Western Weekly Reports

WESTERN WEEKLY REPORTS Reports of Cases Decided in the Courts of Western Canada and Certain Decisions of the Supreme Court of Canada 2012-VOLUME 6 (Cited [2012] 6 W.W.R.)

All cases of value from the courts of Western Canada and appeals therefrom to the Supreme Court of Canada

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[Indexed as: U.F.C.W., Local 401 v. Alberta (Information & Privacy Commissioner)] United Food and Commercial Workers, Local 401 (Respondent / Applicant) and Information and Privacy Commissioner (Respondent / Respondent) and Attorney General of Alberta (Appellant / Respondent) Alberta Court of Appeal Docket: Edmonton Appeal 1103-0211-AC 2012 ABCA 130 Frans Slatter, J.D. Bruce McDonald, Donna Read JJ.A. Heard: January 13, 2012 Judgment: April 30, 2012 Administrative law –––– Standard of review — Correctness –––– Unionized employees picketed employer, casino — Union videotaped and photographed picket lines — Union advised that images of persons crossing picket line could be placed on its website — Union made posters featuring “mug shot” of vice president of employer, and his image was used in union publications — Com- plaints were made under Personal Information Protection Act — Adjudicator found statutory exceptions did not apply — Union successfully applied for judicial review, alleging that exceptions infringed s. 2(b) of Canadian Charter of Rights and Freedoms — Chambers judge struck down certain portions of Act — Attorney General of Alberta appealed — Appeal allowed in part — In place of declarations of invalidity, it was declared that application of Act to activities of union was unconstitutional — As adjudicator did not purport to balance Charter with privacy values, there was no truth to decision to review, either for reasonableness, disproportionality, or correctness — Accordingly, standard of review of compliance of decision with Charter was reviewed for correctness — To extent that decision of chambers judge engaged consideration of constitutionality of Act and engaged in review of decision for constitutional compliance, that decision also had to be reviewed for correctness. Privacy and freedom of information –––– Provincial privacy legislation — Constitutional issues –––– Unionized employees picketed employer, casino — Union videotaped and photographed picket lines — Union advised that images of persons crossing picket line could be placed on its website — Union made posters featuring “mug shot” of vice president of employer, and his image was used in union publications — Complaints were made under Personal Informa- tion Protection Act — Adjudicator found statutory exceptions did not apply — Union successfully applied for judicial review, alleging that exceptions infringed s. 2(b) of Canadian Charter of Rights and Freedoms — Chambers judge struck down certain portions of Act — Attorney General of Alberta appealed — Ap- peal allowed in part — In place of declarations of invalidity, it was declared that 212 WESTERN WEEKLY REPORTS [2012] 6 W.W.R. application of Act to activities of union was unconstitutional — Chambers judge assessed constitutionality of Act based on inaccurate premise about what Act prohibits, and what adjudicator had ordered — Even though union’s purpose was not primarily journalistic, to extent that it did engage in journalistic activities, it was entitled to rely on exemption in Act for that purpose — Further, information could still be used for journalistic purposes or legal proceedings, as those were permitted uses — Information could not, however, be used for educational purposes or leverage in collective bargaining process, as those activities were not exempt. Privacy and freedom of information –––– Provincial privacy legislation — Collection of personal information — Statutory exceptions –––– Unionized employees picketed employer, casino — Union videotaped and photographed picket lines — Union advised that images of persons crossing picket line could be placed on its website — Union made posters featuring “mug shot” of vice president of employer, and his image was used in union publications — Com- plaints were made under Personal Information Protection Act — Adjudicator found statutory exceptions did not apply — Union successfully applied for judicial review, alleging that exceptions infringed s. 2(b) of Canadian Charter of Rights and Freedoms — Chambers judge struck down certain portions of Act — Attorney General of Alberta appealed — Appeal allowed in part — In place of declarations of invalidity, it was declared that application of Act to activities of union was unconstitutional — It was not helpful to analyze this situation as “journalism” — With regard to meaning of “journalistic” purposes, it was unreasonable to think that Legislature intended term to be so wide as to encompass everything within phrase “freedom of opinion and expression” — Issue was whether it was justifiable to restrain expression in support of labour relations and collective bargaining activities such as existed here. Labour and employment law –––– Labour law — Industrial disputes — Picketing — Legality — Effect of Charter of Rights and Freedoms –––– Un- ionized employees picketed employer, casino — Union videotaped and photographed picket lines — Union advised that images of persons crossing picket line could be placed on its website — Union made posters featuring “mug shot” of vice president of employer, and his image was used in union publications — Complaints were made under Personal Information Protection Act — Adjudica- tor found statutory exceptions did not apply — Union successfully applied for judicial review, alleging that exceptions infringed s. 2(b) of Canadian Charter of Rights and Freedoms — Chambers judge struck down certain portions of Act — Attorney General (AG) of Alberta appealed — Appeal allowed in part — In place of declarations of invalidity, it was declared that application of Act to activities of union was unconstitutional — Union had established prima facie breach of its s. 2 Charter rights — AG was not able to justify infringements of free expression — Protection of personal information was no more important than collective bargaining and right of union to communicate its message to U.F.C.W., Local 401 v. Alta (IPC) 213

public — People did not have right to keep secret everything they did in public, such as crossing picket lines — Adjudicator’s order had disproportionate effect on union’s Charter rights, rising to level of unreasonableness. Constitutional law –––– Charter of Rights and Freedoms — Nature of remedies under Charter — General principles –––– Unionized employees picketed employer, casino — Union videotaped and photographed picket lines — Union advised that images of persons crossing picket line could be placed on its website — Union made posters featuring “mug shot” of vice president of employer, and his image was used in union publications — Complaints were made under Personal Information Protection Act — Adjudicator found statutory exceptions did not apply — Union successfully applied for judicial review, alleging that exceptions infringed s. 2(b) of Canadian Charter of Rights and Freedoms — Chambers judge struck down certain portions of Act — Attorney General of Al- berta appealed — Appeal allowed in part — In place of declarations of invalidity, it was declared that application of Act to activities of union was unconstitutional — Striking out or reading down portions of Act were not attractive options — Artificially expanding meaning of “journalism” was not helpful solution. Cases considered by Frans Slatter J.A.: A.T.A. v. Alberta (Information & Privacy Commissioner) (2011), 339 D.L.R. (4th) 428, 2011 CarswellAlta 2068, 2011 CarswellAlta 2069, 2011 SCC 61, (sub nom. Alberta Teachers’ Association v. Information & Privacy Commissioner (Alta.)) 424 N.R. 70, 52 Alta. L.R. (5th) 1, 28 Admin. L.R. (5th) 177, [2012] 2 W.W.R. 434, (sub nom. Alberta (Information & Privacy Commissioner) v. Alberta Teachers’ Association) [2011] 3 S.C.R. 654, [2011] S.C.J. No. 61 (S.C.C.) — considered Alliance Pipeline Ltd. v. Smith (2011), 328 D.L.R. (4th) 1, 56 C.E.L.R. (3d) 161, 16 Admin. L.R. (5th) 157, [2011] 1 S.C.R. 160, 2011 SCC 7, 2011 Car- swellNat 202, 2011 CarswellNat 203, 102 L.C.R. 1, 412 N.R. 66, [2011] S.C.J. No. 7, [2011] A.C.S. No. 7 (S.C.C.) — followed Aubry c. Editions´ Vice Versa Inc. (1998), (sub nom. Aubry v. Editions´ Vice- Versa inc.) 157 D.L.R. (4th) 577, (sub nom. Aubry v. Editions´ Vice-Versa inc.) 78 C.P.R. (3d) 289, (sub nom. Aubry v. Editions´ Vice-Versa inc.) 224 N.R. 321, 1998 CarswellQue 4806, 1998 CarswellQue 4807, (sub nom. Aubry v. Editions´ Vice-Versa Inc.) 50 C.R.R. (2d) 225, (sub nom. Aubry v. Editions´ Vice-Versa inc.) [1998] 1 S.C.R. 591, 5 B.H.R.C. 437, 45 C.C.L.T. (2d) 119, [1998] S.C.J. No. 30 (S.C.C.) — referred to Canada (Attorney General) v. Mowat (2011), 93 C.C.E.L. (3d) 1, D.T.E. 2011T- 708, 337 D.L.R. (4th) 385, 26 Admin. L.R. (5th) 1, 2011 CarswellNat 4190, 2011 CarswellNat 4191, 2011 SCC 53, 422 N.R. 248, (sub nom. C.H.R.C. v. Canada (A.G.)) 2011 C.L.L.C. 230-043, (sub nom. Canada (Canadian Human Rights Commission) v. Canada (Attorney General)) [2011] 3 S.C.R. 471, [2011] S.C.J. No. 53, [2011] A.C.S. No. 53 (S.C.C.) — referred to 214 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

Dor´e c. Qu´ebec (Tribunal des professions) (2012), 2012 CarswellQue 2048, 2012 CarswellQue 2049, 2012 SCC 12 (S.C.C.) — considered Fraser v. Ontario (Attorney General) (2011), D.T.E. 2011T-294, 331 D.L.R. (4th) 64, (sub nom. A.G. (Ontario) v. Fraser) 2011 C.L.L.C. 220-029, 275 O.A.C. 205, 415 N.R. 200, 91 C.C.E.L. (3d) 1, (sub nom. Ontario (Attorney General) v. Fraser) [2011] 2 S.C.R. 3, 233 C.R.R. (2d) 237, 2011 Carswell- Ont 2695, 2011 CarswellOnt 2696, 2011 SCC 20, [2011] S.C.J. No. 20, [2011] A.C.S. No. 20 (S.C.C.) — referred to K Mart Canada Ltd. v. U.F.C.W., Local 1518 (1999), (sub nom. U.F.C.W., Local 1518 v. KMart Canada Ltd.) 66 C.R.R. (2d) 205, (sub nom. United Food & Commercial Workers, Local 1518 v. KMart Canada Ltd.) 128 B.C.A.C. 1, (sub nom. United Food & Commercial Workers, Local 1518 v. KMart Canada Ltd.) 208 W.A.C. 1, (sub nom. U.F.C.W., Local 1518 v. KMart Canada Ltd.) [1999] 2 S.C.R. 1083, 7 B.H.R.C. 384, (sub nom. United Food & Commercial Workers, Local 1518 v. KMart Canada Ltd.) 245 N.R. 1, (sub nom. U.F.C.W., Local 1518 v. KMart Canada Ltd.) 176 D.L.R. (4th) 607, (sub nom. United Food & Commercial Workers, Local 1518 v. KMart Canada Ltd.) 99 C.L.L.C. 220-064, 66 B.C.L.R. (3d) 211, [1999] 9 W.W.R. 161, 1999 CarswellBC 1909, 1999 CarswellBC 1910, [1999] S.C.J. No. 44 (S.C.C.) — referred to Khosa v. Canada (Minister of Citizenship & Immigration) (2009), 82 Admin. L.R. (4th) 1, 2009 SCC 12, 2009 CarswellNat 434, 2009 CarswellNat 435, 304 D.L.R. (4th) 1, 77 Imm. L.R. (3d) 1, 385 N.R. 206, (sub nom. Canada (Citizenship & Immigration) v. Khosa) [2009] 1 S.C.R. 339, [2009] S.C.J. No. 12 (S.C.C.) — followed Leon’s Furniture Ltd. v. Alberta (Information & Privacy Commissioner) (2011), 45 Alta. L.R. (5th) 1, 22 Admin. L.R. (5th) 11, [2011] 9 W.W.R. 668, 502 A.R. 110, 517 W.A.C. 110, 2011 ABCA 94, 2011 CarswellAlta 453 (Alta. C.A.) — referred to Martin v. Nova Scotia (Workers’ Compensation Board) (2003), 2003 Car- swellNS 360, 2003 CarswellNS 361, 2003 SCC 54, (sub nom. Workers’ Compensation Board (N.S.) v. Martin) 217 N.S.R. (2d) 301, (sub nom. Workers’ Compensation Board (N.S.) v. Martin) 683 A.P.R. 301, 310 N.R. 22, (sub nom. Nova Scotia (Workers’ Compensation Board) v. Martin) [2003] 2 S.C.R. 504, 110 C.R.R. (2d) 233, (sub nom. Nova Scotia (Workers’ Compensation Board) v. Martin) 231 D.L.R. (4th) 385, 28 C.C.E.L. (3d) 1, 4 Admin. L.R. (4th) 1, REJB 2003-48214, [2003] S.C.J. No. 54 (S.C.C.) — considered New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, (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 CarswellNB 124, U.F.C.W., Local 401 v. Alta (IPC) 215

2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. 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 Pepsi-Cola Canada Beverages (West) Ltd. v. R.W.D.S.U., Local 558 (2002), (sub nom. R.W.D.S.U., Local 558 v. Pepsi-Cola Canada Beverages (West) Ltd.) 2002 SCC 8, 2002 CarswellSask 22, 2002 CarswellSask 23, 217 Sask. R. 22, 265 W.A.C. 22, (sub nom. R.W.D.S.U., Local 558 v. Pepsi-Cola Canada Beverages (West) Ltd.) [2002] 1 S.C.R. 156, 2002 C.L.L.C. 220- 008, 280 N.R. 333, [2002] 4 W.W.R. 205, 208 D.L.R. (4th) 385, (sub nom. R.W.D.S.U., Local 558 v. Pepsi-Cola Canada Beverages (West) Ltd.) 90 C.R.R. (2d) 189, 78 C.L.R.B.R. (2d) 161, [2002] S.C.J. No. 7, REJB 2002- 27591 (S.C.C.) — referred to PHS Community Services Society v. Canada (Attorney General) (2011), 272 C.C.C. (3d) 428, 336 D.L.R. (4th) 385, 86 C.R. (6th) 223, [2011] 12 W.W.R. 43, 22 B.C.L.R. (5th) 213, 421 N.R. 1, 2011 SCC 44, 2011 CarswellBC 2443, 2011 CarswellBC 2444, 310 B.C.A.C. 1, 526 W.A.C. 1, (sub nom. Canada (Attorney General) v. PHS Community Services Society) [2011] 3 S.C.R. 134, (sub nom. Canada (Attorney General) v. PHS Community Services Society) 244 C.R.R. (2d) 209, [2011] S.C.J. No. 44, [2011] A.C.S. No. 44 (S.C.C.) — referred to R. v. National Post (2010), 401 N.R. 104, 2010 CarswellOnt 2776, 2010 Cars- wellOnt 2777, 2010 SCC 16, [2010] 1 S.C.R. 477, (sub nom. National Post v. Canada) 254 C.C.C. (3d) 469, (sub nom. National Post v. Canada) 318 D.L.R. (4th) 1, 262 O.A.C. 1, 211 C.R.R. (2d) 1, 74 C.R. (6th) 1, 103 O.R. (3d) 398 (note) (S.C.C.) — referred to R. v. Oakes (1986), [1986] 1 S.C.R. 103, 26 D.L.R. (4th) 200, 65 N.R. 87, 14 O.A.C. 335, 24 C.C.C. (3d) 321, 50 C.R. (3d) 1, 19 C.R.R. 308, 53 O.R. (2d) 719, 1986 CarswellOnt 95, 1986 CarswellOnt 1001, [1986] S.C.J. No. 7, EYB 1986-67556 (S.C.C.) — followed Stubicar v. Alberta (Information & Privacy Commissioner) (2008), 81 Admin. L.R. (4th) 150, 97 Alta. L.R. (4th) 23, 2008 CarswellAlta 1625, 2008 ABCA 357, 440 A.R. 190, 438 W.A.C. 190, [2008] A.J. No. 1166 (Alta. C.A.) — referred to U.F.C.W., Local 401, Re (2009), 2009 CarswellAlta 2354, [2009] A.I.P.C.D. No. 10 (Alta. I.P.C.) — referred to Statutes considered: Administrative Procedures and Jurisdiction Act, R.S.A. 2000, c. A-3 Generally — referred to s. 10(d) “question of constitutional law” — considered s. 11 — 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 to s. 1 — considered 216 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

s. 2 — considered s. 2(b) — considered Charte des droits et libertés de la personne, L.R.Q., c. C-12 en général — referred to Freedom of Information and Protection of Privacy Act, R.S.A. 2000, c. F-25 Generally — referred to Labour Relations Code, R.S.A. 2000, c. L-1 s. 84(1) — referred to Personal Information Protection Act, S.A. 2003, c. P-6.5 Generally — referred to s. 1(1)(k) “personal information” — referred to s. 3 — considered s. 4(3) — considered s. 4(3)(c) — considered s. 5(5) — considered s. 7 — considered s. 8 — considered s. 14(d) — considered s. 14(e) — considered s. 17(d) — referred to s. 20(f) — referred to s. 20(m) — referred to Regulations considered: Personal Information Protection Act, S.A. 2003, c. P-6.5 Personal Information Protection Act Regulation, Alta. Reg. 366/2003 Generally — referred to s. 7 — referred to

APPEAL by Attorney General from judgment reported at U.F.C.W., Local 401 v. Alberta (Information & Privacy Commissioner) (2011), 2011 ABQB 415, 2011 CarswellAlta 1486, 339 D.L.R. (4th) 279, 2011 C.L.L.C. 210-055, 53 Alta. L.R. (5th) 235, (sub nom. United Food & Commercial Workers, Local 401 v. Privacy Commissioner (Alta.)) 509 A.R. 150, [2012] 4 W.W.R. 324, 32 Admin. L.R. (5th) 107 (Alta. Q.B.), granting union’s application for judicial review.

R.S. Wiltshire, for Appellant G.J. Gray, Q.C., V.A. Cosco, for Respondent, United Food and Commercial Workers, Local 401 G.S. Solomon, Q.C., for Respondent, Information and Privacy Commissioner U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 217

Frans Slatter J.A.:

1 The respondent union videotaped people crossing its picket line, and suggested it might post those recordings on the Internet. The issue on this appeal is whether the union has a constitutionally protected right to collect images of persons crossing the picket line, and therefore whether an order by the respondent Commissioner preventing it from doing so should be set aside.

Facts 2 The union represents the workers at the Palace Casino in Edmonton. During 2006, collective bargaining broke down and the workers went on strike. During the strike, both the union and the employer videotaped the picket line. The evidence disclosed that in Alberta such taping is standard practice during strikes. The union posted signs in the area stating that images of those who the crossed picket line might be placed on a website entitled “www.CasinoScabs.ca”. 3 The casino is located in a shopping mall, and access to the casino doors is obtained through the mall’s hallways. Several persons who were recorded crossing the picket line filed complaints with the Commissioner under the Personal Information Protection Act, SA 2003, c. P-6.5. The complainants included employees and officers of the employer, as well as members of the public. Notwithstanding the warning sign, the union did not actually post recordings of any of the complainants on the website. 4 The respondent Commissioner directed an inquiry, and an Adjudica- tor concluded that the union did not have the right to collect and use the recordings: U.F.C.W., Local 401, Re [2009 CarswellAlta 2354 (Alta. I.P.C.)], Order P2008-008. The union applied for judicial review, arguing that the effect or interpretation of the Act adopted by the Adjudicator violated its constitutional rights under the Charter of Rights. The chambers judge agreed, and struck down certain portions of the Act: U.F.C.W., Local 401 v. Alberta (Information & Privacy Commissioner), 2011 ABQB 415, 509 A.R. 150 (Alta. Q.B.). The Attorney General of Alberta then launched this appeal. 218 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The Personal Information Protection Act 5 The Personal Information Protection Act expressly states its overall purposes. The most important provision is s. 3: 3. The purpose of this Act is to govern the collection, use and disclosure of personal information by organizations in a manner that recognizes both the right of an individual to have his or her personal information protected and the need of organizations to collect, use or disclose personal information for purposes that are reasonable. The statute recognizes two competing values: the right to protect information, and the need to use it. The Act does not expressly refer to how it interacts with the right to free expression. 6 The Act is a statute of general application with a wide reach. The breadth of its reach arises firstly from the very wide definition of “personal information” in the statute: 1(1) In this Act, ... (k) “personal information” means information about an identifiable individual; ... The Act also regulates a wide range of organizations. It does not apply to “public bodies” (which are regulated by the Freedom of Information and Protection of Privacy Act, RSA 2000, c. F-25), nor individuals not acting in a commercial capacity. But other than that, s. 4 states that it does apply to “every organization and in respect of all personal information”, subject to some listed exemptions and exceptions. 7 One exemption of relevance to this appeal is for “journalistic purposes”: 4(3) This Act does not apply to the following: ... (c) the collection, use or disclosure of personal information ... if the collection, use or disclosure, as the case may be, is for journalistic purposes and for no other purpose; ... The Act is therefore completely inapplicable to “journalistic” information. 8 With respect to the organizations and information it does cover, the basic tenor of the Act found in s. 7 is that the “collection, use and disclosure” of all personal information is prohibited unless the organization has the “reasonable consent” of the individual, or the information in question U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 219

is “exempted” under the Act. There is in addition an overriding limitation in s. 5(5) that: “In meeting its responsibilities under this Act, an organization must act in a reasonable manner”, and the requirement for “reasonableness” is carried forward into other provisions that enable the collection, use or disclosure of personal information. 9 There are some sections of the Act that dispense with the need for consent, or which recognize various forms of “implied consent”. Section 14 lists a number of instances where for policy reasons consent is not required: 14 An organization may collect personal information about an individual without the consent of that individual but only if one or more of the following are applicable: (d) the collection of the information is reasonable for the purposes of an investigation or a legal proceeding; (e) the information is publicly available as prescribed or otherwise determined by the regulations; ...... Unlike information obtained for journalistic purposes (which is outside the operation of the Act), the type of information listed in s. 14 is subject to the Act, but the need for consent is dispensed with. 10 Despite the superficial breadth of the exception for “information publicly available”, that provision has no application here. The information that is prescribed as being “publicly available” is in fact very narrow, and excludes a great deal of information within the literal meaning of the phrase: Personal Information Protection Act Regulation, Alta Reg 366/2003, s. 7. Notwithstanding that the persons crossing the picket line did so in a public place, and could have been observed by any member of the public, that information is not “publicly available” within the meaning of the Regulation. Under the Act, “personal” information is not the same thing as “private” information. 11 In this case the union argued that it was entitled to record the persons crossing the picket line. It argued, firstly, that the recording of the picket line was done for “journalistic purposes”, and therefore its activities were completely outside the operation of the Act under s. 4. Alternatively, it argued that the recording of the picket line was done in anticipation of legal proceedings (for example, before the Labour Relations Board), or for investigations arising out of the strike. If the recording of the picket lines was not otherwise permitted, the union argued that the Act is too sweeping in its reach, and in violation of its Charter rights. As such, 220 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

portions of the Act had to be struck out, or read down, or some other constitutional exemption had to be made available to the union.

The Decision of the Adjudicator 12 The Adjudicator issued lengthy reasons in support of the conclusion that the union was not entitled to videotape the picket line. She confirmed, at para. 105, her previous decision not to refer the issue to the Labour Relations Board, even though that Board would have jurisdiction to consider the constitutional issues. 13 The Adjudicator first resolved a preliminary issue. She rejected the argument that all of the union’s activities were exempt from the operation of the Act because they were related to “journalistic purposes”. While the Adjudicator was prepared to accept that the information was in part being used for journalistic purposes, she noted at para. 20 that the union was also collecting the information for other non-exempt purposes: ... dissuading people from crossing the picket line; acting as a deterrent to violence from non-picketers; gathering evidence should it become relevant to an investigation or legal proceeding (both of altercations as well as to show long periods of peaceful picketing); creating material for use as a training tool for Union members; providing material to other unions for educational purposes; supporting morale on the picket line with the use of humour; responding to similar activity on the part of the employer, and deterring theft of Union property. At a more basic level, many of these purposes also pro- moted the underlying purpose of the strike - that of achieving a resolution to the labour dispute favourable to the Union. Recognizing the limitations on her jurisdiction, the Adjudicator reasoned that she could not “read down” the provision exempting journalistic activities by removing the words “and for no other purpose”. As a result, the exception for journalistic purposes did not assist the union. 14 The union conceded that the video and camera recordings of images of individuals were “personal information” within the meaning of the Act. The Adjudicator confirmed that this concession was consistent with other decisions made by the Commissioner. 15 The Adjudicator found that images had been taken of a number of people who crossed the picket line. Many of those images were not distributed further. However, the image of a vice president of the casino was placed on a mock “police mug shot” poster, and used in other satirical ways. His image also appeared in the union’s newsletter and strike leaflets. The newsletter was apparently distributed to some members of the public, in addition to union members. The video recording of one inci- U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 221

dent involving the vice president was also given to the police. The Adju- dicator decided to disregard the suggestion that some of the images would be posted on the Internet, because the uncontradicted evidence was that the image of only one individual was posted, and that was done with that individual’s consent. 16 Since she found that the union was collecting personal information within the meaning of the Act, the Adjudicator went on to consider whether the union required the consent of the subjects of the images. One reason for recording the images was to use them in possible proceedings before the Labour Relations Board, in court proceedings related to picketing, and possibly to provide evidence to the police. The Adjudicator found that the union was allowed to collect, use and disclose personal information under ss. 14(d), 17(d), 20(f) and 20(m) without consent in relation to such investigations or legal proceedings. To make use of this exception in the Act, the union did not have to prove that an investigation or proceedings was actually underway, so long as one could reasonably be anticipated. To protect the interests of uninvolved third parties, information collected for this purpose had to be kept secure, viewed only as needed, and not retained beyond a reasonable time. Otherwise she found, at para. 98, that this was a reasonable use of the information. 17 The Adjudicator, however, concluded at para. 64 that some of the collected images had not been used for investigative or legal purposes. For example, the images of the vice president that had been placed on the mock poster, and used in other satirical ways, were not used with respect to any legal proceedings. These uses were not, therefore, exempt from the requirement for consent. 18 The Adjudicator rejected the argument that the union was entitled to make other uses of the information without consent. Specifically, the union was not allowed to use the images to dissuade people from entering the casino, even though the Labour Relations Code, RSA 2000, c. L- 1, s. 84(1) allows picketing for that very purpose. She also concluded, at para. 113, that the union was not allowed to use the information in its posters and newsletters. 19 Having found that the union was to some extent using personal information for which consent was required, the Adjudicator next considered whether s. 8 of the Act “deemed” that consent to have been given. Sec- tion 8 requires that the collector of the information give reasonable notice why it is collecting the information, and give the individual a reasonable opportunity to object. The Adjudicator found that the poster at the 222 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

entrance warning that images might be posted on the Internet was not sufficient compliance with s. 8. 20 After dealing with some collateral issues, the Adjudicator ruled that the collection or use of personal information by the union other than for use in an investigation or legal proceeding, or to provide information to the police, was contrary to the Act. She ordered that the union stop collecting information for those unauthorized purposes, and destroy any such information still in its possession.

Judicial Review of the Decision 21 The union applied for judicial review of the decision of the Adjudica- tor. The union argued that, to the extent the Act prevented the collection of the disputed images, there was an infringement of its Charter rights. The Attorney General opposed the application. 22 The chambers judge concluded that the recording of the disputed images had expressive content. That was the case even if the union’s ultimate objective was to dissuade people from crossing the picket line, and even if that meant interfering with their privacy. The chambers judge concluded that picketing itself is an expressive action, citing Pepsi-Cola Canada Beverages (West) Ltd. v. R.W.D.S.U., Local 558, 2002 SCC 8, [2002] 1 S.C.R. 156 (S.C.C.), and that freedom of expression in the labour relations context is fundamentally important, citing K Mart Canada Ltd. v. U.F.C.W., Local 1518, [1999] 2 S.C.R. 1083 (S.C.C.). The chambers judge concluded at para. 100 that recording the images was inti- mately connected with the picket line activity. 23 The chambers judge continued her analysis to find that the Act, at least as the Adjudicator interpreted it, purposely and directly limited the freedom of expression of the union. The chambers judge concluded that the narrow exceptions provided for “publicly available” information, and information collected “for journalistic purposes” exacerbated the effect that the Act had on the union’s freedom of expression. She observed that if there were two possible interpretations of the statute, the court should adopt the one that would render the statute constitutional. 24 The chambers judge examined some of the evidence placed before her, and concluded that the Act could be rendered more constitutionally compliant by adopting an extremely broad definition of “journalism”. In order to do so, the exception for journalistic purposes should not be limited to the traditional media. Rather, it should also be taken to include purposes such as informing the public and picketing union members, dissuading people from crossing the picket line, supporting morale on the U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 223

picket line, training union members, and providing material to other unions for educational purposes (Reasons at paras. 129-30). However, the use of the images on the mock mug shot poster, and in postings on the Internet, went too far to qualify as journalism (Reasons at para. 132). 25 In an analogous fashion, deterring violence, deterring theft of union property, and responding to the similar videotaping by the employer should be taken as coming within the exception for investigations and legal proceedings (Reasons at para. 131). 26 The chambers judge next considered whether the Act’s restriction on the union’s freedom of expression could be demonstrably justified in a free and democratic society, under s. 1 of the Charter. She concluded that the Act’s “general objective” of balancing the need to protect information with the need to use it, was a pressing and substantial goal. Whether the exceptions built into the Act were too narrow would influence whether the means chosen to meet that objective were proportional. 27 The union argued that limiting “publicly available information” to a few published sources had no rational connection to the stated objectives of the Act. It was not rational to try and protect information in the public sphere, such as what individuals did in public spaces. The images recorded here took place in a public place in plain view, and did not include any intimate details about the complainants. The chambers judge agreed with these arguments, rejecting the Attorney General’s submission that the complainants were entitled to some “practical anonymity”. The chambers judge held at para. 155 that the complainants were not just in a public place, but at “a public demonstration with important political and social implications”. She concluded at para. 156 that there was “no rational connection between protecting personal information and exclud- ing public, political demonstrations, like the picket line, from the definition of ‘publicly available’”. 28 The chambers judge concluded, however, that there was a rational connection between protecting privacy interests, and limiting the use of that information to journalistic purposes. 29 The chambers judge continued with the s. 1 analysis by concluding that the impairment on freedom of expression was not minimal. The re- strictive definition of “publicly available” information could not be justified. Further, she found at paras. 160-1 that it was unreasonable to restrict the journalistic exemption to organizations that had purely journalistic objectives. There was no rational basis to exclude organizations that had journalistic as well as other objectives. 224 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

30 The chambers judge next considered whether the salutary effects of the Act outweigh its deleterious effects. She began by noting the important role of communications in strikes and picket lines: 162 The recordings of the picket-line, by video and camera, are integral parts of the picket-line. One of the purposes of picketing is to dissuade people from crossing the picket-line, by both providing information about the labour dispute and by mocking and attempting to shame people who cross the line to do business with the employer, as replacement workers, customers, or suppliers. The recordings accomplish both. As noted by Professor Taylor workers have engaged in picketing to communicate, educate and persuade. The picket line has been their most valuable tactic to maintain solidarity, to deter strike- breaking, bringing the dispute to the public’s attention, dissuading the public from doing business with the employer, and eliciting support from the broader labour movement and the public. Professor Taylor notes that the internet has expanded the scope and nature of the picket-line to generate global solidarity and create “cyber-picket- lines”. Mockery and shaming have been part of strike and picket-line expression since at least the 1890’s. She followed the statements by the Supreme Court of Canada in Pepsi, for example at para. 33 that: “Free expression is particularly critical in the labour context.”. She distinguished Aubry c. Editions´ Vice Versa Inc., [1998] 1 S.C.R. 591 (S.C.C.) because it arose under the Qu´ebec Charter, and because the context was different. The chambers judge found at paras. 172-3 that the deleterious effect of the Adjudicator’s order was severe, because it substantially interfered with the union’s ability to communicate its message. 31 The chambers judge considered the various constitutional remedies that were available. She quashed the offending portions of the Adjudica- tor’s order. She declared the words “and for no other purpose” in the journalism exemption in s. 4(3)(c) of the Act to be of no force and effect. She declared that the definition of “publicly available” information found in s. 7 of the Regulation was invalid to the extent that it interfered with union picketing activity, but suspended that declaration of invalidity for 12 months. During the suspension period, she provided a constitutional exemption for union activity. The Attorney General appealed further to this Court.

Standard of Review 32 The approach to determining the standard of review of a tribunal’s decisions is set out in New Brunswick (Board of Management) v. Dun- U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 225

smuir, 2008 SCC 9, [2008] 1 S.C.R. 190 (S.C.C.). The principles were summarized in Alliance Pipeline Ltd. v. Smith, 2011 SCC 7 at para. 26, [2011] 1 S.C.R. 160 (S.C.C.). Decisions are subject to review for either correctness or reasonableness. The standard of correctness governs: (1) a constitutional issue; (2) a question of general law that is both of central importance to the legal system as a whole and outside the tribunal’s specialized area of expertise; (3) the drawing of jurisdictional lines between two or more competing specialized tribunals; and (4) a “true question of jurisdiction or vires”: Dunsmuir at paras. 58-61. On the other hand, reasonableness is normally the governing standard where the question: (1) relates to the interpretation of the tribunal’s enabling (or “home”) statute or “statutes closely connected to its function, with which it will have particular familiarity”; (2) raises issues of fact, discretion or policy; or (3) involves inextricably intertwined legal and factual issues. These general rules must be applied keeping in mind the basic principles underlying judicial review, and the particular statutory mandate in play. 33 It is also established that common law standards of review can be displaced by specific legislative direction: Khosa v. Canada (Minister of Citizenship & Immigration), 2009 SCC 12 at paras. 18, 51, [2009] 1 S.C.R. 339 (S.C.C.). Khosa demonstrates, however, that the courts will not quickly find that a legislative provision is intended to set a standard of review. 34 The purpose of judicial review is to make sure that administrative tribunals (a) act within their jurisdiction, and (b) act legally. Alliance Pipeline Ltd. v. Smith confirms that the category of “jurisdictional error” is a very narrow one, although it is an issue on which the superior courts review for correctness. 35 But what is “acting legally”? Or more to the point, who is to decide what is legal and what is not? Cases like Dunsmuir, as refined in later cases like Alliance Pipeline Ltd. v. Smith, confirm that a considerable amount of deference is to be extended to administrative tribunals, even on questions of law. It is not that administrative tribunals have “the right to be wrong”, but rather that they have the right “to say what is right and what is wrong”. While the standard of review can vary depending on the expertise of the tribunal, and the nature of the question, many administrative decisions on questions of law will be reviewed for reasonableness. Further, cases like A.T.A. v. Alberta (Information & Privacy Commis- sioner), 2011 SCC 61, [2011] 3 S.C.R. 654 (S.C.C.) have illustrated the wide scope of “reasonableness”. It turns out that “legality” is a very big place. 226 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

36 Under the Dunsmuir analysis, decisions of the Commissioner and his Adjudicators on questions of fact and policy, and on questions of law within the core expertise of the Commission, have called for review on the reasonableness standard: Alberta Teachers’ Association at paras. 34, 39; Leon’s Furniture Ltd. v. Alberta (Information & Privacy Commis- sioner), 2011 ABCA 94 at para. 32, 45 Alta. L.R. (5th) 1, 502 A.R. 110 (Alta. C.A.); Stubicar v. Alberta (Information & Privacy Commissioner), 2008 ABCA 357 at paras. 22-4, 97 Alta. L.R. (4th) 23, 440 A.R. 190 (Alta. C.A.). 37 Under the Dunsmuir process, as restated in Alliance Pipeline Ltd. v. Smith, it had sometimes been assumed that constitutional issues, including the interpretation and application of the Charter, would be reviewed for correctness: Canada (Attorney General) v. Mowat, 2011 SCC 53 at para. 18, [2011] 3 S.C.R. 471 (S.C.C.). That was because such issues were generally felt to be “constitutional”, the first category of reviewable error recognized in Alliance Pipeline. Further, they would generally qualify as “questions of general law of central importance to the legal system”. This would be consistent with the traditional legitimate role of the superior courts in ensuring the legality of the decisions of administrative tribunals. The Dunsmuir emphasis on “deference” directed that the superior courts should not step beyond that traditional role, but did not undermine it. 38 However, in Doré c. Québec (Tribunal des professions), 2012 SCC 12 (S.C.C.) the Supreme Court of Canada held that the standard of review of one specific type of Charter based tribunal decision is reasonableness. That type of Charter issue arises when an administrative tribunal is called upon to balance Charter values in coming to a decision. If a statute or regulation was being challenged under the Charter, the government has the option of attempting to justify it under s. 1 of the Charter. That justification is examined through the test in R. v. Oakes, [1986] 1 S.C.R. 103 (S.C.C.). However, the Oakes test is not used to review the decision of an administrative tribunal that has attempted to recognize Charter values along with other policy and legal imperatives. Where the decision calls for a consideration of the impact of Charter values on the specific facts of the case, Doré at para. 54 calls for a synthesis of the Oakes and Dunsmuir analyses. 39 Doré at paras. 4, 54 recognizes the fundamental importance of Char- ter rights. Where a tribunal decision intersects with Charter rights, Doré at para. 6 states the question as: “... has the decision-maker dispropor- U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 227

tionately, and therefore unreasonably, limited a Charter right.” In this analysis, “reasonableness” is measured in context: As this Court has noted, most recently in Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5, the nature of the reasonableness analysis is always contingent on its context. In the Charter context, the reasonableness analysis is one that centres on proportionality, that is, on ensuring that the decision inter- feres with the relevant Charter guarantee no more than is necessary given the statutory objectives. If the decision is disproportionately impairing of the guarantee, it is unreasonable. If, on the other hand, it reflects a proper balance of the mandate with Charter protection, it is a reasonable one. Thus, when reviewing a tribunal decision for Charter compliance, absent an extricable legal error in interpreting the Charter, the focus of the analysis will be on “disproportionality leading to unreasonableness”. 40 The present appeal raises both kinds of Charter issues. From the perspective of the trial judge, some of the provisions of the Personal Infor- mation Protection Act were inconsistent with the Charter. An analysis of the constitutionality of the statute calls for an application of the Oakes test. On the other hand, it could be argued that the statute is not unconstitutional per se, but that the way it was brought to bear in this particular decision was inconsistent with Charter values. From that perspective, a Doré analysis is called for. Even if the statute is valid, Doré confirms that the particular decision must be consistent with Charter values: PHS Community Services Society v. Canada (Attorney General), 2011 SCC 44 at paras. 116-7, [2011] 3 S.C.R. 134 (S.C.C.). As long as the tribunal’s decision correctly interprets the Charter text, the decision will not be disturbed unless its assimilation of Charter values is disproportional, and therefore unreasonable. 41 The application of Doré in Alberta is, however, complicated by the Administrative Procedures and Jurisdiction Act, RSA 2000, c. A-3, s.11. It provides that certain tribunals, including the Commissioner and therefore his Adjudicators, have no jurisdiction to decide constitutional and Charter issues. The operative definition is: 10 In this part ... (d) “question of constitutional law” means (i) any challenge, by virtue of the Constitution of Canada or the Alberta Bill of Rights, to the ap- 228 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

plicability or validity of an enactment of the Parliament of Canada or an enactment of the Legislature of Alberta, or (ii) a determination of any right under the Consti- tution of Canada or the Alberta Bill of Rights. These legislative provisions recognize the limited expertise and resources of some tribunals with respect to constitutional issues. They were passed in response to decisions like Martin v. Nova Scotia (Workers’ Compensation Board), 2003 SCC 54, [2003] 2 S.C.R. 504 (S.C.C.). 42 The Administrative Procedures and Jurisdiction Act should not be viewed as a direction to Alberta tribunals that they should ignore Charter values. As Doré states at para. 35 “administrative decisions are always required to consider fundamental values”. But because the statute limits their power to directly resolve Charter issues by limiting their jurisdiction, the statute will necessarily influence the standard of review analysis relating to the tribunal’s decisions. As Doré points out at para. 30, the rule in Dunsmuir is based in part on legislative intent, and the intent of the Administrative Procedures and Jurisdiction Act is clearly that the excluded tribunals have a limited role to play in this area. 43 The decision in Doré was premised at paras. 29, 35 on a tribunal “both bound by fundamental values and empowered to adjudicate them, and that administrative discretion is exercised in light of institutional guarantees and the values they reflect”. That important presumption does not prevail in Alberta, where the Legislature has recognized that many tribunals do not have the internal expertise to decide constitutional issues. Further, the Alberta statute reflects a policy decision that the citizens of Alberta are ultimately entitled to have their constitutional rights determined by a superior court. 44 In this case the Adjudicator quite properly did not attempt to engage the Charter issues. She recognized that it was beyond her mandate. It is likely that the parties did not provide a full Charter argument as a result. She not having purported to balance Charter with privacy values, there is in truth no decision to review, either for reasonableness, disproportionality, or correctness. In all the circumstances, applying the four part test in Dunsmuir, the standard of review of the compliance of the decision of the Adjudicator with the Charter should be reviewed for correctness. 45 To the extent that the decision of the chambers judge (as it reviewed the decision of the Adjudicator) engaged a consideration of the constitutionality of the Personal Information Protection Act, it has to be reviewed for correctness. The approach in Doré only applies to the review U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 229

of individual administrative decisions for constitutional compliance, where Charter rights have to be balanced with other values. It has no application to a determination of whether a statute is constitutional. Such issues are always reviewed for correctness: Dor´e at para. 43. To the extent that the chambers judge engaged in an ab initio review of the specific decision for constitutional compliance, that decision is to be further reviewed by this Court for correctness.

The “Tainting” Argument 46 The Commissioner argued on appeal that the chambers judge miscon- strued the reasons of the Adjudicator with respect to what might be called “multipurpose” information. The chambers judge, it is argued, effectively found the Act to be unconstitutional based on an interpretation never adopted by the Adjudicator. 47 The issue arises because s. 4(3) of the Act exempts the collection and use of information when done for certain named purposes, provided that the collection and use is for a named purpose “and for no other purpose”. For example, s. 4(3)(c) exempts from the application of the Act “the collection, use or disclosure, ... for journalistic purposes and for no other purpose”. How is the Act to be applied when information is collected for multiple purposes, some exempt and some not? 48 Two interpretations are possible. The first possible interpretation is that if the personal information is not collected solely and exclusively for the exempt purpose, then the information is governed by the Act, even for the exempt purpose. So, for example, if information is collected 90% for journalistic purposes, and 10% for non-exempt and unauthorized purposes, then the information is not exempt at all. The presence of some secondary purpose “taints” the information, and prevents the exemption from applying at all. 49 The alternative interpretation is that collection for multiple purposes does not “taint” the information. If information is collected partly for an exempt purpose, and partly for other purposes, the exemption is still available for the exempt purposes. The information cannot, however, be used for non-exempt and unauthorized purposes, just because it was collected in part for exempt purposes. So if information is collected 10% for journalistic purposes, and 90% for other purposes, it would still remain exempt for journalistic purposes. 50 There are some portions of the Adjudicator’s decision (for example, paras. 20, 21, 27) which might be read as adopting the “tainting” argument. Counsel for the Commissioner suggested that this occurred be- 230 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

cause the union had originally put forward the exception for journalistic purposes as a preliminary issue that would resolve the entire complaint. When other possible exemptions were identified, the issue became better focussed. In any event, as counsel for the Commissioner demonstrated, the Adjudicator recognized that information collected in part for an exempt purpose could be used for that purpose, even if it had also been collected for other purposes. She agreed, for example, that the videotapes of the picket line had partly been made to gather evidence for potential proceedings before the Labour Relations Board, and that the recordings could be validly used for that purpose (paras. 52-3, 68, 71, 73, 111-2). The fact that the recordings had also been made for other purposes did not “taint” the information. 51 The union understood that the Adjudicator had adopted the “tainting” argument. The chambers judge also understood the Adjudicator to find that information had to be collected “purely” for an exempt purpose (paras. 121, 133). The chambers judge concluded that the limitation by the Act of the collection of information for only “purely journalistic” purposes was constitutionally too narrow. She also suggested (at para. 161) that the Act was not only concerned with the purposes for collecting the information, but with the overall objectives of the organization that was collecting the information: Moreover, personal information is not protected any further by prohibiting an organization with both a journalistic purpose and some other purpose from collecting, using and disclosing it, but not prohibiting an organization with only a journalistic purpose. This caused her to conclude (at para. 172): The deleterious effects on the Union’s freedom of expression are severe. Under PIPA the Union cannot collect, use and disclose the information in its newsletters and leaflets for journalistic purposes, because it has other additional purposes. The Commissioner argues that this is neither the true effect of the Act, nor an accurate reading of the Adjudicator’s decision. 52 The Commissioner’s arguments have merit. Firstly, the Act is not concerned with the overall objectives of any particular organization. It regulates the “collection, distribution and use” of information. It is the dealings with information that is regulated, regardless of what the overall objectives of the organization may be. An organization might have multiple objectives and purposes, but that has no effect on the legality of its dealings with information. So long as the purpose for which the information was collected or used is exempt, it does not matter if that purpose is U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 231

only an insignificant part of the organization’s overall mandate. So, even though the union’s purpose is not primarily journalistic, to the extent that it does engage in journalistic activities it is entitled to rely on the exemption in the Act for that purpose. 53 Further, the Adjudicator (and therefore the Commissioner) did not adopt the “tainting” argument. The Adjudicator did not hold that the words “and for no other purpose” meant that information had to be collected and used exclusively for an exempt purpose. So, for example, if the union had made the picket line recordings 20% for journalistic purposes, 20% for potential use in legal proceedings, 20% for educational purposes, and 40% for use in trying to achieve a favourable end to the strike, the union would not be completely prevented from using the information. The information could still be used for journalistic purposes, because that is an exempt activity. It could also be used in legal proceedings, because that too is a permitted use. The information could not, however, be used for educational purposes, or for leverage in the collective bargaining process, because those activities are not exempt or otherwise authorized. 54 The chambers judge therefore assessed the constitutionality of the Act based on an inaccurate premise about what the Act prohibits, and what the Adjudicator had ordered. That does not necessarily mean that the Act, or its application to these facts, is entirely constitutional, because its en- croachment on the expressive rights of the union must still be shown to be demonstrably justified in a free and democratic society. It does however require a fresh analysis.

The Journalism Exemption 55 The union initially focussed its challenge to the Adjudicator’s order on the exemption in s. 4(3)(c) of the Act for “the collection, use or disclosure, ... for journalistic purposes and for no other purpose”. That was perhaps a natural starting point. The union’s primary argument was that its constitutional right to free expression permitted it to make and publish the recordings of the picket line. The Act contains no discrete exemption for “Charter protected free expression”. The closest thing available was the exemption for journalistic purposes. The two rights are closely connected in the Charter: 2. Everyone has the following fundamental freedoms: ... (b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication; 232 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

... The union’s initial strategy was to argue that all communication of information, including the posting of the picket line recordings on the In- ternet, was journalistic in nature, and so exempt. This same approach led the chambers judge to conclude that the appropriate remedy in this case was to simply delete the phrase “for no other purpose” from the exemption. If this deletion was combined with a wide reading of the word “journalistic”, the Act would survive constitutional scrutiny. 56 The argument depended to a considerable extent on attributing a very expansive meaning to “journalistic”. In using that adjective, it is fair to think that the Legislature intended it to have a wide meaning. However, it is unreasonable to think that the Legislature intended it to be so wide as to encompass everything within the phrase “freedom of opinion and expression”. The chambers judge relied on expert evidence and other materials suggesting that “journalism” has a very wide meaning for constitutional purposes. That may be so, but the proper interpretation of the Act depends on what the Legislature thought was included in “journalism”, not what the learned academic authors thought. 57 In this case it is not helpful to try and force what the union was trying to do into the “journalism” exemption. While the union was, in part, attempting to communicate information to its members and others, that was not the primary or exclusive purpose for recording and using the picket line videos. The union was not primarily engaged in a journalistic activity. This appeal is substantively about labour relations, collective bargaining, and the economic dynamics of a strike. Just because the union might have to communicate with its members and the public about the strike in order to accomplish its labour relations objectives does not turn the whole exercise into journalism. While all journalism may be a form of expression, not all expression is journalism. 58 The Act contains no general exemption for forms of expression that are constitutionally protected. To the extent that the exemptions in the Act are not sufficient to permit the type of collection and use of information engaged in by the union, its constitutionality should be analyzed directly, not indirectly through an artificial screen of journalistic purposes. Whether the restrictions on the union’s expression are demonstrably justified in a free and democratic society should not be based on the premise that a journalistic purpose was involved. The issue is whether it is justifiable to restrain expression in support of labour relations and collective bargaining activities such as existed here. U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 233

59 In summary, it is not helpful to analyze this situation as “journalism”. Not every piece of information posted on the Internet qualifies. If the union wished to publish information about the activities on the picket line in a newspaper or on television, that would likely qualify as journalism. But that need not be decided here, because that is not what the complaints were about.

Freedom of Expression 60 The Charter analysis should start with the interpretation of the Act adopted by the Adjudicator. She held that the union was entitled to collect the disputed images to the extent that they were used for journalistic purposes, and to the extent that they were used for investigations and legal proceedings. She did not decide that the union had to prove its objectives are “exclusively journalistic” to take advantage of the former exemption. 61 The Adjudicator’s interpretation, however, did not permit the union to use the disputed images for a number of its intended purposes: placing the images in newsletters and strike leaflets; dissuading people from crossing the picket line; acting as a deterrent to violence from non-picketers; creating material for use as a training tool for union members; providing material to other unions for educational purposes; supporting morale on the picket line with the use of humour; responding to similar activity on the part of the employer; deterring theft of union property; and generally achieving a resolution to the labour dispute favourable to the union. Insofar as the Act prevents using the information for these purposes, does it inhibit the union’s freedom of expression? If so, is that restriction demonstrably justified in a free and democratic society? 62 The law is clear that labour picketing incorporates an expressive component. As the Court noted in Pepsi: 27 In labour law, picketing is commonly understood as an organized effort of people carrying placards in a public place at or near business premises. The act of picketing involves an element of physical presence, which in turn incorporates an expressive component. Its purposes are usually twofold: first, to convey information about a labour dispute in order to gain support for its cause from other workers, clients of the struck employer, or the general public, and second, to put social and economic pressure on the employer and, often by exten- sion, on its suppliers and clients. 234 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The picket line itself is an expressive activity. 63 It is also appropriate to note that the expressive activity at issue is directly related to the protected Charter right of the workers to associate together to achieve their common goals: Fraser v. Ontario (Attorney General), 2011 SCC 20 at paras. 37-9, [2011] 2 S.C.R. 3 (S.C.C.). 64 The order of the Adjudicator did not have any impact on the picketing itself; the order related to what might be described as a secondary use of the picket line, namely the making and distribution of recorded images of the picketing. One purpose of a picket line has always been to inform the workers and members of the public of the strike. Those who are sympathetic with the strike will often refuse to cross the picket line. It is also clear that the presence of the picket line is intended to discourage and even intimidate the non-sympathetic into suspending their relationship with the employer. Recording and distributing images of those crossing the picket line serves both these functions. It spreads news of the picket line to a wider audience. It also tends to increase the pressure on those who might be tempted to cross the picket line. Rather than just being subjected to the disapproval of those who actually observe a member of the public crossing the picket line, the line-crosser engages the risk that a wider audience of friends, neighbours, business associates, and other members of the public may see the violation of the picket line. Recording the picket line therefore also has an expressive purpose. 65 Where freedom of expression is engaged, that encompasses an ability to collect the information that is to be distributed: R. v. National Post, 2010 SCC 16 at para. 33, [2010] 1 S.C.R. 477 (S.C.C.). Thus, if the union had a right to express its views about the collective bargaining process, the strike, and crossing of the picket line, it also had a right to gather information for that purpose. That would provide some constitutional protection for making the videos of the picket line. 66 The appellant argues that the union’s use of the images amounted to “threats” or “a self-interested interference with privacy” or as “invading people’s privacy to get what it wants from them”. Strikes are not tea parties: Pepsi at para. 90. There are undoubtedly some unpleasant aspects to collective bargaining, but collective bargaining and the strikes that occasionally result are recognized as legitimate features of the Canadian economy. There is nothing in s. 2 of the Charter to suggest that the protected rights can only be used in non-selfish or benevolent ways, and cannot be used to promote one’s personal interests. It is not only pleasant and benign speech that is protected. Attempting to persuade the public to support the union, and to suspend doing business with the employer, are U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 235

key tactical and economic components of a strike. So long as there is no promotion of violence or other illegal activity, a reasonable amount of psychological pressure may be brought to bear on all those involved: Pepsi at paras. 101-7. A balancing of rights is needed: Pepsi at para. 92. 67 It is clear that there are many aspects of the Adjudicator’s order that had a direct impact on the right of the union to free expression: • Newsletters and strike leaflets are entirely expressive; preventing the use of the images in them was a serious infringement on free expression; • Spreading news of the existence of the strike, and attempting to dissuade people from entering the casino are essentially expressive activities; • The use of the vice president’s image was also expressive. Satire has always been a powerful form of persuasion; • Education of union members, and providing information to other unions is expressive at its core. Dissuading people from crossing the picket line, enhancing morale of the strikers, deterring violence and threats, and achieving a favourable end to the strike are all legitimate purposes supported by the right to free expression. Persuading people to think or act in a certain way is a direct purpose of free expression. 68 The union has established a prima facie breach of its s. 2 Charter rights. Are the provisions of the Act demonstrably justified in a free and democratic society? Is the Adjudicator’s decision unreasonable because its effect on the union’s expressive rights is disproportional? To paraphrase Dor´e at para. 66, the appellant must demonstrate that the Ad- judicator’s decision gave due regard to the importance of the expressive rights at issue, both in light of the union’s right to expression and the public’s interest in open discussion.

Justification of the Infringement 69 Determining if the restriction on free expression is justified starts by analyzing whether the objectives of the statute are related to a pressing and substantial goal. If so, the analysis turns to the proportionality of the legislation. If the limiting measures are rationally connected to the objective, one must then determine whether the infringement is as limited as possible. Finally, the analysis examines whether the salutary effects of the Act outweigh its deleterious effects: R. v. Oakes, [1986] 1 S.C.R. 103 (S.C.C.). 236 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

70 The appellant argued that the exemption for journalistic activities, and for information that is publicly available are demonstrably justifiable. That may be so. The issue, however, is whether the Act as a whole is demonstrably justified, having regard to the impact that it has on the expressive rights of the union. The issue is not what the Act allows, but what it prohibits. 71 Prior to the enactment of modern privacy legislation, there was little common law protection for privacy rights. The advent of new technology called for legislative intervention. New technology not only permitted the collection of vast amounts of personal data, it also enabled a much wider analysis of that data to extract information. Most importantly, new technology like the Internet enables vastly wider dissemination of information. In the interest of protecting reasonable expectations of privacy, expectations that one can control one’s own image and personal information, and in order to limit the misuse (including fraudulent use) of personal information, many legislatures enacted privacy legislation. This legislation can be accepted as addressing a pressing and substantial problem. 72 The pressing and substantial problem is the potential misuse of personal information. Limiting the ability of organizations to collect, store, and use that information has a rational connection to the objective. 73 There is, however, a problem relating to proportionality. The constitutional problems with the Act arise because of its breadth. It does not appear to have been drafted in a manner that is adequately sensitive to protected Charter rights. There are a number of aspects to the over- breadth of the Act: • It covers all personal information of any kind, and provides no functional definition of that term. (The definition of “personal information” as “information about an identifiable individual” is essentially circular.) The Commissioner has not to date narrowed the definition in his interpretation of the Act in order to make it compliant with Charter values. • The Act contains no general exception for information that is personal, but not at all private. For example, the comparative statutes in some provinces exempt activity that occurs in some public places. • The definition of “publicly available information” is artificially narrow. U.F.C.W., Local 401 v. Alta (IPC) Frans Slatter J.A. 237

• There is no general exemption for information collected and used for free expression. • There is no exemption allowing organizations to reasonably use personal information that is reasonably required in the legitimate operation of their businesses. This appeal clearly demonstrates the impact that the Act can have on protected rights. The legitimate right of the union to express itself and communicate about the strike and its economic objectives have been directly impacted by the Adjudicator’s order. The appellant has not demonstrated why this heavy handed approach to privacy is necessary, given the impact it has on expressive rights. 74 It is also not apparent that the salutary effects of the Act outweigh its deleterious effects. While the protection of personal information is important, it is no more important than collective bargaining and the rights of workers to organize. It is also no more important than the right of the union to communicate its message to the public. On the other hand, the privacy interest being protected here is minimal. The persons who were videotaped were in a public place, crossing an obvious picket line, in the face of warning signs that images were being collected. The privacy expectations were very low. Protecting that low expectation of privacy does not warrant the significant stifling of expression that resulted from the Adjudicator’s order. 75 The Commissioner argues that the rights created by the Act are “quasi-constitutional” in nature. That verbal rhetoric is not particularly helpful. The statutory provisions in question are not a part of the constitutional framework, nor is there any general protection of privacy or personal information to be found in the constitution. The Act creates a statutory regime, replete with exceptions and exemptions, that do not bear the characteristics of fundamental constitutional protections. While important, the protections in the Act cannot be equated with constitutional values like freedom of expression and freedom of association. 76 The appellant also argues that the need for consent found in the statute is justifiable. This is based on the argument that members of the public have an expansive right to protect the use of their image, even when the image is taken in a public place. Individuals undoubtedly do have an interest in how their images are used. Members of the public cannot, however, have a reasonable expectation that they can live their lives in total anonymity. People do not have a right to keep secret everything they do in public, such as crossing picket lines. There is no recognized right to withhold consent to the dissemination of information about un- 238 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

pleasant conduct. Holding people accountable for what they do or do not do in public is a component of the right to free expression. 77 In summary, the appellant is not able to justify the infringements of free expression arising from the Act. 78 Given that the effect of the Act on the union’s expressive rights cannot be justified in a free and democratic society, it should be no surprise that the decision of the Adjudicator cannot be sustained. As previously noted, the Adjudicator had no jurisdiction to consider constitutional issues, and it did not attempt to balance expressive and privacy issues. As the discussion on the Oakes test confirms, the Adjudicator’s order had a disproportionate effect on the union’s Charter rights, rising to the level of unreasonableness. The decision of the Adjudicator accordingly cannot stand, even under the test in Dor´e.

Remedy 79 The Adjudicator’s interpretation of the Act, and the order she granted interfered with the union’s Charter rights. The chambers judge attempted to remedy that breach by providing expansive and somewhat artificial interpretations on some of the terms used in the Act, and by declaring other portions of the Act inoperative. 80 The particular problem that arises in this appeal could be remedied in any one of a number of ways. Striking out or reading down portions of the statute are not attractive options. The courts have neither the institutional nor the legislative ability to rewrite the Act. It is possible that all of the impugned provisions of the Act might have a constitutional application in some cases, so long as protected rights are not engaged. There is no obvious way to prune this statute so as to make it constitutional. Arti- ficially expanding the meaning of “journalism” is not a helpful solution. 81 The appropriate remedy in this case is, therefore, not to strike down any portion of the statute. A declaration should issue that the application of the Act to the activities of the union was unconstitutional, because it infringed on the union’s Charter rights. The order of the Adjudicator should be quashed. It is within the particular mandate of the Legislature to decide what amendments are required to the Act in order to bring it in line with the Charter.

Conclusion 82 In conclusion, the appeal is allowed only to the extent that the remedy granted by the chambers judge should be varied. In place of the declarations of invalidity, there will be a declaration that the application of the U.F.C.W., Local 401 v. Alta (IPC) Donna Read J.A. 239

Act to the activities of the union was unconstitutional. The order quash- ing the offending portions of the Adjudicator’s decision is affirmed.

J.D. Bruce McDonald J.A.:

I concur:

Donna Read J.A.:

I concur: Appeal allowed in part. 240 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

[Indexed as: Abalon Holdings Ltd. v. 74486 Manitoba Ltd.] Abalon Holdings Ltd. (Applicant / Respondent) and 74486 Manitoba Ltd. (Respondent / Appellant) Manitoba Court of Appeal Docket: AI 11-30-07496 2012 MBCA 15 Michel A. Monnin, Barbara M. Hamilton, Martin H. Freedman JJ.A. Heard: June 10, 2011 Judgment: February 16, 2012 Civil practice and procedure –––– Limitation of actions — Real property — Charges upon land — Mortgage — Payment or acknowledgment –––– Cor- porate owner of property gave mortgage to mortgagee in 1986, then transferred property to its president in 1989 — President transferred property to his holding company in 2001 — Mortgagee served notice of exercising power of sale (“NEPS”) in 1993, after which some payments on mortgage were made — No payments had been made on mortgage since 1999 — Holding company brought successful application to discharge mortgage under s. 106 of Real Property Act — Application judge granted order extinguishing mortgage — Judge held that, pursuant to s. 21(1) of Limitation of Actions Act (“Act”), proceedings to enforce mortgage by action on personal covenant were statute-barred as no payments were made within ten years prior to application — Pursuant to s. 41 of Act, sale or foreclosure proceedings in land titles office were also statute-barred after ten years — Land titles office recognized that NEPS initiated proceeding, as required by Act, which had effect of tolling limitation period — Application judge held that NEPS was spent, and limitation period had expired — Mortga- gee appealed — Appeal dismissed — Application judge correctly concluded that filing of NEPS tolled limitation period — Application judge did not err in law when she concluded that NEPS became spent if default was remedied — Judge was entitled to find that mortgage had been remedied after filing of NEPS and that last payment under mortgage was made in 1999 — Mortgagee did not do anything since 1999 time to continue process initiated by NEPS filed in 1993. Real property –––– Mortgages — Change of ownership — Mortgaged land — Sale or transfer of interest in land — Obligations of purchaser or transferee to mortgagee — Miscellaneous –––– Owner of property gave mortgage to mortgagee in 1986, then transferred property to its president in 1989 — President transferred property to his holding company in 2001, and lived there until his death in 2008 — No payments had been made on mortgage in previous ten years — Holding company brought successful application to discharge mort- Abalon Holdings Ltd. v. 74486 Manitoba Ltd. 241

gage under s. 106 of Real Property Act — Application judge granted order extinguishing mortgage — Application judge held that, pursuant to s. 21(1) of Limitation of Actions Act (“Act”), proceedings to enforce mortgage by action on personal covenant were statute-barred as no payments were made within ten years prior to application — Pursuant to s. 41 of Act, sale or foreclosure proceedings in land titles office were also statute-barred after ten years — Applica- tion judge held that holding company was subject to same obligations as original mortgagor — Transfer of property to holding company in 2001 did not renew limitation period — Mortgagee appealed — Appeal dismissed — Application judge’s reasons as to why limitation period did not start again in 2001 when property was transferred were agreed with. Cases considered by Barbara M. Hamilton J.A.: M. (K.) v. M. (H.) (1992), 142 N.R. 321, (sub nom. M. c. M.) [1992] 3 S.C.R. 6, 96 D.L.R. (4th) 289, 57 O.A.C. 321, 14 C.C.L.T. (2d) 1, 1992 CarswellOnt 998, 1992 CarswellOnt 841, EYB 1992-67549, [1992] S.C.J. No. 85 (S.C.C.) — followed Novak v. Bond (1999), 1999 CarswellBC 1027, 1999 CarswellBC 1028, 172 D.L.R. (4th) 385, 122 B.C.A.C. 161, 200 W.A.C. 161, 45 C.C.L.T. (2d) 1, 239 N.R. 134, 32 C.P.C. (4th) 197, [1999] 8 W.W.R. 499, [1999] 1 S.C.R. 808, 63 B.C.L.R. (3d) 41, [1999] S.C.J. No. 26 (S.C.C.) — referred to Petryk v. Petryk (1966), 56 W.W.R. 120, 1966 CarswellMan 23, 56 D.L.R. (2d) 621, [1966] M.J. No. 48 (Man. Q.B.) — referred to Rafnson v. Canada Permanent Trust Co. (1978), [1978] 3 W.W.R. 85, 3 R.P.R. 255, 87 D.L.R. (3d) 59, 1978 CarswellMan 36 (Man. C.A.) — referred to Sackville v. Canada Permanent Mortgage Corp. (1916), 9 Sask. L.R. 161, 27 D.L.R. 790, 1916 CarswellSask 213 (Sask. C.A.) — referred to Trusts & Guarantee Co. v. McLeod (1929), [1929] S.C.R. 529, [1929] 3 D.L.R. 883, 1929 CarswellAlta 115 (S.C.C.) — referred to Statutes considered: Limitation of Actions Act, R.S.M. 1987, c. L150 Generally — referred to s. 1 “proceedings” — considered s. 21(1) — considered s. 41 — considered Mortgage Act, R.S.M. 1987, c. M200 s. 14 — referred to s. 25 — considered s. 25(1) — considered s. 25(1)-25(3) — referred to s. 25(2) — considered s. 25(3) — considered Real Property Act, R.S.M. 1988, c. R30 s. 77 — considered 242 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

s. 106 — considered s. 106(1) — considered s. 115 — referred to s. 134 — considered s. 134(1) — considered

APPEAL by mortgagee from judgment reported at Abalon Holdings Ltd. v. 74486 Manitoba Ltd. (2010), [2011] 1 W.W.R. 707, 260 Man. R. (2d) 100, 2010 MBQB 251, 2010 CarswellMan 644, 97 R.P.R. (4th) 269 (Man. Q.B.), granting mortgagor’s application to extinguish mortgage on ground it was statute-barred.

K.J. Muys, for Appellant E.G. Zazelenchuk, for Respondent

Barbara M. Hamilton J.A.:

1 This appeal concerns the ten-year limitation period under The Limita- tion of Actions Act, C.C.S.M., c. L150, pertaining to mortgages and the effect a notice of exercising power of sale has on such limitation period. 2 The appellant mortgagee (74486) registered a mortgage in 1986 against property now owned by Abalon Holdings Ltd. (Abalon). In 1993, 74486 Manitoba Ltd. (74486) registered a notice of exercising power of sale (the NEPS) against the property. 3 In 2010, Abalon applied, pursuant to s. 106 of The Real Property Act, C.C.S.M., c. R30, for a declaration and order extinguishing the mortgage on the ground that it was statute barred because there had been no payment or acknowledgment of indebtedness for a period of more than ten years from the date of default under the mortgage. 4 The application judge granted the application. 5 74486 appeals, arguing, among other things, that the judge erred when she concluded that the legal effect of the NEPS on the limitation period was spent because the default under the mortgage for which the NEPS had been filed had been remedied. The legal effect at issue is the tolling of the limitation period; that is, the suspension of the running of the limitation period. 6 74486 has not persuaded me that the judge committed any error of law or palpable and overriding error of fact. I would dismiss the appeal.

Statutory Provisions 7 This appeal engages a number of statutory provisions. I set them out now to provide context for the commentary and analysis that follows. Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 243

8 As already noted, Abalon made application pursuant to s. 106 of The Real Property Act: Statute barred mortgage 106(1) Where a limitation imposed by The Limitation of Actions Act in regard to a mortgage or encumbrance made under this Act, comes into effect, a mortgagor under the mortgage or a person whose land is charged with the encumbrance may apply to the court for a declaration and order extinguishing the mortgage or encumbrance. Court to grant order 106(2) Where, on an application made under subsection (1) the court is satisfied that the applicant is entitled to the declaration and order for which the application is made, the court shall declare that the mortgage or encumbrance is statute barred and thereby extinguished and shall, by order, direct the district registrar to note upon every certificate of title which was subject to the mortgage or encumbrance that the mortgage or encumbrance is statute barred and thereby extinguished and thereafter to treat the mortgage or encumbrance as if it had been wholly discharged by the person entitled by law to discharge it. [emphasis added] 9 Abalon relies on s. 21(1) of The Limitation of Actions Act, which sets out the ten-year limitation period for bringing proceedings to recover money secured by a mortgage unless there has been payment or an acknowledgment of indebtedness during that ten-year period: Recovery of money charged on land 21(1) No proceedings shall be taken to recover any rent charge or any sum of money secured by any mortgage or otherwise charged upon or payable out of any land or rent charge but within 10 years next after a present right to recover it accrued to some person capable of giving a discharge therefor or a release thereof, unless, prior to the expiry of that 10 years, some part of the rent charge or sum of money or some interest thereon has been paid by a person bound or entitled to make a payment thereof, or his agent in that behalf, to a person entitled to receive it, or his agent, or some acknowledgment in writing of the right to the rent charge or sum of money signed by any person so bound or entitled, or his agent in that behalf, has been given to a person entitled to receive it, or his agent, and in that case no action shall be brought but within 10 years after that payment or acknowledgment, or the last of such payments or acknowledgments, if more than one, was made or given. [emphasis added] 244 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

10 In her reasons, the judge noted that s. 41(1) of The Limitation of Ac- tions Act also provides for a ten-year limitation period, but with respect to proceedings for foreclosure or sale under a mortgage: Foreclosure or sale 41 No mortgagee or person claiming through a mortgagee shall take any proceedings for foreclosure or sale under any mortgage of real or personal property or to recover the property mortgaged but within 10 years next after the right to take the proceedings first accrued to the mortgagee, or if the right did not accrue to the mortgagee, then within 10 years after the right first accrued to a person claiming through the mortgagee. 11 The judge explained the difference, rightly in my view, between s. 21(1) and s. 41(1), noting that there was no dispute between the parties that the limitation period was ten years (at para. 5): Section 21 imposes a ten year limitation period with respect to the personal action against the mortgagor to recover the money secured by the mortgage (which proceedings would be pursued in the courts); s. 41 imposes a ten year limitation period with respect to sale or foreclosure proceedings (which proceedings are pursued in Manitoba in the Land Titles Office). While neither party referred to s. 41, it is not disputed that the limitation period in this case is ten years and that that period started to run when the mortgagor defaulted in making payments on the principal and/or interest payable under the mortgage. [emphasis added] 12 Section 1 of The Limitation of Actions Act defines “proceedings” as follows: ... “proceedings” includes action, entry, taking of possession, distress, and sale proceedings under an order of a court or under a power of sale contained in a mortgage or conferred by statute; .... 13 Section 134(1) of The Real Property Act sets out the requirements for service and filing for a notice of exercising power of sale in mortgage sale proceedings: Notice of sale on default 134(1) Where default is made in the payment of the principal sum, interest, annuity, or rent charge, or any part thereof, secured by a mortgage or encumbrance registered under this Act, or in the obser- vance of any covenant expressed or implied in the mortgage or encumbrance, if the default is continued for the space of one month, or for such longer period of time as is therein for the purpose expressly Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 245

limited, the mortgagee or encumbrancer may forthwith give a written notice, a copy of which shall be filed in the land titles office, to the mortgagor or owner of land subject to an encumbrance, and to every other person appearing at the time of filing the notice to have any mortgage, encumbrance, or lien upon, or estate, right, or interest in, the lands subsequent to his mortgage or encumbrance requiring the mortgagor or owner of land subject to an encumbrance and the other persons to be served with the notice to pay, within a time to be specified therein, the money then due or owing on the mortgage or encumbrance or to observe the covenants therein expressed or implied, and stating that in case default is made in so doing, all remedies provided in this Act will be resorted to, to remedy the default. 14 Section 77 of The Real Property Act sets out the implied covenant of a transferee of real property to comply with the covenants under a mortgage registered against that property: Implied covenants in transfer 77 In every instrument transferring land for which a certificate of title has been issued subject to a mortgage or encumbrance, there shall be implied, unless otherwise expressed, the following covenant by the transferee both with the transferor and the mortgagee, that is to say: That the transferee will pay the principal money, interest, annuity, or rent charge secured by the mortgage or encumbrance, at the rate and at the time specified in the instrument creating it, will be bound by every other covenant, term and condition in the mortgage or encumbrance, and will indemnify and keep harmless the transferor from and against the principal sum or other moneys secured thereby, and from and against liability in respect of every other covenant, term and condition therein contained or, under this Act, implied on the part of the transferor. 15 Section 25 of The Mortgage Act, C.C.S.M., c. M200, places an obligation on a mortgagee to give the mortgagor, on request, an annual statement of account. Sections 25(1) to (3) read as follows: Request for statement 25(1) A mortgagor, as long as his right to redeem subsists, may, in writing, request the mortgagee to furnish to the mortgagor a statement of account of the mortgage debt. Mortgagee to furnish statement of account 25(2) Where a mortgagee receives a written request under subsection (1) to furnish a statement of account for the mortgage debt, he shall, within 21 days of the date he receives the written request, at no cost to the mortgagor, furnish to the mortgagor or his authorized agent a statement in writing setting out 246 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

(a) the amount of payments credited, including apportionment as between principal, interest, and, if applicable, taxes; (b) the amount of any payments made by the mortgagee and charged to the mortgagor’s account, indicating the nature of the payments; (c) the amount of the outstanding balance owing on the mortgage debt as of a date not more than 30 days prior to the date he receives the written request; (d) the date of the last credited payment received within the period covered by the statement; and (e) the status of the tax account, where tax instalments have been paid to the mortgagee and credited separately for tax purposes. Statement may be required once a year 25(3) Subject to subsection (4), a mortgagor is not entitled to receive a statement of account of the mortgage debt more than once in any single period of 12 months......

Background 16 In 1986, 74486 registered the mortgage, which was in the principal amount of $80,000, against property (the property) located in Starbuck, Manitoba, owned by Abalon Construction Ltd. 17 In 1989, Abalon Construction Ltd. (known after its name change in 1996 as 0544699 Manitoba Ltd.) transferred the property to Joseph Leo Mulligan (Mulligan), the president of Abalon Construction Ltd. The transfer was subject to the mortgage. 18 In 1993, 74486 filed in the Winnipeg Land Titles Office the NEPS alleging that default had occurred and that $37,100 was due under the mortgage. 19 Subsequent to such filing, payments were made under the mortgage. The last payment was made on September 7, 1999. The principal owing under the mortgage at that time was $29,925.49. 20 In 2001, Mulligan transferred the property to Abalon, which took title subject to the mortgage. 21 Mulligan died in November 2008. 22 In 2010, Abalon filed its application under s. 106 of The Real Pro- perty Act. Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 247

The Hearing 23 In support of its application, Abalon filed the affidavit of Gerald Bon- ham, the current shareholder, officer and director. His evidence was that Mulligan had resided at the property during his lifetime, that Mulligan had kept most of his records there or at the Abalon corporate offices in Winnipeg and that he (Bonham), had conducted a thorough search of the records located at both locations and found no record of any payment under the mortgage or any acknowledgment in writing of 74486’s right to such money given by Mulligan, Abalon or 0544699 Manitoba Ltd. 24 In response, 74486 filed the affidavit of Carol Barker (Barker), its president. Her evidence included that the mortgage is in default and that the amount owing under the mortgage was $63,820.68 on August 7, 2006, which included accrued interest at the rate of 11 per cent. In support of that claim, she attached a schedule of mortgage payments prepared by her accountants with a “print date” of June 14, 2005. The schedule shows default starting with the October 7, 1999 payment. 25 Barker stated in her affidavit that she has “on several occasions demanded payment on account of the Mortgage but there has been a failure or refusal to pay or remedy the default.” 26 The foregoing affidavits were not the subject of cross-examination. 27 Abalon’s position was that it was entitled to have the mortgage removed because no steps have been taken under the mortgage in the last ten years prior to its application. It asserted that whether the mortgage had been remedied or not since the filing of the NEPS was a red herring and irrelevant to its application. 28 74486’s position was two-fold: First, it argued that the filing of the NEPS was the commencement of proceedings taken within ten years for the purposes of s. 21(1) of The Limitation of Actions Act, and that the NEPS has the same effect on a limitation period as a statement of claim in a civil proceeding. Alternatively, it argued that the effect of Abalon’s implied covenant to pay the mortgage pursuant to s. 77 of The Real Pro- perty Act is that the ten-year limitation started in 2001 when the property was transferred to Abalon. 29 During submissions, the judge had a number of questions about the legal effect of the filing of the NEPS, including whether its effect was spent in light of the payments that had been made subsequent to its filing. Therefore, at her request, and with the consent of both counsel, Abalon subpoenaed Russell Davidson, the Senior Deputy District Registrar of 248 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

the Winnipeg Land Titles Office to testify as to the practice in mortgage sale and foreclosure proceedings. 30 Mr. Davidson testified that “the notice exercising power of sale in my opinion satisfies The Limitations of Actions Act as being the document to initiate proceedings.” He also testified that the assistant district registrar would not issue an order for sale without an “affidavit of continuing default.” At the end of his testimony there was the following exchange with the judge: [Judge:] Okay. So my next question is this then. Now, I understand that you can’t look behind the affidavit material that’s filed in the Land Titles, whatever the mortgagee tells you you’ve got to accept unless it’s challenged, but assuming ...... [The mortgagee:] files an NEPS, and then the mortgage is brought up to date, and then six months, a year, two years, ... later there’s a second default, does he have to file a new NEPS? [Witness:] Yes he does...... [Judge:] So he can’t rely on the, on the first NEPS? [Witness:] No. The default that is noted in the first NEPS has been remedied, and one of the key things that Land Titles looks for when we get this affidavit of continuing default is that the default referenced in the NEPS continues to this point. [Judge:] So there has to be continuing default, if he wants to go for an order of sale his affidavit must swear that there is continuing default from ...? ..... [Witness:] ... [T]he default cited in the NEPS. [Judge:] Okay. So if the, if the default’s been remedied he’s got to start from scratch, and again file a new NEPS, and then go from there? [Witness:] That’s correct.

The Judge’s Decision 31 The judge concluded (at para. 44): The applicant has established that there were no payments on the mortgage within the ten years preceding the filing of this application. The respondent has not established that the limitation period was stopped or renewed within that period. Therefore, the applicant is en- Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 249

titled to an order under s. 106 of the Real Property Act extinguishing the mortgage. 32 In reaching that conclusion, the judge addressed a number of legal and factual issues, the first of which was whether a notice of exercising power of sale tolls the limitation period for a claim under a mortgage. 33 In her analysis, the judge explained that: “The service and filing of the NEPS is the first step that a mortgagee must take before obtaining an order for sale or foreclosure ...” (at para. 10). After noting that “there appears to be no authority on the effect of service of the NEPS on the limitation period” (at para. 16), she referred to the evidence of Mr. Da- vidson about the practice followed by the Land Titles Office, which she said “is supported by the legislation” (at para. 18). She concluded that a notice of exercising power of sale tolls the limitation period, but that “its effect would be spent if the default for which the NEPS was served is remedied” (ibid.). 34 She stated that “[t]he difficult issue in this case is determining whether the default was remedied” (ibid.). 35 The judge commented on the lack of evidence concerning the mortgage payments after the filing of the NEPS (at para. 12): .... There is evidence before the court that, as of September 1999, only $29,925 remained owing on the loan. Therefore, it is clear that some payments were made after the NEPS was served. However, I have no evidence before me as to the amount of the payments, when they were made or whether the payments were such that they remedied the default. While the amount owing on the loan was obviously reduced after the NEPS was served, I do not know if the payments were made in such a way that the mortgage was put into good standing, that is to say, that the payments were made current at any point. 36 She addressed the issue of onus at some length (at paras. 26-38), and concluded that the evidentiary onus ultimately fell on 74486 to establish that the default was not remedied after the NEPS was filed. 37 She explained that there was a shifting onus (at paras. 26, 30-31) The question then is whether this evidence establishes, or whether I should infer from this evidence, that the default was remedied. The applicant says that it does; the respondent says it does not. Because the evidence is equivocal, how I resolve this issue depends on where the onus lies..... The parties filed no authority on the question of onus, and, not surprisingly, I have been unable to find any directly on point..... 250 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

... [A] shifting onus has practical appeal and is supported by at least one Manitoba case. In Petryk v. Petryk, [1966] M.J. No. 48; 56 D.L.R. (2d) 621 (Man. Q.B.), the court held that, where in an action on a debt the defendant pleads the expiry of the limitation period, the onus is on the plaintiff to show payments were made which stopped the limitation from running. By analogy, in an application under s. 106 of the Real Property Act, the initial onus would be on the applicant to show that the limitation period had expired. The applicant here has satisfied that onus by leading evidence, which was not disputed, that there have been no payments on the mortgage in the ten years preceding the application. The onus then would shift to the respondent to show that the limitation period had been stopped or suspended. I think that the respondent has initially met that onus by showing that the applicant was served with an NEPS. 38 In her analysis with respect to onus, the judge considered the underlying rationale for statutes of limitation articulated by La Forest J. in M. (K.) v. M. (H.), [1992] 3 S.C.R. 6 (S.C.C.), quoting pp. 29-30, and noted that the ten-year limitation period for the enforcement of mortgages is unusually long relative to other limitation periods prescribed by The Lim- itation of Actions Act. She then wrote (at paras. 35-38): In my view, considering the unusual length of the current limitation period and the rationale underlying limitation periods, referred to by the Supreme Court in K.M. v. H.M., it is reasonable to place the ultimate onus on the mortgagee to satisfy the court that it should be allowed to enforce the mortgage more than ten years after default. From a practical perspective, it makes sense that the onus should fall on the party who is most likely to have the evidence to determine the issue..... So, in proceedings to enforce a mortgage, which party is best able to provide evidence as to the status of the mortgage? Of course, it would be prudent for both the mortgagor and mortgagee to keep records of payments made. In this case, the original mortgagor, who was the person in possession of the property, is now dead. The evidence of Mr. Bonham is that no records regarding payments could be found. On the other hand, it is clear from the statement attached to Ms. Barker’s affidavit, that the mortgagee has at least some records. Moreover, the Mortgage Act places an obligation on the mortgagee to keep records as to the status of the mortgage to satisfy the requirement of s. 25..... Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 251

..... I infer from this provision that the respondent should have had records which would have shown the status of the mortgage after the NEPS was served. As between the applicant and respondent, the respondent is in the better position to provide evidence as to whether the default on the mortgage was remedied after the NEPS was served. By not filing those records in evidence, it has failed to rebut the inference from the evidence that the mortgage was put into good standing. On the basis of the evidence before me, I conclude that the NEPS was spent and the limitation period has expired. [emphasis added] 39 Finally, the judge did not accept 74486’s alternative argument that the transfer of the property by Mulligan to Abalon revived the limitation period in 2001 in light of the implied covenant of Abalon with respect to the mortgage. She noted that 74486 “did not argue that there was an ‘ac- knowledgement’ of the mortgage debt by [Abalon] when it took over the property in 2001 so as to renew the limitation period” (at para. 43). With respect to Trusts & Guarantee Co. v. McLeod, [1929] S.C.R. 529 (S.C.C.), relied on by 74486, she wrote (at para. 42): .... In my view, the case does not support the respondent’s contention that the limitation begins to run when the transferee acquires the property. Rather, the court holds that the transferee’s liability ceases with that of the original mortgagor.....

Positions of the Parties on Appeal 40 74486 asserts that the judge erred by not concluding that the NEPS constituted proceedings taken within ten years, as contemplated by The Limitation of Actions Act, thereby precluding Abalon’s right to an order pursuant to s. 106 of The Real Property Act. It says that the judge was wrong to broaden the issues before her by asking whether the NEPS was spent if the default under the mortgage was remedied. It says that she erred further by concluding that the NEPS was spent, based on evidence that she said was unclear and by misplacing the onus. Finally, it says that the judge erred when she concluded that the limitation period did not start to run again in 2001 when the property was transferred to Abalon, given the implied covenant under s. 77 of The Real Property Act. 41 It says that these alleged errors raise questions of law for which the standard of review is correctness. 42 Abalon’s position is that there are no facts in dispute and that the only real issue on appeal is whether the mortgage is statute barred. This, it says, raises a question of law for which the standard of review is correct- 252 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

ness. Abalon says that the judge was correct to conclude that the mortgage should be extinguished, notwithstanding she did not accept, in full, its arguments.

Analysis and Decision 43 I think it important to be clear about what the judge decided. She concluded that the NEPS tolled the limitation period when it was filed and served in 1986. However, she held that on the facts before her, the default for which the NEPS was filed had been remedied and, therefore, the NEPS was spent. She also held that upon further default by Abalon starting on October 7, 1999, the limitation period started running again and at the time it filed its application, the ten-year limitation period had expired. As a result, she declared that the mortgage was “statute barred and thereby extinguished” (The Real Property Act s. 106). 44 While 74486 raises a number of issues in this appeal, in my view, the only significant one is whether the judge erred when she concluded that the NEPS was spent. The other issues can be addressed briefly. 45 74486 argues that the judge wrongly stated that it filed no authority for its position that the NEPS tolled the limitation period, stating that it referred the judge to the definition of “proceedings” in The Limitation of Actions Act, and to s. 134 of The Real Property Act. This, it says, is clear statutory authority that a notice of exercising power of sale should have the same legal effect on a limitation period as does the filing of a statement of claim. 46 Throughout her reasons, the judge noted, as did counsel in their submissions, that there is little authority for the issues raised by Abalon’s application. When the judge stated that she had not been provided with “authority,” the judge was referring to the fact that 74486 had not provided case law or academic commentary in support of its position that the NEPS tolled the limitation period. 47 In her reasons, the judge did consider the definition of “proceedings” and s. 134 of The Real Property Act. She concluded that pursuant to s. 134, “[t]he service and filing of the NEPS is the first step that a mortgagee must take before obtaining an order for sale or foreclosure” (at para. 10). If any authority is needed for that principle in light of s. 134, see Rafnson v. Canada Permanent Trust Co. (1978), 87 D.L.R. (3d) 59 (Man. C.A.), in which O’Sullivan J.A., after referring to The Law Soci- ety of Manitoba’s Bar Admission Course material with respect to “Mort- gage Sale and Foreclosure Proceedings,” and Victor DiCastri, Thom’s Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 253

Canadian Torrens System, 2d ed. (Calgary: Burroughs & Company Lim- ited, 1962) at 515, wrote (at p. 62): Admittedly, these quotations are not necessarily decisive of the point. Yet they point to a common understanding among conveyancers and Judges that the filing of a notice of exercising power of sale is a first step in the proceedings and not merely a notice that they may be commenced. [emphasis added] 48 The filing of a notice of exercising power of sale is the first step in mortgage sale proceedings. That is clear. In my view, it is also clear that it has the effect of tolling the applicable limitation period. As explained by the judge, this is evident from the statutory regime and supported by the foundational principles pertaining to limitation periods, as well as the evidence of Mr. Davidson. Therefore, the judge correctly concluded that the NEPS tolled the limitation period with respect to the mortgage when it was filed in 1986. 49 This conclusion did not end the matter, as 74486 argued that it should. Given the evidence before her, the judge was obliged to consider whether the NEPS was spent. I do not agree with 74486 that the judge inappropriately broadened the issues before her by engaging in this enquiry. 50 74486 argues that the judge erred in law when she concluded that a notice of exercising power of sale can become spent. By this argument, it is saying that the tolling of the limitation period as a result of the NEPS is in effect today and that it is irrelevant what occurred subsequent to its filing. The judge disagreed and so do I. 51 Mr. Davidson’s evidence, which the judge appropriately noted was supported by the statutory regime (including s. 14 of The Mortgage Act and s. 115 of The Real Property Act, which give a mortgagor protection from acceleration), emphasized the importance of “continuing default” in the mortgage sale proceedings. Simply put, if the default for which the NEPS was filed is remedied there is no longer any continuing default and any right to proceed under the NEPS. See Ratner v. Lavallee, [1975] M.J. No. 323 (Q.B.) (QL) in which Hunt J. wrote that an “affidavit of continuing default ... was necessary to give a right to continue the mortgage sale proceedings” (at para. 6). 52 Sackville v. Canada Permanent Mortgage Corp. (1916), 27 D.L.R. 790 (Sask. C.A.) also provides support for the principle that a notice of exercising power of sale can become spent. In Sackville, the plaintiff (mortgagor) was in default and the respondent (mortgagee) filed a notice 254 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

of exercising power of sale. In dispute was what was agreed to by the parties at a subsequent meeting as to the new monthly payments. The plaintiff then obtained an injunction from the master restraining the sale of the land. That was later overturned by a judge in chambers and there was then a further appeal, by the plaintiff, to the court en banc. Elwood J., writing for five judges, wrote (at p. 790): .... I do not think on this application we are called upon to definitely decide what that arrangement was. The plaintiff swears definitely that the agreement was that he was to pay two payments of $10 each every month, and that no further steps were to be taken by the defendant under the notice of exercising power of sale. If that was the arrangement, then it would seem to me that the proceedings, so far as the notice of exercising power of sale is concerned, would be at an end, and that the defendant company could only proceed again by serving a further notice of exercising power of sale. What the exact arrangement was is a matter that will be determined at the trial. [emphasis added] 53 The judge did not err in law when she concluded that a notice of exercising power of sale becomes spent if the default under the mortgage is remedied. 54 I turn now to the key issue of whether the judge was wrong to conclude that the NEPS was spent in this case because the default under the mortgage had been remedied. Whether the default had been remedied is a question of fact and the standard of review is palpable and overriding error. The issue also raises a question of law with respect to the judge’s placement of the onus on 74486. The standard of review for this discrete question is correctness. 55 As did the judge, I think it important to be reminded of the foundational principles that apply to limitation periods. As noted (and quoted in part) by the judge, La Forest J. articulated these principles at some length in M. (K.). In Novak v. Bond, [1999] 1 S.C.R. 808 (S.C.C.), McLachlin J. (as she then was), wrote of the four characteristics of limitation statutes one of which is to “prevent the bringing of claims where the evidence may have been lost to the passage of time” (at para. 67): The result of this legislative and interpretive evolution is that most limitations statutes may now be said to possess four characteristics. They are intended to: (1) define a time at which potential defendants may be free of ancient obligations, (2) prevent the bringing of claims where the evidence may have been lost to the passage of time, (3) provide an incentive for plaintiffs to bring suits in a timely fashion, and (4) account for the plaintiff’s own circumstances, as assessed Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Barbara M. Hamilton J.A. 255

through a subjective/objective lens, when assessing whether a claim should be barred by the passage of time. To the extent they are reflected in the particular words and structure of the statute in question, the best interpretation of a limitations statute seeks to give effect to each of these characteristics. 56 Walter M. Traub, Falconbridge on Mortgages, looseleaf, 5th ed. (To- ronto: Canada Law Book, 2011) addresses the evidentiary challenge created by the passage of time (at pp. 30-2, 30-3): .... The statutory law imposing limitation periods on the right to seek legal redress has been enacted in the public interest to ensure that there will be an end to the prospect of litigation, once a claim has become stale. The concern is the increasing difficulty to produce evidence and witnesses with the passage of time and the need for persons to be free of unexpected claims arising after an unreasonable period of time. Upon expiry of the limitation period, all rights of enforcement are lost. In the case of a mortgage claim, the party against whom the limitation period has run can no longer bring an action for realization against or recovery of the land. The effect is that both the right to bring an action and the right to assert the rights to title of the real property are extinguished by the expiry of the limitation period. See also Graeme Mew, The Law of Limitations, 2d ed. (Toronto: But- terworths, 2004) at para. 3.2. 57 I think it significant that the schedule of mortgage payments, adduced into evidence by 74486, shows that the last payment on the mortgage was in 1999. It is also significant that the evidence does not disclose 74486 doing anything since that time to continue the process initiated by the NEPS filed in 1993. In those circumstances, the judge appropriately turned her mind to the factual question of whether there had been continuing default under the mortgage. 58 Given the limited evidence before her, the question of onus became crucial. 59 The judge wrote that “it makes sense that the onus should fall on the party who is most likely to have the evidence to determine the issue” (at para. 36), and explained why 74486 had the ultimate onus in this case. I am of the view that the statutory obligation of a mortgagee to keep records under s. 25 of The Mortgage Act tellingly supports this conclusion. Further support is found in Petryk v. Petryk (1966), 56 D.L.R. (2d) 621 (Man. Q.B.), as noted by the judge. In the course of explaining that the onus is on a plaintiff (creditor) to show payments were made which 256 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

stopped a limitation period from running, Dickson J., as he then was, wrote (at p. 4): ...... [Section] 3(1) (f) of the Limitation of Actions Act bars recovery in respect of those items unless there was part payment of the indebtedness by defendant. The burden of establishing part payment is upon the plaintiff: Ball v. Parker (1877), 1 O.A.R. 593. 60 I see no reason to distinguish between the onus on a plaintiff/creditor and a mortgagee, such as 74486, to establish that there has been part payment or acknowledgment of indebtedness within the limitation period. The judge did not err in law in placing the onus on 74486. 61 From the evidence, and the lack of evidence, the judge inferred that the mortgage had been remedied after the filing of the NEPS and that the last payment under the mortgage was made on September 7, 1999. The judge was entitled to make the finding of facts, and inferences from those facts, that she did. She made no palpable and overriding error in concluding that the mortgage had been remedied prior to the default in October 1999. 62 Given that the NEPS was spent and that: “It is common ground that no payments were made on the mortgage within the ten years preceding the filing of the application” (at para. 3), the judge rightly granted the order sought by Abalon. 63 Finally, for the reasons given by the judge, I do not accept 74486’s alternative argument that the limitation period started again in 2001 when the property was transferred to Abalon.

Conclusion 64 The judge thoroughly addressed the correct legal and factual issues. She made no error in law or any palpable and overriding error with respect to the facts in reaching her decision declaring the mortgage statute barred and thereby extinguished pursuant to s. 106 of The Real Property Act. 65 I would dismiss the appeal, with costs.

Martin H. Freedman J.A.:

I agree: Abalon Holdings Ltd. v. 74486 Manitoba Ltd. Michel A. Monnin J.A. 257

Michel A. Monnin J.A.:

I agree: Appeal dismissed. 258 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

[Indexed as: Rubin v. Gendemann] Glenna Jean Rubin (Appellant / Plaintiff) and Klaus Dieter Gendemann (Respondent / Defendant) Alberta Court of Appeal Docket: Edmonton Appeal 1103-0101-AC 2012 ABCA 38 Jean Cˆot´e, Patricia Rowbotham JJ.A., Donna Read J. (ad hoc) Heard: January 10, 2012 Judgment: February 10, 2012 Restitution and unjust enrichment –––– General principles — Requirements for unjust enrichment — Conferral of benefit –––– Parties began dating in December 2001, began living together as common-law couple in July 2003, and separated in January 2009 — Many properties were purchased by G in his name alone throughout parties’ relationship — G agreed to provide funds for renovations and to take over mortgage, taxes, and insurance, provided R sold property to him — Between 2002 and 2003, as part of transaction, G paid off approximately $96,000 of R’s debts — In July 2003, G purchased R’s home, put property in his name alone, and began living with R and her children — R’s claim for unjust enrichment with respect to G’s properties proceeded to trial — R’s claim failed — Taking into account amounts G paid towards R’s debts, as well as mortgage, G paid about $22,500 more than fair market value for home — R was therefore well compensated for sale of home to G — Further, R made no significant contribution to purchase, development or maintenance of any of G’s real properties — G was therefore not enriched by R’s efforts, and R suffered no deprivation — R appealed — Appeal dismissed — Trial judge was satisfied, largely on basis of R’s own acknowledgments, that transfer of property was transfer for which consideration was paid and that there was no basis for claim in unjust enrichment — There was ample evidence in support of this finding — R had not persuaded that appellate interference was warranted. Restitution and unjust enrichment –––– Benefits conferred in anticipation of reward — Family — Common law spouses –––– Parties began dating in De- cember 2001, began living together as common-law couple in July 2003, and separated in January 2009 — Many properties were purchased by G in his name alone throughout parties’ relationship — In July 2003, G purchased R’s home, put property in his name alone, and began living with R and her children — R’s claim for unjust enrichment with respect to G’s properties proceeded to trial — R failed to show requisite three parts to test for unjust enrichment — G received little benefit from R’s limited contributions to household and its maintenance, and R suffered no deprivation — R did not even do much cooking for G, enter- Rubin v. Gendemann 259

tained G’s friends very infrequently, and only supervised upkeep of home — G gave back to relationship more than R was entitled to receive — On policy basis, there was no juristic reason why R should have received part of property, by constructive trust or by money award — R appealed — Appeal dismissed — Considerable evidence was adduced regarding R’s contributions to G’s properties — Although R may have subjectively believed that she made significant contributions, trial judge was required to assess these contributions objectively based upon all evidence — Trial judge’s findings that G was not enriched by R’s contributions was amply supported by record and her conclusion was entitled to appellate deference — There was no error discerned in trial judge’s application of law of unjust enrichment or her conclusion that R did not confer benefit on G. Family law –––– Division of family property — Determination of ownership of property — Application of trust principles — Resulting and constructive trusts — Constructive trusts generally –––– Parties began dating in December 2001, began living together as common-law couple in July 2003, and separated in January 2009 — Many properties were purchased by G in his name alone throughout parties’ relationship — In July 2003, G purchased R’s home, put property in his name alone, and began living with R and her children — R’s claim for unjust enrichment with respect to G’s properties proceeded to trial — R failed to show requisite three parts to test for unjust enrichment — G received little benefit from R’s limited contributions to household and its maintenance, and R suffered no deprivation — R did not even do much cooking for G, enter- tained G’s friends very infrequently, and only supervised upkeep of home — G gave back to relationship more than R was entitled to receive — On policy basis, there was no juristic reason why R should have received part of property, by constructive trust or by money award — R appealed — Appeal dismissed — Considerable evidence was adduced regarding R’s contributions to G’s properties — Although R may have subjectively believed that she made significant contributions, trial judge was required to assess these contributions objectively based upon all evidence — Trial judge’s findings that G was not enriched by R’s contributions was amply supported by record and her conclusion was entitled to appellate deference — There was no error discerned in trial judge’s application of law of unjust enrichment or her conclusion that R did not confer benefit on G. Restitution and unjust enrichment –––– Benefits conferred in anticipation of reward — Family — Miscellaneous –––– Joint family venture — Parties began dating in December 2001, began living together as common-law couple in July 2003, and separated in January 2009 — Many properties were purchased by G in his name alone throughout parties’ relationship — In July 2003, G purchased R’s home, put property in his name alone, and began living with R and her children — R’s claim for unjust enrichment with respect to G’s properties proceeded to trial — R’s claim failed — Parties did not operate in joint family venture context — Parties did not work collaboratively toward common goals — R spent most of her money on herself and her children, and her contributions in 260 WESTERN WEEKLY REPORTS [2012] 6 W.W.R. non-monetary ways were minimal — Most of R’s domestic duties also related to herself and her children, not to domestic partnership — There was also no economic integration, or actual intent to share in assets or wealth generated — Fur- ther, parties led somewhat separate lives — R mostly spent time with her children, and G mostly spent time with his friends — R appealed — Appeal dismissed — Considerable evidence was adduced regarding R’s contributions to G’s properties — Although R may have subjectively believed that she made significant contributions, trial judge was required to assess these contributions objectively based upon all evidence — Trial judge’s findings that G was not enriched by R’s contributions was amply supported by record and her conclusion was entitled to appellate deference — There was no error discerned in trial judge’s application of law of unjust enrichment or her conclusion that R did not confer benefit on G. Evidence –––– Admissibility — Relevance — Miscellaneous –––– Parties began dating in December 2001, began living together as common-law couple in July 2003, and separated in January 2009 — Many properties were purchased by G in his name alone throughout parties’ relationship — G agreed to provide funds for renovations and to take over mortgage, taxes, and insurance, provided R sold property to him — In July 2003, G purchased home, put property in his name alone, and began living with R and her children — R’s claim for unjust enrichment with respect to G’s properties proceeded to trial — R failed to show requisite three parts to test for unjust enrichment — R appealed — Appeal dismissed — Six particular pieces of evidence were each relevant to fact in issue — Because bases for many of R’s claims related to services she alleged to have provided, evidence refuting those claims was clearly relevant. Civil practice and procedure –––– Costs — Security for costs — Order for security — Form and amount of security. Cases considered: Housen v. Nikolaisen (2002), 10 C.C.L.T. (3d) 157, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, 2002 CarswellSask 178, 2002 CarswellSask 179, 2002 SCC 33, 30 M.P.L.R. (3d) 1, 219 Sask. R. 1, 272 W.A.C. 1, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, REJB 2002-29758 (S.C.C.) — followed Kerr v. Baranow (2011), 14 B.C.L.R. (5th) 203, [2011] 3 W.W.R. 575, 64 E.T.R. (3d) 1, 93 R.F.L. (6th) 1, 300 B.C.A.C. 1, 509 W.A.C. 1, 274 O.A.C. 1, [2011] 1 S.C.R. 269, 2011 SCC 10, 2011 CarswellBC 240, 2011 Car- swellBC 241, 328 D.L.R. (4th) 577, 411 N.R. 200, [2011] S.C.J. No. 10, [2011] A.C.S. No. 10 (S.C.C.) — followed Peter v. Beblow (1993), [1993] 3 W.W.R. 337, 23 B.C.A.C. 81, 39 W.A.C. 81, 101 D.L.R. (4th) 621, [1993] 1 S.C.R. 980, 150 N.R. 1, 48 E.T.R. 1, 77 B.C.L.R. (2d) 1, 44 R.F.L. (3d) 329, [1993] R.D.F. 369, 1993 CarswellBC 44, 1993 CarswellBC 1258, EYB 1993-67100, [1993] S.C.J. No. 36 (S.C.C.) — considered Rubin v. Gendemann Per curiam 261

Regulations considered: Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) Federal Child Support Guidelines, SOR/97-175 s. 7 — considered

APPEAL by woman from judgment reported at Rubin v. Gendemann (2011), [2011] 6 W.W.R. 312, 93 R.F.L. (6th) 130, 41 Alta. L.R. (5th) 293, 507 A.R. 215, 2011 ABQB 71, 2011 CarswellAlta 353 (Alta. Q.B.).

E.G. Rice, Q.C., for Appellant T. Huizinga, for Respondent

Per curiam: I. Introduction 1 The appellant and respondent cohabited from June 2003 to January 2009. Each had been previously married and both had children. The appellant’s teen-aged children lived with the couple. For most of the period of cohabitation the appellant was employed as a pharmaceutical sales representative with an income of between $50,000 and $100,000.The respondent is a psychiatrist at the University of Alberta. During the relevant period his income ranged from $500,000 to $1,000,000. After the termination of the relationship the appellant commenced an action against the respondent seeking child support, spousal support and a declaration that the respondent held property on her behalf as a constructive trustee. The appellant’s claims to property were based solely upon the doctrine of unjust enrichment. The trial judge dismissed all of the appellant’s claims. The appellant appeals the judgment with respect to the property claims only.

II. Background 2 The facts are set out in detail in the trial judgment Rubin v. Gendemann, 2011 ABQB 71, 507 A.R. 215 (Alta. Q.B.)(Rubin). Rele- vant to this appeal are the facts relating to the appellant’s claim of a 50 per cent share in the increased value of property owned by the respondent. Although the respondent owns eight parcels of real property, the appellant claims an interest in only six. As at June 2003 the respondent owned four pieces of real property, title to which were in his name alone. One of these properties was the home in which the appellant and her children lived (the Butchart Drive home), and which the respondent purchased from the appellant. The circumstances of this transaction will be addressed in greater detail below. During the relationship the respondent 262 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

purchased four other properties. The appellant made no financial contribution to any of these properties. She claims that she made other contributions which entitle her in equity to a share of the properties.

III. Trial Judgment 3 This was a two-week trial. The appellant testified. Two of the appellant’s friends and her psychiatrist testified as part of the appellant’s case. The respondent testified and called 19 other witnesses, including the appellant’s ex-husband and the appellant’s nanny/housekeeper. The documentary evidence was some 3000 pages. Much of the appellant’s case was based upon her alleged “sweat equity” and “nest feathering”. The respondent took issue with the extent of the appellant’s contribution. Ac- cordingly, assessment of the parties’ credibility was important. Where the evidence conflicted, the trial judge generally preferred the respondent’s evidence. This was not based upon the demeanour of the parties in court, but rather on a recurring pattern showing that the appellant’s evidence tended to conflict with that of other witnesses who had no align- ment with either party (para 14). The trial judge found that the appellant grossly exaggerated certain of her activities (para 17) and her testimony had a “decidedly opportunistic flavour” (para 19). The appellant ac- knowledges the considerable deference owed to a trial judge’s assessment of credibility. Her grounds of appeal do not challenge this assessment. 4 After the close of the case the Supreme Court of Canada issued its decision in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 (S.C.C.), which considered the division of assets between domestic partners. The trial judge invited counsel to make further submissions, and they did. Neither asked to submit further evidence. Using the analysis prescribed in Kerr the trial judge analyzed each of the appellant’s claims. She concluded that the appellant made no significant contribution to the purchase, development or maintenance of any of the respondent’s real properties and accordingly the respondent was not enriched by the appellant’s efforts (para 187), and the appellant suffered no deprivation (para 188). 5 The appellant also advanced an equitable claim on the basis that her efforts to maintain a family and a family home enabled the respondent to commit resources to his work and his investments that would otherwise have been consumed by these domestic tasks: Kerr and Peter v. Beblow, [1993] 1 S.C.R. 980, 101 D.L.R. (4th) 621 (S.C.C.). The trial judge analyzed each of the appellant’s alleged contributions to determine whether Rubin v. Gendemann Per curiam 263

the respondent had been enriched and the appellant deprived. She dismissed each of these. In particular she found that the appellant performed minimal household work as the parties had a nanny/housekeeper throughout the relationship who testified that she performed most of that work. Payment for these services by both the appellant and respondent was taken into consideration. The trial judge rejected the appellant’s claim that she spent significant time attending to the respondent’s elderly mother as the records and testimony of the staff at the nursing home indicated that the appellant rarely attended. 6 In addition, the appellant claimed that her relationship with the respondent was a joint family venture: Kerr at paras 88 and 89. She argued that there was a link between her contributions to the joint family venture and the accumulation of assets. Adopting the framework of analysis from Kerr, the trial judge concluded that there was no joint family venture.

IV. Grounds of Appeal and Standard of Review 7 The appellant raises three grounds of appeal. She says that the trial judge erred in: (a) her treatment of the transfer of the Butchart Drive home; (b) her application of the principles of unjust enrichment; and (c) her consideration of evidence of the conduct of the parties. This appeal engages issues of law and fact. Questions of law are reviewed for correctness, while findings of fact and questions of mixed fact and law are reviewed for palpable and overriding error: Housen v. Niko- laisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (S.C.C.) paras 8-37.

V. Analysis A. The Butchart Drive Property 8 The appellant received the Butchart Drive home as part of her divorce settlement. She and her children lived there from 1993. The respondent purchased the home from the appellant on June 20, 2003 just prior to moving into the home with the appellant. The two had been in a relationship for about 18 months at that time. The transfer of land indicates that the value of the home on June 20, 2003 was $330,000. The respondent assumed the mortgage ($199,000). Relying upon an actual appraisal of the home the trial judge found that its value at June 20, 2003 was actually $300,000, noting that the respondent had purchased it for more than it was worth. After the assumption of the mortgage, the balance of the purchase price was $101,000. 264 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

9 The evidence disclosed that prior to the transfer of the home the appellant had significant debts. The trial judge found that the parties intended that the respondent’s purchase of the home would take into account $65,000 he had paid on the appellant’s debt in 2002. The respondent testified that in late 2002 the appellant revealed to him that she had much more debt than the $65,000 already paid. At that time the appellant was considering selling her home and moving to a smaller home. The respondent offered to pay the additional debt ($60,000 to $70,000) and buy the home. He initially offered $275,000 for the home. However, the appellant asked him to renovate and, in the spring of 2003, the respondent paid for a significant renovation to the home in the amount of $27,500. By June 2003, when the parties signed the transfer, the price was altered to $330,000 to take into account the cost of the renovations and the additional debt. The trial judge found that the appellant was well compensated for the sale of the home and given that the actual value was $300,000, the respondent had paid $22,500 more than the value of the home. 10 The appellant submits that the trial judge erred in law by treating the transfer of the Butchart Drive home to the respondent as a contract of sale instead of a transfer without consideration. She submits that the respondent did not pay the balance of the purchase price. Although she acknowledged in her evidence that the respondent did pay her $65,000, she submits that this was past consideration and, as such, could not be consideration for the contract. Further, she submits that the respondent did not pay the cash to close. 11 However, the appellant acknowledged on the transfer of land that she had received from the respondent “in cash or equivalent the deposit of $65,000 and the cash to close $66,846.75 as set out in the statement of adjustments”. The Seller’s Form, also executed by the appellant, at clause 12.04 says: “I acknowledge that I have already received the De- posit and the Cash to Close.”. The appellant also acknowledged in her testimony that she had received $65,000 to pay off her debts. She confirmed to a friend that the transfer had occurred because the respondent had paid off all of her debt. 12 The appellant submits that the trial judge erred in relying upon the appellant’s acknowledgments. She says that she did not obtain independent legal advice and that the parties were not in equal bargaining positions. 13 This case was pleaded and argued entirely in equity on the basis of unjust enrichment. The appellant argued that she had conferred a benefit Rubin v. Gendemann Per curiam 265

upon the respondent due to her financial and non-financial contribution to property, including the Butchart Drive home. She did not sue to set aside the transfer of the Butchart Drive home on the basis of lack of consideration, duress, or unconscionability. None of these arguments was made at trial. 14 The trial judge was satisfied, largely on the basis of the appellant’s own acknowledgments, that the transfer of the Butchart Drive home was a transfer for which consideration was paid and that there was no basis for a claim in unjust enrichment. There was ample evidence in support of this finding and the appellant has not persuaded us that appellate interference is warranted. This ground of appeal is dismissed.

B. Unjust Enrichment 15 The appellant submits that the trial judge erred in her application of the principles of unjust enrichment. She says that the first error occurred when the trial judge determined the length of the period of cohabitation and characterized the relationship as an adult interdependent partnership. She submits that the nature and duration of the relationship are not pre- requisites to a finding of unjust enrichment. 16 It was the appellant who sought to have these determinations made by the trial judge. These determinations were necessary to determine the issue of spousal support. It seems to us that the length of the relationship is a significant factor in a claim for unjust enrichment. It is not difficult to imagine a relationship being so short as to negate such a claim. At issue in Kerr were two long-term domestic relationships: 25 years for Kerr and Baranow and 12 years for Vanasse and Seguin. Here the relationship was five and one-half years. And while the length of the relationship was one factor to consider, it was the evidence regarding the appellant’s contribution which persuaded the trial judge that the appellant had not met her burden of establishing that she had conferred a benefit on the respondent. The duration of the relationship is also necessary to determine the starting point for the claim of unjust enrichment. While it is true that a claim of unjust enrichment can be made in a relationship other than one of adult interdependent partnership, at no point did the trial judge state that this characterization was necessary for a finding of unjust enrichment. 17 The appellant contends that the trial judge erred in finding that the appellant’s contributions were so little as to disentitle her to any share in the respondent’s properties, particularly the increase in value of the Butchart Drive home. Indeed, it is her submission that in all circumstances the provision of domestic services is an enrichment with a corre- 266 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

sponding deprivation. She submits that it is an error in law to value a contribution as “zero”. Although no authority is cited for this proposition, the appellant submits that this can be inferred from the Supreme Court’s decision in Kerr. We disagree. The Supreme Court in Kerr stated that it is the “unpaid provision of services (including domestic services)” that is the relevant consideration (at para 42). At no point in the judgment does the court say that the provision of domestic services in all cases grounds a claim for unjust enrichment. 18 Considerable evidence was adduced regarding the appellant’s contributions, both financial and non-financial, to the respondent’s properties. The trial judge found, contrary to the appellant’s submissions, that the appellant had provided no financial contribution to any of the properties and that her non-financial contributions to the various vacation properties was no more than what would be expected of a “thoughtful guest”. The appellant characterizes this statement as a fallacy, as the appellant was not a guest. The trial judge did not find that she was a “guest”. Rather, she accepted the evidence of the respondent and other witnesses that much of the housekeeping at the vacation properties was done by house cleaners or by the guests, and that meals were a joint effort. The appellant made much the same contribution as the guests. The documentary evidence also established that it was the respondent who paid for con- tractors to do work at the vacation properties and that he paid for dinners at restaurants and take out meals. The two properties to which the appellant contributed were the Seclusion Bay property where the appellant connected the three owners by email, kept a file of expenses, arranged a house cleaner and booked flights. The trial judge characterized this as de minimis. The second was the Scottsdale property where the appellant created a Yahoo calendar to assist with the use of the property, a task which took about 10 minutes per year. 19 The trial judge also considered the appellant’s non-financial contributions to the Butchart Drive home. She meticulously analyzed the appellant’s domestic contributions including the nanny’s role in the household, the appellant’s meal preparation, the appellant’s entertainment services, the appellant’s other housekeeping duties, and her alleged email/secretarial services. She also considered the appellant’s claim that she took care of the respondent’s mother. The evidence of the nanny/housekeeper, of the respondent and of other witnesses refuted the claims asserted by the appellant. Although the appellant may have subjectively believed that she had made significant contributions, the trial judge was required to assess these contributions objectively based upon Rubin v. Gendemann Per curiam 267

all of the evidence. The trial judge’s finding that the respondent was not enriched by the appellant’s contributions is amply supported by the record and her conclusion is entitled to appellate deference. 20 Although the appellant characterizes the trial judge’s decision as resulting in her receiving nothing from the respondent, this ignores the trial judge’s finding that the appellant expended none of her income throughout the relationship for day-to-day expenses, resulting in a benefit to her of over $120,000 at December 2008. She received a further $118,958.93 from the date of separation to the date of trial. All of this was tax-free. This increased her net worth by 350 per cent even with a lengthy period of unemployment during the period of cohabitation, while the respondent’s net worth increased 290 per cent. The trial judge observed that if anyone had a claim for unjust enrichment, it was the respondent who chose not to pursue such a claim. 21 Although the trial judge was not required to consider the third stage of the unjust enrichment analysis, whether there was any juristic reason to permit the respondent to retain the benefit, she observed that the appellant received several benefits. All of the appellant’s travel costs and those of her children were paid by the respondent. She resided for free during the period of cohabitation, leaving her free to spend her income and child support payments as she chose. Her net worth increased more than that of the respondent. She deducted expenses on her tax returns as business expenses associated with working at home, that were actually paid by the respondent. She sought, obtained and pocketed reimburse- ment from her ex-husband for section 7 expenses which the respondent had paid. She had the use of housekeeping services from mid 2006 paid for by the respondent. 22 In conclusion, we discern no error in the trial judge’s application of the law of unjust enrichment or her conclusion that the appellant did not confer a benefit on the respondent.

C. Conduct of the Parties 23 The appellant submits that the trial judge erred in admitting evidence of the conduct of the parties. She submits that this evidence was not relevant to a claim of unjust enrichment. She points to six particular pieces of evidence. In our view each was relevant to a fact in issue. The respondent adduced evidence from the nursing home in which his mother resided to show that there was no record of the appellant logging in. One of the ways in which the appellant alleged that she had provided a benefit to the respondent was by providing consistent care to his mother. This evi- 268 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

dence was clearly relevant. Another benefit which the appellant claimed to have provided was through entertaining the respondent’s friends and family. The appellant challenges the relevance of evidence given by those friends that they were made to feel unwelcome by the appellant and stopped visiting as a result. Again, the evidence was relevant. The appellant contends that evidence that third parties contributed labour without pay to a vacation property was irrelevant. But, this evidence was relevant to refute her claim that she had provided those very services. The trial judge commented adversely on the appellant’s deceit regarding her quali- fications. She held herself out in her curriculum vitae and on business cards as having a Bachelor of Science degree and did not. Her qualifica- tions were relevant to her claim for spousal support. The trial judge commented upon the amount that the appellant spent during the relationship. The appellant challenges its relevance. However, this evidence was relevant both to the appellant’s alleged financial contribution to the relationship and to her budget associated with her claim to spousal and child support. The appellant contends that evidence of clothing given to a friend was not relevant, but again this related to her reasonable needs in the context of her claim for spousal support. 24 In summary, because the bases for many of the appellant’s claims related to services she alleged to have provided, evidence refuting those claims was clearly relevant. This ground of appeal is also dismissed.

VI. Conclusion 25 The result of this case is unusual. The appellant was found not to have provided any benefit, either financial or through her labour, to the respondent’s properties. Moreover, in the rare circumstances of this case, she did not retain the home that she owned at the beginning of the relationship or any of the increase in value after its sale. Although the appellant characterizes this case as an error in the application of the law of unjust enrichment, this case is about facts. The record and the trial judge’s thorough review and assessment of the evidence amply support her conclusions. The appellant has not demonstrated any error in the trial judge’s application of the law or in her findings of fact. The appeal is dismissed. 26 The appellant was directed to post security for costs. The order directed that she transfer $50,000 into a segregated RRSP account, rather than paying the funds into court, and that if the respondent was entitled to costs upon the disposition of the appeal, the net value of the $50,000 be paid to the respondent’s counsel. As the respondent has been success- Rubin v. Gendemann Per curiam 269 ful, he is entitled to the costs of the appeal, and accordingly, once those costs have been taxed, to be paid from the funds held in the RRSP. If RBC Dominion Securities, the financial institution where the RRSP is held, requires specific direction in relation to the funds, counsel may include a provision in the judgment roll or in a separate court order. If counsel need to address the court regarding costs, they may do so in writing within 30 days of the date of this judgment. Appeal dismissed. 270 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

[Indexed as: Peier v. Cressey Whistler Townhomes Ltd. Partnership] Michael Peier, Respondent (Plaintiff) and Cressey Whistler Townhomes Limited Partnership and 629220 B.C. Ltd., Appellants (Defendants) British Columbia Court of Appeal Docket: Vancouver CA039151 2012 BCCA 28 Levine, Lowry, Frankel JJ.A. Heard: December 9, 2011 Judgment: January 19, 2012 Real property –––– Sale of land — Agreement of purchase and sale — Inter- pretation of contract — General principles –––– At insistence of plaintiff purchaser, contract to purchase town house built by defendant builder included two- part condition that power lines be buried prior to completion — Contract stated that if power lines were not able to be buried, purchaser could cancel at his option and deposit would be returned — When power lines were not buried as of closing date, purchaser invoked condition and demanded return of his $375,000 deposit — Builder attempted to extend completion date, as well as outside date for closing — Purchaser brought action for return of deposit; builder counterclaimed for specific performance or damages for breach of contract — Action was allowed; counterclaim was dismissed — Trial judge held it was fundamental term of contract that power lines be buried prior to completion, and breach allowed termination of contract — Trial judge held examination of entire contract led to conclusion that builder did not have right to extend completion date under circumstances — Builder appealed — Appeal allowed — Once construction of townhouse was finished, purchaser was obligated to complete purchase whenever power lines were buried providing that was done prior to extended outside date — Prior to that, purchaser’s obligation was suspended, but he was never entitled to terminate purchase agreement and walk away from deal. Real property –––– Sale of land — Agreement of purchase and sale — Inter- pretation of contract — Conditions — Conditions precedent — Miscellane- ous –––– At insistence of plaintiff purchaser, contract to purchase town house built by defendant builder included two-part condition that power lines be buried prior to completion — Contract stated that if power lines were not able to be buried, purchaser could cancel at his option and deposit would be returned — When power lines were not buried as of closing date, purchaser invoked condition and demanded return of his $375,000 deposit — Builder attempted to extend completion date, as well as outside date for closing — Purchaser brought Peier v. Cressey Whistler Townhomes Ltd. Partnership 271

action for return of deposit; builder counterclaimed for specific performance or damages for breach of contract — Action was allowed; counterclaim was dismissed — Trial judge held language indicated that completion of parties’ obligations was conditional on fulfilment of condition, since parties agreed that it was condition of contract that power lines be buried prior to completion — Trial judge held condition is term that is essential to contract and of such importance to innocent promisee that he or she would not have entered into contract unless assured of strict or substantial performance — Builder appealed — Appeal allowed — Once construction of townhouse was finished, purchaser was obligated to complete purchase whenever power lines were buried providing that was done prior to extended outside date — Prior to that, purchaser’s obligation was suspended, but he was never entitled to terminate purchase agreement and walk away from deal. Real property –––– Sale of land — Agreement of purchase and sale — Inter- pretation of contract — Particular terms — Miscellaneous –––– At insistence of plaintiff purchaser, contract to purchase town house built by defendant builder included two-part condition that power lines be buried prior to completion — Contract stated that if power lines were not able to be buried, purchaser could cancel at his option and deposit would be returned — When power lines were not buried as of closing date, purchaser invoked condition and demanded return of his $375,000 deposit — Builder attempted to extend completion date, as well as outside date for closing — Purchaser brought action for return of deposit; builder counterclaimed for specific performance or damages for breach of contract — Action was allowed; counterclaim was dismissed — Trial judge held language indicated that completion of parties’ obligations was conditional on fulfilment of condition, since parties agreed that it was condition of contract that power lines be buried prior to completion — Trial judge held condition is term that is essential to contract and of such importance to innocent promisee that he or she would not have entered into contract unless assured of strict or substantial performance — Builder appealed — Appeal allowed — Once construction of townhouse was finished, purchaser was obligated to complete purchase whenever power lines were buried providing that was done prior to extended outside date — Prior to that, purchaser’s obligation was suspended, but he was never entitled to terminate purchase agreement and walk away from deal. Real property –––– Sale of land — Remedies — Rescission — Grounds for rescission — Default of contractual term –––– At insistence of plaintiff purchaser, contract to purchase town house built by defendant builder included two- part condition that power lines be buried prior to completion — Contract stated that if power lines were not able to be buried, purchaser could cancel at his option and deposit would be returned — When power lines were not buried as of closing date, purchaser invoked condition and demanded return of his $375,000 deposit — Builder attempted to extend completion date, as well as outside date for closing — Purchaser brought action for return of deposit; builder counter- 272 WESTERN WEEKLY REPORTS [2012] 6 W.W.R. claimed for specific performance or damages for breach of contract — Action was allowed; counterclaim was dismissed — Trial judge held language indicated that completion of parties’ obligations was conditional on fulfilment of condition, since parties agreed that it was condition of contract that power lines be buried prior to completion — Trial judge held condition is term that is essential to contract and of such importance to innocent promisee that he or she would not have entered into contract unless assured of strict or substantial performance — Builder appealed — Appeal allowed — Condition precedent required that power lines be buried prior to any date chosen for completion — Condition precedent suspended purchaser’s obligation to pay purchase price, but suspension was not open-ended — Outside Date served to give certainty to agreement — Once construction of townhouse was finished, purchaser was obligated to complete purchase whenever power lines were buried providing that was done prior to extended outside date. Contracts –––– Performance or breach — Time of performance — Time of essence –––– Though condition in purchase and sale agreement for new townhome requiring burial of hydro lines provided “time was of the essence”, date for completion was not. Cases considered by Lowry J.A.: Dynamic Transport Ltd. v. O.K. Detailing Ltd. (1978), 85 D.L.R. (3d) 19, [1978] 2 S.C.R. 1072, 20 N.R. 500, 6 Alta. L.R. (2d) 156, 9 A.R. 308, 4 R.P.R. 208, 1978 CarswellAlta 62, 1978 CarswellAlta 298, [1978] S.C.J. No. 52 (S.C.C.) — followed Gulston v. Aldred (2011), 2011 CarswellBC 671, 303 B.C.A.C. 115, 512 W.A.C. 115, 2 R.P.R. (5th) 157, 2011 BCCA 147 (B.C. C.A.) — referred to Jorian Properties Ltd. v. Zellenrath (1984), 26 B.L.R. 276, 46 O.R. (2d) 775, 10 D.L.R. (4th) 458, 4 O.A.C. 107, 1984 CarswellOnt 1376 (Ont. C.A.) — referred to Kingsway General Insurance Co. v. Lougheed Enterprises Ltd. (2004), 13 C.C.L.I. (4th) 173, [2004] I.L.R. I-4323, 32 B.C.L.R. (4th) 56, 2004 BCCA 421, 2004 CarswellBC 1788, [2004] 11 W.W.R. 427, 202 B.C.A.C. 220, 331 W.A.C. 220, [2004] B.C.J. No. 1606 (B.C. C.A.) — considered Mark 7 Development Ltd. v. Peace Holdings Ltd. (1991), 15 R.P.R. (2d) 101, 53 B.C.L.R. (2d) 217, 1991 CarswellBC 18, [1991] B.C.J. No. 239 (B.C. C.A.) — referred to Mark 7 Development Ltd. v. Peace Holdings Ltd. (1991), 21 R.P.R. (2d) 297 (note), [1991] 3 S.C.R. ix, 59 B.C.L.R. (2d) xxxi (note), 4 B.C.A.C. 160 (note), 9 W.A.C. 160 (note), 136 N.R. 417 (note), 1991 CarswellBC 2056 (S.C.C.) — referred to Wiebe v. Bobsien (1984), 59 B.C.L.R. 183, 36 R.P.R. 277, [1985] 1 W.W.R. 644, 14 D.L.R. (4th) 754, 1984 CarswellBC 436 (B.C. S.C.) — followed Peier v. Cressey Whistler Townhomes Ltd. Partnership Lowry J.A. 273

Wiebe v. Bobsien (1985), 64 B.C.L.R. 295, 20 D.L.R. (4th) 475, 39 R.P.R. 228, [1986] 4 W.W.R. 270, 1985 CarswellBC 193, 64 N.R. 394, [1985] B.C.J. No. 1742 (B.C. C.A.) — followed Zhilka v. Turney (1959), [1959] S.C.R. 578, 18 D.L.R. (2d) 447, 1959 Carswell- Ont 81, [1959] S.C.J. No. 37 (S.C.C.) — referred to Statutes considered: Law and Equity Act, R.S.B.C. 1996, c. 253 s. 54 — considered

APPEAL by builder from judgment reported at Peier v. Cressey Whistler Townhomes Ltd. Partnership (2011), 2011 CarswellBC 1433, 2011 BCSC 773 (B.C. S.C.), allowing purchaser’s action for termination of contract and return of deposit.

B. Cramer, A.H. Sabur, for Appellants R.J. Kaardal, B.B. Olthuis, for Respondent

Lowry J.A.:

1 This appeal raises a question of whether the following clause in an addendum to a real estate developer’s standard form purchase agreement relieved the purchaser of a newly constructed townhouse in Whistler, British Columbia, from completing the transaction where the subject requirement was not fulfilled until three weeks after the date on which the vendor had said completion was to take place: It is a condition of this contract that the power/hydro lines on Nancy Greene Drive be buried prior to completion. Should the power lines not be able to be buried, the Purchaser may cancel this contract at their option and have all deposit monies returned including interest. 2 On the date for completion, the purchaser gave notice he was termi- nating the agreement. The vendor gave notice that the completion date was delayed. Five days later, the purchaser commenced this action for the return of his deposit. The vendor ultimately counterclaimed for damages and the action was tried summarily before Mr. Justice Butler who, for reasons indexed as 2011 BCSC 773 (B.C. S.C.), gave judgment in favour of the purchaser. The vendor appeals on a question of law, con- tending, in the main, the delay in the requirement being fulfilled served only to suspend the parties’ obligations to complete the transaction; it did not entitle the purchaser to terminate the purchase agreement. 274 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The Purchase 3 The purchaser was Michael Peier; the vendor was a partnership, Cres- sey Whistler Townhomes Limited Partnership and 629220 B.C. Ltd. Their agreement for the purchase of the townhouse the vendor was to construct was signed in May 2007. The purchase price was $2.5 million. The purchaser paid an initial deposit and subsequently made two more payments for a total of $375,000. The estimated completion date was December 1, 2008. If the completion date had not occurred by December 1, 2009, referred to as the “Outside Date” (which the vendor could for any reason extend for up to 120 days) the purchase agreement would be terminated. 4 The purchaser raised a concern about BC Hydro overhead power lines along the road where the townhouse was to be built. He was told by the vendor’s agent they would be buried before completion. The two of them then agreed on the wording of the clause in the addendum to the purchase agreement. 5 BC Hydro agreed to bury the power lines. The vendor paid it to do so in July 2008 and thereafter had no control over when the work would be done. The lines were not buried until December 11, 2009. 6 The construction of the townhouse was delayed. It was not until Oc- tober 2009 that it was ready for the purchaser’s pre-completion inspection. The required municipal certificate of occupancy was issued on Oc- tober 21. On November 4, the vendor gave the purchaser an Official Notice of Completion fixing November 18, 2009, as the completion date with possession the following day. The agreement provides the balance of the purchase price was to be paid by 2:00 p.m. on the completion date. 7 The purchaser inspected the townhouse on two occasions, October 21 and November 16, accompanied by a representative of the vendor. He identified over 200 deficiencies that had to be rectified. He maintains he made no mention of the overhead power lines on either occasion. He says he was told to confine his inspection to the inside of the townhouse. 8 On November 18, the purchaser was ready and able to complete the purchase. The townhouse may in fact have been unfit for occupancy then because of the work required to rectify two of the deficiencies in particular: a hardwood floor had to be lifted and some drywall had to be re- placed. The purchaser went to the townhouse twice that day. He photographed the power lines. He said nothing to the vendor. He apparently made no inquiry as to when BC Hydro would have the lines buried. Rather, he instructed his solicitors to give the vendor notice he was ter- minating the purchase agreement because the power lines had not been Peier v. Cressey Whistler Townhomes Ltd. Partnership Lowry J.A. 275

buried. Counsel for the purchaser wrote the vendor at 12:36 p.m., notify- ing it accordingly and asking for a refund of the purchaser’s deposit with accumulated interest forthwith. The vendor responded at 1:49 p.m. It extended the Outside Date to March 1, 2010. It also said the completion date would be delayed to December 3 because of the work necessary to rectify the deficiencies. 9 The purchase agreement provides the purchaser was required to complete the purchase despite outstanding deficiencies. It also provides the vendor could delay the completion date if the townhouse was not ready to be occupied, although it would be deemed to be ready to be occupied once the municipality had given its permission, whether temporary, conditional, or final. 10 The purchaser commenced this action on November 23, 2009. There- after the vendor sought to perform the purchase agreement, giving further notices delaying the completion date to accommodate the ongoing rectification of the deficiencies, ultimately to December 21. The purchaser maintained there was no longer any agreement. When the purchaser did not complete on December 21, 2009, the vendor gave notice it would pursue its remedies. The action proceeded to trial in January 2011. 11 With the onset of recession in 2008, the Whistler real estate market declined. The vendor sold the townhouse in the spring of 2011 (while judgment was reserved). The sale price was $1.9 million.

The Judgment 12 The judge considered the issues to be two: whether the power lines clause permitted the purchaser to terminate the agreement and whether the vendor had the contractual ability to extend the completion date. He began his analysis by quoting the following from Kingsway General Insurance Co. v. Lougheed Enterprises Ltd., 2004 BCCA 421 at para. 10, [2004] 11 W.W.R. 427 (B.C. C.A.), as the governing principles: It will, I hope, suffice to note that in terms of contractual interpretation, the same principles of construction applicable to other commercial contracts apply to insurance contracts ...; that the “court must search for an interpretation from the whole of the contract which pro- motes the true intent of the parties at the time they entered into the contract” ...; that the plain meaning of the words used should be given effect unless it would bring about an unrealistic or commer- cially unreasonable result ...; that evidence of the factual background or setting of the contract known to the parties at or prior to the date of the contract may be considered even in the absence of an ambiguity ...; that at the same time, the words of the contract “must not be 276 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

overwhelmed by a contextual analysis” ...; and that in cases of true ambiguity or doubt as to the meaning of the words used, the contra proferentem rule of interpretation may be applied .... [Citations omitted.] 13 With respect to the first issue, the vendor contended the applicable provision of the power lines clause — the first sentence — is not a condition, as stated, but a warranty that did not entitle the purchaser to terminate the agreement: the purchaser was required to complete the transaction on November 18 and could then sue for any loss caused by the warranty having been breached. The vendor maintained the second sentence of the clause, which provides for the purchaser’s termination of the agreement in the event the power lines could not be buried, would otherwise be redundant. The focus of the case as argued in this regard appears then to have been on whether the first sentence of the clause is a warranty. The judge decided it is not. 14 The judge concluded the purchaser was entitled to terminate the agreement based on two considerations: the clear language of the power lines clause and the relationship between the two sentences of the clause. 15 Although he recognized the terminology employed in contractual language is not determinative, he considered the parties having agreed it was to be a “condition” of the contract that the power lines be buried prior to completion was indicative of their intention concerning their obligations if that was not done. After quoting from this Court’s discussion of what constitutes a fundamental term of an agreement in Gulston v. Aldred, 2011 BCCA 147 (B.C. C.A.), he held the burial of the power lines prior to completion to be a condition of the agreement because of its importance to the purchaser: it was fundamental to the agreement. Further, relying on what was said in dissent in Jorian Properties Ltd. v. Zellenrath (1984), 10 D.L.R. (4th) 458, 46 O.R. (2d) 775 (Ont. C.A.), at 780, he added the purchaser would not have entered into the agreement “without assurance of strict performance”. He stated at para. 45 that because of the significance to the purchaser of the lines being buried, the parties had agreed: a) the power lines had to be buried prior to completion; and b) if the power lines were not able to be buried, he did not have to wait until completion to terminate the Contract. Peier v. Cressey Whistler Townhomes Ltd. Partnership Lowry J.A. 277

He concluded the parties must have intended the failure to bury the power lines would result in the termination of the agreement if the completion date could not be extended. 16 The judge rejected the vendor’s contention that the right to terminate arises only under the second sentence of the clause. He interpreted the first sentence and the second sentence as affording the purchaser that right; the first sentence applying if the power lines were not buried prior to completion, the second applying if they could not be buried at all. He first said: [38] The issue is whether the second sentence, which gives Mr. Peier the right to cancel the Contract at any time in the event that the power lines cannot be buried, should be interpreted in a way which rebuts the presumption that the obligation to bury the power lines prior to completion is a condition. The question is not straightfor- ward because there are two ways the second sentence can be interpreted. As Cressey argues, it may be that the parties intended that Mr. Peier had the right to terminate only where the power lines could not be buried at all. However, the second sentence can also be interpreted as giving an additional remedy to Mr. Peier; in that alternate interpretation, the first sentence creates a condition which gives Mr. Peier the right to terminate if the power lines are not buried prior to completion and the second sentence grants a right to early termination, meaning termination prior to the Completion Date, in the event that the power lines cannot be buried. He then concluded: [50] Contrary to Cressey’s argument, the two sentences in the Power Lines Condition do not compel a conclusion that the right to terminate is not available if the power lines are not buried at completion. Instead, I conclude that the two sentences are intended to cover two different situations. The first sentence establishes Cressey’s obligation to bury the power lines prior to completion and creates a condition. The second sentence deals with the situation where it is determined that it is not possible to bury the power lines at all. However, both give Mr. Peier the right to elect to terminate the Contract: 1) If the power lines are not buried prior to completion, he has the right to elect to terminate the Contract because of Cres- sey’s breach of a fundamental condition; and 2) In the event it is determined that the power lines are unable to be buried Mr. Peier has the right to elect to terminate the Contract, prior to the Completion Date. 17 With respect to the second issue, the vendor contended that, even if it was a condition that the power lines be buried prior to completion, the 278 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

fact the townhouse was not actually ready to be occupied on November 18 entitled the vendor to delay the completion date under the terms of the agreement as it purported to do. The judge concluded that was not so. He found it was not open to the vendor to delay the closing date because, for the purposes of the vendor’s right to delay the completion date under the agreement, the townhouse was deemed to be ready to occupy once the municipal approval had been given as it was on October 21. 18 Thus the judge concluded that, because the power lines were not buried at the time the vendor had said the purchase was to be completed (November 18 at 2:00 p.m.), the vendor had by then no right under the agreement to delay the completion date and the purchaser was at no time thereafter required to complete the purchase. Accepting that the first sentence of the power lines clause is a condition as opposed to a warranty, the question becomes whether the judge was right to conclude the clause entitled the purchaser to terminate the agreement on November 18.

Discussion 19 In my view, the answer to the question lies in considering the nature of the condition. It is a condition precedent to the completion of the purchase of the townhouse but not what in law is a true condition precedent. A true condition precedent is a condition that is precedent to the existence of any contractual obligation. It is an external condition dependent upon a future uncertain event, the happening of which depends entirely on the will of a third party: Zhilka v. Turney, [1959] S.C.R. 578, 18 D.L.R. (2d) 447 (S.C.C.). A true condition precedent is to be contrasted with other kinds of conditions precedent where the condition is only precedent to the performance of certain contractual obligations. In his text, The Law of Contract in Canada, 5th ed. (Toronto: Carswell, 2006) at 430, G.H.L Fridman distinguishes a true condition precedent from others as follows: True conditions precedent, in the Turney sense, if they are to be distinguished at all, must be distinguished because their inclusion in an agreement renders that agreement ineffective to bind the parties until the event contemplated by the condition. ... In contrast with such true conditions precedent, other conditions precedent do not affect the validity or binding quality of a contract, but simply suspend performance of the obligations arising under the contract on the part of one, or other, of the parties, or both, until the stipulated condition is fulfilled. 20 The principles for distinguishing between conditions precedent which are not true conditions precedent were articulated in Wiebe v. Bobsien Peier v. Cressey Whistler Townhomes Ltd. Partnership Lowry J.A. 279

(1984), 59 B.C.L.R. 183 (B.C. S.C.), aff’d (1985), 64 B.C.L.R. 295 (B.C. C.A.). The action arose out of the sale of a home that was subject to the purchaser selling his home, which he did, by a certain date. But before he did, the vendor purported to cancel the agreement. The purchaser sued for specific performance. The issue was whether the parties had a binding agreement. On his review of the authorities, the trial judge said at 189: A condition precedent may be of a nature that creates no binding agreement or it may just act as an ingredient which suspends performance of an otherwise complete contract. It all depends upon the intention of the parties as expressed in the contract itself and as shown by surrounding events. and at 191-92: From these English, Canadian and American authorities a general rule is laid down that in a real estate transaction a condition precedent which must be performed by the purchaser will not usually prevent the formation of a contract but will simply suspend the covenant of the vendor to complete until the condition precedent is met by the purchaser. 21 The majority in this Court agreed with the trial judge’s reasoning and upheld the decree he granted the purchaser. While he disagreed in the result on the basis the subject clause was not sufficiently certain, Mr. Justice Lambert recognized three kinds of conditions precedent at 298- 99: Each “condition precedent” case must be considered on its own facts. As Bouck J. indicated, some conditions precedent are so imprecise, or depend so entirely on the subjective state of mind of the purchaser, that the contract process must still be regarded as at the offer stage. An example would be “subject to the approval of the president of the corporate purchaser.” In other cases, the condition precedent is clear, precise and objective. In those cases, a contract is completed; neither party can withdraw, but performance is held in suspense until the parties know whether the objective condition precedent is fulfilled. An example would be “subject to John Smith being elected as Mayor in the municipal election on 15 October of this year.” But there is a third class of condition precedent. Into that class fall the types of conditions which are partly subjective and partly objective. An example would be “subject to planning department approval of the attached plan of subdivision”. This looks objective, but it dif- fers from a truly objective condition in that someone has to solicit the approval of the planning department. Perhaps some persuasion of the planning department will be required. Can the purchaser prevent the 280 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

condition from being fulfilled by refusing to present the plan of subdivision to the planning department? This type of case has been dealt with by implying a term that the purchaser will take all reasonable steps to cause the plan to be presented to the planning department, and will, at the proper time and in the proper way, take all reasonable steps to have the plan approved by the planning department. What he said has been recognized as the most helpful statement of the law on the various kinds of conditions precedent: Mark 7 Development Ltd. v. Peace Holdings Ltd. (1991), 53 B.C.L.R. (2d) 217 (B.C. C.A.), at 223-24, leave to appeal refused, [1991] 3 S.C.R. ix (S.C.C.). 22 I consider the power lines clause to fall squarely within the third kind of condition precedent. It was objective to a point. Burying the lines was something BC Hydro was to do, but the vendor was required to make arrangements and to pay to have it done. 23 Where there is such a condition precedent, the court will imply a term whereby the party responsible for having the condition fulfilled promises to make a bona fide effort to have it done. Until the condition is fulfilled or waived, the obligations of the parties to complete the transaction will be suspended. A condition precedent may be waived under s. 54 of the Law and Equity Act, R.S.B.C. 1996, c. 253, by one party if the condition benefits that party alone. 24 In Dynamic Transport Ltd. v. O.K. Detailing Ltd., [1978] 2 S.C.R. 1072 (S.C.C.), the Court had to consider an agreement for the purchase of land that was known by both parties to be subject to subdivision approval. Which party was to apply was not stipulated. The vendor refused to complete on the date provided for in the agreement. It maintained there was no agreement. Writing for the Court, Mr. Justice Dickson held there was a binding agreement subject to a condition precedent. It was for the vendor to seek the necessary approval. A promise on its part in that regard was to be implied. He found the agreement would be enforceable if the approval was given, but would not if, after the vendor’s bona fide application was made, the approval was denied. In the interim, the parties’ obligations to complete the transaction were said to be suspended. He said at 1082-83: The parties created a binding agreement. It is true that the performance of some of the provisions of that agreement was not due unless and until the condition was fulfilled, but that in no way negates or dilutes the force of the obligations imposed by those provisions, in particular, the obligation of the vendor to sell and the obligation of the purchaser to buy. These obligations were merely in suspense Peier v. Cressey Whistler Townhomes Ltd. Partnership Lowry J.A. 281

pending the occurrence of the event constituting the condition precedent. The existence of a condition precedent does not preclude the possibility of some provisions of a contract being operative before the condition is fulfilled, as for example, a provision obligating one party to take steps to bring about the event constituting the condition precedent: see, for example, the recent decision of the Appellate Divi- sion of the Alberta Supreme Court in Steiner v. E.H.D. Investments Ltd. [(1977), 78 D.L.R. (3d) 449] (leave to appeal to this Court denied December 14, 1977). 25 Dynamic was specifically followed by the majority in this Court in Wiebe stating nothing required any distinction to be drawn. I regard what was said in Dynamic to be in material respects applicable here. 26 Under the purchase agreement, with the power lines clause, the burial of the lines prior to completion can be said to have been essential to the purchaser but the time of completion was clearly not. Indeed, the agreement contained no more than an estimated completion date (December 1, 2008) with the choice of the actual date for completion being entirely at the discretion of the vendor. Though the agreement provided time was of the essence, the date for completion was by no means of the essence. The only date on which the purchaser could rely was the Outside Date (March 1, 2010 as extended) on which the agreement would be terminated if the completion date had not occurred. 27 What can be seen to have been important to someone in the purchaser’s position was a condition that he did not have to pay the purchase price until the lines were buried, such that his leverage in that regard was preserved. If they could not be buried, or if they could be buried but were not buried prior to the Outside Date, the purchase price would never have to be paid and the deposit would be returned. There was a condition precedent that suspended the purchaser’s obligation to pay the purchase price, but the suspension was not open-ended. The Outside Date served to give certainty to the agreement. 28 Under the first sentence of the clause, the parties agreed the power lines would be buried prior to completion or the purchase agreement would terminate on the Outside Date. Under the second sentence, they agreed that if the lines could not be buried the purchaser could, at his option, terminate the purchase agreement. What they did not agree is that the purchaser could terminate the agreement if the lines were not buried until after a date chosen by the vendor for completion. In my respectful view, that is simply not what the clause provides. 282 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

29 The vendor’s Official Notice of Completion setting November 18 as the completion date that was given on November 4, and its subsequent notices of later dates for completion because of the rectification of deficiencies, confused the situation. I consider those notices to have been of no effect save for the notice that the completion date would be December 21 after the power lines were buried. The vendor was not entitled to be paid the purchase price before the lines were buried. Thus, it was not open to it to choose a date for completion to take place before that could occur. The notice of the November 18 completion date the vendor gave could not have been effective because the obligations of both the purchaser and the vendor to complete the purchase were suspended until the lines were buried. The vendor was not entitled to choose a date for completion when completion could not occur. The condition precedent required that the power lines be buried prior to any date chosen. Only then could there be a completion date. 30 Once the construction of the townhouse was finished, I consider the purchaser was obligated to complete the purchase whenever the power lines were buried providing that was done prior to the extended Outside Date. He was obligated to complete the purchase on the date the vendor chose after that was done: December 21. Prior to that, his obligation was suspended, but he was never entitled to terminate the purchase agreement, obtain the return of his deposit, and effectively walk away from his commitment to pay for the townhouse the vendor had constructed for him pursuant to their agreement. 31 Nothing more need be said for the disposition of the appeal. The vendor does challenge the trial judge’s conclusions in other respects which pertain principally to the question of whether the completion date was properly delayed, but I need not address the submissions made.

Disposition 32 I would allow the appeal and dismiss the purchaser’s action. I would remit the question of the remedies available to the vendor to the trial court to be determined on the existing record.

Levine J.A.:

I agree: Peier v. Cressey Whistler Townhomes Ltd. Partnership Frankel J.A. 283

Frankel J.A.:

I agree: Appeal allowed. 284 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

[Indexed as: Farm Credit Canada v. National Bank of Canada] FARM CREDIT CANADA (Appellant) and NATIONAL BANK OF CANADA (Respondent) Saskatchewan Court of Queen’s Bench Docket: Saskatoon Q.B.G. 1887/10 2011 SKQB 321 P. Foley J. Judgment: September 1, 2011* Alternative dispute resolution –––– Appeal from arbitration awards — Right of appeal –––– Two lenders, FCC and NBC, entered into inter-lender agreement setting out their agreed assignment of priorities between themselves for asset classes being liquidated with respect to company — Dispute arose as to interpretation and application of agreement concerning monies from two government assistance programs — Arbitrator found that NBC had priority to surplus in question — FCC appealed — FCC contended that reference to “rights of appeal” in agreement amounted to provision of rights of appeal within meaning of opening words of s. 45(1) of Arbitration Act, 1992 — FCC contended that, consequently, s. 45(2) of Act requiring leave where agreement was silent was inapplicable — Preliminary determination was made that no appeal as of right existed — FCC proffered interpretation that agreement could not bear as article declared award to be final and binding, and prima facie this excluded any right of appeal — Article went on to recognize “any” rights of appeal accorded by Act and, absent specific grant in agreement, then only statutorily-granted appeal available was s. 45(2) appeal for which leave on question of law was required — As no appeal as of right existed, whether of law, fact or mixed fact and law, FCC’s appellate remedy was restricted to application for leave on questions of law as specified in s. 45(2) of Act. Alternative dispute resolution –––– Appeal from arbitration awards — Leave to appeal — Miscellaneous –––– Two lenders, FCC and NBC, entered into inter-lender agreement setting out their agreed assignment of priorities between themselves for asset classes being liquidated with respect to company — Dispute arose as to interpretation and application of agreement concerning monies from two government assistance programs — Arbitrator found that NBC had

*Leave to appeal denied at Farm Credit Canada v. National Bank of Canada (2011), 2011 SKCA 129, 2011 CarswellSask 724, 31 Admin. L.R. (5th) 136, [2012] 6 W.W.R. 309 (Sask. C.A. [In Chambers]). Farm Credit Canada v. National Bank of Canada 285 priority to surplus in question — FCC appealed — Preliminary determination was made that FCC met requirements under s. 45(2)(a) and (b) of Arbitration Act, 1992 for leave to appeal, with respect to one of two issues raised — First issue was whether award disclosed error of law by virtue of its modification of two articles of agreement being in conflict with plain and ordinary meaning of another article of agreement — First issue raised question of law — Second issue was whether award was in error of law in failing to direct that surplus be shared pari passu, or alternatively, distribution be made on basis of registration priority under Personal Property Security Act, 1993 — Second issue was one of mixed fact and law, and consequently was matter not eligible for appeal — Question of law could result in gain or loss of several million dollars for party, which, given nature of arbitration as whole, was materially relevant amount such that question was important to parties and reasonably justified appeal — It was reasonable to accept that issue of law was such that its determination had capacity to affect award in major degree. Personal property security –––– Priority of security interest — Miscellane- ous –––– Two lenders, FCC and NBC, entered into inter-lender agreement setting out their agreed assignment of priorities between themselves for asset classes being liquidated with respect to company — Dispute arose as to interpretation and application of agreement concerning monies from two government assistance programs — Arbitrator found that NBC had priority to surplus in question — FCC appealed — Award not set aside; matter remitted to arbitrator with directions to reconsider award’s implementation in light of present decision, hear submissions, and remit revised award — Arbitrator had determined that introduction of term into agreement to deal with surplus was necessary to provide business efficacy — Term imposed was reasonable, equitable, consistent with presumed intention of parties, and met standard in which officious bystander would deem it “so obvious that it went without saying” — Diffi- culty arose from conflict with existing article of agreement — Inclusion of implied term, although otherwise binding, reasonable, and necessary determination of priority, constituted error of law — Standard of review of was one of correctness, as arbitrator sought to apply established principle of common law concerning implied terms — FCC’s current objection was founded upon wording in agreement which were never intended to apply to unforeseen surplus; award was fully considered — While award’s inclusion of implied term in manner in question could not stand, finding that NBC had priority remained unimpaired — Therefore, award was not to be set aside, and instead power vested in court was to be exercised to refer award back to arbitrator with directions. Administrative law –––– Standard of review — Correctness –––– Two lenders, FCC and NBC, entered into inter-lender agreement setting out their agreed assignment of priorities between themselves for asset classes being liquidated with respect to company — Dispute arose as to interpretation and application of agreement concerning monies from two government assistance programs — Ar- 286 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

bitrator found that NBC had priority to surplus in question — FCC appealed — Award not set aside; matter remitted to arbitrator with directions to reconsider award’s implementation in light of present decision, hear submissions, and remit revised award — Arbitrator had determined that introduction of term into agreement to deal with surplus was necessary to provide business efficacy — Term imposed was reasonable, equitable, consistent with presumed intention of parties, and met standard in which officious bystander would deem it “so obvious that it went without saying” — Difficulty arose from conflict with existing article of agreement — Inclusion of implied term, although otherwise binding, reasonable, and necessary determination of priority, constituted error of law — Standard of review of was one of correctness, as arbitrator sought to apply established principle of common law concerning implied terms — FCC’s current objection was founded upon wording in agreement which were never intended to apply to unforeseen surplus; award was fully considered — While award’s inclusion of implied term in manner in question could not stand, finding that NBC had priority remained unimpaired — Therefore, award was not to be set aside, and instead power vested in court was to be exercised to refer award back to arbitrator with directions. Cases considered by P. Foley J.: Alenco Inc. v. Niska Gas Storage US, LLC (2009), 2009 ABQB 192, 2009 CarswellAlta 459, 5 Alta. L.R. (5th) 353 (Alta. Q.B.) — followed Apache Canada Ltd. v. Harmattan Gas Processing Ltd. Partnership (2010), 2010 ABQB 288, 2010 CarswellAlta 837, 27 Alta. L.R. (5th) 281 (Alta. Q.B.) — followed Aronowicz v. Aronowicz (2007), 84 O.R. (3d) 428, 2007 CarswellOnt 437 (Ont. S.C.J.) — considered Chypiska v. Aspen Homes Ltd. (2010), 2010 CarswellSask 664, 2010 SKQB 376, 98 C.L.R. (3d) 171, 365 Sask. R. 160, 74 B.L.R. (4th) 267 (Sask. Q.B.) — considered Denison Mines Ltd. v. Ontario Hydro (2002), 2002 CarswellOnt 2950, 61 O.R. (3d) 291, [2002] O.J. No. 3464 (Ont. S.C.J.) — considered Fuhr Estate v. Husky Oil Marketing Co. (2010), 496 A.R. 232, 2010 Carswell- Alta 1529, 2010 ABQB 495, 35 Alta. L.R. (5th) 83 (Alta. Q.B.) — considered Grace Residences Ltd. v. Whitewater Concrete Ltd. (2009), 2009 BCCA 144, 2009 CarswellBC 817, 91 B.C.L.R. (4th) 59, 453 W.A.C. 63, 269 B.C.A.C. 63, 78 C.L.R. (3d) 201 (B.C. C.A.) — referred to McAsphalt Marine Transport Ltd. v. Liberty International Canada (2005), 15 C.P.C. (6th) 167, [2005] O.T.C. 262, 2005 CarswellOnt 1425, 22 C.C.L.I. (4th) 129, [2005] O.J. No. 1424 (Ont. S.C.J.) — considered Newswest Corp. v. Glendar Holdings Ltd. (2001), 209 Sask. R. 56, [2001] 9 W.W.R. 312, 2001 SKQB 336, 2001 CarswellSask 457 (Sask. Q.B.) — referred to Farm Credit Canada v. National Bank of Canada P. Foley J. 287

Oakford v. Telemark Inc. (2001), 2001 CarswellAlta 881, [2001] A.J. No. 853 (Alta. Q.B.) — considered Seneviratne v. Seneviratne (1998), 1998 CarswellAlta 343, 222 A.R. 65, 159 D.L.R. (4th) 733, 60 Alta. L.R. (3d) 311, 38 R.F.L. (4th) 76, 1998 ABQB 289, [1998] A.J. No. 435 (Alta. Q.B.) — referred to Venneman v. Mountain View (County) No. 17 (2009), 2009 CarswellAlta 1513, 2009 ABQB 540, [2009] A.J. No. 1048 (Alta. Q.B.) — considered Statutes considered: Arbitration Act, 1992, S.S. 1992, c. A-24.1 Generally — referred to s. 45 — referred to s. 45(1) — considered s. 45(2) — considered s. 45(2)(a) — referred to s. 45(2)(b) — referred to Personal Property Security Act, 1993, S.S. 1993, c. P-6.2 Generally — referred to

APPEAL by lender from award of arbitrator concerning interpretation of inter- lender agreement.

Joel A. Hesje, Q.C., for Farm Credit Canada Jeffrey M. Lee, for National Bank of Canada

P. Foley J.: Background 1 The detailed history of the financing activities, securities taken and priorities established by National Bank of Canada (“National”) and Farm Credit Canada (“FCC”) (jointly the Lenders) in their relationship with Stomp Pork Farms (“Stomp”) through its financial difficulties, its restructuring which included moving assets to two new corporations (Newco and Titan) and its eventual receivership are fully set out in the award of arbitrator M.W. Milani, Q.C. For the purpose of this decision it suffices to record that concurrent with the receivership and in anticipation of their realization on the assets of Stomp and its related companies, the Lenders entered into an Inter-Lender Agreement (“ILA”) setting out their agreed assignment of priorities between themselves for the various asset classes being liquidated. 288 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The Dispute 2 A dispute arose between the Lenders as to the interpretation and application of the ILA concerning monies received and to be received by Newco and Titan from two distinct Government of Canada assistance programs. The one program termed CAIS had been identified and applied for prior to the completion of the ILA. The other termed HTP only came into existence or became known after the ILA’s execution. The programs taken jointly have the capacity of bringing several millions of dollars of fresh assets, some expected, some unexpected, to the liquidation.

The Arbitration 3 The parties adopted the optional arbitration procedure provided for in the ILA and so entered into an arbitration agreement (“the Agreement”) under the authority of The Arbitration Act, 1992, S.S. 1992, c. A-24.1 (“the Act”) in which the issues to be placed before Mr. Milani were specified as: (a) As between National Bank and FCC, which party has priority to the Newco Monies? (b) As between National Bank and FCC, which party has priority to the Titan Monies? 4 By Titan and Newco monies was meant the excess of monies (“the surplus”) received and to be received from the Government of Canada as a result of eventual CAIS and HTP payments, over and above the amount of government payments anticipated, specified and allocated in Article 2.01(g) (Newco) and Article 2.01(h) (Titan) in the ILA.

The ILA 5 Article 2 of the ILA establishes asset classes within which the respective priorities as between the Lenders [and to a minor degree Stomp] are ranked in numerical order. For simplicity, although the asset classes are recited for each of Newco and Titan, this decision will, as does the award, for illustration purposes, refer only to Newco. Like Titan issues would be dealt with identically. Article 2 of the ILA provides in part: 2.01 The Parties hereto acknowledge and agree that the Security shall have the following priorities as between FCC, NBC and Stomp (such priorities shown by numerical ranking in respect of the various asset categories set out below): Farm Credit Canada v. National Bank of Canada P. Foley J. 289

..... (c) Accounts (other than the Newco Program Payments) and Inventory of Newco (other than the Newco Sow and Boar Inventory, as hereafter defined) and Proceeds thereof: 1st - the Newco NBC Personal Property Se- curity on a cross-collateralized basis for repayment of the Newco Operating Loan to a maximum amount of $1,000,000 ... 2nd - the Newco NBC Personal Property Security and the Newco FCC GSA on a pari passu basis (each as to 50%) for repayment to NBC of the NBC Operating Loss Loan to a maximum amount of $550,000 ... 3rd - the Newco FCC GSA and the Newco NBC Personal Property Security on a pari passu basis (as to 84.6154% for FCC and 15.3846% for NBC) for repayment to FCC of the Newco FCC Demand Loan to a maximum amount of $5,426,473 ...... (g) any government program payments that Newco receives including, without limiting the generality of the foregoing, any CAIS program payments or AgriStability program payments (the “Newco Program Payments”): 1st - the Newco NBC Personal Property Se- curity and the Newco FCC GSA on a pari passu basis (each as to 50%) for repayment to NBC of the NBC Operating Loss Loan to a maximum amount of $550,000 plus interest and reasonable realization costs and for repayment to FCC of the FCC Operat- ing Loss Loan to a maximum amount of $550,000 plus interest and reasonable realization costs 2nd - the Newco NBC Per- sonal Property Security for repayment to NBC of the Newco Operating Loan to a maximum amount of $1,000,000 plus interest and reasonable realization costs 290 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

..... (k) all other personal property of Newco (other than Accounts, Inventory, the Newco Sow and Boar Inventory, the Newco Program Payments and the Newco Rolling Stock) and Proceeds thereof: 1st - the Newco NBC Personal Property Se- curity for repayment to NBC of the Newco Operating Loan to a maximum amount of $1,000,000 plus interest and reasonable realization costs 2nd - the Newco NBC Per- sonal Property Security and the Newco FCC GSA on a parri passu basis (each as to 50%) for repayment to NBC of the NBC Operating Loss Loan to a maximum amount of $550,000 plus interest and reasonable realization costs and for repayment to FCC of the FCC Operating Loss Loan to a maximum amount of $550,000 plus interest and reasonable realization costs [Emphasis added]

The Award 6 The detailed award occupies some 42 pages, however its short ver- sion response to the two issues was: 180. I find that the proper interpretation of the ILA and of the intention of the Lenders is that the Surplus constitutes and is to be measured as an account under Section 2.01(c) and (d) of the ILA respectively and should be distributed in accordance with these provisions. In other words National was found to have priority to the surplus Newco [and thus Titan] monies for allocation and distribution in accordance with the ranking specified in Article 2.01(c) integrated with the new Article 2.01(g) definition of “Newco Program Payments” imposed by the award. The definition imposed by the award reads: 2.01(g)any government program payments to the extent of $2,100,000 plus interest and reasonable realization costs that Newco receives including, without limiting the generality of the foregoing, any CAIS program payments or AgriStability program payments (the “Newco Program Payments”): ... [Emphasis added on new words] Farm Credit Canada v. National Bank of Canada P. Foley J. 291

7 As it is the effect of the integration of the amended Article 2.01(g) into the original Article 2.01(c) which occupies most of this decision, a comparison of the wording is helpful: Prior to Award - Article 2.01(c) After Award - Article 2.01(c) Accounts (other than any gov- Accounts (other than any government program payments) that ernment program payments) to Newco receives including, with- the extent of $2,100,000 plus out limiting the generality of the interest and reasonable realiza- foregoing, any CAIS program tion costs that Newco receives payments or AgriStability pro- including, without limiting the gram payments (the “Newco generality of the foregoing, any Program Payments”). CAIS program payments or AgriStability program payments (the “Newco Program Pay- ments”).

This Motion 8 FCC now seeks to appeal against the award either as of right pursuant to s. 45(1) of the Act or, alternatively, upon leave being given pursuant to s. 45(2). The Act provides: 45(1) If the arbitration agreement so provides, a party may appeal an award to the court on a question of law, on a question of fact or on a question of mixed law and fact by notice of motion that briefly states the grounds of the appeal. (2) If the arbitration agreement does not provide that the parties may appeal an award to the court on a question of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that: (a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and (b) determination of the question of law at issue will significantly affect the rights of the parties. 9 The Agreement provides: 11. The award of the Arbitrator on the issues submitted, when made and executed by him, shall be final and binding upon each of National Bank and FCC and enforceable in any court of competent jurisdiction in the same manner as any other judgment of the said court, subject however, to applicable rights of appeal (if any) under the Act. [Emphasis added] 292 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The Right of Appeal 10 In support of its claim of a right to appeal on questions of fact, mixed law and fact, and law, FCC submits that the reference to “rights of appeal” in Article 11 amounts to the provision of rights of appeal within the meaning of the opening words of s. 45(1). Consequently, so it argues, provision for an appeal having been made, then s. 45(2) requiring leave where the Agreement is silent is inapplicable. A like argument was advanced unsuccessfully in Seneviratne v. Seneviratne, 1998 ABQB 289, 222 A.R. 65 (Alta. Q.B.). For those same reasons I dismiss this aspect of the FCC argument. FCC proffers an interpretation the Agreement cannot bear as Article 11 declares the award to be final and binding and prima facie this excludes any right of appeal. The article goes on to recognize “any” rights of appeal accorded by the Act and, absent a specific grant in the Agreement, then the only statutorily-granted appeal available is the s. 45(2) appeal which is conditional upon leave being given on only a question of law. As no appeal as of right exists, whether of law, fact or mixed fact and law, FCC’s appellate remedy is restricted to an application for leave on questions of law as specified in s. 45(2). See also Chypiska v. Aspen Homes Ltd., 2010 SKQB 376, 365 Sask. R. 160 (Sask. Q.B.), per Gunn J. at para. 13.

Grounds of Appeal 11 The FCC motion specifies the questions of law for which it alternatively seeks leave as: i. the Arbitrator erred in failing to consider the ILA as a whole, and not in a manner that gives meaning to all of its terms; ii. the Arbitrator erred in failing to give proper meaning and effect to subsections 2.10(g) and (h) [sic] which explicitly exclude government payments from cross-collateralization; iii. the Arbitrator erred in failing to determine the intention of the parties in accordance with the language they have used in the ILA; iv. the Arbitrator erred in holding that the Government program payments were “accounts” within the meaning of the ILA; and v. the Arbitrator erred in holding that the provisions of The Per- sonal Property Security Act, 1993, S.S. 1993, c. P-6.2, did not apply to determine priorities where the Inter-Lender Agree- ment (ILA) did not expressly provide any covenant or agreement with respect to the collateral at issue. Farm Credit Canada v. National Bank of Canada P. Foley J. 293

12 These grounds were refined and clarified by FCC in both its written and oral presentations such that the questions are here restated as: (A) Whether the award discloses an error of law by virtue of its modification of Article 2.01(g) and (h), which modification is in conflict with the plain and ordinary meaning of Article 2.01(c). (B) Whether the award was in error of law in failing to direct that the surplus be shared pari passu, or alternatively distribution be made on the basis of registration priority under The Personal Property Security Act, 1993, S.S. 1993, c. P-6.2. 13 Two issues need to be determined at this stage: (i) Whether either question is indeed a question of law, and if so (ii) Whether the criteria of importance and significance referred to in s. 45(2)(a) and (b) have been met.

Analysis (i) Whether the questions are questions of law 14 It comes as no surprise that both sides to this debate advance credible supported arguments in support of their particular positions. The examination as to whether the questions are ones of law or ones of mixed fact and law is for the purpose of determining whether leave should be granted. Similar analyses are frequently made for the purpose of determining the proper standard of review and the degree of deference to be accorded on the appeal proper. 15 In my opinion, in determining the threshold question as to whether there is a question of law for which leave to appeal should be granted, regard needs to be had to the analysis of the factual matrix made by the arbitrator and the relationship of the question of law to that matrix. It so happens as set out below that such an analysis leads to a conclusion that the first question posed on this appeal is essentially one involving a question of law whereas the second question is one which on analysis is revealed to be one of mixed fact and law. 16 There is usually little difficulty determining whether a question is one of fact or one of law. It is when the question contains both elements that debate and dispute ensue. In this case both questions entail an interpretation of contracts, both require the parties’ intention to be determined and thus overall both can be said to involve mixed fact and law. FCC says that the facts found by the arbitrator are not contested and hence the legal portion of the question can readily be examined for error. National says that once the arbitrator needs to delve into the factual matrix concurrent 294 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

to determining the relevant legal principles, the questions are ones of mixed fact and law.

(A) Modification of Article 2.01(g) 17 FCC’s argument of error is based on the fact that the ILA creates an asset class of “accounts and inventory” by Article 2.01(c) but expressly excluded from the class “the Newco Program Payments”. Any such payments are then established as a separate asset class by Article 2.01(g). Thus, so argues FCC, any Newco Program Payments received or to be received, whether CAIS and HTP or otherwise and whether allocated or surplus, are Newco Program Payments, and fall outside the Article 2.01(c) accounts class. 18 FCC says that Article 2.01(c) represents a clear and unambiguous statement of what did not fall in the Newco account class. The award [para. 112] however characterizes the occurrence of the unallocated surplus as “an ambiguity caused by this lacuna” which the award then pur- ports to resolve [para. 113] by modifying the words of the class description of Article 2.01(g) to read: (g) any government program payments to the extent of $2,100,000 plus interest and reasonable realization costs that Newco receives including, without limiting the generality of the foregoing, any CAIS program payments or AgriStability program payments (the “Newco Program Payments”): ... [Emphasis added on new words] 19 The award states [para. 119] of this amendment: One consequence of these rearticulated Section 2.01(g) and (h) [the (equivalent Titan class)] is that the ILA [now] does in fact provide for the distribution of the surplus, which is in harmony with the Lenders’ overarching intention that the distribution of all collateral be addressed. 20 The effect of the wording introduced by the award into Article 2.01(g) according to FCC was to move many millions of dollars of government program payments save for $2,100,000 into s. 2.01(c) and so make much of the surplus part of the account class. 21 This FCC says flies in the face of one of the cardinal principles of contract interpretation namely that effect must be given to this Agree- ment’s plain and ordinary meaning that all government program payments fall outside the accounts class. The award is said to have ignored that principle and by implying the term it did in Article 2.01(g) contra- dicted the express term of Article 2.01(c). Reliance was placed on and Farm Credit Canada v. National Bank of Canada P. Foley J. 295

gave rise to a significant question of law fundamental to the issue addressed in the award. Support is found in G.H.L. Fridman, Q.C., The Law of Contracts in Canada, 4th ed. (Toronto: Carswell, 1999), Newswest Corp. v. Glendar Holdings Ltd., 2001 SKQB 336, 209 Sask. R. 56 (Sask. Q.B.) at para. 24, and Grace Residences Ltd. v. Whitewater Concrete Ltd., 2009 BCCA 144, 91 B.C.L.R. (4th) 59 (B.C. C.A.). 22 Particularly useful in considering what constitutes questions of law for the purposes of appeal under the Act are the cases of Alenco Inc. v. Niska Gas Storage US, LLC, 2009 ABQB 192, 5 Alta. L.R. (5th) 353 (Alta. Q.B.) and Apache Canada Ltd. v. Harmattan Gas Processing Ltd. Partnership, 2010 ABQB 288, 27 Alta. L.R. (5th) 281 (Alta. Q.B.) which considered Alberta provisions almost identical to those of Sas- katchewan in s. 45. 23 In Alenco, Hawco J. stated: 16 On what constitutes a question of law, Justice Iacobucci in Canada (Director of Investigation & Research) v. Southam Inc., [1997] 1 S.C.R. 748, said, at para. 35: Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. ... I recognize, however, that the distinction between law on the one hand and mixed law and fact on the other is difficult. On occasion, what appears to be mixed law and fact turns out to be law, or vice versa. 17 Justice Iacobucci went on to say, at para. 37: By contrast, the matrices of facts at issue in some cases are so particular, indeed so unique, that decisions about whether they satisfy legal tests do not have any great precedential value. If a court were to decide that driving at a certain speed on a certain road under certain conditions was negligent, its decision would not have any great value as a precedent. In short, as the level of generality of the challenged proposition approaches utter particular- ity, the matter approaches pure application, and hence draws nigh to being an unqualified question of mixed law and fact. See R.P. Kerans, Standards of Review Employed by Appellate Courts (1994), at pp. 103-108. Of course, it is not easy to say pre- 296 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

cisely where the line should be drawn; though in most cases it should be sufficiently clear whether the dispute is over a general proposition that might qualify as a principle of law or over a very particular set of circumstances that is not apt to be of much interest to judges and lawyers in the future. 18 In Ainsworth Lumber Co. Ltd. v. Grant Forest Products Inc., [2007] A.J. No. 1013 (QB), having reviewed our Court of Appeal’s decision in Worker’s Compensation Board - Ap- peals v. Appeals Commission, (2005) 258 D.L.R. (4th) 29, Kent, J stated this: A more helpful method of finding the line (that is, the line between a question of law and a question of mixed fact and law) is to see if it is possible to extricate a pure legal question. 24 In Apache Canada, McCarthy J., faced with the same conflict of position as arises here, referred inter alia to a decision of the Alberta Court of Appeal: 21 Since this motion was argued, the Court of Appeal has released its decision in Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd., 2010 ABCA 126. At paras. 11 and 12, the Court of Appeal made these comments with respect to the standards of review applicable to the interpretation of a contract: The interpretation of a contract may invoke several standards of review. Some findings of fact may be required. In some cases the trial judge may have to determine which documents, promises, and consideration constitute the contract. There is a limited ability to introduce evidence regarding the circumstances surrounding the formation of the contract. Findings of fact on such issues will only be disturbed on appeal if they disclose palpable and overriding error [citations omitted]. A trial judge’s determination of the factual matrix surrounding the contract in light of the evidence as a whole (including if appropriate extrinsic evidence) is a matter of fact, although the determination may be influenced by legal concepts [citations omitted]. Once the exact terms and nature of the contract, and the surrounding facts, have been established, the interpretation of the words of the contract is a Farm Credit Canada v. National Bank of Canada P. Foley J. 297

matter of law. The interpretation and application of contract principles to a settled set of facts is a question of law reviewed for correctness ... 22 While I am mindful of the Court of Appeal’s comments, I do not believe that a case such as this is of the kind contemplated by those comments. This is not a situation where “the exact terms and nature of the contract, and the surrounding facts, have been established”. Quite the contrary, I am of the opinion that the terms of the Agreement cannot be established without reference to the factual matrix. Therefore, in my view, in this kind of case, the approach taken by Sanderman J. in Shermin-Williams and by Hawco J. in Alenco is eminently sensible. It does not make sense inordinately to parse the Arbitration Decision in search of an “extricable” legal question. Rather, I must keep in mind the dispute, and the factual context, as a whole. 25 In this case, having properly and fully set out the modern law on interpretation of contracts, the arbitrator observed [para. 112] that no provision of the ILA explicitly addresses the disposition of surplus monies. He characterized this as a “lacuna” [para. 113] forming an ambiguity which required effect to be given to the objectively-determined reasonable expectations of the parties garnered from extrinsic evidence. At para. 116 he states: 116. I have concluded that the Lenders intended in Section 2.01(g) to provide for the distribution of proceeds of realization of the following collateral: any government program payments to the extent of $2,100,000 plus interest and reasonable realization costs that Newco receives... I similarly find that the intention in respect of Section 2.01(h) was to provide for the distribution of: any government program payments to the extent of $1,300,000 plus interest and reasonable realization costs that Titan receives... 26 The arbitrator went on to observe at para. 119: 119. One consequence of these re-articulated Sections 2.01(g) and (h) is that the ILA does in fact provide for the distribution of the Surplus, which is in harmony with the Lenders’ overarching intention that the distribution of all collateral be addressed. 298 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

27 At various points of the oral argument as well as in its brief, FCC expressly took no issue with the findings made by the arbitrator which included (i) that the parties intended the ILA to dispose of all assets regardless of source [para. 127]; (ii) that placing the surplus in Article 2.01(c) is consistent with the extrinsic evidence [para. 132]; (iii) that Na- tional and FCC were agreed on National’s ability to effect cross-collateralization throughout the ILA [para. 136]; (iv) that surplus amounts were not excluded from the cross-collateralization [para. 145]; and (v) giving National priority to the surplus in the amended Article 2.01(c) was appropriate to enable the repayment of operating loans consistent with the initial priority structure [paras. 127-28]. 28 Thus, readily extractable from the mix of fact and law considered by the arbitrator is by legal issue raised by FCC in this motion as to whether the imposition of a term to fill the “lacuna” properly discharged the legal criteria for such an imposition. 29 I conclude that the first issue raises a question of law.

(B) Alternate Distribution Required 30 In contrast is the second issue wherein FCC asserted that it was either entitled to the entire surplus because its security interests in all present and after-acquired personal property of Titan and Newco were registered prior in time to the security interests registration by National [para. 97] or that the pari passu sharing established in other security agreements should prevail. To determine whether there was priority in law or a binding pari passu arrangement, the arbitrator looked to the terms of the ILA, prior agreements, the factual matrix and concluded that from this factual matrix it was the Lenders’ objectively-expressed intentions that the personal property registrations should not determine entitlement to the surplus nor was the pari passu arrangement to follow future payments. 31 This in my view demonstrates the antithesis of an extractable issue of law. This question is one of mixed fact and law and consequently a matter not eligible for appeal in this case.

(ii) Whether the criteria of importance and significant aspects of s. 45(2)(a) and (b) have been met 32 Before leave to appeal may be granted on the one identified question of law, s. 45 requires the Court to be satisfied that the applicant has met the two conditions precedent that: (a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and Farm Credit Canada v. National Bank of Canada P. Foley J. 299

(b) determination of the question of law at issue will significantly affect the rights of the parties. 33 Threshold requirements of this type occur in various of Canadian Ar- bitration Acts, the scope and application of which has been considered in both academic works and judicial decisions. In the text by J. Kenneth McEwan, Q.C. and Ludmila B. Herbst, Commercial Arbitration in Can- ada (Toronto: Canada Law Book, 2008), the authors state at para. 10- 76(c): The domestic arbitration legislation in Ontario [Arbitration Act, 1991 (Ont.), s. 45(1)], Alberta [Arbitration Act (Alta.), s. 44(2)], Manitoba [Arbitration Act (Man.), s. 44(2)], New Brunswick [Arbitration Act (N.B.), s. 45(1)] and Saskatchewan [Arbitration Act, 1992 (Sask.), s. 45(2)] provides that the court shall grant leave only if it is satisfied that the importance to the parties of the matters at stake in the arbitration justifies an appeal and that determination of the question of law at issue will significantly affect the rights of the parties. ... The authors note further that there continues to be controversy as to what constitutes “importance” in s. 45(2)(a) and the meaning to be attributed to “significantly affect” in s. 45(2)(b). 34 A review of the jurisprudence from Alberta, Ontario and Saskatche- wan reveals not only differences between provinces but also differences between judges of the same court. In the main, the differences are twofold with regard to each criterion. In Denison Mines Ltd. v. Ontario Hydro (2002), 61 O.R. (3d) 291 (Ont. S.C.J.), Ground J. concluded that the questions of law entail a finding of importance to the parties (criterion (a)) while the words “will significantly affect the rights of the parties” require evidence of future impact on the parties’ rights and their future relationship. He stated: [11] In my view, the criteria set forth in subsection 45(1) reflect the goal of the Act that there must be some finality and certainty to the arbitration process and leave to appeal should not be granted unless the determination of the appeal will have some impact on the future rights of, or relationship between, the parties. In the case at bar, the only effect of the appeal would be to reverse an historic determination as to an amount payable between the parties. It will have no future effect on the rights of the parties or their ongoing relationship in that their contractual relationship came to an end in 1992 and there are no continuing rights or obligations as between the parties. 300 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

35 Three years later, in McAsphalt Marine Transport Ltd. v. Liberty International Canada (2005), 15 C.P.C. (6th) 167, [2005] O.J. No. 1424 (Ont. S.C.J.), Dambrot J. at para. 36 rejected Ground J.’s analysis and concluded it was sufficient to have a significant impact on the rights of the parties in the matter under review. He stated: 36 ... To adopt the reasoning in Denison Mines would preclude an appeal in a case where the relationship between the parties has come to an end no matter how dramatic the significance of the question of law may be in the matter at hand. In my opinion, the importance of the issues at stake in the arbitration is dealt with in s. 45(1)(a). Section 45 (1)(b) deals with the significance of the issue in determining whether the arbitrator’s award can stand. It is meant to eliminate grounds of appeal that are less than decisive to the outcome of the matter. 36 In Aronowicz v. Aronowicz (2007), 84 O.R. (3d) 428 (Ont. S.C.J.), Perell J. agreed with Dambrot’s decision to reject Denison Mines stating: 29 I agree with Dambrot, J. In particular, I agree that whether the determination of the issue of law has an impact on the future rights of the parties is a matter to consider when considering the first prerequisite for granting leave to appeal; that is, the requirement that the resolution of the question of law is important to the parties. I regard, Ground, J.’s helpful analysis of the case law as indicating that a future or ongoing significant impact would be a sufficient factor for deciding that the first prerequisite is satisfied. Future impact, however, is not a necessary factor. 30 I also agree with Dambrot, J. that the purpose of the second prerequisite is to eliminate grounds of appeal that are less than decisive to the outcome of the Arbitration. In other words, there may be an error of law, but if it caused no mis- carriage of justice or if the error of law would not provide a reason for overturning the Award, then leave to appeal should not be granted. This means that some errors of law join errors of fact and errors of mixed fact and law as not being the subject of appeal under s. 45(1) of the Act. I do not regard the alleged errors of law in the immediate case as falling within the class of precluded grounds for appeal. 31 This brings me to the prerequisite of the importance to the parties of the matters at stake, which I confess is the element that caused me the most difficulty because of the strong arguments advanced by Mr. Leon for Abraham and Mr. Richler for Harry. Farm Credit Canada v. National Bank of Canada P. Foley J. 301

32 McAsphalt Marine and Denison Mines are both authority that a significant impact on the financial position of the parties would satisfy this prerequisite. Once again, I view this factor as a sufficient factor but not a necessary factor for leave to appeal to be granted. There is the obvious point that some arbitrations involve non-financial matters or important matters of principle that may not affect the financial position of the parties, and in my opinion, s. 45(1)(a) should not be read in a way that automatically precludes an appeal unless money is involved. 33 However, in the immediate case money is involved, and Harry argues that obtaining an $800,000 upward adjustment to a $25,682,880 purchase price (about 3%) would not justify an appeal and there is no suggestion that not receiving the $800,000 would have a significant impact on Abraham’s financial position. Abraham’s response is that $800,000 is by anybody’s reckoning, a substantial amount of money that would justify an appeal and, moreover, without the price adjustment of clause 4, Harry has been unjustly enriched and righting this wrong would justify the appeal. 34 In my opinion, the amount of money in issue both in absolute terms and in relative terms is relevant to determining the importance to the parties of the matters at stake and weight should be given to the arguments of both Harry and Abraham. But other factors are also relevant (including, as already noted above, the sufficient but not necessary factor of a future impact on the parties). These other factors, together with the amount in issue, lead me to the conclusion that an appeal would be justified and leave should be granted in the immediate case. 35 Clause 4, which was part of Harrys offer, was an integral part of the offer and an important aspect of how he proposed to implement the buy-sell provisions of the Unanimous Share- holders Agreement. Both parties obviously thought the interpretation of clause 4 and the amount of money involved were important enough to arbitrate, and since Harry persists in his position, I assume that had he lost the arbitration about the effect of clause 4, he would be the one seeking leave to appeal. At the moment, it would appear that Abraham feels that he has been cheated by his brother Harry, whom he accuses of having been unjustly enriched. Harry undoubtedly feels that he has done nothing wrong and that there was nothing improper about enforcing the language of clause 4. I think it 302 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

would be important to both parties to have the matters at stake resolved by an appeal. 37 Like disagreement on those same issues has appeared in the Alberta cases. In Oakford v. Telemark Inc., [2001] A.J. No. 853 (Alta. Q.B.), Johnstone J., having given consideration to a series of Alberta cases, concluded that the phrase “importance to the parties” as well as “significantly affect the rights of the parties” involves more than financial loss or gain. He observed: 13 Surely in the context some public interest or some resolution of some public issue must be triggered sufficient to warrant over-riding the mutual agreement of the parties to restrict appeals to issues of law. There is not before the court any evidence of that kind. 14 I agree with the principle he has enunciated. There must be a public issue or something of public interest to warrant an appeal on a question of law. The mere loss or gain of a claim is insufficient. The only reason for Oakford’s appeal is the loss of a claim to money which is insufficient to meet the threshold test established by subsections 44 (a) and (b). 38 In Venneman v. Mountain View (County) No. 17, 2009 ABQB 540, [2009] A.J. No. 1048 (Alta. Q.B.), Moen J. required something more than private party interests. He adopted the public interests’ requirement of Alenco Inc. v. Niska Gas Storage US, LLC, supra. There the applicant had argued that as a billion dollars was at issue, the arbitration had the requisite importance to both parties. Hawco J. held this was not a sufficient ground to find the requisite public interest. He concluded that it would set an unacceptable precedent if a disappointed party were entitled to appeal a consensual binding arbitration because it did not like the decision and because there was a considerable sum of money at stake. Shortly thereafter, McCarthy J., in Apache Canada Ltd. v. Harmattan Gas Processing Ltd. Partnership, supra, accepted the Alenco rationale and concluded that in the case before him, there was merely a private dispute between two parties concerning a particular grievance and an appeal was not justified. 39 That same year, in Fuhr Estate v. Husky Oil Marketing Co., 2010 ABQB 495, 35 Alta. L.R. (5th) 83 (Alta. Q.B.), Manderscheid J. concluded that absent anything in the language of the legislation mandating a public interest element, the Court is restricted to the actual words used. He stated: 100 At the same time, meaning must be given to the actual words used in the legislation. If the legislature intended that leave Farm Credit Canada v. National Bank of Canada P. Foley J. 303

only be granted if there was a public interest component, it would have said so; instead it stated that leave may only be granted where the matters at stake are so important to the parties it justifies an appeal, and where the determination of the question of law will significantly affect the rights of the parties. 101 I agree that there must some meaning attributed to the words. In Schultz, Nash J. suggested that the issues involved are always important to the litigants and the determination of the questions of law always significantly affect the rights of the litigants. Her suggestion then was that there must be something else at issue, otherwise leave would always be granted. With respect, that may not be the case. 102 A party may be able to identify an error on a question of law, but that error may not be essential to the decision or may only have a trivial and inconsequential effect of the decision as a whole. Perhaps, as here, the parties allege numerous errors in order to challenge an arbitral decision, but once analyzed the Court finds that there is only one or two questions of law at issue. If the resolution of those alleged errors will make no practical difference to the end result, the appeal is not justified and the parties’ rights will not be significantly affected. 103 Thus I decline to find that s. 44(2)(a) and (b) require that a public interest be at issue. 40 In Saskatchewan, Gunn J. in Chypiska v. Aspen Homes Ltd., supra, considered the Saskatchewan provisions and in what was essentially obiter given the absence of a question of law stated: (B) If so, does the importance to the parties of the matters at stake in the arbitration justify an appeal? 23 The substance of the arbitration was the allocation of the $133,000.00 deposited in trust by the applicants. The purchase price of the house, exclusive of GST as set out in para. 2 of the amending agreement was $374,625.00. The applicants submit that the alleged errors had financial consequences to them totalling $28,789.12. I cannot say that the importance to the parties justifies an appeal. (C) Will the determination of the question of law at issue significantly affect the rights of the parties? 24 This has been interpreted by the courts as involving some significant ongoing impact. (See Metropolitan Separate School Board v. Daniels Lakeshore Corp., [1993] O.J. No. 304 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

2375 (Q.L.); Charles v. Safeway Gas & Fuels Ltd., [1993] O.J. No. 833 (Q.L.)) 25 If this appeal were allowed to proceed, its determination would not have any impact on the future rights of, or relationship between the parties. (D) Conclusion 26 I am satisfied the proposed appeal does not involve questions of law, that the importance to the parties does not justify an appeal and that it would not significantly affect the rights of the parties. The application for leave to appeal is dismissed. 41 FCC takes the position that the issue in this appeal will be each party’s entitlement to all or part of many millions of dollars. This it submits satisfies both criteria. National relies on the authorities which hold that an issue must be more than the private interests of the parties and that some form of public interest needs to be engaged. Additionally, it relies upon something more than one party’s economic interest being in issue.

Analysis 42 In my opinion, the detailed parsing of the various condition prece- dents of s. 45 has resulted in irreconcilable decisions. If however one examines s. 45 as a whole and pays heed to the words used by the legislation, one can readily discern a legislative intent to filter out from the appeal process those questions of law which are not just frivolous but also those which do not go to the heart of the award. Also to be filtered out are matters which whilst affecting the rights of the parties to some degree, would not in the circumstances of a particular case, make a significant difference in the result. I do not consider the decision in Chypiska as binding up me even though it arguably required evidence of the issue having ongoing impact on the parties. 43 In this case, I am satisfied that the determination of a question of law is such that it could result in the gain or loss for one or the other of the parties of several million dollars, which, given the nature of the arbitration as a whole is a materially relevant amount such that the question is important to each party and reasonably justifies the appeal. Concurrently, it is reasonable in the circumstances to accept that the issue of law is such that its determination has the capacity to affect in a major degree this award. 44 I conclude that FCC has met the requirements of s. 45(2)(a) and (b). Farm Credit Canada v. National Bank of Canada P. Foley J. 305

Was there an error of law? 45 In these proceedings, FCC characterized the arbitrator’s alleged error of law as arising from his implication of a term into the ILA which con- tradicts an express term. As noted above, the arbitrator elected to incor- porate the term into the ILA and consequently it is appropriate to first examine the foundation that must be laid in order for a term to be implied into a contract. 46 In the text by Kim Lewison, Q.C., The Interpretation of Contracts (London: Sweet & Maxwell, 2004), at para. 6.03, conditions to be fulfilled in order for a term to be implied are described as: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) it must be so obvious that it goes without saying; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract. [Emphasis added] 47 In the text by Geoff R. Hall, Canadian Contractual Interpretation Law, 1st ed. (Toronto: LexisNexis Canada Inc., 2007), the author at page 130 states: It is clear that the power to imply terms into a contract is to be used cautiously, and that this power cannot be used either to rewrite the parties’ contract or to contradict the express wording they have chosen. These principles are encapsulated in the following statement made by Cory J.A. (as he then was) while on the Ontario Court of Appeal: When may a term be implied in a contract? A court faced with that question must first take cognizance of some important and time-honoured cautions. For example, the courts will be cautious in their approach to implying terms to contracts. Certainly a court will not rewrite a contract for the parties. As well, no term will be implied that is inconsistent with the contract. Implied terms are a rule based upon the presumed intention of the parties and should be founded upon reason. The circumstances and background of the contract, together with its precise terms, should all be carefully regarded before a term is implied. As a result, it is clear that every case must be determined on its own particular facts. 306 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The Supreme Court of Canada has also made the point that an implied term may not contradict what the parties intended by their words: “Whatever may be implied in a case of ambiguity or absence of a provision, no term may be implied in a contract which is contrary to the clearly expressed intention of the parties.” The prohibition against rewriting the parties’ contract is very consistent with the overarching approach to the interpretation of contracts in Canada. Any implication of a term necessarily goes beyond the words expressly chosen by the parties. This endeavour is legitimate to the extent that it gives context and interpretive accuracy to the words selected, but it is illegitimate when it goes so far as to alter what the parties agreed as evidenced by the words they have chosen. This is particularly the case where the implication in question would improve the bargain for one party at the expense of the other. An implied term may not have that effect. The prohibition against rewriting the parties’ contract goes so far as to preclude the implication of terms that would have been reasonable if the parties had turned their minds to them, if in fact there is no reason to believe that the parties did in fact intend those terms to be included within their bargain. ... [Emphasis added] 48 At page 132, the author notes: Put another way, since a court will not imply a term simply because it is reasonable to do so, the officious bystander test must employ a bystander who is observing what is necessary rather than that which is simply reasonable. On the other hand, the cautious approach which prevents the rewriting of contracts does not preclude some fairly serious judicial surgery to the words chosen by the parties if the exercise is a legitimate one of filling gaps. ... The author concluded: Thus, the gap-filling implication can go quite far, despite the courts’ cautions about implying the terms at all and their admonitions against rewriting the parties’ bargain. 49 It is apparent from the award that the arbitrator was of the view that the introduction of a term to deal with the surplus was necessary to give business efficacy; that the term he imposed was designed to enable Na- tional to apply the surplus in priority to the personal property security on a cross-collateralization basis. He also found as facts that such priority allocation by National was consistent with the objectively-determined intention of the parties. I conclude the term he imposed was reasonable, Farm Credit Canada v. National Bank of Canada P. Foley J. 307

equitable, was consistent with the presumed intention of the parties as found by him, and that the inclusion of the term met the standard in which the officious bystander would deem it “so obvious that it went without saying”. 50 The difficulty here arises not with the merits of the award’s priority determination of the term but in its implementation in its conflict with the existing wording in s. 2.01(c) of the ILA. As identified by FCC, inclusion into the ILA in the manner wrought by the award adds government payments back into Article 2.01(c), which prima facie were expressly excluded in the original Article 2.01(c). Although the implied term was added to the definition portion of Article 2.01(g) it is then in- corporated by reference into Article 2.01(c). This results in its contradic- tion of the exclusionary portion of Article 2.01(c). 51 FCC is therefore correct that the inclusion of this implied term in this manner albeit an otherwise binding, eminently reasonable, appropriate and necessary determination of priority as directed by the arbitrator constituted an error of law. 52 The standard of review here is one of correctness as the arbitrator seeks to apply an established principle of common law concerning implied terms. 53 As observed in the authorities cited above, it is a legitimate exercise of arbitral and judicial function to imply terms in order to fill a gap with what the parties agreed and indeed requested the arbitrator to fill. In the text by Angela Swan, Canadian Contract Law, 2nd ed. (Toronto: Lexis- Nexis Canada Inc., 2009) at page 622, the author considered the use of implied terms to achieve the parties’ objectively-determined contractual intentions. The award does precisely that. 54 The arbitrator concluded that the allocation of the surplus to Na- tional’s indebtedness and the enabling of National to utilize cross-collateralization were matters which both parties had adopted and accepted. These findings, whether characterized as findings of fact or mixed fact and law are final and binding on the parties and in any event, were accepted by FCC in its argument. In short, FCC’s current objection is founded upon wordings in the ILA which were never intended to apply to the unforeseen surplus. This was fully considered in the award. 55 Consequently, while the award’s inclusion of the implied term in the manner it did cannot stand, its finding that National had the priority to the Newco and Titan monies remains unimpaired. I therefore decline to set the award aside and instead exercise the power vested in this Court to refer the award back to the arbitrator with directions to reconsider its 308 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

implementation in light of this decision, hear submissions from the parties and thereafter remit a revised award. 56 The arbitrator may apply for further directions should he deem it necessary. Order accordingly. Farm Credit Canada v. National Bank of Canada 309

[Indexed as: Farm Credit Canada v. National Bank of Canada] Farm Credit Canada (Prospective Appellant / Appellant) and National Bank of Canada (Prospective Respondent / Respondent) Saskatchewan Court of Appeal [In Chambers] Docket: CACV2164 2011 SKCA 129 Richards J.A. Heard: October 24, 2011 Judgment: November 2, 2011 Personal property security –––– Practice and procedure — Appeals –––– Two lenders, FCC and NBC, entered into inter-lender agreement in relation to insolvent company — FCC and NBC subsequently disagreed as to priority between them in respect of funds from two government assistance programs — Arbitrator ruled that NBC was entitled to whole of funds — Arbitrator noted ambiguities in agreement and then read language into provisions to resolve ambiguities — On appeal by FCC, chambers judge found that arbitrator erred because terms he read into provisions created conflict with other provision in agreement — Chambers judge declined to set aside award, and instead referred award back to arbitrator to reconsider its implementation and remit revised award — FCC brought application for leave to appeal — Application dismissed — Whole tenor of arbitrator’s decision cut in NBC’s favour and FCC did not contest idea that arbitrator rejected only two arguments it advanced as to why it should have priority over NBC — It was difficult to see how, even if it was found that chambers judge went too far, his remarks would have any practical impact on arbitrator’s ultimate disposition — Potential bottom-line impact of proposed appeal must surely be important consideration when deciding whether to grant leave, if not in relation to merits of appeal, then in relation to its importance to parties — Importance of proposed appeal was somewhere in between extremes of raising broad questions of judicial authority in statutory context and being of little or no insight into larger points of law beyond particular case — As chambers judge directed arbitrator to hear submissions and remit revised award, end result of arbitration process had not been pre-ordained — FCC had not necessarily lost its claim to funds; this was additional factor weighing against granting leave — Considering both merits and importance of proposed appeal, this was not case where leave to appeal should be granted. Civil practice and procedure –––– Practice on appeal — Leave to appeal — Application — Grounds –––– Two lenders, FCC and NBC, entered into inter- 310 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

lender agreement in relation to insolvent company — FCC and NBC subsequently disagreed as to priority between them in respect of funds from two government assistance programs — Arbitrator ruled that NBC was entitled to whole of funds — Arbitrator noted ambiguities in agreement and then read language into provisions to resolve ambiguities — On appeal by FCC, chambers judge found that arbitrator erred because terms he read into provisions created conflict with other provision in agreement — Chambers judge declined to set aside award, and instead referred award back to arbitrator to reconsider its implementation and remit revised award — FCC brought application for leave to appeal — Application dismissed — Whole tenor of arbitrator’s decision cut in NBC’s favour and FCC did not contest idea that arbitrator rejected only two arguments it advanced as to why it should have priority over NBC — It was difficult to see how, even if it was found that chambers judge went too far, his remarks would have any practical impact on arbitrator’s ultimate disposition — Potential bottom-line impact of proposed appeal must surely be important consideration when deciding whether to grant leave, if not in relation to merits of appeal, then in relation to its importance to parties — Importance of proposed appeal was somewhere in between extremes of raising broad questions of judicial authority in statutory context and being of little or no insight into larger points of law beyond particular case — As chambers judge directed arbitrator to hear submissions and remit revised award, end result of arbitration process had not been pre-ordained — FCC had not necessarily lost its claim to funds; this was additional factor weighing against granting leave — Considering both merits and importance of proposed appeal, this was not case where leave to appeal should be granted. Cases considered by Richards J.A.: Rolling River School Division v. Rolling River Teachers’ Assn. (2009), 2009 CarswellMan 119, 2009 MBCA 38, 236 Man. R. (2d) 249, 448 W.A.C. 249, [2009] 5 W.W.R. 599 (Man. C.A. [In Chambers]) — referred to Rothmans, Benson & Hedges Inc. v. Saskatchewan (2002), 2002 CarswellSask 653, 227 Sask. R. 121, 287 W.A.C. 121, 2002 SKCA 119, [2002] S.J. No. 605 (Sask. C.A.) — followed Statutes considered: Arbitration Act, 1992, S.S. 1992, c. A-24.1 s. 45 — referred to s. 45(1) — considered s. 45(2) — considered s. 45(5) — considered s. 49 — considered Farm Credit Canada v. National Bank of Canada Richards J.A. 311

Personal Property Security Act, 1993, S.S. 1993, c. P-6.2 Generally — referred to

APPLICATION by lender for leave to appeal from judgment reported at Farm Credit Canada v. National Bank of Canada (2011), 2011 CarswellSask 609, 2011 SKQB 321, 31 Admin. L.R. (5th) 111, [2012] 6 W.W.R. 284 (Sask. Q.B.), concerning arbitration award in dispute over inter-lender agreement.

Tim W. Froese, for Farm Credit Canada Jeffrey M. Lee, Michael J. Russell, for National Bank of Canada

Richards J.A.: I. Introduction 1 Farm Credit Canada (“FCC”) and National Bank of Canada (the “Bank”) entered into an inter-lender agreement (the “Agreement”). They subsequently disagreed as to the priority between them in respect of certain government program payments. As a result, and as contemplated by the Agreement, an arbitrator was appointed to decide the matters in dispute. 2 The Arbitrator held in the Bank’s favour. FCC was unhappy with that decision and appealed to the Court of Queen’s Bench pursuant to s. 45 of The Arbitration Act, 1992, S.S. 1992, c. A-24.1 (the “Act”). The Cham- bers judge did not rule as FCC had hoped. It now seeks leave to appeal to this Court.

II. Background 3 The relevant facts are somewhat complex. They concern the financing activities, security interests and priorities of FCC and the Bank in relation to Stomp Pork Farm Ltd., an insolvent Saskatchewan hog pro- ducer. I will not attempt to reproduce all of the background here because it can be found in the Queen’s Bench decision at 2011 SKQB 321 (Sask. Q.B.). 4 For present purposes, it is enough to say that the dispute between FCC and the Bank concerns funds from two Government of Canada assistance programs. “Newco” and “Titan” are corporations created in 2008 during the restructuring of Stomp Pork Farm Ltd. Each new company applied to the Government of Canada for payments under the Cana- dian Agricultural Income Stabilization (“CAIS”) Program. Then, in 2009 and after the Agreement was in place, Newco and Titan each applied for payments under the Hog Farm Transition Program (“HTP”), a wholly new initiative not anticipated when the Agreement was signed. The issue 312 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

between FCC and the Bank concerns their relative priorities in relation to the CAIS and HTP funds. 5 The Agreement establishes various categories of assets and ranks the priorities of the Bank and FCC with respect to each of them. Before the Arbitrator, FCC contended it was entitled to 100% of the CAIS and HTP funds because it had a security interest in all present and after-acquired property of Titan and Newco which had been registered before a similar interest held by the Bank. As well, FCC said the funds should be allocated on a pari passu basis (approximately 85% to FCC and 15% to the Bank) based on various agreements between FCC and the Bank. Neither of these submissions was accepted by the Arbitrator. 6 Rather, the Arbitrator ruled that the Bank was entitled to the whole of the funds in issue. He reached this conclusion by noting certain ambiguities in the Agreement and then, in effect, reading language into ss. 2.01(g) and (h) to resolve those ambiguities. 7 FCC’s appeal to the Court of Queen’s Bench was undertaken pursuant to s. 45 of the Act. It reads, in relevant part, as follows: 45(1) If the arbitration agreement so provides, a party may appeal an award to the court on a question of law, on a question of fact or on a question of mixed law and fact by notice of motion that briefly states the grounds of the appeal. (2) If the arbitration agreement does not provide that the parties may appeal an award to the court on a question of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that: (a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and (b) determination of the question of law at issue will significantly affect the rights of the parties. ... (5) The court may confirm, vary or set aside the award or may remit the award to the arbitral tribunal with the court’s opinion on the question of law, in the case of an appeal on a question of law, and give directions about the conduct of the arbitration. 8 The Chambers judge decided that s. 45(2) of the Act was the applicable provision and framed the questions raised by FCC in this way: (A) Whether the award discloses an error of law by virtue of its modification of Article 2.01(g) and (h), which modification is in conflict with the plain and ordinary meaning of Article 2.01(c). Farm Credit Canada v. National Bank of Canada Richards J.A. 313

(B) Whether the award was in error of law in failing to direct that the surplus be shared pari passu, or alternatively distribution be made on the basis of registration priority under The Per- sonal Property Security Act, 1993, S.S. 1993, c. P-6.2. 9 The Chambers judge then determined that only the first issue presented a “question of law” as required by s. 45(2) of the Act. In considering the substance of the appeal, the judge decided that the Arbitrator had erred because the terms he had read into ss. 2.01(g) and (h) put those provisions into conflict with s. 2.01(c) of the Agreement. However, the Chambers judge then went on to comment as follows: [54] The arbitrator concluded that the allocation of the surplus to Na- tional’s indebtedness and the enabling of National to utilize cross- collateralization were matters which both parties had adopted and accepted. These findings, whether characterized as findings of fact or mixed fact and law are final and binding on the parties and in any event, were accepted by FCC in its argument. In short, FCC’s current objection is founded upon wordings in the ILA which were never intended to apply to the unforeseen surplus. This was fully considered in the award. [55] Consequently, while the award’s inclusion of the implied term in the manner it did cannot stand, its finding that National had the priority to the Newco and Titan monies remains unimpaired. I therefore decline to set the award aside and instead exercise the power vested in this Court to refer the award back to the arbitrator with directions to reconsider its implementation in light of this decision, hear submissions from the parties and thereafter remit a revised award. [56] The arbitrator may apply for further directions should he deem it necessary.

III. The Issues 10 Section 49 of the Act provides an avenue of appeal from the Court of Queen’s Bench to this Court. It reads as follows: 49 An appeal from the court’s decision in an appeal of an award, an application to set aside an award or an application for a declaration of invalidity may be made to the Court of Appeal, with leave of that court or a judge of that court. 11 FCC seeks leave to appeal in relation to two issues. It formulates them in these terms: (a) The learned Chambers Judge erred in law by exceeding his statutory jurisdiction under s. 45(5) of The Arbitration Act, 1992, supra, which governs the relief and remedies available 314 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

to the court in statutory appeals under the Act; and in particular, having determined that the Arbitrator erred in law in interpreting the parties’ Inter-Lender Agreement (“ILA”), the learned Chambers Judge exceeded his jurisdiction under s. 45(5) of the Act, by not remitting the Award to the Arbitrator with the court’s opinion on that question of law, and instead, expressing his opinion on the ultimate issue of the parties’ priorities to the monies at issue; and (b) The learned Chambers Judge erred in law by disregarding or misapplying the legal principles that govern the proper role of the court in reviewing an arbitral award; and in particular, having determined that the Arbitrator erred in law in interpreting the ILA, and having determined that the matter should be remitted to the Arbitrator, the learned Chambers Judge erred in law by directing that the Arbitrator’s prior determination of the ultimate priority issue remained unimpaired, and thus fettering the Arbitrator’s role in determining the ultimate priority issue in accordance with the court’s opinion on the question of law. 12 The approach generally applied in considering applications for leave to appeal involves consideration of both the merit and the importance of the proposed appeal. See: Rothmans, Benson & Hedges Inc. v. Saskatch- ewan, 2002 SKCA 119, 227 Sask. R. 121 (Sask. C.A.) at para. 6. FCC and the Bank both suggest that, when dealing with appeals involving arbitral decisions, it might be appropriate to apply the somewhat more de- manding test described by the Manitoba Court of Appeal in Rolling River School Division v. Rolling River Teachers’ Assn., 2009 MBCA 38, [2009] 5 W.W.R. 599 (Man. C.A. [In Chambers]). In the end, I find it unnecessary to comment on the Manitoba approach because my decision would be the same under either it or the traditional Rothmans test. 13 I will deal first with the merits of the proposed appeal. FCC’s basic position is that the Chambers judge exceeded the authority granted to him by s. 45(5) of the Act. The subsection says a court “...may remit the award to the arbitral tribunal with the court’s opinion on the question of law.” FCC says the only “question of law” before the Chambers judge was whether the award disclosed an error by virtue of the terms the Arbi- trator had read into ss. 2.01(g) and (h) of the Agreement. Therefore, says FCC, this was the only “question of law” on which the Chambers judge was entitled to provide his opinion. In other words, the judge was not permitted, as he did, to go on and say that, notwithstanding the Arbitra- tor’s error, the Arbitrator’s finding as to the priorities enjoyed by Newco and Titan in the CAIS and HTP funds was effectively unimpaired. Farm Credit Canada v. National Bank of Canada Richards J.A. 315

14 The Bank counters this line of argument by submitting that the proposed appeal would have little chance of success because it would attract a deferential standard of review both because the decision of the Cham- bers judge was discretionary in nature and because it concerned the decision of an arbitrator. The Bank also says the appeal could have no practical effect because the Arbitrator has already rejected the only two arguments advanced by FCC as to why it should have priority over the Bank, i.e. the arguments concerning PPSA registration dates and distribution pari passu. Further, says the Bank, the Arbitrator has at least im- pliedly accepted the arguments as to why it should have priority over FCC. These arguments, according to the Bank, stand independently of the Arbitrator’s inclusion of implied language in ss. 2.01(g) and (h) of the Agreement. 15 In my view, the Bank’s points with respect to the merits of the proposed appeal are strong. The whole tenor of the Arbitrator’s decision cuts in the Bank’s favour and FCC does not contest the idea that the Arbitra- tor rejected the only two arguments it had advanced as to why it should have priority over the Bank. As a result, it is difficult to see how, even if it was found that the Chambers judge did go too far (at paras. 54 and 55 of his decision) in commenting on the Arbitrator’s work, his remarks would have any practical impact on the Arbitrator’s ultimate disposition of this matter. 16 FCC deals with this difficulty by suggesting I should focus only on its chances for success in this Court and that I should disregard whether the outcome of an appeal would have any effect on the Arbitrator’s final decision. This strikes me as being an overly narrow approach. The potential bottom-line impact of a proposed appeal must surely be an important consideration when deciding whether to grant leave — if not in relation to the merits of the appeal, then in relation to its importance to the parties. 17 That said, I turn directly to the importance of the proposed appeal. FCC suggests this case raises broad questions about the scope of the authority of a judge acting pursuant to s. 45 of the Act. On the other hand, the Bank says any appeal would be nothing more than a function of the particular language used by the Chambers judge in his decision and would ultimately offer little or no insight into larger points of law. In my view, the legal reality lies somewhere between these two extremes. 18 However, I also note the concluding lines of para. 55 of the decision of the Chambers judge. They indicate that the Arbitrator is directed to “reconsider” the “implementation” of his award in light of the judge’s 316 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

decision. In this regard, the Arbitrator is to “hear submissions from the parties and thereafter remit a revised award.” In other words, the end result of the arbitration process has not been pre-ordained. Significantly, the Bank itself agrees with this reading of the decision. (Although, to be fair, it stresses that, in its view, the Arbitrator cannot reach a different result than the one he has already adopted because he has rejected all of the arguments FCC might make.) 19 The precise implications of the Chambers judge’s comments are matters that can presumably be taken up with the Arbitrator, if necessary. For present purposes, I simply note that, because the Chambers judge did not direct the Arbitrator to reach a specific result, his decision does not necessarily mean FCC has lost its claim to the CAIS and HTP funds. In my view, this too weighs against granting leave. 20 In the end, considering both the merits and the importance of the proposed appeal, I conclude that this is not a case where leave to appeal should be granted.

IV. Conclusion 21 Leave to appeal is denied. The Bank is entitled to costs in the usual way. Application dismissed. Burnett v. Moir 317

[Indexed as: Burnett v. Moir] Garrett Burnett (Plaintiff) and Scott Moir, Garry Todoruk, George Holmes, Sunny Jara, Jeremy Wocknitz, Tyler Wocknitz, Paul Uppal, Lorne Pike, Jim Cessford, The Corporation of Delta, John Does 1 to 10 and Employees 1 to 10 (Defendants) British Columbia Supreme Court Docket: Vancouver S088358 2011 BCSC 1469 A.F. Cullen J. Heard: April 4-8, 11-15, 18-21, 26, 28; May 2-6, 9-12, 16-18, 2011 Judgment: November 1, 2011 Torts –––– Negligence — Duty and standard of care — Duty of care –––– Plaintiff was severely assaulted while patronizing nightclub in Municipality of Delta — Assault occurred while plaintiff and other patrons were being pushed outside through door; assault was captured by surveillance camera — Recording was not sufficiently clear to allow identification of assailant and subsequent police investigation could not determine his identity — Plaintiff suffered moderately severe traumatic brain injury which significantly compromised his future — Plaintiff brought action in negligence against local police department as well as municipality — Action dismissed — Defendants did not have requisite relationship with plaintiff to establish duty of care and were not liable to plaintiff for negligence — Plaintiff failed to meet burden of establishing proximity necessary to prove liability against municipality or police — Pre-assault, municipality did not have necessary close and direct relationship to plaintiff necessary to establish private law duty of care — There was no evidence that plaintiff relied on licensing issued by municipality as warranting particular standard of behaviour at bar — Post-assault, nexus between alleged negligence and harm was weak — Policy reasons intrinsic to relationship between investigator and victim dictated against finding that it was close and direct in sense contemplated by proximity analysis — There was no duty of care owed by defendants to plaintiffs either pre- or post-assault. Law enforcement agencies –––– Police — Duties, rights and liabilities of officers — Conduct of officers — Negligence –––– Plaintiff was severely assaulted while patronizing nightclub in Municipality of Delta — Assault occurred while plaintiff and other patrons were being pushed outside through door; assault was captured by surveillance camera — Recording was not sufficiently clear to allow identification of assailant and subsequent police investigation could not determine his identity — Plaintiff suffered moderately severe trau- 318 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

matic brain injury which significantly compromised his future — Plaintiff brought action in negligence against local police department as well as municipality — Action dismissed — Defendants did not have requisite relationship with plaintiff to establish duty of care and were not liable to plaintiff for negligence — Plaintiff failed to meet burden of establishing proximity necessary to prove liability against municipality or police — Pre-assault, municipality did not have necessary close and direct relationship to plaintiff necessary to establish private law duty of care — There was no evidence that plaintiff relied on licensing issued by municipality as warranting particular standard of behaviour at bar — Post-assault, nexus between alleged negligence and harm was weak — Policy reasons intrinsic to relationship between investigator and victim dictated against finding that it was close and direct in sense contemplated by proximity analysis — There was no duty of care owed by defendants to plaintiffs either pre- or post-assault. Municipal law –––– Municipal liability — Negligence — Building review, inspections and permit issuance –––– Plaintiff was severely assaulted while patronizing nightclub in Municipality of Delta — Assault occurred while plaintiff and other patrons were being pushed outside through door; assault was captured by surveillance camera — Recording was not sufficiently clear to allow identification of assailant and subsequent police investigation could not determine his identity — Plaintiff suffered moderately severe traumatic brain injury which significantly compromised his future — Plaintiff brought action in negligence against local police department as well as municipality — Action dismissed — Defendants did not have requisite relationship with plaintiff to establish duty of care and were not liable to plaintiff for negligence — Plaintiff failed to meet burden of establishing proximity necessary to prove liability against municipality or police — Pre-assault, municipality did not have necessary close and direct relationship to plaintiff necessary to establish private law duty of care — There was no evidence that plaintiff relied on licensing issued by municipality as warranting particular standard of behaviour at bar — Post-assault, nexus between alleged negligence and harm was weak — Policy reasons intrinsic to relationship between investigator and victim dictated against finding that it was close and direct in sense contemplated by proximity analysis — There was no duty of care owed by defendants to plaintiffs either pre- or post-assault. Cases considered by A.F. Cullen J.: Abarquez v. Ontario (2009), 2009 CarswellOnt 2380, 189 C.R.R. (2d) 131, 95 O.R. (3d) 414, 2009 ONCA 374, 66 C.C.L.T. (3d) 169, 75 C.C.E.L. (3d) 159, 310 D.L.R. (4th) 726, 252 O.A.C. 267, [2009] O.J. No. 1814 (Ont. C.A.) — referred to Athey v. Leonati (1996), [1997] 1 W.W.R. 97, 140 D.L.R. (4th) 235, 81 B.C.A.C. 243, 132 W.A.C. 243, 203 N.R. 36, [1996] 3 S.C.R. 458, 31 C.C.L.T. (2d) 113, 1996 CarswellBC 2295, 1996 CarswellBC 2296, [1996] S.C.J. No. 102 (S.C.C.) — considered Burnett v. Moir 319

Attis v. Canada (Minister of Health) (2008), 59 C.P.C. (6th) 195, 300 D.L.R. (4th) 415, 2008 CarswellOnt 5661, 2008 ONCA 660, 254 O.A.C. 91, 93 O.R. (3d) 35, [2008] O.J. No. 3766 (Ont. C.A.) — referred to Beckstead v. Ottawa (City) (1997), 155 D.L.R. (4th) 382, (sub nom. Beckstead v. Ottawa (City) Chief of Police) 37 O.R. (3d) 62, 1997 CarswellOnt 4960, [1997] O.J. No. 5169 (Ont. C.A.) — referred to Clements (Litigation Guardian of) v. Clements (2010), 327 D.L.R. (4th) 1, 12 B.C.L.R. (5th) 310, (sub nom. Clements v. Clements) 505 W.A.C. 56, (sub nom. Clements v. Clements) 298 B.C.A.C. 56, 2010 CarswellBC 3477, 2010 BCCA 581, 79 C.C.L.T. (3d) 6, 4 M.V.R. (6th) 1, [2010] B.C.J. No. 2532 (B.C. C.A.) — considered Cooper v. Hobart (2001), [2002] 1 W.W.R. 221, 2001 CarswellBC 2502, 2001 CarswellBC 2503, 2001 SCC 79, 8 C.C.L.T. (3d) 26, 206 D.L.R. (4th) 193, 96 B.C.L.R. (3d) 36, (sub nom. Cooper v. Registrar of Mortgage Brokers (B.C.)) 277 N.R. 113, [2001] 3 S.C.R. 537, (sub nom. Cooper v. Registrar of Mortgage Brokers (B.C.)) 160 B.C.A.C. 268, (sub nom. Cooper v. Registrar of Mortgage Brokers (B.C.)) 261 W.A.C. 268, [2001] S.C.J. No. 76, REJB 2001-26862 (S.C.C.) — referred to Dorset Yacht Co. v. Home Office (1970), [1970] 1 Lloyd’s Rep. 453, [1970] A.C. 1004, [1970] 2 All E.R. 294, [1970] 2 W.L.R. 1140 (U.K. H.L.) — considered Edwards v. Law Society of Upper Canada (2001), 34 Admin. L.R. (3d) 38, 2001 CarswellOnt 3962, 2001 CarswellOnt 3963, 2001 SCC 80, 8 C.C.L.T. (3d) 153, 13 C.P.C. (5th) 35, 206 D.L.R. (4th) 211, 277 N.R. 145, [2001] 3 S.C.R. 562, (sub nom. Edwards v. Law Society of Upper Canada (No. 2)) 56 O.R. (3d) 456 (headnote only), 153 O.A.C. 388, [2001] S.C.J. No. 77, REJB 2001-26863 (S.C.C.) — referred to Eliopoulos v. Ontario (Minister of Health & Long Term Care) (2006), 35 C.P.C. (6th) 7, 2006 CarswellOnt 6777, 43 C.C.L.T. (3d) 163, 82 O.R. (3d) 321, 217 O.A.C. 69, 276 D.L.R. (4th) 411, [2006] O.J. No. 4400 (Ont. C.A.) — referred to Hanke v. Resurfice Corp. (2007), 69 Alta. L.R. (4th) 1, 404 A.R. 333, 394 W.A.C. 333, 2007 CarswellAlta 130, 2007 CarswellAlta 131, 2007 SCC 7, [2007] 4 W.W.R. 1, 45 C.C.L.T. (3d) 1, 278 D.L.R. (4th) 643, [2007] R.R.A. 1, 357 N.R. 175, [2007] 1 S.C.R. 333, [2007] S.C.J. No. 7 (S.C.C.) — followed Hill v. Chief Constable of West Yorkshire (1988), [1988] 2 W.L.R. 1049, [1989] A.C. 53, [1988] 2 All E.R. 238 (U.K. H.L.) — considered Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board (2005), 202 O.A.C. 310, 36 C.C.L.T. (3d) 105, 2005 CarswellOnt 4589, 76 O.R. (3d) 481, 33 C.R. (6th) 269, 259 D.L.R. (4th) 676, [2005] O.J. No. 4045 (Ont. C.A.) — referred to Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board (2007), 2007 SCC 41, 2007 CarswellOnt 6265, 2007 CarswellOnt 6266, 87 320 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

O.R. (3d) 397 (note), 40 M.P.L.R. (4th) 1, 64 Admin. L.R. (4th) 163, 50 C.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 Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1989), [1989] O.J. No. 471, (sub nom. Doe v. Metropolitan Toronto (Municipality) Commissioners of Police) 58 D.L.R. (4th) 396, 39 O.R. (3d) 47, (sub nom. Jane Doe v. Police Bd. of Commissioners (Metropolitan To- ronto)) 48 C.C.L.T. 105, 1989 CarswellOnt 684 (Ont. H.C.) — referred to Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1990), (sub nom. Doe v. Metropolitan Toronto (Municipality) Commissioners of Police) 1 C.R.R. (2d) 211, (sub nom. Doe v. Metropolitan Toronto (Municipality) Commissioners of Police) 72 D.L.R. (4th) 580, 1990 CarswellOnt 442, (sub nom. Jane Doe v. Board of Police Commissioners of Metropolitan Toronto) 40 O.A.C. 161, 5 C.C.L.T. (2d) 77, (sub nom. Doe v. Metropolitan Toronto (Municipality) Commissioners of Police) 74 O.R. (2d) 225, 50 C.P.C. (2d) 92, [1990] O.J. No. 1584 (Ont. Div. Ct.) — referred to Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1998), 160 D.L.R. (4th) 697, (sub nom. Doe v. Metropolitan Toronto (Municipality) Commissioners of Police) 39 O.R. (3d) 487, 43 C.C.L.T. (2d) 123, 126 C.C.C. (3d) 12, 1998 CarswellOnt 3144, [1998] O.J. No. 2681 (Ont. Gen. Div.) — considered Mooney v. British Columbia (Attorney General) (2004), [2004] 10 W.W.R. 286, 25 C.C.L.T. (3d) 234, 2004 BCCA 402, 2004 CarswellBC 1707, 31 B.C.L.R. (4th) 61, 202 B.C.A.C. 74, 331 W.A.C. 74, [2004] B.C.J. No. 1506 (B.C. C.A.) — considered N. (D.) v. Oak Bay (District) (2005), [2005] B.C.T.C. 1412, 261 D.L.R. (4th) 692, 2005 BCSC 1412, 2005 CarswellBC 2469, [2005] B.C.J. No. 2268 (B.C. S.C.) — considered Norris v. Gatien (2001), 2001 CarswellOnt 4006, 151 O.A.C. 394, 8 C.C.L.T. (3d) 220, 56 O.R. (3d) 441, 41 M.V.R. (4th) 260, [2001] O.J. No. 4415 (Ont. C.A.) — considered Odhavji Estate v. Woodhouse (2003), 19 C.C.L.T. (3d) 163, [2004] R.R.A. 1, 233 D.L.R. (4th) 193, 11 Admin. L.R. (4th) 45, [2003] 3 S.C.R. 263, 70 O.R. (3d) 253 (note), 2003 SCC 69, 2003 CarswellOnt 4851, 2003 CarswellOnt 4852, 312 N.R. 305, 180 O.A.C. 201, [2003] S.C.J. No. 74 (S.C.C.) — considered Project 360 Investments Ltd. v. Toronto Police Services Board (2009), 2009 CarswellOnt 3418, [2009] O.J. No. 2473 (Ont. S.C.J.) — considered Schacht v. R. (1974), 3 N.R. 453, (sub nom. O’Rourke v. Schacht) 55 D.L.R. (3d) 96, 1974 CarswellOnt 251, 1974 CarswellOnt 251F, [1976] 1 S.C.R. 53 (S.C.C.) — considered Small v. Stec (2009), 186 C.R.R. (2d) 363, 2009 CarswellOnt 511 (Ont. S.C.J.) — considered Burnett v. Moir A.F. Cullen J. 321

Traversy v. Smith (2007), 52 C.C.L.T. (3d) 109, 2007 CarswellOnt 7452 (Ont. S.C.J.) — considered Wellington v. Ontario (2011), 2011 CarswellOnt 2334, 2011 ONCA 274, 81 C.C.L.T. (3d) 230, 333 D.L.R. (4th) 236, 105 O.R. (3d) 81, 277 O.A.C. 318 (Ont. C.A.) — considered Williams v. Canada (Attorney General) (2009), 2009 CarswellOnt 2378, 95 O.R. (3d) 401, 57 M.P.L.R. (4th) 164, 2009 ONCA 378, 66 C.C.L.T. (3d) 193, 249 O.A.C. 150, 70 C.P.C. (6th) 213, 310 D.L.R. (4th) 710, [2009] O.J. No. 1819 (Ont. C.A.) — referred to Statutes considered: Liquor Control and Licensing Act, R.S.B.C. 1996, c. 267 Generally — referred to Police Act, R.S.B.C. 1996, c. 367 s. 34 — considered Regulations considered: Liquor Control and Licensing Act, R.S.B.C. 1996, c. 267 Liquor Control and Licensing Regulation, B.C. Reg. 244/2002 Generally — referred to

ACTION by plaintiff seeking damages in negligence from both defendant municipality and police department relating to assault suffered by plaintiff at nightclub.

J. Vilvang, Q.C., T.G. Lewis, for Plaintiff J.M. Poole, J.A. Dowler, M. Chorlton, for Defendants, Corporation of Delta, Paul Uppal, Lorne Pike, Jim Cessford

A.F. Cullen J.: A. Introduction i. The Action 1 This case raises a number of legal and factual issues, but the foremost question is, in what circumstances will police officers be subject to a private law duty of care for acts or omissions committed in the exercise of their public responsibility to preserve the peace and prevent the commission of offences? 2 The plaintiff, Garrett Burnett, was brutally assaulted early in the morning of December 26, 2006 while he was a patron of Cheers Night- club, located in the North Delta Inn (“NDI”), in the Municipality of Delta. The assault occurred as Mr. Burnett and other patrons were being pushed from the pub out through a door into an adjacent sidewalk and 322 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

roadway. The assault was captured on video-tape from a surveillance camera which showed an assailant striking the plaintiff on the head with a bar stool taken from the premises after he apparently stumbled and fell to the ground as he and the others were being ejected. The video recording is not sufficiently clear to allow an identification of the assailant and the subsequent police investigation did not determine who he was. 3 As a result of the assault, the plaintiff has suffered a moderately severe traumatic brain injury which has had a significant impact on the course of his life over the past four and a half years and which will significantly compromise his future. 4 The plaintiff brought a law suit against the owner of the Cheers pub, Three Jay Holdings Ltd., doing business as the North Delta Inn and the Cheers pub, and John Doe 1 and John Doe 2 under action number S073004. Mr. Burnett subsequently commenced a second lawsuit against the owners, the management and certain employees of Cheers as well as against Chief Constable Jim Cessford (“Cessford”), Inspector Lorne Pike (“Pike”), Constable Paul Uppal (“Uppal”) of the Delta Police Depart- ment (“DPD”), the Corporation of Delta, John Does 1 to 10 and employees 1 - 10. For ease of reference, where appropriate I shall refer to the members of the DPD and the Corporation of Delta as the “Delta Defend- ants”. The Delta Defendants filed a Third Party Notice against Three Jay Holdings. The two actions were ordered to be tried together, but before the commencement of the trial, the plaintiff settled his claim against the owners, the management and the various employees of the NDI and Cheers pub and filed a Notice of Discontinuance against those parties. 5 In the result, this action proceeded only as against the Delta Defend- ants, alleging liability in negligence. The Delta Defendants do not dispute that the plaintiff has suffered significant loss and damage, but they take the primary position that the plaintiff has not established one or more of the elements essential to affixing them with liability in negligence. 6 The defendants’ alternative position is that the plaintiff’s own conduct contributed significantly to his injuries and he should be found contributorily negligent for the events leading to his loss. 7 For the reasons that follow, I conclude that the defendants are not liable to the plaintiff for negligence.

ii. The Plaintiff 8 The plaintiff at the time of trial was 35 years old. He grew up in the lower mainland area of British Columbia, with his mother, Vicci Burnett, Burnett v. Moir A.F. Cullen J. 323

his father, Bob Burnett, and his younger sister Andrea Burnett. He was married for a relatively short time, but divorced in 2004. 9 His sister, Andrea, presently lives with her fianc´e, Justin Lieberich. Mr. Burnett’s parents and sister live in New Westminster where he presently resides as well. 10 Both Mr. Burnett Sr. and Mrs. Burnett retired in 2006 from long-term careers with their respective employers. 11 At the time of his injury, the plaintiff was in a relationship with a woman by the name of Carla Guttierez. He had recently returned to Van- couver, on December 23, 2006 and was living with her in her family’s home in North Vancouver. 12 Growing up, the plaintiff was very active in sports including hockey, soccer, lacrosse, baseball, swimming, rugby and football, but as he got into high school, he concentrated on hockey and lacrosse as his primary sports. 13 He first left home at age 18 in 1993 to play hockey in a number of small towns in the interior of British Columbia. The following year he went to Ontario and played with two junior teams in the Ontario Hockey League. His aspiration was to play in the National Hockey League. 14 After starting the next year with a junior team, he ended up playing in the professional or semi-professional leagues, including the new IHL, CHL and ECHL. He played in the ECHL from 1995/96 to 1997/98 when he graduated to the AHL, initially with the Philadelphia Phantoms. He played in the AHL until the end of the 2002/2003 season except for a number of stints in the IHL. 15 In 2003/04 he realized his aspirations by signing with the Anaheim Mighty Ducks of the NHL and playing 39 games with that team. He scored one goal, made two assists and served 184 minutes in penalties. His primary role throughout his professional career was as an enforcer; a fact which is reflected in his statistics, showing relatively high penalty minutes and low point totals throughout the years which he played. 16 In 2004/05 the NHL underwent a lockout. For part of that year, the plaintiff played with the Danbury Thrashers of the new IHL. The following year, 2005/06, he signed a contract with the Dallas Stars of the NHL, but was with Dallas only for the pre-season when he suffered a hand injury. He went on to play ten games with the Iowa Stars of the AHL and finished the season with Phoenix Road Runners of the ECHL, playing 29 games there. 324 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

17 The following year, he worked out in Vancouver with a number of NHL players including Trevor Linden, who testified as to his fitness and dedication, but he was unable to secure a contract with an NHL team or otherwise. Later on in 2006 he signed a contract with the St. Jean Sum- mum Chiefs in the LNAH, a league based in Quebec that features fighting as a prime attraction. 18 He was suspended from the league after playing four games with the Chiefs. The original suspension was for three games, but it was increased by the league to 36 games. The team did not appeal the suspension as Mr. Burnett’s injury, at the heart of this action, prevents him from playing any further hockey, makes such an appeal moot. 19 After his suspension which occurred on December 17, 2006, Mr. Bur- nett flew to Dallas where his vehicle was, and drove home to Vancouver from Dallas, arriving on December 23, 2006.

B. Liability - The Plaintiff’s Case i. The Pleadings 20 The plaintiff’s claim against the Delta Defendants rests on assertions of negligence both before and after the assault. It is not alleged that the Delta Defendants had any direct involvement in the specific events leading up to or comprising the attack on the plaintiff. Rather, it is alleged that the Delta Defendants, specifically, Cessford, Pike and Uppal, failed to properly identify Cheers as a nuisance to the public, a trap for the unwary, and to take pre-emptive steps to abate the danger it represented to potential patrons. 21 It is also alleged that in the wake of the attack upon the plaintiff, the Delta Defendants, specifically the defendants Uppal and Pike, were negligent in the way they responded, initially in seeking “first responder assistance for the plaintiff” and subsequently in investigating the assault, resulting in a failure to capture potential evidence of the identity of the assailant or assailants responsible for the attack, and in the loss of a surveillance video containing a depiction of the events at issue. 22 More specifically, the allegations are that the defendants Cessford, Pike and Uppal failed to warn of the dangers of entering Cheers; that the defendants Cessford, Pike, Uppal and the Corporation of Delta were negligent in allowing Cheers to continue to operate, thereby creating a nuisance to the public and a trap for the unwary; that the defendants Cess- ford, Uppal and Pike failed to report incidents of violence at Cheers to the Corporation of Delta for by-law enforcement purposes or to the Li- Burnett v. Moir A.F. Cullen J. 325

quor Control and Licensing Branch (“LCLB”) of the Government of British Columbia; that the defendant Uppal failed to call for First Re- sponder assistance for the plaintiff; that the defendant Uppal failed to conduct a full and thorough investigation of the witnesses to the assault, and failed to keep any adequate record of such an investigation; and that the defendant Pike lost or destroyed a hard drive and/or video surveillance video depicting the events at issue.

ii. The Evidence (1) Statistics of Service Calls to NDI 23 A significant part of the foundation for the plaintiff’s action against the Delta Defendants comes from a letter directed to the plaintiff’s mother, Ms. Vicci Burnett, dated April 2, 2007 from the DPD in response to her request for information concerning “police statistics pertaining to the business ‘Cheers’ located at 11920 - 70th Avenue, Delta, B.C.” 24 The letter set out information gathered from “police statistics from all [their] records and databases beginning from January 1st, 1998 to March 21st, 2007.” According to the letter, there were a total of 2,410 police service calls to Cheers during that period, 231 of which were for assaults, 9 of which were for uttering threats, 10 of which were obstructing a peace officer, 138 for suspicious person/vehicle occurrences, 200 of which were for creating a disturbance, 217 for “unspecified assistance” and 1,605 of which were for “other”. 25 In the period for which such statistics were available, from February 2005 forward, there were a total of 38 arrests and charges forwarded to Crown Counsel, including 7 in 2005, 28 in 2006, and 3 to the end of March 2007. The yearly number of service calls were set out as follows: • 1998 - 292 • 1999 - 267 • 2000 - 267 • 2001 - 242 • 2002 - 331 • 2003 - 274 • 2004 - 243 • 2005 - 199 • 2006 - 258 • 2007 - 37 326 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

(2) The Anselmo Letter 26 There were additional documents evidencing the history of occurrences at Cheers. Council for the Municipality of Delta received a letter dated October 24, 2006 concerning an assault at Cheers, and complaining about the police response (the “Anselmo Letter”). Council referred the letter to Cessford for a review and report “including a review of the history of complaints relating to this property” for a future executive meeting. On November 20, 2006, Cessford reported orally at a council meeting that the specific matters raised in the letter had been dealt with and resolved to the satisfaction of the writer and no further action was required. According to the Minutes, he advised council that 392 complaints over the past 22 months had been registered, not all attributable to management of the bar and the management of the bar had cooperated with the department through the installation of security cameras, improved lighting and sound attenuation. 27 Council moved to have “staff report back regarding the specific nature of the police complaints related to the activities at the NDI and [the] potential success of show cause hearing.” The report from staff was scheduled to be given at a meeting on December 18, 2006, but that meeting was cancelled by council.

(3) The Liquor Inspector 28 The plaintiff called Kane Scott, an inspector with the LCLB since 1998. His area of responsibility includes White Rock, Delta and New Westminster. He swore an affidavit dated November 26, 2009 to which a number of documents were exhibited. The documents were admitted as authentic by the defendants. Mr. Scott’s evidence was that Cheers pub was part of the NDI which had several different liquor licenses, including two liquor primary licenses for Cheers, another liquor primary license for a separate premises called “All Stars”, one food primary license and one license for a cold beer and wine store. 29 Mr. Scott conducted random inspections of the liquor licensed premises in his jurisdiction, primarily to inspect for over-crowding, intoxication and service to minors. He detailed the means of ensuring compliance, including discussions, correspondence and issuance of contravention notices which could lead to enforcement actions. He identified a schedule of penalties applicable to various contraventions including license suspensions and financial penalties for “riotous conduct”. He is the person responsible for initiating procedures against offending premises and would get the necessary information from his inspections, Burnett v. Moir A.F. Cullen J. 327

from complaints from members of the pubic, from information from other agencies, or information from police through the issuance of licensed premises checks (“LPCs”). The LPCs were issued on pre-printed forms provided to the police, copies of which were to be sent to the LCLB. He identified several issued LPCs and accompanying police reports issued in October of 1999 and September of 2001 relating to events at Cheers, indicating that the matters at issue were resolved without enforcement actions being taken. 30 In May of 2005, Mr. Scott received a report of “riotous conduct” at Cheers, but decided not to pursue further action. 31 In August 2005 in an inspection visit, he found evidence of minors being served at Cheers and of a fight which events were resolved by a monetary penalty being imposed after an enforcement action was taken. His last visit to the bar before the assault on the plaintiff was on Novem- ber 25th, 2006. On that occasion he prepared a Compliance and Enforce- ment Contravention Notice relating to service of a minor. 32 Mr. Scott was not aware of the number or nature of service calls to Cheers between 1998 and the end of March 2007 as set out in the summary sent to Ms. Burnett. He was only advised of the assault upon the plaintiff through media reports, but he testified there was no expectation that the police would advise the LCLB one way or the other of incidents related to premises. He had meetings with Cheers management about matters subject to regulation by the LCLB. Mr. Scott made numerous visits to Cheers where no enforcement action was taken as a result. He noted that Cheers had two separate areas, each subject to a separate liquor licence. His jurisdiction did not extend outside of the licensed bar areas or into the parking lot, and so he would not need to know what went on in the parking lot unless the police thought there was something he needed to know. The use of LPCs was discretionary by the police and that was only one of several ways for Mr. Scott and other liquor inspectors to determine what was going on at bars within their jurisdiction. He noted Cheers had staff at the front door, did “pat downs” for patrons, had security staff monitoring the conduct of patrons, used head sets to communicate, and wore identifiable clothing. The Cheers approach to patron control was consistent with other similar bars. 33 Mr. Scott conducted approximately 32 inspections in all over the years from 1998 to 2006. He noted that altercations including pushing and shoving were occurrences at every bar and what occurred at Cheers was not unique to Cheers. He was aware bar staff would call the police when necessary and cooperate with the police when they attended. Those 328 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

circumstances would factor into whether an enforcement action would be taken or not. If matters went to a hearing, the penalty he recommended would not always be imposed. In the case of serving the minor in 2005 he recommended a two day suspension, but the adjudicator imposed a $3,000 fine instead. 34 The more contraventions by a premise, the higher the penalty and serial contraventions could ultimately lead to closure. He was aware of other bars where that had happened but it was a last resort and there were many other enforcement steps to be taken before that ultimate one. 35 Mr. Scott had imposed a 24-hour suspension on one of the other premises at the NDI - All Stars - but not at Cheers. 36 He was never aware of any other occasion at Cheers where there was an assault as extreme as that on Mr. Burnett. He noted that the service calls to the NDI encompassed all the areas of the complex, not just Cheers. It would encompass the NDI, the cold beer and wine store, All Stars, and the Cheers pub. 37 He agreed that if fights began in the bar and spilled out onto the street or parking lot, that would be of interest to him and he would have the authority to deal with it and could investigate with a view to possible enforcement action. 38 Mr. Scott would not expect an LPC for each “little incident” at NDI - it was not something he could follow up on.

(4) The Licensed Premises Agreement 39 On July 2, 2002, Cheers entered into a Licensed Premises Agreement through its owners with the Corporation of Delta. The agreement provided in part, as follows: 3. The Owners undertake to work with Delta Police Department to reduce calls for Police attendance related to the operation of the North Delta Inn and to attend meetings upon request by Delta Police Department; 4. The following measures will be implemented by the Owners: ... 3. There will be complete support for, and cooperation with, the Delta Police Department Licenced Premises Walk-Throughs; 4. When incidents occur which require police involvement, all North Delta Inn staff will cooperate with police members and will not im- pede or obstruct the investigation in any way; ... Burnett v. Moir A.F. Cullen J. 329

7. Security cameras, linked to video recording equipment, will be maintained on the interior as well as on the outside of the building on 70th Avenue, at the entrance to Cheers, at the south exits to Cheers and in the parking lot east of the building. Any videos that are so required will be surrendered immediately to the Delta Police Depart- ment for investigative or evidentiary purposes; ... 10. The Owners will employ security staff, who will be dressed in a clearly identifiable manner, to patrol the premises and to monitor the activity of the patrons immediately outside the North Delta Inn, particularly at closing time to ensure orderly dispersal. 40 The agreement also provided as follows: THE Corporation of Delta and The Owners recognize that participation in this Agreement is voluntary. Further, there is recognition that the Liquor Control and Licencing Act, the Policies of the Liquor Control and Licencing Board, City Bylaws, and other Statutes and Legislation shall at all times take precedence over this Agreement. The Owners have voluntarily entered into the Agreement. The Cor- poration of Delta would like to commend the North Delta Inn, its owners and principals, for their recognition of their civic responsibilities and their commitment to fostering a good working relationship with The Corporation of Delta and its neighbours. The Owners recognize that the Business Licence shall be subject to cancellation, after consideration by Council, if there has been violation of any conditions of this agreement or the proprietor has failed to maintain law and order on the premises, as stipulated in the Agreement. The Corporation of Delta is committed to the vitality of the 120th Street commercial core and welcomes the owners of the North Delta Inn as active partners in this process. 41 On an earlier occasion, on March 5, 1996, the regional manager of the LCLB wrote to Cessford. The letter concerned the then named “Delta Scottsdale Inn Hotel - Liquor Specials at Cheers Pub - complaint of Councillor Krista Engelland”. The letter referred to a meeting between DPD members and branch members and read in part, as follows: Our meeting explored the complaint of Councillor Engelland regarding constant requirement of police presence at the Delta Scottsdale to deal with drinking and fighting, particularly on cheap drink nights. We were advised by Insp. Rankin at that time that most problems occurred in the parking lot outside the licensed premises. Insp. Rankin also advised that Delta Police no longer write Licensed Pre- 330 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

mise Check Slips (LPC’s) except when a violation of the Liquor Act or it’s Regulations are observed. This office has received no LPC’s for any licensed premises from your Department for about 3 years. Can we assume that no LPC’s were written or that perhaps you no longer forward LPC’s to this office for enforcement action? In light of the Attorney General’s indication that there will be increased monitoring of the licensed establishment to ensure compliance with the law, we are requesting an updated report on the current situation. In the interim, I wish to re-iterate that our Liquor Inspectors are prepared to work closely with your Department to monitor compliance in all licensed establishments in Delta Municipality including Scotts- dale Inn Hotel.

(5) Discovery of the Delta Defendants 42 The plaintiff also read in and relied on portions of Cessford’s examination for discovery in support of the contention that his conduct was negligent. 43 Cessford has been the chief of the DPD since February of 1995 and as such, was in charge of “structuring the intentions and directions of the police force” and agreed it is better to be “proactive rather than reactive”. 44 Chief Cessford noted in his discovery that the total number of service calls for DPD in 2006 was 30,341 and the total number of service calls to Cheers for the same period was 258. 45 He agreed that after the October 24, 2006 letter of complaint concerning the assault at Cheers, municipality staff were asked to prepare a report on the possibility of a show cause for Cheers, arising out of the number of police service calls to that location. He said that initiative would come not from the police, but from the municipality’s staff through the municipality’s legal department. 46 Cessford was aware of the requirement for pubs like Cheers to be licensed by the LCLB to be operated as a liquor selling establishment. There is no policy that a Delta police officer must report “each and every response to a service call to a liquor selling establishment, but they were instructed to advise the LCLB if they have problems and there are issues occurring at a particular bar.” 47 He noted that the DPD put out monthly bulletins on its website, in part to alert the public to areas of criminal activity. The DPD did not provide any statistics of service calls to Cheers to LCLB representatives. Burnett v. Moir A.F. Cullen J. 331

48 There is no record of any response to the LCLB general manager’s letter of March 5, 1996. He only recalled a meeting between his staff and management of Cheers to discuss assaults on one occasion when a shooting took place at a hotdog stand in the parking lot. 49 There was no meeting with the owners and management of Cheers over the assault on the plaintiff and no report was ever filed with Crown Counsel seeking approval of charges. 50 The only licensed premises checks which were kept by the DPD in relation to Cheers were those contained in the documents provided to the plaintiff by the DPD marked as Exhibit 9 at the Examination for Discov- ery of Cessford. 51 The plaintiff also relied on read-ins of Uppal’s Examination for Dis- covery. Uppal acknowledged knowing some of the management at Cheers. He had never been asked to compile or record his attendance at Cheers prior to the assault on the plaintiff. He had never completed any LPCs in respect of Cheers or otherwise. 52 Portions of Pike’s Examination for Discovery were also read in by the plaintiff. Pike had been with the DPD since 1986. He testified he could not clarify the bar as “rough” in the sense of a likelihood on a weekly basis of an assault taking place, but he would not “take his wife there for a drink”. Pike testified there were no statistics kept on Cheers by the DPD and he was not aware of any warnings, suspensions, or citations issued to Cheers. He believed the compilation of LPCs was part of DPD’s officers’ duties to report to the LCLB to keep it informed of occurrences at licensed premises. He did not believe any LPCs were written with respect to the assault on the plaintiff.

(6) The Evidence of the Plaintiff 53 In his evidence, Mr. Burnett was unable to cast much light on the specific events leading up to and comprising the assault on him because of the nature and extent of his head injury and accompanying memory loss. 54 He recalled being at his sister’s apartment in New Westminster on Christmas morning. The previous evening (Christmas Eve) he had been with his girlfriend and her family in North Vancouver. He was at his sister’s with his girlfriend, Carla, his sister, her fianc´e Justin Lieberich, and for a period, his parents. He and Carla then returned to her parents’ place. The plaintiff made a number of telephone calls and ended up talking to Greg Allan, a friend or acquaintance from Vancouver. He arranged to meet with Greg later for dinner downtown. He did not recall if he had 332 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

anything to drink. They then went looking for some place where people were “up-beat and celebrating”. They went to several places and then Greg suggested they go to Cheers in Delta. He did not recall going to Cheers or how he got there. The surveillance video showed him, Greg Allan and Greg Allan’s girlfriend Sharon Catanghal, but he did not independently remember whether Sharon was with them or not. 55 Mr. Burnett’s next memory was being in the hospital, with his parents, sister and his sister’s fianc´e present. 56 Mr. Burnett testified he was not the sort of person to get involved in fights off the ice and had not before. He would tend to try and calm things down. Mr. Burnett testified he barely drank alcohol because of his training regime and need to eat properly. Even in the off-season he would train hard. He denied ever using anabolic steroids, but said he used supplements that would parallel the kind of benefit he would get from steroids, but “without breaking the law”. He would get the supplements from supplement stores in the U.S. and Canada. 57 Mr. Burnett saw a Dr. Lee in California, where he was prescribed several medications including testosterone, but testified it had to do with his own sexual heath, not to counteract the effects of steroids. He never failed any tests for the use of steroids or other drugs during his hockey career. Mr. Burnett acknowledged having used cocaine before. He testified it was “very minimally”. He “never actually purchased it” himself and used it “only a handful of times” if something was going on or at a gathering and he was “pressured into it”. He used it in the off-season at parties. Mr. Burnett did not believe he used cocaine in the summer of 2006 while he was training in Vancouver and playing lacrosse, or in the fall before he went to play in Quebec, or while playing in Quebec. He did not use any cocaine after leaving Quebec and returning to Vancouver on December 23, 2006. 58 It was pointed out to Mr. Burnett that some blood test results in Van- couver taken after the assault showed an amount of cocaine in his blood. He said he did not remember taking any cocaine, but if there was some in his blood, he “could see a possibility someone had some and [he] did a bit.” 59 In cross-examination, Mr. Burnett was probed about the use of “en- hancements” for his hockey career. Although he maintained that he only used supplements that mimic the effects of anabolic steroids and his use of testosterone and other drugs had nothing to do with off-setting the effects of actual steroid use, I am satisfied on all the evidence including his examination for discovery on the balance of probabilities that the Burnett v. Moir A.F. Cullen J. 333

plaintiff did indeed use steroids to enhance his performance as a professional athlete. Indeed, in argument, his counsel fairly conceded that likelihood and attributed the plaintiff’s reticence to admit it to the effect of his head injury and accompanying diminished judgment. 60 The plaintiff acknowledged being in bars when fights or altercations broke out. He agreed one of the bars he went to both before and after his injury was the Roxy on Granville Street in downtown Vancouver. He was aware of altercations there and aware staff would sometimes eject would-be combatants. He had seen fights on the streets outside many bars. He made sure he was “not involved in that kind of stuff”. 61 Mr. Burnett had not lived in Delta since he was five years old, did not read the local papers, and had never read the DPD website before the assault upon him. 62 The plaintiff did not call Greg Allan as a witness. Mr. Burnett’s mother testified that attempts to locate him and his girlfriend Sharon Cat- anghal were unsuccessful.

C. Liability - The Defendant’s Evidence 63 At the close of the plaintiff’s case, the defendants brought a no evidence motion seeking to have the action dismissed on the basis that there was no evidence to support at least one essential element relating to each cause of action that makes up the plaintiff’s case. I dismissed the application holding that there was some evidence to consider in respect of each of the essential elements of negligence which was in substance, the basis of the plaintiff’s claim against the Delta Defendants. As a result, the defendants called a body of evidence that addressed both the issue of liability, and, in the alternative, damages. 64 It was the defendant’s ultimate submission that taken as a whole, the evidence fails to establish, to the required degree, the essential elements of negligence. In particular, the defendants in argument focussed on the alleged deficiencies in the evidence cogent to establishing a duty of care, and also on the absence of sufficient evidence relevant to the issue of a standard of care or that the acts or omissions of the defendants amounted to a breach of such a standard.

i. Expert Report of Dr. John McNeill 65 The defendants rely on the report of Dr. John McNeill, a Professor and Dean Emeritus, in the Faculty of Pharmacological Sciences at the University of British Columbia to provide expert opinion evidence on two questions that potentially relate to the issue of liability: 334 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

1. what effect, if any, would the alcohol and cocaine present in Mr. Burnett’s system likely have had on his physical condition, mental state and behaviour on the evening and early morning of Decem- ber 25/26, 2006? 2. assuming Mr. Burnett used steroids in 1998 - 2004 and in Novem- ber and December 2006, what effect, if any, would this use have had on his physical condition, mental state and behaviour on the evening and early morning of December 25/26, 2006. 66 The assumptions on which Dr. McNeill based his opinion or set out in his report as follows: For the purpose of providing my opinion, I have been asked to assume the following: 1. Garrett Burnett was born on September 23, 1975. 2. Garrett Burnett began using steroids after a major knee injury sustained during the 1998/1999 season of the American Hockey League. Following that, he continued to use a variety of nutritional supplements and steroids, including anabolic steroids that he injected, to assist with his training for professional hockey throughout most of his career. He continued to use steroids in order to remain competitive with other players, improve his endurance and to assist him in bouncing back from his injury. 3. Between the end of summer 2004 and mid-November 2006, Garrett Burnett continued to take caffeine and ephedrine but did not use anabolic steroids because the NHL began drug testing and he did not want to be caught using illegal supplements. 4. As of mid-November 2006, Garrett Burnett used oil-based steroids to assist with his training in preparation for playing in the Ligue Nord-Americaine de Hockey (LNAH), a semi-professional league which does not test players for steroids. 5. In early December 2006, Burnett began playing professional hockey for the St. Jean Chiefs of the Ligue Nord-Americaine de Hockey (LNAH). 6. On the night of the incident, December 25, 2006, Garrett Bur- nett was approximately 6'3" tall and weighed approximately 240 pounds. 7. On the night of the incident, Burnett had consumed a quantity of alcohol and a quantity of cocaine. 8. From 2004 to 2006, Garrett Burnett was prescribed medications and/or supplements to enhance his testosterone levels. Burnett v. Moir A.F. Cullen J. 335

9. Following the incident, Garrett Burnett continued to take medications and/or supplements to enhance his testosterone. 67 Dr. McNeill noted, that in his review of Mr. Burnett’s medical records “there are numerous references to a drug and alcohol problem”. He also noted that while Mr. Burnett was at G.F. Strong Rehabilitation Centre, both as an in-patient and out-patient following the assault, he was seen by a drug and alcohol counsellor. 68 So far as the alcohol present in Mr. Burnett’s system was concerned, Dr. McNeill reasoned that if at the time of testing he had 123 mg per 100 ml of blood (what the plasma alcohol reading of 29.8 mm ultimately amounts to) he would have had between .133 to .153 mg per 100 ml of blood at the time of the assault. He noted that at that level, “individuals are impaired and are more likely to engage in arguments and physical confrontations.” 69 Insofar as the presence of cocaine in Mr. Burnett’s system is concerned, Dr. McNeill noted that “it is a stimulant drug”. It “can produce arousal, alertness, wakefulness and euphoria with an increased sense of energy, alertness and hyper-vigilance.” Dr. McNeill cited an article that stated “that both cocaine and alcohol increase violence and decrease impulse control” and when given together, “their effects are at least addi- tive”. Dr. McNeill noted: In the case of Mr. Burnett, there is the possibility of the drugs acting together in this manner. However, we do not know the quantity of cocaine taken by Mr. Burnett or when it was taken. 70 In terms of the plaintiff’s steroid use and its effect upon him, Dr. Mc- Neill noted that “anabolic steroids are drugs that mimic the effects of the male sex hormone testosterone”. He referenced a review which states that “aggression and violence, mania psychosis and suicide have been associated with anabolic steroid abuse”. He concluded that “steroids taken in November and December of 2006 could certainly have influenced Mr. Burnett’s mental state and affected his behaviour on Decem- ber 26, 2006 at the time of the incident.” He noted “anabolic steroid use from 1998 to 2004 would most likely not affect his mental state in 2006.” 71 He noted, based on his review of Mr. Burnett’s medical records, that Mr. Burnett was receiving treatments for adverse effects of steroid use in 2008 and 2009. The effects noted by Dr. Dahl, an endocrinologist who was treating Mr. Burnett in 2008 and 2009 for the effects of steroid use, according to Dr. McNeill “indicate either a long term adverse effect of anabolic steroids or the continued use of those drugs”. He noted “long- 336 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

term effects on the personality including hypomania aggression and depression have been found in some individuals”. 72 Dr. McNeill concluded: In summary, Mr. Burnett had consumed three types of drugs, all of which are known to increase aggressiveness prior to the incident of December 26, 2006. The amount of alcohol consumed was calculated and found to be in a range that produces decreased inhibitions and increased aggression. The amount of anabolic steroids consumed was significant since side effects of their use were noted. The amount of cocaine consumed is not known and it may or may not have contributed to Mr. Burnett’s behaviour on that date.

ii. The Evidence of Dr. James Kennedy 73 Dr. James Kennedy is an expert in internal medicine and clinical pharmacology and toxicology and was able to give opinion evidence on the effects of the use of alcohol, cocaine and anabolic steroids. He was retained by the Delta Defendants to proffer an opinion on the effects of the use of those substances on the plaintiff on the night in question. 74 By an agreed statement of facts, it was established that analysis of a blood sample and a urine sample from the plaintiff after the assault at 2:40 a.m. on December 26, 2006 revealed the presence of alcohol and cocaine. Dr. Kennedy estimated Mr. Burnett’s blood alcohol reading at the time of the assault to be approximately .139 - .146 mg/100 ml of blood. The urine test for cocaine was not quantitative but the positive test indicated a quantity of at least 300 nanograms of cocaine per millilitre. Dr. Kennedy noted that with the presence of alcohol, cocaine has a life of two to two and a half hours, which allowed him to conclude at the time of the assault at about 1:40 a.m., Mr. Burnett was under the influence of cocaine. Dr. Kennedy testified cocaine increases a person’s level of energy, self-confidence, and gregariousness. It can make a person feel self- confident, powerful and sometimes stimulate aggression. It produces adrenaline which is part of the “flight or fight” mechanism. In circumstances of a confrontation with others, a person having ingested cocaine is more likely to be aggressive and more violent than if he had not ingested it. Taking alcohol with cocaine will prolong the effects of the cocaine. Alcohol is a disinhibitor and will break down day to day control mechanisms. The combination of alcohol and cocaine would have an ad- ditive effect and would render a subject more likely to be aggressive and prone to violence. Burnett v. Moir A.F. Cullen J. 337

75 As far as steroids are concerned, the effect is very variable, and dependent on amounts in the time frame over which it was used. It can lead to feelings of power, inner strength and lack of judgment depending on the circumstances. It can lead to impairment of impulse control. 76 If a person had been taking steroids within the last two months, used cocaine within the last two hours and had alcohol measurements of .37 to .146, he would “be asking for trouble”. The combination of drugs would amplify violent or combative tendencies. 77 Dr. Kennedy reviewed the clinical records of Dr. Lester Lee who prescribed various medications to the plaintiff in California. In his report of January 10, 2011, Dr. Kennedy detailed his review of Dr. Lee’s notes as follows: Opinion: Anabolic steroid use has many and varied long term toxic effects. The likelihood of both short and long term toxic effects is greatly increased with the use of multiple steroid drugs at the same time in various patterns. A common pattern is 1 to 3 times weekly injections, in 4 to 12 week cycles. Dr. Lester Lee’s notes from Janu- ary 2004 to June 2006 describe such a coincident multiplicity of steroid drug use by Mr. Burnett over this time. He already has toxic effects of previous anabolic steroid use when he sees Dr. Lee in January, 2004: hypogonadism (long term effect), low HDL choles- terol (increased cardiac risk), and mild liver damage (short term effect). Over this time, Dr. Lee further prescribes both oil-based and injectible steroids, and other oral agents. These drugs include human Growth Hormone (GH) for muscle bulk and strength, human Chori- onic Gonadotropin (hCG) and Clomid to stimulate testosterone pro- duction, and Tamoxifen to block the effects of steroid-induced es- trogen (gynecomastia). He has this tender breast enlargement toxic effect of steroid use during the time that he saw Dr. Lee. Also during this time he had a thigh abscess, secondary to oil-based steroid injec- tion, another acute side effect. Dr. Lee also prescribed Zoloft, an anti depressant, implying that Dr. Lee has diagnosed a mood disorder. 78 Dr. Kennedy agreed with the proposition put to him in cross-examination that the circumstances in which a person consumes alcohol produced greater changes than the alcohol itself. He agreed that if the circumstances are happy and tranquil as opposed to threatening, that will have a significant influence on the effect of the alcohol, and that is the same with cocaine. He agreed it is the existing state of mind that is exaggerated. If the person affected by alcohol and cocaine went into a bar with fights going on, he might react in an exaggerated way. If confronted by violence, he would be more likely to react in an exaggerated way. He agreed that at the plaintiff’s level of alcohol ingestion, he would be mod- 338 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

erately intoxicated. He also agreed that cocaine stays in the body for a longer period than it has a psychological effect for and there is nothing to permit him to say that the plaintiff was under the influence of cocaine at the time of the assault as the psychological effects of cocaine will disap- pear after one and a half to two hours. 79 As far as steroids are concerned, the psychological effects vary. As with alcohol, the effect of steroids could vary in reaction to the circumstances and rage has to be triggered by some external event.

iii. The Evidence of Jeremy Wocknitz 80 Jeremy Wocknitz was employed by Cheers as part of the security team for about two and a half years prior to the incident. He was one of the individual defendants in the settled action against Cheers. He was, at the relevant time, the head of security. He was responsible for scheduling security personnel, the overall supervision and reporting of security and of reporting to management. Decisions on how to deal with security issues in the bar were ultimately his. 81 The Cheers bar was a split level with two separate spaces. The total capacity was about 600 people. It was open Thursday to Saturday and on long weekends from 9:00 p.m. to 2:00 a.m. There was music and a dance floor and on special occasions the bar had live bands. The clientele was diverse, but mostly under 25. It was only suspected, not confirmed, that gang members attended but the wearing of gang colours was strictly prohibited. 82 The security staff were usually positioned two at the front door, two in the entrance past the coat check area, one in the smoking room, one at the washrooms, one at the rear exit and one on the stairs between the two levels. The job of security staff was to observe the behaviour of patrons and prevent anything from happening. 83 The security staff and management had two way radios with ear pieces. There were codes to identify the levels of response required for an incident or occurrence. The bar itself was broken down into eight sections. The objective was to calm people down or get them to leave if they remained too agitated to calm down. The term “Code Red” required an immediate response to an ongoing physical altercation. The term “Code Yellow” was used to identify an argument or potential problem. Code Yellows would happen three to five times a night. Code Red sometimes none, sometimes two. Police would be called if any injury occurred or the fighting carried on or broke out outside the bar. The management of Burnett v. Moir A.F. Cullen J. 339

Cheers would make the call and police would respond quickly, within two to three minutes. 84 Repeat offenders would be barred from the pub. If they offended a second time, they would be barred a week. If they offended a third time, they would be barred indefinitely. He had barred 12 - 13 people in the course of his time at Cheers. 85 Occasionally it would be necessary to call police to deal with those who were being refused entry to Cheers. 86 Police would make regular nightly checks and sometimes do walk- throughs of the bar and check the identification of the patrons. At closing time, police would make their presence known and would routinely patrol the parking lot, and monitor the park located across the street. The police presence both inside and outside the bar was supported by the management and staff. 87 Liquor inspectors would also come by for checks. Mr. Wocknitz estimated at least one time a month a liquor inspector would come and do a walk through the bar and conduct surveillance of anything considered necessary. 88 He was present on the evening that Mr. Burnett was assaulted and injured. The regular security staff were present. He was at the front door and heard a “Code Yellow” being called over the radio near the exit doors of the upper area of the bar. He closed the front doors and went to the area of the exit doors in the upper bar area. When he got there, he saw the door staff trying to intervene in what appeared to be an argument that had started. There appeared to be two groups: one Caucasian, the other East Indian. Nothing physical had happened at that point. He tried to intervene to calm the parties down. He spoke to Mr. Burnett and told him the night was over, it was not worth it, and they should go their separate ways. Another security staffer, Grant Hart, was already dealing with the East Indian group. He described Mr. Burnett as agitated and not responsive to his comments. There appeared to be a couple of other people with him. Mr. Burnett reached over to a nearby table and picked up and threw a highball glass at the other group. The two groups then con- verged and it became a physical confrontation. The immediate response of the security staff was to eject everyone involved. They could not separate, so they surrounded and pushed all the combatants out the door. The security staff were identifiable by their clothes. They wore black pants, white shirts and some had black arm bands. 89 As the staff pushed the group out the door, punches were being thrown between the two groups. The plaintiff stumbled and fell onto his 340 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

hands and knees. This occurred about 30 seconds after he threw the glass. After that, Mr. Wocknitz saw the flash of a stool being swung outside but then lost sight of it while still removing other combatants. He did not see anyone actually being hit. He went outside briefly. 90 He had watched the video from the surveillance camera and identified Grant Hart as the first security person out through the doorway. He noted the plaintiff on the ground, injured, but did not see who had swung the stool. He originally told the police he thought it was someone named Ricky Guy who he saw outside in the area. He testified he just assumed it was Ricky Guy although he had not known him to be in any previous altercations. 91 He was aware that in 2005, there were two incidents at Cheers involving stabbings. That resulted in an increase in security at the front door and physical searches or “pat downs” at the coat check area. In 2006 there was another stabbing injury which led to having a female staff member to search women as well. He wasn’t aware of any incidents involving the use of bar stools as weapons and he regarded significant injuries as being uncommon. 92 In cross-examination, he noted after the incident he went to the front doors to let patrons out. He agreed he was at the front door when the plaintiff came in, but could recall no issues with the plaintiff and he did not see him again until the confrontation upstairs. The police arrived because of the assault and injury to the plaintiff. He assumed that much of the crowd had dispersed by the time the police arrived. 93 He estimated that there were around 12 - 20 involved in the two groups. Code Yellow meant it was an argument that could escalate. He attended, and his brother Tyler Wocknitz was present too. 94 When the police arrived, he did not speak with them or tell them what happened. He made a brief note, but did not talk to the police until two years later. When he did talk to the police, he told them he thought the plaintiff was in the bar with some bikers; although he did not arrive with bikers. 95 After the assault he and Sunny Jara, one of the bar managers, returned three bar stools from outside to the inside of the bar. He said he did not approach the police because he was taking care of the premises which still had many patrons in it. He denied his failure to talk to police was because of outstanding warrants for his arrest at the time. He agreed he was in custody when the police finally approached him for a statement in December 2008. He was aware they were on the scene, but never approached them, despite what he saw and believed to have happened. Burnett v. Moir A.F. Cullen J. 341

96 There was a meeting of the staff afterward to discuss the incident, but he could not recall speaking to Grant Hart about what he saw. He viewed some of the surveillance video and identified his brother as having ejected a patron at about 1:32 a.m., seven or eight minutes before the assault. 97 He was then shown a segment of the video, apparently depicting another incident after the assault but could not recall it. He could not recall picking up the stool he brought inside, but he recalled Sunny Jara taking two stools inside. 98 He was cross-examined on his examination for discovery at question number 222 where he testified as follows: Q And you saw someone that you knew to be Ricky Guy with a stool? A Yes. 99 He was asked if the answer was true, and he said he never actually saw the stool connect, but that’s who he believed hit the plaintiff. The following questions and answers were put to him: Q Do you remember telling Mr. - Constable West that you saw Mr. Guy hit Mr. Burnett with a stool? A I remember the conversation. Q And you remember telling him what I just read to you, don’t you? A No. Q You went on to tell Constable West that then the police were called, and they showed up. And then you say: They showed up and started dispersing the fight. A little further down you say: No one questioned us. We were told to go back to our job and that was the end of that. Now, on the night of - the early morning hours of the 26th after this incident did you talk to any police officers at all about this incident? A We explained the incident. We didn’t give a formal statement. Q Well, when you say “we”, did you talk to a police officer? A Yes. Q Did you explain to the police officer what had happened? A Yes. 342 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

Q You said to Constable West, “No one questioned us.”” A We didn’t give a formal statement, no. Q That’s what you meant when you say that? A Yes. 100 He testified he couldn’t recall if he had a conversation with the police at the scene. 101 He testified he believed he saw the glint of the stool when it was in Ricky Guy’s hands, but “never saw it 100% all the way through”. 102 He was also cross-examined on a statement he gave to Constable Al West (“West”) of the DPD on December 16, 2008. There he asserted the plaintiff came in with a group of known bikers and he assumed that the plaintiff was a biker. He agreed that there could be one fight a week “some more, some less”. People sometimes got injured and required medical attention. He said ambulances were fairly regular occurrences “it would be no surprise to see ambulances one time a week in that complex”. He said one reason for ambulance attendance was over service, another was due to injury from fights. He agreed the liquor inspector would show up for inspections fairly early in the evening when the bar was not very full and relatively quiet. He did not agree there were three to four small fights and one big one every week. 103 In his statement to West, he told him the plaintiff was throwing “highball glasses”. He also said in the statement as follows: A We didn’t get involved. They said that it was - you know, it was kind of settled. The other gang was predominantly East Indian and Asian. The next thing we know someone threw a glass from one side of the bar to the other, striking - striking the East Indians. A fight broke out inside the bar. Mister - Mr. Burnett was basically the first one in there throwing glassware. He was throwing highball glasses at them, trying to get at them. 104 He said he could not recall saying that or what it meant. 105 In his statement to West, he also said as follows: A The fight was taking place in the rear corner doors. There was fighting back and forth. Basically, we pushed the entire fight outside - Q Okay. A - to, you know, get it out that way from the bar, away from the patrons. Several bartenders and porters and bussers came to help us with the fight because it was a fairly large fight. Burnett v. Moir A.F. Cullen J. 343

And when we got outside, Mr. Burnett fell and tripped over the curb. After he tripped over the curb - what’s his name? I think his name is Ricky. Ricky Guy. Q Ricky what, sorry? A Ricky Guy. Q Guy? A I believe that’s the name. Q Okay. A Had a stool. Q Okay. A We went to get the stool from him. He brought the stool down on top of Mr. Burnett’s head. He went - Mr. Burnett went down. Collapsed. One of his friends that he was with which was, you know, a group white guys - Q Right. A - knocked out Mr. Guy. He was on the ground unconscious as well. At this point, we continued to deal with the rest of the fights because there was glassware. There was everything else. Basically two guys on the ground is less guys that we have to deal with. So the Delta PD was called. I don’t know who called them, but I know that they were called. They showed up. They showed up and started dispersing the fight. The only people that we let back into the bar were - were staff, and everybody else was kind of questioned at that point and that was it. No one questioned us. We were told to go back to our job and that was the end of that. 106 He testified he could not recall telling West that. He recalled a guy being hit and going down. He then referred to Greg Allan as the person he referred to as Guy being hit and going down. He agreed he did not tell the police when they arrived on the scene that Ricky Guy was involved in the assault. 107 He said there were some incidents that occurred at All Stars and about once a month he would be called to deal with a situation there. He agreed he didn’t tell the police at the time of the incidents that he saw Mr. Burnett being hit, that he took a stool from Ricky Guy; that he saw Mr. Burnett throw a glass or that Mr. Burnett was part of some biker gang. He agreed he did say all of those things when he was interviewed at the Surrey Pre-Trial on December 16, 2008. 344 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

108 He was not shown any video by the police. He disagreed that the call before the assault was a Code Red and he disagreed with the suggestion that he never said anything to Garrett Burnett. He denied the fight was on when he arrived and that he just pushed the protagonists outside. 109 He testified he expected the police would investigate and take a statement from him while he still worked there, but that did not happen. He said he never saw anyone apart from the plaintiff actually throw a glass, but he did hear glasses breaking so he assumed others had as well.

iv. The Evidence of Tyler Wocknitz 110 Tyler Wocknitz is Jeremy Wocknitz’s brother. He was employed as security staff at Cheers the night the plaintiff was assaulted. He had worked at Cheers for less than a year at that time. He estimated that there were two to three Code Yellows a night and maybe one Code Red per weekend. The management and staff at Cheers were in favour of calling the police whenever necessary. 111 On the evening of the assault, a few minutes before it occurred, he removed a patron, but he couldn’t recall why, perhaps it was to do with fighting. 112 It was not unusual to see the police around outside the bar and they would come inside and do walk-throughs two to three times a month. Police vehicles were often in the parking lot around closing time. 113 He recalled the incident as starting with a Code Yellow. He went to the area and saw two large groups having a verbal confrontation. He said his brother Jeremy was talking to them, trying to defuse the situation but it escalated when the plaintiff threw a highball glass. It went into the crowd. He described Mr. Burnett as being in an aggressive mood and after the glass was thrown, people started throwing punches. Grant Hart and his brother got out of the middle of the confrontation; other staff members assisted them by surrounding the group and pushing it into the outside area. 114 He was one of the last people out and saw the plaintiff on the ground. There were people with bottles and stools. He took one stool away - he was not aware that Mr. Burnett had been hit with a stool. He assumed that the person holding the stool had struck Mr. Burnett, but did not see it. He described the person he took the stool from as an East Indian male. He said they waited for the crowd to disperse and then went inside. He did not recall where he left the stool. Burnett v. Moir A.F. Cullen J. 345

115 He said people were grabbing stools as they were being pushed outside the door. Mr. Burnett was throwing punches as were others. He said nobody was looking for a way out of the confrontation. Mr. Burnett was not looking for a way out of the confrontation or playing a peace- maker’s role. The fight broke out when he threw a glass. 116 He first spoke to the police in February 2007. 117 He could not recall seeing his brother approach anyone and take a stool away. When he got outside, he saw a stool in someone’s hand and he took it so it could not be used as a weapon. It was not Ricky Guy he took the stool from and he never saw anyone hit Garrett Burnett with a stool. 118 When he was interviewed by West on February 1, 2007 he did not mention that his brother was present; he did not mention that a glass was thrown or how the fight started. He agreed he said, and it was true, that “there was usually a big fight every weekend; at least one - we get small ones all the time - probably one-half dozen a weekend”. 119 He never saw anyone strike the plaintiff with a stool and his brother never told him Ricky Guy struck the plaintiff with a stool. He did not recall if he told his brother Ricky Guy did not hit the plaintiff with a stool. He testified he believed Ricky Guy was there at the scene and was pushed out the door with the others, but he did not recall seeing him outside. 120 He said by small fights he meant verbal confrontations; big ones were not necessarily related to the number of participants. Anything that came to blows did not always result in an injury.

v. The Evidence of Cory Philpot 121 Cory Philpot is a former football player who was employed as a manager at Cheers between 1995 and 2005 and was involved in security issues at the establishment. After leaving Cheers around Christmas of 2005, he continued to do some promotions for Monday night football at All Stars, the adjacent bar, and he visited Cheers two to three nights a week. He was present on the evening of December 25th and 26th, 2006. He was in the lower bar of Cheers with some friends. He saw a large man come into the bar some time after midnight and walk into the crowd and bump into people without apologizing. He described the male as having dark hair, a dark shirt and jeans. He described his attitude as not caring, just pushing his way through. He saw him go to the upper bar after having a drink. He became aware of the assault the next day. In cross-examination he said he had no dealings in his capacity of manager of Cheers 346 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

with Cessford of the DPD, but did have dealings with Inspector Charna. He had a conversation with DPD about cheap drink nights. He said the police thought it was a problem and mentioned that to the management and that they would not support it. He said while he was there, security did not use numerical or colour codes. They kept a list of banned people at the front door. 122 He was working with the new ownership of the NDI/Cheers. He took over when George Holmes was let go. The bar went in a different direction to appeal to different people after it was sold in 2007. He did not think there were frequent fights or police calls to Cheers; some calls went to All Stars. He agreed there were fights in the parking lot and there were two stabbings in 2005. He agreed that under the old regime, people did not feel safe.

D. Police Witnesses i. Constable Uppal 123 Uppal began his police career with training on the job in May 2004. In December 2006 he was assigned to general duties with the DPD. His role was to respond to calls as they came in and perform general traffic duties. He was familiar with Cheers and the NDI. He would attend at Cheers in response to general calls from time to time and sometimes would go to the Cheers location to be “proactive”. The calls which he responded to would depend on the days he was working. Some days were quieter than others. 124 He sometimes would go at closing time to the general area to monitor and ensure patrons would leave in an orderly fashion and he would stand by and keep the peace. He saw a few altercations or fights in the parking lot and would walk over to break them up. He said that a police presence was often enough to disperse groups who might be inclined to fight. He experienced no difficulties in dealing with the staff or management of Cheers. Occasionally he would be asked to park his police vehicle in the parking lot to establish a police presence or to check identifications at the entrance. That occurred in August and September of 2005. 125 The subject of Cheers would occasionally come up at briefings if there was a particular promotion or special event going on. The police would check on issues of over-service, over-crowding or any problematic people attending at the bar. 126 He was on shift overnight December 25/26, 2006. He heard the dispatch to Cheers and because he was close, he let dispatch know and at- Burnett v. Moir A.F. Cullen J. 347

tended to the scene. He identified a transcript of the dispatch as depicting the communication. The dispatch indicated that the call to police was initiated by Emergency Health Services, which meant that they were either already at the scene or had been called to attend and were proceeding there. 127 He arrived within a few moments. According to the surveillance video taken from surveillance cameras at the Cheers pub, his arrival was at 1:43 a.m. He had already been told by dispatch that “EHS is en route” before he got there. After he got there, he requested that dispatch “send him EHS Code 3”. Code 3 meant he requested EHS get there as quickly as possible. He made that request within the first minute or so of his arrival on the scene. On his arrival, he saw the plaintiff on the ground unconscious being tended to by what turned out to be an off duty fire fighter named Steve Brewer, who had placed the plaintiff in a recovery position. It was at that time that he called for EHS to arrive promptly. 128 He noted the plaintiff’s friend Greg Allan in the company of a female person. Allan had a ripped shirt and blood on his face. Uppal determined he was with the plaintiff - he learned that both from Greg Allan and from people standing at the door. According to Uppal, Greg Allan told him that the assailants were “long gone” and indeed he reported that back to dispatch. 129 He described Allan himself as “quite agitated, worked up, angry, very uncooperative”. He did not provide Uppal with “the information he needed in a timely manner”. Uppal’s synopsis which he inputted into his computer at 2:44 a.m. read as follows: Fight at Cheers. Upon police arrival, observed BURNETT lying in a small pool of blood and his friend ALLAN and CATANGHAL standing near by. ALLAN was also involved in the fight and sustained several cuts to his face. ALLAN was hostile and uncooperative. ALLAN iniatilly [sic] declined to be checked by EHS. BUR- NETT transported to RCH and ALLAN transported to SMH. No witness available that were able to recall what had transpired. AL- LAN would only say that they were possibly hit by a chair and physi- cally assaulted by a group of Caucasians [sic] males who had fled the scene prior to police arrival. ALLAN unwilling to provide identification. Identification obtained by girlfriend CATANGHAL. 130 He said that is what Allan had told him about the events. 348 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

131 Subsequently, Uppal completed a longer report at the end of his shift. In it he recounted a further discussion he had with Allan, later by cell phone. He summarized that conversation in his report as follows: Cst P UPPAL spoke with Greg by cell phone requesting further details of the incident. Greg indicated that he had brushed up against some u/k male inside Cheers and that the other male’s drink had spilled, which lead [sic] to a physical fight between them and Greg and Garrett. All parties were kicked out of the club. As soon as they exited, the other group was already waiting outside. Greg indicated one or two of the males had in their possession chairs that they used to assault Greg and Garrett. Cst P UPPAL requests day shift member to attend Cheers in an effort to obtain surveillance footage of the incident. 132 Allan gave no further description of the assailants. 133 Uppal requested “day shift members” to attend Cheers to obtain surveillance tapes. He also indicated in his report that Constable Formby (“Formby”) and Steve Bentley (“Bentley”) arrived on the scene and assisted in trying to locate any witnesses. After Uppal left the scene, he went to the Royal Columbian Hospital. He checked with the Head Nurse and contacted the plaintiff’s family. He arranged to have the plaintiff’s clothing seized for possible forensic evidence. He himself did not look at the video surveillance from the cameras. 134 He had a conversation with an employee of Cheers while at the scene, but his handwritten notes do not reflect that conversation. He had attended Cheers before, possibly for fights, but could not recall having seen ambulances there. 135 No one in DPD had identified Cheers to him as a “hot spot” of frequent illegal activity. He may have had a licensed premises check book- let with pre-printed LCP forms in his duty bag that evening. He did not utilize one that night and never had before. He did not find it necessary. 136 He was the lead investigator by virtue of being the first to attend. He agreed that of the later two officers to arrive, one was just a trainee, that is, Steve Bentley. Uppal was in charge and had the ability to direct the investigation. 137 He agreed with the following timeline on the basis of the time set out in the video: • the blow with the bar stool 1:39:31 • the off duty firefighter coming to the aid of the plaintiff 1:42:47 • Constable Uppal’s arrival 1:43:44 Burnett v. Moir A.F. Cullen J. 349

• second vehicle arrives 14:44:30 • ambulance arrives 1:52:16 • ambulance leaves 2:04 • third police vehicle arrives 2:04:55 and leaves at 2:06 • Constable Uppal leaves 2:07 138 Uppal agreed it was important to get as much information as possible in an investigation and one way to get that information was to talk to people involved. He agreed Greg Allan seemed agitated, uncooperative and intoxicated and he “wasn’t giving information he could have”. He agreed that at some point he talked to a bouncer at the pub. He agreed he advised the plaintiff’s family that the people involved had left the scene, based on what Greg Allan and the bouncer had said. He agreed everyone else said they had not seen anything. He stayed near the injured plaintiff at the scene. The only information he had about the assailants at that point was from Greg Allan and the bouncer. There were people standing around the front door. He remembered asking people what they saw, but how close he got when he was speaking to them he could not recall. 139 He agreed the employees of the pub might be a source of information. They were likely to be sober and might tend to be reliable. He did not talk to any other employee at Cheers apart from the bouncer. He explained his focus was on the plaintiff and ensuring that when EHS arrived, he could give them an indication of his condition or any changes. 140 He agreed he could probably have stayed and conducted further in- quiries of employees and remaining patrons at the pub. He testified because the Cheers employees were known, it would be possible to go back and do follow-up interviews the following day or later on. He did not ask for a list of employees who were present at that time. He agreed he considered it might be possible to identify the assailant from the video tape but he did not ask to see the video tape at that time as the staff were busy at Cheers and he knew they could get it another time. 141 The information he had from Greg Allan was that the assailants were long gone. 142 He only talked to Formby about looking for witnesses, not to Bentley, who was the trainee. He believed the other officers told him they were not successful in obtaining further information. He agreed he believed the chance of altercations occurring at places where alcohol was served, 350 WESTERN WEEKLY REPORTS [2012] 6 W.W.R. was increased. He agreed with the following questions and answers from his examination for discovery: Q I’m assuming that - perhaps more than what I said there and I don’t want to mislead you. This paragraph alleges that if Cheers pub was a place of violence, that fact was known to Mr. Burnett before he went there. Now, my question is very specific. Do you have any information or facts which would support Mr. Burnett knowing that this bar was a place of violence before he went there? A So let me just paraphrase that back to you so I understand it. You’re asking me if I know of any prior knowledge that Mr. Burnett would have had that this was a place of violence. Q Yes. A I don’t know of any specific information that would have lead me to believe that he would know that there was a specific - that this was a violent place. It would just - it would be my understanding that if you’re attending a nightclub where alcohol is served that any person in their right mind would know that this is a - being that alcohol is served and it’s a crowded establishment - that there could be altercations as happens many times in many different places where alcohol is served. ... Q Yeah. A I just think - just personally - is that if you’re going into a liquor establishment where liquor is being served, a night club - it doesn’t matter if it’s Cheers or clubs in Vancouver - fights break out all the time. And if you don’t want to go into a hostile situation like that or a volatile situation like that, then it’s best to avoid it. Q And is every establishment in your mind and in your opinion that serves liquor a hostile and violent situation? A Adding liquor to an establishment can create that environment. Doesn’t mean everyone is - every environment is, no. But situations can arise and incidents can happen. And from that perspective, like I said, it’s no different - Cheers would be - as far as I’m concerned, Cheers would be no different than any other liquor establishment. It just depends on totality of circumstances. Q Like the Four Seasons restaurant in the City of Vancouver? A No, not that. Burnett v. Moir A.F. Cullen J. 351

143 Uppal was not under the impression that there were gangs involved in the assault. He thought there were two groups. He saw Greg Allan as the best potential witness. He was aware Allan’s girlfriend said she did not see anything. He wanted to contain the scene and protect the victim until the ambulance took him away. 144 In this case, further investigation was required and he passed on his report to the Sergeant on the next shift. He believed this investigation would be a longer term one.

ii. Constable Formby 145 Formby has been an officer with the DPD since 2002. He was on duty overnight of December 25th and 26th, 2006 and on patrol with a trainee by the name of Bentley. 146 He was familiar with the NDI and Cheers. He had responded to calls there in the past involving intoxicated people, theft, fights, impaired driv- ers and other similar issues. He sometimes would patrol in the vicinity of Cheers and its parking lot without being called. From time to time he would conduct walk-through patrols of the Cheers pub. 147 Closing time at Cheers was 2:00 a.m. and he had previously attended at closing time to check and monitor departing patrons. In particular, police would attend on specific occasions, such as long weekends or on “FUBAR” nights or when the pub was featuring live bands. The police would patrol both inside and outside on occasions such as that; to establish a police presence and attempt to maintain order. 148 There were some occasions when the DPD would establish a mobile command post near Cheers on special event nights to show a police presence. He never issued any LPCs for Cheers. 149 He sometimes was called on to break up fights. The fights involved only minimal injuries. He had to assess whether the fights were consensual or not and he said it was hard to make that assessment in many cases. He never went inside to deal with fights. The staff had the ability to deal with things occurring inside the bar. 150 Formby identified a police report he authored relating to an incident at Cheers on March 4, 2006 involving a man arrested in the Cheers parking lot, intoxicated, belligerent and resisting arrest. He said that sort of thing would happen quite commonly and there could be arrests, depending on the level of intoxication and the behaviour of the subject. The arrests would be for being in a state of intoxication in a public place. 352 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

151 Another report dated December 2, 2006 noted a fight in the parking lot involving about ten Indo-Canadian males who dispersed when police arrived. 152 He was also referred to a call he responded to on December 26, 2006 at 1:09 a.m. in which a man and his wife claim to have been assaulted by a bouncer at Cheers. It was determined by the investigation that there was no assault, but that the man and his wife were “escorted out of Cheers by the bouncer after getting caught in the middle of a physical altercation in the bar.” They had both been drinking. 153 Formby didn’t recall how long he dealt with those people in the parking lot that evening, but when the dispatch for the assault on the plaintiff came, he came from somewhere else and saw Uppal already on the scene and a gathering of people at the front entrance to Cheers. 154 He spoke to Greg Allan who was in a state of rage at the scene and not being helpful in providing information. He and Bentley tried to gather information from those in the area. He spoke with some people at the scene. He also spoke with the off duty firefighter, Steve Brewer and his friend Richard Mulenar and some people at the door, but it did not lead to anyone who had seen the actual assault. 155 He submitted a report that reflected his involvement. He summarized speaking with the off duty firefighter at the scene and his dealings with Greg Allan, both at the scene and subsequently at Royal Columbian Hos- pital. In his report, he summarized Allan’s statement to him at the hospital as follows: • he was walking thru the nightclub and a drink was spilled, someone hit him • a few punches were thrown, him and his buddy (Garrett) got into a fight with 5 or 6 guys • the 5 or 6 guys went outside and the bouncers threw them out to them • they (5 or 6 guys) hit him and Garrett with some chairs • that’s the last thing he really remembers and his friend (Gar- rett) was on the ground • it was a bunch of redneck guys, all white guys • one guy had a white shirt and jeans, one guy had a blue shirt and jeans and one guy had a red shirt and jeans • he bumped into the guy and the guy spilled his drink on him and then the guy hit him so he hit him back • Garrett was with him the whole night Burnett v. Moir A.F. Cullen J. 353

• he suffered a swollen left eye, cut under his right eye that needed 4 stitches and bunch of bruises and scrapes • his buddy (Garrett) and he both got hit with a chair outside the bar • the fat bouncer at the front door punched him in the head 156 He described Allan as reluctant to engage in the interview which lasted only a few minutes. 157 He had never before responded to an assault with a bar stool at Cheers. He had responded to fight calls at other drinking establishments, but Cheers is larger and holds many more patrons. 158 In cross-examination, he estimated he was involved in setting up a command post at Cheers about a half a dozen times at special events. He agreed that “FUBAR” was an acronym for “fucked up beyond all reason” and Cheers held such events usually the night before a holiday. The reason for a command post at Cheers was to show a visible police presence to avoid large crowds getting out of control. There were fights which broke out which Cheers staff were able to control within the bar and police would intervene in the parking lot if fights broke out or people were being too boisterous. 159 He agreed that there was a nearby Denny’s Restaurant which was affected by confrontations among Cheers patrons after closing and police recommended that Denny’s close for the period around the Cheers closing time, around 1:00 - 3:00 a.m. 160 He could not recall submitting an LPC which covered various violations of the Liquor Control and Licensing Act including rowdiness and fighting and over-service of alcohol. He agreed that such information would be of interest to the LCLB authorities. He agreed he may have been on scene at the time of the first assault call, longer than for the assault on the plaintiff. 161 Most of the assault calls he responded to at the NDI address were in relation to Cheers and not the other locations. Formby explained that any call or incident resulted in a report being logged onto the computer, and each report would be reviewed by a supervisor. 162 Despite being involved in investigations involving intoxicated and assaulted parties at or outside of Cheers, Formby did not submit LPCs. 163 He did not review video surveillance during his time at the scene of the assault on the plaintiff, but he knew it would be viewed the next day by other investigators. Uppal did not ask him to interview staff, but he approached the people standing at the door outside the Cheers pub to 354 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

canvass with them about whether they saw the assault and he wasn’t sure whether they were patrons or staff or both. Uppal told them they needed to locate witnesses. He and Bentley spoke to the fireman, Mr. Brewer and his friend, Mr. Mulenar, but neither of them had seen what happened. 164 He agreed no forensic assistance was called to the scene; no photo- graphs were taken and the scene was not taped or roped off to preserve it for further investigation. He agreed that no “licensed premises check form” was completed or submitted, at least by him, and he left the scene at 2:09 a.m. He agreed that Uppal did not direct him to stay behind to interview staff and he felt that in his experience, there would be opportu- nities in the ensuing days to get full statements from staff members. 165 He later went to the hospital and spoke with Greg Allan after he spoke to the duty sergeant.

iii. Constable Bentley 166 The evidence of Bentley was similar to that of Formby. He was a trainee at the time of the assault. He recounted the first attendance at Cheers in relation to the complaint by the couple, that they had been assaulted by being ejected from Cheers. He described the dealings he had with Greg Allan after attending to Cheers in response to the dispatch arising from the assault on the plaintiff. He described Allan as agitated and uncooperative. 167 He spoke with the friend of the off-duty fireman who was attending to Mr. Burnett who reported that he had not witnessed the assault. 168 He confirmed that he and Formby later attended Royal Columbian Hospital where they spoke again with Greg Allan and Allan gave more detail to them about the incident. He agreed no pictures were taken of the scene and no tape to keep it free of bystanders. He did not recall Uppal asking him to do anything in particular, although he understood that he and Formby were looking for witnesses while staying close to the victim until the ambulance arrived. 169 He did not talk to any of the security staff but agreed they would be the best potential source of information. Neither he nor Formby took possession of any stools. They did not ask who the head of security was at Cheers or try to find him. He agreed they could have stayed at the scene after the ambulance left to follow up with staff, but he had no recollection of being asked or directed to do so. Burnett v. Moir A.F. Cullen J. 355

iv. Sergeant Ryan Hall 170 Sergeant Hall (“Hall”) joined the DPD in 1995. He spent some time on patrol and in investigation divisions of the department. He was pro- moted to the position of Sergeant in 2005 and has fulfilled both a super- visory and investigative role. He was familiar with Cheers along with various other pubs that he patrolled and checked for compliance. The DPD initiated a tactical management team to analyze information and to provide directions to patrol officers to prevent criminal activity. Cheers was a place that was identified from time to time as requiring checking on or a police presence at. 171 The police would generate a file any time there was an incident that they were called to involve themselves in. The file would be reviewed by a supervisor who would direct further investigation as necessary. 172 He identified several reports arising from incidents at Cheers that he had had some involvement with. He identified one case where there was an alleged assault, but where the suspect was never identified and no charges were laid. He identified another case involving the arrest of a person in a state of intoxication in a public place. 173 He testified Cheers was the largest drinking establishment in Delta with about 600 seats for patrons and it was the busiest. The police service calls included reports of assaults, potential impaired driving charges, damage to vehicles and other similar incidents to deal with. He did not, however, see any fights when he went through Cheers in walk-throughs. He was familiar with licensed premises checks which would be issued for non-compliance with the Liquor Control Act and Regulations. He testified that generally, misconduct outside the establishment would not result in licensed premise checks being prepared or issued. 174 He was on night shift starting at 6:00 p.m. on December 26, 2006 and was assigned to investigate the assault on Mr. Burnett. He went to Cheers that evening to obtain video surveillance tapes of the incident. After a discussion with George Holmes, the manager, he returned to the office, prepared an Information to Obtain, and obtained a search warrant on De- cember 27, 2006 which he used to seize the DVR to download all the video taken from the various surveillance cameras at Cheers. He then interviewed George Holmes, Sunny Jara and a person of interest that they indicated, named Kevin Williams. He also did a background check on Mr. Burnett and Greg Allan, the victims of the assault. 175 He contacted Allan by telephone. Mr. Allan expressed reluctance to speak to the police, but Hall eventually located and interviewed him between about 9:00 - 9:15 p.m. on December 27th, 2006. 356 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

176 In a report which he submitted, he summarized Allan’s interview as follows: On December 26th, 2006 from approximately 21:00 hours to 21:17 hours A/Sgt. Hall interviewed ALLEN a second time to clarify some of the details from the assault the night before. The interview was recorded without ALLEN’s knowledge as A./Sgt. Hall had the audio recorder on in his pocket. ALLEN stated in part: a) He was afraid to put himself and BURNETT in jeopardy by talking to the police; b) He did not know who “the guys” were from the night before or he would be dealing with things himself; c) He and “Garrett” (BURNETT) were walking through a group of “guys” and spilled some liquor on them, they swore at each other and a fight ensued; d) The bouncers walked he and BURNETT outside; e) He wanted back in and he pushed one of the bouncers and the bouncer hit him back; f) The police were there while the people who assaulted him were at the front door; g) He was enticing the other people while the police were there; h) He received a black eye and some stitches, possibly with an orbital fracture; i) When the bouncers grabbed them, the other “guys” began hit- ting them with the chairs; j) One of the guys was bald, 5'10, 190 pounds, white, clean shaven and wore a white collared shirt with jeans, ALLEN did not see any further details on the shirt; k) The bouncers threw six of the twelve “guys” out before he and BURNETT were thrown out; l) One of the guys may have been a “bigger” east Indian male with a brown collared shirt; m) ALLEN said he would not pick anyone out of the video if he had the opportunity, and indicated he did not want to cooperate with the investigation; n) The “guys” who were fighting with them kept yelling “Bring them outside?” to the bouncers as he and BURNETT were being escorted outside; o) Some of the clothes DPD seized the night before may have some of the suspects blood on them; Burnett v. Moir A.F. Cullen J. 357

p) Three of the suspects were “Laid out on the floor” or “Knocked the hell out?” and may have been hurt at some time; q) He said BURNETT may not cooperate with the investigation when he wakes up; r) ALLEN did not see what happened to BURNETT and did not see if he was hit with a stool, but thinks BURNETT may have been hit with a stool as he had been; s) ALLEN was hit with the stool outside after being thrown out. 177 He testified that his impression of Allan at the time was that he was not cooperative. 178 He had to get a warrant to obtain the hard drive of the computer that stored the video surveillance and he also downloaded the disk that had earlier been seized of portions of the video surveillance. That disk was downloaded onto the DPD computer hard drive and it was saved there. 179 He initially viewed Kevin Williams as a “person of interest” based on statements from George Holmes and Sunny Jara, but he ruled him out after interviewing him and viewing the video tapes. 180 On December 28, 2006, the police obtained a bar stool, said to be the one used in the assault from George Holmes. Hall sent it to forensic services for testing for blood samples and fingerprinting. 181 In cross-examination, he agreed he was familiar with entertainment district night clubs from his work with the anti-gang task force initiative. He was asked about other bars that had been closed or suspended. He was aware of actions taken in relation to other bars but had no direct involvement in those events. 182 There was no record kept of walk-throughs at Cheers, only of service calls in response to incidents or apparent incidents. Minor things would not be recorded if no action was called for. He never issued an LPC form. He agreed the LCLB authorities would want to know about infrac- tion of the Act and Regulations. He agreed there were various incidents which required police involvement at Cheers that may be of interest to the LCLB but which were not reported by LPC forms. He agreed that Greg Allan spoke to the police two times, but he regarded him as being evasive as he had to track him down and he appeared reluctant to talk. 358 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

v. Inspector Pike 183 Pike had been with the DPD since 1986. He had been in general patrol at various times and at the time of the assault, in 2006, he was the Sergeant in the Criminal Investigation Branch. He is now an Inspector. 184 His patrol experience familiarized him with the NDI and Cheers. Cheers required attention from police patrols around closing time on Fri- day and Saturday nights. He also conducted walk-throughs of Cheers. He described Cheers as catering to a younger crowd. He was aware of fights and altercations both inside and outside the bar. His experience with Cheers pre-dated 1999 while he was still on patrol duties. 185 He said there was a shooting at Cheers in 2003 or 2004 which he became involved in the investigation of. There was an arrest and charges arising from that incident. He also became involved in several of the bar watch programs with other police officers and liquor inspectors, where they would walk through some of the rowdier bars and establish a presence. He did one walk-through of Cheers in September or October of 2006 with a reporter for the local paper, the Delta Optimist and other officers and liquor inspectors. The reporter was there as a ride-along to cover and report on the initiative. In the same night they also visited bars in Langley, Surrey and Maple Ridge. Some of the bars appeared to have a gang presence, but he did not notice that at Cheers. He identified an article written about the bar watch program and the events of that evening in the Delta Optimist by the ride-along reporter. 186 He was also assigned to deal with special events by Inspector Charna (“Charna”) of the DPD. He was the field commander. In those situations, the police would establish a field command post and use video cameras as part of the process of monitoring the behaviour of the patrons at Cheers. There was some interaction with Cheers management in such circumstances as the management tended to be cooperative. 187 He was also a member of the department’s tactical management committee which he described as a group formed to look at the department’s operation and identify specific ongoing issues to deal with. He identified a number of reports detailing occurrences at Cheers and the NDI generally over the years. In particular, he referred to a report of a stabbing incident outside of Cheers in 2005 where there was no or insufficient evidence for charges to proceed. He also referred to minutes of a tactical management meeting on October 18, 2005 referring to information concerning a vehicle being searched for the presence of a gun, where none was found. That vehicle was in the Cheers parking lot. Burnett v. Moir A.F. Cullen J. 359

188 He became involved in the investigation of the assault upon the plaintiff. He said there was no advance warning of any intended assault at Cheers. 189 On the 26th he was the Staff Sergeant in charge of the criminal investigation branch of the department, but he was filling in for the Staff Ser- geant for patrol. He was informed of the events, he reviewed the file as it was submitted and he assessed the case as a serious one. He directed Hall to get a search warrant for the hard drive of the video camera or the computer storing the video from the video surveillance cameras. He was aware of the need to try and get a description of the suspect in the assault. 190 Because of the severity of the injuries to the plaintiff, the criminal investigation branch took on the file. In a case such as this, the expectations of the patrol officer on scene was initially to protect the life of the victim, to gather evidence, if possible, to identify the suspect and effect an arrest. There was an initial indication that the suspect or suspects were Caucasian, but it then changed to an indication that it was an Indo-Cana- dian. Based on his review of the file, he did not regard the witness Allan as being cooperative with the investigation. He noted that Allan’s background showed some association with a criminal gang, and he indicated that would change the way of conducting the investigation. As a result, he assigned the file to experienced investigators. He noted that there were other serious investigations going on as well at the time and it was necessary to prioritize the investigations. 191 One of the things done to attempt to get information was to solicit an anonymous tip through the Crimestoppers program by drafting a description of the event for publication and seeking assistance from members of the public who may have seen the event. No tips were received as a result of that process. 192 Pike identified the timeline of the investigation from the police report. His role was to coordinate the flow of information and direct the investigation. He noted that the investigators became aware of Jeremy Wocknitz as a potential interest, but had some difficulty in locating him. He was eventually interviewed in pre-trial custody on December 16, 2008. 193 He testified there was never enough evidence gathered to forward a report to Crown Counsel seeking charges against any particular individual. He did not feel the investigation was hampered by a failure to rope off the crime scene or talk to Cheers staff the evening of the assault. He 360 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

said the file was open still and it was not uncommon for files such as that one to remain open for some time. 194 In cross-examination he agreed patrol officers play an important role in the investigative process and he as the principal investigator would rely on information acquired and provided by the patrol officer, particularly where they were first responders. 195 When he assumed conduct of the investigation on December 27th, 2006, he had the occurrence report prepared by Uppal at the end of his shift. He did not have the attending officer’s notes and had only a “snip- pet” of video which he did not review at the time, but instead directed a search warrant to get the full surveillance camera videos from the hard drive and to have it mirrored, that is, replicated. He first viewed the video in early January. Pike was cross-examined about whether there was a camera in the upper bar not working and whether anyone checked on that. He was unable to say, but referred to the fact that the hard drive comprising the captured video surveillance was seized and mirrored. He could not say whether a camera in the upper bar was connected to the system or not. 196 He agreed Uppal would not have known Mr. Burnett’s condition or whether it was life threatening until after he left the scene. 197 He thought some of the security staff were identified and interviewed. He said there was a list of those working that day and they were interviewed. He agreed Hart was interviewed on October 29, 2009. Hart said he did not see who had hit the plaintiff. One of the staff members who was not working the night of the assault said in an interview on October 31, 2007 that he heard rumours that it was a staff member who hit the plaintiff over the head with a stool. 198 He agreed that Greg Allan was interviewed on the 26th and again on the 27th of December; George Holmes was interviewed on the 27th of December, 2006, Kevin Williams was interviewed on January 3, 2007; Danielle Tardiff, a security staff member, was interviewed on March 1, 2007; Kyla Johnson, a staff member, was interviewed on March 30, 2007; Mr. Burnett was interviewed on June 5, 2007. 199 He agreed Jeremy Wocknitz was not interviewed until nearly two years later and at that time identified the person by the name of Ricky Guy as the assailant with the bar stool. He noted that Wocknitz also said at that time that Ricky Guy was then hit and knocked out by one of the plaintiff’s friends. Burnett v. Moir A.F. Cullen J. 361

200 He agreed that if that information had come sooner, it would have been useful, but he noted that Wocknitz had left the employ of the bar and it took some time to track him down to interview him. 201 He agreed that Jeremy Wocknitz was not formally interviewed the night of the assault and no information was taken from him. He agreed that Jeremy Wocknitz definitely identified Ricky Guy but then changed his mind several days later and phoned the investigator to say he was not the person who hit Mr. Burnett with the stool. 202 The investigators concluded that Guy was not a viable suspect one or two months later, after some re-interviews, using photos from the surveillance. There was no other credible evidence that he was involved in the assault. 203 Pike agreed the article in the Delta Optimist which he had referred to, referenced closures and/or suspension at bars in jurisdictions other than Delta. He thought there was one suspension in Delta before the article was written. He agreed there was evidence of late service and underage service at Cheers the night the bar watch initiative took place and he said the question of sanction was for the liquor inspector who was present at the time.

vi. Constable Al West 204 West was the principal investigator assigned by Pike. He has been with the DPD since 2001. He served his first four years in patrol, then was with the drug section for a period and in the last three to four years has been a major crime investigator. 205 While on patrol, he was aware of Cheers and would drive through the parking lot on the busier nights. He also did periodic walk-throughs of the bar to check for underage drinking and other Liquor Act infractions. The idea behind that was to establish a police presence to enforce compliance. 206 During that period, he never saw anything get out of control. He had not previously been involved in an investigation featuring Cheers. He became involved in the case in January 2007. He reviewed the video, the patrol reports and any other reports concerning the assault. He prepared a synopsis and a time line for the investigation which he added to as the investigation evolved and developed. 207 The synopsis he prepared reads as follows: On December 26, 2006 at approximately 0140 hours an altercation took place in the upstairs bar area of the Cheers Nightclub. The alter- 362 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

cation involved two large groups of males. Several Cheers doormen attended the fight scene and corralled the two groups of approximately 30 patrons outside of an emergency exit. Once outside of the emergency exit Garrett BURNETT (‘BURNETT’) was hit over the head by an unknown person with a barstool which had been brought outside of the nightclub. BURNETT was knocked unconscious after being struck by the barstool. Greg ALLEN (‘ALLEN’) who accompanied BURNETT in the nightclub was also injured in the altercation. DPD and EHS were dispatched to the scene after 911 calls were received by EHS. BURNETT was transported to Royal Columbian Hospital (‘RCH’) by EHS, and then moved to Vancouver General Hospital (‘VGH’) to receive additional treatment for his closed head injury. ALLEN was transported to Surrey Memorial Hospital (‘SMH’) where he was treated for facial injuries. On December 27, 2006 a search warrant was executed and a digital video recorder was seized. A review of the seized video recorder showed a large group of approximately 30 people exit the club. Al- though the video is of poor quality an unknown male can be seen lifting a dark object (believed to be bar stool) above his head and swinging it downwards. BURNETT is then observed lying motionless. 208 Under the heading “overview of investigation: he wrote as follows: December 26, 2006 a) At approximately 0140 hours an altercation took place between two large groups of customers at the Cheers Nightclub. b) At 0146 hours DPD dispatch were advised by EHS via ECOMM of an assault which had occurred at the Cheers Nightclub. c) At 0148 hours Cst Paul UPPAL (Echo 15) was dispatched to a fight at Cheers in which two males were knocked unconscious. Unit Echo 14 was also dispatched to the call but was advised to stand down by Echo 12 (Cst J. FORNBY and Cst BENTLEY) as they were closer to scene. Patrol Units Echo 11 and Echo 14 were confirmed by dispatch as standing down from the call. Cst J. FORNBY and Cst. BENTLEY arrived at Cheers at approximately 0148 hours. d) At 0149 hours Cst UPPAL requested DPD dispatch EHS Code 3. e) At 0150 hours Cst UPPAL advised dispatch Subject of Com- plaint “long gone”. Burnett v. Moir A.F. Cullen J. 363

f) At 0153 hours Cst UPPAL asked dispatch for an ETA of EHS. g) At 0157 hours EHS arrived at Cheers. h) At 0209 hours EHS transported BURNETT to Royal Colum- bian Hospital arriving at 0224 hours. i) Greg ALLEN (who stated he was BURNETT’S friend) was injured in the altercation and transported to SMH by a second EHS Crew who attended the scene. ALLEN was hostile and uncooperative at the scene. j) Greg ALLEN’S girlfriend Sharon CATANGHAL was standing near ALLEN and BURNETT when police arrived on scene. k) At 0454 hours Cst FORNBY interviewed ALLEN at SMH. Cst BENTLEY seized ALLEN’S white t-shirt, runners and jeans for possible suspect DNA. l) BURNETT’S jeans, black t-shirt, under wear, socks and belt were seized by police. m) At 1330 hours Cst EWING attended the Cheers Nightclub and obtained a Video CD (Video contained CCTV of assault) from Manager George HOLMES. The video was submitted to DPD FISS for enhancement. n) At 2100 hours A/Sgt HALL conducted an interview of AL- LEN at his girlfriend’s (Sharon CATANGHAL’S) residence (CATANGHAL had accompanied ALLEN at Cheers the night of the assault). 209 He then summarized the seizure of the “digital recorder” (which) contained video captured on eight cameras on December 27th at 10:51 p.m. and summarized a review of those recordings. He then listed the date of each witness’ interview and summarized the witness’ evidence. The interviews that were conducted were as follows: • George Holmes, manager of Cheers, December 27, 2006 at 23:23 hours; • Sunny Jara, manager of Cheers, January 1, 2007; • Kevin Williams, witness, January 3, 2007; • Tyler Wocknitz, doorman, February 1, 2007; • Baljit Mann, taxi driver, February 1, 2007; • Rob Fai, bartender, February 2, 2007; • Steve Norton, doorman, February 20, 2007; • Matt Steinsvik, doorman, March 1, 2007; 364 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

• Danielle Tardiff, doorman, March 1, 2007; • Matt McGee, doorman, March 8, 2007; • Adam Rosler, doorman, May 30, 2007; • Kayla Johnson, Cheers employee, May 30, 2007; • Garrett Burnett, complainant, June 5, 2007; • Jared Green, doorman, October 31, 2007; • Jeremy Wocknitz, doorman, December 16, 2008 & December 18, 2008. 210 West also noted that the bar stool said to have been involved in the assault was seized on December 28, 2006 at 9:40 p.m. 211 In the course of the investigation after receiving Jeremy Wocknitz’s information concerning Ricky Guy, West identified him by the name Sengpeth Thammavong. He detailed his attempts to obtain a statement from Thammavong who advised through his counsel that he had nothing to do with the assault at Cheers and was not willing to provide a statement. 212 At the conclusion of his report, West identified what he considered to be discrepancies in the description of the assailant as follows: After interviewing numerous witnesses, the following information was obtained describing a possible suspect in the assault; a) It was a bunch of redneck guys all white guys. Caucasian, 5'10" 190 llbs [sic], clean shaven, white shirt and jeans. (Greg ALLEN) b) East Indian male approximately 5'11" with a skinny build. (Tyler WOCKNITZ) c) A “big guy” grabbed a barstool and hit BURNETT. (George HOLMES). d) East Indian male wearing hat and Nike threw a punch which knocked BURNETT to the ground. e) Heard a rumor [sic] a doorman may have hit BURNETT with a barstool. (Jared GREEN). f) BURNETT was hit with a chair by an Asian male (Jeremy WOCKNITZ). g) Heard a rumor [sic] it was people from White Rock that were involved in the altercation (Matt MCGEE). 213 He concluded as follows: To date investigators have been unable to obtain sufficient evidence to positively identify a possible suspect. Although Sengpeth Tham- Burnett v. Moir A.F. Cullen J. 365

mavong was identified as a possible suspect by one witness, he has refused to provide a statement and at this time, there are insufficient grounds to make an arrest. 214 Delta Police have not received any tips as a result of the media cover- age and Crimestoppers tips. None of the approximately 30 persons in the altercation or any of the nightclub patrons in the club at the time of the incident have provided any information which would assist the investigation. In the absence of receiving information which would insist investigators, the only investigative avenue left for investigators to obtain evidence is to target Sengpeth Thammavong to ascertain what involvement, if any, he has had in this investigation. West also testified about developing the Crimestoppers tip in furtherance of trying to obtain information from the public about the events of the evening. He also testified about a YouTube video which purported to depict the confrontation inside Cheers, but he could not locate the person who created the video to ver- ify it. 215 In cross-examination he agreed he was familiar with the concept of intelligence-led policing and the idea that preventing crime lessens the need to respond. He agreed that police patrols are effective in preventing offending, but when patrol officers are responding to service calls, they are serving in a preventative role. He agreed Uppal, who was the first to respond to this incident, was in charge of the investigation initially. Gen- erally a crime scene will be cordoned off to allow the collection of evidence, but the importance of it depends on the circumstances of the crime. In this case, it doesn’t appear anyone took blood samples or foot- prints from the crime scene, there were no photos of the scene and no measurements taken. He wasn’t aware of Uppal specifying anyone for Fornsby or Bentley to speak to. He agreed it could be useful to get information immediately after an event. In this case, some of the Cheers staff were not interviewed until months later and Jeremy Wocknitz was not interviewed until December 16, 2008. West identified inconsistent descriptions of the assailant as being one of the problems with the case. He agreed the best identification was from Jeremy Wocknitz, who purported to name and know the assailant. He said the reason for the delay in interviewing Wocknitz was that the police had no address for him and their attempts to locate him failed. They entered his name on the police computer information system known as CPIC. He did not know why there was no interview of him before he left Cheers in February 2007. He agreed it was possible that if Wocknitz had provided his evidence sooner and the identified assailant was checked, it might have produced evidence of injury consistent with him having been in a fight. 366 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

216 West said other people were still describing different suspects and that would not change their descriptions and West “could not speak to” what Jeremy Wocknitz would have said at or near the time of the assault. 217 West said what he used to review the events was a mirrored copy of the hard drive. He said the hard drive was never destroyed, only the original of a CD burnt from a portion of the video captured on the hard drive, but the CD had already been saved to the DPD computer network, so nothing was lost. His recollection was that although there was a camera in the upper bar area, it was not working, but he could not recall where he got that information. 218 In a letter dated December 4, 2009, counsel for the Delta Defendants sent responses to requests for additional information at the discoveries of Uppal, Pike and Cessford. 219 Included in the letter, was the following question and response: At approximately 1:30 p.m. on December 26, 2006 Constable Sandberg and Constable Ewing attended at the liquor store at the North Delta Inn and met with George Holmes. AT that time Mr. Holmes showed them video surveillance footage on the computer in the office and burned a computer disk showing some of the footage from an exterior surveillance camera. Both Constable Ewing and Constable Sandberg saw at that time the video footage that was burned to the computer disk. The computer disk was later provided to Acting Sergeant Ryan Hall. Acting Sergeant Hall viewed the video on the computer disk and also saved it to the computer system of the Delta Police Department. A copy of this video saved to the Delta Police computer system has previously been delivered to counsel for all parties under cover of a letter dated November 30, 2009. The computer disk obtained from George Holmes on December 26, 2006 and discussed herein is the same as the computer disk that was later inadvertently destroyed.

vii. Inspector Charna 220 Charna started with the DPD in 1986. He worked through the ranks to his present position as an inspector. Along the way, he had responsibility for the patrol division and he became familiar with the Cheers pub. He was also involved as a member of the tactical management team. He testified it meets on a weekly basis to go over issues identified relating to crime in the community, such as theft from autos, breakings and entering and various different kinds of crime. 221 The NDI used to be known as the Scottsdale Inn. His dealings with Cheers involved ensuring that there were both foot and car patrols in the Burnett v. Moir A.F. Cullen J. 367

area to deal with patrons and to maintain a police presence. He himself had done walk-throughs of Cheers and he did not register any concern regarding the staff’s internal control of its patrons. There were fights in the parking lot and he was in communication with the management of Cheers over issues such as liquor consumption in the parking lot, and intoxicated patrons outside causing disturbances by fighting and through other means. He regarded management generally as very cooperative over issues of concern to the police. He identified one occasion involving a large fight at the All Stars bar at the NDI which caused him to order it closed for the remainder of the night. 222 He referenced a meeting with himself, Scott Moir, one of the owners of the pub, George Holmes, the manager, and Brad Parker, the former Superintendant at DPD. 223 That meeting centered on a complaint by Cheers management that he, Charna, was being too hard on them. Their position was that they were doing their best to control activities in the parking lot of Cheers and would even have staff members doing patrols. Charna said he did not change his attitude about continually bringing issues that arose in the parking lot to management’s attention and pressuring them to maintain control of their patrons. 224 He testified he would from time to time arrange to have a mobile command post set up at or near Cheers to monitor when Cheers was having a special night such as a live band or some other event. 225 In relation to issues about gangsters going to bars, there was a police initiative to check bars in the lower mainland by observing identifications of potential patrons at the front door and doing computer checks for gang associates. He viewed that as providing a deterrent to gang members from attending certain bars. 226 In the fall of 2006 there was an incident involving a Cheers patron who was injured and taken to the hospital by ambulance. The name of the victim was Anselmo. A complaint was made by his father because he was not interviewed by the police notwithstanding the fact that he had been injured. Charna was delegated to deal with that issue by Cessford of the DPD. He dealt with the issue to the evident satisfaction of the victim’s father and he put a report in which was communicated to municipal council who had received the original complaint. Charna was aware that fights occurred inside Cheers and they were usually handled by the staff, but the police would respond when and if called. He had no reports that the staff was unable to control what went on inside the bar as a general rule. 368 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

227 He testified the majority of people involved in such cases would disperse when the police came, but they would intervene when necessary and remove the would-be combatants from the area. He had shut down other bars for the night because of fights that occurred inside. 228 There was a Denny’s Restaurant open 24 hours, located not far from the Cheers pub. There were problems that developed in the Denny’s Res- taurant around the time the Cheers pub closed, as patrons would go to Denny’s and create difficulties. Charna spoke to the management of Denny’s who agreed to close their restaurant between 1:00 a.m. and 3:00 a.m., around the time of the bar closing. 229 There were some noise and damage complaints from a neighbourhood townhouse development. At a meeting held with the police, the police agreed to increase patrols in order to prevent those sorts of problems from occurring from intoxicated patrons of Cheers. 230 Charna was aware of several stabbing incidents at Cheers, but he was not himself involved in the response or the ensuing investigation. In cross-examination he agreed he was not involved in the investigation in the assault of the plaintiff. 231 He agreed that evidence of intoxication or drinking in the Cheers parking lot might provide evidence of a liquor violation inside the Cheers pub. He agreed that the stats between January 1, 1998 and March 1, 2007 obtained from the DPD regarding service calls to Cheers would be accurate. Cheers was open three days a week generally, except on long weekends. He agreed that there were 231 assaults over that time period, some disturbances which involved fighting and also instances of uttering threats. 232 There were two stabbing incidents at Cheers within a little more than a month - one at the end of August 2005 and the other at the end of September 2005. That was an issue for the tactical management team, but he could not say what was done concerning that. He agreed that there was an entry in the tactical minutes of September 28, 2006 of two males checked at Cheers said to be armed and dangerous and as well of a fight involving ten or more Indo-Canadians with the use of pepper spray deployed by someone. He couldn’t say whether those incidents were subjected to any follow-up investigation. 233 He used to issue lots of LPCs but had not done so over the last ten years or so. 234 On April 16, 2006 the tactical management committee minutes reported two arrests for causing a disturbance and an aggravated assault. Burnett v. Moir A.F. Cullen J. 369

He could not say if there was any follow-up with Cheers arising out of that reported incident. He would have brought those issues to the attention of the Cheers management. 235 He estimated that perhaps 30 of the 600 Cheers patrons constituted a criminal element. He did not agree that the main purpose of the under- cover or foot patrols of officers in plain clothes was to gather information regarding criminal activities. The purpose was to go in to monitor liquor- type infractions, to check identifications to see if any warrants were outstanding or if there were any gang members at the bar. He said it was a way of staying on top of gang members going to liquor establishments. He agreed that the DPD did not always report infractions to the LCLB. 236 He denied that he regarded Cheers as a “fishing hole” to catch bad guys. He did not agree with the suggestion that Cheers was allowed to operate because it gave police a place to conduct intelligence investigations. He testified that the DPD’s focus was in resolving issues before they became a problem. He felt if the number of people behaving crimi- nally was relatively small in comparison with the total number at the bar, shutting down the whole bar is not justified. He was aware that the LCLB could suspend operations of a bar as a result of police complaints and he was aware that council could shut down the bar by revoking per- mits. He himself did not report Cheers to council. 237 He agreed the incident arising out of the complaint to council in 2006 got some follow-up and he wrote a memo dated November 8, 2006. The matter was discussed at a council meeting and staff was asked to consider the possible success of a show cause hearing. 238 Charna could not say if that was the only time a show cause hearing was considered. He was aware that reports could be made to the LCLB by LPC forms. He was asked about the number of incidents relating to Cheers in 2005 and 2006 and said if those incidents had been properly collated and brought to his attention, he would have done something about it. He responded that he thought police were doing what should be done by foot and car patrols, by attending around closing time, by engaging and interacting with the patrons and staff, by setting up mobile command posts on special event evenings and by sending plain clothes officers to walk through the pub. He acknowledged there was the option of pursuing suspensions through the LCLB. He agreed people should be able to feel safe, but at liquor establishments, things can be unpredictable and no one is forced to go. He agreed that some level of fighting at Cheers was predictable. 370 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

239 He testified Denny’s was different from Cheers - there was no security staff and Cheers had more security staff than other establishments. 240 The suspensions he spoke about at other bars were just temporary, he noted that police can only suspend a bar license for up to 24 hours and can advise the LCLB which has the authority to suspend for longer periods.

viii. Chief Constable Jim Cessford 241 Cessford has been chief of DPD since February of 1995 following a 25 year career with the Edmonton Police Service. He has had extensive experience in various areas of policing and has been involved in a wide variety of organizations, programs and initiatives concerned with policing duties. 242 He explained that the establishment of the police department comes from the mayor and council, which is required to create a police service, and a police board provides the governance. Governance includes allo- cating the budget and hiring the chief of police. The police board consists of the mayor and five community representatives. It meets monthly. The DPD consists of four patrol platoons comprised of 76 officers, opera- tional support services comprised of 40 officers, and the criminal investigation branch, comprised of 25 officers. The executive of the DPD consists of 6 officers and the administration consists of 13. There are also 65 civilian staff members. The DPD management team consists of the chief, a deputy chief, the superintendant in charge of operations and the superintendant in charge of administration. 243 There is a regular morning meeting involving the management team - the operations Staff Sergeant and representatives from each department. There are reports on occurrences of the last 24 hours and assignments are created where necessary from the morning meeting. There is also a tactical management team which analyzes information concerning service calls and reports to concentrate resources on. 244 Cessford first became aware of Cheers in 1995. He went on ride- alongs with his patrol officers and patrolled the various drinking establishments. Cheers was one of them. He was aware that such places can be problematic and he was aware that generally, the service call volume was quite high in relation to drinking establishments concerning liquor act violations, assaults, and assorted general calls. 245 From time to time Cheers would come up in discussions at meetings or less formally. By 2006 his assessment was that Cheers was typical of liquor establishments. In Edmonton, in the inner city, they could be very Burnett v. Moir A.F. Cullen J. 371

violent with stabbings, robberies, etc. Delta’s establishments were calmer than those that Cessford experienced in Edmonton. He testified that he did talk to LCLB inspectors and got a sense of how Cheers compared with other establishments. 246 He met with the owner and management of Cheers and talked to police constables and got the sense overall that the management and staff at Cheers were cooperative in most areas. 247 Cessford had some recollection of the agreement Cheers management had entered into with the Municipality of Delta in July 2002. At the time, there was concern about noise and the conduct of patrons. Cheers had security staff and they supported police walk-throughs without any kind of obstruction. He knew Cheers had a policy of baring those who had caused trouble before and they had also installed security cameras and lighting as called for in the agreement. 248 He noted that there had been a hot dog stand in the parking lot which attracted problems because of the intoxicated patrons and fights broke out, but they got rid of it to abate the problem - even though it was a money maker - at the request of the police. 249 He was shown the statistics reflecting service calls to the address which had been compiled over the years. He was not aware of those statistics at the time of the assault upon Mr. Burnett. 250 He did not get any feedback from officers that Cheers was hard to police or expressing concerns about the management or security staff. He felt the department took adequate steps to monitor and police the drinking establishments in the jurisdiction by regular patrols, establishing a high visibility including walk-throughs, establishing a presence at closing time and establishing a command post from time to time to check patrons or to take preventative steps on special event nights. 251 He testified that all calls for service would be responded to and that research shows more police uncover more crime and encounter more incidents when they are regularly on patrol in particular areas. 252 He was aware that LPCs were available to complete if the liquor establishment is not properly managed. He said the DPD did some operations with the LCLB and they had a good relationship and would from time to time come along with police to inspect drinking establishments. He was aware that there were some noise complaints concerning Cheers and he was aware that Cheers had worked with the police to keep their doors closed to abate the noise. He was also aware of the complaint concerning Mr. Anselmo whose son was the subject of an assault, but was 372 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

not interviewed by the police. He arranged to have Charna review the file and meet with the complainant in October 2006. 253 He also met with the mayor and city council concerning that matter. There was a discussion about that complaint and also about the complaint history, which Cessford had asked be produced, involving 392 complaints or calls in 22 months. The number encompassed the “whole foot print” at the address including the parking lot. Cessford said he thought the numbers were not out of line with other establishments as they did some comparisons and did not believe the numbers were “out of the ordinary”. 254 The mayor and council asked their staff to report on the viability of a show cause hearing in respect of Cheers, arising out of the service calls. The municipality’s legal staff worked with the DPD on the report, but it came out around the time Cheers was being sold to new owners and a determination was made to work with the new ownership and the issue of a show cause hearing was not pursued at that time. 255 Cessford became aware of the assault on the plaintiff very soon after the incident, but had no involvement with the investigation other than seeking ongoing updates. He was not aware of any incidents similar to that happening at Cheers. 256 In cross-examination, he agreed Cheers was an establishment that required police attention. He was a proponent of intelligence-led policing to prevent crime and disorder. He agreed that that is a process where information is gathered and used to identify and deal with crime areas in a preventative way. 257 He was asked about the suspension of a club called Brandi’s in Van- couver, but said he was not familiar with that. 258 He said information on crime areas in Delta is collected and stored on computers and is subject to analysis. He was not aware of the 2,410 services calls to the NDI between 1998 and 2007, but was informed of the 392 service calls for the past 22 months in December 2006. He said it seemed like a high number, but it involved the whole of the complex, not specifically Cheers. The numbers were broken down and given to council in November 2006. DPD did issue crime reports, but they did not include statistics about crimes against the person, except robbery. The 2008 community report did not produce statistics relating to assaults, although it could have. He agreed there were stats available for the nature and number of service calls to Cheers. He also agreed that there were two stabbings within approximately a month at or outside Cheers in 2005. One of the stabbings occurred outside the bar after it had closed, the Burnett v. Moir A.F. Cullen J. 373

other inside the bar. He agreed there were other incidents including fights and assaults and some special events generated calls for medical help because of over-drinking, although he wasn’t personally aware of those incidents. He himself did not engage with Cheers staff over the issue of “FUBAR” nights or cheap drink nights, but he was aware other members of his department had. 259 He was directed to various police reports detailing cases of violent encounters including assaults with weapons or causing injuries and occurrences at or outside of Cheers’ bar throughout 2005 and 2006. He said he had no specific knowledge of those cases. 260 He agreed such incidents were “on occasion” fairly regular. People would go and become involved in drinking and would occasionally get involved in situations which could result in serious bodily injury. He said the department was aware of goings on at Cheers and was “monitoring the situation”. Issues at Cheers were brought up at tactical management meetings from time to time and what was done arising from those issues was to have regular highly visible patrols, meetings with the staff, owner and management of Cheers, working with the LCLB, and bar initiatives, all to establish a good police presence. 261 There were no notes or records of the meeting with the liquor board representatives. Cessford made no directions to patrols to fill out LPCs. He agreed that Cheers was a hot spot in that it had lots of calls for service. 262 He was referred to an LPC issued May 5, 2006 for allowing disorderly/riotous conduct at Cheers. It made reference to 60 - 70 people outside the bar at the rear exit involving some physical altercation. He was not aware of that particular incident. He was aware officers had the authority to close the establishment for up to 24 hours and the LCLB had a broad range of penalties for enforcement actions. He was aware that Cheers’ business licence could be suspended or revoked by council and that’s what was being contemplated as a result of the Anselmo complaint. 263 He was aware of an initiative in 2009 involving a violence suppres- sion team which would institute bar or restaurant watches to deter known gang members. The initiative would involve identified gang members being asked to leave by police at the behest of management. It would be done through the application of the trespass law. Delta took the program, which initiated in Vancouver, and used it there. Cheers was not, however, a signatory to the initiative, but the team did attend Cheers to seek its participation. Cessford did not recall if information concerning the 374 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

number of service calls to Cheers ever had been requested before No- vember 2006. 264 Cessford was referred to an internal LCLB memo dated November 27, 1995 referring to a meeting that took place November 22, 1995 between representatives of the DPD and the LCLB. He did not recall the meeting referenced in that memo. He was referred to a later letter dated March 5, 1996 from the regional manager of the LCLB to himself, referring to that meeting, noting that no liquor LPC forms had been received from the DPD for 3 years and requesting an updated report on the issue of increased monitoring of the Delta Scottsdale Inn. Cessford acknowledged that he would have received the letter. 265 He agreed he was probably aware of the drinking and fighting outside of Cheers referred to in the letter. He had no record of a response to the letter and was not aware of the Attorney General’s indication of increased monitoring. He agreed LCLB inspectors “were willing to work closely with the DPD to monitor compliance with all licensed establishments in the Delta Municipality including the Scottsdale Inn Hotel.” 266 The DPD believed that cheap drink nights were a problem at Cheers and it had recommended to them that they not hold such events. There were a number of people from the police force communicating the message. He is not certain whether the cheap drink nights stopped as a result of police recommendations or not. 267 He agreed Cheers was a problem in a number of ways requiring increased attention from the police. There were issues of over-service; of under-age service; the cheap drink nights; the “FUBAR” nights and other special events. 268 Those problems continued through to 2006. He agreed that he had some discussions with the legal counsel for the municipality in Novem- ber and December of 2006 concerning Cheers, arising out of the An- selmo incident and council’s request for an opinion on the viability of a show cause hearing. He was referred to some hand-written notes prepared by a lawyer with the municipality’s legal department. They were dated December 18, 2006, referred to Cheers and the Anselmo letter, and referred to the 392 service calls which included a wide variety of complaints. In the note, there was a reference to murders. Cessford testified however that there were no murders at Cheers. 269 He was aware in December 2006 that previously the Hells Angels had made appearances at Cheers. Burnett v. Moir A.F. Cullen J. 375

270 It was ultimately decided that the show cause would not proceed because of the new ownership. 271 He was referred to a warning letter from Kane Scott to Cheers dated January 13, 2000 relating to an incident that had occurred in October of 1999. The letter read as follows: WARNING LETTER This letter is further to a Licenced [sic] Premise Check issued by Cst. [ ] of the Delta Police Department, concerning disorderly conduct of patrons within your licensed establishment on October 8, 1999. Delta Police attended at your premise about 2:10 a.m., to investigate a complaint of an assault that had just occurred. On arrival they learned that your security personnel had ejected about 10 persons from the premise including two victims of the assault incident. Your security personnel had returned the victims to your premise for their safety after having clarified some details of the incident. The suspects in this incident had left the scene prior to arrival, however, the two victims were transported to Surrey Memorial Hospital for treatment of head and facial injuries. I have discussed this incident with George Holmes and Scott Moir. Although your premises is generally well controlled both in the licenced [sic] areas and the parking lot areas surrounding the hotel incidents of altercations involving several persons and injury to persons cannot be ignored. Section 36(2)(a) of the Liquor Control and Licensing Act states: A person holding a licence or the person’s employee must not authorize or permit in the licensed establishment (a) gambling, drunkenness or violent, quarrelsome, riotous or disorderly conduct, Licensees and their employees are responsible for ensuring that adequate patron behaviour and order is maintained within the licensed establishment. Furthermore, public safety, health and well-being must not be jeopardized by the service and consumption of alcoholic beverages. The purpose of this letter is to serve as a warning that should this office continue to receive reports of violations, you could be requested to attend an enforcement hearing. A copy of the Licenced [sic] Premise Check forwarded to our offices is attached for your reference and attention. Should you have any questions concerning the contents of this letter, please do not hesitate to contact the undersigned. 376 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

272 The warning letter was based on an LPC issued by a DPD member. Cessford agreed that in that case, the issuance of the LPC had a good result. He was also referred to an LPC issued with respect to an assault with a weapon at Cheers which occurred on September 9, 2001. There was communication between the DPD and Kane Scott concerning the incident and ultimately no further action was taken against the establishment as it was determined the situation was properly handled by security staff who restrained and removed the combatants and called the police. He agreed that sometimes the DPD is reactive by sending officers to respond to calls and at other times proactive by sending bulletins re: hot spots to enable citizens to avoid situations. That, he explained, happens mostly in theft from autos in certain areas of Delta. 273 Initiatives like Bar Watch and Restaurant Watch to get rid of “bad guys” and to avoid danger in public places are other examples of proactive policing. 274 As far as the Hells Angels are concerned, he had been informed that they had been at Cheers, but infrequently. He did not recall having a conversation with the lawyer for the Municipality along those lines. The DPD would make sure they were not intimidating or setting up business at Cheers.

ix. Sergeant Walter Argent 275 Sergeant Argent (“Argent”) has been with the Vancouver Police De- partment (“VPD”) for 31 years. He is the Sergeant for the community police office in district #1, which includes the downtown core. He has patrolled and worked in the downtown entertainment district for many years and is familiar with the Roxy nightclub located on Granville Street in Vancouver. 276 He was referred to a document summarizing calls for service to the Roxy nightclub address between January 1, 2002 and December 31, 2006. The calls totalled 1,316. The Roxy has a seating capacity of 240 and is open 7 nights a week, with the busiest nights being Friday, Satur- day and holiday nights. 60% - 70% of the calls were on those nights. Argent’s office has responsibility for other clubs as well; some of which are worse for the number of service calls. The service calls included complaints of violent assaults. 277 There were many fights inside and outside of the Roxy. The VPD expected the club to handle the inside altercations, unless it was serious enough to call the police in. Ambulances would be called regularly on Friday and Saturday nights to the area of the Roxy and other clubs. If Burnett v. Moir A.F. Cullen J. 377

there is a major problem, the police can shut down the bar for up to 24 hours, but he had only done that two times. The police used LPC forms only if something arises in the club, such as over-service, improper service and that sort of thing. LPCs would not be sent to the LCLB in response to fights or violence. The Roxy has 8 - 11 doormen who communicate by radios and headphones. In his experience, it is not possible to eliminate fighting from bars; at best, the authorities can only try and control its nature and extent. The police changed their approach to the entertainment district after 2006. Before then they took a strict enforcement approach and wrote tickets for all infractions, but subsequently changed to what Argent described as a “meet and greet” approach. It was a more flexible, less confrontational approach which he said resulted in a 32% reduction in assaults since that new approach had been adopted. 278 In cross-examination, he said the Roxy is a Bar Watch member. It joined the program and adopts the policy. His view is that bars that don’t join the program don’t want to lose the financial benefits that gang members can bring. He agreed that failing to join might promote gang attendance and he could not think of any good reason not to join. 279 There are over 5,000 liquor establishment seats on Granville Street between Robson Street and Pacific Street. Lots of things occur in the streets. Some fights in front of the Roxy may not have anything to do with the Roxy. On hockey nights, more people are out in the street. Drugs are also available, which is another source of bad behaviour, but Argent’s view is that the majority of the problems are caused by alcohol. He said that each bar has different clientele; the Roxy is “relatively high end”. 280 The meet and greet policy would replace the arrest of drunken scuf- flers with sending them home in a cab and getting them off the mall. He testified that in his experience, LPC forms are seldom used. He put in only 3 in 2010. He said in 2002 - 2006 more were used, for liquor violations, but not for incidents on the sidewalks and in front of the various establishments. He said suspensions are used very rarely and he is only aware of it being used two times since 1999. 281 He testified that VPD have a liaison officer who works closely with the LCLB. That officer’s sole duty is to report infractions to the LCLB. That liaison came into being in 2000 and that’s how the main source of information from the police department to the LCLB was channelled, not through the medium of the LPC forms. He assumes that the reports are done in writing and it provides the inspectors with the basis to decide if some enforcement hearing is necessary. He said the object is not to put 378 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

the bar out of business, but suspensions can cost money and send messages. 282 He said police will complain about cheap drink nights because they can cause problems, but police have no power to prevent such promotions. Argent agreed police “could try” to go to the LCLB with complaints arising from cheap drink nights with a view to provoking a warning or a suspension. It would take “a fair amount of planning and enforcement”. 283 He agreed allowing gang members into bars can lead to violence and fights. He was aware on two occasions of reports going to city hall to raise the issue of suspending or cancelling a business licence. That is another means of enforcement. 284 The VPD also issue warnings to the public on its website about “bad areas of crime”. The warnings concerning night clubs involved date rape drugs and Bar Watch warnings. There was only one Bar Watch warning issued that he could recall. He was aware of Brandi’s nightclub. He said there was a concern about gang members being involved in the ownership and at one point, its liquor licence was suspended, although he was not involved in that. Generally, dispatches are run according to the address from which they come and the police try and be accurate. Other clubs will have their own call history, all of which are similar to that of the Roxy. 285 He testified that council pulled the licence of one cafe which had drugs being sold out of it. 286 The VPD website does not have warnings about assaults or fights in the bar area.

x. Police Occurrence Reports Relating to Cheers 2005/06 287 Summaries of all police services calls and those police occurrence reports involving assaults or other forms of violent behaviour relating to 11920 - 70th Avenue in Delta - the NDI complex - for 2005 and 2006 were introduced as exhibits in the defendant’s case. The police reports were subject to the parties’ documents agreement, which reads in part as follows: Police reports of previous incidents will be admissible only as proof of what the police were told about the incident and what they recorded. 288 According to the 2005 summaries, 26 of the service calls related to some form of alleged assault, threatening or obstruction and about 16 to Burnett v. Moir A.F. Cullen J. 379

causing a disturbance. According to the 2006 summaries, there were 31 calls related to various alleged forms of assault and a further 35 calls relating to causing a disturbance, many of which involved belligerent behaviour including fighting. 289 In one case on June 24, 2006 a patron was stabbed two times in the back, resulting in a punctured lung. No assailant was identified. Another call on July 3, 2006 about 2:20 a.m. related to a person who suffered a major concussion, who was found at an intersection near Cheers. There was evidence the victim had attended Cheers at about 11:30 p.m. the previous evening. There was no evidence of where the assault on him occurred. 290 Another call involved a woman who was struck in the face by another woman and received a broken nose on August 18, 2006. The assailant was not identified. 291 In 2005, on August 20th, a Cheers patron was stabbed in the stomach after the bar closed. The injuries were not life threatening and no assailant was identified. 292 On August 26, 2005 a person was stabbed 8 times in the parking lot at Cheers. His wounds were not life threatening and he was released from hospital after getting stitched up. He refused to cooperate with the police and no assailant was identified. 293 On September 30, 2005 a patron was stabbed in the stomach while in the bar. The injury was not life threatening. 294 While there were, as noted, other incidents of belligerent behaviour and acts of violence or threatened violence throughout 2005 and 2006, those were the occasions over that two year period when the injuries were relatively or potentially serious.

E. The Position of the Parties - Liability i. The Plaintiff’s Position 295 The plaintiff relies on the Police Act, R.S.B.C. 1996, c. 367, s. 34 as creating a duty on the police to protect the public from those who would commit crimes. The plaintiff submits that this establishes a private law duty of care to the public at large. 296 The plaintiff notes that as part of their public mandate, the DPD regularly post crime bulletins on their website, warning the public about areas of crime. The plaintiff submits that no such bulletin was posted about Cheers, despite the police being aware of problems at Cheers from as early as 1995. 380 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

297 The plaintiff submits that the evidence establishes that Cheers had a reputation for violence, that the DPD knew about the propensity for violence at Cheers due to the high number of reported incidents between January 1998 and March 2007 totalling 2,410 service calls. The plaintiff asserts that the police demonstrated an understanding of the problems at Cheers when they set up “mobile command posts” outside of Cheers to deal with potentially violent situations before they escalated. 298 The plaintiff says that the DPD failed to take appropriate preventative action in relation to Cheers and had they discharged their duty adequately, he would not have sustained his injuries. 299 The plaintiff submits that over-serving alcohol is likely the true cause of the altercation in which he sustained his injuries and submits that the failure of the police to come to grips with the problem of over-service and the accompanying violence amounts to condonation of the atmos- phere at Cheers. The plaintiff referred to the evidence of violence or potential violence at Cheers over the years and submits that the police response was inadequate to ensure a safe experience for people such as himself. 300 The plaintiff cited Schacht v. R. (1974), [1976] 1 S.C.R. 53 (S.C.C.) and N. (D.) v. Oak Bay (District), 2005 BCSC 1412 (B.C. S.C.) for the proposition that the police can be held liable for a failure to warn an appropriate association or government agency which would then be in a good position to take preventative action. 301 The plaintiff submits that the obvious preventative step for the DPD to take was reporting Cheers to the municipal council and the LCLB. The plaintiff submits this would have resulted in enforcement proceedings that would have led to either a suspension of Cheers’ liquor licence or closure of the bar. Had such enforcement proceedings taken place, Cheers would either have been closed or operating in a safer manner on the night the plaintiff attended the bar and suffered his injuries. 302 The plaintiff also relies on Schacht, and Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1998), 160 D.L.R. (4th) 697 (Ont. Gen. Div.) for the proposition that police can be held liable for a failure to warn which includes a duty to warn potential victims. The plaintiff submits that the police could have warned individuals entering the bar about potential dangers during their routine patrols of the area or while uniformed officers checked the identification of patrons entering Cheers. The plaintiff also suggested that police could have put up a sign warning people about the dangers of entering Cheers. Burnett v. Moir A.F. Cullen J. 381

303 The plaintiff also submits that the police have liability grounded in the negligent conduct of their investigation of his assault. 304 The plaintiff relies on Odhavji Estate v. Woodhouse, [2003] 3 S.C.R. 263 (S.C.C.) and Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board, 2007 SCC 41 (S.C.C.) for the proposition that the police owe a duty of care to members of the public and suspects under investigation to conduct themselves competently. The plaintiff submits that the principles in those cases are also supportive of a duty of care to victims. The plaintiff submits this was recognized in Traversy v. Smith (2007), 52 C.C.L.T. (3d) 109 (Ont. S.C.J.) in which there was a refusal to strike a statement of claim asserting a duty of care between an officer investigating an accident and a victim of that accident. 305 The plaintiff relies on the case of Small v. Stec (2009), 186 C.R.R. (2d) 363 (Ont. S.C.J.) for the proposition that a negligent investigation could result if there is proof that interviewing potential witnesses would have had an impact on the outcome of the case. 306 The plaintiff submits the Delta Defendants were negligent in their investigation of his assault by not proceeding to interview witnesses in a timely manner and submits that had the interviews taken place in a timely manner, the police would have likely made an arrest, secured a conviction and identified the perpetrator to the plaintiff for a civil action. The plaintiff submits that in particular, the police spent insufficient time at the scene conducting an investigation on the night of the altercation. 307 The plaintiff places significant reliance on Odhavji Estate v. Wood- house and Mooney v. British Columbia (Attorney General), 2004 BCCA 402 (B.C. C.A.) as authority that the police can owe a duty of care to victims in the context of conducting criminal investigations. 308 The plaintiff submits that the failures of the Delta Defendants to warn the plaintiff of the dangers at Cheers or to conduct a reasonably competent investigation caused the plaintiff’s injuries. 309 The plaintiff submits the standard of care is dependent on the facts of the case and in the present case, the defendants were required to take reasonable steps to mitigate the danger to the plaintiff in becoming a patron at Cheers pub. The plaintiff submits reasonable steps in the circumstances involve: 1. recognizing the potential for harm to persons who might attend Cheers night club; 2. reporting incidents of violence to the LCLB; 3. reporting incidents of violence to the municipal council; 382 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

4. warning management of Cheers to clean up the place or risk losing their liquor licence and/or business permit; 5. warning prospective patrons of dangers within Cheers; and 6. conducting a reasonably thorough investigation. 310 As to causation, the plaintiff relied on Athey v. Leonati, [1996] 3 S.C.R. 458 (S.C.C.) where Major J. stated the test for causation at paras. 13 and 14 as follows: [13] Causation is established where the plaintiff proves to the civil standard on a balance of probabilities that the defendant caused or contributed to the injury: Snell v. Farrell, [1990] 2 S.C.R. 311; McGhee v. National Coal Board, [1972] 3 All E.R. 1008 (H.L.). [14] The general, but not conclusive, test for causation is the “but for” test, which requires the plaintiff to show that the injury would not have occurred but for the negligence of the defendant: Horsley v. MacLaren, [1972] S.C.R. 441. 311 The plaintiff also relies on Hanke v. Resurfice Corp., 2007 SCC 7 (S.C.C.) at para. 21, where Chief Justice McLachlin confirmed the test for causation as follows: First, the basic test for determining causation remains the “but for” test. This applies to multi-cause injuries. The plaintiff bears the burden of showing that “but for” the negligent act or omission of each defendant, the injury would not have occurred ... 312 The plaintiff submits but for the negligence of the police, Cheers would not have existed in the form that it did on December 26, 2006 and Mr. Burnett would, in all probability, not have been assaulted. The plaintiff submitted in the alternative that if the court determines there are gaps in the chain of causation caused by the need to determine the actions of third parties such as the LCLB or municipal council, the court may need to rely on the “material contribution test”. 313 The material contribution test was set out by Chief Justice McLachlin at para. 25 of Resurfice where she held as follows: First, it must be impossible for the plaintiff to prove that the defendant’s negligence caused the plaintiff’s injury using the “but for” test. The impossibility must be due to factors that are outside of the plaintiff’s control; for example, current limits of scientific knowledge. Second, it must be clear that the defendant breached a duty of care owed to the plaintiff, thereby exposing the plaintiff to an unreasonable risk of injury, and the plaintiff must have suffered that form of injury. In other words, the plaintiff’s injury must fall within the ambit of the risk created by the defendant’s breach. In those excep- Burnett v. Moir A.F. Cullen J. 383

tional cases where these two requirements are satisfied, liability may be imposed, even though the “but for” test is not satisfied, because it would offend basic notions of fairness and justice to deny liability by applying a “but for” approach. 314 The plaintiff noted that at para. 28 of Resurfice, Chief Justice McLachlin described a situation where it would be impossible for the plaintiff to prove that but for the defendant’s negligence, the plaintiff’s injury was caused: A second situation requiring an exception to the “but for” test may be where it is impossible to prove what a particular person in the causal chain would have done had the defendant not committed a negligent act or omission, thus breaking the “but for” chain of causation. 315 The plaintiff submits that in such circumstance, based on the recent case of Clements (Litigation Guardian of) v. Clements, 2010 BCCA 581 (B.C. C.A.), it is appropriate to use the “material contribution test” in assessing the Delta Defendants’ liability. The plaintiff submits that liability should be found against the Delta Defendants and apportioned 50% to the Delta Defendants, 25% to Cheers and 25% to the assailant himself. 316 The plaintiff submits there should be no contributory negligence found based on the submission that even if Mr. Burnett was intoxicated and under the influence of cocaine and steroids at the time of the altercation, a person in his position would be “a product of his environment” and ought not to be held responsible for any violent behaviour he may have exhibited while intoxicated at Cheers.

ii. The Delta Defendants’ Position 317 The defendants submit that a review of the police incident reports for 2005 and 2006 reveal relatively minor incidents of violence and that the police response to each of the situations was entirely appropriate in the circumstances. The defendants submit the plaintiff’s claim that there is no evidence of any enforcement measures is therefore without foundation. The plaintiff submits that as far as a failure to warn is concerned, that the evidence taken as a whole does not establish that the plaintiff would have been aware of any warning issued by the Delta Defendants, or if he did become aware, would have heeded it, given the circumstances under which he attended Cheers and given the fact that he had on previous occasions attended at bars in which violence occurred. 318 Insofar as negligent investigation is concerned, the defendants submit that the plaintiff has failed to establish a duty of care owed to him by the 384 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

police, a breach of the applicable standard of care and causation. The defendants submit the police response was reasonable. 319 As to the duty of care in relation to the plaintiff both pre-assault and post-assault, the plaintiff submits that the test to be met is: a. whether the relation between the plaintiff and the defendant discloses sufficient foreseeability and proximity to establish a prima facie duty of care; and b. if so, whether there are any residual policy considerations which ought to negate or limit that duty of care. 320 The Delta Defendants submit that this case is distinguishable from the Jane Doe case and the case of Mooney relied on by the plaintiff, in that in those cases, the victim was either a member of a narrowly defined class of potential victims or a particular victim exposed to danger from a particular identifiable source. In the present case, the defendants submit Mr. Burnett cannot be described as falling into a similarly narrow class of potential victims. The defendants say that the harm to the plaintiff is not foreseeable in the present case and in any event, the class to which the plaintiff belongs is too broad to impose a duty of care. 321 As to the standard of care, the defendants say that the applicable standard of care is stated in Hill v. Hamilton-Wentworth as a reasonable police officer in comparable circumstances. 322 The defendants submit that the Court is not to substitute its own judgment for what it might do if put in a position of police at Cheers during the time period in question, but rather to determine whether the steps that were taken by the DPD fall within the range of options of what a reasonable police officer might do in response to such circumstances. 323 The defendants point out that the DPD conducted regular walk- throughs of Cheers, they conducted routine patrols of the area and had an established presence outside Cheers at closing time. The DPD also promptly responded to calls for service when received and accompanied LCLB inspectors on visits to Cheers. The defendants submit that all of these initiatives are consistent with the approach taken by the VPD in policing the Granville entertainment district and meet the appropriate standard of care. 324 With regard to the investigation, the DPD interviewed many witnesses in the days following the altercation. The bar stool thought to be the one used to strike Mr. Burnett was seized and subjected to forensic testing. The surveillance footage was also seized and reviewed thoroughly. The cab driver who was seen in the video footage passing the bar Burnett v. Moir A.F. Cullen J. 385

at the time of the altercation was interviewed. Mr. Burnett himself was also interviewed and shown video footage of the incident, but all these interviews proved fruitless. The defendants say that taken in its totality, the investigation is consistent with a competent police investigation, which is still seen as ongoing. 325 The defendants submit that causation is not made out in the present case. The defendants say that the material contribution test is unavailable under Hanke v. Resurfice Corp. because it is not impossible for the plaintiff to establish causation through the “but for” test. The defendants say that the plaintiff has failed to establish that had the police reported incidents of violence to the LCLB that the board would have exercised its discretion to take action against Cheers. The defendants submit that even if they had, it is unlikely and unproven that the action would have been sufficient to prevent Mr. Burnett’s injuries. The defendants rely on the fact that the plaintiff admitted in cross-examination that he attends bars he knows to be violent and submit that even if the police had warned people about potential dangers at Cheers, the plaintiff would have likely been at Cheers on the night in question anyway. The defendants point out that Mr. Burnett is not a resident of Delta and would have had no reason to read DPD bulletins. The defendants submit that there is evidence that Mr. Burnett ignored a caution from Cheers staff to stand down from the verbal altercation that preceded his injuries and that implies he would not have heeded any such warning in any event. The defendants submit in the alternative the plaintiff should be found contributorily negligent and in any event their apportionment of any liability should not exceed 10%.

F. Discussion and Conclusion - Liability i. The Law 326 I see the dominant issue in this case as whether the law recognizes a private law duty of care in the police discharge of their public duties in circumstances akin to those in the present case. 327 A number of cases have explored that issue, the most prominent of which is the decision of the Supreme Court in Hill v. Hamilton- Wentworth (Regional Municipality) Police Services Board, 2007 SCC 41 (S.C.C.). It was written by Chief Justice McLachlin and dealt with the issue “whether the law recognizes a duty of care on an investigating police officer to a suspect in the course of an investigation.” 328 The matter was unsettled and the Chief Justice noted the need to “ask whether as a matter of principle, a duty of care should be recognized in this situation.” Although the various other decisions relied on by counsel 386 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

in the present case focus on the relationship between a police officer and a victim or the family of the victim, the resolution of the issue in Hill, and the analysis which led to it, play an important role in gauging the proper scope of those decisions and the extent to which they assist in resolving this case. 329 In Hill, Chief Justice McLachlin held as follows at para. 20: [20] The test for determining whether a person owes a duty of care involves two questions: (1) Does the relationship between the plaintiff and the defendant disclose sufficient foreseeability and proximity to establish a prima facie duty of care; and (2) If so, are there any residual policy considerations which ought to negate or limit that duty of care? (See Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), as affirmed and explained by this Court in a number of cases (Cooper v. Hobart, [2001] 3 S.C.R. 537, 2001 SCC 79, at paras. 25 and 29-39; Edwards v. Law Society of Upper Canada, [2001] 3 S.C.R. 562, 2001 SCC 80, at para. 9; Odhavji Estate v. Woodhouse, [2003] 3 S.C.R. 263, 2003 SCC 69, at paras. 47-50; Childs v. Desormeaux, [2006] 1 S.C.R. 643, 2006 SCC 18, at para. 47.) 330 In connection with the proximity aspect of the relationship at issue, McLachlin C.J.C. held as follows at paras. 22 - 24 of her decision: [22] The first element of such a relationship is foreseeability. In the foundational case of Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), Lord Atkin stated: The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted re- ply.... Who, then, in law is my neighbour? The answer seems to be - persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. Lord Atkin went on to state that each person “must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour” (p. 580). Thus the first question in determining whether a duty in negligence is owed is whether it was reasonably foreseeable that the actions of the alleged wrongdoer would cause harm to the victim. [23] However, as acknowledged in Donoghue and affirmed by this Court in Cooper, foreseeability alone is not enough to establish the required relationship. To impose a duty of care “there must also be a Burnett v. Moir A.F. Cullen J. 387

close and direct relationship of proximity or neighbourhood”: Cooper, at para. 22. The proximity inquiry asks whether the case discloses factors which show that the relationship between the plaintiff and the defendant was sufficiently close to give rise to a legal duty of care. The focus is on the relationship between alleged wrongdoer and victim: is the relationship one where the imposition of legal liability for the wrongdoer’s actions is appropriate? [24] Generally speaking, the proximity analysis involves examining the relationship at issue, considering factors such as expectations, representations, reliance and property or other interests involved: Cooper, at para. 34. Different relationships raise different considerations. “The factors which may satisfy the requirement of proximity are diverse and depend on the circumstances of the case. One searches in vain for a single unifying characteristic”: Cooper, at para. 35. No single rule, factor or definitive list of factors can be applied in every case. “Proximity may be usefully viewed, not so much as a test in itself, but as a broad concept which is capable of subsuming different categories of cases involving different factors” (Canadian National Railway v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021 at p. 1151, cited in Cooper, at para. 35). 331 Chief Justice McLachlin noted that most cases of negligence proceed on “a type of relationship previously recognized as giving rise to a duty of care” but where “hitherto unconsidered” relationships arise from a claim, “courts must consider whether the claim for sufficient proximity is established.” 332 In the case before her, the Chief Justice posed the question “whether on principles applied in previous cases this relationship is marked by sufficient proximity to make the imposition of legal liability for negligence appropriate.” 333 The court in Hill did not, however, rely heavily on previous cases decided in the context of a relationship between the police and a victim or a police chief and the family of a victim. In connection with such cases, Chief Justice McLachlin wrote as follows: Further, I cannot accept the suggestion that cases dealing with the relationship between the police and victims, or between a police chief and the family of a victim are determinative here, although aspects of the analysis in those cases may be applicable and informa- tive in the case at bar. (See Odhavji and Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1998), 160 D.L.R. 4th, 697 (Ont. Gen. Div.)). I note that Jane Doe is a lower court decision and that debate continues over the content and scope of the ratio in that case. I do not pur- 388 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

port to resolve those disputes on this appeal. In fact, and with great respect to the Court of Appeal who relied to some extent on this case, I find the Jane Doe decision of little assistance in the case at bar. 334 I take the Chief Justice’s comments with respect to the Jane Doe decision in particular, to be somewhat cautionary. In that case, the Court found a duty of care to exist between the police force investigating a serial rapist operating in a particular neighbourhood and one of his victims. I will return to that case later in these reasons. 335 In the Hill decision, the court concluded that the relationship between an investigating police officer and a suspect under investigation was sufficiently proximate to engage a duty of care. In the result, the Supreme Court of Canada dismissed the plaintiff/appellant’s appeal however, on the basis that the impugned police conduct met the general standard of care and was therefore not negligent. 336 How the Court in Hill approached and analyzed the issue of proximity is of considerable importance to the case at bar. The Chief Justice noted that the “most basic factor to consider” is whether “there is a relationship between the alleged wrongdoer and the victim, usually described by the words ‘close and direct’”. 337 The court noted the relationship need not be “intimate” or involve “physical proximity”, but requires circumstances in which the actions of the defendant “have a close or direct effect on the victim, such that the wrongdoer ought to have had the victim in mind as a person potentially harmed.” 338 The Chief Justice concluded that the presence or absence of a personal relationship “is an important factor to consider in the proximity analysis” although she noted it was “not necessarily determinative”. 339 Chief Justice McLachlin also noted the plaintiff has “the formal onus of establishing the duty of care” and the factors at play in the first stage of the analysis are those which arise “from the relationship between the plaintiff and the defendant, for example, expectations, representations, reliance and the nature of the interest engaged by that relationship: Cooper at para. 30 (emphasis deleted) and 34.” 340 In finding a relationship with sufficient proximity to support a cause of action in Hill, the Supreme Court found it to be “personal” and “close and direct”. Hill was “a particularized suspect”. The relationship was not with “the universe of all potential suspects” nor was the plaintiff “one person in a pool of potential suspects”. The court noted he was thus in a closer relationship than in Cooper and Edwards where “the public officials were not acting in relation to the claimant (as the police did here) Burnett v. Moir A.F. Cullen J. 389

but in relation to a third party (i.e. persons being regulated) who at a further remove interacted with the claimants.” 341 The Chief Justice noted the interests engaged by the relationship are additional considerations. She noted that there were no “personal representations” by the defendant or “consequent reliance” by the plaintiff which weighs against proximity, but that nevertheless the plaintiff (as a targeted suspect) “has a critical personal interest in the investigation” or that his “freedom, reputation and how he may spend a good portion of his life [are] at stake”. 342 In the result, the court concluded that “viewed from the broader soci- etal perspective, suspects may reasonably be expected to rely on the police to conduct their investigation in a competent and non-negligent manner” [emphasis added]. 343 In the case of Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police, supra, there were three decisions: the first was the decision of Henry J. of the Ontario Supreme Court High Court of Justice ((1989), 58 D.L.R. (4th) 396 (Ont. H.C.)) dismissing an application by the defendant to strike the plaintiff’s pleadings; the second was a decision of the Ontario Supreme Court, Divisional Court, (1990), 72 D.L.R. (4th) 580 (Ont. Div. Ct.)) dismissing an appeal from the ruling of Henry J.; and the third was the decision of MacFarland J. of the Ontario Supreme Court ((1998), 160 D.L.R. (4th) 697 (Ont. Gen. Div.)) granting judgment to the plaintiff. 344 Justice MacFarland neatly summarized the issues raised and resolved with respect to the existence of a duty of care in the circumstances of the case before her in paras. 180 - 183 of her judgment as follows: [180] My task has been rendered less onerous by the very thorough analysis of Henry J. of the issues raised by the pleading in this case reported at (1989), 58 D.L.R. (4th) 396, 48 C.C.L.T. 105 (Ont. H.C.J.), when the matter came before him on a motion to strike out the statement of claim and the succinct reasons of Moldaver J. (as he then was) on behalf of the Divisional Court (1990), 74 O.R. (2d) 225, 72 D.L.R. (4th) 580, when the decision of Henry J. went to that court on appeal. [181] After citing s. 57 of the Police Act, and observing that by virtue thereof the police are charged with the duty of protecting the public from those who would commit or have committed crimes, Moldaver J. (as he then was) goes on at pp. 230-31 as follows: To establish a private law duty of care, foreseeability of risk must coexist with a special relationship of proximity. In the leading case of Anns v. Merton (London Borough), 390 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

[1978] A.C. 728, [1977] 2 All E.R. 492, 121 Sol. Jo. 377 (H.L.), Lord Wilberforce defined the requirements of this special relationship as follows at pp. 751-52 A.C.: First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter - in which case a prima facie duty of care arises. This principle has been approved by the Supreme Court of Canada in Kamloops (City) v. Nielsen, [1984] 2 S.C.R. 2, 66 B.C.L.R. 273, 29 C.C.L.T. 97, 8 C.L.R. 1, 10 D.L.R. (4th) 641, 26 M.P.L.R. 81, 54 N.R. 1, [1984] 5 W.W.R. 1. Do the pleadings support a private law duty of care by the defendants in this case? The plaintiff alleges that the defendants knew of the existence of a serial rapist. It was eminently foreseeable that he would strike again and cause harm to yet another victim. The allegations therefore support foreseeability of risk. The plaintiff further alleges that by the time she was raped, the defendants knew or ought to have known that she had become part of a narrow and distinct group of potential victims, sufficient to support a special relationship of proximity. According to the allegations, the defendants knew: (1) that the rapist confined his attacks to the Church- Wellesley area of Toronto; (2) that the victims all resided in second or third floor apartments; (3) that entry in each case was gained through a bal- cony door; and (4) that the victims were all white, single and female. Accepting as I must the facts as pleaded, I agree with Henry J. that they do support the requisite knowledge on the part of the police sufficient to establish a private law duty of care. The harm was foreseeable and a special relationship of proximity existed. Burnett v. Moir A.F. Cullen J. 391

Do the pleadings support a breach of the private law duty of care. The law is clear that in certain circumstances, the police have a duty to warn citizens of foreseeable harm. See Schact v. R., [1973] 1 O.R. 221, 30 D.L.R. (3d) 641 (C.A.), affd sub nom. O’Rourke v. Schact, [1976] 1 S.C.R. 53, 55 D.L.R. (3d) 96, 3 N.R. 453, and Beutler v. Beutler; Adams v. Beutler (1983), 26 C.C.L.T. 229 (Ont. H.C.J.). The obvious purpose of the warning is to protect the citizens. I would add to this by saying that in some circumstances where foreseeable harm and a special relationship of proximity exist, the police might reasonably conclude that a warning ought not to be given. For example, it might be decided that a warning would cause general and unnecessary panic on the part of the public which could lead to greater harm. It would, however, be improper to suggest that a legitimate decision not to warn would excuse a failure to protect. The duty to protect would still remain. It would simply have to be accomplished by other means. In this case the plaintiff claims, inter alia, that the duty owed to her by the defendants required (1) that she be warned of the impending danger; or (2) in the absence of such a warning, that she be adequately protected. It is alleged that the police did neither. Instead she claims they made a conscious decision to sac- rifice her in order to apprehend the suspect. They decided to use her as “bait”. They chose not to warn her due to a stereotypical belief that because she was a woman, she and others like her would become hysterical. This would have “scared off” the attacker, making his capture more difficult. [182] The evidence establishes that Det. Sgt. Cameron clearly had linked the four rapes which preceded Ms. Doe’s by the early days of August in 1986 and he and Det. Sgt. Derry knew that the rapist would continue to attack women until he was stopped. They knew the rapist was attacking single white women living alone in second - and third-floor apartments with balconies in the Church/Wellesley area of the City of Toronto. [183] On the evidence I find the plaintiff has established a private law duty of care. 392 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

345 She went on to consider whether the police breached the private law duty of care to the plaintiff in paras. 184 - 189 as follows: [184] Detective Sgts. Derry and Cameron determined, in the context of their investigation, that no warning would be given to any women - let alone the specific target group they had identified and among the reasons given for deciding not to warn was their view that women would panic and compromise the investigation. Detective Sgt. Cam- eron gave this as a reason to Ms. Doe when he interviewed her following her rape and she asked why women had not been warned. [185] In spite of the knowledge that police had about this sexual rapist and their decision not to warn, they took no steps to protect Ms. Doe or any other women from this known danger. In my view, in the circumstances of this case, the police failed utterly in the duty of care they owed Ms. Doe. [186] The decision not to warn women was a decision made by Sgts. Cameron and Derry in the course of their investigation. It was made on the basis of “shop talk” they had overheard or been a part of, according to them, in relation to the Dawson Davidson Annex Rapist investigation. What is apparent is that neither Sgts. Cameron nor Derry made any real effort to look into that investigation and determine whether in fact it had been the publicity that caused Dawson Davidson to flee. [187] Their decision was based largely on rumour and “shop talk” essentially within the 52 C.I.B. and they said they relied on it alone in making the very serious decision not to warn these women of the risk they faced. This they did in the face of the almost certain knowledge that the rapist would attack again and cause irreparable harm to his victim. In my view their decision in this respect was irresponsible and grossly negligent. [188] There is simply no evidence before this court which could be interpreted as suggesting that no warning should have been given in the circumstances of this case. The only persuasive expert opinion called by the defence, in fact, suggests that a suitable warning could have been and should have been given. While the defence experts were careful in giving their evidence when one looks at the totality of their evidence this conclusion is irresistible. [189] Sergeants Cameron and Derry made a decision not to warn women in the neighbourhood and did not do so. They took no steps to protect the women they knew to be at risk from an almost certain attack in result, they failed to take the reasonable care the law requires and denied the plaintiff the opportunity to take steps to protect herself to eliminate the danger and ensure that she would not be attacked. Burnett v. Moir A.F. Cullen J. 393

346 In a not dissimilar case, Hill v. Chief Constable of West Yorkshire, [1988] 2 W.L.R. 1049 (U.K. H.L.), a young woman was attacked and killed by a man who was eventually charged and convicted of her mur- der. It was alleged that he had attacked and killed or attempted to kill a number of young women in the same area in similar circumstances in previous years. The deceased mother launched an action framed in negligence against the police, claiming damages, alleging the police failed in their duty to properly investigate the previous offences and arrest the perpetrator before the deceased was killed. 347 At first instance, on application of the defendants, the plaintiff’s Writ and Statement of Claim was struck as disclosing no cause of action. That ruling was upheld in the Court of Appeal and ultimately by the House of Lords. 348 In the majority judgment in the House of Lords, Lord Keith of Kinkel outlined the public law duty of police officers and its implication for the private law duty of care being asserted at pp. 5 - 6 as follows: By common law police officers owe to the general public a duty to enforce the criminal law: see Reg. v. Commissioner of Police of the Metropolis, Ex parte Blackburn, [1968] 2 Q.B. 118. That duty may be enforced by mandamus, at the instance of one having title to sue. But as that case shows, a chief officer of police has a wide discretion as to the manner in which the duty is discharged. It is for him to decide how available resources should be deployed, whether particular lines of inquiry should or should not be followed and even whether or not certain crimes should be prosecuted. It is only if his decision upon such matters is such as no reasonable chief officer of police would arrive at that someone with an interest to do so may be in a position to have recourse to judicial review. So the common law, while laying upon chief officers of police an obligation to enforce the law, makes no specific requirements as to the manner in which the obligation is to be discharged. That is not a situation where there can readily be inferred an intention of the common law to create a duty towards individual members of the public. 349 Lord Keith noted at p. 6 the elements of a private law duty of care requires more than simply foreseeability of harm: Some further ingredient is invariably needed to establish the requisite proximity of a relationship between plaintiff and defendant and all the circumstances of the case must be carefully considered and analyzed in order to ascertain whether such an ingredient is present. 350 Lord Keith considered the case of Dorset Yacht Co. v. Home Office, [1970] A.C. 1004 (U.K. H.L.), in which young inmates with records of 394 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

previous escapes were taken to an island by prison officers in the vicinity of some moored yachts. Some of the inmates escaped from the island by taking a yacht and in the course of their manoeuvres damaged another yacht. 351 The owner brought suit against the prison officials. In that case, a private law duty and care was found to exist with the requisite relationship of proximity. 352 In his judgment, Lord Keith characterized the relationship thus at p. 7: To give rise to a duty on the part of the custodian owed to a member of the public to take reasonable care to prevent a Borstal trainee from escaping from his custody before completion of the trainee’s sentence there should be some relationship between the custodian and the person to whom the duty is owed which exposes that person to a particular risk of damage in consequence of that escape which is different in its incidence from the general risk of damage from criminal acts of others which he shares with all members of the public. 353 Lord Keith noted that “Ms. Hill was one of a vast number of the female general public who might be at risk from (the killer’s) activities but was at no special distinctive risk in relation to them ...”. He concluded as follows: The conclusion must be that although there existed reasonable foreseeability of likely harm to such as Ms. Hill if Sutcliffe were not identified and apprehended, there is absent from the case any such ingredient or characteristic as led to the liability of the home office in the Dorset Yacht case. Nor is there present any additional characteristic such as might make up the deficiency. The circumstances of the case are therefore not capable of establishing a duty of care owed towards Ms. Hill by the Westyorkshire police. 354 In Traversy v. Smith, supra, the Court was dealing with an application for leave to appeal the dismissal of a motion to strike out the plaintiff’s statement of claim as disclosing no reasonable cause of action against Her Majesty the Queen in Right of Ontario and Constable P.J. Toms. The claims against HMTQ (Ont) and Toms alleged negligent investigation into a serious motor vehicle accident which the plaintiff/respondent was involved in. The claim was based on “ongoing mental distress, anger, depression and anxiety” as well as “prejudice to the plaintiff’s ability to determine the events of the accident ...” and damages arising from the plaintiff’s inability to prove negligence against the principal defendants as a result of the negligent investigation. Burnett v. Moir A.F. Cullen J. 395

355 The chambers judge noted that the tort of negligent investigation by police had been recognized in Ontario in Beckstead v. Ottawa (City) (1997), 37 O.R. (3d) 62 (Ont. C.A.) and Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board (2005), 76 O.R. (3d) 481 (Ont. C.A.). 356 The chambers judge in Traversy concluded the plaintiff before her had an interest in P.J. Tom’s alleged negligent investigation and that the defendants were unable to demonstrate that it was certain the plaintiffs would fail in establishing liability. 357 The divisional court judge agreed. Mr. Justice Power ruled, after considering the Supreme Court of Canada’s decision in Hill v. Wentworth that leave to appeal should not be granted. He concluded as follows at para. 33: For the foregoing reasons I am satisfied that the moving parties have failed to meet the tests for leave to appeal set out in Rule 62.02(4)(a) and (b). Indeed, in my opinion, Ratushny J.’s decision is a correct decision. In my opinion, the existing jurisprudence does not, as argued, stand for the proposition that there is no private law duty of care giving rise to an action in negligence between a police officer investigating a motor vehicle accident and one of the persons (or to that person’s family) whose injuries in the accident were caused by others and who is claiming damages as a result of the underlying accident. (See para. 15(a) and (b) of these reasons). In addition, without a court having an opportunity to examine the entire circumstances of the relevant circumstances, it cannot be stated categorically that the relationship is not a proximate one. (See para. 15(d) of these reasons). 358 In another case relied on by counsel for the defendants, Donald J.A., in dissent, addressed the issue of whether an investigating officer owes a duty of care to a potential victim. In Mooney v. British Columbia (Attorney General), 2004 BCCA 402 (B.C. C.A.) at issue was whether the trial judge erred in dismissing the plaintiff’s claim finding no causation between the negligent investigation and the ultimate harm suffered by the victims. In coming to his conclusion, the trial judge found a duty of care and a breach of the standard of care in circumstances where the police failed to investigate threatening behaviour of the plaintiff Bonnie Mooney’s former spouse, Ronald Kruska. Seven weeks after the failed investigation, Kruska came to Bonnie Mooney’s house and seriously injured her daughter, the plaintiff Michelle Mooney, shot and killed a friend of Ms. Mooney’s and caused significant psychological trauma to 396 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

the plaintiff Kristy Mooney who was present at the time, but not physi- cally injured. 359 The trial judge dismissed the action, finding no causal connection between the failure to investigate and the subsequent harm to the various plaintiffs. 360 The trial decision was upheld by Hall and Smith JJ.A. on the issue of causation. 361 In his dissent, Donald J.A. would have found causation and was thus obliged to deal with the respondent’s argument that there was no duty of care in respect of the victims of the crime which the negligent investigation failed to deter. 362 In connection with that argument by the respondents, Donald J.A. held as follows at para. 44: These arguments are supported by English authority, most notably Hill v. Chief Constable of West Yorkshire, [1988] 2 All E.R. 238 (H.L.). The trial judge did not find that case helpful, nor do I. The public policy considerations were said there to apply where a claim is from a member of a large indeterminate class of persons to whom a general duty of protection is owed. The House of Lords did not exclude private law responsibility for claims arising within a proximity of relationship between the police and the claimant: Home Office v. Dorset Yacht Co. Ltd., [1970] A.C. 1004, 2 All E.R. 294. 363 Justice Donald then quoted passages from Lord Keith’s judgment in Hill v. Chief Constable of West Yorkshire and made the following obser- vations in distinguishing it from the case before him at paras. 46 and 47: [46] The facts in the instant case are quite different from Hill, supra. Bonnie Mooney sought police assistance and had a direct engage- ment with an officer when she presented her complaint. She had a pressing need for protection as a potential victim of Kruska’s violence and the police should have recognized that. She cannot be said to fall into a large indeterminate class; to the contrary she was a person, in Lord Keith’s words at 243 of Hill, supra, with a “special distinctive risk”. [47] In any event, Canadian courts are not so protective of the police. A private duty of care was found in two cases where the victims were part of a class rather than individuals specifically at risk. 364 The two cases cited by Justice Donald were Schacht v. R. which dealt with a police failure to replace a sign warning of an open culvert under construction on a highway after an accident, and the Jane Doe decision. Burnett v. Moir A.F. Cullen J. 397

365 In finding a relationship of proximity between the police and Ms. Mooney, Donald J.A. also relied on policies laid down by the Ministry of the Attorney General, adopted by the R.C.M.P. in relation to domestic violence, which he observed “relate not only to the special proximity between police and complainants, but also gave content to the duty of care and set the standard of care.” 366 Justice Donald then turned to consider the case of Odhavji Estate v. Woodhouse, which had been decided after the appeal before him was argued. He summarized the circumstances of that case in para. 52 as follows: [52] Since the hearing of the appeal, the Supreme Court of Canada issued its reasons in Odhavji Estate v. Woodhouse, 2003 SCC 69. It concerns an action framed in tort alleging misfeasance in public office and negligence against police authorities and others. Marvish Odhavji was shot and killed by officers of the Metropolitan Toronto Police Service after a robbery. The Special Investigations Unit was called in to investigate the conduct of the officers. The officers refused to cooperate and thereby compromised the investigation. Mem- bers of the family of the shooting victim sued to recover damages for psychological harm resulting from the unsatisfactory investigation. They alleged that the failure of the Chief of Police and the Police Services Board to command the officers’ cooperation was misfeasance and negligence. 367 In the result, in that case, the Court held the claims against the police officers and the Chief of Police could stand. 368 Justice Donald concluded in the circumstances before the court in Mooney that the trial judge was correct in imposing a duty of care on the police, holding at para. 57: [57] In summary on the question of the duty of care, having made herself known to the police as a person in fear of a violent abuser, Bonnie Mooney established a special relationship of proximity with the police thereby creating a private duty of care. The duty on the police was to act on the complaint promptly. I am in substantial agreement with the trial judge’s ruling on this issue. 369 As noted, the majority decisions rendered by Hall and Smith JJ.A. dealt with the appeal without reference to the correctness of the trial judge’s determination that there was a duty of care in the circumstances of that case. 370 In a 2009 decision, Project 360 Investments Ltd. v. Toronto Police Services Board, 2009 CanLI 36380 [2009 CarswellOnt 3418 (Ont. 398 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

S.C.J.)] MacDonnell J. dealt with an application to strike pleadings asserting a claim in negligence against police officers. 371 MacDonnell J. described the application before him thus in para. 1: The defendants move under Rule 21.01(1) of the Rules of Civil Pro- cedure for an Order striking paragraphs 35 and portions of paragraph 36 of the Statement of Claim. They submit that those paragraphs assert a claim in negligence that cannot possibly succeed because it is premised on a general private law duty of care, owed to individual members of the public by the police, that does not exist. While the defendants do not dispute that particular circumstances may create a relationship that is sufficiently proximate to give rise to a private law duty of care, they submit that with respect to the claim asserted in the impugned paragraphs no such circumstances have been pleaded. 372 MacDonnell J. gave effect to the motion concluding: In the absence of circumstances giving rise to a special relationship of proximity, the relationship between the police and individual members of the public does not give rise to a private law duty of care. 373 He went on to find “the plaintiff has not pleaded facts that establish a special relationship of proximity.” He granted leave to amend “if the plaintiff’s are so advised”. 374 The factual context before Justice MacDonnell is different from the case at bar. The plaintiffs were the owners of a nightclub in which a patron was shot by a man named McCalla after midnight on October 6, 2002 after he entered the club the previous evening. The plaintiff/owners of the club allege that as a result of the shooting, they suffered economic damages. 375 The impugned pleadings asserted that the police learned on October 5th that McCalla intended to go to the nightclub armed with a firearm. It was not pleaded that the police were aware of any connection, past, present or prospective between McCalla and the nightclub. 376 The defendant police conceded that once they had knowledge of Mc- Calla’s intention to go to the nightclub, there was sufficient proximity in their relationship to the plaintiff to give rise to a private law duty of care, and thus they sought only to strike the portion of the claim that alleged negligent investigation resulting in a failure to arrest McCalla, which would have prevented the shooting and failure to warn the patrons or staff of the nightclub “of the information that had been complied on Mc- Calla”. The pleadings also alleged a failure to identify McCalla as a suspect, a failure to investigate him adequately or at all, and a failure to take Burnett v. Moir A.F. Cullen J. 399

steps to permit the plaintiffs and their staff to identify and locate McCalla. 377 The premise of the application to strike was that those allegations asserted the police owed the plaintiffs a duty of care “regardless of whether they had any knowledge of a link between McCalla and the plaintiffs.” The defendants submitted it is plain and obvious no such duty of care was owed and the police failure to arrest McCalla was in breach of no such duty. 378 In the course of his reasons for striking the impugned paragraphs, Justice MacDonnell relied on the proposition which he derived from various decisions that “the general relationship between the police and individual members of the public has not been recognized as one in which a private duty of care arises.” He acknowledged, however, relying on the Jane Doe case, that “particular circumstances may create a situation in which such a duty is owed”. He noted in those cases where a duty of care was found, the courts were required to distinguish the plaintiffs from other members of the public. 379 He noted that in a series of decisions “in several contexts over the course of the past eight years” different courts have held that “pursuant to the applicable statutory framework, the duty of the defendants was owed to the public as a whole and not to individual members of the public, and accordingly ... proximity had not been established.” He cited Cooper v. Hobart, [2001] 3 S.C.R. 537 (S.C.C.); Edwards v. Law Society of Upper Canada, [2001] 3 S.C.R. 562 (S.C.C.); Eliopoulos v. Ontario (Minister of Health & Long Term Care) (2006), 82 O.R. (3d) 321 (Ont. C.A.); Attis v. Canada (Minister of Health), 2008 ONCA 660 (Ont. C.A.); Williams v. Canada (Attorney General), 2009 ONCA 378 (Ont. C.A.) and Abarquez v. Ontario, 2009 ONCA 374 (Ont. C.A.). 380 MacDonnell J. concluded from his review of the statutory provisions respecting police in Ontario “it is manifest ... the duties of police officers ... is to the public as a whole and not just specific individuals”. 381 He held at para. 19 as follows: To paraphrase language used by the Supreme Court of Canada in Edwards v. Law Society of Upper Canada, supra, and borrowed by the Court of Appeal in Williams, supra, in fulfilling their duties the police are required to act in the general public interest and to balance “a myriad of competing interests the nature of which are inconsistent with the imposition of a private law duty of care.” 382 On that basis, while acknowledging that a pleading raising a special relationship of proximity between the police and the plaintiff could 400 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

stand, MacDonnell J. found in the absence of such a pleading no basis to uphold the pleading asserting a private law duty of care. He concluded as follows at para. 28: As I suggested earlier, the focus of the Chief Justice in Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board, and of Henry J., Moldaver J., and MacFarland J. in Jane Doe, on the specific aspects of the plaintiffs’ situation vis a vis the police that distinguished them from other members of the public would not have been necessary if there were a general private law duty of care owed by the police to individual members of the public. Accordingly, in order for the plaintiffs to maintain an action in negligence against the police for their failure to arrest McCalla prior to October 5, 2002, they must plead facts on the basis of which it could be found that a special relationship of proximity existed prior to October 5, 2002. The Statement of Claim contains no facts of that nature. The plaintiffs have not pleaded that prior to October 5, 2002, the police had any knowledge that McCalla had any link whatsoever to the plaintiffs or their nightclub, that he had ever been there, or that he ever intended to go there. Further, the plaintiffs have not pleaded that the police had any relationship with them prior to October 5. Based on the facts pleaded in the Statement of Claim, prior to October 5 the plaintiffs were in the same position vis a vis the police as every other member of the public. 383 The most recent decision dealing with allegations of a duty of care arising from police conduct is Wellington v. Ontario, 2011 ONCA 274 (Ont. C.A.). The issue as posed by the Court in that case was “do victims of crime committed by police officers have the right to sue the special investigation unit (“SIU”) for negligent investigation?” 384 The circumstances giving rise to the issue in that case involved two police officers shooting and killing a 15 year old boy in the context of the pursuit of a van he was driving. The SIU was the body charged with the responsibility of investigating the shooting. The deceased’s mother and sister and his estate brought an action against the SIU alleging a negligent investigation. The defendants applied to strike the action as disclosing no cause of action. The application was dismissed by the Chambers judge who held: It was not plain and obvious that the action could not succeed and a full evidentiary record was required. 385 The dismissal was appealed to the divisional court and upheld with a dissent. On further appeal to the Ontario Court of Appeal, the appeal was allowed and the action was dismissed. Burnett v. Moir A.F. Cullen J. 401

386 In its analysis, the Court of Appeal, speaking through Sharpe J.A. considered whether the duty asserted by the plaintiffs was novel or had already been recognized by law as a precondition for determining whether the facts alleged gave rise to a private law duty of care. 387 The Court noted if the duty has already been recognized by law, then a duty of care is established and it is unnecessary to engage in further analysis. The Court also noted that if it had been held that no duty of care arises on the facts pleaded “a full Cooper/Anns analysis is not required.” 388 The Court considered Hill v. Hamilton-Wentworth, Beckstead v. Ot- tawa (City), supra, and Norris v. Gatien (2001), 56 O.R. (3d) 441 (Ont. C.A.) and Jane Doe v. Metropolitan Toronto (Municipality) Commis- sioners of Police and concluded the state of the law was as follows: While the police owe a duty of care to a particular suspect under investigation (see Hill and Beckstead) and to warn a narrow and distinct group of potential victims of a specific threat (see Jane Doe), there is now a long list of decisions rejecting the proposition that the police owe victims of crime and their families a private law duty of care in relation to the investigation of alleged crimes. 389 Justice Sharpe found the situation of a suspect, subject to a police investigation, distinguishable as he or she “faces the risk of the stigma of being charged and convicted as well as potential loss of liberty and Char- ter rights.” He noted: “the interest of victims and their families in a proper investigation are simply not comparable.” 390 In the course of his analysis on whether the duty of care alleged had already been recognized by the law, Sharpe J.A. referred to Norris v. Gatien, supra, in paras. 17 - 19 of his reasons as follows: [17] The appellants submit that the duty of care alleged by the respondents has already been excluded by a decision of this court. In Norris v. Gatien (2001), 56 O.R. (3d) 441 (C.A.), leave to appeal to SCC dismissed, [2002] S.C.C.A. No. 54, a cyclist was struck and killed by a motor vehicle driven by an OPP officer. The cyclist’s family sued the officer, the OPP and Mr. Gatien, the municipal police officer who had investigated the fatal accident. Against Gatien, the plaintiffs alleged that he negligently investigated the death, leading to the failure of the criminal prosecution against the OPP officer for impaired driving causing death and driving “over 80”. As in this case, the plaintiffs alleged that their emotional distress had been exacerbated by Gatien’s failure to conduct a proper investigation. Ga- tien successfully moved under Rule 21 to strike the claim as disclosing no cause of action. 402 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

[18] This court dismissed the appeal and upheld the order striking out the claim against Gatien. Writing for the court, Austin J.A. applied the test set out in Kamloops (City) v. Nielsen, [1984] 2 S.C.R. 2, which corresponds closely to the current Cooper-Anns test. Austin J.A. concluded, at paras. 17 - 19, that the relationship between the parties did not give rise to a Prima facie duty of care: This is so because the plaintiffs had no legal interest in the investigation or prosecution of [the OPP officer]; that investigation and prosecution were matters of public law and public interest. Nor had the plaintiffs any legal interest in the disciplinary proceedings taken against [the OPP officer]. Had [the OPP officer] been convicted on either or both charges, the plaintiffs, or some of them, may have derived some personal satisfaction from that conviction. That satisfaction, however, would have been a purely personal matter; it would have no reality in law. Nor did the failure to reach that verdict have any consequence for the appellants sounding in damages. [19] White Norris preceded the Supreme Court’s holding in Hill v. Hamilton-Wentworth Regional Police Services Board, [2007] 3 S.C.R. 129, that the police owe a duty of care to targeted suspects (discussed below), that duty had already been recognized by this court in Beckstead v. Ottawa (City) Chief of Police (1997), 37 O.R. (3d) 62 (C.A.). In Norris, at paras. 19-20, Austin J.A. held that neither Beckstead, nor Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police, (1990) 74 O.R. (2d) 225 (Div. Ct.), supported the family’s claim. In Beckstead, the careless investigation resulted directly in the plaintiff being charged with fraud. In Jane Doe, the police negligence contributed to the plaintiff being sexually assaulted by a known suspect. The alleged negligence in both Beckstead and Jane Doe had a direct, profound and damaging legal impact on the plaintiffs. In Norris, the family’s claim for added grief or mental distress did not implicate rights or interests of a like nature. 391 He also dealt with the Odhavji case, distinguishing it from the case before him and finding, in Justice Iacabucci’s reasons in that case, support for the proposition that individuals are not entitled to damages for an alleged failure to conduct a thorough investigation. He reasoned as follows in paras. 25 - 28 of his judgment: [25] It is my view that Odhavji is distinguishable from the case at bar and that, indeed, passages in Odhavji support the position of the appellants. Burnett v. Moir A.F. Cullen J. 403

[26] Unlike the present case, in Odhavji the victim’s family did not sue the SIU officers or anyone else for negligent investigation of the shooting. The claim against the police officers was for misfeasance in public office, a tort that requires an element of deliberate unlawful conduct as well as awareness that the conduct is unlawful and likely to harm the plaintiff. In finding that the claim for misfeasance in public office should proceed, Iacobucci J., writing for the court, made clear that he was not deciding that the family could sue for negligent investigation, at para. 40: In the defendant officers’ submission, the essence of the plaintiffs’ claim is that they were deprived of a thorough, competent and credible investigation. And owing to the fact that no individual has a private right to a thorough, competent and credible criminal investigation, the plaintiffs have suffered no compensable damages. If this were an accurate assessment of the plaintiffs’ claim, I would agree. Individual citizens might desire a thorough investigation, or even that the investigation result in a certain outcome, but they are not entitled to compensation in the absence of a thorough investigation or if the desired outcome fails to materialize. This, however, is not an accurate assessment of the plaintiffs’ submission. [27] The negligence claim pleaded against the Chief of Police was directly tied to the misfeasance in public office claim asserted against the individual police officers under his supervision. The “essence” of the claim was that the Chief “breached a duty to take reasonable care to ensure that the defendant officers complied with their legal obligation to cooperate with the SIU investigation”, at para. 52. That claim was considered under the Cooper-Anns test. The court held, at para. 54, that while the plaintiffs might well have difficulty in establishing that their distress and anger rose “to the level of compensable psychiatric harm”, it was not “plain and obvious” that the claim would fail and hence the pleading should not be struck out. Iacobucci J. repeat- edly linked the negligence claim against the Chief to the alleged “misconduct” or “improper conduct” of the officers, for example, at paras. 57-58: It is only reasonable that members of the public vulnera- ble to the consequences of police misconduct would expect that a chief of police would take reasonable care to prevent, or at least to discourage, members of the force from injuring members of the public through improper conduct in the exercise of police functions. ... 404 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

The fact that the Chief already is under a duty to ensure compliance with an SIU investigation adds substantial weight to the position that it is neither unjust nor unfair to conclude that the Chief owed to the plaintiffs a duty of care to ensure that the defendant officers did, in fact, cooperate with the SIU investigation. [28] When the judgment is read as a whole, I cannot accept the submission that by allowing the action in negligence to proceed against the Chief, Iacobucci J. intended to reverse the proposition asserted a few paragraphs earlier that individual citizens are not entitled to damages where there is a failure to conduct a thorough investigation. 392 Justice Sharpe concluded that the duty of care at issue before him had not previously been recognized, but went on to consider whether there was anything in the statutory mandate of the SIU that gives rise to a duty of care. 393 He concluded that “to impose a private law duty of care would, in my view, introduce an element seriously at odds with the fundamental role of the SIU to investigate allegations of criminal misconduct in the public interest.” (para. 45). He concluded the SIU’s “duties are not focussed on the detection or protection of victim’s interests but instead relate to protecting the public at large.” (paras. 49). 394 Sharpe J.A. saw in the circumstance before him, similarity to: [a] well established line of cases standing for the general proposition that public authorities charged with making decisions in the general public interests, ought to be free to make those decisions without being subjected to a private law duty of care to specific members of the general public. 395 He concluded the respondents failed to establish a prima facie duty of care under the first branch of the Cooper-Anns test and thus, it was unnecessary to consider whether the duty should be negated for policy reasons.

ii. Application of the Law to the Facts 396 In my view, the law which has arisen from attempts to establish a private law duty of care from a public official’s discharge of public duties does not favour the plaintiff’s case.

(1) Pre-Assault 397 The essence of the plaintiff’s case against the Delta Defendants for the pre-assault period is that they knew or ought to have known that Cheers was an environment that fostered a certain level of disturbance Burnett v. Moir A.F. Cullen J. 405

and violence on an ongoing basis and that their failure to warn of dangers to potential patrons, to take definitive steps to solve the problem, or to abate the risk it represented to an acceptable level, constitutes negligence. Inherent in the plaintiff’s position is the precept that the Delta Defendants owe a private law duty of care to individual members of the public who might become patrons at Cheers pub. 398 The plaintiff likens his position to that of the plaintiffs in Schacht, or Jane Doe, alleging, as with those plaintiffs, both foreseeability and a sufficiently proximate relationship to establish a private law duty of care. 399 As I see it, however, although the plaintiff’s argument has some attraction, it fails to account for the necessary elements of proximity identified by Chief Justice McLachlin in Hill v. Hamilton Wentworth and ex- emplified in the other decisions dealing with the question of whether and when a private law duty of care can arise from the discharge of a public duty or function. 400 The dominant characteristic of proximity necessary to a private law duty of care is a relationship between the alleged wrongdoer and the victim, that is “close and direct” in the sense that “the wrongdoer ought to have the victim in mind as a person potentially harmed”. (Hill v. Hamil- ton Wentworth at para. 29). In that context, “while not necessarily determinative, the presence or absence of a personal relationship is an important factor”. (Hill v. Hamilton Wentworth para. 30). In the present case, it could not be said that the relationship between the plaintiff and the Delta Defendants before the assault was close or direct. The plaintiff had never attended Cheers before, he was not known to the Delta Defendants as a person more likely than anyone else to become a patron of Cheers or to be caught up in an assault. He was not a member of a group more likely to be targeted by an assault at Cheers or elsewhere. There is no personal relationship between the plaintiff and the Delta Defendants. 401 Insofar as the other factors identified by Chief Justice McLachlin indicative of a close and direct relationship are concerned, including “any expectations, representations and reliance” arising from the relationship are concerned, there was little or no evidence that the plaintiff had any particular expectation of the Delta Defendants vis-a-vis the Cheers pub. It was clear from his evidence that he had been in other drinking premises where fights had broken out both inside and out. Indeed he testified that he had been at the Roxy nightclub both before and after the assault, and based on the evidence of police service calls to that establishment and the evidence of Argent of the VPD, it appears there is little to distinguish the Roxy (and other adjacent Granville Street nightclubs) from 406 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

Cheers in terms of the number or nature of police service calls and corre- sponding activities. 402 In addition, there was no evidence of any specific representations from or reliance on the Delta Defendants beyond the implicit representation that because Cheers was licensed to operate meant that it met certain regulatory standards. There is little or no evidence, however, that the plaintiff relied on the fact of licensing as warranting a particular standard of behaviour at the bar. Given his previous experiences in various bars and nightclubs, it appears unlikely that the relationship, such as it was, between the plaintiff and the Delta Defendants, entailed any substantive reliance by the plaintiff based on the fact that Cheers was licensed to operate. 403 His relationship to the Delta Defendants was no closer or direct (and arguably more removed and less direct) than the relationships in Cooper and Edwards where “public officials were not acting in relation to the claimant ... but in relation to a third party ... who, at a further remove, interacted with the claimants.” 404 In the present case, the Delta Defendants were similarly removed from the plaintiff. They dealt with representatives of the LCLB as well as Cheers staff and management in an enforcement capacity, but had no direct dealings or relationship with the plaintiff or the person who assaulted him. 405 The cases in which police failure to act, or negligent actions in connection with a potential victim have engaged a duty of care, in Mooney, Jane Doe and Schacht, either involve specific ascertainable threats to specific ascertainable victims or specific ascertainable threats to a particular class of victim. In Mooney, the police duty was engaged by a complaint made by the potential victim, of threats from her former spouse. In Schacht, the specific threat or risk of harm was an open culvert under construction on a highway and the identifiable group were users of the highway - a group in relation to whom the elements of representation, reliance and expectation would undeniably be at play in relation to those charged with the responsibility of patrolling the highway. As noted by Sharpe J.A. in Wellington v. Ontario, in connection with the Jane Doe case, the victims were part of a “narrow and distinct group” facing “a specific threat”. There are thus clear distinctions to be drawn between the present case involving the plaintiff’s membership in a large indeterminate pool of potential victims and a non-specific threat, which the evidence reveals, was not unique to the Cheers pub. Burnett v. Moir A.F. Cullen J. 407

406 Another aspect of the evidence that weighs against finding proximity based on the factors of expectation, representations and reliance, relates to the plaintiff’s consumption of alcohol and cocaine in combination with his steroid use. The evidence is that combination of drugs is a potent mix, likely to make the user more prone to responding belligerently to real or perceived provocations. 407 While that evidence may be primarily relevant to an issue of contributory negligence, it also has some bearing on proximity. In particular, it belies any inference that might otherwise be open that the plaintiff attended Cheers pub with any particular expectation of, or reliance on there being an environment shaped by police presence, enforcement or regulation. 408 In other words, whether the plaintiff’s consumption of drugs and alcohol actually contributed to the circumstances giving rise to the harm is not at issue in assessing proximity. The point is simply that it is objectively improbable that a person who consumes a mix of drugs with the potential to cause aggression (in the case of steroids and cocaine) and to decrease inhibitions (in the case of alcohol) in the context of attending a particular nightclub has expectations of or reliance on there being police enforcement of the Liquor Act or licensing regulations. 409 That illustrates the difficulty in finding a close and direct relationship between a police or other regulatory agency and a pool of people as large, indeterminate, and idiosyncratic as the potential patrons of any particular bar. 410 It also illustrates the difficulty in finding a close causal relationship in such circumstances as it relates to the failure to warn and the subsequent harm caused. It is objectively improbable that the plaintiff would have encountered a warning had one been issued, in respect of the Cheers pub, given his lack of connection to Delta and unfamiliarity with the Delta Defendants’ website or any local news sources. Equally, it is objectively improbable that he would have heeded any such warning had he encountered it, given the evidence of his attendance at other bars or nightclubs with similar environments to Cheers, and his consumption of drugs that would tend to affect his judgment. 411 The presence or absence of a close causal connection between the negligence alleged and the harm caused is a factor in determining proximity. In Odhavji Estate v. Woodhouse, supra, Iacobucci J. held as follows in the context of a proximity analysis at para. 57: Although a close causal connection is not a condition precedent of liability, it strengthens the nexus between the parties. 408 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

412 Where, as here, the causal connection, insofar as the failure to warn is concerned, is remote and speculative rather than close, it cannot be said that the nexus between the parties is strong or compelling. 413 For those reasons, while finding some limited evidence of a connection between the Delta Defendants and prospective Cheers patrons arising from the police corporate knowledge that a person entering Cheers was likely to be exposed to an environment involving some violent or turbulent circumstances, I am not satisfied the evidence reaches the level of establishing a close and direct relationship featuring the indicia of proximity identified by Chief Justice McLachlin in Hill v. Hamilton- Wentworth, supra, or manifested in other decisions such as Jane Doe, Mooney, or Schacht. 414 I thus conclude the relationship at issue does not sustain sufficient proximity to found a duty of care. The plaintiff was but one of a large indeterminate pool of potential patrons of Cheers, rather than an identifiable potential victim of a specific threat.

(2) Post-Assault 415 The foundation for the asserted liability of the Delta Defendants in negligence post assault, consists of a number of contentions. The first is that Uppal failed to call for assistance from EHS in a timely way. The second is that DPD lost or destroyed critical videotape evidence. The third is that the Delta Defendants negligently conducted their investigation into the plaintiff’s assault, thus failing to identify the perpetrator. 416 Insofar as the first contention is concerned, assuming the existence of a duty of care between Uppal and the plaintiff when Uppal arrived on the scene to find him seriously injured, there is no evidence of what is alleged. The evidence is that EHS had already been called to the scene and were on the way, and it was EHS who notified the police of the circumstances. There is further evidence that Uppal did in fact request that EHS get to the scene as soon as possible. In the result, there was an interval of slightly less than 13 minutes between the assault and the arrival of EHS. There is no evidence that even if there had been a negligent failure by the defendants to summons an ambulance as soon as possible, that it had any effect or impact on the plaintiff’s injuries. There is thus no basis for a finding of a breach of any standard of care against Uppal on the basis that he failed to call for assistance from EHS or that if he did, it was not in any way causative of the plaintiff’s injuries. 417 An aspect of the plaintiff’s assertion of a negligent investigation is the loss or destruction of the critical video evidence. Leaving aside the ques- Burnett v. Moir A.F. Cullen J. 409

tion of whether there is a duty of care which arises between the Delta Defendants and the plaintiff in the circumstances, the evidence falls short of establishing the loss or destruction of any video surveillance evidence. At best, the evidence establishes that a compact disk “burnt” from the video surveillance on a hard drive was inadvertently destroyed, but only after it was downloaded onto the DPD’s hard drive. In addition, the evidence establishes that the video surveillance captured on Cheers pub’s computer hard drive from the evening in question was “mirrored” by DPD and was available for the investigation and, in turn, for the plaintiff’s action. Accordingly, there is no basis for a finding of negligence with respect to that allegation. 418 The main thrust of the plaintiff’s allegation relates to the fact that the police efforts did not yield sufficient evidence of an assailant to even consider charges, which the plaintiff attributes to the lack of a thorough or competent investigation. 419 The plaintiff relies particularly on Odhavji Estate, Mooney and Traversy in support of a contention that once he became the victim of a crime, a private law duty of care is imposed on the police charged with the responsibility of investigating the crime. 420 The case which is factually most similar to the case at bar is Traversy. It is important to note, however, that neither in the original application to strike the pleadings, nor in the application for leave to appeal in that case, was there an affirmative finding that there was such a duty of care. The net effect of Traversy is summed up by Power J. in para. 33 of his judgment that: Without a court having an opportunity to examine the entire circumstances of the relevant circumstances, it cannot be stated categorically that the relationship was not a proximate one. 421 Moreover, the currency of that holding, it seems to me, is called into question by the decision of the Ontario Court of Appeal in Wellington v. Ontario which held: [t]o impose a private law duty of care would in my view introduce an element seriously at odds with the fundamental role of the SIU to investigate allegations of criminal misconduct in the public interest. (para. 45); And: In my view, this is not a case where a trial is required to resolve the duty of care issue. A duty of care has been excluded by prior decisions of this court, the British Columbia Court of Appeal and numerous trial courts. (para. 52) 410 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

422 Insofar as Mooney is concerned, it dealt not with the failure of the police to properly investigate the crime which caused the plaintiff’s injuries; rather it dealt with an investigative failure which arguably caused those injuries. It was a case like Jane Doe of a failure to deal with a specific threat to a specific individual or “a narrow and distinct group of potential victims” (Wellington para. 20). 423 Insofar as Odhavji Estate is concerned, it too is distinguishable from the case at bar. As Sharpe J.A. noted in Wellington, the claim in Odhavji was “for misfeasance in public office, a tort that requires an element of deliberate unlawful conduct as well as awareness that the conduct is unlawful and likely to harm the plaintiff”. Justice Sharpe placed significant reliance on the statement of Iacobucci J. who agreed with the proposition that “no individual has the right to a thorough, competent and credible investigation”, but noted the claim before the court in Odhavji was on a different footing. 424 Although the plaintiff has argued in the case at bar that Wellington is distinguishable because it was the family of a victim, rather than the victim, who was the plaintiff, it is significant that the suit was brought in part by the victim’s estate. In stating the issue, Sharpe J.A. identified the issue as “do victims of crime committed by police officers have the right to sue the SIU for negligent investigation?”. 425 The concept that there is a lack of proximity in the relationship between investigating police officers and the victims of the crime which is under investigation, which emerges from Wellington and the obiter of Iacobucci J. in Odhavji arises from the precept that the primary relationship in a criminal investigation is between the authority of the police and the individual under investigation. 426 It is clear from Hill v. Hamilton-Wentworth it is that relationship and the function which it embraces which is close and direct and engages the indicia of proximity. While that does not necessarily preclude other relationships of proximity from developing, those other relationships must be subject to the need to protect the primary relationship and function. 427 In the present case, it is not pleaded, and nor is there evidence that the failure of the police investigation caused or contributed to any of the injuries suffered by the plaintiff. The evidence presented is compendiously summarized in a report dated June 9, 2009 by Dr. Derek Smith, a psychiatrist retained by the plaintiff to conduct an independent medical examination: Prior to the assault, the plaintiff was free of medical and psychiatric illness. It is therefore my opinion that all of the current problems are Burnett v. Moir A.F. Cullen J. 411

a direct result of the assault and subsequent brain injury of December 26, 2006. 428 The relationship at issue is thus not direct. It is not the impact of the asserted negligence on the plaintiff that is relied on as engaging liability but the impact on his opportunity or ability to seek damages from a third party. That was one of the heads of damage alleged in Wellington v. On- tario, supra, that the allegedly negligent investigation “lessened (the plaintiff’s) opportunity to recover damages in a civil suit.” In rejecting that relationship as proximate, Sharpe J.A. noted, in referring to the Cooper-Anns test: Policy reasons are relevant at both stages of the test. At the first stage, the policy reasons must arise from the nature of the relationship between the parties rather than any external concerns. 429 It was in that context that the court in Wellington ruled at para. 45: In my view, the SIU does not and should not conduct criminal investigations to advance the private interests of any individual citizen. I agree with the submission ... that there is an inherent tension between the public interest in an impartial and competent investigation and a private individual’s interest in a desired outcome of that same investigation which includes seeking to ground a civil action against the alleged perpetrator. To introduce a private law duty of care would in my view introduce an element seriously at odds with the fundamental role of the SIU to investigate allegations of criminal misconduct in the public interest. 430 The Wellington case, while not binding on me, is persuasive authority. Although it is concerned with the statutory mandate of the SIU in Ontario, there is in my view no basis to distinguish Wellington from the case at bar for that reason. The relevant provision of the Police Act, R.S.B.C. 1996, c. 367 is s. 34 which reads as follows: Duties and functions of chief constable and municipal police 34 (1) The chief constable of a municipal police department has, under the direction of the municipal police board, general supervision and command over the municipal police department and must perform the other functions and duties assigned to the chief constable under the regulations or under any Act. (2) The municipal police department, under the chief constable’s direction, must perform the duties and functions respecting the preservation of peace, the prevention of crime and offences against the law and the administration of justice assigned to it or generally to peace officers by the chief constable, under the regulations or under any Act. 412 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

431 In my view, the direction in the Police Act that the police “must perform the duties and functions respecting the preservation of peace, the prevention of crime and offences against the law and the administration of justice” emphasize the very public nature of the duty created, akin to that confronting the SIU. 432 The point made by Wellington v. Ontario, supra, and the cases which it relies on, is that a public duty by its nature excludes the indicia of a proximate relationship with individual or private interests, absent excep- tional circumstances. In Hill v. Hamilton-Wentworth, supra, those excep- tional circumstances were described as “critical personal interests” of a suspect whose “freedom ... reputation and how he may spend a good portion of his life” were put directly at stake by the investigator into the underlying “offences against the law and administration of justice.” 433 In relation to the plaintiff, however, the direct impact on his personal interest came from the underlying offence, not from the investigation into it. 434 The importance and scope of that distinction is emphasized in Hill v. Hamilton-Wentworth, supra, where the Chief Justice noted at para. 36 as follows: [36] The personal interest of the suspect in the conduct of the investigation is enhanced by a public interest. Recognizing an action for negligent police investigation may assist in responding to failures of the justice system such as wrongful convictions or institutional ra- cism. The unfortunate reality is that negligent policing has now been recognized as a significant contributing factor to wrongful convictions in Canada. While the vast majority of police officers perform their duties carefully and reasonably, the record shows that wrongful convictions traceable to faulty police investigations occur. Even one wrongful conviction is too many, and Canada has had more than one. Police conduct that is not malicious, not deliberate, but merely fails to comply with standards of reasonableness can be a significant cause of wrongful convictions. (See the Honourable Peter Cory, The In- quiry Regarding Thomas Sophonow: The Investigation, Prosecution and Consideration of Entitlement to Compensation (2001), at p. 10 (“Cory Report”); the Right Honourable Antonio Lamer, The Lamer Commission of Inquiry into the Proceedings Pertaining to Ronald Dalton, Gregory Parsons and Randy Druken; Report and Annexes (2006), at p. 71; Federal/Provincial/Territorial Heads of Prosecutions Committee Working Group, Report on the Prevention of Miscar- riages of Justice (2004); the Honourable Fred Kaufman, The Com- mission on Proceedings Involving Guy Paul Morin: Report (1998), at pp. 25, 26, 30, 31, 34-36, 1095-96, 1098-99, 1101 and 1124). Burnett v. Moir A.F. Cullen J. 413

435 It is clear from the judgment in Hill v. Hamilton-Wentworth that the relationship forged by the investigative function between a police officer and a suspect is both close and direct, implicates “critical” personal interests and engages a significant public interest in avoiding wrongful convictions. 436 By contrast, the relationship between an investigator and a victim, at least where the substantive harm has already been caused by a third party, is removed and indirect. Moreover, the asserted foundation for finding proximity - the negligent failure to facilitate a civil action against the perpetrator of the substantial harm - runs directly counter to the public interest in ensuring that public officials do not perform their duties and functions to serve private interests. 437 In this case, it is alleged that not enough was done in the immediate aftermath of the offence to identify witnesses and obtain information which may assist in determining who the assailant was. That assertion is somewhat speculative, as is the inference that a more comprehensive initial investigation would lead to a successful action or result in the recovery of damages. 438 The evidence does establish that over time, all potential witnesses were interviewed, all surveillance tapes were seized and reviewed, certain forensic tests were performed on the alleged weapon used, and information from the public was solicited through the Crime Stoppers program. The causal connection between the alleged negligence and harm to the plaintiff is tenuous. It assumes the presence of a forthright, willing and impartial witness who was overlooked. It also assumes that interviewing Jeremy Wocknitz or other Cheers staffers earlier, or acquiring the surveillance tapes earlier would have changed the course and result of the investigation. 439 Jeremy Wocknitz was the only witness who purported to be able to identify the assailant. The fact that at the time of the assault, despite knowing the police were investigating, he declined to come forward to provide any information casts doubt on his initial willingness to cooperate and the reliability of his identification two years later. That he appeared to confuse the assailant with Greg Allan as the one who was knocked down further compromises his reliability. That he subsequently recanted his evidence concerning “Ricky Guy” being the assailant and testified that he did not see what he originally represented to have seen, undermines him and marks his evidence as unreliable. 440 The other witnesses who were interviewed gave largely conflicting accounts of what occurred, and Greg Allan, who was likely in the best 414 WESTERN WEEKLY REPORTS [2012] 6 W.W.R.

position to provide information as to what occurred was uncooperative and contradictory in his accounts of the events. 441 As earlier noted, in Odhavji Estate v. Woodhouse, supra, Justice Iacobucci held that a close causal connection was one of the factors relevant to the inquiry into proximity. 442 In my view, the lack of a close causal connection is thus an additional factor weighing against finding proximity in the present case. 443 As I see it, while there may be particular cases where the evidence justifies finding a proximate relationship between a police investigator and the victim of an offence being investigated, the circumstances would need to overcome both the inherently indirect nature of the relationship, and the critically important precept that criminal investigations do not serve private interests. 444 I conclude this is not such a case. While the import of the assault upon the plaintiff has been profound and devastating, as is clear from Wellington, supra, it is not the severity of the underlying harm that determines the issue of proximity. 445 This is not a case such as Mooney or Jane Doe where it is alleged the investigative negligence led to or failed to prevent the harm to the plaintiff. Nor is it a case such as Odhavji Estate where it is alleged there was a deliberate and unlawful attempt to thwart an investigation into the wrongdoing which led to the harm alleged. 446 In this case, the nexus between the alleged negligence and the harm is weak. Policy reasons intrinsic to the relationship between an investigator and a victim, unlike those between an investigator and a suspect, dictate against finding it to be close and direct in the sense contemplated by the proximity analysis. 447 For those reasons, both general to the relationship between an investigating officer and a victim, and specific to the circumstances to the case at bar, I conclude the evidence falls short of establishing the requisite proximity to found a duty of care in the relationship between the plaintiff and the Delta Defendants post assault. 448 I am thus I am unable to conclude that the plaintiff has met the burden of establishing liability against the Delta Defendants in this case and accordingly I dismiss the plaintiff’s action with costs to the defendants. Action dismissed.