation of rights. The Court in Moore was concerned that knowingthe precise nature of the parties’ relationships could affect the discoveryprocess, not just the trial process: at para. 89.

141 It is important to keep in mind that Perell J. in both Moore andZwaniga did not have the benefit of the Supreme Court of Canada’sjudgment in Sable Offshore which concluded that the monetary terms ofa settlement agreement did not need to be produced prior to trial.

142 In Law Society of Upper Canada v. Ernst & Young, [2007] O.J. No.3984 (Ont. Master) the defendants disclosed the fact that they had a toll-ing agreement. The Master held that the exact terms of the agreementwere protected from production on the grounds of common interest privi-lege, relying on Aviaco. However the Court also noted that if the situa-tion changed, the last line of para. 23 of Aviaco applied requiring disclo-sure of the terms of the agreement, namely:

If there was any aspect of such an agreement that could lead at anypoint to a misleading of the court and other parties, the counselwhose clients were parties to the agreement would then be under anabsolute obligation to immediately disclose the agreement.

143 To similar effect in Glasjam Investments Ltd. v. Freedman, 2014ONSC 3878 (Ont. S.C.J.) Master MacLeod held that the fact of a tollingagreement should have been disclosed at the time an action was discon-tinued where there was ongoing litigation between other interested par-ties. This was because of the danger that the court might have been mis-led that the discontinuance was because the claim was being abandoned,absent disclosure of the fact of an agreement to allow one party to bringan action notwithstanding the potential expiry of the limitation period (atpara. 56). However the precise terms of the agreement did not need to beproduced.

144 In British Columbia, the Code of Professional Conduct for lawyersappears to be consistent with the Ontario case law on disclosure of MaryCarter agreements. The Commentary to Rule 5.1-2 requires lawyers to


immediately reveal the existence and particulars of any agreement be-tween a plaintiff and another party by which the plaintiff is guaranteedrecovery:

Commentary

[1] In civil proceedings, a lawyer has a duty not to mislead the tribu-nal about the position of the client in the adversarial process. Thus, alawyer representing a party to litigation who has made or is party toan agreement made before or during the trial by which a plaintiff isguaranteed recovery by one or more parties, notwithstanding thejudgment of the court, should immediately reveal the existence andparticulars of the agreement to the court and to all parties to theproceedings.

145 The Code of Professional Conduct in British Columbia appears not tohave directly answered the question of whether an agreement betweendefendants to cooperate requires immediate disclosure. What is clear isthat the lawyer has a duty to not mislead the court in the adversarial pro-cess. This still begs the questions whether the court would be misled ifthe agreement was not disclosed; and if so, when is the time to disclosethe agreement; and finally, should the precise terms of the agreement bedisclosed or just the fact and general nature of the agreement.

Should the Fact or Terms of the Agreement Have Been DisclosedImmediately?

Summary of Legal Principles146 Summarizing what can be distilled from the cases, in British Colum-

bia our Court of Appeal has indicated that when there is a settlementagreement between some parties to the litigation there must be disclosureat least close to the start of trial of any evidentiary arrangements andearlier disclosure of any agreement to release, not sue, or to reserverights to sue: Middelkamp, British Columbia Children’s Hospital.

147 In British Columbia Children’s Hospital the reason given for requir-ing disclosure of some agreement terms was to capture arrangements that“could cast light on the quality of the evidence or the motivation of thewitness” and could “affect the weight a court might give to theevidence”: British Columbia Children’s Hospital at para. 36.

148 In Dos Santos, the Court spoke of “the just disposition of pendinglitigation” as a basis for an exception to settlement privilege (at para. 34).


149 While the British Columbia cases were decided in the context of set-tlement privilege, I can conceive of no policy rationale as to why com-mon interest privilege should be protected in such instances whereas set-tlement privilege should give way.

150 The need to disclose evidentiary arrangements is also emphasized inthe Ontario cases. The Ontario cases emphasize the need, in the interestsof the fair administration of justice, for the opposing party and the courtto be able to know exactly where the parties stand in relation to eachother in the adversarial process where that might be different from whatis revealed by the pleadings: Aecon; Zwaniga; Laudon; Moore. Thismeans understanding alliances as well as adverse positions.

151 This is consistent with the professional obligation of a lawyer not tomislead the court about the position of the client in the adversarialprocess.

152 I conclude that where there would be common interest privilege overan agreement between parties in litigation, that privilege should give wayto some extent when necessary for the just disposition of pending litiga-tion, or to put it another way, when necessary to ensure a fair trial. Gen-erally this will include circumstances where:

a) the agreement’s existence could cast light on the quality of theevidence or motivation of a witness or could affect the weight acourt might give to the evidence;

b) the agreement’s existence could be relevant to decisions regardingthe conduct of trial; and, or

c) the court or opposing party could otherwise be misled about theposition of the parties in the adversarial process.

153 More specifically, this means the common interest privilege betweenlitigants who have a cooperation agreement must give way to some ex-tent in the following circumstances:

a) where there are evidentiary arrangements in the agreement;

b) where the agreement contains a release, covenant not to sue, orreservation of rights; and, or

c) where the agreement makes the parties’ true adversarial positionsin the lawsuit different than what might otherwise be expectedfrom the pleadings.

154 The extent to which the common interest privilege must give waymay depend on the circumstances. Some analysis is necessary to deter-


mine whether or not production of the agreement itself is required orsimply disclosure of the fact of the agreement.

155 In some cases it may be enough to disclose the fact of an agreement,without disclosing its actual terms.

156 It is difficult to conceive how disclosure of the fact and general natureof a cooperation agreement between co-defendants would be a signifi-cant encroachment on common interest privilege.

157 Just as one must understand that litigation privilege is distinct fromsolicitor-client privilege, so too is it distinct from settlement privilege asthe latter is premised on the special policy consideration of encouragingparties to settle: Dos Santos at paras. 45-46.

158 Common interest privilege is a branch of litigation privilege which ispremised on facilitating a party’s preparation of its case in the adversarialprocess: Blank at paras. 27-28. Disclosing the fact that two parties arecooperating or have a reservation of rights agreement would not seri-ously impede this policy goal. The exchange of information as part of thepreparation of the parties’ cases will remain privileged.

159 As for the timing of disclosure, this may depend on the nature of theagreement.

160 Since the court must never be misled about the position of a party inthe adversarial process, I conclude that it is necessary to disclose imme-diately any agreement which affects the party’s position in a way that isdifferent than that revealed by the pleadings. An agreement between par-ties who are adverse on the pleadings, such as between a plaintiff anddefendant, or a defendant and third party, which contains a full or partialsettlement or release or reservation of rights, or a degree of cooperationnot to be expected between adverse parties, should therefore be disclosedimmediately.

161 An agreement dealing with evidentiary arrangements between partiesshould be disclosed at least by the start of trial, and possibly even by thetime of examinations for discovery if it could allow the opposite party anopportunity to challenge the quality of the evidence and motives of thewitness on discovery.

162 I will now analyze the timing of the disclosure of the Agreement atissue here.


Analysis of the Agreement163 Under the Agreement, the parties agree to share and exchange infor-

mation that is not subject to solicitor-client privilege (s. 1) and agree tomake available to one another their witnesses (s. 2). The parties agree notto disclose the shared information to any other party unless compelled orunless the information is otherwise available to the disclosing party (s.4); they agree that such information disclosed is without prejudice (s. 5);and they agree that such shared information shall not be subject to cross-examination unless the information was otherwise available to the cross-examining party (s. 5). All of these provisions seem to address sharingand keeping confidential information in pursuit of their common interestin defeating Bilfinger in the two proceedings.

164 Documenting the parties’ intentions to keep their communicationsconfidential can assist in ensuring that the elements necessary to assertcommon interest privilege are present.

165 The decision in Aviaco stated that the agreement provided for “confi-dentiality” of the information exchanged pursuant to the agreement,which the Court found to be typical of these types of agreements betweenco-defendants (para. 16), and that these terms did not require disclosure.Again, however, the fact that the co-defendants did have a cooperationagreement described as a standstill agreement was disclosed.

166 I find that the terms in the Agreement related to sharing and keepingthe parties’ exchanges of information confidential do not amount to “evi-dentiary arrangements”. Nothing in the agreement restricts or commits aparty to giving their evidence in a certain way, for example.

167 Pursuant to the Agreement the parties also agree not to be bound bythe evidence or findings of the Court in these proceedings and to be freeto call other evidence in other proceedings between them (s. 6). Thisterm does not directly constitute an arrangement about evidence in thecurrent proceedings. However, arguably it could have an indirect impacton expectations or assumptions about evidence because it implies thatsome evidence on “residual issues” may be deliberately left out and notcalled in these proceedings.

168 The Agreement also allows each defendant the right to sue the otherafter the conclusion of the present proceedings and postpones the runningof a limitation period in respect of such claims. In accordance withBritish Columbia Children’s Hospital this can be construed as a provi-sion dealing with reservation of rights.


169 Here, unlike in Aecon, the Agreement cannot be said to have changedthe litigation landscape in a way that is contrary to the pleadings. Bilf-inger is suing both HMM and Metro Vancouver, and both HMM andMetro Vancouver clearly have a common interest in defeating Bilfinger.Their interests are aligned on the pleadings as they are in the Agreement.

170 Nevertheless, as a trier of fact, I am interested in knowing of the factof any deeper alignment of interests and reservation of rights betweenHMM and Metro Vancouver.

171 Often a cross-examiner will ask a witness whether he is testifyingvoluntarily or under subpoena for the very purpose of illustrating anyalliances, and wishing the court to draw inferences as a result. The an-swer to this kind of question does not resolve the issue of a witness’scredibility on its own, but it can be a pebble on the scale in the weighingof evidence. Thus it is that the degree of alliances between parties can berelevant.

172 If in the Metro Action, Metro Vancouver was to call HMM witnessesas part of its case it could be relevant to know that Metro Vancouver andHMM had signed a cooperation and reservation of rights agreement.Likewise if HMM sought to cross-examine a Metro Vancouver witnessat trial.

173 In my view it is not necessary for the agreement to be contrary to theposition of the parties on the pleadings in order for the existence of theagreement to be potentially relevant to assessing the evidence of the par-ties and to decisions regarding the conduct of trial.

174 As another example, if at trial it was not known that Metro Vancou-ver had reserved the right to sue HMM, this might affect the perceivedsincerity of the Metro Vancouver evidence or submissions to the effectthat HMM did not do anything wrong. Knowing that Metro Vancouverhas reserved the right to sue HMM, and the same in reverse, may helpunderstand the parties’ motives and put their evidence and submissionsinto a more accurate perspective. In the end knowing of these arrange-ments may not be of much influence in the total assessment of all theevidence. But the point is that failing to disclose these arrangementscould potentially create a misleading perception of the evidence byomission.

175 In addition, there are some unusual circumstances in this case whichimpact on the significance of the relationship between the parties to theAgreement. Often a lawsuit involves facts that have happened in the past.


In this case, the relevant facts have been ongoing. Once Bilfinger wasterminated as the contractor, and a new contractor was hired to completethe Project, the rock conditions encountered by that new contractor andany tunnel design and contract changes became relevant to assessingBilfinger’s claim that the original design was unsafe in light of the rockconditions, and in assessing Metro Vancouver’s claim for damages.

176 Because of the ongoing work in completing the Project, evidence wasbeing created by HMM and Metro Vancouver after the launch of the twolawsuits that is very relevant to these issues and the claims beingadvanced.

177 In the course of this application HMM pointed to some evidencewhich it says suggests that the ongoing contractual relationship betweenHMM and Metro Vancouver, and the positions they are taking in relationto the current tunnel contractor, have been very much shaped by the exis-tence of the Agreement. To put it another way, Bilfinger argues that theAgreement is a lens through which the evidence and conduct of HMMand Metro Vancouver in relation to the ongoing tunnelling work shouldbe seen.

178 Even without the Agreement, it is possible that the same argumentscould be advanced by Bilfinger that HMM and Metro Vancouver have aninterest in crafting their evidence strategically regarding the ongoing tun-nelling work and so their evidence in that regard should not be seen astruly objective or independent of one another or of the issues in this law-suit. Whether those arguments will ultimately prevail will of course re-main to be seen.

179 But the point is that in the circumstances of this case, where the ongo-ing relationship of HMM and Metro Vancouver continues to be highlyrelevant to the issues in the lawsuit, I find that the fact that HMM andMetro Vancouver have an agreement of the nature here is sufficient rele-vant to Bilfinger and its testing of the evidence of HMM and Metro Van-couver that had it not been disclosed it could have negatively affected thefairness of the trial.

180 Here I find that Bilfinger is entitled to know, as part of a fair litigationprocess, both the fact that HMM and Metro Vancouver have a coopera-tion agreement in respect of this lawsuit and the fact that they have areservation of rights agreement in respect of claims against each other.This knowledge could cast some light on the quality of the evidencegiven or the motivation of witnesses.


181 Further, without disclosure of the fact of the Agreement, the Courtmight not be as informed as it should be to make decisions on the con-duct of the trial. But submissions have not yet been received on the con-duct of the trial, these decisions have not yet been made, and the Agree-ment has been disclosed. There is therefore no issue in this case of theCourt having been misled.

182 I conclude that it was not necessary for Metro Vancouver and HMMto disclose the Agreement immediately upon the Agreement being en-tered into, because the fact their interests were aligned was evident onthe pleadings and was not contradicted by the Agreement. But it wasnecessary for them to disclose at least the fact that they had entered into acooperation and reservation of rights agreement before the start of trial.This fact has been disclosed before the start of trial.

183 As for whether they should have disclosed the existence of the Agree-ment earlier, I come back to the fact that in June 2012, Bilfinger’s coun-sel on examination for discovery asked a representative of Metro Van-couver if there was any agreement between Metro Vancouver and HMMwith respect to the proceedings. This request was not answered until ap-proximately one year later, despite seven follow-up letters.

184 I accept that counsel for Metro Vancouver may have needed sometime to consider the question of whether or not there was an obligation todisclose the Agreement itself. But once the question was asked on exami-nation for discovery, there was no sound basis for refusing to disclose atleast the fact of the existence of a cooperation agreement, allowing thetwo parties to exchange information under the protection of common in-terest privilege and allowing for a reservation of rights. Since I have con-cluded this fact would need to be disclosed before the start of trial, thereis no good reason for not disclosing it earlier, soon after the question wasasked on examination for discovery.

185 Requiring production of this information is a small encroachment onany common interest privilege that might exist, as it does not reveal theunderlying discussions and information exchanged under the common in-terest privilege.

186 This ruling is not an invitation for wide-ranging examination for dis-covery about the underlying discussions between the parties to theAgreement, delving into the preparation of their cases. The significanceof the existence of such an agreement only goes so far to help understandthe nature of the adversarial or cooperating relationships between parties.


187 Had Bilfinger been informed of the nature of the Agreement, it wouldhave then allowed Bilfinger to make an informed decision as to whetherto seek production of the Agreement itself.

188 As the actual Agreement has been produced in this case before trial, Ido not need to decide the question of whether the actual terms shouldhave been disclosed, or whether disclosure of the fact and nature of theagreement would have sufficed. Nevertheless, it strikes me that an analy-sis of prejudice will often resolve the issue. Here, nothing in the Agree-ment itself revealed the substance of information exchanged and dis-cussed between the cooperating parties. There is no prejudice to eitherMetro Vancouver or HMM caused by disclosure of the Agreement. Pro-ducing the actual document avoids speculation as to any improper terms.

189 In reaching my conclusion, I find nothing significant turns on the factthat HMM is not a named party in the Metro Action because it is namedas a defendant in the Bilfinger Action. There is also little doubt HMM isan important witness in both proceedings.

Conclusion on Disclosure Obligation190 I conclude that Metro Vancouver and HMM ought to have disclosed

the fact that they had a cooperation agreement dealing with exchange ofinformation under a common interest privilege, and the fact they hadagreed to reserve rights to sue one another, soon after the question wasasked of the witness for Metro Vancouver on examination for discovery.

191 However, disclosing the actual Agreement when Metro Vancouverdid in July 2013, so that the opposing party and the Court would beaware of it, was sufficiently in advance of planning the conduct of thetrial so as not to cause any prejudice to decisions regarding the trial itself.

Remedy192 Bilfinger seeks relief by way of this Court finding the delayed disclo-

sure of the Agreement to be an abuse of process and ordering the plead-ings of Metro Vancouver and HMM to be struck.

193 In Aecon the Ontario Court of Appeal stayed the third and fourthparty proceedings as a result of the non-disclosure of the agreement be-tween the plaintiff and defendant. The parties who had not been aware ofthe agreement between the plaintiff and defendant were thus able toavoid judgment against them on the third party and fourth party claims.There was no judgment awarding damages in favour of any party.


194 Here the relief sought by Bilfinger is of a different quality than that inAecon, as Bilfinger seeks not only to strike the claim by GVWD againstit, it seeks to strike the defences of Metro Vancouver and HMM in theBilfinger Action, resulting in no defence to Bilfinger’s large claim fordamages.

195 I do not consider that the relief sought by Bilfinger would be fair orproportionate even if there was an obligation on Metro Vancouver andHMM to disclose the Agreement earlier.

196 The Court in Aecon was concerned about a miscarriage of justice be-cause there was an aspect of the relationship between the parties to theagreement that made their pleadings a sham.

197 Here Bilfinger knew Metro Vancouver and HMM have aligned inter-ests because Bilfinger advanced a claim against these parties, and neithermade any claims against each other.

198 I also note that it is likely Bilfinger at least suspected as a logicalinference from the fact that Metro Vancouver and HMM did not advancecross-claims against each other that there might be some kind of agree-ment between those two parties. This suspicion is evidenced by the factthat counsel for Bilfinger has persistently been making inquiries in thisregard.

199 In Moore v. Bertuzzi, 2012 ONSC 5008 (Ont. S.C.J.) the parties re-turned before Perell J. who addressed the appropriate form of relief forthe failure to produce the settlement agreement. The Court noted theMaster’s finding that the failure to disclose the agreement was by thelawyers, not the parties, and that the lawyers’ mistakes were made ingood faith. The Court held that unlike in Aecon, there was no miscarriageof justice. Perell J. held that ordering production of the settlement agree-ment was a sufficient remedy because the parties and the trial judge wereable to adjust the pre-trial and trial procedure accordingly.

200 The same observations can be made here. Bilfinger and this court canadjust accordingly now that the Agreement is known.

201 I do not find a miscarriage of justice or abuse of process justifying therelief sought by Bilfinger.

202 I conclude that since the Agreement has now been produced no rem-edy is required.

Special Costs203 Both sides to the applications seek special costs against the other.


204 Both sides were partially successful and partially unsuccessful in theresult.

205 Bilfinger did not succeed in obtaining the relief it sought, but it wassuccessful in principle in part based on my conclusion that the fact theparties had a cooperation and reservation of rights agreement ought tohave been disclosed earlier than it was.

206 Metro Vancouver and HMM did not succeed in their position that theAgreement did not need to be disclosed at all, but Metro Vancouver hadalready disclosed the Agreement and they succeeded in their position thatno remedy was necessary.

207 Bilfinger says that the conduct of Metro Vancouver and HMM war-rants special costs.

208 I disagree. There is no basis for any suggestion that the lawyers wereacting other than in good faith in considering the Agreement privileged.There was considerable room for uncertainty whether HMM or MetroVancouver should have disclosed the fact of or any part of theAgreement.

209 I do not consider the delay by Metro Vancouver and HMM in produc-ing the Agreement to justify special costs against them. HMM did list theAgreement on the privileged section of its list of documents, not in a waythat revealed the nature of the agreement but at least in a way that al-lowed Bilfinger the opportunity to question it (albeit noticing this listingwas made more difficult in this case because of the large volume of doc-ument production). Ultimately the Agreement was produced by MetroVancouver, several years into the litigation but more than a year beforetrial.

210 As for special costs against Bilfinger, the application by Bilfinger washard-hitting. Some aspects of the Notice of Application appeared to sug-gest impropriety on the part of the other parties, and by inference, theircounsel.

211 However, two grounds of Bilfinger’s application were abandoned,and it advised the other parties of that before the hearing. This is reasona-ble counsel work, in response to the capable submissions of the otherparties, and Bilfinger cannot be criticized for it.

212 Furthermore, Bilfinger’s counsel made it clear in oral submissionsthat Bilfinger was not attacking the integrity of counsel for the other par-ties. Instead, Bilfinger was arguing that the Agreement gave rise to ques-tions that had not been answered by the other parties.


213 While I am concerned about Bilfinger’s position on the applicationbeing overstated, I do not find Bilfinger’s conduct in bringing this appli-cation was so egregious as to warrant special costs against it.

214 The Bilfinger application is dismissed. I consider it appropriate tosimply order costs of the present application in the cause.

Application dismissed.

Appendix “A”

Cooperation Agreement

This Cooperation Agreement entered into and effective this 26th day ofFebruary, 2009 by and between:

The Greater Vancouver Water District, a statutory corporationorganized under the laws of British Columbia (the “GVWD”)The Greater Vancouver Regional District, a statutorycorporation organized under the laws of British Columbia (the“GVRD”) The Greater Vancouver Sewerage and DrainageDistrict, a statutory corporation organized under the laws ofBritish Columbia (the “GVS&DD”) Hatch Mott Macdonald Ltd.,a firm of consulting engineers incorporated under the laws of theProvince of Ontario. (“HMM”)

WHEREAS:

A. The GVWD undertook the development of two underground fun-nels approximately 7.1 km in length (the “Twin Tunnels”) as acomponent of its Seymour — Capilano Filtration Project in NorthVancouver, British Columbia.

B. Pursuant to a contract with the GVWD, HMM prepared the origi-nal design of the Twin Tunneis and is providing on-going engi-neering services during its construction.

C. The GVWD entered into a contract to construct the Twin Tunnels(the “Contract”) with Bilfinger Berger/Fru-Con (“BBFC”) an un-incorporated joint venture of Bilfinger Berger AG (“BBAG”), acompany organized in Germany and Fru-Con Construction Corpo-ration (“Fru-Con”) a company organized in the United States ofAmerica. The Contract was subsequently assigned to BilfingerBerger (Canada) Inc. (“BBC”), a corporation organized under thelaws in the Province of British Columbia.


D. In May 2008, prior to completion of construction of the TwinTunnels, the GVWD terminated BBC’s right to perform furtherwork under the Contract.

E. The GVWD has commenced an action against BBFC, BBAG,Fru-Con and BBC in the Supreme Court of British Columbia,Vancouver Registry Action No. S-083856 (the “GVWD Action”).

F. BBFC, BBAG, Fru-Con and BBC have commenced an actionagainst the GVWD, the GVRD, the GVS&DD (collectively,“Metro Vancouver”), HMM and The Corporation of the Districtof North Vancouver in the Supreme Court of British Columbia,Vancouver Registry Action No. S-084599 (the “BilfingerAction”).

G. Metro Vancouver and HMM are mutually desirous of cooperatingin the defence of the Bilfinger Action and the prosecution of theGVWD Action (collectively, the “Proceedings”).

THE PARTIES AGREE AS FOLLOWS:

1. Metro Vancouver and HMM agree to share and exchange infor-mation they have pertaining to the issues raised in the Proceed-ings, save and except any such documentation as may be subjectto a solicitor-client privilege.

2. Metro Vancouver and HMM shall make available to the other anyand all such witnesses accessible to each of them as may be neces-sary for the purpose of defending the Bilfinger Action or prosecut-ing the GVWD Action, subject always to the right of participationof each party’s legal counsel in any witness interviews or briefingsof witnesses for discovery or trial.

3. Metro Vancouver and HMM agree to cooperate and work togetherin defending the Bilfinger Action, including jointly developing adefence strategy and cooperating in assigning tasks and carryingout tasks and activities in implementing that strategy.

4. Any and all information or documentation exchanged between andamongst the parties to this Cooperation Agreement shall be infor-mation subject to a common claim of solicitor-client privilege byeach and all of the parties and no such information shall be dis-closed to any other party or parties whatsoever without the writtenconsent of the party imparting or delivering any such information,unless compelled to do so by a Court of competent jurisdiction, or


unless any such documentation or information is or would be oth-erwise available to or accessible by the disclosing party.

5. Any and all information and documentation shared between andamongst the parties to this Cooperation Agreement shall bedeemed to have been shared on a without prejudice basis and shallnot be the subject of any future cross-examination by any one ormore of the parties hereto unless any such information or docu-mentation is otherwise available to or accessible by the cross ex-amining party. Additionally, any and all such information anddocumentation shall be used only for the purposes stipulatedherein and for no other purpose whatsoever.

6. Should there be residual issues between and amongst Metro Van-couver and HMM following a final determination or settlement ofone or both of the Proceedings or termination of this Agreementpursuant to clause 10, then the parties to this Cooperation Agree-ment covenant and agree to make all good faith efforts to resolveany such issues by way of negotiation or, failing that, by media-tion or, failing that, agree to exercise good faith efforts to definethe residual issues and submit the same for determination to theSupreme Court of British Columbia pursuant to the Rules of thatCourt. In the event of a reference to the Supreme Court, the partiesshall not be bound by the evidence given or any findings of theCourt in the Proceedings, but shall be free to call such evidenceand take such positions as if there had been no Proceedings. If theparties to this Cooperation Agreement fail to resolve any residualissues by way of negotiation or mediation, and in the event thatone or more of the parties, in good faith, decline to submit theresidual issues by way of reference to the Supreme Court, theneach of the parties hereto is at liberty to proceed with such otherlegal proceedings as that party deems appropriate to resolve theresidual issues.

7. Metro Vancouver and HMM shall each be independently repre-sented by legal counsel for the duration of this CooperationAgreement. Each of the parties shall be responsible for all costsincurred by their own independent legal counsel. The legal coun-sel so retained shall be free to act as legal counsel for the partythey represent in any subsequent proceedings between andamongst the parties hereto, notwithstanding their involvement aslegal counsel for the purpose of this Cooperation Agreement.


8. Until the conclusion of the Bilfinger Action, whether by way ofsettlement or by way of trial, including all appeals, neither partyshall charge the other for any assistance or work provided by themto the extent reasonably necessary to carry out their obligationsunder this Cooperation Agreement including, without limitation,hourly charge-out rates or disbursements.

9. Notwithstanding the Limitation Act, Metro Vancouver and HMMagree that the running of time with respect to the limitation periodapplicable to any claim that one party may have against the otherarising out of the issues raised in the pleadings currently ex-changed in the Proceedings is hereby postponed from the effectivedate of this Cooperation Agreement to 60 days following the co-nolusion of the Bilfinger Action and the GVWD Action, whetherby way of settlement or by way of trial, including all appeals.

10. Any party hereto may terminate their respective obligations underclauses 1, 2 and 3 of this Cooperation Agreement on 30 days writ-ten notice, but all other covenants, undertakings and agreementsunder this Cooperation Agreement shall remain in full force andeffect and binding on all the parties hereto.

11. Metro Vancouver and HMM each undertake and agree to notifyand obtain the consent to this Cooperation Agreement of any in-surer or insurers who may afford coverage to that party if a claimwas now advanced against that party in the Proceedings by anyother party hereto.

Signed by each of the parties hereto by their solicitors and duly author-ized agents for the purpose of entering into this Cooperation Agreement.



[Indexed as: Manitoba Public Insurance Corp. v. Myerion]

The Manitoba Public Insurance Corporation, Plaintiff andRosalind Myerion and Mark’s Auto Sales Inc., Defendants

Manitoba Court of Queen’s Bench

Docket: Winnipeg Centre CI 13-01-82563

2014 MBQB 159

Toews J.

Judgment: July 22, 2014

Motor vehicles –––– Civil liability of owner — Determination of owner-ship — Agreement of sale –––– M took possession of motor vehicle (subject ve-hicle) pursuant to conditional sales agreement (CSA) with dealership — Whileoperating subject vehicle, M negligently collided with another vehicle — Insurerof other vehicle, Manitoba Public Insurance Corporation (MPIC), commencedaction for damages against M and dealership — MPIC obtained default judg-ment against M in amount of $18,379.51 — Trial was held with respect to deal-ership’s liability to MPIC — Dealership held to be jointly and severally liablefor judgment amount — Dealership was responsible for M’s negligence by oper-ation of vicarious liability imposed by s. 153(3) of Highway Traffic Act —Dealership continued to manifest its ownership in subject vehicle by exercisingdominion and control over vehicle after CSA was executed — Firstly, CSAmade it clear that “title” to subject vehicle remained fully vested with dealershipuntil M had made all of required payments — Other indicia of dominion andcontrol included dealership’s right to inspect subject vehicle and prohibitionagainst transferring subject vehicle to another person without dealership’s con-sent — Further, principal of dealership admitted that he was legal owner of sub-ject vehicle in his statement to MPIC after accident — It is not necessary to de-termine that common law requirements establishing duty of care have been metin order to impose liability under s. 153(3) of Act — There can be more thanone “owner” under s. 153(3) of Act.

Motor vehicles –––– Civil liability of owner — Consent to possession — Mis-cellaneous –––– Pursuant to conditional sales agreement — M took possessionof motor vehicle (subject vehicle) pursuant to conditional sales agreement(CSA) with dealership — While operating subject vehicle, M negligently col-lided with another vehicle — At time of accident, M was operating subject vehi-cle without driver’s licence or insurance, which breached CSA — Insurer ofother vehicle, Manitoba Public Insurance Corporation (MPIC), commenced ac-tion for damages against M and dealership — MPIC obtained default judgmentagainst M in amount of $18,379.51 — Trial was held with respect to dealer-

Manitoba Public Insurance Corp. v. Myerion 579

ship’s liability to MPIC — Dealership held to be jointly and severally liable forjudgment amount — Dealership was responsible for M’s negligence by opera-tion of vicarious liability imposed by s. 153(3) of Highway Traffic Act — Deal-ership was owner of subject vehicle — M had acquired possession of subjectvehicle with consent of dealership — Fact that M was in breach of terms of CSAeven before time of accident might have provided dealership with legal basis toretake possession of subject vehicle — However, until steps to regain possessionwere taken by dealership, subject vehicle remained in M’s possession pursuantto CSA.

Cases considered by Toews J.:

Hayduk v. Pidoborozny (1972), [1972] 4 W.W.R. 522, 29 D.L.R. (3d) 8, 1972CarswellAlta 55, [1972] S.C.R. 879, 1972 CarswellAlta 141 (S.C.C.) —followed

Honan v. Gerhold (1974), 50 D.L.R. (3d) 582, 1974 CarswellOnt 249F, [1975] 2S.C.R. 866, 3 N.R. 81, 1974 CarswellOnt 249 (S.C.C.) — considered

Naber Seed & Grain Co. v. Prairie Pulse Inc. (2007), 2007 CarswellSask 282,2007 SKCA 58, (sub nom. Naber Seed & Grain Co. (Receivership) v.Prairie Pulse Inc.) 299 Sask. R. 222, (sub nom. Naber Seed & Grain Co.(Receivership) v. Prairie Pulse Inc.) 408 W.A.C. 222, [2007] 8 W.W.R. 79,33 C.B.R. (5th) 1 (Sask. C.A.) — referred to

W.C. Fast Enterprises Ltd. v. All-Power Sports (1973) Ltd. (1981), 40 C.B.R.(N.S.) 182, 16 Alta. L.R. (2d) 47, 1981 CarswellAlta 198, 126 D.L.R. (3d)27, 29 A.R. 483, [1981] A.J. No. 912 (Alta. C.A.) — referred to

Yeung (Guardian ad litem of) v. Au (2006), 9 P.P.S.A.C. (3d) 13, 51 B.C.L.R.(4th) 258, 40 C.C.L.T. (3d) 286, 2006 BCCA 217, 2006 CarswellBC 1055,[2006] 7 W.W.R. 75, 31 M.V.R. (5th) 77, (sub nom. Yeung v. Au) 225B.C.A.C. 168, (sub nom. Yeung v. Au) 371 W.A.C. 168, 269 D.L.R. (4th)727, [2006] B.C.J. No. 975 (B.C. C.A.) — considered


Court of Queen’s Bench Act, S.M. 1988-89, c. 4Generally — referred to

Drivers and Vehicles Act, S.M. 2005, c. 37, Sched. As. 1(1) “owner” — considered

Highway Traffic Act, S.M. 1985-86, c. 3Generally — referred tos. 1(1) “owner” — considereds. 85 — referred tos. 153(3) — considereds. 173(1)(a) — referred tos. 226(1) — referred to


Highway Traffic Act, R.S.O. 1970, c. 202Generally — referred to

Manitoba Public Insurance Corporation Act, R.S.M. 1987, c. P215ss. 26(1)-26(4) — referred to

Motor Vehicle Act, R.S.B.C. 1996, c. 318s. 86(1) — considereds. 86(3) — considered

Personal Property Security Act, S.M. 1993, c. 14Generally — referred to

Sale of Goods Act, R.S.M. 1987, c. S10s. 3 — considereds. 19 — considered

Vehicles and Highway Traffic Act, R.S.A. 1955, c. 356s. 130 — considered

Words and phrases considered:

owner

It should be noted that s. 1 of the [Highway Traffic Act, S.M. 1985-86, c. 3] hasincorporated the definition of “owner” under The Drivers and Vehicles Act,C.C.S.M., c. D104. . . That provision of The Drivers and Vehicles Act provides:

“owner” includes a person who has exclusive use of a vehicle under a lease orother agreement for a period of more than 30 days.

[T]here can. . . be more than one owner under the provisions of the Manitobalegislation. In my opinion, that could include the owner to whom the vehicle isregistered. . . or an owner as determined under the common law.

TRIAL with respect to whether automobile dealership was vicariously liable fornegligence of driver who purchased vehicle pursuant to conditional salesagreement.

Trevor M. Brown, for PlaintiffRichard D. Buchwald, for Defendants

Toews J.:

1 The plaintiff, The Manitoba Public Insurance Corporation (MPIC),commenced a legal proceeding against the defendants, Rosalind Myerion(Myerion) and Mark’s Auto Sales Inc. (Mark’s), in respect of a motorvehicle accident that occurred on November 23, 2011, at approximately1:00 a.m. at the corner of Silver Avenue and Ferry Road in the City ofWinnipeg.

Manitoba Public Insurance Corp. v. Myerion Toews J. 581

2 As a result of Myerion’s failure to defend the action brought byMPIC, Myerion was noted in default and ordered to pay MPIC the sumof $16,541.60 plus $352.91 for pre-judgment interest, $1,150.00 for thecosts and $335.00 for disbursements of the action, for a total judgment of$18,379.51.

3 Mark’s filed a statement of defence denying any liability and in duecourse the dispute as between MPIC and Mark’s proceeded to trialbefore me. The defendant Myerion did not participate in the trial of thismatter as a witness or otherwise.

4 MPIC and Mark’s filed an agreed statement of facts for the purposesof the trial, the substantive portions of which provide as follows:

1. On September 20, 2011, Rosalind Myerion (“Myerion”) entered aconditional sales agreement (the “Agreement”) with Mark AutoSales Inc. (“Mark’s”) regarding a 1998 Dodge Stratus (the“Stratus”).

2. One of the terms of the Agreement between Myerion and Mark’swas that title in the Stratus would remain fully vested in Mark’s,until Myerion paid the full amount due and owing under theAgreement.

3. After the Agreement was signed, Myerion took possession of theStratus.

4. Myerion breached the Agreement when she failed to pay Mark’sthe required payments for the Stratus, which were due on Septem-ber 30th and October 31st, 2011.

5. As a result of Myerion’s failure to make the required payments forthe Stratus, Mark’s repossessed the vehicle.

6. On November 18, 2011, Mark’s placed a temporary policy of in-surance on the Stratus. The policy of insurance was issued byManitoba Public Insurance (“MPI”) and expired on November 22,2011. Mark’s was listed as owner of the Straus [sic] on the policyof insurance.

7. On November 18, 2011, Myerion paid Mark’s $1,000.00 for thelate payments on the Stratus.

8. After making the payments, Myerion took possession of theStratus.

9. On November 23, 2011 at approximately 1:00 a.m., Myerion wasoperating the Stratus and was involved in a collision. Myerion was


driving westbound on Silver Avenue, in Winnipeg, when shefailed to stop at a red light, entered the intersection at Ferry Road,and collided with a 2007 GMC Canyon (the “Canyon”) (the“Collision”).

10. At the time of the Collision:

a) The Canyon was being driver by Morgan Braun (“Braun”);

b) Braun was driving the Canyon southbound on Ferry Roadand entered the intersection at Silver Avenue on a greenlight and with the right-of-way;

c) Braun insured the Canyon with MPI under Manitoba num-ber plate FGP 369;

d) Myerion had not paid Mark’s the full amount owing underthe Agreement;

e) Myerion was operating the Stratus without a valid driver’slicense;

f) the Stratus was an uninsured vehicle, as the temporary in-surance placed by Mark’s had lapsed at midnight on No-vember 22, 2011.

11. In connection with her operation of the Stratus on November 23,2011, Myerion was convicted of one count Failure to Complywith a Traffic Control Device, one count of Driving Without Lia-bility Insurance Card, and one count of Driving Without a ValidDriver’s License, contrary to sections 85, 226(1) and 173(1)(a) ofThe Highway Traffic Act C.C.S.M. c. H60.

12. As a result of the Collision, the Canyon was damaged and ren-dered a constructive total loss. On December 6, 2011, MPI paidBraun $20,188.85 for the actual cash value of the Canyon.

13. On December 13, 2011, MPI also paid Braun $952.75 as a reim-bursement of the GST credit associated with the actual cash valueof the Canyon.

14. On December 23, 2011, MPI sold the salvage of the Canyon at apublic auction for $4,800.00.

15. On June 26, 2012, MPI reimbursed Braun’s deductible in theamount of $200.00.

16. The damages to the Canyon resulting from the Collision amountto $116,541.60.


17. On January 17, 2012, Manohar (Mark) Ram, the owner of Mark’s,provided MPI with a written statement regarding this incident.

5 The written statement provided to MPIC on behalf of Mark’s and re-ferred to in para. 17 of the agreed statement of facts provides as follows:

I, Manohar Ram (Mark), owner of Mark’s Auto Sales, of Portage laPrairie, in the Province of Manitoba, do solemnly declare that I amthe legal owner of a 1998 Dodge Stratus. On September 20, 2011 Ileased this vehicle to Rosalind Myerion for $4995. She gave me$1500 down payment with the monthly payments of $400 startingSeptember 30th. She never made that payment or the October 31stpayment so on November 1, 2011 I repossessed the vehicle. In theGarage Keepers Act I have to give them some time so I gave her 30days before I transfer the vehicle back in my name or sell it. On No-vember 18, 2011 she came in with $1000 and we put a dealer tempo-rary permit on the vehicle to insure that she didn’t leave the lot withno insurance on the car. She said she had a driver’s license and shewould provide us a copy of it. Normally we do not release a vehicleuntil we see a copy of a current driver’s license. When she came inon November 18th, I was not in that day, my administrative assistantMaria released the vehicle to Myerion without having a copy of thedriver’s license, but she did release it with the dealer permit. Nor-mally our permits are for one week. We require the people to provideus a copy of the registration because I have to provide that copy ofthe registration to the financial institution I deal with so they willprovide me the money for the vehicle. We called her within 2 daysafter the registration should have been put on the vehicle and she saidthat she had been involved in an accident. She said she rolled througha stop sign and couldn’t stop the car. I asked her where the car wasand she said it must be in the compound in Winnipeg. The policewere at the scene. She said it happened in the night.

6 The two issues which require determination here are:

1) Was Myerion negligent in the operation of the Stratus and respon-sible for the collision between that vehicle and the Canyon drivenby Braun?

2) If Myerion was negligent and responsible for the collision, isMark’s vicariously liable for the damages caused by Myerion andsuffered by Braun, and, consequently, through its right of subroga-


tion under the insurance policy issued to Braun and the applicablelegislation, to MPIC?

7 In respect of the first issue, I find that based on the uncontradictedand, indeed, uncontested testimony of Braun at the trial of this matter,Myerion was negligent and entirely responsible for the collision. Thisresponsibility is further evidenced by the fact that, in connection with thecollision between the Stratus and the Canyon, Myerion has been con-victed of one count of failing to comply with a traffic control device, onecount of driving without a liability insurance card and one count of driv-ing without a valid driver’s licence contrary to the provisions of TheHighway Traffic Act, C.C.S.M., c. H60 (the HTA).

8 The second issue is not as straightforward.9 MPIC takes the position that on the basis of s. 153(3) of the HTA,

Mark’s is vicariously liable for the negligence and resulting damagescaused by Myerion.

10 Section 153(3) of the HTA provides: Certain drivers deemed agents of owner

153(3) In an action for the recovery of loss or damage sustained by aperson by reason of a motor vehicle upon a highway, every persondriving the motor vehicle who is living with, and as a member of thefamily of, the owner thereof, and every person driving the motor ve-hicle who has acquired possession of it with the consent express orimplied of the owner thereof, shall be deemed to be the agent or ser-vant of the owner of the motor vehicle and to be employed as suchand shall be deemed to be driving the motor vehicle in the course ofhis employment; but nothing in this subsection relieves any persondeemed to be the agent or servant of the owner and to be driving themotor vehicle in the course of his employment from liability for suchdamages.

11 MPIC submits that ownership is not dependent on possession of theStratus and that there can be more than one owner. MPIC states that thereare four reasons why Mark’s should be considered an owner of the Stra-tus in this case and therefore vicariously liable to MPIC.

12 First, MPIC points to the Stratus conditional sale agreement (theCSA) between Mark’s as the “Seller” and Myerion as the “Buyer” (tab Aof agreed book of documents). MPIC submits that the CSA is only an


“agreement to sell” and not a “sale.” That distinction is made clear at s. 3of The Sale of Goods Act, C.C.S.M., c. S10, which provides:

Sale and agreement to sell

3(1) A contract of sale of goods is a contract whereby the sellertransfers or agrees to transfer the property in goods to the buyer for amoney consideration, called the price. There may be a contract ofsale between one part owner and another.

Absolute or conditional

3(2) A contract of sale may be absolute or conditional.

“Sale” and “agreement to sell”

3(3) Where under a contract of sale the property in the goods is trans-ferred from the seller to the buyer the contract is called a sale; butwhere the transfer of the property in the goods is to take place at afuture time or subject to some condition thereafter to be fulfilled thecontract is called an agreement to sell.

When “sale” effected

3(4) An agreement to sell becomes a sale when the time elapses orthe conditions are fulfilled subject to which the property in the goodsis to be transferred.

13 Furthermore, I think it is instructive to reproduce the first three sub-stantive sentences of the CSA in order to properly understand the signifi-cance of the provisions of the CSA. Those three sentences provide asfollows:

This Agreement covers the instalment purchase of vehicle describedbelow. The words you and your mean the Buyer. Seller means theSeller named above. We, our and us mean the Seller.

14 MPIC points out that pursuant to para. 1 of the CSA, the buyer agrees“that title to the vehicle shall be and remain fully vested in the Selleruntil you have paid all you own [sic] under this Agreement.”

15 Paragraph 2 of the CSA sets out the purchase price and the financingamount, making it clear that the full amount of the purchase price wasnot paid on September 20, 2011, the date of the execution of the CSA.

16 I find that paras. 6, 7, 8 and 9 of the CSA are also relevant to thedetermination of this issue. Those paragraphs provide:

6. Care of vehicle. You promise to keep the vehicle in good repairand replace all worn, broken or defective parts. If you fail to do this,we can make repairs and charge you for them. We have the right to


inspect the vehicle at any reasonable time. You will comply with allapplicable laws relating to the vehicle and its maintenance.

7. Use of the vehicle. You will provide us with at least ten (10) busi-ness days prior to notice of your intent to lease the vehicle or sell ortransfer any interest in it or give possession or control to anyone else.You agree not to lease the vehicle or to sell or transfer any interest init or to give possession or control to anyone else without our writtenpermission. The vehicle must not be used in any illegal manner. Youwill provide us with at least ten (10) business days prior notice ofyour intent to remove the vehicle from Manitoba for more than thirty(30) days. You agree not to remove the vehicle from Manitoba formore than thirty (30) days without our written approval.

8. Claims against the vehicle. You confirm that no one but us hasany legal interest in the vehicle. You will keep the vehicle clear of alllegal claims against it except ours. If you don’t, we may settle theclaim and charge you what it cost, including incidental expenseswhich include our legal expenses. You agree that we have a securityinterest in the proceeds of the vehicle; including the proceeds of saleof the vehicle should it be sold either with or without yourpermission.

9. Loss or destruction of vehicle. You must keep the vehicle insuredagainst loss or damage from fire, theft and collision. If we requireyou to carry additional insurance coverages, you agree to do so. If thevehicle is damaged, you will use the proceeds of the insurance torepair the vehicle. However, if the vehicle is lost, stolen or signifi-cantly damaged, we may decide whether to use the insurance pro-ceeds to replace the vehicle or to apply them to what you owe underthis Agreement. The loss, destruction or damage of the vehicle doesnot excuse you from making payments under this Agreement unlessthe insurance proceeds paid to us repays the total balance due.

17 In accordance with those provisions, Mark’s is entitled, amongstother things, to make repairs to the vehicle and charge Myerion if thevehicle is not kept in a state of good repair. Written consent must beobtained from Mark’s if the vehicle is leased or sold or any interest in thevehicle is transferred, or possession or control is given to anyone else, orthe vehicle is taken out of the province for more than 30 days. At para. 8,Myerion confirms that “no one but us has any legal interest in the vehi-cle,” while, pursuant to para. 9, Myerion is required to “keep the vehicleinsured against loss or damage from fire, theft and collision.”

18 Pursuant to para. 9, it is also noted that Myerion is required to agreeto carry “additional insurance coverages” if Mark’s requires her to do so


and that, in the event the vehicle is “lost, stolen or significantly dam-aged,” it is Mark’s that makes the decision to “use the insurance pro-ceeds to replace the vehicle or to apply them to what you owe under thisAgreement.”

19 Second, MPIC states that the intention of the parties makes it clearthat Mark’s is the owner. In this regard, MPIC relies on the certificate ofinspection (dated November 16, 2011) and the registration and insurancedocuments (tab C of agreed book of documents) identifying Mark’s asthe owner of the vehicle, as well as tab B, which is dated November 1,2011, and which purports to authorize a named individual to repossessthe Stratus on behalf of Mark’s.

20 According to MPIC, the third indication of ownership by Mark’s isthat the vehicle was in fact repossessed by Mark’s and remained inMark’s possession until it was released to Myerion on November 18,2011, after all arrears were paid.

21 The fourth argument being advanced by MPIC in support of Mark’sowning the Stratus at the material time is that following the accident, in astatement provided to MPIC on January 17, 2012 (tab G of agreed bookof documents), Mr. Ram, as owner of Mark’s, advises that Mark’s is thelegal owner of the Stratus and that it had leased the vehicle to Myerion.

22 On the basis of those four arguments, MPIC states that Mark’s is theowner of the vehicle and that, pursuant to s. 153(3) of the HTA, Mark’s isvicariously liable for the damages caused by the negligence of Myerion.

23 On the other hand, Mark’s submits that it is not the owner of the Stra-tus and is therefore not vicariously liable for the actions of Myerion.

24 Mark’s argues that once Myerion signed the CSA on September 20,2011, she had exclusive use of the Stratus. Although the Stratus was re-possessed on November 1, 2011, due to non-payment, it was returned toMyerion when the payments were brought up to date. Mark’s states thatthis means that Myerion continued to have exclusive use of the Stratusunder the CSA.

25 Mark’s also submits that Myerion had exclusive use of the Stratus fora period of more than 30 days and had the right to pass property in theStratus under the terms of the CSA. Although Mark’s had a legal andsecurity interest in the Stratus until all of the payments were made,Mark’s argues that Myerion still had exclusive use of the Stratus and istherefore the owner of the vehicle.


26 At para. 21 of its submission, Mark’s states that “at all material timesMyerion was not in default under the Agreement” and that “[t]his, to-gether with the fact that she had possession and control of the vehicle atall material times, shows that she retained ownership of the vehicle.”

27 Mark’s also argues in its submission (at para. 23): The Plaintiff alleges that the Defendant owed a duty of care to theowner of the GMC to drive the Dodge carefully and in a prudent andreasonable manner. The Plaintiff did not, however, plead the neces-sary elements of a duty of care, which are required under Canadiancommon law. Jurisprudence has established that the courts must con-sider (1) the foreseeability of the damages as a result of the tort com-mitted and (2) the policy concerns which arise from the relationshipbetween the parties. If, based on these factors, there is a prima facieduty of care, the next step of the test is to consider if there exist anypolicy concerns extraneous to the relationship of the parties, whichcan reduce or negate the duty. (Klar, Tort Law, 4th ed., Thompson[sic], Carswell: Toronto ON, 2008 at page 173-174)

28 In this context, Mark’s argues, at para. 25 of its submission, that,based on the law of tort, “there does not exist sufficient proximity... toallow the Plaintiff to recover damages by the vehicle sold by the Defen-dant to Myerion.”

29 I do not accept this argument. In my opinion s. 153(3) of the HTAimposes a vicarious liability on the owner of a vehicle, without the courthaving to determine that all of the common law requirements establish-ing a duty of care have been met.

30 In considering the Alberta equivalent of s. 153(3) of the HTA, theSupreme Court of Canada, in Hayduk v. Pidoborozny, [1972] S.C.R. 879(S.C.C.), at 884, held that s. 130 of Alberta’s The Vehicles and HighwayTraffic Act, R.S.A. 1955, c. 356, provides for the vicarious liability of theowner of a motor vehicle for damages caused by the negligent operationof that motor vehicle where the driver is driving with the implied or ex-press consent of the owner.

31 In the Hayduk case, the court also held at pp. 886-87 that there couldbe more than one owner under the provisions of the Alberta legislationand that the extended meaning given to the definition of “owner” underthe Alberta legislation can include both the registered owner and the per-son who has the exclusive use of the motor vehicle for a period of morethan 30 days.


32 It should be noted that s. 1 of the HTA has incorporated the definitionof “owner” under The Drivers and Vehicles Act, C.C.S.M., c. D104,which also provides an extended meaning for “owner” similar to thatfound in the Alberta legislation considered in Hayduk. That provision ofThe Drivers and Vehicles Act provides:

“owner” includes a person who has exclusive use of a vehicle undera lease or other agreement for a period of more than 30 days.

33 As in the Hayduk case, I find that, in this case, there can also be morethan one owner under the provisions of the Manitoba legislation. In myopinion, that could include the owner to whom the vehicle is registered,as was the case in Hayduk, or an owner as determined under the commonlaw.

34 In Honan v. Gerhold (1974), [1975] 2 S.C.R. 866 (S.C.C.), the On-tario Court of Appeal had dismissed an appeal from the trial court whichfound that the defendant registered owner of the vehicle was not vicari-ously liable for damages under the provisions of Ontario’s The HighwayTraffic Act, R.S.O. 1970, c. 202, finding that the defendant “ha[d] no titlewhatever in the vehicle registered in his name” (at p. 872).

35 However, after a review of the facts as found by the trial judge below,Spence J., on behalf of the Supreme Court of Canada, overturned thedecisions of the lower courts in that case. Without deciding whether Mr.Gerhold was vicariously liable on the basis of being the registered owner,he held Mr. Gerhold liable on another basis, stating (at p. 873):

I have therefore come to the conclusion that the appeal should suc-ceed on the basis that whether the word “owner” in s. 105 (now s.132) of The Highway Traffic Act should be interpreted to cover regis-tered owner, Gerhold was the owner in a common law sense of thevehicle which was involved in this accident and therefore Gerhold isliable under the provisions of the said s. 105 of The Highway TrafficAct.

36 In the case at bar, Mark’s takes the position that, while the Stratuswas registered in its name for the convenience of Myerion until midnighton November 22, 2011, when Myerion was involved in the accident onehour after midnight, Mark’s was no longer the owner, registered or other-wise, since the registration had expired and Mark’s only remained theowner “until the conditions of the agreement are complied with” (at para.15 of Mark’s argument).

37 Leaving aside the issue of whether a person is no longer the regis-tered owner of a motor vehicle simply because the registration has ex-


pired, it seems to me that on the basis of common law, Mark’s remainedan owner within the meaning of s. 153(3) of the HTA notwithstanding thefact that the registration card had expired one hour before the accidentoccurred.

38 In my opinion, Mark’s continued to manifest its ownership in the mo-tor vehicle by exercising dominion and control over the vehicle after theCSA was executed on September 20, 2011. I have already referred tosome of these factors, but overall they include the following.

39 Firstly, para. 1 of the CSA makes it clear that “title” to the Stratusremained fully vested with Mark’s until Myerion had made all of thepayments required under the agreement.

40 Section 19 of The Sale of Goods Act provides: Property passes when intended to pass

19(1) Where there is contract for the sale of specific or ascertainedgoods the property in them is transferred to the buyer at such time asthe parties to the contract intend it to be transferred.

Intention of parties

19(2) For the purpose of ascertaining the intention of the parties re-gard shall be had to the terms of the contract, the conduct of the par-ties, and the circumstances of the case.

41 In this context I do not think that there is any distinction to be madebetween the terms “title” and “property.” These terms are often used in-terchangeably and in the context of the CSA and The Sale of Goods Act,specifically s. 19 thereof, I think they can be used in such a fashion here.See W.C. Fast Enterprises Ltd. v. All-Power Sports (1973) Ltd. (1981),29 A.R. 483 (Alta. C.A.) at para. 15, and Naber Seed & Grain Co. v.Prairie Pulse Inc., 2007 SKCA 58, 299 Sask. R. 222 (Sask. C.A.) atpara. 53, (2007), 299 Sask. R. 222 (Sask. C.A.).

42 Mark’s has argued that when a conditional sale agreement providesthat the vendor retains “title” in the goods, the vendor remains the owneruntil the conditions are complied with. If by this Mark’s means that own-ership passes to the buyer at any time when the buyer is in full compli-ance with all of the conditions of the CSA, this would mean that, in thiscase, ownership could jump back and forth between the buyer and selleruntil all of the payments were made by Myerion.

43 Specifically it would mean that during the time that Myerion was cur-rent with all of her payments under the CSA, she was the owner. How-ever, as soon as she went into arrears, Mark’s became the owner again.


Only upon making the final payment would ownership finally rest withMyerion.

44 Similarly, if Mark’s interpretation is to be accepted, given the respon-sibility of Myerion to insure the vehicle under the CSA, the moment thatthe insurance on the vehicle expired at midnight on November 22, 2011,ownership of the vehicle either went from Mark’s as the registered owner(as evidenced by the permit sales application at tab C of agreed book ofdocuments) or it went from the ownership of Myerion (if Mark’s argu-ment that the property had already passed to Myerion at an earlier time isaccepted) to ownership by Mark’s pursuant to the terms of the CSA sinceMyerion was no longer in compliance with the agreement.

45 In either case, it would be Mark’s that would be the owner at the timeof the accident on November 23, 2011.

46 I find that under para. 1 of the CSA, together with the other indicia ofdominion and control reserved to Mark’s in the CSA, there was no inten-tion to pass the title or the property in the Stratus until Myerion had madeall of her payments.

47 Secondly, paras. 6 and 7 further indicate a level of dominion and con-trol over the Stratus consistent with and indicative of the ownership ofthe Stratus remaining with Mark’s until all the payments have been madeby Myerion.

48 Under para. 6, not only is Myerion required to “keep the vehicle ingood repair and replace all worn, broken or defective parts,” but if shefails to do this, Mark’s “can make repairs and charge you for them.” Alsounder that paragraph, Mark’s retains the right to inspect the vehicle “atany reasonable time.”

49 Under para. 7, there is a requirement that the vehicle or any interest inthe vehicle cannot be leased, sold or transferred to any other person orremoved from the province for more than 30 days without the writtenconsent of Mark’s.

50 Thirdly, under para. 8, Myerion is asked to confirm that “no one butus has any legal interest in the vehicle.” As referenced earlier, “us” in theCSA is specifically used as one of the words to refer to the seller orMark’s and does not include the buyer.

51 Finally, pursuant to para. 9, Myerion is required to agree to carry ad-ditional insurance if Mark’s requires her to do so, and in the event thatthe vehicle “is lost, stolen or significantly damaged,” it is Mark’s that


makes the decision to “use the insurance proceeds to replace the vehicleor to apply them to what you owe under this Agreement.”

52 I think it is important to point out that according to Mr. Ram’s testi-mony, the general form of the CSA used in this case was prepared by alawyer on behalf of Mark’s for use in its business. He indicated thatabout three-quarters of the company’s sales are financed using this formof agreement. He also stated that most of his customers have poor creditratings.

53 On the basis of Mr. Ram’s evidence, I think it is evident why thisform of agreement is utilized. Even though Mark’s registers a financingstatement under The Personal Property Security Act, C.C.S.M., c. P35(the PPSA), in respect of the vehicles it sells by way of a conditional saleagreement (as it did in this case), in view of the generally poor creditratings of its clientele, Mark’s understandably wishes to maximize its se-curity over the vehicles it sells pursuant to these conditional sale agree-ments. Therefore, the language that Mark’s has adopted in these agree-ments strives to achieve a measure of control and dominion over thevehicle being financed beyond that afforded through the PPSA registry.However, in doing so, Mark’s, in effect, retains title and property, andtherefore ownership, in the vehicle.

54 I also wish to address the matter of the statement that Mr. Ram pro-vided to MPIC on behalf of Mark’s on January 17, 2012. I have repro-duced it earlier in these reasons. It is clear that, on the face of that state-ment, it too would strengthen the conclusion that Mark’s was the ownerof the Stratus at the time of the accident on November 23, 2011.

55 It is important to remember that Mr. Ram is a relatively sophisticatedsmall businessman who employs a number of staff. He has ownedMark’s since 2007 and before that he was a car salesman for a largeWinnipeg dealership for a number of years. It is no doubt a very difficultbusiness and he appears to be successful at it, despite the challenges ofselling and financing the sale of cars to clients who, for the most part,have poor credit ratings.

56 Joanne Neufeld, the employee of MPIC who took the statement fromMr. Ram on behalf of Mark’s on January 17, 2012, has been employedby MPIC for approximately 16 years and as a part of her responsibilitiestakes statements from various people in respect of motor vehicle acci-dents. She presently has the same job as she did in 2012. Although thenumber of statements that she has taken on a weekly basis has variedover the years, in 2012 she took about a dozen statements a week.


57 Ms Neufeld was produced as a witness by MPIC at the trial and de-scribed the taking of the statement from Mr. Ram. She indicated that sheasked Mr. Ram to attend at MPIC’s offices in Portage la Prairie in orderto discuss and determine the issue of insurance coverage for the Stratus.

58 In the course of that meeting, she took the statement from Mr. Ram.She states that, as a result of the conversation, she typed out a statementwhich contained words not necessarily used by Mr. Ram. However, ac-cording to Ms Neufeld, Mr. Ram appeared to read the document and in-dicated his agreement with the contents. She did not recall if he re-quested any changes before he signed the statement. She testified thatMr. Ram’s behaviour was good throughout the meeting and that therewas no rush in the taking of the statement.

59 During his cross-examination of Ms Neufeld, counsel for Mark’s didnot directly raise the issue of whether Mr. Ram was rushed in the takingof the statement. However, Mr. Ram did reply to questions from counselfor Mark’s on this issue during his direct examination. Mr. Ram statedthat he did not agree with some of the terms or words used in the state-ment and would not have signed off on the statement as it stood had henot been so rushed in the taking of the statement.

60 It appears to me that the proper procedure would have been to put thatallegation directly to Ms Neufeld during her cross-examination beforeraising it in Mr. Ram’s direct examination. When counsel for MPIC ob-jected to the way this matter had been raised by Mark’s counsel, I indi-cated that I would allow the questions, but that this would affect theweight to be given to Mr. Ram’s testimony on this issue. At that point,Mark’s counsel quite properly indicated that he would move on.

61 In respect of the first sentence in the statement, I accept Ms Neufeld’stestimony that Mr. Ram, speaking as owner of Mark’s, admitted that hewas the legal owner of the Stratus and that she typed this admission intothe statement.

62 Similarly, I have no reason to dispute the truthfulness of any otheraspect of the statement. Whether the CSA in law constitutes a lease, as itis indirectly referred to in the statement, is another issue, but in my opin-ion, as a whole, the statement tends to support the finding that at all ma-terial times, the title and property in, and the ownership of, the Stratusremained with Mark’s.

63 On the basis of the agreed statement of facts, it is clear that at thetime of the accident on November 23, 2011, Myerion was in possession


of the Stratus and had acquired it with the consent of Mark’s. The factthat Myerion was in breach of the terms of the CSA even before the timeof the accident might have provided Mark’s with the legal basis to retakepossession of the Stratus, but until steps to regain its possession weretaken by Mark’s, it remained in her possession pursuant to the CSA withMark’s under which she acquired that possession.

64 Having found that Mark’s was the owner of the Stratus at the time ofthe accident and that Myerion was driving the Stratus at the time of theaccident, having acquired the possession of the Stratus with the consentof Mark’s, I also find that Mark’s is responsible for the damages causedby Myerion’s negligent operation of the Stratus.

65 The responsibility of Mark’s for the damages arises as a result of theoperation of the vicarious liability imposed by s. 153(3) of the HTA on anowner where the driver has acquired the possession of the vehicle withthe consent of the owner.

66 MPIC’s rights of subrogation in respect of both defendants are statu-torily set out in ss. 26(1) through (4) of The Manitoba Public InsuranceCorporation Act, C.C.S.M., c. P215.

67 In closing, I would note the comment of Mark’s in its counsel’s writ-ten argument (at para. 33):

If the Defendant is deemed vicariously liable for the actions of Myer-ion and is considered an owner of [the Stratus], and is thereby liablefor damages as claimed, then each and every car dealership in Mani-toba faces the same likelihood, and it is hard to imagine that this isthe intention of the law in Manitoba.

68 I do not know whether each car dealership in Manitoba uses a similarform of conditional sale agreement since that evidence is not before me.However, I do know that in at least one other jurisdiction in Canada, theLegislature specifically considered that this result was quite possiblegiven the similar wording of its vicarious liability provisions.

69 In the case of Yeung (Guardian ad litem of) v. Au, 2006 BCCA 217,225 B.C.A.C. 168 (B.C. C.A.), the court considered the British Columbiavicarious liability provision found at s. 86(1) of the Motor Vehicle Act,R.S.B.C. 1996, c. 318. Section 86(1) in that Act is identical to s. 153(3)of the Manitoba HTA. The court also considered s. 86(3) of the BritishColumbia legislation, which, unlike the Manitoba HTA, creates a legis-lated exception to the vicarious liability of a seller of a motor vehicleunder a conditional sale agreement by which the title to the motor vehicle


remains with the seller until the purchaser becomes the owner on fullcompliance with the contract.

70 Sections 86(1) and (3) of British Columbia’s Motor Vehicle Act pro-vide as follows:

Responsibility of owner in certain cases

86 (1) In an action to recover loss or damage sustained by a personby reason of a motor vehicle on a highway, every person driving oroperating the motor vehicle who is living with and as a member ofthe family of the owner of the motor vehicle, and every person driv-ing or operating the motor vehicle who acquired possession of it withthe consent, express or implied, of the owner of the motor vehicle, isdeemed to be the agent or servant of that owner and employed assuch, and is deemed to be driving and operating the motor vehicle inthe course of his or her employment.

(3) If a motor vehicle has been sold, and is in possession of the pur-chaser under a contract of conditional sale by which the title to themotor vehicle remains in the seller until the purchaser becomes theowner on full compliance with the contract, the purchaser is deemedan owner within the meaning of this section, but the seller or theseller’s assignee is not deemed to be an owner within the meaning ofthis section.

71 It is apparent that the Legislature in British Columbia foresaw thepossibility of a conditional sale seller in the position of Mark’s beingheld vicariously liable in these circumstances and as a matter of publicpolicy decided that was not a desirable result. Accordingly, it created thisexception to the general rule of the vicarious liability of an owner of amotor vehicle.

72 Whether such an exception to the general principle of vicarious liabil-ity set out in s. 153(3) of the HTA is good public policy is for the Legis-lature of Manitoba and not for me to determine.

73 In accordance with my findings and the earlier default judgmentnoted against the defendant Myerion, I order, as against both of thenamed defendants, jointly and severally:

1) the sum of $16,541.60;

2) pre-judgment interest on each individual payment from the datethat the payment was made (as set out in para. 9 of the statementof claim) to the date of the judgment; and


3) post-judgment interest in accordance with the provisions of TheCourt of Queen’s Bench Act, C.C.S.M., c. C280.

74 MPIC shall have its costs of this action. If counsel cannot agree onthe amount, either party can ask me to determine the appropriate amount.

Order accordingly.

R. v. Elliott 597

[Indexed as: R. v. Elliott]

Her Majesty the Queen, Respondent and Simon James Elliott,Applicant

Alberta Court of Queen’s Bench

Docket: Edmonton 140428558X1

2014 ABQB 429

Robert A. Graesser J.

Heard: June 11, 2014

Judgment: July 15, 2014*

Criminal law –––– Prisons and prisoners — Regulation — Transfer of pris-oners — Duty of fairness –––– Prisoner applied for order of habeas corpus —Prisoner, serving long sentence, had been in medium-security federal correctionfacility before he was reclassified as maximum-security offender and was invol-untarily transferred to maximum-security federal correction facility — Incidentsleading up reclassification largely centred around incident which occurred afterprisoner covered his cell window (in contravention of institution rules) in protestand to force meeting with warden to voice his concerns about his treatment —Leading up to incident was argument with guard where prisoner was said tohave called insulted and threatened guard — Prisoner was also alleged to havethreatened to burn down facility — Reason given for prisoner’s involuntarytransfer was “escalating aggressive and inciting behavior” — Despite directivefrom warden that all relevant footage be preserved, video footage of incident inwhich prisoner was alleged to have covered his window had been lost — Appli-cation granted; prisoner returned to medium security institution — Final deci-sion stated that prisoner had demonstrated seriously problematic behavior in pre-vious institution and that transfer to higher security was necessary interventionat this time — Either warden’s board had used information that was not dis-closed to prisoner, or it made findings of fact on which there was no evidentiarybasis to do so — Former constituted breach of procedural fairness; latter sug-gested unreasonableness — Either that, or there was adequacy of reasons is-sue — There was no discussion in final decision relating to why prisoner’s ex-planations and rebuttal were given no weight and why information from guardswas accepted over prisoner’s, which again raised issues concerning adequacy ofreasons for decision and reasonableness issues — If prisoner’s credibility was

*A corrigendum issued by the court on July 21, 2014 has been incorporatedherein.


important consideration, and videotape evidence was likely best evidence as towhat occurred and was said during this incident, it was difficult to conclude thatacceptance of guards’ evidence over that of prisoner was reasonable when bestevidence was apparently ignored — Two breaches of disclosure alleged by pris-oner, being instigator of fight and being under behaviour contract at another in-stitution, were not minor, technical breaches — Prisoner was denied opportunityto respond to these allegations because nothing was disclosed to him of his con-duct at previous institution being in play by warden’s board — Videotape shouldhave been disclosed to prisoner as requested — Why video, being most proba-tive evidence of incident, was not considered in reassessment and transfer pro-cess was unexplained.

Criminal law –––– Extraordinary remedies — Habeas corpus — Availabil-ity of remedy — General principles –––– Prisoner applied for order of habeascorpus — Prisoner, serving long sentence, had been in medium-security federalcorrection facility before he was reclassified as maximum-security offender andwas involuntarily transferred to maximum-security federal correction facility —Incidents leading up reclassification largely centred around incident which oc-curred after prisoner covered his cell window (in contravention of institutionrules) in protest and to force meeting with warden to voice his concerns abouthis treatment — Leading up to incident was argument with guard where prisonerwas said to have called insulted and threatened guard — Prisoner was also al-leged to have threatened to burn down facility — Reason given for prisoner’sinvoluntary transfer was “escalating aggressive and inciting behavior” — De-spite directive from warden that all relevant footage be preserved, video footageof incident in which prisoner was alleged to have covered his window had beenlost — Application granted; prisoner returned to medium security institution —Final decision stated that prisoner had demonstrated seriously problematic be-havior in previous institution and that transfer to higher security was necessaryintervention at this time — Either warden’s board had used information that wasnot disclosed to prisoner, or it made findings of fact on which there was noevidentiary basis to do so — Former constituted breach of procedural fairness;latter suggested unreasonableness — Either that, or there was adequacy of rea-sons issue — There was no discussion in Final Decision relating to why pris-oner’s explanations and rebuttal were given no weight and why informationfrom guards was accepted over prisoner’s, which again raised issues concerningadequacy of reasons for decision and reasonableness issues — If prisoner’scredibility was important consideration, and videotape evidence was likely bestevidence as to what occurred and was said during this incident, it was difficult toconclude that acceptance of guards’ evidence over that of prisoner was reasona-ble when best evidence was apparently ignored — Two breaches of disclosurealleged by prisoner, being instigator of fight and being under behaviour contractat another institution, were not minor, technical breaches — Prisoner was denied

R. v. Elliott 599

opportunity to respond to these allegations because nothing was disclosed to himof his conduct at previous institution being in play by warden’s board — Video-tape should have been disclosed to prisoner as requested — Why video, beingmost probative evidence of incident, was not considered in reassessment andtransfer process was unexplained.

Cases considered by Robert A. Graesser J.:

Cardinal v. Kent Institution (1985), [1985] 2 S.C.R. 643, [1986] 1 W.W.R. 577,24 D.L.R. (4th) 44, 63 N.R. 353, 69 B.C.L.R. 255, 16 Admin. L.R. 233, 23C.C.C. (3d) 118, 49 C.R. (3d) 35, 1985 CarswellBC 402, 1985 CarswellBC817, [1985] S.C.J. No. 78 (S.C.C.) — considered

Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board(2007), 2007 SCC 41, 2007 CarswellOnt 6265, 2007 CarswellOnt 6266, 87O.R. (3d) 397 (note), 40 M.P.L.R. (4th) 1, 64 Admin. L.R. (4th) 163, 50C.C.L.T. (3d) 1, 368 N.R. 1, 285 D.L.R. (4th) 620, [2007] 3 S.C.R. 129,[2007] R.R.A. 817, 50 C.R. (6th) 279, 230 O.A.C. 253, [2007] S.C.J. No. 41(S.C.C.) — followed

Irving Pulp & Paper Ltd. v. CEP, Local 30 (2013), 52 Admin. L.R. (5th) 1, (subnom. Irving Pulp & Paper Ltd. v. Communications, Energy andPaperworkers Union of Canada, Local 30) 1048 A.P.R. 1, (sub nom. IrvingPulp & Paper Ltd. v. Communications, Energy and Paperworkers Union ofCanada, Local 30) 404 N.B.R. (2d) 1, (sub nom. C.E.P.U., Local 30 v.Irving Pulp & Paper, Ltd) 77 C.H.R.R. D/304, 2013 SCC 34, 2013 Car-swellNB 275, 2013 CarswellNB 276, 359 D.L.R. (4th) 394, (sub nom. IrvingPulp & Paper Ltd. v. Communications, Energy and Paperworkers Union ofCanada, Local 30) 445 N.R. 1, 231 L.A.C. (4th) 209, (sub nom.Communications, Energy and Paperworkers Union of Canada, Local 30 v.Irving Pulp & Paper Ltd.) 285 C.R.R. (2d) 150, D.T.E. 2013T-418, (subnom. CEPU, Local 30 v. Irving Pulp & Paper) 2013 C.L.L.C. 220-037, (subnom. Communications, Energy and Paperworkers Union of Canada, Local30 v. Irving Pulp & Paper, Ltd.) [2013] 2 S.C.R. 458, [2013] S.C.J. No. 34,[2013] A.C.S. No. 34 (S.C.C.) — followed

Khela v. Mission Institution (2014), 64 Admin. L.R. (5th) 171, (sub nom.Mission Institution v. Khela) [2014] 1 S.C.R. 502, 2014 SCC 24, 2014 Car-swellBC 778, 2014 CarswellBC 779, 368 D.L.R. (4th) 630, 307 C.C.C. (3d)427, 9 C.R. (7th) 1, 455 N.R. 279, 2014 CSC 24, (sub nom. Khela v. MissionInstitution (Warden)) 2014 B.C.A.C. 91, (sub nom. Khela v. MissionInstitution (Warden)) 599 W.A.C. 91, [2014] S.C.J. No. 24 (S.C.C.) —distinguished

May v. Ferndale Institution (2005), 343 N.R. 69, 34 C.R. (6th) 228, [2005] 3S.C.R. 809, 2005 SCC 82, 2005 CarswellBC 3037, 2005 CarswellBC 3038,261 D.L.R. (4th) 541, 204 C.C.C. (3d) 1, 49 B.C.L.R. (4th) 199, 220


B.C.A.C. 1, 362 W.A.C. 1, 38 Admin. L.R. (4th) 1, 136 C.R.R. (2d) 146,[2006] 5 W.W.R. 65, [2005] S.C.J. No. 84 (S.C.C.) — distinguished

N.L.N.U. v. Newfoundland & Labrador (Treasury Board) (2011), 2011 Car-swellNfld 414, 2011 CarswellNfld 415, 2011 SCC 62, 38 Admin. L.R. (5th)255, (sub nom. Nfld. and Labrador Nurses’ Union v. Newfoundland andLabrador (Treasury Board)) 2011 C.L.L.C. 220-008, (sub nom.Newfoundland & Labrador Nurses’ Union v. Newfoundland & Labrador(Treasury Board)) 424 N.R. 220, 340 D.L.R. (4th) 17, D.T.E. 2012T-7, (subnom. Newfoundland & Labrador Nurses’ Union v. Newfoundland &Labrador (Treasury Board)) [2011] 3 S.C.R. 708, 213 L.A.C. (4th) 95, 97C.C.E.L. (3d) 199, (sub nom. Newfoundland and Labrador Nurses’ Union v.Newfoundland and Labrador (Treasury Board)) 986 A.P.R. 340, (sub nom.Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador(Treasury Board)) 317 Nfld. & P.E.I.R. 340, [2011] S.C.J. No. 62(S.C.C.) — followed

New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. NewBrunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, 2008 CSC 9, (sub nom.Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223,329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th)1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 Car-swellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (subnom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, [2008] S.C.J. No. 9,[2008] A.C.S. No. 9 (S.C.C.) — followed

R. v. Sheppard (2002), 50 C.R. (5th) 68, 211 Nfld. & P.E.I.R. 50, 633 A.P.R. 50,210 D.L.R. (4th) 608, 284 N.R. 342, [2002] 1 S.C.R. 869, 2002 SCC 26,2002 CarswellNfld 74, 2002 CarswellNfld 75, 162 C.C.C. (3d) 298, [2002]S.C.J. No. 30, REJB 2002-29516 (S.C.C.) — considered

R. v. Stinchcombe (1991), 18 C.R.R. (2d) 210, 68 C.C.C. (3d) 1, 8 W.A.C. 161,1991 CarswellAlta 559, 1991 CarswellAlta 192, [1992] 1 W.W.R. 97,[1991] 3 S.C.R. 326, 130 N.R. 277, 83 Alta. L.R. (2d) 193, 120 A.R. 161, 8C.R. (4th) 277, EYB 1991-66887, [1991] S.C.J. No. 83 (S.C.C.) —considered


Access to Information Act, R.S.C. 1985, c. A-1Generally — referred to

Corrections and Conditional Release Act, S.C. 1992, c. 20Generally — referred tos. 27 — considereds. 27(1) — considereds. 27(2) — considereds. 27(3) — referred to

R. v. Elliott Robert A. Graesser J. 601

Regulations considered:

Corrections and Conditional Release Act, S.C. 1992, c. 20Corrections and Conditional Release Regulations, SOR/92-620

Generally — referred to

APPLICATION by prisoner for habeas corpus, relating to transfer of prisoner.

Robert Drummond, for RespondentSimon Elliott, for himself

Robert A. Graesser J.:

I. Introduction1 This is an application by Simon James Elliott for an order of habeas

corpus. Mr. Elliott was a serving prisoner at Mission Institution, a me-dium-security federal correction facility in British Columbia.

2 He was reclassified as a maximum-security offender and was invol-untarily transferred to Kent Institution, a maximum-security federal cor-rection facility in British Columbia.

3 Mr. Elliott argues that his reclassification and involuntary transferwere done in a manner which denied him procedural fairness and wasunreasonable. For those reasons, the reclassification and transfer decisionshould be quashed, and he should be returned to a medium-securityfacility.

4 Her Majesty the Queen opposes his application, arguing that he wastreated fairly and that the Final Decision of the Warden’s Board was rea-sonable given the information available and that led to the FinalDecision.

II. Background5 Mr. Elliott is serving a lengthy prison sentence. He was assessed in

May, 2013 as a medium-security offender. Assessments of prisoners areconducted from time to time using a security reclassification scale (SRS).In May, 2013, he scored 25 on the SRS. At the time, he was at anotherfederal medium-security institution.

6 Mr. Elliott was transferred to Mission Institution in late September,2013. Shortly after his arrival there, he expressed concerns about thefood he was being served. As a practising Muslim, he wanted to ensurethat the meat was Halal. Responses from guards were not to his satisfac-


tion. He was having difficulty accessing the telephone, and complainedto guards about that. He also expressed concerns about his safety on theunit in which he was housed. He was also unhappy about not being pro-vided with a loaner TV. He felt that he was being unfairly treated.

7 As a result of these and other issues, Mr. Elliott was involuntarilysegregated from September 30, 2013 to October 3, 2013. He was thenvoluntarily segregated from October 7 until his emergency involuntarytransfer on October 11, 2013.

8 The incidents leading up the reclassification are described in the As-sessment for Decision, and largely centre around an incident which oc-curred after Mr. Elliott covered his cell window (in contravention of in-stitution rules) in protest and to force a meeting with the Warden to voicehis concerns about his treatment at Mission. Leading up to the incidentwas an argument with a guard where Mr. Elliott is said to have called theguard a “fucking moron” and would “go through you like butter”. Duringthe window-covering incident, Mr. Elliott is said to have threatened tohave the guards go into the cell to get him, and that it took an hour ofnegotiations for him to remove the window covering.

9 The reason given for his involuntary transfer (which resulted from hisreclassification to maximum security) was “escalating aggressive and in-citing behavior”. Mission Institution concluded that Mr. Elliott’s beha-viour could no longer be managed at Mission Institution.

10 Following his transfer to Kent Institution, Mr. Elliott was providedwith a notice of this decision on October 16. He was also provided withnotice of the decision reclassifying his security classification to maxi-mum security as his SRS had been reassessed as 27.5. Notice of this de-cision was given to him at Kent Institution on October 17, 2013.

11 Both of these notices are contained in the Certified Record.12 These decisions were made by Mr. Elliott’s parole officer and the

manager of assessment as to the security reclassification, and by themanager of assessment as to the involuntary transfer.

13 Procedures under the Corrections and Conditional Release Act, SC1992, c 20 [“CCRA”] and the Corrections and Conditional Release Reg-ulations, SOR/92-620 [“CCRR”] require that decisions such as these beconfirmed by the Warden after the offender has been given an opportu-nity to respond to the decisions.

14 The offender is to be provided with copies of the underlying deci-sions, as well as an “Assessment for Decision”. The Assessment for De-


cision is described as a recommendation made pursuant to Commis-sioner’s Directive 710-2 (Transfer of Offenders) and Commissioner’sDirective 710-6 (Security Classification).

15 The security reclassification was completed using the SecurityReclassification Scale, together with an analysis of the Institutional Ad-justment, Risk of Escape and Risk to Public Safety factors.

16 The Assessment for Decision was completed by the parole officer andmanager of assessment.

17 Before being transferred from his previous medium-security institu-tion to Mission Institution, Mr. Elliott had received a score of 25 out of100. That placed him in the medium-security classification (17.5-25.5).The evaluation done while at Mission and which led to his transfer andreclassification showed a score of 27.5. This placed him in the maximumsecurity category, although still in the “discretionary range Medium”classification. As noted in the Assessment for Decision, Mr. Elliott wasin the “Maximum-Security classification, although within the 5% Over-ride provision for Medium-Security.”

18 Mr. Elliott responded to the decisions by way of a 16 handwrittenpage Rebuttal in which he disputed the incidents at Mission Institution asdescribed in the decisions and provided his own explanation for theevents.

19 A Warden’s Board was held on October 30, 2013 and both the reclas-sification and the involuntary transfer were confirmed. As required, awritten decision was issued on November 5, 2013.

20 It is from the Warden’s Board Decision (the “Final Decision”) thatMr. Elliott seeks habeas corpus.

21 The Crown, in a very fair brief submitted for this hearing, describedthe information on which the Assessment for Decision (recommendation)as having been based on:

a. using physical aggression (striking a wall);

b. making veiled threats to guards;

c. inciting other inmates to act up;

d. calling a guard a “fucking moron” and threatening to “go throughyou fuckers (guards) like butter”;

e. covering his cell window, telling guards they would “have to go inand get him” and forcing an hour of negotiations to remove thewindow cover; and


f. threatening to burn down the institution.22 For Mr. Elliott’s part, he answered all of these in detail in his Rebut-

tal. He described his underlying issues with conditions at Mission Institu-tion (concerns over Halal meat, difficulties accessing the telephone andsafety concerns).

23 He explained the striking a wall as being an angry response when hewas unfairly required to leave a class he attended because he was late. Hesaid he was late because he was meeting with his parole officer.

24 He denied entirely the veiled threats to guards, which is what guardsinterpreted his statement that he “was prepared to go to the hole” until hewas moved into a cell with a friend. He describes the guards’ response asan overreaction.

25 As for the inciting other inmates to act up, he denies doing this andsays the conversation guards say they overheard between him and twoother inmates did not happen the way guards say it did.

26 He acknowledged calling one of the guards a “fucking moron”, butjustified it as a response to unfair and unequal treatment of him thatmorning by guards, including denial of telephone rights.

27 He acknowledged covering his cell window, as he had not yet beenallowed to speak to the Warden about his concerns and complaints, andhe wanted to precipitate a meeting.

28 The comment about the guards having to go in and get him was notmade to guards, but was the guards’ misinterpretation of what he said toa fellow inmate.

29 He acknowledged that he and a representative of the Warden spokefor about an hour about his concerns.

30 He denies threatening to burn the institution down, and says he saidsomething about “livening up the place”.

31 He also denies saying he would go through the guards “like butter”.32 He disputed the bases for security reclassification and argued for

lower scores.33 He also raised a number of issues which, although important to him,

are not relevant to the issues here: procedural fairness and the reasona-bleness of the decisions.

34 Mr. Elliott noted that the incident relating to the covering of his cellwindow, which involved some of the alleged threats and the “negotia-tion”, was videotaped by one of the guards. Through counsel, he re-


quested that the videotape be preserved, and attached as an exhibit to hisaffidavit an email from counsel to the Warden on October 17 saying “Iam requesting video footage from a handheld video camera to be pre-served.” The Warden wrote to counsel on October 17 stating: “I havedirected my staff to preserve all video evidence.”

35 Yet when Mr. Elliott sought to have that produced following a re-quest dated October 21, 2013 under the Access to Information Act, RSC1985, c A-1, he was advised on January 20, 2014 that “we were unable tofind any record of video footage of the above incidents taken using ahandheld camera or device.”

36 Mr. Elliott maintains that the video footage would verify his versionof events following the covering of his cell window.

III. Position of Parties

A. Mr. Elliott37 In his Affidavit in Support of his application, Mr. Elliott puts forward

his version of events. His specific complaints about the Final Decisionrelated to what he described as false allegations.

38 Firstly, he states that he was falsely accused of being the instigator ofan assault at his former institution and that he was falsely accused ofhaving been on a “behavioural contract” at the former institution. Hecomplains that the Final Decision wrongly suggested that he had previ-ous program involvement in one place in the decision, but noted that hehad a lack of program involvement as being a factor in institutional ad-justment concerns.

39 He states that he had never been offered a program during his threeyears of incarceration.

40 These errors, according to Mr. Elliott, constitute a breach of CCRA, s27(1) as none of these things had been contained in the Assessment forDecision and he had no opportunity to reply to them.

41 Because of the wrongful security reclassification and involuntarytransfer, Mr. Elliott maintains that he is being held involuntarily andagainst his will.

42 He notes that any charges against him relating to the window-cover-ing incident have since been withdrawn.

43 He relies on Khela v. Mission Institution, 2014 SCC 24, 455 N.R. 279(S.C.C.) [“Khela”], May v. Ferndale Institution, 2005 SCC 82, [2005] 3


S.C.R. 809 (S.C.C.) and Cardinal v. Kent Institution, [1985] 2 S.C.R.643, 24 D.L.R. (4th) 44 (S.C.C.).

B. Crown44 The Crown argues that there were no denials of procedural fairness to

Mr. Elliott in the Final Decision process and that the Final Decision isreasonable. Thus Mr. Elliott’s application for habeas corpus should bedismissed.

45 The Crown acknowledges that the involuntary transfer of an inmatefrom a medium-security institution to a maximum-security institution is adeprivation of residual liberty, and that the onus or burden is on theCrown to demonstrate that this deprivation was lawful.

46 As there is no challenge to the Warden’s jurisdiction to deal with thematter (only to the manner in which the Warden’s Board dealt with it),the Crown characterizes their burden as demonstrating that there was nobreach of procedural fairness and that the decision was reasonable.

47 The Crown argues that the institution complied with the transfer pro-cess requirements of the CCRA.

48 The Crown acknowledges that the Certified Record does not containany documents supporting the Warden’s Board’s conclusion that Mr. El-liott had instigated an assault on another inmate (noting instead that therecord notes that he was involved in inmate fights at another institutionon May 11, 2012 and November 22, 2012).

49 The Crown also acknowledges that the certified record does not con-tain any mention of Mr. Elliott being on a “behavioral contract” (notinginstead that the record refers to Mr. Elliott having been cautioned aboutthe repercussions of his negative behaviour).

50 The Crown argues, however, that if these can be considered errors inbreach of the CCRA, they did not result in any unfairness. The Crownstates: “The reclassification and transfer decisions were based on infor-mation actually provided to the Applicant”.

51 The Crown argues that Khela involved different facts and should bedistinguished.

52 As for the reasonableness of the decision, the Crown argues that theFinal Decision is to be reviewed on the standard of reasonableness, asdescribed in New Brunswick (Board of Management) v. Dunsmuir, 2008SCC 9, [2008] 1 S.C.R. 190 (S.C.C.) [“Dunsmuir”] such that it shouldnot be interfered with if it falls within “a range of possible acceptable


outcomes which are defensible in respect of the facts and the law” andshow “justification, transparency and intelligibility.” (at para 47 of Dun-smuir and quoted at para 77 of Khela).

53 The Crown refers to N.L.N.U. v. Newfoundland & Labrador(Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708 (S.C.C.) [“New-foundland Nurses”] that the reasons “must in fact or in principle supportthe conclusion reached” (at para 12).

54 The Crown notes that the N.L.N.U. case and Irving Pulp & Paper Ltd.v. CEP, Local 30, 2013 SCC 34, [2013] 2 S.C.R. 458 (S.C.C.) [“Commu-nications, Energy and Paperworkers Union”] require that the decision asa whole needs to be considered, without a “line-by-line outcome treasurehunt for error” (CEP, Local 30 at para 54, citing N.L.N.U., at para 14).

55 The Crown argues that the decision as a whole was reasonable.

IV. Law56 The latest word on this subject from the Supreme Court of Canada is

the recent Khela decision. The facts there bear a close resemblance to thefacts of this case, as it involved a transfer from a medium-security insti-tution (Mission) to a maximum-security institution (Kent). Similarprocesses occurred in both cases. Mr. Khela had received an “Assess-ment for Decision” as well as a Notice of Emergency Involuntary Trans-fer Recommendation” based on a Security Intelligence Report. That Re-port identified Mr. Khela, on the bases of anonymous sources, as beingresponsible for a stabbing at Mission Institution. There, prison staff had“overridden” Mr. Khela’s medium-security rating on his most recentSRS.

57 Mr. Khela had objected to the Assessment for Decision on factualbases, and ultimately brought a habeas corpus application.

58 The British Columbia Supreme Court granted the remedy, holdingthat the provincial superior court had concurrent jurisdiction with theFederal Court to hear habeas corpus applications. The chambers judgegranted the remedy based on her conclusion that the process below failedto provide necessary disclosure under s 27(1) of the CCRA. Mr. Khelahad been denied information as to the identities of the confidentialsources. As the Warden had not provided evidence that withholding thisinformation was necessary to protect the safety of a person, the securityof the penitentiary, or the conduct of a lawful investigation (under s27(3) of the CCRA), Mr. Khela had not been given all the information to


be considered. The decision was held to be “null and void for want ofjurisdiction”.

59 The British Columbia Court of Appeal upheld the decision, findingthat the failure to provide sufficient information rendered the transferprocedurally unfair.

60 The Supreme Court dealt with four issues:

1. jurisdiction issues between Federal Court and Provincial superiorcourts;

2. the scope of review on an application for habeas corpus;

3. the scope of the duty of disclosure under CCRA, s 27; and

4. whether in this case, there were grounds for finding that the deci-sion was unlawful.

A. Jurisdiction61 After some discussion contrasting certiorari in Federal Court and cer-

tiorari in aid of habeas corpus in Provincial Superior courts, the Su-preme Court confirmed that federal inmates should have a choice of fo-rums, like other litigants.

62 The Supreme Court noted that one of the main differences betweencertiorari and habeas corpus is the issue of onus. On judicial review, theapplicant bears the onus throughout the application; with habeas corpus,once the applicant has established a deprivation of liberty and raised alegitimate ground upon which to challenge its legality (Khela, at para 40,citing May v. Ferndale Institution), the onus switches to the detainingauthority to justify the deprivation of liberty.

63 Another difference concerns the availability of remedies; the third isthe absence of discretion relating to habeas corpus applications, whilejudicial review remains a discretionary remedy.

64 The Court emphasized the need for a readily available remedy in ap-propriate situations, noting that provincial superior courts were more ac-cessible than Federal Court and are more locally available to inmatesseeking a remedy. A factor favouring concurrent jurisdiction is also therequirement that certiorari in Federal Court is available only after “wad-ing through the lengthy grievance procedure available under the statute(CCRA)” (at para 58).


B. Scope of Review65 Lebel J in Khela indicated the standard of review with at para 52:

As I mentioned above, on an application for habeas corpus, the basicquestion before the court is whether or not the decision was lawful.Thus far, it is clear that a decision will not be lawful if the detentionis not lawful, if the decision maker lacks jurisdiction to order thedeprivation of liberty (see, for example, R. v. J.P.G. (2000), 130O.A.C. 343), or if there has been a breach of procedural fairness (seeMay, Miller and Cardinal). However, given the flexibility and theimportance of the writ, as well as the underlying reasons why thejurisdiction of the provincial superior courts is concurrent with thatof the Federal Court, it is clear that a review for lawfulness willsometimes require an assessment of the decision’s reasonableness.

66 The appellant sought a limitation on provincial superior courts’ pow-ers to review solely on the basis of jurisdictional errors.

67 The Court concluded this issue at para 72: The above reasoning leads to the conclusion that an inmate may chal-lenge the reasonableness of his or her deprivation of liberty by meansof an application for habeas corpus. Ultimately, then, where a depri-vation of liberty results from a federal administrative decision, thatdecision can be subject to either of two forms of review, and the in-mate may choose the forum he or she prefers. An inmate can chooseeither to challenge the reasonableness of the decision by applying forjudicial review under s. 18 of the FCA or to have the decision re-viewed for reasonableness by means of an application for habeascorpus. “Reasonableness” is therefore a “legitimate ground” uponwhich to question the legality of a deprivation of liberty in an appli-cation for habeas corpus.

[Emphasis added.]

68 Dealing specifically with transfer decisions, the Court held at paras73-75:

[73] A transfer decision that does not fall within the “range of possi-ble, acceptable outcomes which are defensible in respect of the factsand law” will be unlawful ... Similarly, a decision that lacks “justifi-cation, transparency and intelligibility” will be unlawful ... For it tobe lawful, the reasons for and record of the decision must “in fact orin principle support the conclusion reached” ...

[74] As things stand, a decision will be unreasonable, and thereforeunlawful, if an inmate’s liberty interests are sacrificed absent any ev-idence or on the basis of unreliable or irrelevant evidence, or evi-


dence that cannot support the conclusion, although I do not foreclosethe possibility that it may also be unreasonable on other grounds.Deference will be shown to a determination that evidence is reliable,but the authorities will nonetheless have to explain thatdetermination.

[75] A review to determine whether a decision was reasonable, andtherefore lawful, necessarily requires deference ... An involuntarytransfer decision is nonetheless an administrative decision made by adecision maker with expertise in the environment of a particular pen-itentiary. To apply any standard other than reasonableness in review-ing such a decision could well lead to the micromanagement of pris-ons by the courts.

[Emphasis added, citations omitted.]

69 The Court emphasized the fact-driven nature of transfer decisions (atpara 76).

70 In paras 77 to 79, the Court summarized the principles applicable tohabeas corpus in superior courts:

1. the traditional onuses with respect to habeas corpus remains: oncethe inmate has established a deprivation in liberty and casts doubton the reasonableness of the deprivation, the onus shifts to the de-taining authority to prove that the transfer decision wasreasonable;

2. superior courts have no discretion to refuse to hear an applicationfor habeas corpus once the above factors are met;

3. there is a residual discretion as to whether the writ will issue,based on the explanation provided by the detaining authority; and

4. applicable standards of review are reasonableness as to the deci-sion below, and correctness as to issues of procedural fairness.

C. Disclosure71 CCRA, s 27 provides:

27. (1) Where an offender is entitled by this Part or the regulations tomake representations in relation to a decision to be taken by the Ser-vice about the offender, the person or body that is to take the decisionshall, subject to subsection (3), give the offender, a reasonable periodbefore the decision is to be taken, all the information to be consid-ered in the taking of the decision or a summary of that information.

(2) Where an offender is entitled by this Part or the regulations to begiven reasons for a decision taken by the Service about the offender,


the person or body that takes the decision shall, subject to subsection(3), give the offender, forthwith after the decision is taken, all theinformation that was considered in the taking of the decision or asummary of that information.

(3) Except in relation to decisions on disciplinary offences, where theCommissioner has reasonable grounds to believe that disclosure ofinformation under subsection (1) or (2) would jeopardize

(a) the safety of any person,

(b) the security of a penitentiary, or

(c) the conduct of any lawful investigation,

the Commissioner may authorize the withholding from the offenderof as much information as is strictly necessary in order to protect theinterest identified in paragraph (a), (b) or (c).

. . .

[Emphasis added.]

72 At para 82 of Khela, the Supreme Court stated: As this Court put it in Cardinal ... “there is, as a general common lawprinciple, a duty of procedural fairness lying on every public author-ity making an administrative decision which is not of a legislativenature and which affects the rights, privileges or interests of an indi-vidual” ... Section 27 of the CCRA guides the decision maker andelaborates on the resulting procedural rights ... In order to guaranteefairness in the process leading up to a transfer decision, s. 27(1) pro-vides that the inmate should be given all the information that wasconsidered in the taking of the decision, or a summary of that infor-mation. This disclosure must be made within a reasonable timebefore the final decision is made. The onus is on the decision makerto show that s. 27(1) was complied with.


73 Lebel J at para 83 explains that this disclosure obligation requiredunder s 27(1) was not the same as Stinchcombe disclosure (R. v.Stinchcombe, [1991] 3 S.C.R. 326, 130 N.R. 277 (S.C.C.), differentiatingbetween cases where residual liberties, but not innocence, are at stake.

74 Further, and unlike the Stinchcombe obligation, only evidence whichwas considered in making the decision must be disclosed, not all evi-dence in the detaining authority’s possession (also at para 83).

75 Justice Lebel noted at para 85: If the correctional authorities failed to comply with s. 27 as a whole,a reviewing court may find that the transfer decision was procedur-


ally unfair, and the deprivation of the inmate’s liberty will not belawful. This is certainly a “legitimate ground” upon which an inmatemay apply for habeas corpus.

76 Not all breaches of procedural fairness will result in a grant of habeascorpus (para 90), as:

... not all breaches of the CCRA or the CCRR will be unfair. It willbe up to the reviewing judge to determine whether a given breach hasresulted in procedural unfairness. For instance, if s. 27(3) has beeninvoked erroneously or if there was a strictly technical breach of thestatute, the reviewing judge must determine whether that error or thattechnicality rendered the decision procedurally unfair.

[Emphasis added.]

D. Lawfulness of Decision77 On the merits, the Supreme Court agreed with the conclusions of the

chambers judge (para 94), holding that: ... It is unclear from the Assessment what each of the three separateand distinct sources said, or why the new information “corroborated”previous claims. Vague statements regarding source information andcorroboration do not satisfy the statutory requirement that all the in-formation to be considered, or a summary of that information, be dis-closed to the inmate within a reasonable time before the decision istaken.

78 Habeas corpus was confirmed. The Supreme Court noted that if theWarden had considered disclosure of any of the withheld information tobe justified under s 27(3), it was incumbent on the detaining authority toestablish that.

79 Finally, the Supreme Court held it was unnecessary to consider thereasonableness of the decision because it had instead identified procedu-ral unfairness.

80 The Supreme Court found as well that it was procedurally unfair ofthe Warden to have failed to disclose the scoring system for the SRS,even though the Warden had elected to override the SRS. This was dif-ferent from May v. Ferndale Institution where the issue related to thedisclosure of the scoring matrix for the reclassification process. Therehad been no “override” by the Warden, and the reclassification was donesolely on the basis of the SRS score: paras 96-97.


81 At para 120, Lebel J concluded: In conclusion, the respondents failed to disclose all the relevant in-formation or a summary of the information used in making the trans-fer decisions despite several requests by the appellants. The respon-dents concealed crucial information. In doing so, they violated theirstatutory duty. The transfer decisions were made improperly and,therefore, they are null and void for want of jurisdiction. It followsthat the appellants were unlawfully deprived of their liberty.

[Emphasis added.]

82 May v. Ferndale Institution was essentially reaffirmed by the Su-preme Court in Khela.

83 Cardinal v. Kent Institution is noteworthy for recognition that a dutyof procedural fairness applied to disciplinary proceedings within a peni-tentiary, regardless of whether it involved administrative segregation ordisciplinary segregation.

84 N.L.N.U., CEP, Local 30, are cited by the Crown with respect to theirrefinements of the standard of reasonableness determined in Dunsmuir.

V. Analysis85 There are several disclosure issues here. Mr. Elliott complains that

nothing at all was disclosed to him about his allegedly being the instiga-tor of an incident at his previous institution, or about him allegedly hav-ing been under a “behaviour contract” at the previous institution.

86 In the Final Decision, dated November 5, 2013, the Warden’s Boardnoted in the third paragraph:

The gist of the involuntary is based on Mr. Elliott, after being placedin segregation on a voluntary basis, became increasing threateningand violent to the point where he could no longer be managed at Mis-sion Institution. Mr. Elliott threatened violence towards the staff, andthreatened to start fires and take control of the exercise yard. He wasidentified as the instigator in an assault on another inmate. There hadbeen previous institutional concerns that have resulted in his place-ment on a behaviour contract and other interventions.

87 It is clear that the Warden’s Board considered this information, hav-ing referred to it as part of the “gist” of the transfer decision.


88 While it appears that no consideration was given to the residual dis-cretion the Warden had having regard to an SRS rating of 27.5, the FinalDecision states:

In reviewing this case in its totality, I note Mr. Elliott has demon-strated seriously problematic behavior. A transfer to higher securityis a necessary intervention at this time.

89 The difficulty with consideration of this information is that either Mr.Elliott was not provided with disclosure that information from his formerinstitution was being considered, or if the objected-to statements werenot accurate and were a misinterpretation by the Warden of informationthat had been disclosed to Mr. Elliott, the reasonableness of the decisionis called into question.

90 In other words, either the Warden’s Board had and used informationthat was not disclosed to Mr. Elliott, or it made findings of fact on whichthere was no evidentiary basis to do so. The former constitutes a breachof procedural fairness; the latter suggests unreasonableness.

91 Or if there is some explanation for how the Warden’s Board came tothese conclusions on the information before it and which had been dis-closed to Mr. Elliott, that explanation did not find its way into the FinalDecision. That raises an issue as to the adequacy of reasons under R. v.Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869 (S.C.C.). The latter is apoint not raised by Mr. Elliott, but is inferentially raised in looking at thereasonableness of the decision as the adequacy of reasons is consideredin Khela as a factor to consider in a review for reasonableness.

92 The Crown does not deal with Mr. Elliott’s complaint that, despite hisrequest, he was not provided with the videotape of the incident involvinghim covering his cell window and confronting the guards, leading to theallegations of threats to the guards and threats to damage the institution.Mr. Elliott refers to the incident being videotaped at page 13 of his Re-buttal. As noted above, he had requested this video footage in a CSCOffender Privacy Act Request dated October 13, 2013. Preservation ofthe video footage had been requested by counsel on Mr. Elliott’s behalfon October 11, 2013 and the Warden had replied on October 17, 2013that staff had been directed to preserve all video evidence.

93 The Final Decision does not deal with the video evidence at all, sothere is no indication that the Warden’s Board looked at the video foot-age even though the Warden was clearly aware that it existed. The factthat it subsequently disappeared is after-the-fact information which is cu-rious, but essentially irrelevant to the decision under review.


94 The Final Decision (as quoted above) finds that Mr. Elliott threatenedviolence towards the staff and threatened to start fires and take control ofthe exercise yard. Mr. Elliott denied those allegations in his Rebuttal andgave explanations which were clearly contradictory of those findings.

95 There is no discussion in the Final Decision relating to why Mr. Elli-ott’s explanations and Rebuttal were given no weight and why the infor-mation from the guards was accepted over Mr. Elliott’s. Again, thatraises issues concerning the adequacy of the reasons for decision reason-ableness issues.

96 It also begs the question as to whether the Warden should havelooked at the videotape evidence. If Mr. Elliott’s credibility was an im-portant consideration, and the videotape evidence was likely the best evi-dence as to what occurred and was said during this incident, it is difficultto conclude that the acceptance of the guards’ evidence over that of Mr.Elliott was reasonable when the best evidence was apparently ignored.

97 CCRA, s 27(1) refers to disclosure of all information “to be consid-ered” at the hearing. Stinchcombe disclosure relates to not only the evi-dence which may be used by the Crown in prosecuting the accused, butalso any evidence which may be of assistance to the defence. While theSupreme Court has consistently held that disclosure under s 27(1) of theCCRA is not the same as Stinchcombe disclosure, I cannot think that in-tention of the section, and the requirements of procedural fairness, per-mits the Crown to cherry-pick and disclose only what may be of assis-tance to its position, and not what may be of assistance to the inmate.

98 That is especially so when the inmate has specifically requested dis-closure of such information, as is the case here.

99 I recognize that Mr. Elliott is concerned about many other issues, andin particular the merits of his various complaints at Mission concerningtelephone access, Halal food issues, TV issues, compatibility issues withother inmates, program issues, health issues and discriminatory treat-ment. Essentially these issues all relate to justification for his allegedbehavioural issues. Those relate to the reasonableness of the decision andthe adequacy of reasons, rather than disclosure. These alleged defects inthe Final Decision are therefore not subject to review on the correctnessstandard.


A. Disclosure100 The Crown acknowledges that the Record contains no mention of a

behavior contract, nor any information about Mr. Elliott being the insti-gator of any fights. However, the Crown argues that Mr. Elliott had beenwarned at Mission about his negative behaviour and the Record notesthat he had been involved in inmate fights in 2012 (obviously at anotherinstitution).

101 The Crown argues that not all breaches of disclosure will result in afinding of procedural unfairness, and that even if the above issues couldbe described as “errors” in breach of the CCRA, there was no unfairnessto Mr. Elliott as the reclassification and transfer decisions were based oninformation actually provided to him (presumably referencing the scor-ing system for the SRS).

102 The Crown distinguishes between the situation in Khela, which in-volved non-disclosure of the identity of informants and the situation herewhere Mr. Elliott was provided with sufficient information about the in-cidents which resulted in his reclassification (what had happened while atMission).

103 I do not think that Khela can be limited to its facts. The essence of thedecision is to confirm habeas corpus is available in provincial superiorcourts, as well as the ability of the provincial superior courts to granthabeas corpus on the basis of procedural unfairness. I conclude procedu-ral fairness includes breaches of the detaining authority’s disclosure obli-gations under CCRA, s. 27(1)

104 There is no attempt to limit disclosure to the SRS scoring system, orto the identities of informants. Those only happened to be the breachesthe court dealt with in Khela.

105 The exception recognized in Khela (at para 90) is for minor breaches,or technical breaches.

106 The question left by Khela is, if there is a breach, did the breachrender the decision procedurally unfair?

107 Here, two breaches alleged by Mr. Elliott, being the instigator of afight and being under a behaviour contract, are not minor, technicalbreaches. The Final Decision references the main cause of his reclassifi-cation and transfer as being “seriously problematic behavior”. The War-den specifically refers to him being the instigator of an assault (withoutapparently recognizing that it occurred at another institution) and a for-mer placement on a “behaviour contract and other interventions”.


108 It cannot reasonably be said that these “facts” did not play a signifi-cant role in the decision.

109 Mr. Elliott was denied the opportunity to respond to these allegationsbecause nothing was disclosed to him of his conduct at the previous insti-tution being in play by the Warden’s Board.

110 The failure to disclose the information is in my view a serious breachof the Institution’s disclosure obligations under s 27(1).

111 I am also of the view that the unexplained failure to disclose thevideotape of the incident is also a breach of s 27(1) and a denial of proce-dural fairness. There was no suggestion before me that the videotapenever existed; the evidence was that by the spring of 2014 it could not befound. The videotape should have been disclosed to Mr. Elliott as re-quested. Why it, being the most probative evidence of the incident, wasnot considered in the reassessment and transfer process is unexplained.That also goes to the overall fairness of the process to Mr. Elliott.

112 Thus, I conclude that the decision was procedurally unfair and mustbe set aside on that basis.

B. Reasonableness113 Because of my findings on procedural fairness, it is unnecessary for

me to deal with the reasonableness of the decision itself. However, it wasfully argued, and in my view should be dealt with fully in this decision.

114 Clearly, there was information before the Warden’s Board to con-clude that Mr. Elliott’s behaviour at Mission Institution was unmanage-able in that institution. The SRS indicated a higher security classification.The Warden does not have to exercise a discretion to depart from thesecurity classification, and I do not think it is necessary, where no discre-tion is exercised, to justify the failure to exercise the discretion.

115 That being said, the Warden’s Board either looked at informationfrom Mr. Elliott’s previous institution without providing that informationor a summary of it to Mr. Elliott, or the Warden’s Board misapprehendedthe information which had been provided to Mr. Elliott and which wasconsidered by it before making the Final Decision.

116 Since there is nothing in the Certified Record which could supporteither fact-finding, it is not necessary for me to consider the alternativescenario misapprehension of evidence might raise. The only reasonableconclusion is that the Warden’s Board had information from the institu-tion Mr. Elliott was in prior to being transferred to Mission, which con-


tained that information, or contained information from which those con-clusions might reasonably be drawn, and that information was notdisclosed to Mr. Elliott.

117 I would simply observe that if the Warden’s Board misconstrued dis-closed information, that would likely make the decision unreasonable, asit is clear that it placed weight on these two factors. Being the instigatorof a fight is far different from being the victim of aggression; beingunder a behaviour contract is pejorative, suggesting that the inmate hasbeen of previously poor behavior. There is no other reasonable interpre-tation of that status.

118 A further concern is the absence of any weighing of the informationfrom the guards and Mr. Elliott’s explanation as contained in hisRebuttal.

119 It was not clearly explained why Mr. Elliott apparently withdrew hisRebuttal before the Warden’s Board convened. The Certified Recordsuggests that Mr. Elliott requested a time extension but it is unclear howthat request was addressed. Nevertheless, the Final Decision notes that,but says that the Rebuttal was considered in any event.

120 But where and how was it considered?121 One paragraph in the Final Decision deals with it, in these terms:

The Rebuttal as presented does explain some of the circumstances inthe incidents leading up to his Emergency Transfer, but does not in-dicate that Mr. Elliott takes full responsibility ...

122 When his Rebuttal denies that he made any threats to do harm to theguards, or to damage Mission Institution or take control of the exerciseyard, there should, in my view, be some assessment of Mr. Elliott’s cred-ibility or the credibility of the guards who provided the contrary informa-tion on which the warden obviously relied.

123 From the reasons given, I cannot make a determination one way orthe other as to whether the decision was reasonable.

124 N.L.N.U. makes it clear that the adequacy of reasons, where reasonshave been given by the decision-maker, is a matter that goes to the rea-sonableness of the decision and is not a matter of procedural fairness.Here, the Warden’s Board gave reasons for the decision, so proceduralfairness is not engaged. The adequacy of reasons is still determined onthe old case law following R. v. Sheppard,

125 If the reasons are determined to be inadequate, there still needs to bea determination that they are unreasonable despite any inadequacies. I


read N.L.N.U. as requiring further analysis even when reasons have beendetermined to be inadequate.

126 In R. v. Sheppard, Mr. Justice Binnie, writing for the Court, stated atpara 24:

In my opinion, the requirement of reasons is tied to their purpose andthe purpose varies with the context. At the trial level, the reasonsjustify and explain the result. The losing party knows why he or shehas lost. Informed consideration can be given to grounds for appeal.Interested members of the public can satisfy themselves that justicehas been done, or not, as the case may be.

127 At para 55, Binnie J summarized the jurisprudence on the duty of atrial judge to give reasons, which were held to be equally applicable tocriminal and civil cases:

1. The delivery of reasoned decisions is inherent in the judge’s role.It is part of his or her accountability for the discharge of the responsi-bilities of the office. In its most general sense, the obligation to pro-vide reasons for a decision is owed to the public at large.

2. [...] Reasons for judgment may be important to clarify the basis forthe [result] but, on the other hand, the basis may be clear from therecord. The question is whether, in all the circumstances, the func-tional need to know has been met.

3. The lawyers for the parties may require reasons to assist them inconsidering and advising with respect to a potential appeal. On theother hand, they may know all that is required to be known for thatpurpose on the basis of the rest of the record.

[....]

6. Reasons acquire particular importance when a trial judge is calledupon to address troublesome principles of unsettled law, or to resolveconfused and contradictory evidence on a key issue, unless the basisof the trial judge’s conclusion is apparent from the record, even with-out being articulated.

7. Regard will be had to the time constraints and general press ofbusiness in the [...] courts. The trial judge is not held to some abstractstandard of perfection. It is neither expected nor required that the trialjudge’s reasons provide the equivalent of a jury instruction.

8. The trial judge’s duty is satisfied by reasons which are sufficient toserve the purpose for which the duty is imposed, i.e., a decisionwhich, having regard to the particular circumstances of the case, isreasonably intelligible to the parties and provides the basis for mean-


ingful appellate review of the correctness of the trial judge’sdecision.

9. While it is presumed that judges know the law with which theywork day in and day out and deal competently with the issues of fact,the presumption is of limited relevance. Even learned judges can errin particular cases, and it is the correctness of the decision in a partic-ular case that the parties are entitled to have reviewed by the appel-late court.

128 In Hill v. Hamilton-Wentworth (Regional Municipality) PoliceServices Board, 2007 SCC 41, 285 D.L.R. (4th) 620 (S.C.C.), Chief Jus-tice McLachlin, for the majority, summarized the following principlesfrom Sheppard in a civil case at paras 100-101:

100 The question is whether the reasons are sufficient to allow formeaningful appellate review and whether the parties’ “functionalneed to know” why the trial judge’s decision has been made has beenmet. The test is a functional one ...

101 In determining the adequacy of reasons, the reasons should beconsidered in the context of the record before the court. Where therecord discloses all that is required to be known to permit appellatereview, less detailed reasons may be acceptable. This means that lessdetailed reasons may be required in cases with an extensive eviden-tiary record, such as the current appeal. On the other hand, reasonsare particularly important when “a trial judge is called upon to ad-dress troublesome issues of unsettled law, or to resolve confused andcontradictory evidence on a key issue”, as was the case in the deci-sion below ... In assessing the adequacy of reasons, it must beremembered that “[t]he appellate court is not given the power to in-tervene simply because it thinks the trial court did a poor job of ex-pressing itself” ...


129 I recognize that Mr. Elliott did not make any submissions concerningthe adequacy of reasons, and instead argued the unreasonableness of thedecision. The Crown focused on the reasonableness standard fromDunsmuir, N.L.N.U. and CEP, Local 30, but also referred to the require-ment that the reasons being reviewed for reasonableness must:

1. Fall within a range of possible acceptable outcomes which are de-fensible in respect of the facts and law (Dunsmuir, at para 47,Khela, at para 73);

2. Show justification, transparency and intelligibility (Dunsmuir, at47, Khela, at para 73); and


3. In fact or in principle support the conclusion reached (N.L.N.U., atpara 12, Khela, at para 73).

130 I am also mindful, as argued by the Crown, that deference is to begiven due to the expertise of the decision-maker (Khela, at para 75) andthat the decision is to be reviewed as “an organic whole” without a line-by-line treasure hunt for error (N.L.N.U., at para 14, CEP, Local 30, atpara 54).

131 N.L.N.U. at para 12 provides significant guidance on the approach toa review of reasons for adequacy (or more appropriately now, reasona-bleness):

It is important to emphasize the Court’s endorsement of ProfessorDyzenhaus’s observation that the notion of deference to administra-tive tribunal decision-making requires “a respectful attention to thereasons offered or which could be offered in support of a decision”.In his cited article, Professor Dyzenhaus explains how reasonable-ness applies to reasons as follows:

“Reasonable” means here that the reasons do in fact or inprinciple support the conclusion reached. That is, even ifthe reasons in fact given do not seem wholly adequate tosupport the decision, the court must first seek to supple-ment them before it seeks to subvert them. For if it is rightthat among the reasons for deference are the appointmentof the tribunal and not the court as the front line adjudica-tor, the tribunal’s proximity to the dispute, its expertise,etc, then it is also the case that its decision should be pre-sumed to be correct even if its reasons are in some re-spects defective.

[Italics in original, underlining added for emphasis.]

132 At para 15, the Supreme Court indicated that “the (reviewing) Courtmay look to the record for the purpose of assessing the reasonableness ofthe outcome”. (at para 15)

133 On that point, para 54 in CEP, Local 30 holds that before a court canconclude that the outcome is “outside the range of reasonable outcomes”,the court must review the entire record. In that regard, it appears that theSupreme Court now requires the reviewing court to look to the entirerecord to see if the record can supplement the reasons which have beengiven with reasons obvious to the reviewing court appearing in therecord.


134 The Court in N.L.N.U. continued at para 16: Reasons may not include all the arguments, statutory provisions, ju-risprudence or other details the reviewing judge would have pre-ferred, but that does not impugn the validity of either the reasons orthe result under a reasonableness analysis. A decision-maker is notrequired to make an explicit finding on each constituent element,however subordinate, leading to its final conclusion ... In otherwords, if the reasons allow the reviewing court to understand why thetribunal made its decision and permit it to determine whether theconclusion is within the range of acceptable outcomes, the Dunsmuircriteria are met.

[Emphasis added.]

135 The difficulty with the reasons under review is that there is not onlynothing in them to supplement the reasons given, but the reasons them-selves have been supplemented by the decision-maker to include infor-mation not disclosed to Mr. Elliott as required by CCRA, s 27(1).

136 As for the reasonableness of the decision, I am of the opinion that thedecision is not reasonable as:

1. it was based, in part, on information not disclosed to Mr. Elliottand which should have been disclosed to Mr. Elliott so he couldrespond;

2. it contains no analysis at all of Mr. Elliott’s Rebuttal;

3. it contains no analysis at all of credibility issues between theguards and Mr. Elliott; and

4. there is nothing in the Certified Record which can be used to sup-plement the reasons supporting the reassessment and transfer.

137 These again are not minor, technical points. The Warden’s Boardplaced significance on Mr. Elliott having been the instigator of a fightand being under a behaviour contract. Fundamental to the issue of Mr.Elliott’s behaviour problems at Mission is the guards’ account of therehaving been threats made as to personal injury and property damage. Butfor those concerns, there would be little if anything to support a reclas-sification and transfer. There is essentially nothing left in the recordwhich could allow a reviewing court to find the Final Decision to bewithin the range of reasonable outcomes.

138 A decision which relied entirely on the reassessment process and itsscoring could not be found reasonable when the facts on which the reas-sessment was based are contested, and the decision-maker made no ap-


parent attempt to ascertain credibility and reliability. That is made moretroubling here by the potential availability of videotape evidence whichMr. Elliott claims would support his version of events. A conclusion thatMr. Elliott has failed to take full responsibility for the events is unreason-able until there has been a resolution of which version of events is ac-cepted, and why.

139 Ultimately, the Final Decision must be set aside as being unreasona-ble, as well as being procedurally unfair.

140 I am mindful of the warning in Khela at para 75 that the courts shouldavoid micromanaging prisons. Mr. Elliott may well be properly charac-terized as a maximum-security inmate whose behaviour cannot be appro-priately managed at a medium-security institution. But in making thatdetermination, Mr. Elliott, even as a serving prisoner, is entitled to proce-dural fairness and for decisions affecting his liberty to be reasonable.

141 Here, Mr. Elliott was denied procedural fairness, and the reasonsgiven for his reclassification and transfer were inadequate to satisfy thebasic requirements that a litigant is entitled to know why the outcome hasbeen arrived at, and which permit meaningful appellate review.

VI. Result142 Mr. Elliott is successful in his application for habeas corpus. He

should be returned to a medium-security institution. He requested that hebe transferred to the medium-security institution in Grande Cache, Al-berta as that would place him closer to family. I note that here, recogniz-ing that such a decision falls on Corrections Canada and not the Court.

Application granted.


[Indexed as: Wang v. Sun]

Hongli Wang, Plaintiff and Xue Jin Sun and Xiao Ri Hou,Defendants

British Columbia Supreme Court

Docket: Vancouver S136114

2014 BCSC 87

Skolrood J.

Heard: December 5, 2013

Judgment: January 21, 2014

Conflict of laws –––– Property — Jurisdiction over real property — Miscel-laneous –––– Plaintiff alleged that he provided consulting services to defendantwith respect to sale of property in China — Plaintiff claimed he was owedequivalent of $3,398,000 CDN as commission — Defendants submitted thatBritish Columbia court should decline jurisdiction — Defendants brought appli-cation for order staying proceeding — Application dismissed — Defendantsfailed to establish that there was another forum that was clearly more appropri-ate for determination of plaintiff‘s claim under commission contract so as todisplace plaintiff’s prima facie right to forum of his choice — Defendants hadnot adduced any evidence to establish that law of contract in China was differentfrom law in B.C. — Chinese proceeding was not parallel proceeding and permit-ting plaintiff’s action to proceed in B.C. would not be inviting multiplicity ofproceedings or possible inconsistent outcomes.

Cases considered by Skolrood J.:

Balla v. Fitch Research Corp. (2006), 2006 CarswellBC 698, 2006 BCSC 275,29 C.P.C. (6th) 317, [2006] B.C.J. No. 623 (B.C. S.C.) — considered

Braunizer v. Canadian Pacific Ltd. (1995), 1995 CarswellBC 438, 10 B.C.L.R.(3d) 195, [1995] B.C.J. No. 1745 (B.C. S.C. [In Chambers]) — referred to

Byle v. Byle (1990), 65 D.L.R. (4th) 641, 46 B.L.R. 292, 1990 CarswellBC 348,[1990] B.C.J. No. 258 (B.C. C.A.) — considered

Coulson Aircrane Ltd. v. Pacific Helicopter Tours Inc. (2006), 2006 Car-swellBC 1548, 2006 BCSC 961, 32 C.P.C. (6th) 152, 57 B.C.L.R. (4th) 226(B.C. S.C.) — considered

De Corde v. De Corde (2011), 2011 BCSC 1719, 2011 CarswellBC 3367, 30C.P.C. (7th) 136 (B.C. Master) — considered

McIntyre v. Richardson Estate (2012), 2012 BCSC 1347, 2012 CarswellBC2753 (B.C. S.C.) — referred to

Wang v. Sun 625

Mid-Ohio Imported Car Co. v. Tri-K Investments Ltd. (1995), 1995 CarswellBC934, 13 B.C.L.R. (3d) 41, 41 C.P.C. (3d) 259, [1996] 2 W.W.R. 144, 129D.L.R. (4th) 181, 65 B.C.A.C. 98, 106 W.A.C. 98, [1995] B.C.J. No. 2199(B.C. C.A.) — considered

O’Brien v. Simard (2006), 2006 BCCA 410, 2006 CarswellBC 2324, 230B.C.A.C. 120, 380 W.A.C. 120 (B.C. C.A. [In Chambers]) — considered

Pao On v. Lau Yiu Long (1979), [1980] A.C. 614, [1979] 3 W.L.R. 435, [1979]3 All E.R. 65 (Hong Kong P.C.) — considered

Schwarzinger v. Bramwell (2011), 2011 BCSC 283, 2011 CarswellBC 512 (B.C.S.C.) — considered

Sutherland v. Banman (2008), 2008 BCSC 1194, 2008 CarswellBC 1872 (B.C.Master) — referred to

Van Breda v. Village Resorts Ltd. (2012), 17 C.P.C. (7th) 223, 2012 SCC 17,2012 CarswellOnt 4268, 2012 CarswellOnt 4269, 91 C.C.L.T. (3d) 1, 343D.L.R. (4th) 577, 429 N.R. 217, 10 R.F.L. (7th) 1, (sub nom. Charron Estatev. Village Resorts Ltd.) 114 O.R. (3d) 79 (note), 291 O.A.C. 201, (sub nom.Club Resorts Ltd. v. Van Breda) [2012] 1 S.C.R. 572, [2012] S.C.J. No. 17,[2012] A.C.S. No. 17 (S.C.C.) — referred to

Westec Aerospace Inc. v. Raytheon Aircraft Co. (1999), 1999 CarswellBC 825,67 B.C.L.R. (3d) 278, 34 C.P.C. (4th) 1, 1999 BCCA 243, 173 D.L.R. (4th)498, 122 B.C.A.C. 18, 200 W.A.C. 18, [1999] B.C.J. No. 871 (B.C. C.A.) —considered

Westec Aerospace Inc. v. Raytheon Aircraft Co. (June 16, 1999), Doc. 27356,[1999] S.C.C.A. No. 298 (S.C.C.) — referred to

Zecher v. Josh (2011), 9 C.P.C. (7th) 369, 2011 CarswellBC 561, 2011 BCSC311 (B.C. Master) — considered


Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28Pt. 3 — referred tos. 3 — considereds. 11 — considereds. 11(2)(b) — considereds. 11(2)(c) — considereds. 11(2)(d) — considereds. 11(2)(e) — considereds. 11(2)(f) — referred to

Rules considered:

Supreme Court Civil Rules, B.C. Reg. 168/2009Generally — referred toR. 8-1(4) — consideredR. 8-1(4)(c) — considered


R. 21-8(1)(b) — referred toR. 21-8(2) — referred to

Forms considered:

Supreme Court Civil Rules, B.C. Reg. 168/2009Form 32 — referred to

APPLICATION by defendants for order staying proceeding.

K.M. Jackson, J. Cabott, for PlaintiffK.G. McKenzie, for Defendants

Skolrood J.:

Introduction1 This is an application by the defendants for an order staying the pro-

ceeding on the basis that the court should decline jurisdiction pursuant tothe doctrine of forum non conveniens.

2 In their notice of application, the defendants also seek an order stay-ing the proceeding on the ground that the court lacks jurisdiction over thematter. However, at the hearing of the application, counsel for the de-fendants conceded that this court does have jurisdiction and he limitedhis submissions to the issue of whether the court should decline to exer-cise that jurisdiction.

Background3 The defendant Xue Jin Sun (“Sun”) was the sole shareholder in a Chi-

nese company that owned a piece of property in Liaoning Province,China known as Dalian Jinrijunjian Park (the “Park”).

4 In or about September 2011, Sun entered into a contract (the “ParkSale Contract”) to sell his interest in the Park to Coastal Realty Invest-ment (China) Ltd. (“Coastal”). The original sale price was 380,000,000RMB, later amended to 345,000,000 RMB.

5 The plaintiff Hongli Wang (“Wang”) alleges that he provided Sunwith consulting services in connection with the sale to Coastal pursuantto a contract between him and Sun (the “Commission Contract”). Thematerial terms of the Commission Contract are as follows:

a) Wang agreed to provide consulting services in relation to the pro-posed sale by Sun of his interest in the Park to Coastal;

Wang v. Sun Skolrood J. 627

b) Sun agreed that if Coastal (i) signed an agreement to purchaseSun’s interest in the Park and (ii) caused 5,000,000 USD to bepaid into an account specified by Sun, then Sun would:

i. pay the sum of 4,100,000 RMB to or on behalf of Wang tosatisfy a debt owing by Wang to another company for de-sign services provided in connection with the sale of Sun’sinterest in the Park; and

ii. pay Wang a fee of 20,000,000 RMB (or the equivalentamount in US or Canadian dollars) (the “Commission”).

6 Wang further alleges that on or about September 28, 2011, Coastalpaid the sum of 5,015,045 USD into the account specified by Sun. Some-time after September 28, 2011, Sun paid 4,100,000 RMB directly to thedesign firm who provided the services, as contemplated in the Commis-sion Contract.

7 On or about October 4, 2012, Coastal’s parent company paid a further5,000,000 USD into the account specified by Sun.

8 Wang says that by virtue of the Commission Contract, Sun wasobliged to hold a portion of the amounts received in trust for him andthen to pay him the Commission within one week. Sun failed to do soand, accordingly, Wang claims that he is owed the sum of 20,000,000RMB which, as of July 17, 2013, equalled 3,398,000 CDN.

9 I should pause here to note that while I have only referred to Sunabove in connection with the Commission Contract, in his notice of civilclaim, Wang alleges that the defendant Xiao Ri Hou (“Hou”), who isSun’s wife, was also party to the Contract and is jointly liable with Sunfor the damages claimed. Wang also advances claims against Hou forknowing assistance and knowing receipt on the basis that she participatedin a breach of trust by using funds paid to Sun, which should have beenear-marked for Wang, to purchase property in B.C.

10 In January of 2013, Sun sued Coastal in China for breach of the ParkSale Contract (the “Chinese Proceeding”). Specifically, Sun alleged inthat litigation that Coastal had refused to complete the transaction andSun sought the balance of the purchase price.

11 On April 5, 2013, Coastal filed a defence in the Chinese Proceeding.The thrust of Coastal’s defence is that the Park Sale Contract had effec-tively been frustrated because Coastal was not able to acquire the Park inthe manner that the parties had originally contemplated. In June 2013,


Coastal filed a counterclaim against Sun seeking return of the moniespaid to date.

12 Wang commenced the within action against Sun and Hou on August14, 2013. On the same date, Wang sought a garnishing order before judg-ment (the “garnishing order”) which was granted on August 16, 2013.

13 On August 23, 2013, the defendants filed a notice of application seek-ing to set aside the garnishing order. The application came on for hearingbefore me in chambers and on September 11, 2013 I granted the defend-ants’ application and ordered that the garnishing order be set aside.

14 On October 8, 2013, after the application to set aside the garnishingorder but before filing this application, the defendants filed a Jurisdic-tional Response. The defendants filed this application on November 5,2013.

The Parties’ Positions

The Defendants15 As noted above, at the hearing of this application, counsel for the de-

fendants advised the court that the defendants were abandoning their ap-plication for an order staying the proceeding on the ground that this courtlacks jurisdiction. They did so, quite properly, recognizing that pursuantto s. 3 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C.2003, c. 28 (the “CJPTA”), this court has jurisdiction by virtue of the factthat the defendants are ordinarily resident in B.C. The defendants there-fore focussed their submissions on the issue of forum non conveniens.

16 The defendants rely on s. 11 of the CJPTA which provides: Discretion as to the exercise of territorial competence

11 (1) After considering the interests of the parties to a proceedingand the ends of justice, a court may decline to exercise its territorialcompetence in the proceeding on the ground that a court of anotherstate is a more appropriate forum in which to hear the proceeding.

(2) A court, in deciding the question of whether it or a court outsideBritish Columbia is the more appropriate forum in which to hear aproceeding, must consider the circumstances relevant to the proceed-ing, including

(a) the comparative convenience and expense for the parties tothe proceeding and for their witnesses, in litigating in thecourt or in any alternative forum,

(b) the law to be applied to issues in the proceeding,


(c) the desirability of avoiding multiplicity of legal proceedings,

(d) the desirability of avoiding conflicting decisions in differentcourts,

(e) the enforcement of an eventual judgment, and

(f) the fair and efficient working of the Canadian legal system asa whole.

17 The defendants say that the application of these factors in this casemakes it clear that the court in China is a more appropriate forum inwhich to hear and resolve Wang’s claim and that therefore this courtshould decline jurisdiction.

18 Specifically, the defendants submit:

a) Wang and Sun are both residents of China, although Sun and Houhave a residence in B.C.;

b) The proper law of the Commission Contract, while not stated inthe contract, is Chinese law;

c) The underlying agreement giving rise to Wang’s claim for theCommission, i.e the Park Sale Contract, is being challenged in theChinese Proceeding, therefore allowing this action to go ahead inB.C. may lead to inconsistent outcomes; and

d) Most of Sun’s assets and all of his business interests are in Chinasuch that if Wang is successful he would be able to enforce hisjudgment against Sun in China.

19 The defendants submit further that in determining whether to exerciseits discretion under s. 11 of the CJPTA, the court is not limited to consid-ering the factors enumerated in that section but may take account of otherfactors as well. The defendants say that the following additional factorsweigh in favour of this court declining jurisdiction in favour of the Chi-nese court:

a) Sun will be at a disadvantage if the two related cases are tried indifferent courts in different countries;

b) The material witnesses all reside in China;

c) The costs of this action in B.C. will be significant in that transla-tors will be required and expert evidence will be necessary toprove Chinese law.

20 At the heart of the defendants’ position is the submission that itmakes no sense for this action to proceed in B.C. when the validity of the


contract that forms the basis for Wang’s claim to the Commission is be-ing decided in the Chinese Proceeding.

The Plaintiff21 Wang submits at the outset that the defendants’ notice of application

is deficient in that it does not state the legal basis on which they say thecourt should decline jurisdiction. Wang says that the application shouldbe dismissed on this ground alone.

22 Wang submits further that in bringing its application to set aside thegarnishing order without first filing a jurisdictional response, the defend-ants attorned to the jurisdiction of this Court and are now precluded fromarguing that the court should decline to exercise its jurisdiction.

23 Substantively, Wang says that in order to properly consider whetherhis claim should be permitted to proceed in B.C., it is important to under-stand clearly the nature of that claim.

24 Wang’s claim is based primarily on the Commission Contract whichhe says entitled him to the payment of the Commission upon Coastalsigning the Park Sale Contract and paying Sun an initial $5 million.Wang says that because those events occurred, the Commission is paya-ble regardless of what may or may not happen in the ChineseProceeding.

25 Wang’s notice of civil claim also includes a claim for breach of trust,on the basis that a portion of the funds received by Sun from Coastalwere to be held in trust for Wang’s benefit. Wang further advances aclaim for knowing assistance and knowing receipt against Hou on thebasis that she assisted Sun in the breach of trust by receiving the fundsthat she knew or ought to have known were to be held in trust for Wang.Finally, Wang alleges that the use of the funds received from Coastal topurchase property in B.C. amounted to a fraudulent conveyance.

26 In Wang’s submission, if there was a breach of trust and if Houknowingly assisted in that breach, the events giving rise to those claimsoccurred in B.C. That is because Sun directed Coastal to pay the initialfunds under the Park Sale Contract into an account in B.C. Similarly, thefraudulent conveyance claim is also directly tied to B.C. because thefunds were used to purchase property here.

27 Wang submits that all of these claims are properly brought in B.C.and that they are not necessarily related to the issues raised in the Chi-nese Proceeding. In fact, says Wang, there is no guarantee that if this


proceeding is stayed, the claims could be joined with the ChineseProceeding.

28 In terms of the factors set out in s. 11 of the CJPTA, Wang submitsthat they do not in fact favour the Chinese Proceeding. Wang says thatthe defendants have not produced any evidence to establish that theywould be inconvenienced by having this matter heard in B.C., nor havethey produced evidence to support the contention that Chinese lawshould govern the Commission Contract and, if it does, that Chinese lawis at all different from the law of B.C. Finally, Wang submits that theproperty in respect of which he claims a trust is situated in B.C., thusconsiderations concerning potential enforcement of a judgment weighheavily in favour of permitting the action to continue here.

Analysis

Adequacy of the Defendants’ Notice of Application29 In their notice of application, the defendants list the following under

Part 3 Legal Basis:

1. The law of contract;

2. The law of conflict of laws;

3. Rule 21-8(1)(b) of the Supreme Court Rules; and

4. Rule 21-8(2) of the Supreme Court Rules.30 Wang submits that once it is established that the court has territorial

jurisdiction, the party asking the court to decline to exercise that jurisdic-tion pursuant to the doctrine of forum non conveniens has the onus ofestablishing that there is another available forum that is clearly moreappropriate: Van Breda v. Village Resorts Ltd., 2012 SCC 17 (S.C.C.) atparas. 103, 108-109 [Club Resorts Ltd.].

31 Wang says that the defendants have not met that onus because theirnotice of application fails to identify an alternative forum that is moreappropriate and further fails to identify the legal basis on which they saythe court should decline to exercise discretion. In this regard, they citethe decisions of Master Bouck in Zecher v. Josh, 2011 BCSC 311 (B.C.Master) [Zecher], and De Corde v. De Corde, 2011 BCSC 1719 (B.C.Master). In Zecher, Master Bouck said as follows about the content of anotice of application at para. 30:

Form 32 of the SCCR lends itself to providing both the opposingparty and the court with full disclosure of the argument to be made in


chambers. Parties should put in as much thought to the necessarycontent of that Form as is done when preparing the supporting affida-vits. When a party is represented, responsibility for that content lieswith counsel.

32 In Zecher, Master Bouck declined to order the relief sought in thenotice of application. However, as I read her reasons, she did so not be-cause the notice of application did not conform to the requirements of therules but rather because the legal basis articulated in the notice was notsufficient to support the relief sought.

33 Rule 8-1(4) deals with the content of a notice of application and re-quires in R. 8-1(4)(c) that the notice must:

...set out the rule, enactment or other jurisdictional authority relied onfor the orders sought and any legal arguments on which the orderssought should be granted.

34 This language is largely replicated in the instructions included inForm 32, the notice of application form.

35 I agree with counsel for Wang that the legal basis set out in the de-fendants’ notice of application falls short of what is contemplated by R.8-4(4)(c). It constitutes a bare recitation of the Rules relied on and only ageneral reference to the law of contract and the law of conflicts. There isno articulation of how this law is said to apply in the circumstances ofthis case or even a skeletal outline of why the defendants say that the testfor forum non conveniens is met.

36 That said, it has been held that the requirements of R. 8-4(4) are di-rectory and not mandatory, thus I would not find the notice of applicationto be a nullity on this ground (Sutherland v. Banman, 2008 BCSC 1194(B.C. Master) at para. 8 citing Braunizer v. Canadian Pacific Ltd.(1995), 10 B.C.L.R. (3d) 195 (B.C. S.C. [In Chambers]) at para. 7).

37 The real question, as it was before Master Bouck in Zecher, iswhether the legal basis set out in the notice sufficiently identifies for theopposing party the case that it has to meet in terms of the relief sought.As I have noted, the defendants’ legal basis is, at best, bare bones. How-ever, when combined with the facts set out in the notice, as well as therelief sought in Part 1, I do not think that Wang can fairly be said to havebeen caught off guard by the application or the arguments advanced insupport at the hearing.

38 In the circumstances, I would not dismiss the defendants’ applicationon this ground. However, my conclusion in this regard should in no way


be seen as approving of the approach to articulating the legal basisadopted in the defendants’ notice and I endorse Master Bouck’s com-ments in Zecher about the need for proper particularization.

Did the defendants attorn to the jurisdiction and, if so, are they nowprecluded from arguing forum non conveniens?

39 Wang cites O’Brien v. Simard, 2006 BCCA 410 (B.C. C.A. [InChambers]), for the proposition that by attorning to the jurisdiction, aparty is foreclosed from arguing forum non conveniens (at para. 9):

...it is clear that the intention of the drafters [of R. 14, the predecessorto the current R. 21-8] was to preserve the common law rule that theright to challenge jurisdiction on the basis of forum non conveniensexpires with attornment. To use the language of [R. 14 (6.4) (now R.21-8(5)], once the defendant “submits to the jurisdiction of the court”he is precluded from asking the court to decline jurisdiction as op-posed to contending that the court lacks jurisdiction as a matter oflaw.

See also McIntyre v. Richardson Estate, 2012 BCSC 1347 (B.C. S.C.) atparas. 57-58.

40 Wang submits that the defendants attorned to this jurisdiction bybringing the application to set aside the garnishing order because as partof their application they contested the merits of Wang’s claim. Further,in terms of the relief sought in that application, the defendants did notsimply ask that the garnishing order be set aside but included in theprayer for relief a request for “[s]uch further and other relief as to thisHonourable Court may deem just.”

41 Wang relies on the decision of Mr. Justice Johnston in Balla v. FitchResearch Corp., 2006 BCSC 275 (B.C. S.C.), where he found that a sim-ilar prayer for relief on an application could have permitted the defendantto go beyond the purely procedural aspects of its claim and to seek sub-stantive relief (at para. 57). In the circumstances, Johnston J. found thatthe defendant had attorned to the jurisdiction.

42 In his reasons, Johnston J. cited the Court of Appeal decision in Mid-Ohio Imported Car Co. v. Tri-K Investments Ltd., [1995] B.C.J. No.2199 (B.C. C.A.), where Mr. Justice Wood said at para. 15:

...the law in British Columbia today entitles a party to an action todispute an order for service ex juris upon him of an originating pro-ceeding, and to challenge jurisdiction, both simpliciter and forumconveniens, without the risk that bringing such applications will con-


stitute acceptance by him of the jurisdiction of the court. Beyondthat, the common law prevails such that unless an appearance beforethe court is made under duress, it will be regarded as voluntary.

43 For their part, the defendants cite the decision of Madam Justice Rossin Coulson Aircrane Ltd. v. Pacific Helicopter Tours Inc., 2006 BCSC961 (B.C. S.C.), where she held that merely including a general prayerfor “further and other relief” in a notice of motion would not entitle thatparty to seek relief on the merits and thus would not amount to attorn-ment. However, in that case, Madam Justice Ross held that the defendanthad in fact attorned because it had defended the claim on the merits andhad availed itself of the Rules of Court in relation to discovery of docu-ments (at para. 37).

44 In my view, the defendants did not attorn to the jurisdiction of thiscourt by way of their application to set aside the garnishing order. Suchan application falls within the exception identified by Wood J.A. in theMid-Ohio Imported Car Co. decision as being made under duress. In thatdecision, Wood J.A. referred at para. 8 to the historical definition of du-ress as being limited to “those circumstances in which property belong-ing to the protesting party had been seized by process and was in thecustody of the foreign court.”

45 More recently, in Schwarzinger v. Bramwell, 2011 BCSC 283 (B.C.S.C.) [Schwarzinger], at para. 49, Madam Justice Gray noted the defini-tion of duress taken from the English decision of Pao On v. Lau YiuLong, [1979] 3 All E.R. 65 (Hong Kong P.C.), at 78: “Duress, whateverform it takes, is a coercion of the will so as to vitiate consent.” MadamJustice Gray also noted that this definition had been adopted in B.C. inByle v. Byle (1990), 65 D.L.R. (4th) 641 (B.C. C.A.), at 651.

46 In Schwarzinger, Madam Justice Gray held that an application by thedefendants to vary a worldwide Mareva injunction did not constitute at-tornment because the application was brought under duress. The scope ofthe injunction was such that the defendants were precluded from carryingon in the ordinary course of business and they were in effect compelledto bring the application in order to be able to carry on their day-to-daybusiness operations.

47 In the case at bar, the effect of the garnishing order obtained by Wangwas to seize significant assets belonging to the defendants, which seizurethey alleged caused them undue hardship. In the circumstances, the de-fendants had no alternative but to come before this court to seek to havethe garnishing order set aside.


48 It is not a case, as Wang characterized it, of the defendants availingthemselves of this court’s process and benefitting from the exercise ofjudicial discretion in their favour. Rather, it was Wang who invoked thecourt’s jurisdiction initially by obtaining the garnishing order, again leav-ing the defendants with no recourse but to come before the court to re-cover their property.

49 It is true that in their application to set aside the garnishing order, thedefendants contested the merits of Wang’s claim. For example, they de-nied that any money was in fact owing to Wang. However, they did soonly in the context of seeking to establish grounds for setting aside thegarnishing order. I do not think that it can be said that the defendants’application was concerned with the merits of Wang’s claim.

50 In my view, the inclusion in the prayer for relief in their notice ofapplication of a request for “such further and other relief as to thisHonourable Court may deem just” does not change the character of theapplication. Given the narrow scope of the application, I do not think thatthis general prayer would have permitted the defendants to seek any sortof relief in respect of the merits of Wang’s claim. As such, it is not suffi-cient in my view to constitute attornment on the part of the defendants.

Should the Court decline to exercise its discretion to hear the matter?51 Having found that the defendants have not attorned to the jurisdiction

of the court, the issue then is whether they have established that there is amore appropriate forum in which to have Wang’s claim determined.

52 In considering this issue, I start with the proposition that a plaintiffhas a prima facie right to proceed in his or her chosen forum and that adefendant asking the court to exercise its discretion to decline jurisdic-tion has a significant onus to meet.

53 In Club Resorts Ltd., the Supreme Court of Canada said the follow-ing:

[103] If a defendant raises an issue of forum non conveniens, the bur-den is on him or her to show why the court should decline to exerciseits jurisdiction and displace the forum chosen by the plaintiff. Thedefendant must identify another forum that has an appropriate con-nection under the conflicts rules and that should be allowed to dis-pose of the action. The defendant must show, using the same analyti-cal approach the court followed to establish the existence of a realand substantial connection with the local forum, what connectionsthis alternative forum has with the subject matter of the litigation.


Finally, the party asking for a stay on the basis of forum non con-veniens must demonstrate why the proposed alternative forum shouldbe preferred and considered to be more appropriate.

. . .

[108] Regarding the burden imposed on a party asking for a stay onthe basis of forum non conveniens, the courts have held that the partymust show that the alternative forum is clearly more appropriate. Theexpression “clearly more appropriate” is well established. It was usedin Spiliada and Amchem. On the other hand, it has not always beenused consistently and does not appear in the CJPTA or any of thestatutes based on the CJPTA, which simply require that the partymoving for a stay establish that there is a “more appropriate forum”elsewhere. Nor is this expression found in art. 3135 of the Civil Codeof Quebec, which refers instead to the exceptional nature of thepower conferred on a Quebec authority to decline jurisdiction: “... itmay exceptionally and on an application by a party, decline jurisdic-tion ...”.

[109] The use of the words “clearly” and “exceptionally” should beinterpreted as an acknowledgment that the normal state of affairs isthat jurisdiction should be exercised once it is properly assumed. Theburden is on a party who seeks to depart from this normal state ofaffairs to show that, in light of the characteristics of the alternativeforum, it would be fairer and more efficient to do so and that theplaintiff should be denied the benefits of his or her decision to selecta forum that is appropriate under the conflicts rules. The court shouldnot exercise its discretion in favour of a stay solely because it finds,once all relevant concerns and factors are weighed, that comparableforums exist in other provinces or states. It is not a matter of flippinga coin. A court hearing an application for a stay of proceedings mustfind that a forum exists that is in a better position to dispose fairlyand efficiently of the litigation. But the court must be mindful thatjurisdiction may sometimes be established on a rather low thresholdunder the conflicts rules. Forum non conveniens may play an impor-tant role in identifying a forum that is clearly more appropriate fordisposing of the litigation and thus ensuring fairness to the partiesand a more efficient process for resolving their dispute.

54 As suggested in the final sentence of the above passage, the objectiveof the court in deciding a forum non conveniens application is to ensurefairness to the parties and the efficient resolution of the dispute.


55 I have summarized above the respective positions of the parties and Iwill not repeat those arguments in detail here. I will however assess thefactors set out in s. 11 of the CJPTA.

The comparative convenience and expense for the parties to theproceeding and for their witnesses, in litigating in the court or in anyalternative forum (s. 11(2)(a))

56 The defendants’ principal submission under this factor is that bothWang and Sun reside in China and that the circumstances underlying thedispute occurred in China. However, in their notice of application seek-ing to set aside the garnishing order, the defendants alleged that both Sunand Hou are permanent residents of B.C. and that Hou has been living inVancouver since 2006 and is receiving cancer treatments here.

57 Further, no evidence has been adduced by the defendants as to thecomparative cost or convenience to them or to any proposed witnesses oflitigating the matter here or in China.

58 On this point, it would appear that the two main witnesses will beWang and Sun, the principals to the Commission Contract. As notedabove, the defendants have previously alleged that Sun is a permanentresident of B.C. and there is no evidence that Wang would be undulyinconvenienced by the matter being heard here. Indeed, his preference isreflected in the fact that he commenced his action in this court.

The law to be applied to issues in the proceeding (s. 11(2)(b))59 The Commission Contract does not include a choice of law provision

but I agree with the defendants that the law governing the contract islikely that of China, given the circumstances in which the contract wascreated.

60 That said, the defendants have not adduced any evidence to establishthat the law of contract in China is different from the law in B.C., or thatthis court would have any difficulty interpreting and applying that law.

The desirability of avoiding a multiplicity of legal proceedings andconflicting decisions indifferent courts (ss. 11(2)(c) and (d))

61 This is the central thrust of the defendants’ position. They say that thevalidity of the Park Sale Contract will be determined in the ongoing Chi-nese Proceeding and that the outcome of that proceeding is directly rele-vant to Wang’s claim under the Commission Contract. The defendantssubmit further that to permit Wang’s claim under the Commission Con-


tract to proceed in this court is to invite the possibility of inconsistentoutcomes, particularly if the Chinese court finds that the Park Sale Con-tract is void.

62 I agree with Wang that based on how his claim under the Commis-sion Contract is pleaded, that claim is not dependent on a finding that theunderlying Park Sale Contract is valid. In his notice of civil claim, Wangpleads that his entitlement to the Commission arose if and when Coastalsigned an agreement to purchase the Park and paid $5 million into a bankaccount specified by Sun. It is Wang’s position that this obligation re-mains in force regardless of whether the Park Sale Contract is valid orthe sale transaction proceeds or does not proceed. Accordingly, the out-come of the Chinese Proceeding will have no bearing on the likelihoodof Wang’s claim succeeding.

63 I note further that Wang is not a party to the Chinese Proceeding andit is not clear, based on the material before me, that Wang’s claim couldbe joined with that proceeding. For example, the claims for breach oftrust, knowing assistance and receipt and fraudulent conveyance areclaims that clearly arose in B.C. and are very different in substance fromthe issues before the Chinese court.

64 The Court of Appeal discussed the meaning of “parallel proceedings”in Westec Aerospace Inc. v. Raytheon Aircraft Co., 1999 BCCA 243(B.C. C.A.) aff’d without reasons [1999] S.C.C.A. No. 298 (S.C.C.).There, the court allowed an appeal from a decision of a judge of thiscourt denying an application for a stay due to the existence of parallelproceedings in the United States. Speaking for the court, Madam JusticeRowles said:

[26] This issue arises from Westec’s contention that the Kansas pro-ceedings are not truly “parallel” in the sense that term was used in472900 B.C. Ltd. v. Thrifty Canada. Westec argues that it is suing inBritish Columbia on a contract, the existence of which Raytheondoes not even acknowledge in its Kansas action. On the principle thatcontracts are treated separately in law, Westec argues that there arenot parallel proceedings in this case which would trigger the analysisin 472900 B.C. Ltd. v. Thrifty Canada.

[27] With respect, the narrow meaning Westec gives to the words“parallel proceedings” flies in the face of the juridical use of the termand the policy rationale that supports it. Lord Diplock, to repeat hisquotation from The Abidin Daver, supra, described parallel proceed-ings as being, “a suit about a particular subject matter between aplaintiff and a defendant”, and earlier in his Lordship’s reasons, at


476, as being, “litigation between the same parties about the samesubject matter in which the roles of plaintiff and defendant were re-versed”. The present case clearly falls within that description.

[28] Taking a narrow, particular, and formalistic approach to deter-mining whether proceedings are parallel is also not consonant withthe policy rationale for avoiding parallel proceedings. There are twopolicy concerns with parallel proceedings. Litigating the same dis-pute twice, in two sets of proceedings in different jurisdictions cre-ates obvious inefficiencies and waste. More importantly, parallel pro-ceedings raise the possibility of inconsistent or conflicting judgmentsbeing given. In The Abidin Daver, supra, Lord Diplock, at 477 (AllE.R.), said that the danger of conflicting decisions if two actionswere to proceed concurrently in different jurisdictions is a significantone and that:

Comity demands that such a situation should not be per-mitted to occur as between courts of two civilised andfriendly states. It is a recipe for confusion and injustice.

[29] If additional costs and inconvenience and the possibility of con-flicting decisions are to be avoided, the focus of the inquiry as towhether there are parallel proceedings should remain on the sub-stance of the dispute and not on how it is framed in any given action.

65 While I am mindful of the court’s admonition to avoid applying anarrow and overly formalistic approach to determining whether proceed-ings are parallel, it cannot be said that Wang’s claim in this court andSun’s claim in the Chinese Proceeding effectively involve the same par-ties litigating the same dispute in different courts. In the circumstances, Ifind that the Chinese Proceeding is not a “parallel proceeding” and thatpermitting Wang’s action to proceed in B.C. would not be inviting a mul-tiplicity of proceedings or possible inconsistent outcomes.

The enforcement of an eventual judgment (s. 11(2)(e))66 As evidenced by the previous garnishing order proceeding, the de-

fendants have substantial assets in this jurisdiction. Of particular note,the property that is the subject of the fraudulent conveyance claim is lo-cated in B.C. and as such this factor weighs in favor of this court retain-ing jurisdiction.


The fair and efficient working of the Canadian legal system as a whole(s. 11(2)(9))

67 This factor is not relevant because the other potential forum is not inCanada.

Other relevant circumstances68 The other circumstances relied on by the defendants are really just

variations of the factors articulated under s. 11 of the CJPTA and turnlargely on the existence of the Chinese Proceeding. None of those factorstip the balance in favor of this court exercising its discretion to declinejurisdiction.

Summary and Conclusion69 In summary, the defendants have not established that there is another

forum that is clearly more appropriate for the determination of Wang’sclaim under the Commission Contract so as to displace Wang’s primafacie right to the forum of his choice.

70 The defendants’ application is therefore dismissed.

Application dismissed.

WESTERN WEEKLY REPORTS

Documents